{"id":26144,"date":"2013-03-04T12:00:19","date_gmt":"2013-03-04T12:00:19","guid":{"rendered":"http:\/\/www.transcend.org\/tms\/?p=26144"},"modified":"2013-03-15T20:45:46","modified_gmt":"2013-03-15T20:45:46","slug":"lords-of-disorder-billions-for-wall-street-sacrifice-for-everyone-else","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2013\/03\/lords-of-disorder-billions-for-wall-street-sacrifice-for-everyone-else\/","title":{"rendered":"Lords of Disorder: Billions for Wall Street, Sacrifice for Everyone Else"},"content":{"rendered":"

The President\u2019s \u201csequester\u201d offer slashes non-defense spending by $830 billion over the next ten years. That happens to be the precise amount we\u2019re implicitly giving\u00a0Wall Street\u2019s biggest banks<\/em> over the same time period.<\/p>\n

We\u2019re collecting nothing from the big banks in return for our generosity. \u00a0Instead we\u2019re demanding sacrifice from the elderly, the disabled, the poor, the young, the middle class \u2013 pretty much everybody, in fact, who isn\u2019t \u201ctoo big to fail.\u201d<\/p>\n

That\u2019s injustice on a medieval scale, served up with a medieval caste-privilege flavor. The only difference is that nowadays injustices are presented with spreadsheets and PowerPoints, rather than with scrolls and trumpets and kingly proclamations.<\/p>\n

And remember: The White House represents the\u00a0liberal<\/i>\u00a0side of these negotiations.<\/p>\n

The Grandees<\/b><\/p>\n

The $83 billion \u2018subsidy\u2019 for America\u2019s ten biggest banks first appeared\u00a0in an\u00a0editorial<\/a>\u00a0from\u00a0Bloomberg News<\/i>\u00a0\u2013 which, as the creation of New York\u2019s billionaire mayor Michael Bloomberg, is hardly a lefty outfit.\u00a0 That editorial drew upon sound economic analyses to estimate the value of the US government\u2019s implicit promise to bail these banks out.<\/p>\n

Then it showed that, without that advantage, these banks would not be making a profit at all.<\/p>\n

That means that all of those banks\u2019 CEOs, men (they\u2019re all men) who preen and strut before the cameras and lecture Washington on its profligacy, would not only have lost their jobs and fortunes in 2008 because of their incompetence \u2013\u00a0they would probably lose their jobs again today.<\/i><\/p>\n

Tell that to Jamie Dimon of JPMorgan Chase, or Lloyd Blankfein of Goldman Sachs, both of whom have told us it\u2019s imperative that we cut social programs for the elderly and disabled to \u201csave our economy.\u201d The elderly and disabled have paid for those programs \u2013 just as they paid to rescue Jamie Dimon and Lloyd Blankfein, and just as they implicitly continue to pay for that rescue today.<\/p>\n

Dimon, Blankfein and their peers are like the\u00a0grandees<\/i>\u00a0of imperial Spain and Portugal. They\u2019ve been given great wealth and great power over others, not through native ability but by the largesse of the Throne.<\/p>\n

Lords of Disorder<\/b><\/p>\n

Just yesterday, in a rare burst of candor, Dimon said this to investors on a quarterly earnings\u00a0call<\/a>: \u201cThis bank is anti-fragile, we actually benefit from downturns.\u201d<\/p>\n

It\u2019s true, of course. Other corporations \u2013 in fact, everybody else \u2013 has to survive or fail in real-world conditions. But Dimon and his peers are wrapped in a protective force field which was created by the people, of the people, and for \u2026 well, for Dimon and his peers.<\/p>\n

The term \u201cantifragile\u201d was coined by maverick financier and analyst Nassim Taleb, whose book of the same name is subtitled \u201cThings That Gain From Disorder.\u201d That\u2019s a good description of JPMorgan Chase and the nation\u2019s other megabanks.<\/p>\n

Arbitraging Failure<\/b><\/p>\n

Dimon\u2019s comment was another way of saying that his bank, and everything it represents, is\u00a0The Shock Doctrine<\/i>\u00a0made manifest. The nation\u2019s megabanks are arbitraging their own failures, and the economic crises that flow from those failures.<\/p>\n

These institutions are designed to prey off economic misery. They suppress genuine market forces in order to thrive, and they couldn\u2019t do it without our ongoing help. The Treasury Department and the Federal Reserve are making it happen.<\/p>\n

We who have made these banks \u201cantifragile\u201d have crowned their leaders our Lords of Disorder.<\/p>\n

Once Dimon told\u00a0reporters<\/a>\u00a0that he explained to his seven-year-old daughter what a financial crisis is \u2013 \u201csomething that happens \u2026 every five to seven years,\u201d which \u201cwe need to do a better job\u201d managing.<\/p>\n

Thanks to fat political contributions, Dimon manages them well. So do his peers. Misery is the business model. And by Dimon\u2019s reckoning another shock\u2019s coming any day now.<\/p>\n

