Wall Street’s Socialists

Take a good look.

Exchange floor

These are the real Socialists in America today(1).

No, not Socialism in the text-book definition of the word. I mean something more heinous:  a dystopian form of capitalism in which all the gains are privatized and all the losses are socialized.

The New York Times reported that when Bernanke said, “…the economy could soon be strong enough to live with less of its stimulus, the markets threw their version of a tantrum.”

Why is that? Why do the all-knowing and all-powerful “invisible hands” on Wall Street who control the world’s finances and our so-called free market start wringing those hands and selling off stock at the thought of fewer stimulus dollars?

Shouldn’t they be overjoyed? What happened to all the confidence they profess to have that capitalists and corporations would thrive if they were simply left to their own devices?

And, where are the cheers from the GOP, tea partiers, and Randians on the right for Bernanke’s announcement?

Why are “investors” (and let’s be clear, they don’t mean us) selling stocks when corporate profits are generally at historic highs?

I know. Buy low, sell high. So, has the high been reached? Could it be that those highs have been achieved at least in part because there was federal stimulus being pumped into the economy?

Could it be that Wall Street is having their tantrum now because they know the truth: that tapering back now is a bad idea? After all, some really smart people who have won Nobel Prizes for how much they know about economics have been telling us that the recovery hasn’t been all that great – except on some paper and in reality for an infinitesimally small number of people – precisely because there has been too little stimulus.

Wall Streeters and banksters are a lot of things. One thing they are not is stupid. They know that corporations won’t do so well once the Federal Reserve tapers back.

They have to know what many of us know:  that on some very disturbing levels austerity has proven to be a complete failure. Austerity does not lead to growth. If the Feds curtail stimulus now without a healthy, prosperous, and confident middle class, the whole charade of corporate profitability will be revealed and proven to be unsustainable.

Can’t you just see Wall Street coming back to the federal government again to be bailed out?

Let’s hope that this sell-off wakes up our elected leaders. Wall Street needs much more and much tougher regulation, and they need it now. The big banks created out of the fiasco that was the GOP and W administration – yes, it’s still his and their fault and always will be despite all the attempts to rewrite or ignore history – need to be broken up, and they need to be regulated under new Glass-Steagall-like regulations on steroids.

Our only hope as citizens will be to vote for politicians like Bernie Sanders, Elizabeth Warren, and Sherrod Brown who also believe that our society requires a stronger government that protects us from the unfettered greed of people running banks and big corporations. It is their big and dark money, and the influence it has over our politicians, that represents the real threat to our society.

(1) I’m not claiming that the gentlemen specifically pictured above are socialists. I don’t know them or their politics. This is merely symbolic metaphor.

Sources:

A Fit of Pique on Wall Street, New York Times, June 21, 2013. http://www.nytimes.com/2013/06/22/business/economy/a-fit-of-pique-on-wall-street.html

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‘Whale-sized’ Proof That Wall Street Can’t Be Trusted

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Michael /Cavanagh and Douglas Braunstein swear into a Senate Permanent Subcommittee on Investigations hearing in Washington, D.C., on March 15th, 2013. -Andrew Harrer/Bloomberg via Getty Images

Wall Street is proving once again that they simply cannot be trusted. What is required is even greater and stronger regulation, not less. We also need laws that expeditiously put bankers in jail for the kinds of willfully unethical actions undertaken by JP Morgan senior managers in the London Whale escapade.

Few of us are likely to read a 307-page Senate report. Instead, read Gretchen Morgenson’s New York Times article, “JP Morgan’s Follies, for All to See” from March 16.

Wall Street remains out of control. In fact, they are now a greater threat to stability in the global economy than before the crash they caused just five short years ago.

It’s also important to understand and admit that Dodd-Frank is not strong enough despite any accusations over its supposedly onerous overreach.

What other conclusions can anyone come to when the government seems powerless to foresee and forestall the world’s largest derivatives trader, a firm described as “the bank that enjoys the best reputation among its peers,” from acting with this kind of hubris, impunity, and disregard for ethical conduct?

The Senate report disproves this premise <that Dodd-Frank would make the banking system safer> with vigor.

Its pages of e-mails, testimony, telephone transcripts and analysis show that traders in the bank’s chief investment office hid money-losing derivatives positions, if only temporarily; that risk limits created by the bank to protect itself were exceeded routinely; that risk models were changed to minimize losses; that bank executives misled investors and the public; and that regulations are only as good as the regulators enforcing them.

What can we do about it? For starters, we can make our voices heard.

The people in DC are supposed to work for us. A few like Bernie Sanders and Elizabeth Warren are demonstrating through word and deed that they do represent citizens first.

What’s corrupting the vast majority of politicians and our government is money. Big Money. Money that was, to be sure, always there, but money that is now exponentially larger and more dangerous because of the sheer amounts, the lack of transparency about its sources, and the influence it is having on lawmakers as a result of the Citizens United ruling by the Supreme Court.

As citizens, we are well within our rights – in fact, we have a duty – to call or write to your elected leaders to ask – and to demand, if we must – to know what their positions are on Citizens United. You can find your Senator here and your Representative here.

Here’s an even easier way.

Get involved in the movement to overturn Citizens United.

Help spread the word and throw your support behind groups of like-minded citizens like BeTheWave, Represent.Us, MAYDAY.US, Wolf-PAC.com, and Coffee Party USA.  Join forces and pressure our elected officials to take a stand on Citizens United one way or the other. Every Senator and every Representative needs to be on record so voters will know if the candidate represents our concerns as citizens or the concerns of Big Money.

We need to vote for and support Senators and Representatives who want to break up the banks, not defend and deregulate them further. We can see where that leads. What we need are elected officials who will build up and build upon Dodd-Frank so that we have some sort of 21st century version of Glass-Steagall.

History really does repeat itself, doesn’t it? It happens exclusively because we refuse to study it and learn from it. Among the many excellent posts by John Cashon, the one titled “Franklin Roosevelt, an advocate for the people” is highly recommended as one that will help the reader to understand the similarities between the early 20th century and the early 21st century.

Unless and until our laws change, the people most responsible for tanking our economy five years ago and who are putting our economy at risk again are not going to change their behavior. And so long as politicians care more about raising incredible amounts of money – and feathering their nests for a post-electorate career in the private sector – than they do about representing us, the necessary laws have only a small chance of getting sponsored and passed.

Still, we cannot and should not give up or stay silent. As citizens, we must demand that government take a stronger and more active stance to protect us from a financial system whereby gains are privatized and losses are socialized.

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Dorothea Lange’s Migrant Mother depicts destitute pea pickers in California, centering on Florence Owens Thompson, age 32, a mother of seven children, in Nipomo, California, March 1936. – from http://en.wikipedia.org/wiki/Great_Depression

The concerns about today’s financial services sector are not hyperbole conjured out of thin air. Wall Street and the free market have proven once again that they cannot be trusted to regulate themselves. The “invisible hand” really does require a strong and very visible counter-balancing force that comes only from government and only through regulation, oversight, legislation, and when necessary, significant punishment under the law.

The unregulated and unfettered capitalists who caused the financial collapse of 80 years ago knew no limits to their hubris. Their progeny seems not to have any today.

In borrowing the words of FDR, we should welcome their hatred for our desire to want to stop them from wrecking the economy over and over and over again. We should throw our full support behind those candidates who would equally embrace the “hatred” of Wall Street while they work to increase regulation and overturn Citizens United.

(Updated 9/12/2015)