Robbing Us Blind – Bush Gang’s Robber Barons

Robbing Us Blind Bush Gang’s Robber Barons

The Robber Barons Return as the Bush Gang,
Small Time Crime: Bush and Cheney,
Mega-Crime: Three Decades of Class Piracy

excerpted from the book

Robbing Us Blind

The Return of the Bush Gang and the Mugging of America

by Steve Brouwer

Common Courage Press, 2004, paper

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NUMBER OF AMERICANS WITH NO HEALTH INSURANCE YEAR
1982 25 million
2002 43.6 million
NUMBER OF BILLIONAIRES IN THE USA
1982 13
2002 229

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A band of rich thugs has mugged the United States of America. For the second time in twenty years, the Bush Gang-otherwise known as The Family or The Dynasty-is pilfering our pockets and emptying the public treasury. Under the direction of George W, Dick Cheney, and Donald Rumsfeld, the members of this criminal clique are plundering our country t: again, just as they did in the 1980s and early l990s. What is more, as the nation slips inexorably toward economic chaos, the Bush Gang is drowning out criticism with the noise of war drums and blinding the American people with a frenzy of waving flags. Rather than fix things at home, they want to enlist our help in plundering the world.

America’s destiny is now linked to the reckless and selfish pursuits of a corporate elite who are disregarding the well-being of the United States. Like the “Robber Barons” in the Late nineteenth century, the Bush Gang is devoted to the business of fleecing the American people and buying out the last vestiges of honest government. Through their policies, their political alliances, and their personal behavior, the members of Bush Gang I encouraged various kinds of criminal behavior in the 1980s-massive financial fraud in the Savings and Loan industry, “junk bond” scandals on Wall Street, and widespread government malfeasance. When they left office in the early 1990s, they saddled us with a long recession and a tremendous national debt. When Bush Gang 11 returned to the scene in 2001 and 2002, we immediately became aware of their participation-at Harken and Halliburton, Enron and Arthur Andersen-in a massive corporate crime wave that included many of the nation’s biggest accounting firms, insurance companies, manufacturers, and financial institutions.

On top of this corporate criminality, the members of the Bush Gang were the central agents in thievery of even greater magnitude, the “mega-crime” of our era. They began to engineer the systematic robbery of the income and wealth of American working people during the 1980s, then pressured a weak Democratic administration to acquiesce to most of their demands in the 1990s, and finally resumed their project with renewed vigor with George W. Bush’s election in 2000. This mega crime has resulted in the wholesale redistribution of money to a very small minority of wealthy Americans, thus leading to inexcusable levels of economic and social inequality in the United States. Consequently, our political system now resembles, as it did a century ago, a plutocracy-a government of the rich, by the rich, and for the rich.

… more importantly, the Bush Gang represents a much larger group, the ultra-conservative, corporate upper class that has taken over our country just as they did a century ago. The last time a tiny, self centered minority held so much power, dominating the United States through their control of “Money Power” and the Republican Party, they were called the “Robber Barons.” Though it might seem unfair to pick on a particular family by recasting the Robber Barons as the Bush Gang, these guys deserve the attention. The roots of Bush family power extend back to the beginning of the 20th century-George W and Jeb really are the great-grandchildren of the Robber Barons. The Bush family has a long record-their involvement in upper-class investment schemes, their promotion of dangerous intrigues in foreign affairs, their long-time participation in Republican politics, and their membership in a variety of elite institutions-that makes them ideal examples of how the corporate upper class maintains and wields its power in the United States.

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The Bush Gang is throwback to “The Gilded Age,” that time over a hundred years ago when wealth was worshipped in all its forms and the nation was ruled by a band of notorious financiers and capitalists, which is why people called them Robber Barons.

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The economic and social evidence is overwhelming: the Bush Gang and the new generation of thieves have orchestrated a massive redistribution of America’s wealth. They have taken from the poor, from the working class, and from a wide swath of the middle class, and given to the rich-that is, to themselves. The share of national income that goes to the bottom nine-tenths of the American people, the large majority who reside at the base of the economic pyramid, shrank from 67% of the total in the late 1970s to about 52% twenty years later. Analysis of statistics kept by the Internal Revenue Service shows that almost all of this missing income was redistributed to the very richest Americans, the top one percent of our population-in fact, their take of the loot, already a robust 9.3% of all American income in 1979, had more than doubled, to 20.8%, by 2000.

