Columnist - George Will

Keeping in mind that there is no such entity, human or otherwise, that can actually be called a - Real Conservative, ask yourself the following question: Who are these people who call themselves - Conservatives? And most important, why do they hate the - American Working Class?

"Unemployment is still below 7 percent; it was around 25 percent when Franklin Roosevelt became president. Less than 20 banks have failed, not the 4,000 that went under in the first part of 1933."

Hoover Institution historian - Victor Davis Hanson

"One of the weirdest, most perceptually jarring things about the economic crisis is that everything looks the same. We are told every day and in every news venue that we are in Great Depression II, that we are in a crisis, a cataclysm, a meltdown, the credit crunch from hell, that we will lose millions of jobs, and that the great abundance is over and may never return... And yet when you free yourself from media and go outside for a walk, everything looks . . . the same." --Wall Street Journal columnist Peggy Noonan.

Wall Street Journal columnist - Peggy Noonan

One has to inquire in absolute astonishment, where the hell is this woman walking - New York City's Park Avenue?

As best that can determine, for the most part, this disassociated group appears to be a casual alliance of the well off high income or retirement secured upper Middle Class inhabitants. And they have long demonstrated a tendency to favor, over and above the average American citizen, the 'power elite' of industry, commerce and finance - in all matters economic. As of late however, a cold sobriety is seeping into the psyche of many of these, hither to - Real 'Conservatives'.

Quite suddenly, however, in rapidly increasing numbers, many have come to realize that they too are sailing on the U.S. Economy Titanic. They are coming to the realization that they may share a common bond with the Working Man and Woman in steerage: And they are even more surprised that the ship's captain and officers, whose actions and decisions they have loyally defended for decades, can clearly be seen sailing off into the horizon on more economically sturdy vessels - that their pensions and retirement savings may have paid for.

How Do We Fault Thee? Let Us Count the Ways

If we organize this litany of cause and effect and the American Worker, it goes something like this:

(1) - Banks and Mortgage Finance companies and their agents who knowingly wrote balloon mortgages for Lower Middle and Middle Income Working People (for homes they would eventually not be able to afford - because of the balloons) - were not the cause of the - Housing Meltdown. It was the Working Class Home buyers who should have known they couldn't afford those homes.

(2) - Americans were given a stimulus package by the Bush administration to aid the economy, but most used it to pay exorbitant credit card interest and finance charges, medical bills and mortgage payments that were overdue. Therefore, it was the - fault of the Working Classes that the stimulus package did not work as intended!

(3) - Working Class Americans purchasing ‘gas guzzlers’ from Detroit brought on the fuel crisis. Clearly it was - not the fault - of the auto industry for manufacturing 'gas guzzlers' to the exclusion of all else.

(4) - The crisis in the auto industry was brought on by Working Class Americans who - not being able to afford to buy or run these high priced, heavy fuel consumption cars, suddenly, without warning, began refusing to buy them from Detroit. Obviously, the auto slump had nothing to do with the fact that Big Three, in the face of many warning signs - for decades, continued to manufacture inefficient cars that were not suited for the times.

Need we go on?

None Dare Call It Theft

The following are editorial examples (from both Liberal and Conservative news sources), of the people Conservatives stubbornly backed right to the end of illusion to the edge hard edge of reality:

As mortgages went bad, executives cashed out''

By William Heisel - Los Angeles Times
November 26, 2008

The subprime lending industry was starting to buckle under the weight of bad loans in November 2006, when executives at Irvine-based New Century Financial Corp. held a conference call to release their latest earnings.

Loan volume was down and defaults were up, the earnings report showed, and in recent weeks at least five stock analysts had downgraded the company's shares. Moreover, four executives had sold nearly $20 million in stock in the last four months, six times as much as they had sold over the previous 12 months. That led one analyst to ask whether there was anything investors should know.

"It's just part of their personal financial diversification plan," Chief Executive Brad A. Morrice said in response to the question during the Nov. 2 earnings call.

Those executive stock sales, however, have emerged as a central element in the Justice Department's criminal investigation of New Century, according to a person familiar with the inquiry who was not authorized to speak publicly.

Bloombergnews.com

November 26, 2008

AIG Gives ‘Retention’ Pay After Scrapping Bonuses

Nov. 26 (Bloomberg) -- American International Group, Inc.,the insurer that said yesterday it scrapped bonuses for top executives after a U.S. bailout, will still pay 130 managers “cash awards” to stay with the firm, including $3 million to retirement services chief J. Wintrob.

