Month: September 2008

Congress, Bankers and Wall Street, Part 2

COLUMBUS: Congress and Wall Street are still arguing over $700,000,000,000. They can’t agree on what to call it. Is it a loan, or a purchase, or an insurance policy? To a number of taxpayers it looks like a ripoff.

All week I’ve been watching those birds as they hustle hither and yon, often in the hallway outside the House chamber. Once in a while on the TV news shows I see in the background the statue of a man standing there with his hand in his pocket (his own pocket) looking down on them with a knowing grin. Well, I think this whole situation could come to quick resolution if a couple of pages of quotes of this prominent Oklahoman were Scotch taped to the base of that statue, and everyone who walked past was persuaded to stop and read ’em. Not just read, but subscribe to ’em. (See below, and last week)

In other news, October 1 is the one hundredth birthday of the Model T Ford. By the 1920s, my friend Henry Ford accounted for half of all the cars on our roads and in our ditches, every one a Model T, and every one of them black. Speaking as one of many humorists of that era, no other single thing contributed as much to a comedian’s career as did the Model T, with the possible exception of bankers, Wall Streeters and lawyers.

Historic quotes from Will Rogers:

“It looks like the financial giants of the world have bungled as much as the diplomats and politicians. This would be a great time in the world for some man to come along that knew something.” DT #1611, Sept. 21, 1931

“Borrowing money on what’s called ‘easy terms,’ is a one-way ticket to the Poor House. If you think it ain’t a Sucker Game, why is your Banker the richest man in your Town? Why is your Bank the biggest and finest building in your Town? Instead of passing Bills to make borrowing easy, if Congress had passed a Bill that no Person could borrow a cent of Money from any other person, they would have gone down in History as committing the greatest bit of Legislation in the World.” WA #14, March 18, 1923

“Why don’t somebody print the truth about our present economic situation? We spent six years of wild buying on credit — everything under the sun, whether we needed it or not — and now we are having to pay for ’em, and we are howling like a pet coon.

This would be a great world to dance in if we didn’t have to pay the fiddler.” DT #1224, June 27, 1930

“Prosperity this Winter is going to be enjoyed by everybody that is fortunate enough to get into the poor farm.” DT #1031, Nov. 14, 1929

(On spending money) “We have been just going like a house afire, and we couldent see any reason why we shouldent keep right on burning. Our tastes were acquired on credit, and we wanted to keep on enjoying ’em on credit.

It wasent what we needed then that was hurting us, it was what we was paying for that we had already used up. The country was just buying gasoline for a leaky tank. Everything was going into a gopher hole and you couldent see where you was going to get any of it back.

You see in the old days there was mighty few things bought on credit. Your taste had to be in harmony with your income, for it had never been any other way. I think buying autos on credit has driven more folks to (rob banks) as a regular means of livelihood than any other contributing cause… I don’t reckon there has ever been a time in American homes when there was as much junk in ’em as there is today. Even our own old shack has got more junk in it that has never been used, or looked at than a storage place. Most everybody has got more than they used to have, but they havent got as much as they thought they ought to have. So it’s all a disappointment more than a catastrophe. If we could just call back the last two or three years and do our buying a little more carefully why we would be O.K.” WA #419, January 4, 1931

“Politics are receiving a lot of attention because we have nothing else to interest us. No nation in the history of the world was ever sitting as pretty. If we want anything, all we have to do is go and buy it on credit. So that leaves us without any economic problem whatever, except perhaps some day to have to pay for them. But we are certainly not thinking about that this early.” DT #660, Sept. 6, 1928

“See where Congress passed a two Billion dollar bill to relieve bankers’ mistakes. You can always count on us helping those who have lost part of their fortune, but our whole history records nary a case where the loan was for the man who had absolutely nothing.” DT #1715, Jan. 22, 1932

Bankers and Wall Street same as eighty years ago

COLUMBUS: This week Treasury Secretary, Mr. Paulson, pulled off an early Halloween Trick or Treat. Without even the benefit of a mask or a bed sheet with holes for the eyes and mouth, he knocked on our door and demanded Seven Hundred Billion Dollars. Or else.

He said he was acting on orders from Wall Street, the big bankers and insurance companies. He says it’s not as bad as it might first appear; it’s a loan.

What’s the collateral, you ask. Mortgages, he answers.

Why don’t the bankers just collect on the mortgages to get their $700 Billion? Because these particular mortgages are pretty much worthless, bought by poor sops with no foreseeable means of ever making the payments.

Why did the bankers loan money to these poverty stricken souls? Because the bankers and brokers got paid their commissions and bonuses for what money they handed out, not for what they collected.

