Wall Street stokes the fires of class warfare
Image by George Eastman House via Flickr
As unemployment approaches 10% (the actual number, when everyone is included, is far higher) and people continue to lose their homes and savings, we now learn that Wall Street will be paying out record bonuses this year.
Ouch.
Of course, huge bonuses on Wall Street is not a new concept. Employees at investment banks have long been paid fairly small stipends throughout the year with the understanding that their true earnings would come via the bonus. This is just how it was always done –and nobody complained about it because nobody really cared.
Then came TARP. Now we notice. Now we care – big time.
Yet the tin ears on Wall Street have determined to tune out the large cries of disgust that could lead to some very unpleasant results just as they determined to tune out every signal warning of the impending catastrophe they brought about inside the casinos that lined The Street.
It is not particularly remarkable that bankers continue to earn big sums of money. What is stunning is that these wizards of Wall Street have yet to grasp the wisdom of altering the method in which they pay their employees so as to avoid the most toxic words in today’s English language – the bonus.
Flaunting wealth before those who are less fortunate used to be referred to as ‘bad form.’ But it has become something so much more important. Sticking the thumb of Wall Street into the eyes of a suffering America is precisely the behavior that will inflame and, ultimately, lead to a war between the classes. That will be good for nobody – including the money-makers on Wall Street.
The roots of a social revolution between the ‘haves’ and the ‘have-nots’ have already been planted.
I don’t pretend to have taken the tea bag movement very seriously. But when I see these people beating up on Sen. Lindsay Graham,(R-S.C.), a man with one of the most conservative records in government, my lack of interest in tea baggers turns to a genuine concern that these folks have grown dangerously irrational and out of control. Wall Street’s behavior is the perfect trigger to push this over the edge and onto some dark and dangerous territory.
It’s not hard to understand how the banker class came to believe that they are insulated from the reactions of those who do not benefit from their fancy financial footwork. When one can claim ownership of at least one branch of government-the Treasury- one begins to feel pretty darn powerful and above it all. And let’s face it, how many lower middle class and poor people spend much time studying the market for buying opportunities? When was the last time one of these folks sat in a boardroom with a bunch of bankers and lawyers working through a merger or acquisition?
Still, Wall Street continues to place itself in the line of fire. And while an uprising, expressed in ways that could prove very frightening, might be explained away as deserved karma for the bankers, all Americans stand to become the collateral damage of the bankers’ insensitivity and greed.
When the pay-off for Wall Street’s hubris comes, it will extend far beyond the financial district in Manhattan. It will strike at the very heart of America.
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At the risk of seeming pissy, there are three branches of government Executive, Legislative, and Judicial. Treasury is a dept. not a branch, it is part of the Executive branch.
Rick in all candor I think you’re giving the tea baggers and such far too much credit. I really believe they are not protesting policy but using current policy to rationalize their hate for the black guy in the White House and all the Jews who surround him. If your premise was in fact correct they would have taken to the streets long before this as their man George Bush shoveled billions dollars to the likes of Haliburton and such. Why isn’t their rage directed at the insurance companies but seems so focused at the banking industry? I’ll bet my last dollar that if you ask these people who control the banks they’ll reply “the Jews”.
You’re like my old english teacher who would give me high marks for content and ding me for grammar. Yes, I actually do know there are three branches to the government – and treasury is not one of them. I suppose I can go back in and change it to “department” but that will necessitate a whole lot of extra explanatory words. Since I’m not conducting a civics lesson, I think I’ll let it be.
As for the substantive part, I don’t know how much i want to agree with you. I guess, as a Jew, it always makes me uncomfortable to explain away behavior by saying “oh, they just hate Jews.” It always feels a little too self-serving and paranoid. This may a part of it all – but I don’t think it is the driving part.
In response to another comment. See in context »Rick I’m very hard pressed to find a reason other than bigotry to explain the vitriol we now see coming from the extreme right. For the most part they remained silent while Bush was draining the Dept. of the Treasure (he said pissily) and engaging in nation building. Bush violated just about every conservative principal you can imagine and that crowd remained mute. So I think it’s fair to ask exactly what has changed that has driven that crowd into orbit. The only answer I can come up with is racism and bigotry. Seriously people just don’t get that enraged over deficits, it doesn’t make sense.
