Free Mike!

Max Sawicky sawicky at epinet.org
Tue Jan 23 07:46:43 PST 2001


I read Predators Ball by Connie Bruck a couple of years ago. It was fun to read. What I took from it was that of Milken's two alleged sins -- junk bond dealing and insider trading -- the former was no crime. Junk bonds simply means financing risky investments. If people do this with their eyes open, that's their business.

It could be the case that junk-financed managements are nastier, but this could be due to the firms' more tenuous financial condition. The financing aspect of it would seem to be extraneous. To say that such firms should be financed by 'conservative' banks is a non sequitur. If they are risky, they would not attract such financing.

My guess is that the insider trading stuff is ubiquitous. The bigger the fish, the more he/she will command by way of information. So IMO that is an important offense and not pardonable, on the merits.

Full disclosure: I received a very nice fee for contributing an article to the "Milken Institute" magazine some years ago. And I'd do it again. I need the money.

mbs

Nice overall point about how policing on the margins maintains the integrity of a rigged racket. But just in case you are serious, it is worth analyzing why Milken really deserves jail. You make the case that Milken funded marginal risky investments when many others would not. But is that a good thing? You cite MCI- MCI was a massive unionbusting firm that grew based on regulatory subsidy by the FCC and did little more than helped usher in lower rates for big business customers at the expense of higher costs for local phone service.

I can and have made a case for why big lumbering banks like Bank of America in its heyday where much better for working class folks (even if tilted inevitably to the wealthy) since it tied the savings and fates of average people into the success of the overall economy. As the days of Savings and Loans and regional banks have given way to junk bonds, "securitization" and venture capital, the money game has become even more starkly an internal circulation of capital among the elite.

Hell, to give a personal example- when I was in Vegas, financing of the casinos had just recently shifted from mob and Teamster pension funds to Milken-financed junk bonds. The result was unquestionably a harsher, anti-worker management.

Do you have any argument for how junk bond financing improved the lives of average folks over the older, conservative banking approach?

Nathan Newman

----- Original Message ----- From: "Doug Henwood" <dhenwood at panix.com> To: "lbo-talk" <lbo-talk at lists.panix.com> Sent: Tuesday, January 23, 2001 9:53 AM Subject: Free Mike!

Today's Feed daily is my plea to Free Mike Milken! <http://www.feedmag.com/templates/select_template.php3?a_id=1581>. Though they wouldn't let me use those three words as the closing line.

Doug



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