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There Were No Banks In The Stone Age
There Were No Banks In The Stone Age
There Were No Banks In The Stone Age
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There Were No Banks In The Stone Age

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Ever wonder what happened to taxpayers' TARP funds used to bail out banks and other companies during the financial crisis and who still owes the Government? What can we do about the growing Wealth Gap? Can better education and higher savings rates save America? Who really pays what share of income taxes? Besides banks and bankers, who else contributed to the financial crisis? How much do bankers really make?

The book takes a fresh, and hard-hitting look at the key issues surrounding the financial crisis and beyond, including who is to blame, what happened to the TARP money, the fairness of the income tax system, bankers' compensation, but most importantly, capitalism, the wealth gap, and the U.S. savings rate. Although an ex-banker and one of the 1%, his book including the analyses and the conclusions will surprise many on both sides of the fence, both the 1% and the 99%. Even if it doesn't change the reader's opinion about everything, it will compel the reader to re-examine many aspects of the financial crisis, the wealth gap, the low savings rate.

Among the book's conclusions:
•The 1%, i.e., the wealthy, will need to pay disproportionately more in income taxes to address the budget deficit
•The Wealth Gap is capitalism's biggest failure and needs to be corrected, but it does not mean there is something better than capitalism on the horizon
•Many people and not just banks and bankers contributed to the financial crisis
•The US will need to improve its education system and raise its personal savings rate to remain competitive in the global economy and avoid becoming a welfare state
•if and when the next crisis happens, the Government may have no choice but to bail out any failing banks again so these banks need to pay for that implied insurance policy

About William Lau

William Lau is a recently retired investment banker who spent 28 years working in two leading global investment banks in New York and Hong Kong. He is a graduate of Phillips Academy, Harvard College where he graduated Cum Laude with an A.B. degree in Economics, and The University of Chicago where he graduated with an MBA. Prior to his retirement, he was an Equity Capital Markets professional at a leading investment bank.
Mr. Lau is currently a lecturer at two leading universities.

LanguageEnglish
PublisherWilliam Lau
Release dateFeb 19, 2012
ISBN9781465881212
There Were No Banks In The Stone Age
Author

William Lau

William Lau is a retired investment banker who now lectures at two leading universities. His book, "There Were No Banks In The Stone Age", about the 1%, the problems of the wealth gap, banks/bankers and the financial crisis is now available at most online ebook retailers. His professional career included two years as an auditor with a "Big-Four" accounting firm in New York, and 28 years as an investment banker with two leading investment banks in various positions in New York and Hong Kong. These positions have included assignments in financial analysis, mergers and acquisitions, oil and gas investment banking, transaction execution, and equity capital markets. Since his retirement in 2011, he has been writing his book about the recent global financial crisis. In addition, he has started his teaching career as a lecturer at two leading universities. He grew up in a variety of countries in the Middle East where he was born, and in Southeast Asia where he saw firsthand the horrors of war during his childhood living in Saigon (now called Ho Chi Minh City) at the time of the Vietnam War. After spending time in several American and French schools in Saigon and Bangkok, he eventually found his way to Phillips Academy, a boarding school in Andover, Massachusetts. Upon graduation, he matriculated at Harvard College where he graduated Cum Laude with an A.B. degree in Economics. Later on, he also went back to school to earn his M.B.A. from the University of Chicago.

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    Book preview

    There Were No Banks In The Stone Age - William Lau

    There Were No Banks In The Stone Age

    William Lau

    Copyright 2012 by William Lau

    Smashwords Edition

    ****

    Smashwords License Statement

    This ebook is licensed for your personal enjoyment only. This ebook may not be re-sold or given away to other people. If you would like to share this book with another person, please purchase an additional copy for each reader. If you are reading this book and did not purchase it, or it was not purchased for your use only, then please return to Smashwords.com and purchase your own copy. Thank you for respecting the hard work of this author.

    Table of Contents

    Foreword – Full Disclosure

    Chapter 1 – Poor Lazy Bastards And Rich Greedy Buggers

    Chapter 2 – Who Dunnit?

    Chapter 3 – The Power Of Blame

    Chapter 4 – TARP And We Want Our Money Back

    Chapter 5 – The Auto Industry And The Kodak Moment

    Chapter 6 – Taxes: What Is Fair And What Are The Facts?

    Chapter 7 – Excessive Banker Pay

    Chapter 8 – Crossing The Picket Line

    Chapter 9 – Capitalism Or Socialism...

