Michael Milken did tremendous damage to the American economy.
His pardon by Donald Trump is a disgrace.
People are often not convicted for their real crimes but for the stuff they can get caught for.
Michael Milken’s real crimes do not involve the esoteric technicalities of bond trading.
His crimes are what he did to the mindset of Americans and how they view their fellow countrymen.
By ushering in the era of junk bonds, Michael Milken enabled corporate raiders to buy up companies to which they had no emotional connection.
Prior to Milken, many companies were family owned, regional businesses where the owners had a vested interest in the community.
The owners, while well off, lived in or near the community, and they understood that their wealth came about principally because of their workers.
Consequently, owners took care of their workers.
With the advent of junk bonds it became easy for outsiders to purchase companies that they knew little about except what could be gleaned from a balance sheet and income statement.
So these corporate raiders would peruse financial statements from the safe confines of their New York City penthouses and scout for prey.
Like an eagle soaring above the landscape, they scanned the terrain for helpless slower moving animals.
It was easy pickens for them.
They borrowed as much money as they wanted via Michael Milken’s firm, Drexel Burnham Lambert, swooped in, bought the company and then performed their magic.
Their magic often involved asset stripping and job layoffs.
By laying off employees, selling the machinery and buildings while outsourcing the jobs to China for cheap labor, the new owners made a fortoona.
After awarding themselves stock option packages and fantastic salaries, they did even better.
Afterall, they were indispensable geniuses, right?
But what about the workers they laid off?
Did all those workers immediately find jobs?
Some did, but many lost well-paying jobs.
Many families broke apart.
When families break up, people become depressesd and turn to drugs.
Crime goes up.
Unemployment goes up.
Morale goes down.
All sorts of social ills arise, social ills with costs that are shouldered by the American taxpayer.
What Milken’s junk bonds produced was a breaking apart of the social contract we have with one another where we agree to not rip each other off.
Junk bonds made it too easy for the greedy to prey upon the weak.
Junk bonds set the ball rolling toward dismantling the American economy which was robust because it took care of its workers.
The result is the Oxycontin culture we created where drugs have replaced well-paying jobs.
That’s the real crime of Michael Milken.
That Trump would pardon him shows how little Trump understands economics and how little he cares for you.
That’s quite at odds with the man who asked to be our voice.
Copyright 2020 Archer Crosley All Rights Reserved
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