When you are being dispossessed, when your assets and income are shrinking due to the activities of others, then you are being robbed. When the perpetrators organize themselves purposefully to dispossess you, when they plunder your savings, then it is fair to call them a “gang.” One dictionary definition fits them perfectly: “Gang-a group of people working together for criminal, disreputable ends.”

Our whole notion of freedom in the United States is based upon a the willingness of citizens to speak up and throw self-satisfied elites out of power. Those who fought against the “Money Power” in the past, such as the Kansas farmers who helped invent the term “Robber Barons” in the 1880s, never apologized for calling them a criminal class. Mary Ellen Lease, an outspoken Populist leader of the time, told her Midwestern audiences that they could not afford to be shy. “Raise less corn and more hell!” she said.

She also told them where to go to recover their lost farms and stolen wages: “Wall Street owns the country. It is no longer a government of the people, by the people, or for the people, but a government of Wall Street, by Wall Street and for Wall Street.”

Over the past few decades in the United States, there has been little popular criticism of the “elite,” the small class of people who dominate corporate ownership and management. Obviously many critical voices are blocked by the corporations themselves, since they have successfully monopolized the major media. But there is another factor. There are no prominent politicians castigating members of the monied elite and calling them “malefactors of great wealth.” And though some of us have heard vague references to “The Gilded Age,” we seldom hear it applied to the society we live in today. Was the slogan invented by cranky losers who missed out on the American success story? Not so. The United States’ most famous and humorous writer of the nineteenth century, Mark Twain, wrote his wickedly satirical novel, The Gilded Age, in 1873, thus giving a name to the first great wave of American corporate and financial thievery. The theme reappeared constantly in his writing for over forty years. When one of the most famous criminals of the era, the railroad scam artist and financier known as Jay Gould, died in 1892, Twain offered a mock eulogy:

The people had desired money before his day, but he taught them to fall down and worship it…. The gospel left behind by Jay Gould is doing giant work in our days. Its message is ‘Get money. Get it quickly. Get it in abundance. Get it in prodigious abundance. Get it dishonestly if you can, honestly if you must.

In those days, the powerful indictments of a variety of outraged Americans-populist Democrats, trade union organizers, progressive Republicans, home-grown and immigrant socialists-changed our political culture. With their strong sense of morality and their powerful voices, they condemned “Money Power” for creating a culture of greed and dishonesty. The struggle against the corrupt supremacy of the rich went on for so long, roughly from 1865 to 1935, that three or four generations of Americans had to rebound from discouraging defeats before they finally triumphed. Along the way, they recruited the help of people from all social classes. One of them, President Theodore Roosevelt, the descendent of a wealthy New York family and a Republican, had the courage to defy a substantial sector of his own party and say: “We hold it to be a prime duty of the people to free our government from the control of money.” In the same fashion, Woodrow Wilson, a fairly conservative Democrat, echoed the rhetoric of the populist chorus: “The masters of the government of the United States,” he said, “are the combined capitalists and manufacturers of the United States.”

Even with such contributions at the presidential level, the popular campaign to promote more honest politics and progressive taxation faltered in the early decades of the 20th century. After World War I, the rich counterattacked by mounting an extraordinary celebration of the glory of their own money. Their exuberant excesses-cutting taxes, speculating in finance, and buying every possible extravagance (three attributes which reappeared in the 1980s and 1990s)-eventually brought the Roaring Twenties down to earth with an abrupt crash.

The Great Depression led to the disgrace and the downfall of the aristocracy of money. Franklin Roosevelt, backed by a massive popular coalition of working people, realized that it was in the interests of his party to keep the rich at bay and he was determined to keep it that way after his re-election in 1936: “I should like to have it said of my first Administration that in it the forces of selfishness and lust for power met their match. I should like to have it said of my second Administration that in it, these forces met their master.”

That never quite happened. But for decades the equality and dignity fostered by the New Deal kept the nation focused on the health and happiness of middle-class and working-class Americans. The ultra-rich paid their high taxes, and lo and behold, they survived quite well, just slightly less wealthy than before. No aristocrats were marched off to the guillotine, nor did the nation’s industries and businesses starve for capital. In fact, the United States lived through a golden era, from the 1940s to the 1970s, in which most of its citizens enjoyed unprecedented levels of economic growth and prosperity.

