Published on WSWS, by Barry Grey, 15 October 2009.
According to the Wall Street Journal, the major US banks and financial firms are on track to hand out a record $140 billion in compensation this year. This is a 20 percent increase from 2008 and $10 billion more than the previous record, set in 2007.
The stock market celebrated the news, outlined in a front-page Journal article on Wednesday, along with the release of JPMorgan Chase’s third-quarter earnings report, which showed a seven-fold increase in profits from last year to $3.6 billion. The Dow Jones Industrial Average rose 145 points, closing above the 10,000 mark for the first time in a year.
The record pay being handed out by the 23 largest publicly traded banks, hedge funds, asset management firms and stock and commodity exchanges (the report did not include privately held companies) underscores the class interests being served by the Obama administration and the subordination of the entire political system to a financial aristocracy which essentially dictates government policy.
The American financial elite, aided and abetted by the White House and Congress, is profiting from an economic disaster that is driving hundreds of millions of working people in the US and around the world into poverty—a disaster precipitated by its own methods of financial speculation and fraud and its manic pursuit of personal gain.
One year after the financial crash of 2008, the richer-than-ever compensation packages for bankers give the lie to Obama’s occasional protests against Wall Street “excesses” and talk of tough, new banking regulations. It demonstrates that the administration’s economic policies, including trillions in subsidies to the banks, have been devoted to paying off the bad debts of the bankers at public expense and protecting the wealth of a miniscule section of the population.
There is an element of provocation in the pay awards being doled out by the banks. Far from curbing their avarice, they are flaunting their wealth and power in the midst of soaring unemployment and deepening social misery for millions of Americans …
… This colossal squandering of resources is rooted neither in psychology nor the “culture” of Wall Street, but rather in the capitalist system itself. The profit system subordinates all social needs to the accumulation of personal wealth by the narrow stratum that owns and controls the means of production, dominated by finance capital—the most parasitic and predatory section of the ruling elite.
The social disaster threatening the working class can be reversed only on the basis of a struggle for socialism, in which the productive forces created by the working class are taken out of private hands and developed under democratic control for the benefit of society as a whole.
The working class must break the stranglehold of the financial aristocracy. The ill-gotten gains of the CEOs and financiers must be expropriated, without compensation, and these funds, which add up to trillions of dollars, used to meet the needs of working people for jobs, housing, education and health care, and to rebuild the crumbling social infrastructure.
The books and business dealings of the big banks must be opened to public scrutiny, with criminal investigations undertaken into their illegal practices.
This requires the building of a mass socialist movement directed against the Obama administration, the two-party system and the capitalist system which they defend. (full text).