EMAIL SIGN UP!
Most Popular This Week
Popular content
Today's Top News
Of Breadlines and Banks
President Obama was elected with a large enough mandate for fundamental change that he could forge a fresh social compact, lock in place a new set of mutual obligations and rewrite the relationship between the state and the populace.
Sasha Abramsky's comments in his book Breadline USA (which I'm paraphrasing there) would be striking enough on any day. The need for change is obvious. In 2008 the official poverty line stood at a shameful $10,590 for a single person and $21,203 for a family of four. And according to the Census 37 million Americans were living at or below those numbers. In 2008, 28.4 million Americans were receiving food stamps, a number that's risen 19 percent since today's recession started.
The need for change is obvious, and last November, the appetite for it became palpable. "President Barack Obama's election was an astounding transformative moment," writes Abramsky. "Tens of millions of voters, from the most liberal to the most conservative regions of the country, stood up and said no more to the divisive greed-driven policies and priorities of the recent past."
But then there's this, from today's news. Analysts report that the Wall Street firm Goldman Sachs, a major recipient of government cash, has earned a staggering $2 billion in the last three months. The bank's stock value has soared 68 percent and the Wall Street Journal predicts that it's on track to pay out as much as $20 billion this year, in compensation and benefits to its employees -- or about $700,000 per person.
As formerly homelss mom, Franceska Dillella told GRITtv today -- poor Americans, like those in her New York shelter, celebrated on election night. But well-connected Goldman didn't just get hugs or hope when they fell on hard times: Goldman received $13 billion from the Bush bailout of the failed insurance giant AIG and $28 billion more in low-interest loans -- plus insurance worth untold billions more -- thereafter. Now the bank's repaid that loan and bounced back: how? The Times says Goldman "Brilliantly" capitalized on chaos--making a fortune trading bonds and buying and selling volatile currencies in a shifting market, and making out from gambling on commodities like oil -- raising prices for everyone.
Back to Abramsky. In Breadlines Sasha writes that if Obama rewrites the social contract and all the rest, he might be able contain the calamity of the 2008 economic collapse. "But if he fails that calamity will haunt the next several decades..."
What's more too big to fail: The banks or the country?
- Posted in
Comments
Note: Disqus 2012 is best viewed on an up to date browser. Click here for information. Instructions for how to sign up to comment can be viewed here. Our Comment Policy can be viewed here. Please follow the guidelines. Note to Readers: Spam Filter May Capture Legitimate Comments...
65 Comments so far
Show All"What's more too big to fail: The banks or the country?"
Tsk, tsk, Laura Flanders, did you not know that the banks ARE the country, at least that portion of it worthy of the solicitious attention of our political leaders? As Goldman Sach goes (down and up and down and up), so goes the roller coaster known as the U.S. economy.
I've met people who would desperately invest in such stocks especially if they were unemployed or even underemployed. See my response to Cygnus. Maybe we the people are guilty of falling for it. Well, not you and me but you get the idea. ;(
What part of Senator Dick Durbin's confirmation that financial industry owns Congress didn't the author understand ?
What part of Senator Dick Durbin's confirmation that financial industry owns Congress didn't the author understand ?
A question to all CD'ers:
How will you be celebrating Goldman Sach's blowout earnings today?
I already switched to a credit union a long time ago. I tried to get a couple of my ex-friends to pull out of the GS stock but they shouted "Well Jenny, you're employed but we're not so shut up and quit telling us what to do with our money ! Maybe we'll be richer than you but as a friend, it's none of your business to tell me what to do with my money unless you're a loser !" Sigh, I haven't seen them since January but I don't feel like going back to them. I wouldn't be surprised if they're still into it. I may have lost those two "friends" but I'm happy I met more wise people on this site. :)
I've been a credit union member all along and never had a bank account and I haven't regretted it. I'm not sure I can help those two friends of yours. They're either gonna have to learn to live in nature or find a job. Gambling on the market doesn't get one very far.
