Wall Street Bonuses

Not surprisingly, the stock manipulations that helped lead to a Democratic Super-Majority in Congress led to record bonuses. Apparently, many interesting things happened in 2008. For example Bernie Madoff had dramatically increased bonuses prior to his arrest. (DeepCapture is running reports on less than savory connections of Bernard Madoff. It is like a repeat of Joseph Kennedy).

2008 was a banner year for stock manipulation. Our country has not seen such epic stock manipulation since the heady days of Joseph Kennedy whose insider trading scams accumulated the billions necessary to buy his clan the status as first family.

I suspect that George Soros, who hates George W. Bush with every fiber of his being, was probably the leader of the pack. I look forward to seeing how historians play out his manipulations. Currently people praise Soros for the breaking of the Bank of London in the 1990s. I would love to hear more about his short position in 2008.

Tearing a page from The Prince, Obama is currently voicing outrage at the lieutenants who helped engineer his rise to power. It is an astute move. Fanning the flames of wealth envy keeps the masses in check. Dangers exist, however, if people look beyond the smoke and mirrors to see just who did the manipulations.

Obama should do well if the press can keep attention focused on how Republicans were chumps. Republicans were so focused on arguments about state v. private control that they failed to realize the ease with which the powers that be can manufacture financial ruin.

At all cost, the press must avoid deeper discussions on the cause of economic collapse. The left wing media needs to pound the drums of wealth envy without asking simple questions such as: "Why were bonuses at a record level when the market tanked."

When properly formed, bonuses track performance. In traditional bonus systems, bonuses drop when the market drops.

For that matter, it appears that a very large number of traditional investors lost their savings and a very large number of traditional financial advisors not only got no bonus, they received a pink slip for Christmas.

The only way that a market crash could generate near record bonuses would be if the bonuses weren't geared toward rewarding constructive activity, but were geared toward destructive activity.

We are told that the gearing of bonuses toward destructive activity is the result of deregulation. This is absurd. A free market tends to be weighted toward positive incentives. The negative incentives were pretty much all created with the idea that they would check irrational exuberance. As such, they are the creation of the desire for regulation, and are not the result of deregulation.
Of course, the point of deriding bonuses is to fan wealth envy.

The wealth envy arguments bounce off me. My anger is not aimed at the bonuses, but at the structure of the financial institutions which are now dominated by absurdities like credit default swaps, short selling (ftds), and mandated community reinvestment schemes. These created the swamp of sub-prime government guaranteed mortgage backed securities.

Madoff is important in understanding the problem. The former chair of NASDAQ was fundamental in creating a trading system that allowed unbridled short selling. The justification for the program was that shorting regulates the market.

The design that gave investors like Madoff and Soros the ability to engage in massive coordinated naked short attacks essentially gave a group of insider investors the power to destroy companies at will.

Folks, like Soros and Madoff, who hold the power to destroy, are a magnitude more powerful than those who struggle to create. An abortionist could kill a hundred fetuses in the time it takes an obstetrician to deliver a healthy child.

Republicans and Libertarians deserve the anger thrown in their direction. These idiots spent their days defending capitalism, when they should have been defending the free market against capitalism.

Had anyone read Marx, they would have realized that Marx never defined Communism. Marx simply gave a recipe for using the tools of capitalism to destroy the free market.

The greatest enemy of freedom is not the person dreaming of social utopia, but the intellectual working feverishly to undermine the financial system of the free society.

The people who work to undermine a financial system wear the title capitalist along with those who invent and build things.

People simply note that the rogues on Wall Street rape their investments as the market goes up and as it goes down.

The mob is incapable of seeing the difference between those who receive rewards for their creations and those who exploit weaknesses in the regulatory regime to make billions by tearing things down. All the mob sees is people getting bonuses and they are overcome with envy.

The left shows cunning in denouncing the lieutenants that brought them into power. The denouncing allows them to slap the shackles on the producers of this world under a false guise. By publicly deriding the sheep in lambs clothing, the wolves can take down a few more sheep from the herd.

It is the simply art of misdirection. If giving record bonuses for the destroyers of the world, then the left can justify taking the bonuses from the producers.

The fact that Wall Street bonuses hit record levels while the market tanked is just a symptom of the problem. The problem is that rogues created financial structures that pay off big time for the destruction of wealth. This created an inherently instable structure. It was simply a matter of injecting enough bad debt in the system and the system will implode.

The art of undermining economies is well known. You can find examples of thugs engineering the financial destruction of their enemies since antiquity.

If ever Americans regain the sentiment for freedom, I hope the leaders learn from the lesson of the 2008 manipulation. Conservative intellectuals need to stop accepting the terminology of the left. They should defend the free market and reject capitalism.