Wednesday, March 25, 2009

A rant about the U.S. financial mess and a suggestion for a 5-year recapture tax to recover money from those who greedily scammed our financial system

This is a rant, unrelated to the Reprographics business and industry. So, if you don’t want to waste your time reading one of my rants, skip this one!

I don’t know why people are so fixated on the AIG bonus thing. In “the scheme of things”, the AIG bonus issue is nothing more than a tiny pimple on a very large elephant’s ass.

It seems like every time our politicians get the opportunity to bash someone for something that happened that was stupid (or greedy or an oversight), they totally jump at the opportunity to climb on the bandwagon and shout-out about it, simply to get brownie-points and notoriety for shouting-out about it, even when the issue, in the scheme of things, is very minor. Do they not have better things to do with their time? Is that what we elected them to do?

Our Representatives and Senators and the Administration should stop the bull-shit about the AIG bonuses, and get down to the serious business of going after the ‘real money’ that was scammed from the financial system. That ‘real money’ is why we are shelling out billions and billions of taxpayer dollars.

I’m far less concerned about the recent AIG bonus issue than I am about the 60 some trillion dollars in insurance coverage that AIG evidently wrote on stuff that it insured, and because of that, the hundreds of millions of dollars, if not billions and billions of dollars, that AIG officers and executives and shareholders pulled out of AIG over the past 5 (or more) years!

What a scam! Can you imagine being in the insurance business and selling insurance coverage – in return for premium payments – even though your business will never be able to cover the claims? The premiums that AIG charged (for insurance on various types of debt obligations – what do they call that type of insurance, “credit default swaps?”) were enormous, and those premiums were, of course, considered “income” to AIG. And the “income” from those premiums was used to fund huge bonuses and compensation packages handed out to AIG officers and executives. How long did this damn scam go on? Was it one month, five years, ten years? Hell, I don’t know.

Since Congress sets the law, they should get down to the business of coming up with a “recapture tax.” I’m not talking about a recapture tax on the recent AIG bonuses, but a recapture tax that goes back five, maybe even more, years. Let’s get serious about this – what our congressmen (congresspersons, to be politically correct) should be doing is going after the earnings that were distributed that, in reality, were based on fictional income.

And, while they are at it, AIG is not the only financial institution that paid out huge sums of money over the past several years based on fictional profits. Go after the other insurance companies, investment banks, banking institutions, and mortgage companies and mortgage originators as well.

The other evening, one of the Sunday evening news shows, I can’t remember whether it was DateLine or 60 Minutes, aired several stories about the mortgage lending business. One of the mortgage companies profiled was “People’s Choice”. Is it not clear to everyone that People’s Choice, and other companies like P.C., knew that they were selling mortgages to lots of people who could not afford those mortgages, to people who had insufficient income to justify the mortgages, to people who would eventually default on those mortgages? Even the mortgage company insiders referred to them as “liars loans!”) Mortgage companies (I should say their executives, officers and insider-shareholders) didn’t care who got a mortgage, because they weren’t going to hold the mortgages they sold. All they cared about was earning fees on the mortgages they put out. They earned fees from the people who got the mortgages and they earned fees when they sold the mortgages to investment banks and other financial institutions. God damn greedy SOB’s. Everyone one of us (I’m talking about every U.S. taxpayer, and eventually, all our children, once they become taxpayers) will pay dearly for that greed. Damn it, our congresspersons and the administration need to get serious about this. They should put into place a five-year (or more) recapture tax to get back the money that these greedy people scammed from the system.

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