Money For Nothing<\/b><\/p>\n

Bloomberg\u2019s use of the word \u2018subsidy\u2019 in this instance can be slightly misleading. Public institutions don\u2019t issue $83 billion in checks to Wall Street\u2019s biggest banks every year. But they didn\u2019t let them fail as they should have \u2013 through an orderly liquidation \u2013 after they created the crisis of 2008 through fraud and chicanery. Instead it allowed them to prosper from it, creating that $83 billion implicit guarantee.<\/p>\n

As we detailed <\/a>in 2011, the TARP program didn\u2019t \u201cmake money,\u201d either. Banks received a free and easy trillion-plus dollars from our public institution, on terms that amounted to a gift worth tens of billions, and possibly hundreds of billions.<\/p>\n

That gift prevented them from failing. In private enterprise, this kind of rescue is only given in return for part ownership or other financial concessions. But our government asked for nothing of the kind.<\/p>\n

Unpaid Debts<\/b><\/p>\n

Breaking up the big banks would have protected the public from more harm at their hands. That didn\u2019t happen.<\/p>\n

Government institutions could have imposed a financial transaction tax, whose revenue could be used to repair the harm the banks caused while at the same time discouraging runaway gambling. \u00a0They still could.<\/p>\n

They could have imposed fees on the largest banks to offset the $83 billion per year advantage we\u2019ve given them. They still could.<\/p>\n

But they haven\u2019t. This one-sided giveaway is the equivalent of an $83 billion gift for Wall Street each and every year.<\/p>\n

Cut and Paste<\/b><\/p>\n

$83 billion per year: Our current budget debate is framed in ten-year cycles, which means that\u2019s $830 billion in Sequester Speak.\u00a0 You\u2019d think our deficit-obsessed capital would be trying to collect that very reasonable amount from Wall Street. Instead the White House is proposing<\/a>\u00a0$130 billion in Social Security cuts, $400 in Medicare reductions, $200 billion in \u201cnon-health mandatory savings,\u201d and $100 billion in non-defense discretionary cuts.<\/p>\n

That adds up to exactly $830 billion.<\/p>\n

No doubt there is genuine waste that could be cut. But $830 billion, or some portion of it, could be used to grow our economy and brings tens of millions of Americans out of the ongoing recession that is their daily reality, even as the Lords of Disorder continue to prosper. It could be used for educating our young people and helping them find work, for reducing the escalating number of people in poverty, for addressing our crumbling infrastructure, for giving people decent jobs.<\/p>\n

It\u2019s going to Wall Street instead.<\/p>\n

Trillion-Dollar Tribute<\/b><\/p>\n

The right word for that is\u00a0tribute.\u00a0<\/i>As in, \u201ca payment by one ruler or nation to another in acknowledgment of submission \u2026\u201d or \u201can excessive tax, rental, or tariff imposed by a government, sovereign, lord, or landlord\u00a0\u2026\u00a0an exorbitant charge levied by a person or group having the power of coercion.\u201d (Courtesy\u00a0Merriam-Webster<\/a>)<\/p>\n

In this case the tribute is made possible, not by military occupation, but by the hijacking of our political process by the corrupting force of corporate contributions.<\/p>\n

The fruits of that victory are rich: Bank profits are at near-record highs. Most of the country is still struggling to dig out from the wreckage they created but, as Demos\u2019 Policy Shop<\/a> puts it, \u201cfor the banks it\u2019s 2006 all over again.\u201d<\/p>\n

On Bended Knee<\/strong><\/p>\n

\u201cMillions for defense,\u201d they said in John Adams\u2019 day, \u201cbut not one cent for tribute.\u201d<\/p>\n

Today we\u2019re paying for both. That doesn\u2019t leave much for the elderly, the disabled, the impoverished, the children, or anybody else who doesn\u2019t\u00a0<\/i>\u201cbenefit from disorder.\u201d\u00a0Nobody\u2019s fighting for them in this budget battle.<\/p>\n

That leaves the public with a clear choice: Demand solutions that are more just and democratic \u2013 or submit willingly to the Lords of Disorder.<\/p>\n

____________________________<\/p>\n

Richard (RJ) Eskow is a well-known blogger and writer, a former Wall Street executive, an experienced consultant, and a former musician. He has experience in health insurance and economics, occupational health, benefits, risk management, finance, and information technology.<\/i><\/p>\n

Go to Original \u2013 ourfuture.org<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

We\u2019re collecting nothing from the big banks in return for our generosity. Instead we\u2019re demanding sacrifice from the elderly, the disabled, the poor, the young, the middle class \u2013 pretty much everybody, in fact, who isn\u2019t \u201ctoo big to fail.\u201d<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[65,51,55,146],"tags":[],"class_list":["post-26144","post","type-post","status-publish","format-standard","hentry","category-anglo-america","category-europe","category-capitalism","category-economics"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/26144","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=26144"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/26144\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=26144"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=26144"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=26144"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}