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Wednesday, February 27, 2013

Lords of Disorder

Billions For Wall Street, Sacrifice For Everyone Else

By Richard Eskow
Our Future.org
February 27, 2013

The President’s “sequester” offer slashes non-defense spending
by $830 billion over the next ten years.

That happens to be the precise amount we’re implicitly giving
Wall Street’s biggest banks over the same time period.

We’re collecting nothing from the big banks in return for our
generosity.

Instead we’re demanding sacrifice from the elderly, the disabled,
the poor, the young, the middle class – pretty much everybody, in
fact, who isn’t “too big to fail.”

That’s injustice on a medieval scale, served up with a medieval
caste-privilege flavor.

The only difference is that nowadays injustices are presented
with spreadsheets and powerpoints, rather than with scrolls and
trumpets and kingly proclamations.

And remember: The White House represents the liberal side of
these negotiations.

The Grandees

The $83 billion ‘subsidy’ for America’s ten biggest banks first
appeared in an editorial from Bloomberg News – which, as the
creation of New York’s billionaire mayor Michael Bloomberg, is
hardly a lefty outfit.

That editorial drew upon sound economic analyses to estimate the
value of the US government’s implicit promise to bail these banks
out.

Then it showed that, without that advantage, these banks would
not be making a profit at all.

That means that all of those banks’ CEOs, men (they’re all men)
who preen and strut before the cameras and lecture Washington
on its profligacy, would not only have lost their jobs and fortunes
in 2008 because of their incompetence, they would probably lose
their jobs again today.

Tell that to Jamie Dimon of JPMorgan Chase, or Lloyd Blankfein of
Goldman Sachs, both of whom have told us it’s imperative that we
cut social programs for the elderly and disabled to “save our
economy.”

The elderly and disabled have paid for those programs, just as
they paid to rescue Jamie Dimon and Lloyd Blankfein, and just
as they implicitly continue to pay for that rescue today.

Dimon, Blankfein and their peers are like the grandees of imperial
Spain and Portugal.

They’ve been given great wealth and great power over others,
not through native ability but by the largesse of the Throne.

Lords of Disorder

Just yesterday, in a rare burst of candor, Dimon said this to investors
on a quarterly earnings call: “This bank is anti-fragile, we actually
benefit from downturns.”

It’s true, of course. Other corporations in fact, everybody else has
to survive or fail in real-world conditions.

But Dimon and his peers are wrapped in a protective force field which
was created by the people, of the people, and for … well, for Dimon
and his peers.

The term “antifragile” was coined by maverick financier and analyst
Nassim Taleb, whose book of the same name is subtitled “Things
That Gain From Disorder.”

That’s a good description of JPMorgan Chase and the nation’s
other megabanks.

Arbitraging Failure

Dimon’s comment was another way of saying that his bank, and
everything it represents, is The Shock Doctrine made manifest.

The nation’s megabanks are arbitraging their own failures, and
the economic crises that flow from those failures.

These institutions are designed to prey off economic misery. They
suppress genuine market forces in order to thrive, and they couldn’t
do it without our ongoing help.

The Treasury Department and the Federal Reserve are making it
happen.

We who have made these banks “antifragile” have crowned their
leaders our Lords of Disorder.

Once Dimon told reporters that he explained to his seven-year-old
daughter what a financial crisis is “something that happens … every
five to seven years,” which “we need to do a better job” managing.

Thanks to fat political contributions, Dimon manages them well. So
do his peers. Misery is the business model. And by Dimon’s reckoning
another shock’s coming any day now.

Money For Nothing

Bloomberg’s use of the word ‘subsidy’ in this instance can be slightly
misleading. Public institutions don’t issue $83 billion in checks to
Wall Street’s biggest banks every year.

But they didn’t let them fail as they should have through an orderly
liquidation after they created the crisis of 2008 through fraud and
chicanery.

Instead it allowed them to prosper from it, creating that $83 billion
implicit guarantee.

As we detailed in 2011, the TARP program didn’t “make money,”
either.

Banks received a free and easy trillion-plus dollars from our public
institution, on terms that amounted to a gift worth tens of billions,
and possibly hundreds of billions.

That gift prevented them from failing.

In private enterprise, this kind of rescue is only given in return for
part ownership or other financial concessions. But our government
asked for nothing of the kind.

Unpaid Debts

Breaking up the big banks would have protected the public from
more harm at their hands. That didn’t happen.

Government institutions could have imposed a financial transaction
tax, whose revenue could be used to repair the harm the banks
caused while at the same time discouraging runaway gambling.

They still could.

They could have imposed fees on the largest banks to offset the
$83 billion per year advantage we’ve given them. They still could.

But they haven’t.

This one-sided giveaway is the equivalent of an $83 billion gift for
Wall Street each and every year.

Cut and Paste

$83 billion per year: Our current budget debate is framed in ten-
year cycles, which means that’s $830 billion in Sequester Speak.

You’d think our deficit-obsessed capital would be trying to collect
that very reasonable amount from Wall Street.

Instead the White House is proposing $130 billion in Social Security
cuts, $400 in Medicare reductions, $200 billion in “non-health
mandatory savings,” and $100 billion in non-defense discretionary
cuts.

That adds up to exactly $830 billion.

No doubt there is genuine waste that could be cut. But $830 billion,
or some portion of it, could be used to grow our economy and brings
tens of millions of Americans out of the ongoing recession that is
their daily reality, even as the Lords of Disorder continue to prosper.

It could be used for educating our young people and helping them
find work, for reducing the escalating number of people in poverty,
for addressing our crumbling infrastructure, for giving people
decent jobs.

It’s going to Wall Street instead.

Trillion-Dollar Tribute

The right word for that is tribute. As in, “a payment by one ruler
or nation to another in acknowledgment of submission …” or “an
excessive tax, rental, or tariff imposed by a government, sovereign,
lord, or landlord … an exorbitant charge levied by a person or group
having the power of coercion.” (Courtesy Merriam-Webster)

In this case the tribute is made possible, not by military occupation,
but by the hijacking of our political process by the corrupting force
of corporate contributions.

The fruits of that victory are rich: Bank profits are at near-record
highs.

Most of the country is still struggling to dig out from the wreckage
they created but, as Demos’ Policy Shop puts it, “for the banks it’s
2006 all over again.”

On Bended Knee

“Millions for defense,” they said in John Adams’ day, “but not
one cent for tribute.”

Today we’re paying for both.

That doesn’t leave much for the elderly, the disabled, the
impoverished, the children, or anybody else who doesn’t
“benefit from disorder.”

Nobody’s fighting for them in this budget battle.

That leaves the public with a clear choice:

Demand solutions that are more just and democratic or submit
willingly to the Lords of Disorder.

http://blog.ourfuture.org/20130227/lords-of-disorder-as-seniors-
sacrifice-more-billions-for-wall-street

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