Wednesday, October 14, 2009
Political economy from "Dilbert"
Ha ha ha!
Uh, actually, what's so funny about this? These tell a sordid tale, and are more on-target than almost any news analysis. Note that Goldman Sachs is about to announce record bonuses because of record "profits," and other "too big too fail" banks are showing similar "profits."
Well, well, well. Might the TARP, TALF, PPIP, etc. and suspension of FASB rules have anything to with these "profits?" Subsidized credit, bailout funds, government purchase of toxic MBS, changes in how "assets" are valued so as to boost balance sheets, and so on constitute sources of "profit?" And might the 2B2F banks' agents in Treasury have anything to do with these gifts from the government (i.e. taxpayers)?
For example, take a look at this Financial Times article on Goldman's deal with CIT. It's GS vs. the taxpayers... and since GS effectively staffs the U.S. Treasury leadership, there's an interesting twist on the Principal-Agent Problem. Officially we'd suppose that Treasury acts of behalf of U.S. citizens. On the other hand, the people running Treasury are all super-wealthy financiers who helped engineer the financial shambles. Quite a dilemma for them to decide who they are there to serve, isn't it?
The plunder of the American taxpayer continues.
Hahahahaha. No, it's not really funny, but I'd rather laugh than cry.