Post by johnmak on Oct 23, 2011 8:08:34 GMT -7
This is from the Letters to the Editor in The Binghamton Press. Binghamton, NY adjoins my old hometown of Vestal. It's cool to know that if I was still living there, I would have an opportunity to "Occupy" there as well. This helps to show the scope and power of this Movement.
Last Saturday, Oct. 15, I ventured down Court Street to see what an "Occupied Binghamton" looked like and ask what it was about. One week later, protestors are still encamped on the corner of Court and State. Most cite the growing gap between the rich and the poor. My own research took me from the left-wing "blogosphere" straight into the heart of corporate America.
Citibank's leaked memo from 2005 entitled "Plutonomy: Buying Luxury, Explaining Global Imbalances" states, "The U.S., the U.K. and Canada are the key plutonomies — economies powered by the wealthy ... (these countries) will likely see even more income inequality." Further into the memo, Citigroup speculated on the causes of the increasing disparity:
"Was the U.S. always a plutonomy — powered by the wealthy, who aggrandized larger chunks of the economy to themselves? Not really. ... With the exception of the boom in the Roaring 1920s, this super-rich group kept losing out its share of incomes ... till the early '80s. Why? The answers are unclear, but the massive loss of capital income (dividend, rents, interest income, but not capital gains) from progressive corporate and estate taxation is a possible candidate. The rise in their share since the mid-'80s might be related to the reduction in corporate and income taxes."
There is evidence that Citigroup and other corporations are not just planning their investment strategies around a plutonomy trend; they are actively contributing to it. Large corporations continue to increase the flow of hundreds of millions of dollars in lobbying and campaign contributions every election cycle. Meanwhile, they reap billion-dollar benefits in the form of tax breaks, tax holidays, tax returns and bailouts. A look at the numbers will confirm that these guys do indeed know how to invest.
Besides the restructuring of taxation mentioned in "Plutonomy," the 1980s also ushered in an era of financial deregulation that endures to this day. While it's true that the laissez-faire ideology that dominated the financial sector created wealth, the high-stakes game was a house of cards and when the music stopped, so did the all of the talk about the evils of government involvement — in 2008, Wall Street financial giants took the largest welfare checks in history. That got the music going again and soon the Dodd-Frank regulatory act was being shot to pieces by the same bank lobby and political school that had paved the way to the crisis in the first place. It was back to business as usual, and bank executives got colossal bonuses paid out in our money, while we got foreclosed, laid off and downgraded.
That stings quite a bit. And, apparently, it will send people into the streets.
It seems to me that banks that are too big to fail are too big to exist. No privately owned, risk-taking institution should become so systemically important as to necessitate bailouts paid out with public funds. The citizens of the United States need to nix the lobbyists and diversify our banking portfolio.
Stephens is a Binghamton resident.
Last Saturday, Oct. 15, I ventured down Court Street to see what an "Occupied Binghamton" looked like and ask what it was about. One week later, protestors are still encamped on the corner of Court and State. Most cite the growing gap between the rich and the poor. My own research took me from the left-wing "blogosphere" straight into the heart of corporate America.
Citibank's leaked memo from 2005 entitled "Plutonomy: Buying Luxury, Explaining Global Imbalances" states, "The U.S., the U.K. and Canada are the key plutonomies — economies powered by the wealthy ... (these countries) will likely see even more income inequality." Further into the memo, Citigroup speculated on the causes of the increasing disparity:
"Was the U.S. always a plutonomy — powered by the wealthy, who aggrandized larger chunks of the economy to themselves? Not really. ... With the exception of the boom in the Roaring 1920s, this super-rich group kept losing out its share of incomes ... till the early '80s. Why? The answers are unclear, but the massive loss of capital income (dividend, rents, interest income, but not capital gains) from progressive corporate and estate taxation is a possible candidate. The rise in their share since the mid-'80s might be related to the reduction in corporate and income taxes."
There is evidence that Citigroup and other corporations are not just planning their investment strategies around a plutonomy trend; they are actively contributing to it. Large corporations continue to increase the flow of hundreds of millions of dollars in lobbying and campaign contributions every election cycle. Meanwhile, they reap billion-dollar benefits in the form of tax breaks, tax holidays, tax returns and bailouts. A look at the numbers will confirm that these guys do indeed know how to invest.
Besides the restructuring of taxation mentioned in "Plutonomy," the 1980s also ushered in an era of financial deregulation that endures to this day. While it's true that the laissez-faire ideology that dominated the financial sector created wealth, the high-stakes game was a house of cards and when the music stopped, so did the all of the talk about the evils of government involvement — in 2008, Wall Street financial giants took the largest welfare checks in history. That got the music going again and soon the Dodd-Frank regulatory act was being shot to pieces by the same bank lobby and political school that had paved the way to the crisis in the first place. It was back to business as usual, and bank executives got colossal bonuses paid out in our money, while we got foreclosed, laid off and downgraded.
That stings quite a bit. And, apparently, it will send people into the streets.
It seems to me that banks that are too big to fail are too big to exist. No privately owned, risk-taking institution should become so systemically important as to necessitate bailouts paid out with public funds. The citizens of the United States need to nix the lobbyists and diversify our banking portfolio.
Stephens is a Binghamton resident.