Saturday, November 19, 2011

Wall Street wages war on Main Street

You might have heard that some of the 1% has threatened to go on strike, millionaires like Bill O'Reilly on Fox News.

Have the poor really been waging a class war against the rich, or has it been Wall Street that's been waging a war on Main Street for these past 30 years?

David Mooney, CEO of one of the nation's largest credit unions, and who once used to work for the banking giant JPMorgan Chase, says "I don't say this lightly, but the consumer is simply an income stream - - and exploiting that is the purpose of the banking organization."

Why do the ultra-wealthy, and those on Wall Street, resent and despise humanity, and think of the masses as nothing more than insignificant beings, like bacteria on a slide under a microscope? Or as specimens in a petri dish? As nothing more than an "income stream"?

But not everyone in the 1% feels this way. Alec Baldwin wrote: "It's similar to the way we sidestep the homeless or indigent on the street, believing that they got there like a leaf falls from a tree; as if they belonged there through some law of nature, and that we are not responsible in any way. I have grown up in the latter half of the 20th Century. When the Greatest Generation was replaced by the greediest generation...the definition of success became getting the most for doing the least. It became about getting away with what you can, and the only issue was getting caught. Which pretty much defines the Wall Street culture of today."

Those on Wall Street (and the Republicans) are saying Americans should blame Washington for encouraging people to buy homes that they couldn't afford -- and for doing nothing to stop or discourage consumers from piling on more than $10 trillion in household debt. Why? Were not the CEOs on Wall Street rewarded for the homeowner's "capitalist" behavior?

But now we've learned that President George W. Bush, our leader, actually advocated for homeownership, as did Republican presidential hopeful Newt Gingrich, who as the former Republican Speaker of the House (who has since been ousted for ethics violations) had been paid over $1 million as a lobbyist by Freddie Mac to have the Republicans in Congress "smooth things over" for the mortgage giant...and to encourage consumers to "pile on household debt".

And why were adjustable-rate mortgages even lawful to begin with?

And I wasn't paying a mortgage when I lost my job, nor did I have any excessive household debt, other than a typical car payment...and I am just but one of about 21 million Americans who are unemployed today (and I am also just but one of 14 million who have lost jobs and have remained unemployed for the past 3 years since the mass layoffs began in 2008.

Taxpayers gave billions of dollars to "bail out" the biggest of the banks because they made and sold fraudulent securities, even though these banks did not pay their share of taxes for years. To return the favor, the banks then filed a record 3.8 million foreclosures in 2010, up 2% from 2009 and an increase of 23% from 2008, according to RealtyTrac. But 2011 could be even worse.

And not one single banker ever went to jail, as though, just like the feds and our politicians in Congress - - they're all above the law. Instead, the "pillars of our society" and "our business leaders" on Wall Street had rewarded themselves with multi-million-dollar bonuses and "golden parachutes", laughing all the way to their banks...while Main Street was applying for food stamps.

It seems law enforcement only goes after the low hanging fruit, vigorously perusing poor and petty criminals because shoplifters and pot growers might be much easier to catch and prosecute - - meanwhile the authorities and the SEC let the rich white-collared crooks off the hook. (And who do they say is lazy?)

Today as state attorney generals are ramping up their own investigations and possible prosecutions, banks are trying to negotiate an immunity clause for themselves. U.S. Attorney General Eric Holder and the state AGs have been working with the nation's five largest mortgage firms -- Ally Financial (formerly GMAC), Bank of America, Citigroup, JPMorgan Chase and Wells Fargo -- to settle "disputes" over illegal foreclosure practices, such as the robo-signing of foreclosure documents.

(Good luck with that, because we know who really runs this country, our court system, and law enforcement. I'll believe it when I see it. And don't you like how they call them "disputes" rather than "crimes"?)

But after 3 years since the housing market first collapsed, and after millions of Americans were laid off from their jobs, Wall Street still remains out of touch with reality, let alone ordinary Americans - - and refuses to take any blame for all the damage they've done, both to the economy, and for all the lives they've shattered - - lives destroyed because of the banker's greed, not because of our mismanagement of household finances.

