Take Away All Dick Fuld’s Money — Use It To Buy Streetcars

A clawback, as you probably know but many of your fellow Americans do not, is the repossession of a reward that should never have been bestowed in the first place. It’s something of buzzword these days since the financial wizards who gutted the world economy by selling lots of phony paper and taking on absurd risk are still very rich even while their firms are living on taxpayer money.

In televisionland, pundits tend to shake their head sadly and say it’s too late to do anything about the exorbitant bonuses paid out to Dick Fuld and his ilk. But if America is going to be the sort of country that can look itself in the mirror (so to speak) in coming years, that money needs to be clawed back. It’s arguably well within Congress’s power to do so, and it would probably be their most popular action in years. In the best of all worlds the seized loot would go into a special coffer and be spent on something optimistic and socially productive–something with symbolic value.

We’d like to suggest streetcars. They’re just fantastic–an aesthetically brilliant 19th century technology poised for a 21st century comeback. They reduce congestion and pollution and are potent investments in local revitalization. Portland, Oregon, spent $100 million on it’s streetcar network and reaped massive local economic benefits–more than $2.5 billion, according to some calculations. Little Rock has enjoyed similarly robust results. Under the shadow of the reckless newfangled “financial innovation” that laid our economy low, the streetcar speaks to a rather more sensible way of doing things. Not surprisingly, dozens of American cities want in on the action.

To kick the process off then, here are some suggested pairings of fallen financial titans and proposed streetcar projects they could fund with what’s left of their ill-gotten gains. So, come on, Congress – clawbacks for street cars. Ding, ding, ding!

CASE #1

Joe Cassano - While taking in at least $280 million in personal income since 2000 as the head of the AIG division that sunk the parent company, Cassano and friends have cost the taxpayer $120 billion and counting.

and

Robert Rubin - The mastermind behind Citibank’s risk strategy (as well as a key player in the Clinton administration decision to loosen essentially drop all regulation of financial derivatives) certainly has at least a $100 million he can kick in, even after his millions of shares in Citi have fallen into the low single digits.

Can buy streetcars for:

Tuscon - estimated cost of $70 million  (see artist’s rendition of this proposed line in the video below the jump)

Grand Rapids - $70 million;

Cincinnati - $132 million;

and

Columbus - $100 million

CASE #2:

Hank Paulson - The former CEO of Goldman Sachs lobbied aggressively for investment banks to be able to leverage themselves at 30 times capital instead of a measly 12. Greater risk = greater prosperity, after all! It was true for him anyway – he walked off with a cool $700 million, and got preferred tax treatment when he sold because he was going to take a government job.

Can buy streetcars for:

Albuquerque - $270 million

Miami - $280 million

Atlanta - $121 million

and Winston Salem, NC - $40 million;

CASE #3:

Dick Fuld - After running up vapor profits for Lehman Bros by pushing toxic assets on unwary investors, Fuld played a key role in the near-collapse of the credit system last fall. Most of his wealth was tied up in now-worthless Lehman shares, but we’re betting that between stock sales and cash compensation he’s got at least $200 million squirreled away.

and

Angelo Mozilo - Sold $400 million in stock in his shoddy subprime mortgage outfit Countrywide, while his investors (and those who bought the mortgages he issued) were getting destroyed.

Can buy a streetcar for:

New York City - $500 million

And the fun doesn’t need to end there. Former Citi CEO Charles Prince looks like an ideal funder for the city of Milwaukee, as does Peter Kraus for Missoula and Lloyd Blankfein for Seattle, and…