“The expectation from the public and Congress was that they weren't getting bonuses, not that they’d be pushed off by several months,” said David Schmidt, a consultant at executive pay firm James F. Reda & Associates...

Having It All and Begging for More

Auto industry CEO's took the outrage up a notch, by staying in amazing hotels and having chauffeurs in DC.  Back home they have executive dining areas, perks and bonuses that are ridiculous.  Bonuses are generally given to employees who’ve done a good job.  They’re being given $100 Million in bonuses for doing a bad job. And in a plea to congress for billions of taxpayers money, they had the unmitigated gall to arrive - on three private jets. 

This prompted one congressperson to ask them, “Could you not have downgraded to First Class?  Or even jet-pooled?” 

Among the three of them, they best reply they could come up with was - personal security concerns. And from whom do they require this extraordinary level of security - taxpayers'?

How Wrong Can Conservative's Trust of Wall Street Be?

If one harbors any doubt that Conservatives want it both ways and in the middle too, consider carefully the following three editorials:

Fannie Mae Eases Credit To Aid Mortgage Lending

By STEVEN A. HOLMES

Published September 30, 1999

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

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All of the 'so called experts' (mainly of a Conservative mind set), had experienced the S&L mess of the 1980's. Therefore, we are moved to ask, if they could forecast the possible danger coming - why let it happen?

President Bill Clinton presided over the repeal of the Glass-Steagall Act of 1933, which had prevented the coupling of investment banking and lending. To be exact, on November 12, 1999 Clinton signed into law the Republican initiated Gramm-Leach-Bliley Act. Economists have long criticized this action.

Phil Graham (R) inserted the mortgage lending deregulation into legislation at the last minute. It passed a Republican-controlled Congress with veto-proof majorities in both houses. However, It was not just the lending rules that led to this meltdown status. It was the ability of the deregulated financing and banking system to bundle high-risk loans into securities, mixed with good loans, and to trade them, unregulated, as securities that led to this mess.

For untold decades, the Conservative search for the Economic Holy Grail started and ended at Wall Street. The ideal of 'unrestrained capitalism' was the magic kingdom, and those 'entrusted' to run the financial institutions and major corporations were the kings.

In light of what we now know, consider the following excerpts from a glowing economic appraisal printed in the countries leading - Conservative Oriented - financial newspaper as late as January of 2008:

January 28,2008

The Wall Street Journal

The Economy Is Fine (Really)

By Brian Wesbury

"It is hard to imagine any time in history when such rampant pessimism about the economy has existed with so little evidence of serious trouble."

Then after two pages of impressive statistics to back up his point, Mr. Wesbury goes on to state:

"The good news is that the U.S. financial system is not as fragile as many pundits suggest. Nor is the economy showing anything other than normal signs of stress." And he goes on to add; "Initial unemployment claims, a very consist ant canary in the coal mine for recessions, are nowhere near a level of concern."

Wesbury ends the piece with the following fully quoted paragraph:

"Because all debt rests on a foundation of real economic activity, and the economy is still resilient, the current red alert about a crashing house of cards looks like another false alarm. Warren Buffet, Wilbur Ross and the Bank of America are buying, and there is still $1.1 trillion in corporate cash on the books. The bench of potential buyers on the sidelines is deep and strong. Dow 15,000 looks much more likely than Dow 10,000. Keep the faith and stay invested. It's a wonderful buying opportunity."

Now contrast Mr. Westbury's viewpoints (he is chief economist for First Trust Portfolios, L.P.), with today's reality as reflected in the following news article of late:

Economic Signs Point to Longer, Deeper Recession

Decline Began a Year Ago, Experts Declare; Wall Street Reacts With Huge Sell-Off

By Neil Irwin

Washington Post Staff Writer
Tuesday, December 2, 2008

The U.S. economy entered a recession one year ago, a group of the nation's leading economists said yesterday, and new evidence that the downturn will be deep and prolonged sent the stock market plummeting.

So the economy is just fine. Really Mr. Westbury!!!

Kings Go Forth

Corporate Croesus

Published: April 8, 2008

As accustomed as we are to the other-worldly rewards lavished on captains of finance and industry, it is still galling that the chiefs managed to finagle a raise last year as many of the companies they led were in trouble.

A study published on Sunday by The Times of many of the biggest companies found that chief executives who had held their jobs for at least two years got an average pay increase of 5 percent last year, despite poor results at many of their companies.

