The collapse of financial solvency of many of our corporations and

[KlatooBNikto]

the solvency of the U.S. Government itself have been on parallel tracks ever since the 80's except for the brief spell during the Clinton years. This is no accident.In the Reagan Era, it became fashionable to make supermen out of CEOs who, through rigged deals with investment banks, made themselves rich by looting their corporate treasuries.The same CEOs through the revolving door wound up at the highest levels of our government when the socalled CEO president Bush took over.Bush the first presided over one of the colossal financial fiascos called the S&L scandal until his son bested him with an incredible array of financial scandals.

The root cause of the problems of profitablity faced by our corporations lies in the total destruction of equity capital built up by solid management over many decades.This was done by greedy managers in collusion with Investment banks like Citibank, Merrill Lynch and J.P.Morgan.Many previously profitable profitable companies assumed too much debt as they got passed from hand to hand much like Elizabeth Taylor changed her husbands.The collapse of equity and the assumption of debt resulted in debt service becoming a major item on their operating costs.This is why corporations are now scarmbling to go to India and China to reduce their labor costs blaming everyone but themselves for this disaster.

In the same way, Mr.Bush and his financial managers, who inherited a healthy economy from Mr.Clinton, decided to pass on tax cuts to the wealthy following their ideological mumbo jumbo and have now saddled this country with a debt load that, according to david Walker the Comptroler General threatens to explode out of sight.The strom clouds are on the horizon and the only sure thing awaiting the U.S. is the prospect of becoming another Argentina.When 50% of your GDP is devoted to debt service and you have maxed out your credit cards, even the gullible Chinese and Japanese bankers are going to take their money elsewhere.

As General Zinni said, in his own colorful way:"We are f---ed".

[DebJ]

1. CEO pay levels increasing 500% indexed to inflation kind of

drains those coffers, too, doesn't it? But hey, that's okay, they can keep pulling it off OUR backs...driving our wages down until we can't afford the bus fare to work, then go overseas...


Nice post, by the way. Thanks.

[DebJ]

3. PS - bank profits are outrageous. I protest this way: I accidentally

left a penny in a bank account that I attempted to close out when I moved out of state last year. Because the penny was left in it, the bank has kept my account open. I called them after a few months and said hey why don't you close out this account. They said I would have to drive back to that state, during regular banking hours, and sign papers to close it out.
What the heck. Let them keep spending money for their nice color printed heavy paper bank statement and the postage to mail it.
Sheesh.

[KlatooBNikto]

4. You are lucky you are not being charged a service fee for this.

[ayeshahaqqiqa]

2. Thanks for this post!

I hadn't been aware of the connection between the shady CEOs of the 80s and shady people in the Bush administrations before.

[annabanana]

5. It's theft, plain and simple....

All the excuses and "explanations" are just smoke & mirrors....

[no_hypocrisy]

6. Part of the blame belongs to the shareholders who dropped the ball

with regard to monitoring their corporations. Shareholders vote on their boards of directors who in turn hire CEO and agree to outrageous salaries, benefits, stock options, and golden parachutes. Shareholders have access to the quarterly reports and portfolios and can demand accountability. Shareholders have the right to bring suit against their board of directors if they do not act as strict fiduciaries to the corporation, meaning the entity comes first, not them.

All this didn't happen by itself.

[KlatooBNikto]

7. Many managers reduced the boards to the status of rubber stamps

just like Bush has reduced Congress and the SC to the same status.