By William J. Furney
The Bali Times
Capitalists gathered in the wintry-scenic town of Davos last week, scratching their frozen heads and wondering where capitalism had gone.
Down the toilet.
Fawning media outlets hovered and waited for “answers” to the current fiscal predicament from the assembled chieftains of global finance, only to get what they do every year at this annual back-slap fest: enough hot air to get a flotilla of balloons aloft, and little else.
Meanwhile, corporate titans who had just been bailed out to the tune of hundreds of billions of dollars, thanks to the accommodating US government, were busy doing their bit to prop up the downward-spiraling global economy: splurging on private jets and an array of other luxury items – for their personal office space.
And as taxpayers’ cash poured into their coffers, the banks were going full-steam ahead in doling out tens of billions of dollars in bonuses to their staff. If these employees had been performing so well that they were deserving of hefty bonuses, why are the institutions they work for teetering on the edge of bankruptcy and having to be bailed out by emergency government funds?
As Maureen Dowd wrote in her New York Times column last week, “How could Citigroup be so dumb as to go ahead with plans to get a new $50 million corporate jet, the exclusive Dassault Falcon 7X seating 12, after losing $28.5 billion in the past 15 months and receiving $345 billion in government investments and guarantees?”
They just don’t get it.
Meanwhile, in Paris, thousands were out on the streets rioting against the economic calamity, in a possible portent of things to come everywhere.
It seems clear to me that what’s happening is economic evolution, but there’s a twist that doesn’t abide by the Darwinian rules: some of the unfittest have survived – at least for now – propped up with great vaults of cash.
There’s no doubt that an economy that is based on credit, as in America, the UK and other European countries – wallets full of cards and similarly easy availability of car and house loans – is not built on solid ground. It has been the “Have it all now!” way of life that has curdled into the “What happened?” way of life. Grandparents (the sage ones) the world over, who saved up before they bought something substantial, are now vindicated in their “living beyond your means” comments that fell on deaf materialistic ears.
However, as we hear daily of another massive round of corporate layoffs, there is solace: Bali, hit by one storm after another yet seemingly growing stronger with each strike, is benefiting. The Miami Herald carried a report last week that given the rise of the US dollar against most currencies, Bali as a vacation destination is now more affordable than ever.
“This Hindu-majority island and tourist destination near the center of Indonesia’s archipelago has always offered bargains. But a series of factors has made it even better, including the impact of the global recession and a 20-percent strengthening of the US dollar against the Indonesian rupiah since 2006,” its visiting reporter, Craig Simons, wrote.
Meanwhile, Barack Obama has rightfully taken a swipe at the corporate leaders – an oxymoron if ever there was one – that are responsible for the global economic downturn yet continue on their wastrel ways oblivious to public sentiment, calling them “shameful,” and there’s plenty more that can be said about these legendary fat cats who continue to raid the pantry and pile on the pounds at everyone’s expense.
Hear the wails in the corporate corridors this week as Obama imposed a cap of half a million dollars on top pay packets – compensation that has ranged in recent years from $3 to $20 million annually, and more. Just how will they survive?
The corporate sector hit back by saying their brightest stars, facing vastly reduced salaries, might well defect to elsewhere. Let them.
Judicious Obama on Thursday (Bali time): “For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis is not only in bad taste – it’s a bad strategy and I will not tolerate it as president.”
When this unsettling episode finally plateaus and a sense of normalcy returns in the markets and financial institutions, it will surely be a far more level playing field, and a much sounder one at that.
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