Risk and Reward

A lot of this is very similar to the first post on this blog, written in May. I hate to rehash the same old topics, but government doesn't ever seem to want to actually change anything, so these things tend to keep coming up.

In this article by Mike Shedlock, he states his outrage for the lack of outrage toward Wall Street, the Federal Reserve, the Treasury, etc. Mike talks about how the bailout-enriched Goldman Sachs is at it again, where "it" is huge bonuses and questionable merits. (Note: technically GS was not a direct bailout recipient, but of AIG's $70 billion bailout, they immediately paid 13B to Goldman. Well, that worked out well!) He links to many other sources and articles, but the highlight of it all is this quote from Rolfe Winkler:

"Main Street still owns much of the risk while Wall Street gets all of the profit."

That is the point of everything. And I'm not even using hyperbole there. When it comes to the entire US economy -- yea, the entire financial system -- this is the crux of everything. The common person (Main Street) ends up bailing out the rich when things go bad, but in better times, the spoils all go to the "Masters of the Universe." The risk/reward is completely screwed up.

The #1 thing we can do about this is support getting rid of, auditing, limiting the power of, or basically hindering in any way possible, the Federal Reserve. Take away this "lender of last resort" to fall back on, and certain companies couldn't joy-ride their RIDICULOUS amounts of risk to huge returns until the bottom falls out, then get bailed out, and do it all again. IT WOULD NO LONGER HAPPEN. Companies would fail as the result of bad leadership. And you know what? That's good. We need that. Because at a time where we have 10% unemployment, some of the tax money of those recently unemployed was sent, just months ago, to companies that are now paying out $Million+ bonuses to their executives. That...is outrageous.