Add Income Inequality To Massive Bail-outs of Rich Bankers and What Do You Get?
As the number of billionaires - between 1,600-1,700 now - begins to approach 2,000, possibly in the next year or so, and the purchasing power of the income of a growing percentage of people continues to decline, you can expect the vice of envy to show its ugly face more and more. But it won't be only the billionaires who face the growing condemnations of "the rich." Such condemnations will steadily devolve to just about anyone who has more than whoever it is doing the condemning. This sad reality will, I believe, surface more and more as we work our way through 2014 and beyond.
I've no doubt that Marxists and other socialist types will try to take advantage of the very real phenomenon of income inequality, but it's a real shame if they have their way. They offer no real or lasting solutions, especially the hard-line Marxist varieties, as we've witnessed in the collapse of the Soviet Union, East Germany, more recently the coming collapse of Venezuela's economy and - possibly - society. And while the list is longer than these few examples, I'm afraid the recent bail-outs of bankers have and will continue to incite the mob and provide a forum for these worst elements to attempt to impose the failures of socialism here in the U.S.
On the other hand, what can you expect when the reality sinks in of what really happened in 2008 and thereafter when the government extended a helping hand to Wall Street even as the vast body of its citizens were losing their jobs as they watched the value of their retirement plans disappear. Even today, precious few have been able to obtain the level of employment they once had, and precious fewer have been able to restore any reasonable value to their retirement savings.
If you're interested in learning exactly how the government misled us all as they doled out trillions to already rich and powerful people and corporate entities, pick up a copy of Bail-Out by Neil Barofsky.
If you have been following our recent posts, you know that one of our concerns is the potential for social unrest spinning out of control in the face of the ongoing difficulties so many of us face. While Mr. Barofsky's book does tend to dwell on Mr. Barofsky himself a bit too much, he does include enough of the facts to at least give you a basic understanding of how, in the midst of a crisis that allegedly threatened to collapse the financial system of the entire world, Wall Street was able to suck up most of the bail-out money originally intended to provide relief to the everyday people whose home values had crashed and whose mortgages were now underwater. Even when you factor in the personal responsibility of many people for their own plight, many of whom bought houses too big and expensive by taking on enormous mortgages, in some cases lying about their finances to qualify for those mortgages, one is still appalled as our author sheds light on those days from the original TARP bail-out under Bush to the explosion of money doled out when Obama arrived in office. Yes, that same Obama who rode the crest of a wave of populist support promising the people change, reform, and all the other nostrums that people seem to always fall for when things aren't going well and the "new guy" claims to have their best interests at heart.
But back to the issue of social unrest, why not let the author of Bail-out tell us what he concluded after serving as special Inspector General of TARP and subsequent bail-out programs:
I've no doubt that Marxists and other socialist types will try to take advantage of the very real phenomenon of income inequality, but it's a real shame if they have their way. They offer no real or lasting solutions, especially the hard-line Marxist varieties, as we've witnessed in the collapse of the Soviet Union, East Germany, more recently the coming collapse of Venezuela's economy and - possibly - society. And while the list is longer than these few examples, I'm afraid the recent bail-outs of bankers have and will continue to incite the mob and provide a forum for these worst elements to attempt to impose the failures of socialism here in the U.S.
On the other hand, what can you expect when the reality sinks in of what really happened in 2008 and thereafter when the government extended a helping hand to Wall Street even as the vast body of its citizens were losing their jobs as they watched the value of their retirement plans disappear. Even today, precious few have been able to obtain the level of employment they once had, and precious fewer have been able to restore any reasonable value to their retirement savings.
If you're interested in learning exactly how the government misled us all as they doled out trillions to already rich and powerful people and corporate entities, pick up a copy of Bail-Out by Neil Barofsky.
If you have been following our recent posts, you know that one of our concerns is the potential for social unrest spinning out of control in the face of the ongoing difficulties so many of us face. While Mr. Barofsky's book does tend to dwell on Mr. Barofsky himself a bit too much, he does include enough of the facts to at least give you a basic understanding of how, in the midst of a crisis that allegedly threatened to collapse the financial system of the entire world, Wall Street was able to suck up most of the bail-out money originally intended to provide relief to the everyday people whose home values had crashed and whose mortgages were now underwater. Even when you factor in the personal responsibility of many people for their own plight, many of whom bought houses too big and expensive by taking on enormous mortgages, in some cases lying about their finances to qualify for those mortgages, one is still appalled as our author sheds light on those days from the original TARP bail-out under Bush to the explosion of money doled out when Obama arrived in office. Yes, that same Obama who rode the crest of a wave of populist support promising the people change, reform, and all the other nostrums that people seem to always fall for when things aren't going well and the "new guy" claims to have their best interests at heart.
But back to the issue of social unrest, why not let the author of Bail-out tell us what he concluded after serving as special Inspector General of TARP and subsequent bail-out programs:
"I now realize that the American people should lose faith in their government. They should deplore the captured politicians and regulators who took their taxpayer dollars and distributed them to the banks without insisting that they be accountable for how the bailout money was spent. They should be revolted by a financial system that rewards failure and protects the fortunes of those who drove the system to the point of collapse and will undoubtedly do so again. They should be enraged by the broken promises to Main Street and the unending protection of Wall Street. Because only with this appropriate and justified rage can we sow the seeds for the types of reform that will one day break our system free front the corrupting grasp of the megabucks." (p. 234)And in case it isn't clear to you that really nothing has changed to reign in the big banks since the original 2008 crisis hit, Barofsky explains that as of 2012:
"The top banks are 23 percent larger than they were before the crisis. They now hold more than $8.5 trillion in assets, the equivalent of 56 percent of the country's annual output, up from 43 percent just five years ago. The risk in our banking system is remarkable concentrated in these banks, which now control 52 percent of all industry assets, up from 17 percent four decades ago. As to Dodd-Frank, there is now broad recognition that it has not solved the problem it was meant to address - the power and influence of banks deemed too big to fail." (p. 229)So there we have the potential tinder box populated by those whose income has not "kept up" standing side-by-side with those who "cleaned up" during the crisis, who even today continue to benefit from the largess of the government. And that's how you get what will be, I fear, growing social unrest, whose manifestations we have only begun to experience.
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