In recent decades, citizens of the United States of America developed amnesia about the financial piracy of the past. Many of us slipped into a delusional state, worshipping the gods of finance and luxury, tantalizingly displayed in ubiquitous advertising but not really within our reach, while forgetting that our real priorities still concerned work, family, and community. Some, it seemed, were bowing down before the false idols of Dow Jones and Wall Street and chanting the incantations they found in Money, Invest, and Fortune. Meanwhile most families were struggling to stay afloat, with mothers and fathers working many more hours per week simply to avoid slipping behind and going further into debt.

The “Bush Gang” Represents Unrestrained Upper Class Power

For years a number of authors, myself included, have written about the growing inequality in America. In the 1980s, I criticized the ultra-conservative path pursued by the Reagan/Bush administrations. And in the l990s I took the Clinton administration to task for doing too little to reverse this reactionary course, for all too often they simply acquiesced to the demands of powerful corporate interests. Many thoughtful writers were raising similar warnings-from moderate, liberal, and left perspectives-but, all in all, they barely touched the consciousness of most Americans. During the euphoria generated by the enormous Internet and stock market “bubble” of the late l990s, it was difficult to get anyone to pay attention to the pressing problems of real life on earth, such as repairing the social fabric of our country and fairly sharing the fruits of our labor.

From the vantage point of a new century, we can see that our worst suspicions have been confirmed. Economic analysis shows that the increasing inequality in the United States was not an unfortunate or transitory phenomenon, but the result of systematic plundering by the rich. Historical perspective places the Bush family and its political associates at the heart of this privileged elite. For this reason, the “Bush Gang” becomes a convenient and accurate metaphor for describing how the corporate upper class and the ultra-right wing of the Republican Party have manipulated the economy and the government for their own selfish ends.

From the moment the first George Bush took over leadership of the Task Force on Regulatory Relief in 1981, the Bush Gang mounted a very effective program of dismantling the rules and regulations that had controlled the predatory instincts of big business ever since the Great Depression. This led to the emergence of a new, low-wage corporate model that utilized every possible method of exploiting working people. In later chapters, we will explore how diverse corporate actors-WalMart, the meat-packing industry, and for-profit health care providers-used a combination of business deregulation and the outright coercion of labor to make their employees work harder, faster, longer, and for less pay. Squeezing working people-this is the legacy of the Bush dynasty. They did not do this primarily to be cruel; they did it to make more money.

And since we are talking about an upper class gang whose prime objective in life is money, we will devote considerable time focusing on how the rich have been getting it and keeping it-their methods of hauling in income; their preoccupation with accumulating wealth and capital; their obsession with avoiding taxes in order to augment their income and wealth all the more; and their insatiable appetite for other people’s savings and Social Security.

We will also look at some important ideological elements that have helped the Bush brand of capitalism win out over American democracy. Their belief in the value of capital takes priority over all other human values; their support for the anti-democratic legal apparatus of corporations protects their class advantages; their isolation in elite organizations warps their ideas and social relations (the Bushes’ Skull and Bones club is a prime example); and their monopolization of news and information in the corporate media spreads their views widely among the general population.

Finally, we will consider political questions that are of immense importance to the future of American democracy. What kind of lust for power and profit is driving the Bush Gang’s compulsion to take over the world? Do the American people realize that they are rapidly losing both their money and their ability to influence their government?

George W and the Renewed Urge to Plunder and Pillage

Ever since the 1980s, grave damage has been done to the institutions that promote democracy and equality. The ultra-conservative program of serving the wealthy and punishing lower income Americans became so well-entrenched, even among many Democrats, that it ultimately gave free rein to corporate thievery. During the Clinton years, the Democratic Party occasionally tried to limit the most egregious methods which the corporate class used to bilk the majority of working Americans, but in most respects they fell under the influence of the Bush Gang, too. Frightened off by the vicious attacks mounted by the Republican Congress and the pit bulls of talk radio, Democrats attended to the agenda of their own wealthy campaign donors. For this reason, there was no effective Democratic opposition to the initiatives of the Bush Administration in 2001, even though the Democrats won more popular votes in the 2000 election.

