Tag Archives: money

The rich get richer, and the poor….

Obama announces debt deal

Well, when you’re a Tea Party-backed Republican and you’re crowing about your ‘victory‘ in the debt-ceiling deadlock, why should you care? After all, you stood in the landslide mid-terms on a ticket of no taxes and rolling back so-called ‘big government’, under a misguided sense of taking America back to Washington-era constitution, and after weeks of acrimonious argument and Capitol chicanery, you’ve succeeded in hijacking a process that’s hitherto been smooth and commonplace and turning it into a means to push America further to the right.

It’s astonishing that, for an administration that still holds a Senate majority, this government can be held hostage by a group of politicians that, for all the aghast cries from dissenting Democrats, didn’t even support such a painful bill because the cuts were not nearly tough enough, and the compromises too weak. The likes of Ron Paul, Michelle Bachmann, who would sooner give up their right to bear arms than bring in tax increases for the rich, have come off best in a game of brinkmanship that played with the global economy as if it was a roulette table. While many thought that a deal would eventually be done, simply because it had to, it’s incredible to think that a President whose election ideals reached out to the poor and disenfranchised so much has now been forced to support a deal that must’ve felt like sucking vinegar, against everything he and many of his party stood for.

So why did it come to this? The debt ceiling had to to be raised, as it had painlessly by countless Democrat and Republican Presidents before, but this time the Democrats, shorn of their House majority, had to face the fact that this time the vote would be made, by those on the far right, to symbolise the deep divisions on Capitol Hill. The GOP, so riven itself in conflict that on Friday its House leader, John Boehner, humiliatingly lost proposed vote simply to approve his own party’s plan, has managed to play a game of chicken, safe in the knowledge that however opposed to their plans President Obama was, he would most likely compromise in the national interest, something they would refuse at all costs. And what costs? While many doom mongers had forseen another 2008, the reality was that a US that couldn’t service its own payrolls could’ve sent the markets into turmoil, and yet Tea Party-backed Republicans and many more moderate in their party saw it as a viable alternative to many of their bete noires, especially that spectre of all spectres, tax rises for the rich.

It’s a distasteful, unpalatable truth that many of these super-rich politicos see it as their divine right to save the majority of the wealth for the majority of the rich. Bush’s tax cuts, an abomination when they were brought in 2001, are staggeringly still here, making those with the most proportionally better off year on year. It was this unthinkable that saw the Right push back against a series of proposed Democrat plans that would’ve seen them take a hit along with many schemes designed to help the poorest – social security, education, Medicare, Medicaid – in favour of swingeing cuts that simply left them untouched. To a British citizen like myself, even with a Conservative-lead government, this seems an almost unbelievable truth. That a country as apparently welcoming and diverse as the United States, self-appointed global leader and trumpeter of its ideals, can allow this abomination to persist, in fact to be furthered is shameful beyond description. But this, to many on the Right, is the American Dream. You are responsible only for yourself, you reap what you sow, your success is yours alone to enjoy, and no-one, NO ONE, is going to deprive you of it. Perfect, if you’re a millionaire, but if you’re below the poverty line? Well, you just need to work harder. It comes as no surprise that the majority of these Tea Party-backed are white, middle and upper-class (yes, there are token minorities, there always are), and their supporters even more so, while all the poor are often black, many minorities. Well, they’re just poor because they’re lazy, or they don’t work hard enough, or they’ve not made their own opportunities. It’s one of the staggering conditions of the United States: try to redistribute wealth, to help using taxes those less well off than you? You’re a socialist.

In a Europe where Obama would be, and is, welcomed with open arms for his lofty ideals and balanced views, many in his own country happily equate him with Stalin. And as the Right pushes further from the centre, these viewpoints, festering in the fetid cauldron of the likes of Glenn Beck and Bill O’Reilly on Fox News, gain more and more mainstream credence, and soon, they are talked of as the ‘centre’ ground in a country whose politics are becoming ever more polarised. So, we’re left with a bill, that’s passed with disgust by the majority of Democrats, and amazingly rejected even more so by the Tea Party for its weakness, that ‘saves’ the States, for now. And you almost have to take your hat off for the way the Right fought the battle. They’ve weakened the President, undermined the economy, and a Senate majority, won a bill that’s abhorrent to Democrats, and for them this is just the beginning. And why? Because they’d rather see people on the street over medical bills, bankrupted by mortgage repayments, homeless and jobless, because they see it as their divine right to retain all the wealth they have, at the expense of those who have none. That is, in their eyes, the American way, the American ‘dream’.

It’s a disgrace, and no amount of argument, however eloquently expressed, will convince me that the Tea Party is anything other than the politics of the mean. The selfishness of the wealthy over the powerlessness of the poor. Helping those less well off than you isn’t socialism, it’s humanity, and these last few weeks have shown, as if it wasn’t already flashing like a million watt bulb, that these people have none.

When something sounds too good to be true….

It usually is.

Bernie Madoff

Take Bernie Madoff. Financier to the stars, the rich, the cream of America’s (and the world’s) elite. A genius player of the money markets, a former chairman of the NASDAQ, a Wall Street legend. What better pedigree could you choose? And who better to invest with? The perfect high-rolling individual with whom to invest your millions. Or so it seemed. An investment return that defied the markets. And yet, in the end, no more than a Ponzi scheme.

Despite the intelligence of many of his clients, it was the oldest trick in the book. There was no capital, merely the payment of money to investors using other investors’ money. A paper profit but a puff of smoke. A house of cards. Arguably the biggest private fraud in history – $50bn – and perpetrated by an individual with an aura of invincibility that allowed him to convince those willing to make a seemingly staggering return to part with their life savings. There was the rarefied air of the Palm Beach Country Club, home to most of his investors, who he personally chose. There was no application to this exclusive group, you were invited by Madoff, adding to the air of elitism.

But the sad fact was many of these were older, couples, many charities that saw his philanthropy and followed it for the benefit of their charitable purposes. Big banks suffered as well – investors at BNP Paribas, Banco Santander, and HSBC were among the heaviest hit. Amazingly, the SEC investigated Madoff’s organisation eight times in the last sixteen years, and, incredibly, found no evidence. Similarly, a rival firm, determined to replicate his amazing results, concluded they were impossible, and in 2005, a report to the SEC still resulted in no findings. In the end, the credit crunch was what took the rug from under his manicured feet. Wishing to withdraw 7bn, Madoff couldn’t cover the cash. The end was nigh.

This week he pleaded guilty to 11 charges of fraud, and may face up to 150 years in jail. He’ll most likely die there. But while he admits his role, and remorse, only he will know why he did it. It is, in a time where greed is laid bare to us all, a staggering conceit, and one that probably says as much about personal greed (and, at the same time, the willingness for people to accept anything in order to make money) as any. Gordon Gecko would be proud.

4 billion pounds…. money well spent?

Is it really necessary to stump up almost 4 billion (yes, BILLION) pounds for two new huge aircraft carriers for the British Navy when we don’t have the armour to keep our soldiers alive? Ok, so there’s more jobs, for an industry that’s almost dead, but think of what that could’ve done on healthcare, social welfare, inner cities, or even charity. The mind boggles, but hey, we prop up the defence industry and have for the last century, so why stop now?