Civilization Lost

There were several articles in today's Wall Street Journal (April 14, 2008) that makes one wonder about the state of our society. One was about elderly folks on fixed incomes throughout the country who are losing their homes through foreclosure because slick talking mortgage brokers persuaded them to unnecessarily refinance mortgages, obtain reverse mortgages or take out home equity loans. Many of these people had lived for decades in their homes and had built up substantial equity or had completely paid them off. A lot of them were victims of fraud as the unscrupulous brokers filed false loan applications and did not advise the homeowner of the high fees, adjustable rates and other explosive terms involved in the refinancings. Since the borrowers incomes are so low, usually just monthly payments from social security, they do not qualify for government sponsored mortgage relief programs.

On the flip side, we read that Goldman Sachs, a company that received bail-out funds (and generated a sizable first quarter profit), is issuing $5 billion of new shares so they can pay the government back. While it is admirable they want to pay back the money they apparently didn't need, the reason for doing so is to release their executives from the compensation restraints imposed by the government on financial organizations receiving bail-out funds. This will allow them to quickly increase their pay from the paltry minimum of $1 million that nearly a thousand of them received last year to their more traditional multi-million dollar levels.

There is something very wrong with a country that uses taxpayer money to bail out millionaire bankers and financial advisors while letting low and middle class folks lose their modest homes to foreclosure, particularly when the foreclosures are the result of financial fraud.

Another article discussed how pilots at American Airlines are demanding that their average salaries and benefits be increased by 50% from the current $225,000 per year to $337,500 per year. Granted that airline pilots have some of the most awesome responsibilities of any occupation (certainly significantly more than Goldman Sachs investment bankers), but is this a good time to be demanding big increases given today's economic environment? And for any occupation, when is enough enough?

Perhaps it is time for Americans to pause and reflect on what our country's culture and principles have evolved into. We are no longer a society that believes in fairness, integrity, compassion and justice. Americans are now all about unrestrained greed, self-centered narcissism and gluttonous hedonism. We demand it all and we demand it now, and the hell with everyone else. And when the bubbles burst it seems to me that our government could have displayed a little more compassion and support for the victims of the financial frauds and Wall Street excesses by helping those lower and middle class folks who did nothing wrong instead of bailing out and sustaining the lifestyles of the rich and famous.