- js reader version
- view hidden posts
- tags and related articles
by SF Workers Action
Tuesday, Mar. 31, 2009 at 3:43 PM
These past several weeks have witnessed a stunning attack on working people, with the Obama administration leading the charge.
It started with Larry Summers, Obama’s chief economic adviser, responding to the A.I.G. bonuses by pontificating about the sanctity of contracts: “We are a country of law. There are contracts. The government cannot just abrogate contracts.” Like a mad dog pursuing its prey, he pounced on the conclusion that absolutely nothing could be done about the bonuses. Unfortunately, Summers voiced no similar outcry when the Obama administration, only weeks earlier, insisted that the U.A.W. contracts be renegotiated as a condition for the auto industry receiving a bailout, suggesting that a different set of rules applies to the rich than to the rest of us who constitute the majority and work for a living.
However, when a public uproar swept the country in response to these bonuses, many of which were ear-marked for the financial wizards who helped drive the economy over the cliff, the Obama administration executed a hasty about-face. Suddenly, they too were “outraged,” along with everyone in Congress who wanted to keep alive any chance of re-election.
But then, Eliot Spitzer, former New York governor, weighed into the fracas, arguing that the bonuses were only the tip of the iceberg. The real scandal, he claimed, centers on A.I.G.’s decision to redirect billions of its public bailout funds to some of its trading partners, including Goldman Sachs. For weeks, A.I.G. had refused to divulge the names of these recipients and only acquiesced when threatened with legal action. According to Spitzer, the issue is basically this: if taxpayers are being forced to sacrifice by bailing out financial institutions, shouldn’t the financial institutions themselves be compelled to make their own sacrifices rather than being made completely whole by taxpayer money, as is happening when Goldman Sachs receives taxpayer money from A.I.G.? And one could add that, after all, the financial institutions had some responsibility in creating this financial disaster; we working people had nothing to do with it.
But even these setbacks for working people pale in comparison to the latest dog and pony show orchestrated by the Obama administration in response to the toxic assets that are dragging down the financial institutions here in the U.S. and around the world. As Paul Krugman, Princeton economist, observed: “…basically the plan hands out gold-plated toasters to anybody who participates.” Joseph Stiglitz, Nobel Prize-winning economist, described it as “very badly flawed,” offering “perverse incentives,” that amount to “robbery of the American people.”
Basically, the program, which is trumpeted as a public-private partnership, will give billions of dollars of our taxes to subsidize private investors who buy the toxic assets. We will contribute 94 percent of the cost, leaving only 6 percent that the private investors must shoulder. If the toxic assets prove to be worthless, as their name suggests, we taxpayers will suffer heavy losses while the investors can walk away almost painlessly. However, if these assets turn out to be profitable, then the investors and taxpayers share in the proceeds on a 50-50 basis, not on the basis of 94-6, as one would think if fairness marked the bottom line. This kind of partnership resembles the kind that exists between predators and their prey. Or, as Paul Krugman noted, it’s like this: heads the private investors win, tails the public loses. Once again a different set of rules applies to rich as opposed to the rest of us.
All of the above can be summarized in this way: as long as the markets operate to make the rich even richer, we must consider them sacred. However, when they fail to deliver this outcome, the government must step in and, with our tax money, insure that the rich can continue their ascent to ever-greater heights of wealth while the rest of us languish in the dust, struggling to buy a home, keep a job, provide a decent education for our children, secure health coverage for ourselves and our family, and so on.
Finally, many of us harbor the illusion that when it comes to paying taxes, the rich carry the heavier burden. As Dorothy Brown recently pointed out: “There are effectively two tax systems in America: one for the very rich and one for the rest of us. Income from stock dividends and capital gains, which makes up a disproportionate amount of the earnings of the very rich, is taxed at 15 percent. But the bulk of what the rest of us earn — wages and interest from savings accounts — is taxed at up to 35 percent.” For this reason, billionaire Warren Buffett, to his credit, has complained that he was taxed at a rate of 17.7 percent on his million income while his secretary struggled under the onerous rate of 30 percent.
The government has embraced two sets of rules: one for the rich and another for the rest of us. Working people will have to organize themselves so that they can forcefully demand, not only a bailout for working people, but an entirely new and just set of rules that level the playing field. But they will have to come to the realization that the root of the problem lies in the fact that this is a class society, and anything of significance happens on that basis.