This abdication of responsibility by the j Democrats allowed the reassembled Bush Gang to pursue the same objectives that guided the United States when Ronald Reagan and the first Bush Gang took office twenty years earlier. They wanted to 1 ) give huge tax breaks to the wealthy and the corporations; 2) begin a military build-up that reaps very high profits for defense industries; 3 ) ignore the increasing indebtedness of the private sector and the federal government; 4) disregard the general welfare of most citizens and their natural environment; 5) deregulate almost all corporate activity and financial markets; 6) limit constitutional freedoms and the rights of working people.

When the younger Bush was inaugurated, the U.S. government had a federal surplus o $129 billion. But less than two years later, by the autumn of 2002, the deficit hit $157 billion and kept growing, with shortfalls of over $450 billion predicted for 2003 and 2004.

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Robert Brenner, director of the Center for Social Theory and Comparative History at UCLA

Between 1995 and 1999, the value of stock options granted to US executives more than quadrupled, from $26.5 billion to $110 billion, or one-fifth of non-financial corporate profits, net of interest. In 1992, corporate CEOs held 2 percent of the equity of US corporations; today, they own 12 percent. This ranks among the most spectacular acts of expropriation in the history of capitalism.

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An interesting analysis by United for a | Fair Economy (UFE), which specializes in interpreting economic trends for a popular audience, looked at the compensation of corporate CEOs whose companies were being investigated for improprieties by the Securities and Exchange Commission, the US Justice Department, and other authorities. In the 23 major companies examined, including AOL Time Warner, Bristol-Myers Squibb, Kmart, Lucent Technologies. and Xerox, the CEOs were paid a combined total of over $1.4 billion from 1999 through 2001, or an average of $62.2 million each for the three year period. In contrast, the average CEO at the top 500 US corporations had cumulative earnings averaging $36.5 million for the same period of three years. Crime, it seems, was paying well, double the going rate for more honest executives. For the shareholders of these 23 companies, there was a different story-they lost $530 billion in stock value, or more than 73 per cent. Many workers at these companies, 162,000 of them, fared the worst- q7 they lost their jobs..

In September of 2002, Fortune surveyed 1,035 large companies whose market value had dropped at least 75 percent and found that insiders had cashed out to the tune of $66 billion, since January 1999.

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According to Federal Election Commission data, Bush received more than twice as much as Gore in individual campaign contributions for the 2000 election. He took in $101 million to Gore’s $45 million. In order to gain this $56 million advantage, the Bush campaign sacrificed about $15 million in federal funds.

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Theft and Plutocracy

Lobbyists and corporations were dangling the bait for all comers throughout the 1990s. Many Democrats were scared silly that they would fall far behind the levels of political funding achieved by their rivals. They had good reason; they had lost badly in the money-raising races during the Reagan/Bush I years. So off they went, scurrying after big business, currying favor in the most obsequious ways. Clinton, with his “New Democratic” image that kept working people and unions at arms length, was quite adept at using the power of the White House to attract corporate donations, particularly from the burgeoning financial sector that loved his Secretary of the Treasury, Wall Street dynamo Robert Rubin.

Probably no one on the Democratic side outdid Joe Lieberman, the 2000 candidate for vice president and long-time devotee of the probusiness contingent known as the Democratic Leadership Council. He was a major supporter, often working hand-in-hand with Republicans, of changes in accounting rules and tax preferences that led directly to abuses of stock options and corporate bookkeeping. When the Senate pushed through rules stipulating that stock options given to employees (and in particular, to CEOs) did not have to be reported as expenses, this allowed corporate boards to keep grossly overcompensating their chief executives while inflating the levels of corporate profits at the same time. Many CEOs then went so far as to drive up the price of their newly acquired stock with bookkeeping tricks and sold off their inflated holdings through insider trading schemes before the stock values fell. After these scandals became public in 2002, Lieberman pretended to be appalled at the lack of corporate oversight by public watchdog agencies. But Arthur Levitt, the former head of the Securities and Exchange Commission, had been deeply frustrated when Lieberman and others undermined his attempts to catch fraudulent behavior. He called the Democrat to account when he said:

Where was Lieberman? He was busy tying up the SEC in knots over auditors’ independence, over the budget, and over options accounting.

