Unions are the only organized group in this country that, at this juncture, have the power to stand up to corporate greed.
"Welcome to Plutocracy"
Plutocracy defined: Literally 'rule by the rich', the term is used to denote a wide range of situations where a group of individuals are able to exert disproportionate power and influence in society and social institutions because of their wealth.
here are some excerpts:
That’s how financial capitalism works today: Conserving cash rather than bolstering hiring and production; investing in their own shares to prop up their share prices and make their stock more attractive to Wall Street. To hell with everyone else.
Led to the Financial Crisis.
Fast forward to the 20th & 21st century:
- investment banks went public--no longer using their own money - allowing for risky investments & higher rates of pay-back,
- the safety laws for financial institutions that had been put in place were stripped away (deregulation)
- borrowers without adequate credit or down-payment were not only allowed - but encouraged to take large loans to purchase inflated-priced homes
- investment banks paid rating agencies to distort the truth on the safety ratings of these loans (ie. subprime loans rated as excellent)
- subprime loans most profitable--predatory lending--these buyers were charged higher interests rates > their loans bundled and sold to unsuspecting investors as Triple-A rattings -
- CDO's (Collateral debt obligations) - Pay an investment banking firm $15 Million to put together a CDO full of bad mortgage- related assets that were believed to likely lose value. Next, sell slices of the bundle to many global investors . Next, secretly bet against it - knowing that it will fail. Then, make $1 Billion in profit - while the global investors lose over $1 Billion. This is how Goldman Sachs defrauded investors.
- Goldman Sachs sold 3.1 Billion dollars of bad loans & worthless securities
- CDO's (collateral debt obligations) - imagine the owner of your meat department betting against the bad meat he sells - knowing it is bad - in the same way these investment banks bet against the bad mortgage securities - betting that they would fail - and then profiting from the high interest they made!
- Foreclosures jumped to Six Million by 2010 and are expected to grow to Nine Million.
- Men who destroyed their companies got to keep there money (in the Millions $$$) and didn't go to jail
- NO Attempt made to recoup the millions $$$ made by these CEO's who defrauded the financial system - nor No attempt to indict them!
- Since 1980s we live in a more UNequal society
- Outsourcing jobs to other countries - corporations save money, Americans lose jobs
- American factory workers laid off to the tens of thousands
- Americans trying to pay for college go into debt - $50 to 100 thousand dollars
- American tax policies shift to Favor the Rich - Bush decreases taxes for the wealthiest 1% of Americans
- Americans RESPOND to these changes by: working longer hours, going deeper into debt to afford their homes, cars, college for children, vacations
Furthermore, remember how the traditional bankers put up their own capital in making loans? In the 1980's the investment banks went public—no longer using their own money. The Reagan administration and the lobbyists started in with deregulation. With it, away went the Glass-Steagall Act! With deregulation and the selling off of bad (sub-prime) loans to unsuspecting others, the investment bankers went unscathed in the global financial meltdown in 2008.
Notice how these high powered men continue to be Recycled through the Government/Banking system Despite their unethical conduct.
1989 - early '90s: Savings & Loan Crisis - the Chairman, Keating serves five years for corruption charges;
DeConcini, a senator involved in the scandal was later appointed by President Clinton in February 1995 to the Board of Directors of the Federal Home Loan Mortgage Corporation
In 1990s: Clinton era and increasing revolving door between Washington and Wall Street
In the decade of 2000s: George Bush pushes for further deregulation and relaxed enforcement—remember Enron, Worldcom, accounting fraud of Fannie Mae & Freddie Mac. ?
massive housing and mortgage credit bubble sweeps the United States; mortgage lending quadruples, housing prices double
2004: After intense lobbying by investment banks, the SEC lifts the leverage limits on the investment banking industry, allowing them to borrow more
2005: IMF chief economist warns of dangerous incentives and risks in the financial system; Larry Summers, who later became director of the National Economic Council dismisses his concerns, calling him a “Luddite”
The beautiful thing about creating fear is people will not only accept that something must be done, but – if enough fear is created – they're usually willing to act without even contemplating or debating the direction.
"Terrified that this injustice would inspire a movement to change all of that, corporate interests including the Koch Brothers spent billions in 2009 and 2010 on misinformation campaigns and political theater designed to turn the resulting Great Recession into a weapon to divide us rather than the unifying wake-up call it was destined to be.
WHO ARE THESE FOXES who were put in trusted positions
to GUARD OUR HEN HOUSE?
- Larry Summers - head of the NEC (National Economic Council) - hired as Chief Economic Adviser to Obama -- and former Clinton Treasury Secretary - influenced deregulation
- Henry Paulson - Chairman and CEO of Goldman Sachs (one of the top defrauders for promoting investments they new would fail) - was hired by Obama to be (74th) US Treasury Secretary - denying any problems: "We're going to keep growing - if we're growing then we're not in a recession."
- Timothy Geithner - previously the president of the Federal Reserve Bank of NY - put him at the heart of the global economic crisis as it unfolded in 2008. Hired by Obama in January 2009 as (75th) US Secretary of the Treasury -- defending the Bail Out of the banks.
- Ben Bernanke - previously served as the Federal Governor & Chairman of George W. Bush's Council of Economic Advisors - sitting on the Financial Stability Oversight Board that oversees troubled asset relief (appointed in 2006 - during the heat of the impending financial melt-down) In 2009, appointed by President Obama
- Alan Greenspan - Chairman of the Federal Reserve from 1987 (remember Ronald Reagan Administration - deregulation) to 2006. He rebuked regulations.
Of all the new financial wealth created by the American economy in that 21-year-period, fully 42% of it went to the top 1%.
A whopping 94% went to the top 20%, which of course means that the bottom 80% received only 6% of all the new financial wealth generated in the United States during the '80s, '90s, and early 2000s
Just as wealth can lead to power, so too can power lead to wealth. Those who control a government can use their position to feather their own nests, whether that means a favorable land deal for relatives at the local level or a huge federal government contract for a new corporation run by friends who will hire you when you leave government. If we take a larger historical sweep and look cross-nationally, we are well aware that the leaders of conquering armies often grab enormous wealth, and that some religious leaders use their positions to acquire wealth.
If the top 1% of households have 30-35% of the wealth, that's 30 to 35 times what they would have if wealth were equally distributed, and so we infer that they must be powerful. And then we set out to see if the same set of households scores high on other power indicators (it does). Next we study how that power operates. Furthermore, if the top 20% have 84% of the wealth (and recall that 10% have 85% to 90% of the stocks, bonds, trust funds, and business equity), that means that the United States is a power pyramid.
The financial sector employs Three Thousand lobbyists - Five BILLION $$ on lobbying and campaign contributions - Wall Street Government - Plutocracy at its finest!
Charles Ferguson, producer of Inside Job > "For decades in the past the financial industry was safe but something changed - the financial services industry went corrupt and they corrupted the regulators and the academia and engaged with the government. They will tell us it won't happen again."