On the one hand, the rich own the economy and run it exclusively in their own interests in pursuit of the maximization of profits, regardless of the pain and suffering they inflict on the rest of us and the environment. They lay us off, foreclose our homes, and deprive us of health care without a second thought. And by giving millions of dollars to politicians, they in essence run the country, secure in the knowledge that the politicians will return the favor with preferential legislation and bailouts on demand.
On the other hand, working people labor long and hard only to be told that we are being laid off, or our pension has disappeared, or we have lost our savings on a stock market that operates according to unfathomable principles.
We must insist that the country operate in the interests of the majority. But this goal requires that we embrace truly democratic principles so that every important economic decision is discussed, debated, and determined by a vote. Only then will we succeed in abolishing classes, abolishing the privileges of the rich, and establishing a society where the full development of every individual is the fundamental premise embraced by all.
Report this post as:
GUIDE TO REBEL CITY LOS ANGELES AVAILABLE
lausd whistle blower
Help KCET and UCLA identify 60s-70s Chicano images
UCLA Luskin: Casting Youth Justice in a Different Light
Change Links April 2018
Nuclear Shutdown News March 2018
Join The Protest Rally in Glendale on April 10, 2018!
Join The Protest Rally in Glendale on April 10, 2018!
Spring 2018 National Immigrant Solidarity Network News Alert!
Anti-Eviction Mapping Project Shows Shocking Eviction Trends in L.A.
Steve Mnuchin video at UCLA released
Actress and Philanthropist Tanna Frederick Hosts Project Save Our Surf Beach Clean Ups
After Being Told He's 'Full of Sh*t' at School Event, Mnuchin Demands UCLA Suppress Video
Resolution of the Rent Strike in Boyle Heights
What Big Brother Knows About You and What You Can Do About It
Step Up As LAPD Chief Charlie Beck Steps Down
Our House Grief Support Center Hosts 9th Annual Run For Hope, April 29
Don’t let this LA County Probation Department overhaul proposal sit on the shelf
Echo Park Residents Sue LA Over Controversial Development
Former Signal Hill police officer pleads guilty in road-rage incident in Irvine
Calif. Police Accused of 'Collusion' With Neo-Nazis After Release of Court Documents
Center for the Study of Political Graphics exhibit on Police Abuse posters
City Agrees to Settle Lawsuit Claiming Pasadena Police Officer Had His Sister Falsely Arre
Professor's Study Highlights Health Risks of Urban Oil Drilling
Claims paid involving Pasadena Police Department 2014 to present
Pasadenans - get your license plate reader records from police
LA Times Homicide Report
More Local News...
What does the Quran Say About Islamic Dress??
Biodiversité ou la nature privatisée
The Market is a Universal Totalitarian Religion
Book Available about Hispanics and US Civil War by National Park Service
The Shortwave Report 04/20/18 Listen Globally!
The Republican 'Prolife' Party Is the Party of War, Execution, and Bear Cub Murder
Paraphysique de la dictature étatique
Book Review: "The New Bonapartists"
The West Must Take the First Steps to Russia
Théorie générale de la révolution ou hommage à feu Mikhaïl Bakounine
The Shortwave Report 04/13/18 Listen Globally!
“Lost in a Dream” Singing Competition Winner to Be Chosen on April 15 for ,000 Prize!
The World Dependent on Central Banks
Ohio Governor Race: Dennis Kucinich & Richard Cordray Run Against Mike DeWine
March 2018 Honduras Coup Again Update
Apologie du zadisme insurrectionnel
ICE contract with license plate reader company
Black Portraiture(S) IV: The Color of Silence...Cuba No...Cambridge Yes
Prohibiting Micro-Second Betting on the Exchanges
Prosecutors treat Muslims harsher than non-Muslims for the same crimes
Amy Goodman interview on cell phone safety
Mesa, Arizona police officer kills unarmed white man
Israeli leaders should be prosecuted for war crimes
Paraphysique de l'autorité
Two Podcasts on fbi corruption
Fbi assassins assault & try to kill DAVID ATKINS
More Breaking News...