Now, if that doesn’t frighten you, I don’t know what it would take. For all of you concerned about the nationalization of the banks, I’d like to offer that it may have already happened. The power of the entire banking community rests with seven players. That opens up all kinds of difficulties not the least of which being the lack of competition.
I conjectured last week about who is going to carry Wall Street’s responsibilities going forward vis-à-vis raising capital for the nation’s business. I told you that it would be the banks. Today, I amend that to read seven banks.
Seven banks holding the nation’s capital raising in the palm of their institutional hands…and you think the fees are exorbitant now?!
The one great thing that I saw last Friday was Goldman-Sachs saying to the government, “upon further review, you can have your money back.” Now, why do you think they did that? Do you think it had anything to do with the government dictating compensation? Of course it did, but more importantly it had to do with Goldman realizing that the government is going to be their competition when it comes to raising capital and they simply have to be licking their chops at that prospect. Who wouldn’t want to compete against the government? If Goldman-Sachs re-enters the arena as a true investment bank, and I pray God they do, then that will give others courage to jump in as soon as they realize that the water is fine.
Folks, you do not want the government raising money. You do not want legislators running companies, and you do not want the Supreme Court of the United States sitting on boards. I would pose the following; what is wrong with paying somebody market value? America paid Michael Jackson tens of millions of dollars to grab his private parts; America paid Paris Hilton millions for being Paris Hilton; America paid Alex Rodriguez 270 million dollars to commit baseball fraud.
Now, before you say that America did not pay them, I would point out that America bought the tickets and provided the celebrity. We did the same thing for business leaders. Free markets create this kind of thing, and it works. Is it nuts? I don’t’ know. It is not for me to say, but this much I do know; if we are going to restrict the pay of anybody in American business; then we need to restrict it across the board. Movie stars cannot make more than the President of the United States especially if the studio gets a tax break (and they do). Look what Michigan is doing for filmmakers. How is that any different? The point is that it is not. The difference is that Wall Street is foremost in your mind because the media will not let it go. You want evidence? Try this on for size; what do you think happens to the stimulus debate if we are attacked on our soil tomorrow? Where do you think the media, and us as a result, commit our attention?
Your Honor, I rest my case.
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