Of Breadlines and Banks

Published on
by
GRITtv

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?

Laura Flanders

Laura is YES! Magazine's 2013 Local Economies Reporting Fellow and is executive producer and founder and host of "GRITtv with Laura Flanders." Follow her on Twitter @GRITlaura.

More in: