The rich have stolen the economy
By Paul Craig Roberts
Online Journal Contributing Writer
Nov 2, 2009, 00:18
that Treasury Secretary Timothy Geithner�s closest aides earned millions of
dollars a year working for Goldman
Sachs, Citigroup and other Wall Street firms. Bloomberg reports that none
of these aides faced Senate confirmation. Yet, they are overseeing the handout
of hundreds of billions of dollars of taxpayer funds to their former employers.
The gifts of billions of dollars of taxpayers� money
provided the banks with an abundance of low-cost capital that has boosted the
banks� profits, while the taxpayers who provided the capital are increasingly
unemployed and homeless.
JPMorgan Chase announced that it has earned $3.6 billion in
the third quarter of this year.
Goldman Sachs has made so much money during this year of
economic crisis that enormous bonuses are in the works. The London Evening
that Goldman Sachs� �5,500 London staff
can look forward to record average payouts of around 500,000 pounds ($800,000)
each. Senior executives will get bonuses of several million pounds each, with
the highest paid as much as 10 million pounds ($16 million).�
In the event the banksters can�t figure out how to enjoy the
riches, the Financial Times is offering a new magazine -- How To Spend It. New York City�s
retailers are praying for some of it, suffering a 15.3 percent vacancy rate on
Fifth Avenue. Statistician John Williams (shadowstats.com)
reports that retail sales adjusted for inflation have declined to the level of
10 years ago: �Virtually 10 years worth
of real retail sales growth has been destroyed in the still unfolding depression.�
Meanwhile, New York City�s homeless shelters have reached
the all-time high of 39,000, 16,000 of whom are children.
New York City government is so overwhelmed that it is paying
$90 per night per apartment to rent unsold new apartments for the homeless.
Desperate, the city government is offering one-way free airline tickets to the
homeless if they will leave the city and charging rent to shelter residents who
have jobs. A single mother earning $800 per month is paying $336 in shelter
Long-term unemployment has become a serious problem across
the country, doubling the unemployment rate from the reported 10 percent to 20
percent. Now hundreds of thousands more Americans are beginning to run out of
extended unemployment benefits. High unemployment has made 2009 a banner year
for military recruitment.
A record number of Americans, more than one in nine, are on
food stamps. Mortgage delinquencies are rising as home prices fall. According
Brinkmann of the Mortgage Bankers Association, job losses have spread the
problem from subprime loans to prime fixed-rate loans. On a Wise, Va.,
fairgrounds, 2,000 people waited in lines for free dental and health care.
While the U.S. speeds plans for the ultimate bunker-buster
bomb and President Obama prepares to send another 45,000 troops into
Afghanistan, 44,789 Americans die every year from lack of medical treatment.
National Guardsmen say they would rather face the Taliban than the U.S.
Little wonder. In the midst of the worst unemployment since
the Great Depression, US corporations continue to offshore jobs and to replace
their remaining US employees with lower paid foreigners on work visas. While
jobs decline, high rates of legal immigration continue, bringing more
competition for fewer jobs.
The offshoring of jobs, the bailout of rich banksters and
war deficits are destroying the value of the U.S. dollar. Since last spring,
the U.S. dollar has been rapidly losing value. The currency of the hegemonic
superpower has declined 14 percent against the Botswana pula, 22 percent
against Brazil�s real and 11 percent against the Russian ruble. Once the dollar
loses its reserve currency status, the U.S. will be unable to pay for its
imports or finance its government budget deficits.
Offshoring has made Americans heavily dependent on imports,
and the dollar�s loss of purchasing power will further erode American incomes.
As the Federal Reserve is forced to monetize Treasury debt issues, domestic
inflation will break out. Except for the banksters and the offshoring CEOs,
there is no source of consumer demand to drive the U.S. economy.
The political system is unresponsive to the American people.
It is monopolized by a few powerful interest groups that control campaign
contributions. Interest groups have exercised their power to monopolize the
economy for the benefit of themselves, the American people be damned.
Craig Roberts [email
him] was Assistant Secretary of the Treasury during President
Reagan�s first term. He was Associate Editor of the Wall Street Journal. He has
held numerous academic appointments, including the William E. Simon Chair,
Center for Strategic and International Studies, Georgetown University,
and Senior Research Fellow, Hoover Institution, Stanford University. He was
awarded the Legion of Honor by French President Francois Mitterrand. He is the
author of Supply-Side
Revolution : An Insider�s Account of Policymaking in Washington; Alienation
and the Soviet Economy and Meltdown:
Inside the Soviet Economy, and is the co-author with Lawrence M.
Stratton of The
Tyranny of Good Intentions : How Prosecutors and Bureaucrats Are Trampling the
Constitution in the Name of Justice. Click here for
Peter Brimelow�s Forbes Magazine interview with Roberts about the recent
epidemic of prosecutorial misconduct.
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