Well as a the article says We gave them about 40 billion this year and they made 2 billion in profit which they will give to their employees as a bonus.... so next time when they lose 2 billion we had better give them another 40 billion so that they don't get cheated as a hedge against inflation.
I'll skip the celebration.
As Gail pointed out it is worse than that with 20 billion for bonuses.
After being in the hole, from a new profit of 2 billion they can afford 20 billion because we just gave it to them.
Considering what they got for free, the profit is not staggering at all.
Party on, Wall Street.
Goldman never needed the bailout money, they were forced to take it. The best thing for them was the collapse of Bear Sterns and the decision that they promoted not to bailout Lehman Brothers. With the reduced competition it was even easier to make money in equities, commodities and forex markets using their computer trading that anyone who knows how it works can use to manipulate markets to their financial benefit.
Our country is in a steep decline, beginning with the obvious problem that it has lost its way ethically. Those who get rich at the expense of others have gained money but at the price of their souls. Take that in any metaphorical way you want.
"Analysts report that the Wall Street firm Goldman Sachs, a major recipient of government cash, has earned a staggering $2 billion in the last three months. The bank's stock value has soared 68 percent and the Wall Street Journal predicts that it's on track to pay out as much as $20 billion this year, in compensation and benefits to its employees -- or about $700,000 per person."
It earned $2 billion in the last 3 months and is planning on paying out $20 billion to its employees?
What brilliant alchemists! I wonder how many other "to-big-to-fail" banks will be able to turn $2 billion into $20 billion?
Profits is what's left from revenues after expenses have been deducted. And that $20 billion gets written off as an expense...or at least that's how it works to my limited understanding. Can someone tell me if I'm right or wong?
zmann July 14th, 2009 11:43 am
"Profits is what's left from revenues after expenses have been deducted. And that $20 billion gets written off as an expense..."
zmann,
It this is true, what you're saying is that Goldman Sachs over a three month period has already taken in $22 billion in revenues or expects to do so by the end of the year in order to dish-out $20 billion to its employees in compensation and benefits. That of course doesn't even address the "$13 billion from the Bush bailout of the failed insurance giant AIG and $28 billion more in low-interest loans -- plus insurance worth untold billions more" that Goldman has allegedly payed back.
Without including the "insurance worth untold billions more", Goldman will have to bring in revenues somewhere in the vicinity of $60+ billion to pay off taxpayer loans and give $20 billion to its employees in compensation(what type) and benifits (what type). And if their shareholders expect a profit, they'll have to earn a hell of a lot more!
How did Goldman mangage to bounce back so quickly in the worse recession we have ever had in this country? No wonder they're so concerned about the alleged theft of their software that could potentially be used to "manipulate markets in unfair ways". If I was making that much money in the worst recession in history, I would be worried too!
zmann,
Jubak at Microsoft Money has a great article on the Goldman profit. He lays bare the fact that, given the bailout funds and give away interest rates on the loans that Goldman received, a complete moron would have made much more than the profir they declared. They are liars. They are still underwater and lying about it. Even greedy fools should steer clear of this stock.
Heh not to worry, I don't make enough money right now to invest a windowsill pot of herbs, nevermind stocks. I plan on funding my retirement through annuities, from what I've heard that would work best. But I'm pretty clueless about this kind of stuff, even if I am Jewish :-)
You are confusing profit with payroll. The salaries and bonuses to it's employees - up to and including the CEO, are business expense - no different than the rent or utilities. The profit is what left after all the expenses including payroll have been paid.
But of course salaries and bonuses can be lowered during bad times (though it seems in these types of companies that never happens), whereas rents and utilities can't. But then that would be more profit to be taxed, so of course they'll give it to the executives instead.
Obama's heart is left. His poitics centrist. We must help him follow his heart. Goldman Sachs got its welfare bailout. Now the American people need help.
The "American people" don't own Obama, Goldman Sachs does.
