Victor Davis Hanson: Hardly the Best and Brightest

realclearpolitics.com ^ | February 12, 2009 | Victor Davis Hanson

[kellynla]

Most historians agree that earthquakes, droughts or barbarians did not unravel classical Athens or imperial Rome.

More likely the social contract between the elite and the more ordinary citizens finally began breaking apart -- and with it the trust necessary for a society's collective investment and the payment of taxes. Then civilization itself begins to unwind.

Something like that has been occurring lately because of the actions on Wall Street and in Washington, D.C. The former "masters of the universe" who ran Wall Street took enormous risks to get multimillion-dollar bonuses, even as they piled up billions in debt for their soon-to-be-bankrupt companies.

Financial wizards like Robert Rubin at Citicorp, Richard Fuld at Lehman Brothers and Franklin Raines at Fannie Mae -- all of whom made millions as they left behind imploding corporations -- had degrees from America's top universities. They had sophisticated understanding of hedge funds, derivatives and sub-prime mortgages -- everything, it seems, but moral responsibility for the investments of millions of their ordinary clients.

The result of such speculation by thousands of Wall Street gamblers was that millions of Americans who played by the rules, and put money each month away in their 401(k) plans and elsewhere, lost much of their retirement savings. Many likely will have to keep working well into their 60s or 70s, and delay passing on their jobs to a new generation awaiting employment.

[Le Chien Rouge]

Take your pick — on the one side, we have free-market capitalists who took huge amounts of money as their companies eroded the savings of tens of millions; on the other, we have supposedly egalitarian liberals who skipped paying taxes......

....I belive in karma and payback will be a bitch......

[Raster Man]

For once I disagree with VDH. How can he call Robert Rubin and Franklin Raines “financial wizards”? At Citigroup, Rubin’s sole area of expertise was fly-fishing in Montana. Raines is a political hack who got installed at FNMA to make sure that the Democrats continued to get their campaign contributions.

[kellynla]

they may have been “financial wizards” but they were also crooked as snakes...

[stayathomemom]

This whole thing is so sick. I see unintended consequences everywhere. The oppressive tax rates are going to encourage an even bigger black market economy. Formerly law abiding citizens will throw up their hands and do what is necessary to keep ahead. Since they no longer have pride in their country they will adopt a “screw you” (sorry, that's as vulgar as I get) attitude toward the rule of law. It's all down hill from there.

[kellynla]

“Is there a VDH ping list? How do I get on it?”

I believe “Tolik” can help you out.

[kellynla]

You're welcome. BIG SMILE
And “Thank You!” for posting the VDH articles.

[Tolik]

I agree with you about Raines, But Rubin together with Greenspan were lauded as “financial geniuses that brought us the Clinton era prosperity”.

Anyway, minus a very short list of skeptics, the whole Wall Street was merrily pumping up the bubble like its no tomorrow.

[kellynla]

There is still hope...but the Gelding Old Party will have to get a testicle & spine implant before the next election in 2010...but the only REAL solution is Term Limits and America is gonna have to “take out the trash”(secure BOTH borders & deport ALL illegals & foreign muzzies) sooner or later if she expects to survive! And of course, we will have to increase manufacturing dramatically in our economy so the Middle Class can prosper and succeed!

No matter what happens, Hussein is another Jimmy Carter... “one & done” because we cannot spend out way out of this mess and Socialism/Communism has NEVER worked and NEVER will!

[pgkdan]

He’s said what I’ve been thinking. I have completely lost faith and confidence in government and Wall Street and I’m ready to consider throwing both aside!! The French Revolution suddenly doesn’t seem to have been such a bad idea afterall. We could keep a guillotine busy for months...rhetorically speaking of course.

[Sherman Logan]

The result of such speculation by thousands of Wall Street gamblers was that millions of Americans who played by the rules, and put money each month away in their 401(k) plans and elsewhere, lost much of their retirement savings.

I agree with 90% of what VDH has to say here.

However, nobody wants to recognize that some significant percentage of the money ordinary people "lost" was in their account, albeit on paper only, because of the inflated values created by the bubble.

IOW, some significant percentage of the roughly 30% of value the average investor has lost was never really there at all. (Unless he had the good fortune or sense to sell at the top and leave another poor schnook holding the bag.)

Even the illusion of value was there only as a result of the bubble. Yet every article I've seen implies that the high values really existed and deflated only because of the actions of these designated villains.

[pgkdan]

How can he call Robert Rubin and Franklin Raines “financial wizards”? At Citigroup, Rubin’s sole area of expertise was fly-fishing in Montana. Raines is a political hack who got installed at FNMA to make sure that the Democrats continued to get their campaign contributions.

I'm sure his tongue was firmly planted in his cheek when he typed those words. He doesn't believe that they were financial wizards at all...In fact he points out their incompetency. But they were sold to US as financial wizards.

[pgkdan]

I don't think we can ever take back what we've lost through the ballot box. That process has been thoroughly corrupted. The left has succeeded in creating a new class that's almost completely dependent on the government for their survival. Those people will never vote to get LESS from gov't. We've also seen widespread voter fraud and corruption becoming institutionalized in the last several elections. Motor voter registration. Early voting, same day registration, vote by mail, and the lsit goes on and on.

The Stimulus bill just passed by the Senate gives the government authority over my health care decisions. Dr patient confidentiality was once almost sacred...now it's non existent. I keep reading that we're spending our children's inheritance and that they'll have to pay to get us out of this debt. That's a joke. We're not in debt...we're insolvent! Broke. Bankrupt. And they want to print trillions more!

[arthurus]

When you have HALF the population dependent on the government for their livelihood, HALF the population who don't pay ANY income taxes

then HALF the population is a constituency for higher taxes and higher government spending and with a newly much empowered ACORN maybe 60% of counted votes .

[kellynla]

who says “Communism is dead!”

[Crolis]

Seconded. Great column.

[listenhillary]

Tolik

See ping list at post 19

[The Pack Knight]

Yet most disgraced Wall Street elites will retain their mega-bonuses and will not go to jail.

Well, running your company into the ground is certainly a bad thing, but, last I checked, it wasn't a crime. This is what shareholder derivative suits are for.

A big problem, though, is that many, if not most, directors have clauses in their contracts whereby the corporation is obligated to indemnify the directors against any judgments or settlements arising from their duties on the board. The best thing would be for state legislatures or courts to declare these terms void as against public policy. The directors and executives of these companies SHOULD be held responsible, but by their shareholders, not by the state.

[caseinpoint]

My “patriotism” went to a strong agreement that it includes a civic duty to pay every penny I can to taxes, as I think Biden defined patriotism. I love this country and will not do anything to undermine the Constitution or the basis for government under it. It does mean I won’t necessarily put myself out to save Obama and his administration from their own folly.

[HowlinglyMind-BendingAbsurdity]

"The result is the same. Our best educated, wealthiest and most connected in matters of finance proved our dumbest -- and our political leaders were less than ethical in meeting their moral responsibilities as citizens. If ordinary Americans were to follow the examples of Wall Street and Washington elites, the nation would neither collect needed revenue nor invest its capital. All that is a recipe for national decline and fall."

Holy θυμος, Batman!

Yes, but they read Fanon, Nietzsche, and Toni Morrison with Monarch and Cliffsnotes in college, so they must be really smart, right?

[caseinpoint]

Thanks. I always file. Some people can handle the stress of skating along the legal requirements of filing but I have enough stress in my life without adding more. This tax year and next should be interesting to watch.