Now Age Minute - 4.12.10
Across the Great Divide
Charles Prince is sorry. In case you don't know Mr. Prince, he headed Citigroup during the heights and collapse of Wall Street that ushered in the Great Recession, and one of the main reasons your retirement account has turned to toilet paper. Not according to Prince, though. He's just sorry it happened to you. According to a story from the Guardian of London,
Charles Prince, former chief executive of Citigroup, today expressed regret for the huge losses run up by the bank during the 2008 banking crisis, but did not take responsibility for Citi's woes or its $45bn (£29.5bn) taxpayer bailout.
"I can only say I am deeply sorry that our management – starting with me – was not more prescient and that we did not foresee what lay before us," Prince told a US congressional panel investigating the origins of the worst US financial crisis since the Great Depression.
No one knows for sure what made him do it. But area farmers in upstate New York believe it was the severe drop in prices paid to New York dairy farmers by middlemen processors that made Dean Pierson, a second generation dairy farmer, take his life, along with the lives of his 51 cows, this past January. According to a story from the NY Times,
Sometime after finishing the morning milking, Mr. Pierson, 59, a dairy farmer who grew up on High Low Farm on Weed Mine Road in Columbia County, which his father bought when he was an infant, did something no one will ever entirely explain. He took a small-caliber rifle and went through the barn he built about a decade ago methodically shooting all 51 of his milking cows in the head.
He left a note on the front door that warned the reader not to go inside but to call the police. Then he sat down in a chair and killed himself with a single rifle shot to the chest. He left behind a short suicide note scrawled on scratch paper that made reference to his depression over personal and financial issues. He expressed his love for his family but said he was “overwhelmed.”
Earlier this month, Senator Chuck Schumer and Assistant Attorney General Christine Varney, the country's top antitrust investigator, held a forum for New York's dairy farmers to air their grievances stemming from the falling prices being paid to dairy farmers from dairy processors, as opposed to the steady retail prices being paid by consumers. According to a story about the forum from LancasterFarming.com,
“The large milk processors — the so-called middlemen — seem to be just squeezing our farmers relentlessly. There’s no competition or too little competition, and as a result the price paid for milk is way too low. The price isn’t going down on the shelves where people are buying it, and good old-fashioned American competition would say it should be,” said Schumer.
Indeed, many dairy farmers have been put out of business, and the ones that are still in business are barely making it...
...He cited one processor in particular — Dallas-based Dean Foods Co. — as an example of a recent investigation, alleging it purchased a smaller dairy company in Wisconsin to quash competition.
“Dean Foods is the largest fluid milk buyer in the country. They are scooping up all the other buyers, and they dominate too much of the dairy industry. They thwart competition. Both the farmer and the consumer is hurt. During the darkest days last year when farm gate prices went way down, Dean Foods had announced that quarterly profits had risen a staggering 31 percent. Prices went down for milk but somehow Dean Foods’ profit almost went up by a third. They manage large portions of the market for fluid milk throughout the country. In New England they have 70 percent, and New England is an important market for many of our farmers in the eastern part of our state,” he said.
Could this be what drove Dean Pierson off the edge? One can only guess.
According to the U.S.D.A., 2% of the workforce is employed in the agricultural sector, compared with about 90% when the U.S. Constitution was signed. Arguably, the Industrial Revolution that coincided roughly with the founding of our country impacted our relationship with food, and the land it comes from, more spectacularly than any event since the human cultivation of food began nearly 10,000 years ago. While industrial and technological advances and inventions have greatly improved the quality of life for millions of people, they have not come without a price. A price most dramatically evidenced by modern American's disconnect with, and utter confusion about, food and where it comes from. As our sophistication about markets, entertainment, and consumer goods has grown, our understanding about food is so non-existent, it's undone what was gained by thousands of generations of accumulated wisdom. America is suffering from a deadly case of misplaced sophistication.
Accompanying Charles Prince in his testimony last week was former Treasury Secretary and former Citigroup director, Robert Rubin. Yes, that Robert Rubin. The head-of-the-snake of Wall Street deregulation, who went from policy making at Treasury to fortune raking at Citi. And as a reward for presiding over the public raping at Citi, Rubin pulled in a cool 150 million. While Prince was able to put forth an apology for Citi's part in the bank's collapse, that was beyond any contrition Rubin could muster. From his opening statement, “We all bear responsibility for not recognizing this, and I deeply regret that". Got sleepless nights, evil doer? I doubt it.
A good part of debate regarding the causes for the collapse of banks like Citi concern the notion that they were too big, and, hence, bailed-out because they were deemed "too big to fail". Unfortunately, Dean Pierson was too small to succeed in the dog-eat-dog nature of modern, American capitalism. In my last column, I wrote about the war being waged against Main Street by Wall Street. I can't think of a more illustrative example of the war's great divide than the contrasting stories of the Citi boys, with their public theft, rape and reward, against the fate that fell Dean Pierson. To borrow Mr. Rubin's quote, “We all bear responsibility for not recognizing this, and I deeply regret that".
Craig Gordon
Now Molly dear, don't ya shed a tear,
Your time will surely come, you'll feed your man
chicken ev'ry Sunday, Now tell me, hon, what-cha done with the gun.
Across The Great Divide, Just grab your hat, and take that ride.
Get yourself a bride, And bring your children down to the river side.
- J.R. Robertson