The Democratic Party National Committee required that Obama put his heart in storage as a condition of receiving their party's nomination last year.
Worse than that for Obama: they required that he sell his soul. I do now understand why anyone would expect different, given that his rise to power was from a thoroughly corrupt system.
These politic's are Centrist? You must be kidding.
Preserving the banking system as is, as Obama is doing, is what I would consider centrist too. Now, lowering corporate and capital gains taxes and lifting regulations is the right-wing agenda for banks. Left of center is to do thorough investigations, assign blame, and prosecute those responsible where applicable, and reintroduce all the regulations that were lifted over the past few decades, and perhaps introduce more. The leftist position is basically fuck the banks, go to credit unions, buy local, and create an economy based on sustainability and good stewardship of the planet, not growth.
Or at least that's how I see it.
"The leftist position is basically fuck the banks, go to credit unions, buy local, and create an economy based on sustainability and good stewardship of the planet, not growth."
Actually, even a lot of conservatives have dared not touch the credit unions. On buying local, visit some of the deep red rural areas in VA and MD. There's more of a buy local mentality there even though it's kind of implicit.
Perhaps that's more of a populist position then. Populism can transcend the political spectrum.
That's true. I'm all for populism straight. I'm getting so sick and tired of all this left vs right divide myself. Even on this site of all places, there's still so much division and intolerance and maybe all of us are guilty of it, each of us in some way or other. Today, I had a disagreement and a misunderstanding in another article and I got whacked for it by being called gutless and no intellectual. I asked for reference and no reply but at least someone else was kind enough to show up and help and I thanked her for it and even gave a general reply on why need to unite and find ways to help one another instead of shooting and condescending one another. George Lakoff always warned about this kind of divisiveness. Ronald Reagan even had an 11th commandment to get the GOP united back in 1980 and I'll bet Obama and his team did the same thing to finally get the Democrats united as best as possible last year even though Obama has offered plenty of disappointments for us all to be outraged at. I would just love to see good populism transcend the political spectrum because I'm sick and tired of war and hell in life and I see more people feeling the same way.
As long as it's not Christian, right-wing populism...Chris Hedges warned about that a few months ago...it still scares me. Just think of Glenn Beck *shudder*
zmann,
I agree. The "ism" thing isn't where people are at. They see that large organizations like government and corporations invariably shaft the little guy so they don't see the solution in some new or old hero or "ism". The internet has helped people to see that we can buy from each other without so many acursed middle men milking us along the way. Populism is one thing you could call it but I think it's just common sense.
Yeah...which is why the Right, through Glenn Beck, are going through such lengths to claim they own "common sense"...it's even the name of his new book.
Of Course,
These people like Beck are PR experts. They are always trying to get out in front of any rational thinking in order to side track it.
Having lived in or been through pretty much all of Virginia since childhood, how can people, conservative or otherwise, buy local? Like most of the South, there is no "local" left - only Wal-Mart, Home Depot, Kroger, and that all time dining favorite, Red Lobster! For the neighborhood bar, there is Applebee's or Max and Erma's, or TGI Fridays. There is this one real mom-and-pop neighborhood bar in Vienna, Virginia - the Vienna Inn, it is regarded as so unique that it is a tourist attraction like the "Main Street" in Walt Disney world.
There are no food-co-ops in NOVA, or the Tidewater - where 2/3 of the entire state's population lives. Never seen a farmers market either. Kroger, Safeway, or Giant Food.
Having lived in this kind of environment, I didn't know what local-scale mom-and-pop economics was until I moved across the M-D line into the unfashionable rust belt. What an epiphany!
It's a wonder that people see this as a decline in America. Only if Obama is successful will America decline. And I don't believe he will be. He won't be rewriting any social contract.
This is the first stage in an American renaissance, get rid of the Corporate first laws, then jettison the Utopian ambitions of their extremist counterparts to bring us back to an America that we should be.
Obama's over reach will expose both for what they really are.