In response to another comment. See in context »Hello Rick,
I have to disagree with you on this one. The issues of executive pay and bonuses on Wall Street are more about metaphor rather than the substance of class warfare. These banks will just say “Hey, our banks are profitable and it is these guys who are bringing in the profits so what do you care?”. As you noted, these issues only become an issue when these banks were in trouble and getting welfare (TARP). It became symbolic of the real class issues out there, the Obama administration is rushing billions of dollars to rescue millionaires but is doing little to help ordinary Americans in distress. However, it is merely that, a symbol, a metaphor. This is why these banks are paying back the TARP money as fast as they can.
The more immediate issue is where are these banks and investment firms getting their profits? Are these profits real, sustainable sources of income or are they more Ponzi schemes and shell games. For example some firms are paying back their TARP monies not with cash but with promissory notes secured against future income. Well if that future income fails to develop, those notes are worthless. Other Wall Street giants are making profits by buying the life insurance policies of the sick and dying (three bits on he dollar or so) and making themselves the beneficiaries. Ghoulishness aside, this hardly seems like the long term basis for a sound business. The raise in stock prices and the huge profits may all be so much sleight of hand.
The long term issues are that our economy is bereft of high paying blue collar jobs. Industrial firms have “off-shored” all every possible job they possibly can. What does that leave the US economy, and the US working class with? FIRE (Finance, Insurance, Real Estate) is what. This is the the dominant part of the US economy. What kind of job market does that create? What kind of future does that portend for those entering the job market? That is the bigger, long term issue.
David- not sure you are disagreeing as much as just discussing a different topic. I don’t disagree with your comment but I don’t see it as being at odds with my post.
In response to another comment. See in context »It seems like the banking industry comes up with a new outrage every day, but their continued indifference to the rest of the US is so prevalent that I wonder whether there’s something deeper to their sense of security. There was a time when we made products in this country, and investment banks were a way of funding that, but that time is pretty much done. At this point, investment is itself the major industry, while traditional industry (the kind that makes useful stuff) is mostly gone. As terrible as I considered TARP to be, and as annoyed as I was at Sen. Schumer’s role in passing it, I live in an essentially one-industry town, and that town happens to be the financial capital of the Western Hemisphere. Our transition to a post-industrial society has been handled so badly that Wall Street really does hold all the cards, and not just because they lobby so hard.
The hubris might not just be bluster, is what I mean, and the realization that these people are more powerful than American democracy itself frightens me more than class warfare. Even more scary: I can’t think of anything that could be done about it. Thanks to Reagan, Bush, Clinton, NAFTA, GATT, et al., what alternative do we have but to keep feeding this beast?
The topic of class warfare makes me quite angry so I will spare a rant only to say this:
In my opinion the war has been going on for some time and both the victims and victors were for the most part unaware of the battles.
While the country was distracted with the fear of class warfare that the right defined as something to do with gays and religion and big government, the Bankers and manufacturers were quietly rebuilding the economic rules of the country with free trade and a world economy.
Maybe it was what Bush Sr. meant with the New World order, a new society based not on political issues but economic. However they were doing it to save the country.
In the eighties this country was in trouble, high interest rates, low employment and an aging manufacturing base that could not afford, because of interest rates, to rebuild. Europe was in the midst of trade agreements and had newer equipment and a younger workforce and little pension problems.
Most countries after WW2 that had their economies crushed, such as Europe and Japan and recently China have turned to investment in manufacturing and infrastructure.
America in the eighties took a different turn, a new way to look at the problem.
Big business considered labor the problem and looked at the lesson of Japanese cars flooding the market, good cars a third less than ours. Object of the lesson: Cheap labor.
That was what we needed.
Make our products for less and sell them on the international market. My god just think of all those future Chinese customers. But they couldn’t do it alone.
The laissez fare minded businessmen looked to the government to help, they had to get cozy and they got what they needed: Tax breaks for companies who when overseas.
The first to get hurt was the textile industry which is currently just about bled dry. (300,000 lost jobs since George Bush entered office) Suddenly we were all wearing shirts from El Salvador and Honduras and they were at prices we were used to. And once you pay a designer to put his label on it, double the price. And what about shoes, hats, toys…military uniforms…no…can’t do that.
There was still a problem, one of tariffs and it seemed only one industry was still fighting for them.
