[9/5/10 re-post from correntewire]
Les Leopold in the Huffington Post responded to the Republican "blame the victim" economic talking point that the reckless and unmotivated American working and middle classes are responsible for their own unemployed/walking-on-thin-ice economic situations in spite of the savaging of the U.S. treasury by corporate pirates.
During 2009, the worst economic year since the Depression, the top ten hedge fund honchos averaged $900,000 an hour (that's $1.8 billion each per year). And they did it only because we saved their butts from total collapse. Now it's payback time. The bankers owe the American people hard cold cash, not just the promise of a great trickle down in the distant future.
Leopold points out that these shameless and destructive (to everyone else) opportunists are not only denying responsibility for crashing the economy but are insisting they are now being unjustly threatened by even the slightest suggestion of regulation. To me this seems as outrageous as a gang of rapists demanding a thank you note from their victim. Leopold:
Incredibly, Wall Street executives are howling over every proposal to limit their profits or, god forbid, stick them with part of the bill for all the damage they've caused. They refuse to admit that they've done anything wrong. In fact they feel victimized. They seem to believe that skimming billions from our financial system via taxpayer bailouts is a good thing for everyone. Can they really believe that if we just left them alone, new jobs would flow like wine?
Wall Street billionaire Steve Schwarzman got apoplectic when someone suggested that we close his favorite tax loophole (carried interest which allows him to pay a much lower tax rate than the rest of us). That would be "like when Hitler invaded Poland in 1939," he fumed.
Let's stay with his regrettable analogy. Surely Schwarzman knows that Hitler rode to power in 1932 on the back of Germany's massive unemployment crisis. And surely he knows that a massive jobs programs funded by taxes on the ultra-rich is a far better alternative.
Leopold reports on the latest unemployment statistics.
The August unemployment numbers are ugly, yet again. Nearly 30 million Americans are still jobless or forced into part-time jobs. The Bureau of Labor Statistics official unemployment rate is 9.6%. ...
Leopold says that we must resist the collective guilt mongering from shameless, sociopathic oligarchs and Republican politicians echoed by a citizen-betraying media. Leopold relates the outrageous but seductive FALSE narrative:
"We Americans sank ourselves in debt. We consumed more than we produced. We bought homes we couldn't afford and used them as ATMs. Of course Wall Street did its part by offering us mortgages they knew we couldn't really afford. The government also contributed mightily by pushing Fannie and Freddie, the giant housing agencies, to underwrite "politically correct" loans to low-income residents who shouldn't have been buying homes at all. In short, we all are to blame."
From a flawed narrative always comes a flawed policy prescription:
"The era of excess is over. We need to cut back on spending and borrowing. We need to reduce government debt by raising the Social Security retirement age and cutting social programs We've got to streamline our public sector by laying off public employees and cutting back their lavish pensions. And all workers will have to adjust to an era of intense foreign competition: We've got to reduce our wage and benefit demands if our companies are going to compete globally. We have to live within our means."
In short, we gorged ourselves until the economy crashed. Now we've got to tighten our belts and accept less to get it going again. It's simple and logical and.....dead wrong.
This is what really happened according to Leopold:
For starters, "we" didn't create this mess. Wall Street did, with the help of politicians who pushed through financial deregulation and an increasingly regressive tax structure that put outrageous sums of money in the hands of a few. Freed from regulations and flooded with money, Wall Street bankers went crazy. And before long, our economy crashed.
It really is that simple. Starting in the late 1970s our country embarked on a grand real-time experiment to "unleash" the economy from government rules and oversight. The theory was that to end the era of "stagflation," we had to cut taxes on the super-rich, freeing them to lead a gargantuan investment boom that would of course lift all boats. At the same time, the financial sector was liberated from its New Deal-era shackles. Yes, those constraints had prevented a financial crash for more than 40 years. But now, argued the best and the brightest, the new world order required a more nimble financial sector. Naturally, the markets could police themselves.
In retrospect it seems like a very bad joke.
Actually, the plan did work beautifully for the top one percent of us. In fact, these excessively wealthy people laughed all the way to the bank. America's distribution of income, which had been reasonably equitable during the post WWII era, flew apart. In 1970 the top 100 CEOs earned about $45 for every dollar earned by the average worker. By 2008 it was $1,081 to one.
With so much wealth in hand, the super-rich literally ran out of tangible goods and service industries to invest in. There simply was too much capital seeking too few real investments. And what a honey pot that proved to be for Wall Street's financial engineers! Freed from any limits on constructing complex new financial products, hedge funds and too-big-to-fail banks and investment houses created an alphabet soup of new securities with the sky-high yields the super-rich craved. The rating agencies abetted the crime by blessing these flimsy products with AA and AAA ratings.
[snip]
The cause of the crash is no mystery. The Great Depression happened the same way: a skewed distribution of income combined with a deregulated financial sector created a big bubble, and it burst. The only way to break the cycle is to attack those fundamental causes -- we need to move money from the very top of the income ladder to the middle and the bottom, and we need to tie Wall Street up in regulatory knots.
