Thursday, March 18, 2010

It's Your Money



We took a long weekend in NYC, (before the no-name storm), to eat some Chinese, see the Tim Burton show at the Modern, look for the breaking crocus buds in the park, and catch up with old friends. Dinner at their studio in the way east fifties included some folks who worked at the UN and were preparing for International Woman's Day. A lively conversation ensued in which the definitions of, and objectives of "development" were discussed. It was generally agreed that what we all required was a value shift. That simply having women join the elite crowd of those doing business as usual wasn't acceptable. At this table, as I am sure tables around the world, "Unacceptable" practices focused on the bonuses being distributed to the masters of the financial universe. The scale of this transfer of wealth was incomprehensible. From the article: "How about this. Currently, according to news reports, just 23 top investment banks, hedge funds and other Wall Street firms will get $140 billion in bonuses this year, a sum almost exactly equal to the estimated $142 billion in budget shortfalls for all 50 states in fiscal 2010. Or to put this another way, approximately 300,000 lucky rascals who fiddle with other people’s money on Wall Street are getting bonuses roughly equal to what 300 million Americans will lose for countless needed state services, or pay in the form of higher state taxes to cover state shortfalls. And these bonuses, please remember, are above regular salaries at these 23 Wall Street firms."

To add an international note to the scale of the taking consider the news that the cost to repair Haiti has come in at 11.5 billion.

We are all schooled in the excessive behavior of the wealthy and powerful. From David down we have read of the great, falling for the pretty young thing, building ridiculous palaces, squandering their nation's capital, venturing off on land grabs. Nothing seems to compare with the current excess, and the hubris that accompanies it, of those who mismanage the world's collective wealth, and get paid for their mistakes. They may have destroyed the world as we know it.

Dinner was concluded on notes of bafflement. The best guess as to how the world was going to solve this economic crisis was that we would inflate our way out of it. But no one could imagine what was in the minds of the men who took so much off the table.

We needed to walk off dinner. We were staying on the upper west side and we chose to walk cross town to catch an uptown train. We didn't map our route. It was governed by the pattern of red lights. Walk west, hit a light, turn north, hit another light, walk west again. In the course of this chicane we passed The NY Palace Hotel, The University Club, The Peninsula Hotel, and The Metropolitan Club. All haunts of the super rich. I paused outside the iron gates. "What was consistent to all of these places," I asked. And there they were. Double parked up and down the block: The limos, the town cars, the black pariahs. In a world in which any smart rap singer can acquire the house on the hill, drink the DP, get tickets to a Yankee's game, it is obvious that the last vestige of privilege is the ability to park where you want. This is the most exclusive club as civic employees have learned. No more will they be allowed to abuse their "official business", right to park placards, they toss on their dash-boards. Nothing pisses off the public more than to know parking rights are being abused. Seinfeld learned the hard way that wealth and fame just don't cut it when it comes to the ultimate perk. He was called out when his driver abused the privilege.


So that's it? That's what the hundreds of millions a year buys? That's all there is?

Not quite. The next morning our stroll to the station was interrupted by the screaming sirens of not one, but tens of cop cars preceding and following the blacked out GMC. We couldn't see in but the smart money was on Hillary. Clearly the ultimate perk isn't having the place to park, It's the motorcade.The ability to avoid red lights, stop traffic, and have the path cleared for you on your race to the next fundraiser.

2 comments:

  1. Speaking of inflation, I would be very curious to hear your take on what will happen as we continue to attempt to inflate our way out of this mess...what will it take before the rest of the world finally stops playing with our devalued currency? What do you think will happen in the US?

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  2. fixed assets; fixed priced bonds, pensions that are not indexed, will be devalued. Currency exchanges will adjust. It will be interesting to see which currencies stay strong against the dollar. The Euro weakness we are currently seeing is related to their debt. Smart folks will stay fluid and indexed. Argentinians have been doing this for decades. They cash their paychecks daily, save nothing, and adjust the price of their labor, or commodity daily. Americans are slow learners and totally dependent. I fear they lack the agility to survive the coming changes. A counter intuitive move is to be highly leveraged, owe lots of dollars on the stuff you depend on. Pay back the debt with the cheap currency. In other words, mirror the fed!

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