Sunday, February 22, 2009

Making Mistakes

“Some very smart people made some very big mistakes.” The specific source of this quote is not important, as the thought behind it is widely accepted as the basis for the economic meltdown we are experiencing at the moment, and I regard the argument as being utter nonsense. I would use stronger terms if this were not a “family” blog. Get one thing straight, people,
Nobody has made any freaking mistakes.

Take the City of San Diego as an example. The city officials went to the managers of the union pension and offered a deal. They said that they would increase the pension benefits if the unions would a) agree not to demand pay raises and b) agree to let the city “defer” payments to the pension fund for a few years.

The result is a city budget in crisis, but that was not a mistake. City officials knew very well that would happen and they didn’t care. They would be out of office by the time it did, and they would have served their time in office without raising taxes or cutting services. Their plan worked perfectly. They are all in private life now, their pockets full of money, and another group is in office and is left to clean up the mess.

Wall street bankers, hedge fund managers, lending managers and auto corporation executives all “made bad decisions” but are walking away with millions, and in some cases billions, of dollars in their offshore bank accounts. You and I are really angry at them; Congress is really angry, is calling them bad names and demanding that they sell their airplanes; the stock in their companies is going in the tank; but they still have millions, and in some cases billions, of dollars in their offshore bank accounts.

They knew exactly what they were doing, they knew exactly what would happen, and they didn’t care. They were becoming wealthy, and that was the point of the exercise. Damaging other people, even an entire nation, in the process was not a consideration in the pursuit of the accumulation of extreme wealth and power.

When Washington politicians talk about the Wall Street bonuses and salaries they use the phrase that “These people don’t get it.” They get it. They don’t care.

And the Washington politicians don’t have all that much room to talk with their endless “free lunch” mantra of tax cuts. Some want to cut taxes on the wealthy and some on the middle class, but all of them endlessly sing the tax cut refrain. If they can pass enough tax cuts and spending bills while in office they can pull off the national version of San Diego. They can retire on their government pensions without having raised taxes or cut services, and leave the mess for someone else to clean up.


  1. Anonymous8:29 PM

    I'm not entirely sure that they knew what the end result would be, but I'm sure they knew it wouldn't be good. Or they should have known, being the "smart people we have to pay zillions to attract".

    And politicians are well known for playing "now" and forgetting "later". Tax cuts sound really great, but they pay the bills.. and politicians really know how to pile on the bills too (aka: spending). You can't have both..

  2. Man, this was a good article/blog/post.

    Hits the nail squarely on the head.

  3. Anonymous3:51 AM

    Government Union thugs and Politicians have extorted and sold the future from your country -