Obsolete strategy there, to try and sell centrism as the moderate, sensible balance between two extremes. Instead, centrism is only a license for oppression from the right, which harbors both liberal irresponsibility and conservative authoritarianism. The oppressor, when confronted with the misery he creates, only has to point at the so-called balance of centrism to arrest the criticism. Philanthropy has been one of his favorite tools. He claims the people need the elites so balance is good. He claims that without the right, the politics of irresponsibilty and authoritarianism, we have only chaotic anarchy on the left, when in fact most species in nature thrive in anarchy. It is only up against organized oppression itself where anarchy fails. Again, the right's arguments collapse down to "tolerate oppression just because that's your condition". The center is the refuge of the oppressor and is no man's land for the people. Hostile territory. The only safe harbor for the people is the far-left. This is the big lesson people are learning today. It's coherent with everyday experience, that is, those who are most happy are most free from oppression, i.e. standing on the far-left.
Just as 40 is the new 30, "centrism" is the new capitulation.
Under the guise of bipartisanship, Obama is giving the Republicans 95% of what they demand so that they will have ownership of the actions and policies that evolve during his watch, irrespective of the damage caused to 98% of Americans.
Just as Clinton promoted a NAFTA Bill (sans safety and environmental conditions) as vigorously as his republican predecessor did, Obama is zealously carrying the torch for many of the Dubya Regime's projects and policies.
Just as the Democrats lost control of Congress in 1994 as a result of Clinton being such a good republican, the Democrats will lose control of Congress in 2010 as a result of Obama being such a good republican.
rtdrury,
"The oppressor, when confronted with the misery he creates, only has to point at the so-called balance of centrism to arrest the criticism."
That is so true. There should be a course in high school dedicated to teaching people to combat this form of manipulation. My dad was an Army officer and this was one of his favorite techniques. It took me a long time to see through the bullshit.
Thank you for your wise words.
How do you think Obama is overreaching? Ask a progressive economist like Paul Krugman or Dean Baker about Obama's policies...they'll tell you he isn't really doing jack,
A more polite way of saying it is that Obama is letting the "free market" determine action and policy. We have seen how well that has worked.
The definition of insanity is: trying the same things over again and expecting different results.
Obama is a complete sellout. He will definitely fail. I am almost sorry I voted for him (except, maybe for a moment, when I remember the phrase, "My fellow prisoners")
The deficits his admin are running are staggering and will eventually lead to another economic meltdown. Only there will be no bailout for this one; the government will have to face the music and cut spending. So Goldman maybe be riding high on the hog now but the party will soon be over...and for a long time.
Obimbo is continuing the looting and gutting of the United States. Just as capital knows no boundaries in the contemporary world, people like Obimbo or George Wanker Bush know no loyalty to anyone or anything except money. At the end of Obimbo's first term, we would all be staggered to learn exactly how much money he amassed in those four years.
Credit card companies are getting much tighter with their credit as well, and not budging on their usury rates. I checked into getting a better rate for a cash advance on one of my cards for a major purchase. They would not even consider anything less then 22% plus a 3% (soon to be 5%) transaction fee. I feel sorry for those deep in debt with them. It's all part of the banskster structure.
Sorry to hear you had a need to make a "major purchase". Perhaps you can build what you need from waste materials.
I would have if I could have. I just had to dig deeper into savings. We needed a newer vehicle, and I wanted one I could afford with better gas mileage. Before the banks collapse, you could negotiate better terms. Even with the prime rate so low, they won't budge off their usury rates. I'd rather hike or ride a bike than give them my business, though it might be hard to force the wife and kids to do that (ha, ha).
Shach writes
Obama's heart is left. His politics centrist
Touching sentiments. Its the so-called progressives who drank the "Obi-Kool-Aid" last November who continue to hallucinate about his "heart" being on the left. As George Lakey reports from Norway (Europe defined these political terms)
"Here, Obama would be on the right wing"
(Seeing Obama as Norwegians See Him )
http://www.commondreams.org/view/2009/07/08-2
Maybe Shach like a lot of that esteemed breed called "Americans" needs a primer on political definitions.
