Vital to the United States - so they have said

It seems that this past Friday Citigroup had its stock fall beneath $4 a share. Just some weeks ago they were floating plans to buy Wachovia, another embattled financial institution, now they are being lumped into the "too big to fail" group. I will freely admit that I do not understand much of the intricacies of the financial markets, I also admit to being less than heartened by the fact that those who are supposed to understand the whole thing apparently need frequent tutorials. Here is what I do know, in 2002 the Organisation for Economic Cooperation and Development (OECD) found that the United States was the most unequal society of all industrialized nations and there has been plenty of time spent on discussion of a new gilded age where the top 1% control roughly 20% of the wealth (conversely, the bottom 80% manages some slippery control of about 17%!). But hey, as I referenced another time, in another context, as late as this time last year, there were those who were championing the idea that what was of importance was the "narrowing range of experience" - after all, "the distance between driving a used Hyundai Elantra and a new Jaguar XJ is well nigh undetectable compared with the difference between motoring and hiking through the muck."

It seems that much of that has changed with a growing global food crisis and a projected collapse of 1 in 57 banks. We have a massive banking bailout that is significantly higher than the $700 billion figure that is typically thrown about, a sum that left even those who are fans of Treasury Secretary Hank Paulson concerned about the "prospect of unelected officials putting massive amounts of taxpayer resources to work without transparency or approval from Congress, and without a clear process at work, is indeed troubling." And it is the complete lack of transparency that troubles me most. Recently the Treasury released its "custodian" contract for implementing the lithely named Emergency Economic Stabilization Act of 2008 which expressly states that "the Treasury may designate [private] Financial Institutions as financial agents of the United States . . . " Buried at the end of the document, however, is the troubling bit.

For all the shoddy talk that has been spread about concerning golden parachutes and whatnot, apparently it is unnecessary for the American taxpayer to know what the designated financial agents are to be compensated for their efforts!

Of course, the plan has abruptly and awkwardly changed from the buying of "toxic assets" and it remains to be seen what is going to come of the whole mess - though the initial reaction has not been entirely to the good. But I would be surprised if there was an opening up of the accounting books in any later versions. Let me reiterate, I do not know much about many of the financial tools that are in play here (though I don't believe many other do either) but I see little to suggest in all of this that anything has changed from two years ago (almost to the day) when Warren Buffett went on record saying "There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” The even more recent $25 billion tossed to the Big 3 auto makers doesn't even really try and hide any of this. The money has few strings attached to it and (at least as it regards Chrysler) it is being given to a private company.

Ok, so let's allow for the seasoning that golden parachutes and extravagant AIG retreats have added to this witch's brew, but the discussion for the great bulk of this whole thing has been about sub-prime loans and now (with the automakers) legacy payments. The former is financial speak for "overreaching poor folks" and the latter refers to health care and pension guarantees won by unions. We need not even consider that in the last twenty years the word "liberal" has become something akin to political poison but . . . in an environment when a community action organization has been accused of being at the heart of both the sub-prime crisis and a grave threat to the very fabric of democracy, I don't think the class warfare is over though I do know which side I would put my money (what little of it is left) on.