Bankruptcy

America.. a Plutonomy

By J. Michael McBride

One of my favorite columnists, Ed Wallace, explains in a recent article that America is a plutonomy, which CitiCorp defined in 2006 as: "A political economy, in which economic growth is powered and consumed mostly by a wealthy minority; as such, the economic growth of that society becomes dependent on the fortunes of that same wealthy minority." Mr. Wallace goes on to point out that Wall Street firms have "distorted our real economy, look at 1973 - 1985: Total Wall Street profits formed only 16 percent of all corporate earnings in America. In the past decade, Wall Street’s profits have swelled to 41 percent of all U.S. corporate earnings. How did that happen? Simple, really. Who do you think drove corporations to outsource American jobs so that their massively better profits would increase their stocks’ share prices?

Who do you think is borrowing money from the Fed and FDIC for virtually no interest, yet has raised your credit card interest to over 20 percent?

Who do you think provided so much easy money for mortgages that they alone created the foolish and unsustainable housing bubble that collapsed? Then, realizing that the house of cards they’d built was going to implode, they turned around and bought layers of derivatives — insurance to cover their losses –a combination that blew up the world’s financial system?

And then, as their share of all earnings went from 16 percent to 41 percent, who do you think went to Washington to get multiple income tax cuts for themselves, selling it as a tax cut for the American people?

And finally, when these 'anti-socialist' firms, who demanded complete and total deregulation of their companies for more profits, realized they had destroyed everything, who do you think ran first to Washington for the biggest socialist bailout in American history?

Ironically, those very same free-market capitalists are now telling reporters that they aren’t to blame for the meltdown and layoffs. Even more ironically, Wall Street is now backing candidates for office who scream that our new socialist government must be stopped at any cost. Give me a break."

Here is a link to the whole article: http://www.star-telegram.com/2010/04/09/2102870/the-american-dream.html

Michael

Full post as published by Texas Lawyer Blog on April 20, 2010 (boomark / email).