Destroying an American Icon

I'm not talking about General Motors, they have taken care of destroying themselves on their own, albeit with plenty of help from the UAW. The US Senate is now working on destroying another American iconic business; Wall Street. The investment banks on Wall Street and other large commercial banks have in the last century become global institutions that allocate capital all over the globe. They became so good at doing this that the entire world came to rely on them in some fashion, allowing them to become interwoven into the global economy and profit handsomely.

We all realize there have been some grave mistakes made by these banks in the past few years, although it's not as though it's just one bank that missed the ball here. The loss experience among Wall Street banks has been pari passu regardless of their mistakes. This should lead us to recognize that; perhaps it was society's mistakes that have caused these problems, and it is the banks who are being unduly punished.

Chris Dodd was kind enough to insert a new pay limit clause into the stimulus bill which now limits Wall Street bonuses to one third of total compensation. These new limits reach far beyond the top management to other top executives who are actually the revenue drivers for these firms. It is quite easy to foresee the employment path of these top revenue producers, and it does not include US investment banks.

Thank you Chris Dodd for forcing the best and brightest at our iconic institutions to take jobs in other countries to be sure their financial institutions are prepared to seize the remarkable opportunities that will surface as the World comes out of recession.

Amazing agreement

"Every economist agrees that the government spending in a recession is essential," said Sen. Claire McCaskill, D-Missouri. "So this bill isn't perfect, but it's essential."

Missed the poll she took of "every" economist. It's only essential if you're a rent seeking Senator who is trying to get an early start paying back all the lobbyists and special interest groups that got you elected.

Link to article on CNN

Unemployment

According to the newest unemployment data, there are 3.6 million people who are unemployed in the US. To cure that, the Senate has finalized their plans on a $800 billion stimulus plan. If we just divided up the stimulus amongst the unemployed, that would be around $220,000 per person.