Net income at Office Depot fell 23 percent last year compared with 2006; its share price fell 64 percent. Steve Odland, its chief, made nearly $18 million all told — some 85 percent more than in 2006. With the share price of Toll Brothers, the luxury homebuilder, plummeting, it seems reasonable that Robert Toll, its chief, got no bonus. Still, the company took steps to ensure that he gets one this year, even if home-building doesn't recover.

It’s hard to square the conceit that chief executives are rewarded for improving companies’ performance with the fact that chiefs at 10 financial-services firms in the study made $320 million last year, even as their banks reported mortgage-related losses of $55 billion.

Meanwhile, the average earnings of typical workers have failed to keep up with inflation in four of the past five years. According to the economists Emmanuel Saez of the University of California, Berkeley, and Thomas Piketty of the Paris School of Economics, average incomes in the highest-earning 1 percent of the United States grew 11 percent year-over-year between 2002 and 2006. Incomes in the bottom 99 percent grew by 0.9 percent annually over the period. This year looks bad, too.

This polarization is producing a pattern of income distribution rarely seen outside Africa or Latin America, and unheard of in the United States, at least since the gilded age. In 2006, the 15,000 families in the top 0.01 percent of the income distribution — earning at least $10.7 million apiece — pocketed 3.48 percent of the nation’s total income, double their share in 1993.

This polarization is producing a pattern of income distribution rarely seen outside Africa or Latin America, and unheard of in the United States, at least since the gilded age. In 2006, the 15,000 families in the top 0.01 percent of the income distribution — earning at least $10.7 million apiece — pocketed 3.48 percent of the nation’s total income, double their share in 1993.

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America’s CEO's are raking in the big bucks and leaving shareholders and workers to pay the tab. The median year-on-year total CEO pay rose 30 percent in 2004. The average increase was a whopping 91 percent, according to researchers at the Corporate Library. They predicted total CEO pay to increase another 30 percent in 2005, too. The ratio of average CEO pay to production worker pay jumped from 301-to-1 in 2003 to 431-to-1 in 2004.

It’s also bonus time for the big players. How about a $11.5 million bonus for Morgan Stanley CEO John Mack for just five months on the job, or $38 million for Goldman Sachs CEO Henry Paulson? He only got a $30 million bonus in 2004.

Have you started thinking about paying your taxes for 2008? It would be a no-brainer if you were a big CEO. The new rage in hidden CEO perks is “gross-ups.” More than half of the nation’s largest companies now give their top executives extra money, or gross-ups, to cover personal taxes on corporate perks and other income

If the United States is to continue to embrace globalization, technological innovation and other forces that contribute to economic growth, it has to share the spoils better.

Where Have Conservatives Gone Wrong?

Long before Ronald Reagan made the term a household expression, Conservatives fervently believed in some form of - trickle down theory, and in some ways, appeared to have linked it with Christianity: God is good and so is Capitalism. We now we know that outlook to be flawed!

Trickle down did not work as expected and very few of the working class (Low Income Working Poor and upwardly striving Middle Class) got wet or decently - damp. But at this late date, in spite of the economic turmoil we are going through as a country, there are still some Conservatives out there trying to catch the old comfortable - Capitalism Horizon.

In the interim, they have taken to blaming all of our current problems on the nation's working citizens. Shame on all of you!

You have refused to recognize that Capitalism is only a tool - not a religion. Its sole purpose being to assist a nation's citizens: all of its citizens. As we have to employ manure to make flowers and vegetables grow, we are required to mix capitalism with carefully controlled portions of other disciplines, some like the manure we may not like.

Yes, Social Security is a form of Socialism - but it has successfully kept millions of Americans out of economic depravation when they become too old to work, but have never earned enough to save up for a decent retirement.

Yes, our massive state police forces are a form of Fascism - but they have managed to keep our society in a state of order because of constitutionally dictated laws.

Yes, we do need Capitalism - for this country could not have built itself up to be the giant among nations that it has become without it.

Unfortunately, single-minded Conservatives, have allowed the corporate agents of profit to be free of morality, thereby corrupting this magic mixture. They gave free reign to the power brokers who are no more than - 'Dollar Patriots': They have arrogantly demonstrated that they don't give a damn about this country - or its people.

They view their mission as one of delivering ever-increasing dividends to stockholders, while excessively filling their own pockets. When the end does come, they bail out of an eroding economy with lucrative Golden Parachutes.

My Conservative brethren, the Working People of this country, who send their sons and daughters off to fight our wars, should be your heroes - not the Wall Street hucksters! Change your ways and your pilot philosophies - now!