Well, you can have the money on one condition: For all those birds responsible for creating and perpetuating this mess, we, the taxpayers, get to set the length of the prison terms.

In 1929, Mr. Andrew Mellon was the Treasury Secretary for President Hoover, but he didn’t have nerve to ask for $700 Billion. Even if he had, I don’t know that it would have put off the Great Depression. And we don’t have any way of knowing if in 2008 it will put off Great Depression II.

We owe a Trillion Dollars on credit card debt, we’re sending $700 Billion a year overseas for oil, so perhaps sending an equal amount to New York don’t seem like such a hopeless deal.

It sure caught our Presidential candidates by surprise. They are working on a joint statement to be released just before the Friday night debate that will read: “Since Sec. Paulson is spending in one week all the money we intended to spend over the next four years for new and wonderful programs, we propose to suspend the campaign and postpone the election until November 2012.”

Since we haven’t learned anything in eighty years, I’ll let the authentic Will Rogers take it from here:

Will Rogers on Banking and Wall Street:

“I guess there is no two races of people in worse repute with everybody than the international bankers, and the folks that put all those pins in new shirts.” Aug. 26, 1932

“The bankers just got a good cussing by everybody for loaning too much money. Well, they got some awful nice buildings. So when a banker fails, he fails in splendor.” DT #2345, Feb. 7, 1934

“If a bank fails in China, they behead the men at the top of it that was responsible…If we beheaded all of ours that were responsible for bank failures, we wouldn’t have enough people left to bury the heads.” Feb. 6, 1927

“You can’t break a man that don’t borrow; he may not have anything, but Boy! he can look the World in the face and say, “I don’t owe you Birds a nickel.” You will say, (if everyone stops borrowing) what will all the Bankers do? I don’t care what they do. Let ’em go to work, if there is any job any of them could earn a living at. Banking and After-Dinner Speaking are two of the most Non-essential industries we have in this country. I am ready to reform if they are.” WA #14, March 18, 1923

[In a speech to the American Bankers Association convention in New York City] “You have a wonderful organization. I understand you have ten thousand here. And if you count the ones in the various federal prisons, it brings your total membership up to around thirty thousand.” 1923

“Bankers are likeable rascals. Now that we are all wise to ’em, it’s been shown that they don’t know any more about finances than the rest of us know about our businesses, which has proved to be nothing.” DT #1924, Oct. 4, 1932

“But we can’t alibi all our ills by just knocking the old banker. First he loaned the money, then the people all at once wanted it back, and he didn’t have it. Now he’s got it again, and is afraid to loan it, so the poor devil don’t know what to do.” DT #1833, June 8, 1932

“We never will have any prosperity that is free from speculation till we pass a law that every time a broker or person sells something, he has got to have it sitting there in a bucket, or a bag, or a jug, or a cage, or a rat trap, or something, depending on what it is he is selling. We are continually buying something that we never get from a man that never had it.” DT #1301, Sept. 24, 1930

“Just been talking today out here to all the Senators investigating these stock swindles and overcapitalizations. There has been hundreds of millions lost. There ought to be some form of guardianship for people that buy all this junk. Education won’t do it. (The buyers are) the ones we have educated up till they are just smart enough to fall for everything that comes along.” DT #2270, Nov. 12, 1933

“The whole financial structure of Wall Street seems to have fallen on the mere fact that the Federal Reserve Bank raised the amount of interest from 5 to 6 per cent. Any business that can’t survive a 1 per cent raise must be skating on mighty thin ice… But let Wall Street have a nightmare and the whole country has to help get them back in bed again.” DT #950, Aug. 12, 1929

“It’s no laughing matter being a Republican in these perilous times. Anyone can be a Republican when the stock market is up, but when stocks are selling for no more than they’re worth, I tell you, being a Republican – it’s a sacrifice.” Oct. 14, 1934

“I am not against (bull fighting). Every nation has their own affairs and own sports. Some nations like to see blood, and some like to see their victims suffer from speculation. It’s all in your point of view. They kill the bull very quick. Wall Street lets you live and suffer.” DT #1646, Nov. 1, 1931

Will comments on Wind, Bankers and Republicans

COLUMBUS: I just returned to Columbus from Missouri. I was in Green City Saturday night where the Northeast Missouri Rural Telephone Co-op put on a dinner for a thousand customer/owners and their families. Their motto is “Owned by those we serve.” I told them that’s a better slogan than the one used by Fannie Mae and Freddie Mac, which is (or should be) “Owed by those we serve.”

I told you last week those two are owed $5 Trillion in mortgage payments. Their stock dropped from about $60 to less than a dollar, and this week their CEOs each said that in consideration of their lengthy and valuable service steering these now-bankrupt institutions we should give them a $10 Million bonus. Well, I have another suggestion, but I’ll leave the final choice up to you. Should we give each of those polecats ten million dollars? Or ten years?

