If you’re tired of hearing about the recovery you can’t feel, while seeing headline after headline about how well Goldman Sachs is doing — or who’s getting big bonuses on Wall Street now, while the rest of the country is facing the grim reality of long-term joblessness — you might want to come to Chicago on October 25 – 27, where thousands of Americans will “come together on the streets of Chicago to demand a banking system that puts the American people first and a Congress that makes it happen!”
If you’re enraged that the same banksters we bailed out are doing everything in their power to stop much-needed consumer protection, and you’re ready for a showdown, come to Chicago and tell the banksters “No!”
Some time around the the news that 80% of Wall Street got bonuses last year, even as the consequences of their handiwork began trickling down to the real economy, I starting wondering “What’s Wrong With Wall Street?”.
- What would possess AIG, after being bailed-out to the tune of $85 billion by American taxpayers, to hand out millions in bonuses and spend $440,000 on a spa retreat for executives?
- Or what would possess John Thain to hand out nearly $4 billion in bonuses to Merrill Lynch executives, just as Merrill was being sold to Bank of America, and after taxpayers ponied up $20 billion to cover what would have been a losing bet for Bank of America?
- What would possess Thain to then demand a $10 billion bonus for himself? (Let’s not even discuss the $1.22 million redecorating job on his office. See it for yourself.)
Since then, I’ve come to the conclusion that it not because they’re “stupid,” as Rep. Barney Frank said. It’s not because “They don’t get it,” as Sen. Clair McCaskill said. These folks may have cooked up exotic financial instruments that even they didn’t understand well enough to keep from wrecking the economy, but the know they know what they’re doing. They “get it,” as far as the consequences are concerned. They just don’t care.
Actually, it’s bullies that kick sand your face. But that’s OK. Not all idiots are bullies, and not all bullies are idiots. But some idiots are bullies and some bullies are idiots. It’s when bullies and idiots team up — with the latter doing the former’s bidding — that we’re in real trouble. I’d say hold on to your lunch money, but they’ve already got it.
How better to describe the way we were herded, cajoled and threatened into coughing up a bailout package. Remember it had to be passed now, now, now? Or else something terrible would happen to us? As a result, we’re paying their bonuses.
If, as Mark Berger said, congress had no idea that these firms would turn around hand out bonuses, buy jets, schedule junkets, etc. after receiving bailout funds, it’s because they didn’t know who they were dealing with anti-socials and narcissists will turnaround and do just that. Because it’s true that they don’t get it, and they don’t care.
…This may very well be the problem with the Wall Streeters and why they “don’t get it.” They have an utter lack of awareness about any connections to the rest of us, even when the rest of us are suffering an economic downturn brought on by the very sector that so richly rewards them even as many of us are hurting.
And when confronted with it, they blink with wonder and ask “What does that have to do with me?”
And when confronted with their outsize compensations juxtaposed against the painful economic reality most Americans are living with, they blink with wonder and say “But I deserve it.” And mean it.
And when confronted by the above, we give it to them.
Now, what does that say about what’s wrong with them? And what’s wrong with us?
Even as the Dow broke 10,000, we learned that the bailouts had revived both the banks and the bonuses, fueling a “new era of Wall Street wealth.” We know it didn’t create jobs, or much wealth beyond Wall Street, by the economic pain we still see in our communities, but somehow the 400 richest Americans got $30 billion richer in the midst of the downturn.
We’ve spend trillions to stretch a safety net beneath these, the wealthiest Americans. We were told disaster would ensue if we didn’t. We are doing so even as the the last thread of the social fabric that was the safety net for the rest of us, is about to snap.
According to official statistics, the unemployment rate in the United States is now 9.8 percent. But those statistics understate the severity of the jobs crisis. The official statistics do not include the 875,000 Americans who have given up looking for work, even though they want jobs. When these “marginally attached” workers and part-time workers are added to the officially unemployed, the result, according to another, broader government measure of unemployment known as “U-6,” is shocking. The United States has an unemployment rate of 17 percent.
And even this may understate the depth of the problem. By adding the 3.4 million Americans who want a job but have not looked for one in over a year, businessman, philanthropist and Obama advisor Leo Hindery Jr. infers an actual unemployment rate of 18.8 percent. In other words, nearly one in five Americans is unemployed or underemployed.
The sound you hear is the sound of the social fabric in America rotting and beginning to snap. Thanks to the unemployment insurance system adopted during the New Deal years, and thanks in part to the stimulus that the Obama administration and Congress passed earlier in the year, we do not have hordes of out-of-work Americans standing in line at soup kitchens and riding the rails from town to town. Even so, the invisible decay of America’s social order is just as real as the highly visible decay of abandoned McMansions in new developments that are turning into ghost towns across the continent.
Lending that the bailout was supposed to enable banks to do never really happened. The banks held on to it instead, preferring to use it to pay off their debts acquire other banks. Thus the that was supposed speed recovery didn’t happen. So, it couldn’t spur the creation of new jobs, or secure existing jobs.
The economy is now coming up short by 9.4 million jobs, including 6.9 million positions that employers have eliminated and 2.5 million jobs that were needed to absorb new workers but were never created.
And unemployment is on the rise, jumping from 9.4 percent in July to 9.7 percent in August. For several demographic groups, the unemployment rate is already in double digits, including men (10.1 percent), Hispanics (13 percent), African-Americans (15.1 percent) and teenagers (25.5 percent). In all, 14.9 million workers are now jobless, of which fully one-third have been out of work for more than six months, the highest level of long-term unemployment by far in any post World War II recession. There are now nearly six workers available for every job opening, up from 1.7 workers per opening when the recession began in December 2007.
Worse, hiring is not expected to rebound anytime soon, even if overall economic growth resumes this year. Employers are likely to fill any additional workloads by adding hours to truncated workweeks and ending worker furloughs. Wage gains, which are always repressed when jobs are scarce and unemployment is high, will be an even longer time coming as employers restore pay cuts put in place during the recession before giving raises.
Without job growth and pay raises, consumer spending will not revive substantially because alternative sources of spending power — home equity and credit cards — are largely tapped out. And without an upsurge in spending, businesses will not add workers, and so on, in a decidedly unvirtuous cycle.
But on Wall Street, times are almost back to where they were, as many of those whose actions and decisions led to the current crisis are rewarded. Goldman Sachs, for example, made huge profits from the subprime loan debacle, and even paid $60 million to settle a Massachusetts investigation into the firm’s role in the packaging of mortgage securities that drove the disaster. Now, Goldman is boasting record profits and paying record bonuses, despite the bailouts. Meanwhile, foreclosures are driving more homeowners into homeless shelters.
If you want to speak out against any of the above, and join your voice with others demanding accountability and commonsense financial reform NOW. Come to Chicago next week, and speak out!