COLUMN: You Broke It, You Pay

By Tobin Barnes
At first glance, you’re going to think I’m nuts, but please, withhold your scorn until I’ve explained. Here’s my proposal:

We need a new tax.

Easy! Settle down and hear me out.

It’s what I call the I-Screwed-Up-the-Nation Tax.

I’ll let the bureaucrats decide a better name later. They’re good at that.

For example, it’s tough to beat their acronym T.A.R.P. for the $700 billion bank bailout program. Few know that the name comes from some Latin words that roughly mean “The bank system ruined our lives so let’s throw a tarp over it.”

That’s a good one. But for now, I’m sticking with I-Screwed-Up-the-Nation Tax as the name of my proposal. That’s right, some people screwed up the nation, if not the world, if not for years, in their selfish quest for bigger and bigger bonuses and commissions.

In many cases, hundreds of thousands of dollars of yearly income that could buy McMansions wasn’t enough for these people. Nay, millions of dollars that could buy planes and Jaguars and family compounds wasn’t even enough. Nay, tens of millions of dollars that could buy islands wasn’t even enough. Nay, hundreds of millions that could endow families in leisure for generations wasn’t even enough.

These people wanted more. So they took advantage of a regulatory system that was asleep at the switch and peddled mortgage packages that doomed millions of victims and thereby the nation to failure.

It doesn’t take 20-20 hindsight. It was a pyramid scheme based on adjustable-rate mortgages that any reasonable businessman knew was bound to come tumbling down when the bubble eventually and predictably burst. It was a predatory system, and, strangely enough, some wags blame the prey for the mess it’s made of our economy. But who, other than those living as hermits in caves, doesn’t dream, doesn’t aspire? All those not guilty, cast the first stone.

No, I blame the predators who knew they were wheeling and dealing loans that were bound to fail, all for the bigger commissions, all for the bigger bonuses. And how about the predatory financial wizards who packaged these loans into securities they knew were bound to go bust with the first hiccup in the economy.

Didn’t seem to bother them a bit. They got their cash up front and they’ve probably still got it. Everybody else is holding an empty bag, but their bag’s still obscenely chubby. And they’re still in the leadership positions and jobs they were in before.
They screwed up the nation (if not the world, if not for years), and there have been no consequences for them.

And who are “they”?

They’re the people at the top who didn’t realize these schemes were saturating their business plans despite their hundred-million dollar salaries (it seems that the more you make nowadays, the less you have to know about what’s going on). And “they” are also the people at the bottom who coaxed unqualified lenders into financing and refinancing mortgages they could never repay.

But the bottom “they” were only following company directives pushed on them by the higher ups, right? Yeah, but “they” had to know what they were doing just like the “theys” on the top. The culpability is widespread.

Now, some commentators would like to see a lot of these shysters, especially the top ones, in jail for what they did to the economy. Maybe, maybe not.

Me? I’d rather just see them cough up their ill-gotten gains by paying their fair share of the new I-Screwed-Up-the-Nation Tax.