Ten of our biggest financial institutions got together Sunday and announced a plan whereby each one contributes $7 Billion to an emergency fund. They can each draw from it if they get in trouble. Of course, it’s too late for Lehman Brothers Bank because they can’t afford the entry fee; probably have a rough time rounding up even $7000.

Now get this… once a bank puts up it’s Seven Billion, if it ever finds itself bordering on bankruptcy it is eligible to draw out a third of the total money in the fund. So now, once all the checks clear, the race will be to see who can fail first. Because after the first three failures take out a third each, the others seven will be left holding an empty bag.

I flew back from Kansas City on Southwest. About half the plane was filled with electric company crews who had competed there in the International Lineman’s Rodeo. We had so much tailwind from Hurricane Ike that once the pilot got up to about 30,000 feet he just turned off the engines and glided. Good thing these men got home because those 75 mile an hour winds knocked over so many trees and power lines it’ll take a week for ’em to get the lights on for everybody. This wind gives us Midwesterners just a hint of what Texans are going through.

Last week I promised to fill you in on our Republican candidates. John McCain says he’ll shut down the lobbyists and eliminate earmarked funds going to each state. Sarah Palin supports him 98 percent on the plan. In other words, eliminate pork barrel spending for the other 49 states, but leave Alaska alone. They kinda figure, since they send us so much oil we won’t object to sending a few million back up there. After all, they don’t have many people, and moose don’t pay taxes, even if you threaten to shoot ’em.

Historic quotes from Will Rogers:

“When you see all the bankers in one huddle, and then you go over and get in an opposition huddle by yourself, you can’t be all wrong. If they’re all going one way, there is something wrong with it.” Radio broadcast, May 26, 1935

“Banking and After Dinner Speaking are two of the most non-essential industries we have in this country. I am ready to reform if they are.” WA #14, March 18, 1923

“It’s a great country, is Alaska, where you have to live off the country, hunt, trap, kill and live. Four mails a year into that place, two and a half months when it’s not frozen in.” WA #665, Sept. 15, 1935 (written about August 13)

“Small towns was where all our best thinkers come from.” American Magazine, December 1929

“Money and women are the most sought after and the least known about of any two things we have.” WA #595, May 20, 1934

“Putting a lobbyist out of business is like a hired man trying to fire his boss.” DT #2704, April 5, 1935

“The President only tells Congress what they should do. Lobbyists tell ’em what they will do.” Notes, October 20, 1929

Conventions Over: Parties Hike Legs, Mark Territories

COLUMBUS: The conventions are over and the path to November 4 is clear. Republicans are going after the Western vote, women and the small town vote. Democrats zeroed in on the East, African-Americans and big city voters. Republicans will concede Hawaii to Obama, but will make him fight for Kansas. Democrats will let McCain have Arizona and Alaska, but they’ll battle for New Mexico and Colorado.

This week I’ll work on the Democrats, and next week see what I can dig up on the Republicans. Senator Obama is mainly associated with Chicago. He seldom mentions his time at Columbia and Harvard Universities; I guess like others of his standing, he’s trying to live that down.

In Chicago in the 1920s and ’30s, Prohibition was a dominant factor, and Al Capone was the headliner. You might say Al Capone was the original “community organizer.” He set the standard for all community organizers to follow, and up to now no one has even come close. Al’s gang had Chicago so well organized he expanded to take in most of Miami, Philadelphia, New York and Los Angeles. How’s that for a political base. But he eventually was jailed, not for murder or selling moonshine, but because he neglected to pay income taxes on his ill-gotten loot.

Senator Biden’s state of Delaware is a fine little agricultural state that is home to DuPont and all those other big corporations looking for lower taxes. Delaware is required by law to support two Senators, the same our bigger states. Under the circumstances, they would not object to giving up one they have nurtured for over thirty years, for the good of the country.

While you were enjoying the football games this weekend as a pleasant diversion from politics (assuming your team won), your government saddled you with more mortgage debt than you could imagine. Even if you have been conservative and only bought as much house as you could pay for, today you also are the unsuspecting owner of your share of Five Trillion Dollars in IOUs. Not Million or Billion, but Trillion. So thanks to the ineptitude of the financiers who ran Freddie Mac and Fannie Mae into the ground, you may own the house you’re living in, plus a share of 5 or 6 others. This kinda puts you in the same category as John and Cindy McCain although it don’t feel like it.