Through steep progressive taxes on the super-wealthy, fair income taxes on hedge funds and transaction fees on Wall Street's proprietary trading, we can keep that bubble from reinflating -- and in the process raise the money we need to put America back to work. With the revenue we collect, we can hire millions of people to weatherize homes and buildings and rebuild our infrastructure. Instead of laying off teachers we can hire more, and provide them with better training and support. We can expand universities and colleges too, and allow people to go to college for free, which will improve our peoples' skills -- and keep young people off the unemployment rolls.
Of course all this would be costly in the short run. But progressive taxes on the super-rich and a windfall tax on Wall Street profits and bonuses would pay for it all, and then some. The American people would understand that it's only fair to require the super-rich (whom we just bailed out) to fund the jobs they helped destroy through their reckless financial gambling. And in the long run, investing in infrastructure and education will make our country richer. Just look at the GI Bill: Giving returning WWII vets a free college education was expensive -- but Congress later found that every dollar spent on the program yielded a return to our economy of $6.90.
Leopold asserts quite clearly that it is time for Wall Street to return the favor, return the $10 trillion!
Are we really justified in reclaiming this wealth from Wall Street? Well, it's our wealth, isn't it? We just gave it to them. I'm talking about the nearly $10 trillion (not a typo) we shelled out to financial institutions in loans, asset guarantees, market supports, low-interest loans and a myriad of other forms of assistance as part of our rescue of the financial system. Now, thanks to our largess, the bankers are back to making record profits and bonuses again. ....
Obama and Democratic party, here is the healthiest not to mention fairest plan!!!! Get us back our $10 trillion!
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And a ps I will add to the above so readers will not make the mistake (though how could they at this point in time?) of assuming the robbery of our $10 trillion (and the unlikelihood of getting it back but instead be buried in more suck-it-up, golden b.s. from the Prez and both Party's opportunistic and corporate-pimped-out SHAMELESS politicians) is solely on the shoulders of the Republican rabid rat bastards. It is also due to the collusion of the rabid rat bastard Democrats in less than rabid rat bastard clothing, but not as camouflaging to their betrayal as it once was. I repeat a comment I have been quoting by an eloquent women on DU:
"Refreshing honesty from a comment Randall Kohn cited at correntewire from Claudia Jones at Democratic Underground:
http://www.correntewire.com/comment_of_the_day_4
"67. Democrats prefer to lose
"Democratic party politicians are in an unenviable position. They must convince people that they are fighting for the everyday working class people while they are actually working for the wealthy few. This is a delicate balancing act. When they gain power, as in 2006 and 2008, they have an enormous problem because people have an expectation that they will actually do something to benefit the working class people. Convoluted and improbable excuses and rationales must be concocted lest people see through the ruse. Of course, part of the game is denying that any of this is going on. It was remarkable to see the relief - almost glee - among party politicians, flacks and liberal pundits after the 2010 drubbing. They paid lip service to being unhappy over the results, yes. But they were very happy to be back in their comfort zone and go back to pointing the finger at the Republicans and claiming impotence and to blaming the general public for the state of the country."
Democratic Party as well as Republican Party are the great protectors and enablers of the PREDATOR CLASS."
"Refreshing honesty from a comment Randall Kohn cited at correntewire from Claudia Jones at Democratic Underground:
http://www.correntewire.com/comment_of_the_day_4
"67. Democrats prefer to lose
"Democratic party politicians are in an unenviable position. They must convince people that they are fighting for the everyday working class people while they are actually working for the wealthy few. This is a delicate balancing act. When they gain power, as in 2006 and 2008, they have an enormous problem because people have an expectation that they will actually do something to benefit the working class people. Convoluted and improbable excuses and rationales must be concocted lest people see through the ruse. Of course, part of the game is denying that any of this is going on. It was remarkable to see the relief - almost glee - among party politicians, flacks and liberal pundits after the 2010 drubbing. They paid lip service to being unhappy over the results, yes. But they were very happy to be back in their comfort zone and go back to pointing the finger at the Republicans and claiming impotence and to blaming the general public for the state of the country."
Democratic Party as well as Republican Party are the great protectors and enablers of the PREDATOR CLASS."
These hedge fund scandals are often very complicated; which is presumably the point since that enables them to prevent most people, often including me, from understanding and preventing what they're doing.
However there are other scams that they are also running that are easier form many of us to understand like fraudulent advertising and planned obsolescence etc. and these clearly also costs the public trillions of dollars in losses one way or the other.
Those who conducted the scams , regardless of which ones, are supposed to get tax breaks while the rest of us need "to live within our means," after letting them getting away with it.
HHmmm
However there are other scams that they are also running that are easier form many of us to understand like fraudulent advertising and planned obsolescence etc. and these clearly also costs the public trillions of dollars in losses one way or the other.
Those who conducted the scams , regardless of which ones, are supposed to get tax breaks while the rest of us need "to live within our means," after letting them getting away with it.
HHmmm
Hi Libby!
Another of your very thoughtful pieces.
I started to comment but my scribble got out of hand so I’ve posted it as a blog.
.
Another of your very thoughtful pieces.
I started to comment but my scribble got out of hand so I’ve posted it as a blog.
.
Libby, these facts can't be repeated often enough. The current disaster was man-made and avoidable; it was not some Act of God like an earthquake or tsunami, nor is it mysterious and unfathomable. Unfortunately, false information that disgusies these facts has great social value, as does historical amnesia. [r]
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