When the recession was initially setting in and workers were seeing their job security and life savings melt away, some wealthy Americans continued to gorge themselves at the trough of greed.
A growing federal investigation into an insider-trading scandal, announced this week, has revealed a ring of high-ranking individuals who knowingly and systematically violated the law to turn illegal profits. So far, there have been eleven indictments involving, among others, executives of Intel Corp., IBM Corp., and the management consulting giant, McKinsey & Co, as well as two large hedge funds.
It’s possible that additional defendants may soon be named. The companies, whose unreleased information was exploited, included Google, Advanced Micro Devices, Inc., and Hilton Hotels Corp.
This represents the first time that authorities have employed the same wire-tapping efforts against alleged white-collar criminals that they have used in the past against organized crime.
The extent of the greed involved here is perhaps no better illustrated than by the fact that hedge-fund owner Raj Rajaratnam, with a net worth of $1.3 billion, allegedly committed his crimes for a puny profit of just $12.7 million, which was less than 1% of what he was worth..
The revelation of this nationwide pattern of highly placed executives sharing confidential information gleaned from their jobs, in order to turn illegal profits, suggests the likelihood of a much wider involvement on the part of the wealthy.
One must wonder why some of the rich feel a need to sacrifice what principles they still may have in order to reap more riches - more than they could ever spend. It brings to mind a similar pattern under which some politicians inexplicably stoop to take payoffs illegally when it’s so easy to take them “legally.”
The answer, of course, is that old bugaboo, greed.
Some may remember the character, Gordon Gekko, played by Michael Douglas in the movie Wall Street. In particular, Gekko’s famous speech that “greed is good” may ring a bell.
It may not be as well known that the role was allegedly based on capitalist Ivan Boesky who gave a speech at the University of California in Berkley in 1986, where he said, among other things: “I think greed is healthy. You can be greedy and still feel good about yourself."
It’s unclear how good Boesky felt about himself after he was subsequently jailed and fined $100 million for insider trading violations.
Greed is nothing new and it is not necessarily bad. It becomes bad, however, when it is unrestrained.
This nation must make sure that reforms and regulations are put in place now so that the abuses and white collar crimes of the past few years will never be repeated.
Dave McGill, News Correspondent
Dave’s column, “The Contrarian,” generally published every Friday, to Gather Essential News and other groups will sometimes present a contrary view to various aspects of the news, or an alternate take on the conventional wisdom of the day. It will also often appear on other days of the week
Dave has been a senior officer of an eastern insurance company, involved in economic projections and investment strategy, president of a Midwestern mortgage banking company, and a financial consultant in Southern California, serving clients in the field of commercial real estate development.
You can find all of Dave’s “the contrarian” columns at: http://gather.com/thecontrarian. Keep up with Dave’s other postings and Gather activity by joining his Gather network at: http://atadaskew.gather.com. You’ll find Dave and other News correspondents, plus celebrity content and plenty of news experts at: news.gather.com.
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Comments: 63
There are no freedoms without restrictions, no "isms" without regulation.
I highly recommend the documentary film and companion book, "The Corporation: The Pathological Pursuit of Profit and Power," by Joel Bakan (2004). Free Press.
Liberalism and Capitalism
Since Mises, though, we've been lead down that garden path and into the blind alley of Neo-liberalism. The difference is crucial.
That is a lot of power, and spending a few mil to corrupt government is pocket change.
I hope they get what they deserve.
Merriam-Webster defines greed as a selfish and excessive desire for more of something (as money) than is needed. Other dictionary sources use the same word "Excessive."
What is "Restrained" greed?
Eletist kings (humpty dumptys) having a great fall at the "Billionaire Bust".
Rule #1
Cover your ASSets!!
These people should not get away with their tricks. A confication of double the amount they got illegally plus a long time to sit in prison should teach them something. Maybe they would get over their obsessions.
That is a good quote from Ford. One of the things we need to recognize is the people greed hurts ... and the the degree to which that cripples us all.
When the recession was initially setting in and workers were seeing their job security and life savings melt away, some wealthy Americans continued to gorge themselves at the trough of greed.
A growing federal investigation, announced this week, has revealed a ring of insiders who knowingly and systematically violated the law to turn illegal profits.
What did they do to violate the law?
I fail to see how redistributing the wealth from the rich to the U.S. Government, while forcing the citizens of this Country into the poor house, is a viable solution.
If someone could figure out how to remove greed from the human race, then the problem will be solved. Until then, I'll take our Capitalist/ Democracy over a Marxist/Socialist system any day of the week, any week of the month and any month of the year.
Annoying, eh, Visionaerie? So are the power-poops regurgitated.
Take a history course outside the scrotum.
That's why it's such a swell idea to move further into socialism; We have such fine upstanding people at the top ; )
It was only a little bit tricky to tell . . . trying not to bite my tongue, with it stuck so far into my cheek ; )
Real snappy comeback there, Bruce, 'lotta rhyming ; )
My understanding is that Goldman Sachs also has quite a surprise when one of their employees left with information that did not want out.
Also, other countries are no longer buyer so much U.S. debt, and some have said the U.S. government is buying debt from itself.
Some are saying we will have to have a re-set. I am not sure what they mean by that, but I think it has something to do with derivatives, and that so much debt was entered using debt as an asset that somehow that will have to be dealt with.
We still have food, water, and shelter. It's just how we trade those things may have to change, given the collaboration between government and some groups that worked to buy influence.
http://www.wallstreetwatch.org/soldoutreport.htm
If the voters had any brains they'd vote in a Democrat for President and a Republican controlled House and Senate. Historically, by the numbers, that combination has produced the largest gains in the markets.
You're right, Cena...The money follows the power.