Historic quotes from Will Rogers:

“Well, here we are folks, out in the old city of Chicago… We are barricaded here in the Wrigley Building. The Bugs Moran Gang are holding down the east side of Michigan Boulevard and the Capones are entrenched on the other side…Of course, they do have these gangs here, and they do kill each other. Well, that is their privilege. In the old days, no one would have gone to any trouble if the Dalton Brothers started to shoot the James Boys, would they? This is really, all kidding aside, one of the greatest cities in the world…
You are not going to get me coming out here telling any jokes about these racketeers and gangsters. I arrived in this city intact, and I am going to try and leave likewise. They are a fine bunch of boys, and they are just trying to distribute good cheer among everybody. In fact, I am a kind of racketeer myself. I have been accused of having a racket, and I have come to see what their graft is here, and if theirs is any better than mine. If it is, I may join them. So before the week is over you are liable to see it: Capone & Rogers, Incorporated.
It is all right to scatter good humor at the expense of the Senate, for they are harmless. But these boys carry a gun.” Radio broadcast, June 22, 1930

“Everybody you talk to would rather hear about Al Capone than anybody you ever met. What’s the matter with an age when our biggest gangster is our greatest national interest.” DT #1757, March 11, 1932

“Coleman Du Pont, United States Senator from Delaware, has lost use of his vocal cords. Now I feel sincerely sorry for his personal discomfiture, but if his ailment could be made contagions and he distribute it among his brother members of the Senate, his illness would prove to be a tremendous national blessing.” DT #396, October 28, 1927

“When a party can’t think of anything else they always fall back on Lower Taxes. It has a magic sound to a voter, just like Fairyland is spoken of and dreamed of by all children. But no child has ever seen it; neither has any voter ever lived to see the day when his taxes were lowered. Presidents have been promising lower taxes since Washington crossed the Delaware by hand in a row boat. But our taxes have gotten bigger and their boats have gotten larger until now the President crosses the Delaware in his private yacht.” WA #97, October 19, 1924

Hurrican Gustav Blows Past Hot Air from Dems and GOP

COLUMBUS: Just as the Republicans were ready to blow into St. Paul at the upper end of the Mississippi, Hurricane Gustav decided to “gust” into New Orleans at the other end. (As I’m sending this out Monday morning, the Cat 2 hurricane has reached Louisiana and Mississippi.)

I suggest that both parties call a moratorium on politics until we see the full effects of Gus. Then I further propose that no matter what happens, neither party try to use the hurricane to political advantage. These hurricanes never bother to ask your politics before knocking down your house.

The Democrats finished their convention in Denver, with 85,000 gathered at a football stadium to listen to their nominee. It was a good speech. Mr. Obama rattled of a list of worthy causes, dozens of ’em, that have a hefty price tag attached. Free health care for everyone, free college education for the needy, more and better teachers, money to build up the military, billions for renewable energy and nuclear power. Then he announced he would reduce taxes on 95 percent of Americans. That got wild applause and delegates were dancing in the aisles.

But then I got to feeling sorry for the other 5 percent and missed the rest of the talk. Could I be unfortunate enough to be trapped in that top 5 percent? Regardless, I did some investigating, and found that those folks already pay more than half of all income taxes, so asking them to raise it to three-fourths may not totally destroy their bank accounts or ambition.

Mr. Obama did not mention the top 1 percent, but I’ve got a clue what’s coming for them. Next April they’ll each get a personal phone call from President Obama.

“How much did you make?”

“Mr. President, counting stock sales, a salary bonus, and a small inheritance my wife received, it added up to 2.3 million dollars.”

“That’s wonderful. Send it in.”

Then the President will add, “As a token of appreciation, we’ll send a nice card to your offspring informing them you are now destitute and will be living off them for a while.”

Most of the excitement centered on the Vice-Presidential picks. Senator Joe Biden of Delaware was named by Obama. He’s a fine man, experienced in foreign affairs. He ran for President, got 9000 votes in Iowa and dropped out, causing Senator Clinton to ponder on why she wasted six more months gathering 18 million votes, with nothing to show for it.

Then Mr. McCain reached all the way to Alaska and named Governor Sarah Palin as his V-P. She fits his maverick style, had been mayor of a small town, and it seemed that McCain selected her to appeal to women voters who are good mothers, have competed in beauty pageants and love to hunt moose. That’ll bring in a lot of men voters, too.

Historic quotes from Will Rogers:

“Democrats never agree on anything…, that’s why they’re Democrats. If they agreed with each other, they’d be Republicans.” Saturday Evening Post, May 1, 1926

“This Alaska is a great country. If they can just keep from being taken over by the U. S. they got a great future. There may be some doubt about the Louisiana Purchase being a mistake, but when Seward in ’68 bought Alaska for $7,000,000 he even made up for what we had overpaid the Indians for Manhattan Island.” DT#2815, August 13, 1935