Obama Economic Team Bails as System Fails

Published on Global Research.ca, by Danny Schechter, August 8, 2010.

… Is anything changing? The banks say they will not change the way they finance mortgages so it is still buyer beware. The Wall Street Journal reports another instant crash of the markets is possible. And General Motors that was down and on the way out is back thanks to the government’s largesse but sniping at its rescuers, insisting an end to government ownership would be good for their image and “employee morale.” Huh?

“We want the government out period,” blusters GM’s ungrateful CEO Edward E. Whitacre Jr. This same company recently spent $3.5 billion buying a new subprime lending company to replace GMAC, the GM lender whose bad loans sunk GM. On top of that, these geniuses just produced The Volt electric car that sells for $40,000, hardly a brilliant move in this economy. Of course they blame all their problems on the government, never themselves.

Like so many others, they seem to be banging on Obama, everyone’s target of choice. If that’s your inclination, let’s blame him also for what he has not done.

He hasn’t led a consistent push back against Wall Street, perhaps because he hopes in vain that big business will create private sector jobs and wants to show naysayers how pro-business he really is. This has turned him into an inversion of FDR.

As Ezra Klein of the Washington Post observed: “The reality is that America’s supposedly anti-business president has led an extremely pro-business recovery.

Businesses are sitting on about $2 trillion in cash reserves. Business spending jumped 20 percent last quarter, and is up by 13 percent against 2009. The Obama administration has dropped taxes for small businesses and big ones alike.”

So much for that canard.

Is there anything to be done? There is no shortage of proposals for jobs programs and taxes on transactions, for tougher rules on derivatives, and imposed compensation limits. In most cases the US, with pressure from Wall Street and its political allies, has opted for easily maneuvered around and malleable regulations.

One small reform has been proposed by the much-maligned Ralph Nader for those of us who live in the appropriately named “Empire State, ” one that currently shelters a Wall Street where hedge fund managers make billions.

Nader notes, “Low-moderate and middle-income New Yorkers already pay a higher percentage of family income in state and local taxes than do the richest one percent of New Yorkers!

Surprisingly, there is a simple way to eliminate the state deficit and prevent tens of thousands of layoffs and large service cutbacks.

What most New Yorkers do not know is that for about a century there has been a state stock transfer tax on purchases of securities. This year, this tax, similar to ones imposed in 30 other countries, will amount to about $16 billion. Amazingly, since 1979, this tax has been instantly rebated by New York State back to the brokers or clearinghouses who paid it. A 100% rebate every year for the bailed out industry that caused the recession and its immense human damage.”

Putting a stop this sleazy practice could be as important in phasing out the Bush tax cuts but so far it’s not on anyone’s agenda, Dems, Repugs or Media.

Maybe because they think of it as “structural.” (full text).

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