San Juan Mountains

San Juan Mountains
San Juan Mountains: Grenadier Range

Monday, June 6, 2016

Matt Damon Should Stick To Acting

I enjoyed the Bourne series of movies.  After watching the first one I got hooked and had to finish the entire series.  If I am remembering them correctly, and I am probably not, I particularly appreciated the emphasis upon the fact that the government is never to be trusted.  As I recall the various branches of the government of the Socialist Democracy of Amerika involved in spying on behalf of the empire were portrayed as heartless, cold-blooded killers who cared about nothing more than protecting their own piece of government turf.  Matt Damon played Jason Bourne, a man who had once worked for the spying machine and then had a change of heart about going around murdering foreign nationals for fun and profit.
Last Friday Matt Damon delivered a commencement address to the graduating class of MIT.  CNBC.com reported the story, in part, like this, "Hollywood actor Matt Damon branded Wall Street as a cabal that 'steals people's money,' right before making a thinly veiled endorsement of Massachusetts' freshman Democratic senator Elizabeth Warren....the Boston-bred Damon gave a politically tinged speech that also took aim at presumptive GOP nominee Donald Trump, the media and elected officials. Damon excoriated politicians who are 'incentivized to think short term, and simply do not engage with long-term problems.'  Yet Damon—an outspoken Democrat who has endorsed Hillary Clinton—reserved some of his harshest critique for bankers, which he faulted for the 2008 financial pandemic that reverberated through the global economy. Ironically, Clinton has come in for sharp criticism for her ties to the financial industry, cultivated during her tenure as New York's junior senator.  Calling the crisis 'the biggest heist in history,' the actor insisted that financial institutions were aware of the ramifications of their actions, which he called fraudulent. 'It was theft, and you knew it. It was fraud and you knew it, And you know what else? We know that you knew it...I don't know if justice is coming for you in this life or the next but if it does come in this life her name will be Elizabeth Warren.'"  Let's consider Mr. Damon's comments for a bit here today.
I will take Damon's comments in the order they were presented in the CNBC.com report.  According to Wikipedia, a cabal is defined as "a group of people united in some close design together, usually to promote their private views or interests in a church, state, or other community, often by intrigue, usually unbeknown to persons outside their group."  I find it fascinating that Damon would choose to define the investment bankers who operate on Wall Street as a cabal.  The various companies involved in investment banking on Wall Street are highly competitive, especially with one another, for business.  To allege that they have formed some sort of secret society with the goal being to destroy the wealth of the citizens of the SDA sounds a bit paranoid to me.  Furthermore, the idea that what goes on inside the board rooms of these investment bankers is top secret defies belief.  Everything they produce and sell to the investing public is precisely that, public.  There are no secret investments, despite what you might have been told about "Wall Street fat cats," that are not offered to the public.  Everything that goes on within Wall Street investment banking firms is designed to produce investment products the public will want to invest in.  Damon's position that they constitute a cabal is ridiculous.
Damon could have taken the opportunity to pontificate about some of the real cabals that exist in this immoral country if he had wanted to.  He could have talked about trade unions and how they create unemployment by restricting the supply of labor available to profit seeking companies.   He could have talked about professional licensing laws that require anyone who wishes to be a doctor, a lawyer or a taxi cab driver to be a member of the cabal first.  He could have talked about all of the cabals created by the gigantic body of commercial rules and regulations that exist in this country but he didn't.  I wonder why?
Matt also confidently declares that Wall Street investment banking firms "steal people's money."  Well, I guess if having a person voluntarily enter into a contract to give some of his money to an investment banking firm in the expectation of a return on his investment is an act of theft, then Matt is right.  I just have a hard time defining theft as anything that takes place voluntarily and in the free market.  How Wall Street bankers steal other people's money was not described.  Maybe he went into more detail in his speech.  What I find interesting is how Matt came to his conclusion.  Certainly, given the hatred for financial institutions that exists in this socialist and post-Christian society, somebody should have been arrested, tried and incarcerated for theft by now. Other than Bernie Madoff, who I don't believe Matt is talking about in his speech, none of those Wall Street profiteers Damon despises so much has even been indicted for theft at this point.  I wonder why Matt concludes that Wall Street bankers are a cabal of thieves?
