02/04/09 Baltimore, Maryland The winds of feigned outrage promise to blow hard from Washington, D.C. today. The new president will announce limits on executive pay for companies slopping at the TARP trough. And at the other end of Pennsylvania Avenue, Congresscritters will hold hearings on Bernie Madoff’s Ponzi scheme.
Thus it’s pretty clear the power elite has settled on a dual-distraction strategy. Madoff and executive pay will serve as convenient whipping boys for public consumption, lest the booboisie actually wake up to how the culture of bailout and endemic legalized corruption is robbing them blind.
Madoff is especially convenient in this regard. It’s so easy to take the case of a guy who committed obvious crimes that anyone with room-temperature IQ can understand, and make him the poster child for everything that’s gone wrong in the finance sector and even the wider economy the last several months. Sure beats having to slog through things like excess money and credit creation by the Fed and how that encouraged a culture of leveraged risk among both home buyers and bankers. Far easier to pin it all on Madoff. I’m sure we’ll hear cries today about how regulators were asleep at the switch. Well, yes they were. They were too busy haranguing Martha Stewart and Mark Cuban for the victimless crime of “insider trading.” But just as anytime somebody goes on a shooting rampage, the answer won’t be better enforcement of existing laws, but rather the enactment of new ones.
Executive pay? Same deal. Get the masses in a lather over million-dollar bathroom suites while the banks collect TARP money, and the masses will never question the premise behind TARP itself — whether it’s wise to reward one bad decision after another with one bailout after another. (And besides, whatever limits are announced today are sure to generate some sort of work-around that will enable the head honchos to still enjoy a massive payday beyond $500,000 or whatever the limit will be.)
Washington now functions under a bipartisan consensus forged in the days just after September 29, 2008 — when Congress rejected the first bailout bill and the Dow dropped 778 points. (A “reverse operation” by the Plunge Protection Team? Just asking.) After that came general agreement that Citi, Goldman, Bank of America, et.al. really are “too big to fail,” and it’s the natural order of things that taxpayers should ride to the rescue. The suggestion that these institutions should be allowed to fail, that keeping them alive will only put off the inevitable and make the consequences far worse when the inevitable happens… That is beyond the realm of acceptable discourse. It is not something entertained by Serious People.
And to prevent the masses from entertaining such notions, we get Madoff and we get executive pay caps. We get the dual-distraction strategy. Score another one for the banksters.
Yeah I am also waiting for tax-payers to wake up and revolt … will it happen or will I keep on waiting ….
This is a brilliant article. Also, just to add to what you’ve already pointed out about this being a showcase of economic irresponsibility, notice as newsy.com pointed out that the emphasis seems to be on the people who were duped instead of the crime itself. Another example of how this is being used as a stunt to get some otherwise overly-radical economic policies past the public.