Europe Moves to Penalize Those Responsible for Financial Crisis While America Continues to do Nothing

Generally, we are taught when someone does something wrong, they are penalized for their bad actions in some way, whether put into timeout as a child, given a failing grade for a lack of work in school, fired from a job for not showing up, or thrown in prison for violating the law.  Europe is doing just that when it comes to going after the powers responsible for the financial crisis the world is still pulling itself out of nearly five years later.

The CSM reports:

Last week the European Parliament and the European Union Commission agreed on rules which would see bankers’ bonuses capped at a year’s salary, only with explicit approval from shareholders this amount can rise to two years’ pay. It is this deal the finance ministers now have to vote on.

In a separate development, Switzerland, which is not part of the EU, held a referendum on March 3 which brought a resounding approval for limiting executive pay and banning payouts to new and departing managers.

Banning payouts to departing managers?  You mean, they actually think a CEO who runs a company into the ground doesn’t deserve millions of dollars in severance pay and compensation when fired?  Oh, those crazy Europeans and their rational thinking!

The ultimate point here is Europe has decided it’s best to learn from its mistakes and try to do what it can to avoid another economic catastrophe.  And as these policies show, they aren’t concerned about going after what we call in the United States the “job creators”.  They understand their countries are better off in the long run with the right regulations in place to fight income inequality and aren’t swayed by the propaganda machine these corporations release on society in order to keep their CEOs absurdly compensated regardless of whether they are successful or not.

And America is, of course, following the same path by passing laws that regulate what led to the crisis in 2008 and making sure our financial future is secure from this same type of crash.  The members of our great Congress are standing up to these folks at the top and are telling them we will not let you gamble and bet on losing scenarios just so you can make ridiculous profits at the expense of the majority of the population in which these Congresspersons serve.  They are doing their patriotic…what’s that?  They’ve done nothing?  This stuff is just going to happen again?  Fantastic.

In fact, not only is Congress doing virtually nothing to avoid another crisis, we are all standing by and watching corporate profits soar to new heights.  This article in the NYT says it all and is hard to swallow considering the employment climate the country continues to wallow in.  Some vomit inducing points from the article worth quoting at length:

With millions still out of work, companies face little pressure to raise salaries, while productivity gains allow them to increase sales without adding workers…But although experts estimate that sequestration could cost the country about 700,000 jobs, Wall Street does not expect the cuts to substantially reduce corporate profits.

As a percentage of national income, corporate profits stood at 14.2 percent in the third quarter of 2012, the largest share at any time since 1950, while the portion of income that went to employees was 61.7 percent, near its lowest point since 1966.

Corporate earnings have risen at an annualized rate of 20.1 percent since the end of 2008, he said, but disposable income inched ahead by 1.4 percent annually over the same period, after adjusting for inflation.

“There hasn’t been a period in the last 50 years where these trends have been so pronounced,” Mr. Maki said.

So, remember the fight over those tax increases on the wealthy the country just had?  Yep, those guys are going to be just fine it seems.  In fact, I’m pretty sure those folks making over 400k a year could give plenty more and still be eating well.

It is rather amazing we can see these facts as a whole and still somehow believe the propaganda about how we can’t hurt the “job creators”.  Considering a little thing called reality, there is a question that needs to be asked here and now to those against the higher taxes on these folks.  If we are seeing these profits at record highs, where are the jobs they are supposedly creating?  Do they require even more money to create jobs?  Are these profits and this level of economic inequality not enough yet?  Do things need to be even more unequal?  Seriously?

And as if that wasn’t bad enough, there was one last ironic knife in the throat at the end of the NYT article.  Know how those same people who were against the tax increases also want to do away with the Fed and want no outside intervention in the economy from any type of government entity?  Well, it seems the Fed helped those same people:

The Federal Reserve has also played a crucial role in propelling the stock market higher, economists and strategists say, even if that was not the intent of policy makers. The Fed has made reducing unemployment a top priority, but in practice its policy of keeping rates very low and buying up the safest assets to stimulate the economy means investors are willing to take on more risk in search of better returns, hence the buoyancy on Wall Street amid the austerity in Washington and gloom on Main Street.