The most ignorant statement that came out of his mouth last Friday, actually a series of statements, had to do with Matt's opinion on what caused the Great Recession.  Like all other worshipers of government in this envy-filled country Matt believes that the free market was responsible for the Great Recession.  In particular, he believes that financial institutions operating freely on Wall Street created the Great Recession for their own, as yet undisclosed, evil motives.  At first blush Matt's argument is hard to swallow.  The most hard hit corporations in the country during the Great Recession were financial corporations.  Remember Lehman Brothers?  It was the 4th largest investment bank in the world when it collapsed in 2008.  If the goal of the investment bankers was to steal money and enrich themselves they did a pretty poor job of it.
Damon proudly declares that he personally knows with absolute certainty that the as yet unnamed investment bankers on Wall Street he is speaking about knew they were behaving fraudulently when they created, packaged and sold mortgage backed securities stuffed to the gills with subprime mortgages.  I wonder where the fraud took place?  Did it take place when the Clinton and Bush administrations threatened to fine into oblivion any mortgage company that refused to issue billions of dollars in subprime mortgages to unqualified buyers?  Did it take place when mortgage companies were sued by agents of the federal government for refusing to issue mortgages to black people because those black people, imagine this, were not qualified to own the mortgages?  Or maybe it happened when, to alleviate the risk associated with all of those horrible mortgages they were forced to sell to unqualified buyers, Wall Street bankers followed a tried and true risk reduction strategy and packaged those subprime mortgages into mortgage backed securities, thus reducing the potential risk to investors by spreading the risk of bad individual loans around an entire package of loans.  I wonder, did fraud take place when government sponsored bond rating organizations declared the mortgage backed securities created by the investment banking firms to be of much higher quality than they actually were?  Matt, as far as I could tell, never really explained where the corporate fraud took place.
Matt failed to mention that the collapse of the mortgage backed securities market that triggered the Great Recession took place because the federal government, attempting to assign blame and punish profit seeking companies for the recession of 2001-2002, changed the rules on how those securities were to be valued on the balance sheet of the firms.  A new rule, called "mark to market," forced the investment banking firms to value the government mandated mortgage backed securities at zero value when the market could not immediately assign a value to them.  Given a little time the free market would have sorted it all out and each security would have been assigned a free market value.  That time was never permitted.  Nancy Pelosi fearfully announced that if Congress did not do something there would be no economy in the SDA the next day.  So Congress and Treasury did something and several investment banking firms were suddenly bankrupt even though they were quite solvent, with tons of cash on hand.  Maybe fraud took place when, immediately after those mortgage backed securities were valued at zero, the Federal Reserve, operating under the Treasury directive that no mortgage backed securities could be sold in the free market, established a fiat money slush fund, called Maiden Lane, and purchased all of those securities at deep discounts from their true value.  I am not a financial genius like Matt Damon but it sure looks to me like fraud took place when the Fed eventually sold all of those mortgage backed securities back into the free market with huge profit margins, causing the Federal Reserve to be the world's most profitable company for two years running.  None dare call that a cabal because the god of civil government was involved. 
The most outrageous claim made by Matt during his speech was his prediction that the avenging angel by the name of Elizabeth Warren is coming to get those evil profit seeking corporations that operate on Wall Street.  Apparently Warren is hugely popular with the Hollywood set.  Warren, for her part, is also an economic idiot and a liar to boot.  Go here for the story.  Those twin attributes make her a perfect career politician.  If Hillary does not end up being our first Queen, I am pretty certain that Queen Elizabeth will rise again four years from now. 

No comments:

Post a Comment