Clinton and his henchmen did not cause the corporate crime wave, but were reacting to the burgeoning “Money Power” that had enveloped American politics. They felt they had no choice but to bargain with the big-time corporate brokers who had been feeding at the Republican trough throughout the 1980s. The “New Democrats” seldom showed the slightest interest in reviving the substantial ideas of the Old Democrats, such as instituting universal health care or restoring the rights of laboring people, themes that date back to the robust promises of the New Deal. In general, the Democrats were easily frightened back into line by a rabidly right-wing Congress and were held prisoner to the economic course that was dictated by big business.

p22
historian Sidney Schama

… the United States Inc. is currently being run by an oligarchy, conducting its affairs with a plutocratic effrontery which in comparison makes the age of the robber barons in the late 19th century seem a model of capitalist rectitude.

p26
Americans in the 1970s were starting to make demands that seemed unreasonable to the most powerful leaders of our economic institutions. Citizens groups agitated and petitioned for many things, and among their demands were the following: clean up the environment and stop burning so much oil; use workers’ pension funds, which were burgeoning, to govern corporations in a more democratic manner; free up the labor process and wake unions up from their lethargic state; promote more opportunities and better wages for minorities and women; restrict the kinds of imperialistic policies that had led to the Vietnam War; and keep progressing on civil rights.

The prospect of a more democratic America was threatening to the rich in the early to mid-1970s. The bastion of big business, The Business Roundtable, which represented 200 of the largest American corporations, was formed under the guidance of John Connally, President Nixon’s Secretary of Treasury.

p27
Nixon and Connally helped the Business Roundtable get started on plans to reassert corporate power and use the vast resources of big business to mold public opinion. The Roundtable asserted that “chief executives of major corporations should take an increased role in the continuing debates about public policy.” Elite organizations dominated by Wall Street bankers, executives, and lawyers, such as the Council on Foreign Relations and the Trilateral Commission, began discussing the problem of “too much democracy” in both industrialized and developing countries. They were finding it difficult to control the new varieties of political movements that were springing up everywhere. And new think tanks, such as the Heritage Foundation, or obscure ones given new life, such as the American Enterprise Institute, were suddenly funded in lavish style by a bevy of ultra-conservative, ultra-rich families such as Coors, Mellon, Bradley, and Olin. They were ready to launch their highly ideological, right-wing agenda into the middle of American politics.

As the moderately conservative elite and the very conservative foundations mounted their offensive, they were joined, for various reasons, by a number of middle-class allies: fundamentalist evangelists who proclaimed the moral decline of the United States; “nativist whites” who worried that they would lose ground if economic and political opportunities were extended to Hispanics and Blacks and Asians; and a variety of home-owners and small business owners who were being pinched financially and wanted to have their taxes reduced, and so naively threw in their lot with big business.

The Arrival of Bush Gang I

In the ’80s, these economic and political forces combined to establish a new ultra-conservative, Republican era of government that has dominated the United States ever since. This power shift to the extreme right, with its unabashed devotion to the needs of rich Americans and the biggest corporations, has been attributed to various factors over the years-for instance, to the “Reagan Revolution” in the early ’80s, the “New Christian Right” in the late ’80s, or Newt Gingrich’s “Conservative Revolution” in Congress in the mid ‘9Os. Looking backwards from the 21st century, however, it is apparent that this has been the era of the “Bush Gang.” The Bush family and their political allies have been the dominant influence in and around the White House and they are perfect representatives of the ascendant upper class.

p28
Once in office, the Reagan and Bush regime immediately embarked on a campaign to lower taxes on the rich, cut regulation of business, restrict the activities of organized labor, and cut back on federal assistance for education, health, and other social needs.

p28
… the National Labor Relations Board (NLRB) was established in the 1930s to protect the right of Americans to bargain for a fair wage. The Reagan-Bush team did not abolish labor laws or the NLRB; it simply stacked the Board with appointees who were sure to take the side of big business in any disputes with labor unions. This tactic, combined with a reluctance to enforce regulatory laws on pollution and safety, allowed corporations to increase their profits without raising wages at the same time. Then, to make those profits even more valuable, income taxes on corporations and rich individuals were sharply cut. At the same time, many Americans experienced a decline in their wages and their standard of living, while almost all Americans were working more hours than they had in the 1970s and paying higher social security taxes.

