Winston Churchill once said, "You can always count on Americans to do the right thing - after they've tried everything else." The old boy had us dead to rights, as a nation we don't learn and we don't take advice. Churchill's bromide could be applied to Wall Street as well with one slight alteration. "You can always count on Wall Street to do the right thing when pigs fly and chickens sing opera."
Wall Street is a one eyed monster that like organized religion hides behind altruistic motives yet is responsible for a vast majority of the worlds suffering. Since it's beginnings it has been manipulated and used by the insiders to pick the pockets of the unsuspecting rubes. Every economic calamity that has befallen this nation was born on Wall Street and suckled at the teat of the pliable public officials in Washington.
From the Knight's Templer to the Black Hand these organizations swear a vow of secrecy to never reveal their secrets to the suckers. So what would you call a rat that rats out the other rats? There is no nobility in being a stooge nor benevolence in squealing on your compatriots especially when you do it with a smirk on your face. So who exactly is Jamie Dimon the Chief Executive Officer of JP Morgan Chase ratting out?
Our new financial reform legislation promises to reign in Wall Street excesses. Just like a twelve year old promises to take out the trash"someday. The Dodd-Frank provision that brings back part of the Volcker rule to force banks to cut in house hedge funds won't go into effect for twelve years! The DoddFrank bill requires 67 studies and 243 new rules to be configured or as Churchill put it, "The length of this document defends it well against the risk of its being read."
Rather than to actually regulating the banks the DoddFrank legislation signed into law last month asks pleadingly that the banks follow the recommendations of the Federal Reserve. So rather than an instant replay in the Super Bowl on a contested call they will instead call up to the owners sky box for a decision.
The Institute of international Finance, an industry group representing more than 400 firms and they released a report in June that said the proposed rules would erase 3.1 percent of gross domestic product in the U.S., Euro region and Japan by 2015. The Institute of international Finance is a lobbying group made up of the 400 usual suspects and their plan is simple. Complicate, delay and water down until the recommendations of the Basil Committee aren't slated to go into effect until 2018 if then.
Meanwhile the city of Chicago has leased the parking meter concession to Morgan Stanley Infrastructure Partners for $1.16 billion for seventy-five years. Immediately Chicagoan's discovered that parking rates had gone up. Morgan Stanley is going to net $5 billion dollars on the deal and the citizens of Chicago will pay taxes levied by corporations because the city has also leased Midway Airport and the Chicago Skyway.
Just the other day Robert Rubin and Paul O'Neill said, that a second round of stimulus wasn't necessary the economy was doing better all by its self. Then came this months economic numbers that proved them wrong. Unemployment up and wages rose two tenths of one percent and was the first rise in wages in a year!
Productivity was down in the new labor report and productivity is a funny number to ascertain. Suppose you have five clerks at Wal-Mart and each clerk rings up a thousand dollars in sales per hour. The manager sends one clerk home and the remaining four clerks ring up $1,100 dollars and hour that's improved productivity. The company's costs have gone down while profit and sales have increased but it's a phony number. Then the manager sends another clerk home and the lines begin to back up and people begin to drop their purchases and go home.
When the line finds it's equilibrium the clerks are only ringing up $900 dollars an hour and management is concerned about falling productivity. What's wrong with those lazy employee's?
It was a great motivation tool he could have just started with, "you guys suck!" But after his speech the boss opened the floor to suggestions, to a man the mechanics all said, "We've only got one crane, if someone is moving an engine to the test stand we have to wait ten or fifteen minutes to use the crane." Then someone added, I'm stuck because you only have one test stand and if they have a problem I've got nothing to do! I can't start on a another engine because I can't move the one I've got and if I do I'll just have to put it all away if there is a problem with my engine. New crane or extra forklift $5,000, new test stand $10,000 the bosses solution was to lay another mechanic off.
Because the UPS clerk was unloading and loading trucks UPS shipment weren't getting shipped out thus increasing the number of angry phone calls. The idle mechanics began loading outgoing shipments to help get the job done but when a mechanic dropped a $9,000 engine with the forklift management issued a new decree. "Only certified forklift drivers are allowed on company forklifts!"