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posted by Logical

In reply to: Galis: What's a workable principle for taxation? »

November 30, 2012

This country was at it greatest when the top tax bracket was over 70%, it was in really crappy shape when the tax rates were the lowest in 50 years. G.W.Bush presided over two recessions and two major stock market crashes. But something that is more insidious...let's look at the culture the tax slashers created. Under Ronald Reagan, we had the savings and loan scandal. Under Reagan we had Michael Milkin and the junk bond debacle. Under Bush we had the Enron debacle, the banking meltdown which almost led to the destruction oc our economy and Capitalism as we know it. Bush's yes man Treasury Secretary, Hank Paulson chose to let Lehman Brothers go under. He chose to save Goldman Sachs, the company he led for 14 years. He chose to save AIG so tha they could pay Goldman Sachs every penny that was owed the. If he had saved Lehman Bros. it can be argued that the market would not have been spooked. We will never know. These people that have the idea that, once in power--
whether it is a President, who is bought by corporate interests, or a CEO like Ken Lay who was Bush's best friend and was on the Energy Committee with Dick Cheney that created the policies that allowed Enron to screw the investors and employees of trillions of dollars-- there is a pervasive sense of entitlement. These people have a sense that they have become very wealthy for whatever reason, and to he'll with the 99% that is struggling. I worked many years for Smith Barney, a once proud, honorable firm that valued its employees and treasured their clients. I watched as Chuck Prince, a lawyer that didn't know his a$$ from his elbow start the downward trajectory. He first slashed the brokers salaries (brokers are not traders, brokers are the hardworking backbone of a financial advisory firm) and he got a multi million dollar raise. The firm continued downward, fostering the growth of hedge funds and crappy investments. When the board fire Prince he walked away with over $15,000,000 in severance pay--FOR MASSIVE FAILURE! They put Vikram Pandit in as CEO. Vikram was a failed hedge fund manager (tax rate 15% because his compensation was not a "salary"). He was a total disaster. Citigroup (the mother company of Smith Barney) stock dropped from $58 to 87 CENTS. They fired Vikram this year and he walked away with millions. I sold all if my Citigroup stock at $58 and left the firm after one conference call where Vikram Pandit lied to all the employees. We knew he was lying through his teeth, and he knew we knew, and he didn't give a flip. Basically we were told if we didn't like it we could leave. And thousands of us did. That year, at my new firm alone, they hired over a thousand ex-Smith Barney brokers. This is a long way of telling you that these people are bad for Capitalism because they engender a sick culture that, by its nature, makes the rich fabulously rich, and it does everything to prevent the lower classes from even getting a foot on the bottom rung. These hedge fund managers and pathetically stupid CEOs do NOT work hard. And, while 90% of the CEOs do work hard, and are great leaders (Jamie Dimon is one of those) there is no reason that the disparity between CEOs and workers salaries should be so vast. Sorry for the long post.

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