Their first time through, riding into Washington on the coattails of Ronald Reagan, the Bush Gang and their associates pulled off a two-pronged assault on the stability of the economy. They approved large spending increases that benefited military contractors (their former business associates) by an inordinate amount. They let their campaign contributors and political pals play fast and loose with the nation’s banking system. And through it all they got much richer.

Despite the shaky state of both the economy and the average family’s finances at the end of the 1980s, the first Bush Gang kept basing its decisions on a very narrow foundation defined by parameters of accumulated wealth. When George I became President in 1989, he brought in three especially trusted associates with him: Secretary of Treasury Nicholas Brady, Secretary of State James Baker, and Secretary of Commerce Robert Mosbacher. These old friends not only shared Bush’s upper class training and background, but they also had a collective net worth of about $250 million between them.

By 1991, the average American family with the median income of $37,340 was working much more than it had twelve years earlier (two-earner families increased their working hours by about 10%), but hardly making more than they had in 1979 (less than a 3% increase; according to figures provided by the U.S. Census Bureau, the gain was less than a thousand dollars). This typical family was paying 27.6% of their income in combined federal, state, and local taxes.

The richest Americans fared much better, increasing their before-tax incomes by over 60% over the same period, while their overall tax rates continually declined until they approximated those paid by average citizens. One prominent example was the household of President George H.W. Bush, whose income varied from $0.5 million to $1.3 million per year from 1989 to 1991. Their total tax rate-state, local, and federal-ranged from 18% to 27%. The rate would have been higher except that George I listed his residence as a hotel in Texas, not the White House or the family home in Maine. Texas has no income tax, whereas the District of Columbia and the State of Maine levy a healthy income tax on the rich.

By 1992 most Americans were left with a very bad taste in their mouths. Not only had they been deprived of growth in their incomes but they were also saddled with a worrisome federal deficit and a steep recession. Twelve years of Reagan and Bush budget deficits, largely caused by a failure to collect sufficient taxes from the rich and by the expense of a ballooning defense budget, had more than quadrupled the federal debt. It climbed from less than $1 trillion when they took office to more than $4 trillion when they left. The American economy was a wreck-the commercial banking and financial system had barely survived numerous scandals, while the savings and loan system had been so thoroughly looted that taxpayers were left to pick up the bill that would climb to $500 billion (when annual interest payments were applied).

During the Clinton years a combination of factors-higher rates of taxation on the rich, the Earned Income Tax Credit granted to many low-paid workers, an increase in the minimum wage, and a period of lower unemployment- seemed to slow the growth of income inequality. But on many other issues, Clinton caved into the pressure of the mounting challenges from the conservatives. His willingness to lower the capital gains tax from 28% to 20% signaled an enthusiasm for aiding the big financial and investment institutions and the people who profited from them. His unwillingness to keep pursuing health care reform betrayed most Americans, and especially lower-income working people.

During the Clinton years a combination | of factors-higher rates of taxation on the rich, the Earned Income Tax Credit granted to many low-paid workers, an increase in the minimum wage, and a period of lower unemployment- seemed to slow the growth of income inequality. But on many other issues, Clinton caved into the pressure of the mounting challenges from the conservatives. His willingness to lower the capital gains tax from 28% to 20% signaled an enthusiasm for aiding the big financial and investment institutions and the people who profited from them. His unwillingness to keep pursuing health care reform betrayed most Americans, and especially lower-income working people.

p31
Clinton and Gore abandoned the natural constituency of the party that had been built up by the followers of Franklin Roosevelt during the Depression and the Second World War. That is to say, the Democrats were so busy trying to compete with the Republicans in wooing the wealthy and the upper-middle class that they did little of substance to serve working Americans. In fact, they often sided with the allies of the Bush Gang in promoting reactionary policies, such as the so-called “welfare reform,” that punished the poor. No one was helping the wage and salary earners, the farmers and small business people, and the retired people … had depended on strong government

p32
… political discussion in the United States is usually restricted to the moderate to conservative range that precludes discussion of class conflict. If “class warfare” is mentioned, it is because a conservative wants to suggest that certain matters should be kept off-limits in American political discussion …

p34
According to The Washington Post, the president, the vice president, and their cabinet were the richest men ever to take over the executive branch of government. In particular, five of them-Vice President Dick Cheney, Secretary of Defense Donald Rumsfeld, Secretary of the Treasury Paul O’Neill, Secretary of Commerce Donald Evans, and Secretary of State Colin Powell-were together worth about $600 million dollars, according to their own self-disclosure statements. George W’s own wealth was a little more modest, in the $20 to $30 million range, but that estimate did not take into consideration large sums he might inherit from his parents some day.

