The Watering Hole, Saturday, September 21, 2013: Pru Too Big, Too

The Financial Stability Oversight Council, a US Treasury Dept agency created with the passage of Dodd-Frank, has designated insurance giant Prudential Financial as “too big too fail,” a move that forces the third non-banking institution so designated to undergo additional oversight and stress testing to avoid the kind of financial crisis we endured before. The Pru joins American International Group (better known as AIG) and General Electric Capital Corporation (better known as GE Capital) as non-banks to earn the distinction, and it’s one they don’t want. The FSOC “determined that material financial distress at this company — if it were to occur — could pose a threat to US financial stability,” but they stressed that there were no signs of trouble at the moment. The Prudential said in a statement that it is “reviewing the rationale for the determination and our options.” The rationale, I’m sure, has to do with the fact that Prudential has over a trillion dollars in assets worldwide. If they were to engage in extremely risky behavior they could bring about global financial ruin. They should be scrutinized more closely.

Better yet, they should be broken up into smaller companies that can’t be bring down the entire global financial markets should they fail. “Too big to fail” is the same as “too big to exist.” No person and no corporation (they are not the same thing) should ever be so big and financially powerful that they could bring down the world economy should they stumble. That is not a sound financial footing. I’m neither an economist nor a person educated in the field of Economics, but I can promise you this: No economy can work if the money within it doesn’t circulate. If all the money is in the hands of too few people, then it stands to reason there isn’t enough leftover for everyone else to use. Hoarding more money than you’ll ever need to use in your lifetime is not just selfish, it’s actually harmful to everyone else. In order for society to function, people need to have money to spend to get the things done that they need done. For example, I’ve got a gutter that needs to be repaired. Money’s a little tight right now so I can’t get it done. If I could, the gutter repair company would not only fix my broken gutter (which could save me money down the road form damages caused by the broken gutter), but they could take the money I pay them and use it not only to pay their workers, but also to pay for the materials they used to fix my gutter. Their workers, in turn, would take their paychecks and go to the store to buy groceries, and the companies from which they bought their supplies to fix my gutter would use their money in a similar way. And the money would move from one business to the next, into the hands of the workers, who in turn would circulate the money around getting the things done that they need done. None of us are getting rich off the one or two transactions we have with that money, but we’re all getting what we need. That doesn’t happen when rich people sit on money they don’t need. (And, no, their investment into more stocks does not help the economy nearly as much.) What good is having more than you need? How do you benefit from excessive selfishness? And why do we treat the philosophy of Selfishness as something positive?

To paraphrase Aaron Sorkin, the Republican Party has been so busy trying to keep their jobs that they forgot to do their jobs. The Tea Party faction (a project of the Koch Brothers and their ilk) has got the semi-normal members of the party so frightened of losing their jobs that they cave in out of fear of being primaried out of Congress. The result is forty-one pathetic attempts to defund Obamacare. I keep hearing them say how Obamacare is “destroying” the country, yet I never once gear exactly how this is happening. No one ever truthfully explains how the law is harming our nation. What I do hear is example after example of how conservative business owners are trying to get around Obamacare by cutting employees’ hours so they won’t have so many full-time workers who are eligible for health insurance. In other words, because some people will be selfish, everyone has to suffer. Instead of denouncing the greedy business owners, conservatives have held them up as examples of what could go wrong with healthcare reform. “Obamacare is bad because greedy, selfish people like me can take advantage of it and my workers.” Maybe the law needs to be strengthened, not repealed.

This is our daily open thread. Feel free to talk about Prudential, the Koch Brothers, your greedy, selfish Republican relatives or anything else you wish to discuss.

38 thoughts on “The Watering Hole, Saturday, September 21, 2013: Pru Too Big, Too

  1. ” . . . why do we treat the philosophy of Selfishness as something positive?”

    As Gordon Gekko noted, “Greed is good.” I see it more as proof of evolution, proof that humans are maybe a step or two below Pasture Bulls on the evolutionary scale. ‘Below’ pasture bulls because while pasture bulls only want to screw every cow in the herd, their human equivalent wants to screw everyone and everything that’s out there anywhere. See Gordon Gekko along with the entire nonfictional embodiment of Wall Street . . . and most of DC as well. Keep barf bucket handy.

  2. What ‘Defunding Obamacare’ Really Is About

    Medicare surtax on wages and investment income: The law raised the Medicare tax on wages and subjects investment income to a Medicare tax for the first time.
    But the changes only affect high-income households.
    They will owe another 0.9% on their earned income over $200,000 ($250,000 if married). That’s on top of the 1.45% Medicare tax that they currently pay on all of their wages.
    For those making more than $200,000 ($250,000 if married) and who have investment income, they also may be subject to a 3.8% tax on at least a portion of their capital gains and dividends.

    As the Bush tax cuts expired, the Capital Gains rate went up from 15% to 20%. This part of the law adds another 3.8% to that 20% for high earners,(see the chart at the 3.8% link), plus opens up all that income to Medicare taxes as well. When you hear any Republican saying that Obamacare has to be repealed, this is really why. If a Republican merely says there are some parts of the law, like the individual mandate, that they’d like to see changed, they’re not on the inside with the Koch Brothers’ Americans For Prosperity.
    A guest on Thom Hartmann the other day mentioned this, almost in passing, and it’s the real problem the Rs have with the law. Like Nancy Pelosi said, we had to pass it to see what was in it.

    • I disagree with his premise that Democrats are equally to blame for the dysfunction in Washington. He’s using the old “both sides do it” excuse. Well how many goddamn times do the Democrats have to vote No on repealing the ACA? How many times do they have to vote No on anti-abortion legislation? What else have the Republicans been offering, besides naming Post Offices?

  3. Pennsylvania Priest Caught With Pantless 15-Year-Old

    A Catholic priest in Pennsylvania has been charged with molesting a teenage boy after police said he was found in a car on a college campus with a 15-year-old who was wearing no pants, according to a police criminal complaint filed Friday in Lackawanna County.
    The Rev. W. Jeffrey Paulish was charged with one felony count of involuntary deviate sexual intercourse and one felony count of unlawful contact with a minor after Dunmore police say they found him and the boy on Thursday in a car on the Worthington Scranton campus of Penn State University, according to the complaint.

  4. We saw this on the season premiere of Key & Peele. You don’t even have to know anything about the movie “Les Mis” to appreciate this parody. If you ever saw any of the commercials for it, you’ve seen enough. (Not sure if the link will work, but if you have to go to Youtube to see it, it’s worth it.)

  5. Kanye West declared himself the “No. 1 rock star on the planet” during an interview with BBC Radio.

    I don’t know which planet he’s referring to, or if he knows what the words “rock star” mean, but it’s a safe bet that Kim will be his Yoko.

    • This has reached the point where it has ceased to be a domestic issue. The world cannot stand idly by.

      Role reversal…how do you like that NRA – see how the world view your sorry arse…

  6. Rep. Eric Swalwell- D Pleasanton, raises eyebrows with ‘wet dream’ comment

    I rise in strong opposition to this radical right-wing effort to walk our economy off of a cliff and cause a government shutdown,” the freshman lawmaker said. “I invite my colleagues on the other side to wake up from this radical, ideological wet dream, and come back to reality.

    • Everything the Reich passes in the House is their most recent wet dream! I think I remember using the same language not that long ago.

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