Of the broader market’s 13 percent rise in 2012, about half was a result of the Fed’s actions, Mr. Harris of Bank of America Merrill Lynch estimates.

In other words, the government, the entity the people should turn to when they are being screwed by big corporations, has continued to help those corporations while doing nothing for the people or to protect the majority of the population from further recessions induced by bad behavior.  When we are being deprived by the corporate world and the government is standing by watching this occur, who exactly do we turn to?

Europe clearly knows how this should work.  America (particularly the right wing), however, still doesn’t get it.

What if Unrestrained Capitalism is the Catalyst for One World Government?

Former Supreme Court Justice John Paul Stevens was in the news this week receiving the Presidential Medal of Freedom and criticizing some recent decisions made by the bench where he used to sit.  One of the main targets of his comments was a decision made while he was still a justice and was a dissenter: the highly controversial Citizens United case.  Stevens wonders about the decisions’ effect on voters’ contributions versus non-voters, for example corporations and foreign entities whether business or a hostile group.  He says the issue will return to the Court in some form and it will likely be addressed in a way that restricts non-voters contributions to campaigns in some way.  That’s a nice assessment and positive outcome for the future in one area but will those restrictions even matter?

This is not to suggest an apocalyptic world of death and oppression with some seedy gentleman in a three-piece suit pushing a bunch of buttons in a fortress somewhere.  But it does create some questions as to the long term effects.  Even if we are able to restrict parties’ and candidates’ campaign contributions from foreign entities, will we be able to truly restrain spending by Super PACs?  And if that spending is not restrained, what’s to stop global corporations from running governments around the world through their propaganda?

A reality playing a role here is global corporations would run smoother if the rules they had to play by in every country they did business in were the same (or if the rules just didn’t exist).  If, for example, environmental laws concerning the dumping of hazardous materials were the same in all countries, a corporation could easily move a factory from one country to another with more raw materials without having to update their equipment.  This is a cost saving factor for the business so the owners obviously want the same rules everywhere they play regardless of the effects on the local populace.

At this point, a decision would be made as to the cost versus profit if a company can financially influence elections.  Is it profitable in the long term to spend some money on Super PACs to get favorable representatives into government so the rules can be changed to what the company wants?  If the bottom line says yes, what’s to block them from doing this?  In reality, not much.  Even if the company does not headquarter its operations in the U.S., it can still transmit contributions and influence through its branches.  Toyota would be a perfect example.

To some extent, most Americans probably aren’t bothered by this idea.  Since we are (for now) the richest country on the planet, corporations pedaling their influence typically means American corporations pushing their ideas on others outside our borders and little concern is shown for this in the U.S.  The recent scandal with Wal-Mart in Mexico is a fitting example here.  The backlash in the U.S. and Mexico was relatively quiet for different reasons.  Americans are okay with the exporting of our ideas and culture because of pride and if that happens through corporations, so be it.  Mexico is okay with the corruption because, well, they aren’t going to attack their largest employer in the interest of their GDP no matter how egregious the violation.

A key point should be made here.  Once a foreign corporation becomes so ingrained in a country that they are one of the largest employers their influence on elections is virtually unstoppable despite where their headquarters might be and who ultimately calls the shots.  Just imagine if the shoe had been on the other foot in the Wal-Mart scandal.  What if (a complete hypothetical here) one man stood at the top of a corporation that had tons of influence in the U.S. through the media and some of those organizations even played a significant role in elections?  What if that guy was not American and was from…I don’t know…let’s say Australia?  Imagine how outraged Americans would be if they knew something like that was going on.

Oh, wait.  That already happened.  I must have missed the outrage.

The question now becomes how tolerant will Americans be of this type of influence?  There really is nothing stopping this from happening at this point.  We have to ask ourselves what the new standards will be and what will be a violation of law, if there are any, when governing this area?  Will our attitudes eventually mimic that of Mexico toward Wal-Mart at some point when it would be too costly to prosecute these actions?

We have stood idly by and seen banks become “too big to fail.”  Will we soon see foreign corporate influence in American elections become “too big to punish”?  And when that happens, will we see it begin its spread across the world?  Maybe a better question: has it happened already?