The Rich Have Stolen the Economy

Paul Craig Roberts
Friday, Oct 16th, 2009

Bloomberg reports 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 Standard reports 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 rent.

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 to Jay 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. economy.

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.

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.

The problem started with the deregulation of mortgage by the Republican congress in 1999 and Bush hand off wall street once he became president. People making 15,000 a year buying house costing over $500,000 with a mortgage of over 3,000 a month. Then the greedy lyons of wall street let loose by the Bush adm wiht no one to check on their greed. The SEC chief was nonexistant during the Bush Adm.

So I am a supporter of Obama. Yet I am so amazed at how righty his recovery act was. There will be very little trickle down as unemployment hits double digits. It will probably take another 6months-1year before large companies start hiring again. Yet by that time many middle class families with unemployed will have used up most of their savings.

In a left leaning gov't I would think that the role of it is to ensure that americans have jobs yet that is obviously not a priority. If it were BUSH i would understand, its the nature of the beast.

The majority of infrastructure in the US was built during FDR's administration, that includes roads, bridges, aquaducts, dams, power lines, etc. All of which in a recent study by the gov't affirms that they are in decrepid conditions. Also replacing power lines with newer smart grid technology can help conserve loses which are about 30% on a typical power line.


Also if you have seen this:
THE HISTORY CHANNEL: America’s Crumbling Infrastructure
By Barry Ritholtz - October 5th, 2009, 12:15PM THE HISTORY CHANNEL: America’s infrastructure is collapsing. Tens of thousands of bridges are structurally deficient or functionally obsolete. A third of the nation’s highways are in poor or mediocre shape. Massively leaking water and sewage systems are creating health hazards and contaminating rivers and streams. Weakened and under-maintained levees and dams tower over communities and schools. And the power grid is increasingly maxed out, disrupting millions of lives and putting entire cities in the dark. The Crumbling of America explores these problems using expert interviews, on location shooting and computer generated animation to illustrate the kinds of infrastructure disasters that could be just around the bend.



With all this in mind why hasn't this administration done more, there are obviously many projects that are needed to be done that will no doubt employ many americans. It is not as if we are hiring people to dig a hole then another group to refill the hole. THese are serious issues.


So while the upper-middle and upper class reap the rewards the average american is stuck with being unemployed or being in a household with some one unemployed.

THE HISTORY CHANNEL: America’s Crumbling Infrastructure

That was a VERY interesting and disturbing program. Highly recommended.

I think the last time a US president invested real money in the infrastructure was Lyndon Johnson.

We need some serious investment in infrastructure PRONTO. And I'm not even talking about initiating any new projects but simply maintaining what's there now. This country is literally falling apart. Again, I refer to the documentary already mentioned.

I am not sure but even if it is thats 1969 which is 40 y.o.

Facts are not enough jobs when there is much to be done.

http://www.gurufocus.com/news.php?id=48135

In the above article there are many important stattistics and firgures regarding infrastructure and the jobs that could be created, as well as the Obama plan which is still being waited on.

Sounds akin to "world without humans" or "after humans" or whatever those programs were, they were highly interesting. Except this one is real. When was it on?

It first came on a few months ago and since then it has appeared several other times on the History Channel. If you look out for it I'm sure you'll catch it. And unfortunately it's as real as it gets.