Republic Gone Bananas

It wasn’t the sight of members of Congress fleeing the Capitol building last week after the debt ceiling debacle that startled me. It was the policeman armed with an M16 combat rifle outside the House of Representatives, guarding them.

 

The New York Times piece never mentioned the cop. Nor did the caption on the photo by Stephen Crowley. Only one of the hundreds of people who commented on the story online mentioned the unknown officer.

But that was the real story to me.

Yes, the debt ceiling got raised – that was never seriously in doubt, because the financial consequences of default would have been devastating even for the Tea Partiers…. especially for the Tea Partiers. Slightly more interesting was the question of whether the president and the Dems would negotiate their way out of the paper bag the Tea Party people had put them in. (Nope.)

It was the heavily armed Capitol policeman that summarized for me all that has happened to this country over the last decade as we slid into a stinking pool of fear, anger and greed so at odds with our heroic journey. To see that kind of weaponry at the greatest living monument to democracy seemed undeniably to question it.

Maybe some members of Congress have concluded that they need more guns to ward off a nut job like the one who opened fire on Congresswoman Gabrielle Giffords and passers-by in Tuscon last January. But a machine gun on the steps of the Capitol building seems like way more firepower than necessary to stop a lone assassin.

It reminded me of the images we have come to expect from banana republics where the corrupt leaders treat themselves like royalty, insulated from the struggling populace by security men wielding polished pistols or machine guns.

When I lived and worked in Washington in the Seventies, the Kennedy and King assassinations were only a few years old and the wounds were still raw.

 

 

 

Shockingly, President Reagan was shot at the Hilton up on Connecticut Avenue, just after taking office in 1981. But no one – least of all Reagan, who deeply understood the power of imagery and symbolism – would have permitted the conduct of lunatics to steal our freedom and trap us in a mental state of siege.

Or is it simply that the moment has come when the rulers must protect themselves from the ruled?

Around The Web: Wall Street Rules

When it comes to the big money, we’re still playing by Wall Street rules.
For example, California pension officials are paying their investment advisors hefty bonuses  even though the funds suffered whopping losses in the real estate crash, an investigation by Associated Press found.

The pension fund faces unfunded liabilities of billions of dollars, though there are sharp differences about the exact amount.

While the rest of the state suffers layoffs, cutbacks and furloughs, life is good for the crew at CALPERS. Fifteen employees were paid more than $200,000 – two more than two years earlier. Though the fund lost nearly $60 billion, all the funds investment managers got bonuses of more than $10,000, and several got more than $100,000.
CALPERS’ generosity extended beyond its investment advisers; the agency also gave its public affairs officer nearly $19,000 in bonuses for two straight years, and a human resources executive who got nearly $16,000 for those years.
Officials at CALPERS offer a variety of explanations: they say the bonuses cover 5 years to encourage their advisers to think long term, not short term. As a result, some of the managers’ funds that saw the steepest short-term declines got the largest bonuses. They have to pay the big bonuses despite the losses because they’re contractually obligated. They insist they have to pay the bonuses because if they don’t, their investment advisers will go to work at hedge funds.

Sound familiar? These are the same explanations we got from the big, bailed out banks who insisted that they had to hand over huge bonuses even though had to go on the dole.
CALPERS’ bonus system seems guaranteed to give its investment advisers lavish bonuses. When times are tough, the bonuses are a little less lavish. But none of the investment experts are actually accountable or will lose out for plunging the state’s pension in too deep into an unsustainable real estate bubble.

California’s pension system is hardly alone in making sure that those who manage its money are rewarded handsomely whether they win or lose.

In Massachusetts, the executive director of the state employees pension fund quit earlier this year while the Legislature contemplated a pay cap. Michael Travelgini, was paid a base salary of $322,000. In 2008, even though the fund’s investments lost money, they did better than other states, so he was given a $64,000 bonus.

Travelgini said the state’s investment managers weren’t paid enough. He’s going through the revolving door to work at a hedge fund that does business with the state, though he won’t solicit the state for a year.

These compensation issues are a strong reminder for the rest of us the lingering issues of the bubble culture. The people who run the pension systems seem to have been infected by the culture of Wall Street and forgotten whose money they’re managing. It will take a powerful disinfectant to remind them.