Tuesday, June 29, 2010

Taking Advantage of the Crisis That They Created

It doesn't take a rocket scientist to figure out who engineered this financial crisis.  Yet Republicans, Wall Street, and the corporate/government elite,  expect us to believe that they, who made huge fortunes understanding the way the economy works, were clueless about the possibility of the largest economic disaster since the Great Depression...even today, as they continue to prosper more than they ever have, two years after the economic collapse. And now they want us to foot the bill...endure the consequences that they should eagerly bear the brunt (see chart below).

Yeah right. The only thing the teflon-coated power/money brokers are eager about is tapping we the people for more and more money.

They preach deficit cuts, tough austerity measures and sacrifice, trying to convince us, once again, that these measures are in our own best interest. Meanwhile they continue to take advantage of the crisis they themselves created, feathering their personal nests at the vast expense of all the rest of us.

Take GOP House Minority Leader John Boehner, in addition to predicting a GOP political rebellion (despite the fact that the Bush administration who squandered the fairly found fiscal position inherited from the Clinton administration over his 8-years in office)  wants to raise the eligibility for retirement to age 70 , scale down health reform, undermine social security, medicare and other bedrock social programs.

As anyone out of work, over 45-years old, can tell you, finding employment, never mind at their previous salary level, is damned near impossible.  And now Boehner wants to add another 8 years to retirement eligibility?  That's great. He will collect anywhere from $80,000-$100,000 annual, upon retirement.

Paul Krugman says we are facing a third depression. And as he says, it doesn't matter that "the Obama administration understands the dangers of premature fiscal austerity — but because Republicans and conservative Democrats in Congress won’t authorize additional aid to state governments, that austerity is coming anyway, in the form of budget cuts at the state and local levels."

But one has to wonder why the elites want these severe austerity measures. Don't they benefit when the economy grows? Don't they prosper when there's more stimulus, under conditions of full employment?

The answer according to Dr. Robert A. Johnson - Executive Director of The Institute New Economic Thinking (INET) in an interview with Real News is that
"if you're a big bank right now that's loaded up on Treasury bonds, paying zero and earning 3.5 percent, the thing that can hurt you is interest rates go to 5 percent, which they would do if the economy recovered. So you have essentially used what I'll call the yield curve trade, the riskless yield curve trade of the Treasury market on the balance sheet of big banks to create a coalition for maintained austerity."
Why should we suffer the consequences of their criminal behavior? Why are we facing long-term structural unemployment, cuts to social programs, delayed eligibility for retirement...in other words, the deterioration of our wealth and security, while they continue to reap the rewards of the massive crime they committed?  Where are our 0% interest loans guarnteed to yield at least 3-5%?
"We have a financial sector that was 46% of corporate profits in 2007. I think last year it approached 40% again in the recovery. It's only 3% of the workforce. We have a system of politics that's very dominated by finance. Financial services beg the question: what are you—if you're taking that much of the profit, if you're taking that much of the income, if you're taking an $800 billion bailout, what are you doing for society? What's the basic function?
And once finance becomes so overgrown [that] instead of taking 5 or 6 or 7% of profits it's taking 30 to 40%, we have to ask ourselves: are we not as a society paying an enormous tax to a system that is designed to be a—.
You know, finance is supposed to be a servant to commerce. Commerce and economy and markets are a service to social goals. Well, the servant's servant has become the master's master, and it's time to re-invert that. I think the political process we see underway and the hostility and the anger and the pressure on legislators is an early—what you might call an early stage of that rebalancing. But it will be a hard and tough road. And it was in Great Britain. And they didn't really get out from the clutches of the control of finance for quite a long time." - Dr. Robert A. Johnson
Liberty without equality would be as empty as equality without liberty would be authoritarian.” - Alan Wolf, author of Future of Liberalism

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