Saturday, January 14, 2012

Five 1%ers behaving badly



1. Here is a Mexican tycoon breaking a parking attendant's teeth because he wouldn't leave the counter to help the tycoon change a tire on his Porsche. The tycoon, Miguel Sacal Smeke, owner of the Nino Sacalli textile group, also owns condos in Aventura, Fla., according to the Mexico Unmasked blog.

The incident took place in a posh Mexico City condo high rise on July 8 last year. According to Mexico Unmasked, the video has gone viral in Mexico. Sacal responded by apologizing to the valet, who lost his job, and giving him money.
(H/T The Naked Capitalist)

2. Michigan billionaire and union buster Matty Moroun was sent to jail by a judge because he failed to complete a $230 million bridge linking the U.S. to Canada. The Daily Mail reports,
Detroit International Bridge Co. was declared in contempt of court in November for failing to finish work on the state ordered project linking the U.S.-Canada span with two Detroit interstates.
The bridge, which handles 8,000 trucks a day and $100 billion in trade every year, accounts for the bulk of Mr Moroun's £1.5billion fortune.

'It is clear that the Detroit International Bridge Co. does not intend to comply with the court orders unless meaningful sanctions are imposed,' Wayne County Judge Prentis Edwards said.
3. Arthur Laffer, the discredited Fox News talking head supply-side economist, was named in a Texas lawsuit accusing him of participating in a Ponzi scheme. You may remember the "Laffer curve" he dreamed up from the '80s. It purportedly showed that Reagan tax cuts would pay for themselves by increasing revenue. They didn't.

While the Laffer curve is fictional, Ponzi schemes aren't. Gawker reports,
...according to 52 investors who are suing him in Texas for fraud, negligence, and breach of fiduciary duty—(Laffer is) a con man who lent his name to a Ponzi Scheme.
The plaintiffs accuse an investment fund called Laffer Frishberg Wallace Economic Opportunity Fund, of which Laffer was a principal, of fraudulently funneling investor dollars into a radio company called BizRadio that the firm's managers were tight with. From the complaint:
The BizRadio business was a Ponzi Scheme constructed with the support of the Defendants. BizRadio never generated sufficient revenue through the sale of airtime to keep itself a viable entity. BizRadio was able to exist through the continuous influx of additional capital until it eventually collapsed in upon itself. Defendants were the primary source of BizRadio's funds.... [The investors] were repeatedly solicited for additional investments with returns which Defendants knew were not possible except through a pyramid scheme. Defendants continued to provied funding to BizRadio...long after they were aware that the promised returns were false and that BizRadio was perpetrating a fraud on investors.
4. Jeffrey Verschleiser, an executive with great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money Goldman, Sachs, is renting out Aspen's Hotel Jerome, a 94-room hotel, for three days for his daughter's Bat Mitzvah this weekend. Matt Taibbi tells us,
Jeffrey Verschleiser is one of the biggest assholes in the entire world!
The story begins at Bear Stearns, where Verschleiser used to work, up until the company exploded, in large part because of him personally....
 
Verschleiser was triple-dipping. First he was selling worthless “sacks of shit” to investors, representing them as good investments. Then, he kept the money from the return sales of the wormy apples. And then, on top of that, he made money by betting against the insurers he was sticking with these toxic assets.
We all know what happened from there. Bear, Stearns went under, thanks in large part to insane schemes like Verschleiser’s, and all of us were forced to pick up at least part of the tab as the Fed spent billions subsidizing Bear’s emergency takeover by JP Morgan Chase... 
5. Mitt Romney, who made hundreds of millions of dollars strip-mining profitable businesses and firing their workers, said the wealth gap is something that should be discussed "in quiet rooms." (And we know who gets to enter those quiet rooms. Certainly not any 99%ers.)

The Washington Post's Greg Sargent writes,
Mitt Romney had a remarkable exchange on NBC this morning that may not be as attention-grabbing about his “fire people” gaffe — but may actually be just as revealing and significant. And I hope it gets some attention.
In it, Romney suggested that concerns about Wall Street conduct and inequality are driven by “envy,” and even said we needn’t have a public debate about inequitable wealth distribution in this country.
The Economic Populist has a terrific takedown of Mittens' business practices as CEO of Bain Capital. The entire post is well worth a read, but we bring you this summary:
Mitt Romney ranks among the 3,000 wealthiest Americans, a small minority among the 1%. How he got there had nothing to do with capitalism, with free markets, with his ability to create jobs, or his love for America. He got there not as a buccaneer of capitalism, but as a pirate, raping and pillaging his way across the corporate landscape, pulling equity out of one firm after another, and leaving the debt-laden hulks to survive if possible, while thousands of workers were left poorer.