Most of these men, and the larger raiding party they brought into government with them, had already served loyally under the Reagan/Bush I administrations and they knew the routine very well. In the first half of the year 2001 they immediately reverted to the modus operandi that had been set forth back in 1981:

* Give extraordinary tax relief to very rich citizens and corporations.
* Build up the military with rapid increases in defense spending and weapons procurement. * Assert a very aggressive posture in international relations.
* Offer every possible kind of deregulation of business activity.
* Overlook the criminal activity of the businessmen who support their agenda. * Disregard the very real possibility of large federal deficits.

p34
The tax legislation of 2001 promised tax savings for all, which was only true to the extent that many average taxpayers enjoyed a small rebate on their 2001 tax payments (due to an amendment that originated in the Progressive Caucus in the House of Representatives, not in the Bush administration). The real money, however, was written into the full ten-year program-52% of the tax benefits went to the richest 1% of Americans …

p35
The Bush administration immediately renounced a series of foreign agreements, including the Kyoto Agreement on Global Warming and the International Criminal Court, that would have held it to true international standards. It also signaled the United Nations that it did not necessarily intend to comply with future U.N. decisions.

p35
As the depth of the economic downturn became apparent, the Bush administration did not pursue a broad-based plan of economic stimulus. Although they might have used deficit spending in a positive way to revive the incomes of average Americans or invest in public infrastructure, the Bush Gang chose instead to follow the exact same course that had led to very wasteful deficits throughout the 1980s and early l990s. They kept expanding the tax cuts for the rich at the same time they were increasing expenditures on defense and new weaponry. Thus, within their first year of retaking office, Bush Gang 11 relinquished the entire government surplus that had been so carefully cultivated in the previous few years and set a pattern for incurring large deficits for the coming decade.

In short, the Bush Gang immediately delivered the goods in 2001 that wealthy Republican supporters had paid for in advance.

p36
Bush Gang II wanted to eliminate the federal estate tax, the levy on inherited wealth that falls almost exclusively on the very rich. Currently, inheritance taxes only affect the top 2% of the population, and for most of those people who leave estates under $5 million, the consequences are generally mild. Estate taxes are designed to take the biggest chunk from a much tinier segment of the populace, the super rich-people like George H.W. Bush and George W. Bush. In 1999, for instance, half of all federal inheritance taxes were paid by only 3,300 estates that had an average value of $17 million apiece.



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Most Helpful Customer Reviews

13 of 14 people found the following review helpful:5.0 out of 5 stars Important reading — by the end, fully justifies its title., September 13, 2004

By Matthew Vaughan (Palo Alto, CA United States) – See all my reviews
(REAL NAME)

This review is from: Robbing Us Blind: The Return of the Bush Gang and the Mugging of America (Paperback)

I don’t pay much attention to titles (which I consider part of the exaggerated PR to get a book sold), but the frequent references from early in the text to the “Bush Gang” as not only descendants of the “Robber Barons”, but in many ways worse than them, at first almost put me off. How biased was this book going to be, exactly? I was looking for hard evidence, not unsubstantiated claims or whining.

Well hard evidence I got, in abundance. The author clearly knows his stuff, on a wide range of topics. None if this is really a surprise, much of it I already knew or suspected, and some of it I’d learned years ago and forgotten about until now, but Brouwer puts together probably the most devastating critique of Bush and those that surround him thus far put on paper — precisely because it primarily lays out facts and history, harshly exposing many of Bush’s policies and public statements to the scrutiny of reality in the form of history, the government’s own numbers and the public opinions of dozens of experts.

It also draws together the motivations behind both domestic and foreign policy in such a way that it all comes into sharp releif, finally all making perverted sense. An American foreign policy that seeks to destabilize democratic governments to be replaced by autocratic regimes (which we have demonstratively done multiple times and are still trying to get away with) makes no sense, until it is viewed through the lens of NOT CARING about long-term destabilization, fairness to the people of that country, or promoting any sort of ideal of democracy or civil rights. It’s all about short- and medium-term profits for large companies via control of oil and other resources, and when looked at as a motivation for all government policy, suddenly everything Bush does seems perfectly obvious. It also demonstrates that Bush and his cronies are essentially crooks, with entirely selfish motivations. Many of us already suspected as much, but this book makes it all clear, in no uncertain terms.

