Subscribe to Dollars & Sense magazine. Recent articles related to the financial crisis. Civil Rights Movement for the Middle ClassA guest post on Naked Capitalism. Hat-tip to Ben C.A New Civil Rights Movement is Afoot for the Middle Class By John Bougearel, Director of Futures and Equity Research at Structural Logic. Tuesday, October 21 2009 The core of America is the middle class. And Harvard Law Professor and chair of the Congressional Oversight Panel COP (the COP is to oversee TARP, the Troubled Assets Relief Program) Elizabeth Warren tells us that the core of America is being carved up, hollowed out. In her words, "I Believe Middle Class is Under Terrific Assault...Middle class became the turkey at the Thanksgiving dinner" of the financial elite. Elizabeth Warren is more than just right. Call it for what it is. It has more names than Satan. Call it plundering. Call it pillaging. Call it extortion, Call it fraud. Call it racketeering. Call it the financial raping of the middle class. Call it criminal. Consider the following. Middle class never consented to this financial rape. They vehemently protested it when the gov't first proposed a $700 bailout of the financial system called TARP in Septermber 2008. Yet what did Congress and our government do? They went ahead and did it anyway. This boils down to one thing, taxation without representation. Our votes do not matter anymore. This is happening because the US government is allowing it to happen. It is one thing for the government to raise the social safety nets for the poor, elderly and such. It is entirely another to raise the social safety nets for the financial elitists at taxpayer expense. But that is exactly what the government has done in the past year. They have rescued a financial system at the expense of everyone else. Mythical constructs and messages that financial companies are Too Big to Fail, systemic risk is too great, No More Lehman Brothers have been created by the powers that be. And it is in the name of No More Lehman Brothers and Too Big to Fail that Middle Class America is being carved up and hollowed out. Appearing in Michael Moore's "Capitalism: A Love Story, Michael Moore asks Elizabeth Warren (regarding the $700 billion dollar taxpayer funded bailout of the financial elite) "Where's are money? And Warren takes a deep breath, looks briefly over her left shoulder (as if she might find it there), and exhales "I don't know." Washington Post's Lois Romano asked Elizabeth Warren, "Why don't you know?" WARREN: We don't know where the $700 billion dollars is because the system was initially designed to make sure that we didn't know. When Secretary Paulson first put this money out into the banks, he didn't ask for ‘what are you going to do with it.' He didn't put any restrictions on it. He didn't put any tabs on where it was going to go. In other words, he didn't ask... US Secretary of the Treasury Hank Paulson did not ask the banks what they were going to do with our taxpayer money. The US treasury, given Congressional blessing, simply gave the banksters hundreds of billions of taxpayer dollars with no questions asked. This is wholesale taxation without representation. So Romano asks Warren, "Are we, as an [economy] are we better off systemically now? Have we put things in place to prevent this from happening?" Warren replies "This really has me worried." And it should have Warren worried because our Humpty Dumpty financial system had a great fall, and Humpty was put together again by all the King's horses (read the US Treasury and Congress) and all the King's men (read Uncle Sam's taxpayers), Yet, Humpty Dumpty is still the same old fragile egg he was when he sat on a wall right before he had his great fall.
And it is not just the Humpty Dumpty financial system that is so fragile. WARREN: The way I see it is that the financial system itself is quite fragile, and that the underlying economy, the real economy, jobs, housing, household wealth, is still in a very perilous state. So Lois Romano asks Warren, "Are we going to look back in two or three years at this TARP expenditure and say well, it worked." WARREN: "What is so astonishing about the first expenditures under TARP was that taxpayer dollars were put into financial institutions that were still, um, left all of their shareholders intact, that were still paying dividends, that paid their creditors 100 cents on the dollar. We put taxpayer money in without saying ‘you've got to use up everyone else's money first.' And once that's the case, I don't know how you ever put the genie back in the bottle. I don't know how you ever persuade either a large corporation or the wider marketplace that if you can just get big enough and tie yourself to enough other important people, institutions, that if something goes wrong, the taxpayer will be behind you. Aaron Task interviewed Elizabeth Warren at The Economist's Oct 15-16 "Buttonwood Gathering" In that interview, Warren says, The big banks always get what they want. They have all the money, all the lobbyists. And boy is that true on this one. There's just not a lobby on the other side. The Buttonwood Gathering event took place over the weekend following Q3 earnings announcements from the big banks. Because of the taxpayer bailout of these big banks, some of them, namely JPM and GS are now enjoying record profits and will enjoy record bonuses this season. The irony is overwhelming that this is happening in 2009. Because of the failure of the financial system, more than 7 million middle class jobs have been lost, and the US economy is confronting double digit unemployment for the first time since 1982. Without taxpayer dollars, these record profits and record bonuses in 2009 would not even be possible for the big banks. Hell, without taxpayer dollars zombifying them with congressional and White House sanctioning, they'd have gone the way of the dinosaurs, the way of the buggy whips. That is the way history should have gone. But no, that is counterfactual now. There is something very wrong in America, the very way it is being run by government, and run over by the big banks. It is high time for middle class America to push back, precisely because our elected officials have not only failed to do so, but have legislated all of this to make it happen. Our government has become an active agent in the gutting of the middle class. Commenting on Wall Street' record 2009 bonuses Elizabeth Warren says she is
Read the rest of the post. Labels: Elizabeth Warren, financial regulation, John Bougearel, middle class, Naked Capitalism, TARP program |