Tuesday, September 13, 2011

While GOP Rails Against Social Security, Corporate Giants Are Real Ponzi Scams

GOP Presidential rabble-rouser Gov. Rick Perry and other Republicans of his ilk ranting and raving that Social Security was a Ponzi scheme ought to look up what a Ponzi scheme really was.

For the benefit of those who hadn't had the time to cruise Wikipedia or watch a couple of TV crime dramas, a Ponzi scheme was a scam wherein a con artist got a bunch of marks to give him all their money by promising a big return on their investments, and got everyone to believe him by paying off some of the earlier marks with money collected from later marks. Then, when the scammer figured he'd gotten a big enough haul, he dashed with the cash.

Social Security, despite Perry's and the GOP's ravings, was solvent for another twenty years, and with minor tweaks to payroll taxes, namely by having Perry and his ultra-rich cronies kick in their fair share of scoots, would remain solvent until genetically engineered pigs rocketed through space, at which point Social Security would be the least of eveyone's problems.

For real Ponzi schemes, one need look no further than the trans-national plutocracies greasing the political wheels. For real scams and ripoffs, one need look no further than the trickle-down, supply-side voodoo economics corporate scammers that call the shots.

Perry and Republicans of his ilk want to plunder the Social Security trust funds and hand all the money to their Wall Street cronies. After all, the big money tycoons were running a bit short having blown all the money everyone pumped into 401Ks and mutual funds. The S&P 500 closed on September 14 at 1172.87, a whole eighty-some-odd points above where it closed on September 14, 2001, when it closed at 1092.34. That was a whole lot of nothing for however much folks pumped into the S&P 500 over those ten years. Well, a whole lot of nothing minus the appropriate fees and carrying charges bankers, brokers, hedge fund managers and assorted wannabes and hangers-on deducted for booze, hookers and that fleet of Cessna Citation Xs.

Which was why Perry and his GOP brethren figured doing away with Social Security and handing all of eveyone's money to those same big money tycoons was just the trick to secure everyone's retirement, or at least the big money tycoons' retirements, less the appropriate fees and carry charges for booze, hookers, and another fleet of Cessna Citation Xs. Or XIIs. Or whatever Roman numeral Cessna would be up to by that time.

Because who wouldn't want to hand all her money to the likes of Bank of America, one of the nation's Big Four banks? Or whatever number Big banks America was down to nowadays.

Not that Bank of America was really Bank of America, the venerable San Francisco fiduciary institution founded by Amadeo P. Giannini that, thanks to a wise investment in fireproof vaults, was up and running behind an plank set on a couple of barrels while the ruins were still smoldering from the 1906 earthquake and fire.

Because Bank of America was really NationsBank, the ignoble North Carolina pyramid scam that bought out and leveraged and merged with about a gazillion other banks, including Bank of America, which by then was also leveraging and buying out about a gazillion banks itself, until they leveraged their cakeholes into buying out Countrywide and Merrill Lynch and collapsed the whole teetering pile of cards.

Now, that was a Ponzi scheme if ever there was one.

Now, B of A, or whatever the seething den of Enronian inequity was calling itself nowadays, announced Monday it was going to have to add another 30,000 poor slobs to the legions of unemployed queuing for the dole, as they might say in Jolly Old. Now B of A, or whatever the heaving pile of private-sector plutocracy-in-action was calling itself nowadays, was going to have to combine even more operations and close even more offices to keep the champagne flowing and the caviar doing whatever caviar did in the boardrooms and corporate suites and aboard all those Cessna Citation Roman numeral whatevers.

Not that any of that was going to help B of A, as when a Ponzi scheme collapsed, it really, really collapsed.

"I think this is rearranging the deck chairs on the Titanic, actually," economist Simon Johnson, late of the International Monetary Fund and current MIT nabob told the PBS Newshour. "Our biggest bank has got itself into terrible trouble. Remember, they bought Countrywide at a crazy price. They bought Merrill Lynch at an even more crazy price. They need to unravel this mega-bank. It's too big to manage at this point."

Countrywide, for the benefit of those who'd been neglecting to fill in their scorecards, was the banking scam that went from lame to fame by pumping piles of cash into the housing bubble, then crashed all the way to left-hand-to-the-forehead loser when the boom went bust in 2008.

Now, thanks to B of A's braniacs from the Charlie Ponzi School of Business and Elocution, B of A, Countrywide notwithstanding, owned more bad paper than all the settling tanks in all the sewage treatment plants in America.

"The big uncertainty for Bank of America is how much...are all their other mortgage problems going to cost them?" said Bert Ely, monetary policy wonk, as though the bad paper itself wasn't a big enough problem. "They're facing lawsuits in the billions, maybe several tens of billions of dollars."

When asked whether B of A was down for the count or was going to make it to a neutral corner, Ely made a throat-clearing sort of noise and said, "It's going to be a long hard slog for them to do so."

That would be a "no."

And, as far as corporate America's money mavens went, B of A was the First Team. Top Dog. Cock of the walk. If-you-could-make-it-there-you-make-it-everywhere, "A" foam-finger Number One.

Exactly the sort of folks Rick Perry figured should be in charge of everyone's money, instead of bumbling, stumbling old Ponzi-scamming Uncle Sam, who everyone and his or her brother, sister, and third cousins twice-removed and put back three times was shovelling mountains of cash at because all the equity markets everywhere in the world were making like the Cyclone at Coney Island.

Ponzi scheme indeed. 

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