Jason Ader, who lives in Las Vegas and manages a hedge fund, says it's a different story for many of the wealthy people who work in finance in New York City, and who don't spend a lot of time in states with high unemployment and high foreclosure rates. Living in Manhattan or the Hamptons or hedge fund havens like Greenwich, Connecticut, can lead to a bit of myopia.

When asked about the Occupy Wall Street protests he says: "At first I had friends who were scratching their heads at the protests," says Ader, who also sits on the board of Las Vegas Sands and a small Nevada community bank called Western Liberty Bancorp.

A recent survey by the marketing firm HNW found that half of the nation's richest 1 percent "don't see themselves as being part of that elite group." Also, 44 percent of those surveyed told the HNW pollsters they already pay too much in taxes (even though today in 2011 the tax rates are actually at historical lows. They're smart, so they must realize this. So why do the lie and complain?)

And many on Wall Street still see the events leading up to the financial crisis as a case of banks having legitimately sold something - whether it be mortgages or securities backed by those loans - - they don't take any blame at all. Like a drug addict, in total denial. If HNW had surveyed me, I'd have told them that these CEOs are just evil psychopaths.

In some cases, some of the disconnect between Wall Street and Main Street might simply be a matter of lifestyle, and the fact that the super wealthy really do live differently from everyone else. Hedge fund managers and bankers fly around on private jets, live in palatial penthouse apartments overlooking Central Park and have second homes in the country.

But after 3 years, one thing is apparently clear - they won't lift a finger to invest in Main Street. They are not patriotic like some of the financial giants in America's past. It's a "me" society these days, especially for those who have, in many ways, already ceded from this country. They are not patriotic millionaires, and especially the big bankers.

According to one Reuter's article, the only way to jump-start the U.S. economy now is for the federal government to get behind a serious program to encourage consumer debt forgiveness and principal reductions on mortgages by banks. (http://tinyurl.com/3cbdjpk)

Federal policy makers should broker what amounts to an out-of-court settlement between institutional bond investors, banks and consumer advocates - essentially, a "great haircut" to jump-start the economy. Some are envisioning a negotiated process in which cash-strapped homeowners get real mortgage relief, even if it means forcing banks to incur severe write-downs and bond investors to absorb haircuts, or losses, in some of the securities sold by those institutions. (Ha! That'll be day!)

The mortgage firms Fannie Mae and Freddie Mac (whose CEOs have been paid millions in bonuses) have been propped up by about $169 billion in bailouts by taxpayers since they were first rescued by the taxpayers in 2008, yet there's a "a moral overtone" to the argument against reducing mortgage debt burdens for individual borrowers. (Because people who still have jobs and are paying their mortgages would feel it's unfair to them, and they'll begin whining...especially Sean Hannity.)

And the October collapse of MF Global Holdings is prompting some critics to say Wall Street hasn't learned any lessons from the financial crisis. MF Global was run by former New Jersey Governor Jon Corzine, who was also a former Goldman Sach's CEO. I'll bet he's not applying for food stamps! There's some talk that some investors like the Koch brothers had the miraculous foresight to withdraw all their money in advance, prompting accusations that big players got a ‘heads up’ just before the firm’s collapse.

"Wall Street capitalism has given us a foul stench in our society," says former PIMCO executive, Paul McCulley.

All the big boys and fat cats on Wall Street got theirs. Now what's left for the 99%? After 30 years of seeing their jobs outsourced overseas, and having large corporations squeeze whatever they could from the working-class; and after millions of the once-middle-class Americans had lost their jobs since 2008; and after they spent these past 3 years of the economic collapse living in misery, the once-middle-class have either:

  • lost their self-respect before eventually losing their homes,
  • been forced to survive on welfare, jobless benefits, and food stamps,
  • had Wall Street, Fox News, and the Republicans blame them for being jobless,
  • had those same people accuse them of being lazy hobos, drug addicts, morons, and alcoholics,
  • been forced to take drug tests before qualifying for any government assistance,
  • been college grads that are buried in debt and denied for even a minimum wage job,
  • and/or have already losing everything, and are now being falsely accused of waging a class war on the ultra-rich.