The Auto industry.
But that was blunted by the machinist industry that started closing down and moving overseas. Cheaper parts. And the thought that we could build cars overseas, buy foreign companies. Maybe it could work.
What was needed were trade agreements and fast. Congress issued fast track permission for the President to send his envoys overseas to drum up business and they delivered.
Then came NAFTA and a democratic president who signed it over the opposition of the unions and a crazy Texan. If a democrat went against the unions there really was a new world order.
So now goods were cheap and Walmart, with a buy America founder changed its tune with cheap Chinese products with American labels. Good timing for at the time people had less money…because of a certain lack of good jobs in the south until the Japanese came to town.
The rust belt was hurting creating mad men like Micheal Moore. The media was there for a while, but then they were hurting too and bought up by bigger companies. Vertical integration was the buzz word and they were caught up in the good times.
But something else was happening: We were recovering from the eighties. Interest rates started to fall and Wall Street discovered that companies that solved their labor issues could be profitable found investors from all over the world. In 1972 the Dow average was around 1000 and the eighties saw things going up and up. Big Business was becoming bigger and merging and being taken over… hostility it was said.
Bigger was better. Everyone wants in, screw pensions…401k is the way to go…and why not social security while we’re at it! Think of the fees! And some card counter that was thrown out of Vegas has a great idea…Hedge funds…like going to a casino that gives you money to play for free.
We wanted and needed a consumer economy but for one small problem. The new credit cards were not making much money in the eighties.
Damn usury laws…if only…yes, the Supreme Court says usury laws are a state problem! Banks fall over themselves to get to Delaware where they can keep those high interest rates of the seventies inflation crazies. So banks charge 6% to themselves and 20% for consumers. We love it, we can buy anything. Hell even houses and turn they over…everyone wants a house now that rates are lower.
The consumer nation is born. The service industry is up and coming.
Then comes the internet and it plays right into the game plan. Why have telephone operators here? Out sourcing jobs is the name of the game.
The banking industry is flush, wall street is flush…where to go from here? How about to Clinton? Combine them…think of it the financial sector can only grow the GNP, plenty of jobs, economy will love it and Clinton can take credit and might as well take credit for the internet while at it.
Of course there were plenty of hiccups, a crash here and there, a housing bubble in the seventies that tripled housing prices, a savings and loan scandal, oil problems, a dot com scandal, enron. But for the most part they hurt consumers. So it’s all good right?
Now I am no expert…though I did live through all of this and at times profited and lost. The end of regulating anti-trust destroyed one thriving enterprise but some of the bubbles proved helpful but was burned in the dot com burst. I tried to ride it all out but in the end the country I knew is no more.
There are less skilled labor and a lost generation of new skilled labor.
My country is broke, its citizens pay more for less, less quality and are in debt up to their necks.
The country’s economy is in the hands of mystery men, wizards who say things are great and are surprised out their pants when it isn’t.
My country owns banks and insurance companies and car factories and we are not socialists. Nor do we know where the money has gone. We are in two wars that we can’t afford and can’t get out of.
The pentagon will not or can not tell us how they spend $600 billion dollars a year. At least the Soviets and Chinese put on a big parade every year to show off what they bought.
The government accounts for over twenty per cent of the economy and states would collapse without their support.
We can’t get things done…billions disappear in our efforts to build hospitals and roads and power overseas.
The Laura Bush Children’s hospital in Iraq is nine years behind schedule and billions over-budget and forgotten. At home we are trying to rebuild our infrastructure but money goes to states and vanishes.
During the depression of the thirties we built a string of dams and lit the entire south, built national parks, even had artists at work on fantastic murals. It happened quickly, urgently.
Now it takes years just to talk about it, another year to figure out what favored business should get the contract and by then there is no money left. New Orleans anyone?
We have a government divided by people who just don’t want the wrong guy getting credit for helping.
Family farms are gone, rural areas filled with suburbs and people who think they are rural but work in banks or for coffee vendors or hospitals and only experience the land when camping or hunting.
We now have factory farms who grow inedible corn that goes into some secret concoction that flavors everything we eat and makes us fat and unhealthy. The still remaining independent farmers grow the same corn for the guaranteed government fixed price. When the get their checks who do they think they are working for?
