The Rich Have Stolen the Economy
From Offshoring Jobs to Bailing Out Bankers

"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 adds 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 per cent 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, occupants of New York City’s homeless shelters have reached the all time high of 39,000, 16,000 of whom are children."

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Good News on Wall Street Means… What Exactly?

"It’s literally amazing to me that our press corps hasn’t yet managed to draw a distinction between good news on Wall Street for companies like Goldman, and good news in reality.

"I watched carefully the reporting of the Dow breaking 10,000 the other day and not anywhere did I see a major news organization include a paragraph of the “On the other hand, so fucking what?” sort, one that might point out that unemployment is still at a staggering high, foreclosures are racing along at a terrifying clip, and real people are struggling more than ever. In fact the dichotomy between the economic health of ordinary people and the traditional “market indicators” is not merely a non-story, it is a sort of taboo — unmentionable in major news coverage."

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China's Export Drive Moves Into High Gear

"During this decade the global economic and financial dynamic that mattered most was the United States - China relationship. China sold cheap manufactured goods to American consumers desperate to maintain their standard of living in the face of a shrinking job market and declining real wages. Americans borrowed money to pay for the essentials of its lifestyle - college education, premium health care, two or more cars, etc. The Chinese were the major lenders to American consumers, financing the purchases of the goods China was selling.

"What this dynamic was doing was forestalling the inevitable decline in the American standard of living that began when Deng Hsiao Ping first unleashed China's capitalist spirits. The West looked on this development greedily - 800 million new consumers ready to buy Western products! This was a great misconception, because it assumed somehow that China was going to make its way up the economic ladder by making Westerners richer. In fact the reverse began to happen. Hundreds of thousands of entrepreneurial manufacturers arose in China, with access to labor willing to work for pitiful wages and no benefits, and with no governmental regulation on working conditions or environmental degradation. The result has been an economic catastrophe for the West, which has seen its manufacturing sector whittled down, its trade deficits soar, and its debt levels skyrocket.

"The credit crisis that arose in 2007 and 2008 was the end of the line for this financial dynamic, despite every effort of the US to keep the game going. The only way to do this is for the US to turn to the last agency that can still borrow money - the federal government. Last year the US government borrowed or issued debt guaranties for an amount equal to its entire gross national product for 2008. Since obviously no nation can borrow its way to prosperity, this is a last ditch effort at maintaining a First World lifestyle through programs that subsidize car purchasers and housing sales. This game can go on a few more years until China finally chokes on all the US paper it is accumulating, and which is progressively becoming less and less valuable since there are no other buyers.

"There are already signs that the Chinese government has had enough and is buying only as much US paper as can help stabilize the global financial markets."

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