Wednesday, March 18, 2009

Outrage: Grassley Says Kill Yourselves; Schumer Says We'll Mug You at Tax Time

Senator Charles Grassley appeared on CNBC’s Sqawkbox, an early morning business show, and was questioned about his remarks. You haven’t heard of his remarks on the bailouts and, specifically addressed to the people who pumped subprime mortgages where there was a high risk of default and on the hedge funds and banks that played upon the down cycle?

The media reports Grassley’s remarks with a great deal of indignation and quite literally. As if Sen. Grassley said the following:

“Listen up, investment bankers... Go kill yourselves!”

Grassley was referring to the fact that some “investment bankers” had no sense of shame in ferreting out the subprime toxic debt that financial institutions were carrying and then making bets (through SWAPs and CDOs) that profited from the market downturn. Grassley referenced Japanese businessmen who have a culture where business disgrace is equal to personal disgrace and have been known to commit hari-kari.

It makes sense to me—kill yourselves, assholes—but no one really expects them to do that. The idea is more that those responsible for causing the mess and profiting from it should have a sense of remorse and not reward themselves for their weaknesses. That’s what Grassley meant. Yet one CNBC guest, Cliff Asness, asked Grassley an interesting question

Did Grassley think his advice should apply just as much to people like Barney Frank who engages in daily public theatrics,” kabuki”, and shows of public indignation on television? The commentator correctly pointed out that such high profile Democrats as Frank and Dodd pushed sub-prime mortgages through congressional legislation and public exhortation. Dodd’s unethical affiliation with bankrupted sub-prime former mortgage giant Countrywide Bank and CEO Angelo Mozilo has been widely reported in the Wall Street Journal and other newspapers.

On the other hand, there is considerably less media indignation regarding Senator Chuck Schumer’s remarks about the AIG execs who get bonuses for their failed performances. Schumer got ever more beyond himself in a public display of righteousness unmatched in the Bible, the Koran, the Torah or any other book.

Schumer said that, if the bonus getters wouldn’t return the bonuses, he and his cohorts in Congress would tax the payments at 100 percent. Laughable, isn’t it? That’s putting the Obama administration in the unusual position of threatening to violate contract law a la Marxist dictatorship, something President Obama surely wants to avoid.

For that matter, the Obama administration hasn’t been able to make up its mind where it stands on the issue of the AIG bonuses. The President himself expressed “outrage” but then later had key spokespersons explain that contract law was contract law and couldn’t be violated. Well, Schumer’s flagrant display of blunt authoritarianism was perhaps intended to deflect attention away from the mounting problems Obama faces. It didn’t work—Democrat approval ratings are beginning to slide as people wake up to the many ways in which they have been hornswoggled, and to the fact that 155 million bucks doesn’t add up to the trillions of dollars in debt laid at the feet of taxpayers by Obama Inc.

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