Good point, Eamon....The current chief lobbyist for the drug industry, at $2.5 million per year, is the ex-congressional legislator who gave the drug industry Medicare Part D with no negotiation allowed on cost. Look for Baucus to become a lobbyist for the healthcare industry next.
Devin, not only is competition supposed to be at the heart of true capitalisn (as opposed to our brand) but it is also supposed to serve the public interest. Pure capitalism should provide jobs and products and, like religion, it should be separated from the political process.
Visionaerie, I'm not sure that history supports your point. The regulations put in place after the Great Depression succeeded in preventing a repeat for many decades and then, when our capitalist-controlled government removed them - voila - another depression.
And, Timothy, there are many choices between the corruption-based system we have today and a Marxist/Socialist system. The wealth gap is increasing even faster than the Fed can shovel money out the door right now. If it's not changed, today's recession will seem like a walk in the park.
Thanks for the feature, jJack, and - Rex and Dorian- your well-expressed disillusionment is, I believe, spreading like a wildfire.
Tim, interesting point, although I would suggest that instead of "good times run on capitalism," - capitalism runs on good times (and it runs so damn fast it needs a few anchors to slow it down).
What might that be, Linda?... and thanks for the link, Libremoon.
Jim G., ----regulated...
Stories of stuff are circulating now on the internet. I still like George Carlin's riff on this the best.
Near the center of town, where I live, is a parking lot for cars of the rich as they park for high-ticket sporting and other events. It is near the transit transfer center and the river. It was built with public money. Homeless people could use this covered space like a hostel when it is not occupied by cars. At least homeless people would not get wet in a climate like Portland's, and many homeless object to close conditions in shelters as being places where illness could pass around.
Taxpayers pay for huge structures, sometimes, that are then the turf of particular groups rather than being available for multiple needs at multiple times. These sorts of challenges need to be looked at in more inclusive ways than we have in the past.
Often, cartels and certifications and membership in exclusive groups stand in the way of employment of modest-income people and in the way of their trading labor for meeting needs.
I hope we will figure out ways to be more inclusive and to look for strengths in un- and under-employed people.
It isn't just corporations wired in to government that exclude people. Unions have a history of this as well.
Of course, it has been the alumnae of Goldman Sachs that have spread out into the financial sector and government agencies that have poisoned the system and contributed greatly to the crisis of the past two years. They were instrumental in removing regulatory authority and turning a blind eye to the irresponsible orgy that ensued.
So, why shouldn't it continue with this kid...
Dave, I'm getting a little tired of you beating up on our free enterprise capitalist system and advocating "government reforms and regulations" as the answer to all of our problems. For the record, I'm for using all tools available, including those used on the mob, to catch and prosecute crimes in our financial system. We have to restore confidence in the system.
But, you conveniently overlook the members of our corrupt Congress who have blocked reforms and regulations in exchange for contributions and favors when you trumpet "government is the answer".
You overlook Rep. Barney Fwank's protection of his Fannie and Freddie "boy toy" by blocking reform and allowing many of the abuses that resulted in the home mortgage debacle. Fannie and Freddie's officers were let off with a wrist-slap for monumental fraud that cost the stockholders dearly, and "reforms and regulations" that would correct F & F's home mortgage excesses are still being blocked.
Sen. Chris Dodd and the other “Friends of Angelo” in Congress who received huge favors in connection with mortgage loans and received only a wrist-slap from their corrupt friends on the Senate Ethics Committee, making "Senate Ethics Committee" the latest oxymoron in Washington. Dodd and his friends, like Joe Biden, have long blocked meaningful reform of the financial services industry, and have denied resources to the SEC and other agencies charged with regilating the financial services industry.
Other names like Sen. Ted Stevens, Sen. Harry Reid, and Rep. John Murtha are legendary for their shady deals, and virtually all of the members of Congress have played the "earmark game" that benefits wealthy contributors and, in many cases, themselves.
So Dave, don't try to sell me that line about "reforms and regulations" being the answer to the problems with capitalism. The lack "reforms, regulations, and enforcement" by our government is the cause of most of the problems you choose to blame on "Our brand of capitalism", and most of the financial services industry will welcome adequate reforms and regulations to keep the "bad apples" out of the industry.
But, that won't happen until the voters reform the government that you have so much faith in. The white collar crooks in Washington put to shame any crooks that "Our brand of capitalism" has to offer, and they have betrayed the trust of many citizens who have been financially devastated by white collar crime. Nothing will happen to improve this situation until the voters "reform" Congress by firing them all.
Personally, I believe that the House, the Senate, the Congress, the president and the Supreme Court should ALL be arrested and we can sort out the innocent later since there will be so few.
It's time for dramatic change. I'm simply tired of the Fascism. I'm tired of the corporate/military/industrial/banking complex controlling the globe. It's time for a revolution and I'm not afraid to say it. Nothing less will work.
I don't think these big money boys are any more greedy than the rest of us. They just have more temptations than most. How many of us could resist the temptation to gain $12 million by doing something unethical? Very few is my guess.
The result is that we will always have rich people who cheat because they have far more opportunities to cheat. It isn't capitalism or socialism (because it really doesn't matter whether government dominates business or business dominates government, the result is the same). It's the fact that money is involved and money lets us do these things. So long as we retain the same kind of money we will get the same kind of results as we see throughout history. (Take your pick of time and place.)
But, you choose to place your faith in a corrupt government to increase their control of the economy.
I choose to clean up government by defeating the incumbents in Congress and establishing effective regulations for business activities to level the playing field, a legitimate and required government function.
You want to put the fox in charge of the hen house. I want a new watchdog.
There are some wealthy candidates appearing on the scene now who say they won't take PAC money, but my skepticism is far greater than my optimism that this will create a solution to the problem. Didn't someone pledge that there would be no lobbyists in the White House?