Monday, December 14, 2009

Easy Money

This is a kind of strawman argument to make by Obama, but nonetheless it will resonate:

In an interview with CBS's "60 Minutes" programme, he said he did not run for office to be "helping out a bunch of fat cat bankers on Wall Street".

Later on Monday, the president will meet some of the US's top bankers face-to-face.

He is scheduled to hold a meeting with executives from Goldman Sachs, JP Morgan Chase and Citigroup.

He is planning to tell them to step up lending to small businesses and get behind legislation to overhaul Wall Street regulations.

The term "fat-cat bankers" is one of those totems of neurolinguistic programming that I have been urging Democrats to pick up on for quite some time. We are not in a race war in this nation, nor are we truly in a political fight with the right.
We are, however, in a class war, one that pits the monied interests against the hundreds of millions of Americans who not only are not wealthy, but stand absolutely no chance of ever becoming wealthy. ("No chance" includes a rounding error to account for that small percentage, perhaps one-tenth of one percent, who might actually get lucky and hit the lottery or write a novel that takes off).
"Fat Cat Banker" raises the image of Mr. Monopoly, Rich Uncle Pennybags, complete with top hat, morning coat and striped pants, wearing a monocle and smoking a cigar, or the image used in so many mortgage and business lending commercials prior to the banking crisis, with a wood-paneled office, drinking brandy from a snifter which the banker then uses to crush the poor little guy trying to get a loan from Megabucks Bank.
But it's the rest of his remarks that truly intrigued me.

""They don't get it," Mr. Obama said. "They're still puzzled why is it that people are mad at the banks. Well, let's see. You guys are drawing down ten million, twenty million dollar bonuses after America went through the worst economic year that it's gone through in decades, and you guys caused the problem.[...]

Much of it was due to the irresponsibility of large financial institutions on Wall Street that gambled on risky loans and complex financial products seeking short-term profits and big bonuses with little regard for long-term consequences.[...]

What's really frustrating me right now is that you've got these same banks who benefited from taxpayer assistance who are fighting tooth and nail with their lobbyists up on Capitol Hill, fighting against financial regulatory control," he said.

And here's the most effective point he's made while raising the image of the greedy banker: not so much that the banks were greedy for their own sake, but that they owe a debt of gratitude to the small business owners and taxpayers who stood by them when the shit hit the fan. 
See, any idiot with a degree in accounting or finance (like me) could have told any banker that the risks they were taking by lending to anyone and everyone who walked up with a hat in hand were enormous and unnecessary. That the bankstahs spent more time listening to the shareholders who threatened mutiny if this quarter's earnings didn't meet or exceed last quarter's earnings and the board of directors who insisted on pay-for-share-performance than they did to the people warning them of the cliff they were about to drive over means they now owe a debt to the people who not only warned them, but who got down under the cliff and caught the bank before it crashed.
 Greed is pervasive in the capitalist system. Hell, it IS the capitalist system and used wisely, greed is good. I'm not about to stick my neck out on the chopping block unless there's a better than even chance that I'll end up better, much better, off than when I knelt in front of it.
But here's the thing: that same greed should recognize the people who stood by me, my workers, my investors, my community. That same greed should acknowledge the role of my customers and my vendors. AND that same greed should reward the government that put me in a position to take the chance, by creating a framework that was safe for me to do business in.
And if anyone of these groups, these stakeholders, goes above and beyond the call of duty to assist me when I am in trouble, then greed should absolutely be given to them, not me.
The parallel in my mind is alcoholism. If a man is supporting his family and giving to his community and keeping up with his obligations, then by all means, if he's a drunk then let him drink.
But keep an eye on him, because at some point, the drink, the greed, will overtake him and someone needs to be prepared to step in.
The right wing knuckleheads will tell you that this should be a function of his family (the company), taking care of his alcholo problem (his greed), but they may not notice or worse, may not care. That's when someone else needs to step in and stop him.