The American oligarchy has done a spectacular job in creating Orwellian spectacles..the latest gimmick of-course is to put a "black" face on a murderous, pillaging empire and letting people "Hope" for "Change"
As if the galley-slaves will be invited to the manor-house to live like humans.
Keep on tripping
Cyrus
cyrus ptolemon Shach writes
Obama's heart is left. His politics centrist
Obama's heart is THEFT, not left, not right, not center and not good.
Goldman & Obama are made for each other.
"...trading bonds and buying and selling volatile currencies in a shifting market, and making out from gambling on commodities like oil..."
Thanks for contributing to society, f@#king bankster mafia SOBs... I mean, fellow patriotic Americans!
I ever met any of yaz at a party, I'm taking teeth. Understand?
Goldman Sacks didn't EARN anything. They plundered.
Obama can KEEP his CHANGE!
He has done nothing for the people who voted him into office - well unless of course some of those people are the CEOs of Goldman, AIG and the rest of the recipients of Billions of Dollars in Bailouts and Bonuses. But for those on the ground, the poor, the working class and the middle class people, NOTHING, NADA, Squat!
I am SO Happy I did NOT Vote for (your president) Obama.
People, things are going to get bad - Here is my advice, at least the advice I am living by;
buy Silver (or Gold if you can afford it) Silver is cheap right now, with great long term investment potential, really, Silver is RARE and has MANY (including health) more uses than any other precious or non precious metal out there - It is a Great way to safely invest any money you can afford to invest. Don't take my word for it, do the research.
Get OUT of the Stock Market - and be careful with your devaluing dollar!
Eat Organic (preferably Vegetarian or Vegan) but STOP eating GMO's, Processed foods, fast foods, Junk food - They aren't, the people at the top of the chain. And if you want to survive you need a healthy body! Invest in your health and eat right.
Buy non-GMO seeds as well, save them, plant them and grow your own vegetables and herbs. It might help once people start lining up for bread and cheese.
Stop the excessive shopping for useless items and if you do shop - BUY AMERICAN or at the very least, FAIR TRADE Items. Do NOT Support their system of mass consumerism, slave shops, NAFTA & CAFTA etc. Support local American business. The same goes for food, support your local Farmers.
And most of all, if you still are, STOP drinking that kool-aid - wake up to the fact that you have been had, admit it, Obama fooled a lot of people with his slick talking, big smiley face and all around nice guy persona. I know you had good intentions, W was a moron, you were looking for some real, needed Change, but we (well you who voted for him) have been Bamboozled.
It is time to start thinking about the next election and the time in between that next election. Start preparing and looking into other possibilities, look into the future of this country, some new political parties, THIRD PARTIES or so called Alternative Candidates such as RON PAUL, Cynthia Mickinney, Green Party, Libertarian Party etc...
If you buy metals, make sure you have it in hand. I don't trust a piece of paper that says I own it. Remember the Goldsmith's Tale!
Hmmm, what makes you believe there will be another election, or that any conscionable person or party would be allowed to participate?
I do echo your advice about divesting yourself from 'paper' wealth...unless, of course, you might be referring to toilet paper. Even that we can wean ourselves away from, though for most folks I reckon the concept is a bit gross.
I would add to your comments about saving and storing seed (heirloom varieties as much as possible, when and if you can find them), but along with the seed, you might want to gather up a wide selection of hand tools, books of any and all kinds, and ammo...lots and lots of ammo. And no, I am not a gun nut (not that knowing how to properly handle and use weapons is necessarily a bad thing in and of itself), but you never know when an ample supply of bullets might come in handy.
Who has any money to buy silver? Sorry, but you are way out of touch.
Who has money to buy organic?
It's been rice and beans and only the cheapest of those, for many of us, for far too long.