Wall Street Take-Off: 2012-2013

Published on Dissident Voice, by James Petras, August 12, 2013.

On July 16, 2013, Goldman Sachs, the fifth largest US bank by assets announced its second quarter profits doubled the previous year to $1.93 billion. J.P. Morgan, the largest bank made $6.1 billion in the second quarter, up 32% over the year before and expects to make $25 billion in profits in 2013. Wells Fargo, the fourth largest bank, reaped $5.27 billion, up 20%. Citigroup’s profits topped $4.18 billion, up 42% over the previous year.  

The ruling elite, the financial CEOs pay is soaring: John Stumpf of Wells Fargo received $19.3 million in 2012; Jamie Dimon of J. P. Morgan Chase pocketed $18.7 million and Lloyd Blankfein of Goldman Sachs took $13.3 million … //

… The Crises of Labor Deepens – 2013:

The new speculative bubble of 2012-2013 is a product of the central banks’ (the Federal Reserve in the United States) low (virtually zero) interest policies, which allow Wall Street to borrow cheaply and speculate, activities which puff up stock prices but do not generate employment, and furthermore depress industry and polarize the economy.

The Obama regime’s promotion of financial profits is accompanied by its policies reducing living standards for wage and salaried workers. The White House and Congress have slashed public spending on health, education and social services. They have cut funds for the food stamps program (food subsidies for poor families), day care centers, unemployment benefits, social security inflation adjustments, Medicare and Medicare programs. As a result the gap between the top 10% and the bottom 90% has widened. Wages and salaries have declined in relative and absolute terms, as employees take advantage of high unemployment (7.8% official) underemployment (15%) and precarious employment.

In 2013 capitalist profits, especially in the financial capital, are booming while the crises of labor persists, deepens and provokes political alienation. Outside of North America, especially in the European periphery, mass unemployment and declining living standards has led to mass protests and repeated general strikes.

In the first half of 2013 Greek workers organized four general strikes protesting the massive firing of public sector workers; in Portugal two general strikes have led to calls for the resignation of the Prime Minister and new elections. In Spain, corruption at the highest level, fiscal austerity leading to 25% unemployment, and repression have led to intensifying street fighting and calls for the regime to resign.

The bi-polar world of rich bankers in the North racking up record profits and workers everywhere receiving a shrinking share of national income spells out the class basis of “recovery” and “depression”, prosperity for the few and immiseration for the many. By the end of 2013, the imbalances between finance and production foretell a new cycle of boom and bust. Emblematic of the demise of the “productive economy” is the city of Detroit’s declaration of bankruptcy: with 79,000 vacant homes, stores and factories the city resembles Baghdad after the US invasion – nothing works. The Wall Street-devastated city, once the cradle of both the auto industry and the organized industrial workers’ leap into the middle-class, now has debts totaling $20 billion. The big three auto companies have relocated overseas and to non-union states while the billionaire bankers “restructure” the economy, break unions, lower wages, renege on pensions and rule by administrative decree.
(full text).

(James Petras, a former Professor of Sociology at Binghamton University, New York, owns a 50-year membership in the class struggle, is an adviser to the landless and jobless in Brazil and Argentina, and is co-author of Globalization Unmasked (Zed Books). Petras’ most recent book is The Arab Revolt and the Imperialist Counterattack. He can be reached here. Read other articles by James, or visit James’s website).

Links:

Ally and Target: US Intelligence Watches Germany Closely, on Spiegel Online International, by Laura Poitras, Marcel Rosenbach and Holger Stark, August 12, 2013 (Photo Gallery): German intelligence services cooperate closely with the NSA, but the country is also a target of US surveillance, as a document seen by SPIEGEL makes clear. The spy software XKeyscore is operated from a facility in Hesse, with some of the results landing on President Obama’s desk …;

On Shaky Ground: A German Architect Remakes Saudi Arabia, part 1, on Spiegel Online International, by Susanne Beyer, August 09, 2013 (Photo Gallery of the Riyadh Metro): Eckhard Gerber is a socially progressive, successful architect with a passion for democracy. So why is he building prestige projects — including a new National Library — in a repressive place like Saudi Arabia?
Part 2: Albert Speer’s Troubling Riyadh Courthouse;

James Petras, USA:

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