Tuesday, October 1, 2013
The Great American Stickup
Five Years Later, Wall Street is Still Winning
Five years after Wall Street crashed the global economy and caused the worst economic crisis since the Great Depression, the "Too Big To Fail" financial behemoths are riding high on a wave of unprecedented recovery while the rest of us are worse off than ever.
For all the initial shock and outrage at Wall Street's destructive excess, five years later, Congress has enacted few meaningful, enforceable financial reforms, Wall Street CEOs are once again raking in record salaries, and not one banker has gone to prison. The cover of a recent issue of Time magazine seems to sum things up best: "How Wall Street Won."
Has nothing changed?
As Ralph Nader points out in a recent editorial for The Huffington Post ("Five Years Later: Wall Street is Still At It," 09/20/2013), "One would hope that, five years later, our country would be on the road to economic recovery."
"Yet many of the worst excesses of Wall Street remain," he writes. "...Wall Street and the big banks are even bigger, richer, and more powerful than they were in 2008 when U.S. taxpayers bailed them out of their self-inflicted crisis."
Nader was one of a handful of economic critics who warned, early on, that Wall Street's reckless behavior and arrogant risks could well lead to another recession. But he and his colleagues were promptly ignored or ridiculed by the corporate media. (Nader's latest book, a compilation of recent essays and Op-Eds is sardonically titled, Told You So.)
Five years later, nearly all of the "Too Big To Fail" banks that caused the Great Recession (JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, Goldman Sachs and Morgan Stanley to name a few), are again thriving, while minimum-wage workers have not had a raise in three decades.
Real wages, adjusted for inflation, have remained stagnant from their 1972 peak. This, despite the fact American workers are working harder than ever. Major employers like Walmart cynically exploit what remains of our beleaguered social safety net by paying their employees dirt-cheap wages and actively encouraging them to apply for government assistance. Indeed, what does it say about U.S. business culture when the average Walmart employee cannot afford to shop at Walmart? As a result of these businesses' stinginess (Walmart being just one example), taxpayers end up footing the bill to help provide for low-wage workers.
This is not free-market capitalism. It is corporate welfare.
I have made this point numerous times on this blog, but I will state it again as it does not seem to be sinking in:
Corporations--not the bedraggled, greasy-looking panhandler begging for money on the street corner--are society's real Welfare Queens. We, as taxpayers, are essentially paying their employees for them--and they do not even work for us! Why welfare-loathing, libertarian conservatives refuse to support a living wage for all is perhaps one of the most paradoxical inconsistencies of modern politics. I ask in all seriousness then, when will these lazy corporations and their mega-millionaire CEOs start pulling their own weight and stop freeloading off the rest of us productive Americans?
Meanwhile, the national unemployment rate remains stuck at an anemic 7.3 percent, according to the Bureau of Labor Statistics' August jobs report. And that is just the "official" rate. The actual unemployment rate (what the few economists who bother to report on it refer to as "U-6"), according to Forbes' Dan Diamond, is closer to 15 percent. This statistic includes the dozens of frustrated women and men who have given up looking for work entirely. As Diamond notes, this real unemployment rate has doubled from 2007- 2009.
To wit: Most of my friends my age are either desperately searching for work, or underemployed at low-wage jobs that do not utilize their college education. According to a story earlier this summer in The Portland Press Herald/Maine Sunday Telegram ("Special Report: Maine's Top Jobs," June, 2013), the jobs with the highest expected growth in the foreseeable future are exclusively in health care or retail.
In the wake of the Great Recession, working-class Americans feel the "American Dream" is increasingly out of reach. It is time to wake up to the truth, America: Unregulated, free-market capitalism has failed the majority of us. It's time to reboot the system and install a new operating system.
Indeed, this was the sentiment in the wake of the Great Depression. After the economy tanked and hundreds of Americans lost their life savings, the general consensus was that capitalism had failed. Many left-leaning citizens began to talk openly and candidly about the need for social-democratic reforms, if not outright socialism. Novels like John Steinbeck's The Grapes of Wrath painfully and vividly portrayed the human costs of capitalism's insatiable thirst for ever greater profits.
Yet, save for a tongue-in-cheek Newsweek cover story, the 2008 financial collapse has not brought about a similar rethinking of capitalism. The only time the "S-word" was uttered by elite, cable television news hosts was to ludicrously claim then-candidate Barack Obama was running on a "socialist" agenda. (If only!) As it turned out, this smear campaign failed miserably and Americans overwhelmingly elected Obama president twice. Once in office this "socialist" president proceeded to stack his cabinet with wealthy bankers, businessmen, and other corporate servants, including the union-busting Rahm Emanuel. Some socialist.
But all is not lost. There was one good thing to come out of the recession. No, not Dodd-Frank--Occupy Wall Street. Despite its obvious structural flaws and its failure to engage the political system, Occupy's contributions should not be undermined. We can credit the Occupy movement with reigniting the debate on class-struggle. Two years after its launch, we still routinely use terms like "99 percent," and "one percent" to talk about wealth inequality. The future, I believe, lies in some fusion between Occupy Wall Street and the Green Party.
Until such a political-protest hybrid emerges, we will have to do our best to scrape by however we can. After all, it's Wall Street's world. We just live in it.