Waxingandwayneing’s Weblog

September 18, 2008

“I’m as mad as hell, and I’m not going to take this anymore!”

Filed under: The Economy — waxingandwayneing @ 10:08 pm

In the 1976 film, “Network”, actor Peter Finch expresses his outrage over being fired and ends up firing up a nation similarly frustrated over life’s inequities.  Declaring to the country, “I’m as mad as hell, and I’m not going to take this anymore!”, Finch becomes the unwitting spokesman for a frustrated populace.  An apathetic public is energized by a television anchor pushed beyond his boundaries.

How much outrage must we feel before we say, “Enough is enough?”  With the events of this week–the bailout of private investment houses and the injection of massive amounts of precious capital into the financial system–isn’t it about time we feel the need to open our windows and shout Peter Finch’s mantra?

I am not critical of the intervention taken to stave off a probable collapse of the financial system.  Although you cannot blame the surgeon for amputating a gangrenous leg, you should be upset that the patient’s situation got to that point. Far-reaching measures are needed to address such a serious situation, yet anger is still a valid emotion that the matter occurred.  When will we en masse express the viceral frustration with these buffoons for getting us into this mess?

These so called “experts” promoted these financial programs with such cavalier recklessness and egotistical bravado, enriching themselves along the way to previously unheard of levels.  Mortgage executives and investment agencies created a lending environment that required a limitless level of mortgage loans to feed an insatiable demand for collaterlized debt securities.  The result of this unbridled demand caused loan origination standards to abandon the basic principles of lending:  Can the borrower and will the borrower repay the loan?  Instead, the system took on the strategy of a drug dealer–interested only in getting others dependent on his product than in the long-term detriment of dependency.  With mortgage brokers popping up on every corner with the sole purpose of feeding new loans to a thirsty investment community, we all sat back and watched the market get strung-out and compromised.

So, instead of stopping the flow of drugs, I mean loans, that should never been made, so many of us looked the other way while unqualified families became homeowners, driving up real estate prices to unsustainable levels.  Real estate brokers made fat commissions for deals that sold themselves, while mortgage lenders paid fees to poorly trained producers so happy to bend rules and fabricate financial data to just close those loans.  Others along the way also enriched themselves from artificial means, yet none as much as the investment house executives and quasi-government agencies.

These selfish fatcats knowingly seized upon a vulnerable marketplace.  Veiled behind the premise of providing a necessary flow of funds to the lending community, these executives promoted a system that provided them with massive amounts of compensation for the generation of assets they knew would eventually be found out to be grossly overvalued.  Instead of stopping the practices that lead to these realities, these crooks cared primarily about the short-term and their growing wallets.

My solution is rather simple.  Now that the government has decided to use our funds to bail out the system, we must do what we can to return to the basic premise of any business transaction: the matching of risk and return.  This week, many people have criticized the imbalance of the current financial debacle, with the public sector now absorbing the risk, while the private sector enjoyed the profits.  I recommend that we make all of the executives of the affected financial institutions pay back all of their compensation, since they feel no willingness to absorb the effects of the risk they created.  Those executives unable or disinclined to repay the benefits they realized should first be paraded down Main Street–make them feel the shame of what they have done by publicizing their names in newspapers–and then sent to prison.

If you think this sounds harsh, then enjoy your life of complacency.  Remain silent as the big boys continue to screw you without permission or regret.  If you are as pissed off as I am, then get up, walk over to your open window and yell, “I’m as mad as hell, and I’m not going to take this anymore!”  Then, after you scream, send an email to your congressional representative and share your outrage.


1 Comment »

  1. Great writing! Loved the drug dealer analogy. I think your concept of using the risk and return model against the financial institutions could be further developed in future articles. Looking forward to more of your writing.

    Comment by Steve Naylor — September 21, 2008 @ 4:32 pm

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