The average kid in high school cannot afford college even if he has the grades but he can start out his adult life with a huge debt to a bank.
My streets are crumbing, my sidewalks filthy filled with wandering homeless.
All of this, while a portion of the population who, while trying to get the country out of a crisis created a monster, this portion or their children are doing well, the system works for them…even when it doesn’t.
Yet that same system is failing main street. Wall street news is a daily occurance. When was the last time anyone heard of the plight of labor in America on a national news broadcast?
Jobs flowed from the country, industry lost and billions made by people who create no value for the country.
I love this country and have been lucky enough to experience other countries, even a few under communism. This is still, with all it’s problems the best place for me but we are being left behind. We are number one in military and little else.
We are no longer the industrial giant, it was embarrassing to have our boys in Iraq wait six years for the proper equipment to keep them safe.
A year ago I would have said that class warfare is nonsense. Today I think it has happened under our noses and the average guy out there whose wages have remaining constant no matter good times or not, has lost.
Just look at health care. Can we have anything for the average citizen? Who speaks for us? Who in congress speaks for labor? The news says the insurance industry is mounting a full frontal assault.
On who, me?
Assault?
Were do I sign up? Where is my general with the anti-insurgency plan.
Class war…you betcha!
(sigh…a rant after all. just can’t help myself)
“In my opinion the war has been going on for some time and both the victims and victors were for the most part unaware of the battles.”
I agree, although I wonder how many of the victors were unaware of its battles. I often listen to the podcasts of the radio show “This is Hell” [thisishell.com], and a few months ago they had an episode about NAFTA that really stuck with me. Addressing the question “who won in NAFTA – Canada, the US, or Mexico?” an expert guest made the chilling point that looking at the question that way is hopelessly naive. The winners were millionaires in Toronto and New York and Mexico City; the losers were everyone else. The idea that we can still tie these things to outdated models of national identity is nonsense, a myth the ruling classes – people who can easily buy their ways out of outdated national residency requirements the rest of us must live under – find useful.
I don’t mean to go all tinfoil hat here; certainly the great majority of the “winners” of this ongoing class war were simply born into their status and are, indeed, unaware of the battles. But your point is well taken; it’s been game on for a couple decades at least.
In response to another comment. See in context »kramer,
Great point and it is interesting that Obama has decided not to go after corporate off shore accounts…where there is no doubt enough lost revenue to help fund health care. We can’t even get these guys to pay the fines we levy against them.
In response to another comment. See in context »[...] This post was mentioned on Twitter by Geoff Morris, John Sendra. John Sendra said: Wall Street stokes the fires of class warfare http://bit.ly/4ETxus [...]
http://www.infowars.com/fall-of-the-republic-trailer-5-police-state/
Fall Of The Republic documents how an offshore corporate cartel is bankrupting the US economy by design. Leaders are now declaring that world government has arrived and that the dollar will be replaced by a new global currency.
President Obama has brazenly violated Article 1 Section 9 of the US Constitution by seating himself at the head of United Nations’ Security Council, thus becoming the first US president to chair the world body.
A scientific dictatorship is in its final stages of completion, and laws protecting basic human rights are being abolished worldwide; an iron curtain of high-tech tyranny is now descending over the planet.
For complete story and video clip go to: http://www.infowars.com/fall-of-the-republic-trailer-5-police-state/
Ah yes…but its all good. I’ve got my tin foil hat tuned into the ‘elders’ on planet Xenon. They’re gonna give me the word when its time to leave the planet.
By the way, you might want to hang on to your day job as a wingnut, because a Constitutional scholar you are not Article I, Section 9 of the Constitution has nothing to do with the President or his ability to take his turn at the head of the UN Security Council. Article 1 Section 9 is about the limitations on the powers of the legislative branch – which would be Congress.
But, you hang in there and feel free to use my page to promote your website.
In response to another comment. See in context »I knew all along you had some snark in you!
In response to another comment. See in context »Sometimes, you just can’t help it!
In response to another comment. See in context »Rick, this can’t be your first time interacting with a follower of Alex Jones. They’re not all that different from Glenn Beck fans. In fact, there’s a lot of overlap.
In response to another comment. See in context »I think it is my first. Seems almost whackier than Beck.
In response to another comment. See in context »And that’s saying something!
In response to another comment. See in context »