Then when the beaten down 99% had finally had enough, and when they took to peaceful protesting at Occupy Wall Street, the government hired private security forces (turning citizens against citizens) to evict them in the middle of the night from their pathetic shantytown-like encampment at Zuccotti Park; tossing their library books and tents into dumpsters like common trash; then having the New York City mayor proudly declaring "victory" over the American people.

Wall Street, Fox News, and the Republicans had falsely accused the peaceful protesters of sleeping in feces, theft, rape, drug abuse, and murder...all to put the protesters in a bad light to drive a negative public consensus against them (using a few minor incidents out of context and exaggerating the facts); deliberately attempting to sabotage the protester's cause against corruption in our government, money in our politics, and corporate greed. I guess when the son of the NYC chief of police works for Fox News, it makes it easier to skew the facts.

Again, Alec Baldwin: "Occupy Wall Street people understand that not only are more difficult times possibly around the corner, they know that the current government will likely do as it has historically done, which is to protect the rich and powerful at the expense of the long term interests of the middle class. Some of the most financially successful people in America continually remind us all that capitalism is a contest. There are winners and losers. And the winners want to enjoy their success and they want the losers to keep it down. The noise of the vanquished is spoiling the victors' fun."

Now one has to wonder...

...why have the Republicans been trying so hard to completely eliminate the last remaining life lines for these poor and disenfranchised people, such as unemployment benefits, Social Security, TANF, food stamps, Medicare, and Medicaid? Why? What is the Republican's end game?

And after all that has been done to oppress and to completely break the backs of the 99% - - after the ruthless and unrelenting 30-year class war that's been waged by Wall Street against Main Street - - why hasn't there yet been a full scale civil war?

But if it ends up being an all out civil war, I'll be happily sitting on the sidelines cheering for the home team...the 99%.

Low Corporate Taxes = Excessive CEO Salaries

It doesn't matter what a corporation pays in taxes as compared to GDP, or how it's compared to any other index of measure (to skew the numbers), it's what they actually pay to the U.S. Treasury after loopholes (aka "deductions") that matters most. And for the last 25 years corporations have actually paid historically low taxes.

While today some corporations may have paid the maximum rate of 35% (when it was over 50% in the 1950s), many others paid ZERO, with the average being only 18%.

The same can be said for their CEOs and other high-income earners. While although the top bracket is also almost historically low (at 35%, when it was once over 90%), what they actually pay is nearer to 15% because the majority of their income is earned through capital gains.

And because corporations have been paying a low effective corporate tax rate for decades, that didn't keep them from outsourcing jobs overseas for cheap labor, but rather, it did enable them to pay very excessive CEO salaries...who only mostly pay 15% in federal income taxes on their capital gains.

2 comments:

  1. Sen. Scott Brown (R-Mass.) owns a total of up to $200,000 in Bank of America, GE, and Exxon-Mobil stock. He's also performed extraordinary legislative favors for all three companies, eliminating a bank tax from Dodd-Frank that would have hit BofA and GE, gutting the Volcker Rule which would have curbed risky securities trades at both companies, and voting against a bill to end federal subsidies for oil companies.

    Friday, there were 92 co-sponsors for Congressman Tim Walz's STOCK Act (Stop Trading on Congressional Knowledge), a law forbidding lawmakers from using inside information to enrich themselves in the stock market. But the STOCK Act only curbs actual trading -- if members of Congress just happen to own a company's stock, and then just happen to perform legislative favors for that company, well then...

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  2. I made a video protest recently for my blog. It is quite funny even if you are pro-megabank. I called my credit card's customer service line to do some negotiating. Having a bit of leverage, I thought it presented a great opportunity to mess with them a little and make a few points about the unfairness of the credit card lending system. Since it's a protest at home, I called it my kitchen counterstrike against Bank of America. I think you might enjoy it. http://www.ragingwisdom.com/?p=508

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