    Chapter 10 – Reducing The Wealth Gap

    Chapter 11 – My Own Random Walk Through Wall Street

    Chapter 12 – Savings And The Welfare State

    Chapter 13 – The Rear-View Mirror Cannot See The Road Ahead

    About The Author

    List of Figures

    Figure 1 – TARP Disbursements and Repayments

    Figure 2 – TARP's Largest Bank Disbursements and Repayments

    Figure 3 – Analysts' Estimates of Banks' 2012 Earnings and Return on Equity

    Figure 4 – Average Federal Individual Income Tax Rates By Income Group: 1986-2009

    Figure 5 – Average Federal Individual Income Tax Rates By Income Group: 1986-2009

    Figure 6 – Share of Federal Individual Income Taxes Paid By Income Group: 1986-2009

    Figure 7 – Share of Federal Individual Income Taxes Paid By Income Group: 1986-2009

    Figure 8 – Summary Income and Federal Individual Income Tax Data – 2009

    Figure 9 – Adjusted Gross Income of Taxpayers in Various Income Brackets: 1986-2009 (in $ Billions)

    Figure 10 – Adjusted Gross Income of Taxpayers in Various Income Brackets: 1986-2009 (in $ Billions)

    Figure 11 – Share of Adjusted Gross Income of Taxpayers by Income Group: 1986-2009

    Figure 12 – Share of Adjusted Gross Income of Taxpayers by Income Group: 1986-2009

    Figure 13 – Typical Total Compensation for Revenue-Generating Investment Bankers at Leading Firms

    Figure 14 – China's GDP Growth Rate 1953-2010

    Figure 15 – Percentage of Children in Single Parent Families by Race in the U.S. – 2009

    Figure 16 – Gross National Savings as a Percentage of GDP – An International Perspective

    Figure 17 – U.S. Personal Saving Rate: 1959-2010

    Figure 18 – Breakdown of U.S. Federal Government Spending for 2010

    Foreword – Full Disclosure

    My objective in writing this book is to explore in more detail, and to present some thoughts about, the financial crisis, the role of banks and bankers in causing the crisis, and more generally, the chronic problems of the growing wealth gap in the U.S. and our country's loss of competitiveness in a global economy which the crisis has exposed.

    This book has given me the opportunity to express my views and to dispel many of what I feel are half-truths or misconceptions about wealth, banks, the wealthy, and taxes. Most of this book covers issues relating to recent debate about:

    • who and what caused the recent financial crisis

    • TARP, the tax-payer funded government bailout of many companies and institutions, and what has been rightly returned to the government

    • the banking and auto industries, among the largest recipients of TARP funds

    • the fairness of the federal individual income tax system and the need to increase taxes on the wealthy

    • capitalism versus socialism

    • the problem of the wealth gap and some of its underlying causes

    • the chronically low savings rate

    • the Occupy Wall Street protestors

    I do not expect every reader to agree with my conclusions and some may not even agree with my analysis. My hope is a majority of people who read this book can at least agree that the issues I bring up are complex rather than simple thereby defying simple generalizations, that the origins of the crisis are not so clear cut as we would like to believe, and finally, that the aftermath may involve facts which most people have overlooked. Consequently, vilifying a small group of people, be it bankers, the 1%, or the wealthy, and creating policies that target them will not prevent similar crises from happening in the future.

    The book is meant to foster discussion among everyone rather than lay blame and be divisive. There will always be those who disagree with some, many, or even all of my views but as long as some, and hopefully a majority agree with the facts and even just some of my perspectives, then we have some basis for discussion and debate about the past, the present, and the future, founded on facts rather than misguided rhetoric.

    I am not an expert on data analysis, economics, or the tax system. Therefore, I may have reached conclusions that are not supported by a rigorous analysis of the data I have collected. If I have made any errors, they are not intentional and in any case, I do not believe any of my conclusions are likely to have been wrong by 180 degrees. I have also relied on data collected, and research done by others without independent verification.

    I concede I have a necessarily biased view given my background but I have always tried to be objective in my data gathering, my analysis, and my conclusions. As a retired investment banker who had worked in New York and Hong Kong, I count myself among the lucky, but also hard-working and honest bankers. I am not greedy. I did not have anything to do with the U.S. real estate or related businesses nor the bubble and crash that followed. I did not defraud anyone.

    Having graduated from a leading prep school and an Ivy League college in Massachusetts, I did have a privileged education but I did not get accepted because of who I was. I come from a middle class family in Asia and I received financial aid in college where I also worked as a dishwasher in the dining halls to help pay for my school tuition. Nearly 30 years ago, I became a naturalized U.S. citizen.

    If the 1% refers to the wealthy, I am part of the 1%; if it refers to the greedy and corrupt I am

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