The language is hard and to the point — pulling no punches. Brouwer calls a spade a spade — and a thief a thief and a liar a liar. At first the terms used sound unfair and entirely subjective. But by the end, it’s difficult to feel that this is anything other than the truth, finally called by its name.

Books like “All the President’s Spin” look at how the media is letting Bush get away with continuous almost-lies that deceive just as surely as real-lies would, at how rules of media fairness are being manipulated by Republicans to force essentially favorable coverage without allowing the media to portrary conservative deceptions as untruths.

Books like “Robbing Us Blind”, unlike the mainstream media, aren’t limited by the rules of “journalistic fairness” that dictate equal time to both sides and disallow the reporter from expressing obvious skepticism. “Robbing Us Blind” is freely skeptical, and refreshingly truthful. Terms like “Gang” and “Robber Baron” are useful tools to frame the point of the book, but aren’t really necessary — had they been omitted, most likely the reader would have come to the same conclusion by the end regardless. But the only reason they sound shocking in the first place is because the mainstrem media has been so complicit in playing into Bush’s hands, disguising his and his associates’ true natures.

Here, the truth is told in not only all its unvarnished perversity but also in scrupulously footnoted, factual detail.

One of the most important books that every American should read before the election.

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7 of 8 people found the following review helpful:5.0 out of 5 stars A gem of a book, August 10, 2004

By Paul Lappen (Manchester, CT USA) – See all my reviews
(VINE VOICE) (REAL NAME)

This review is from: Robbing Us Blind: The Return of the Bush Gang and the Mugging of America (Paperback)

This book looks at the myriad of ways that average and lower-income Americans have been systematically robbed of their monetary wealth through deliberate government policy. That wealth has been given to the top 1 percent of the people, in terms of income, by a group of elites and super-rich that the author calls the Bush Gang. The Bush family has been at, or near, the seat of American power for 16 of the last 24 years.

To give one example, from 1982 to 2002, the number of Americans without health care jumped from 25 million to 43 million, a rise of more than 50 percent. In that same period, the number of American billionaires rose from 13 to 229.

The Bush Gang’s plan looks something like this: Give tax relief to corporations and the very rich. Build up the military with big increases in defense spending. Be very aggressive in international relations. Deregulate business as much as possible. Overlook the criminal actions of those businessmen who support this agenda. Ignore the real possibility of large deficits. Also, attack labor and working Americans as much as possible.

This book covers a number of topics. The Bush remedy for a sick economy is CEOs who will drive up a company’s stock price by laying off thousands of workers. There has been a systematic plan to keep wages low for most Americans in order to transfer wealth to the richest. The famous Skull and Bones club at Yale was originally endowed in the 1830s by the Russell Trust. It was connected to a company that, at the time, was the premier American smuggler of opium. The media, especially Rupert Murdoch and Fox News, can be counted on to keep up the fear level. One of the justifications for tax cuts is that the money will be used for new investment. Has that happened over the last 25 years?

What is to be done? The Democratic Party needs to get a backbone. It should not blame Ralph Nader for the results of the 2000 election, but itself. It needs to push its vision for America: higher minimum wage, federally funded health care for all, full employment, public works spending that fixes America’s infrastructure, good public schools, etc.

This is a gem of a book. Can’t get ahead financially? This book gives part of the reason. It’s highly recommended.

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12 of 16 people found the following review helpful:5.0 out of 5 stars Essential Reading!, December 4, 2003

By Mark C. Aldrich (Carlisle, PA United States) – See all my reviews
(REAL NAME)

This review is from: Robbing Us Blind: The Return of the Bush Gang and the Mugging of America (Paperback)

Surely you have often wondered what the deal is with Bush’s rather repulsive smirk. Read this book and that expression (“yah, you think I’m stupid, but you don’t know the half of it…”) may begin to make more sense to you. “Robbing Us Blind” makes a compelling case for the immediate impeachment of the Bush Gang. (How did we let things get this bad, anyway?) Brouwer writes clearly and elegantly. Matt Wuerker’s illustrations are a great addition to the text. Read this book and pass it on. Then get out there and do something

This book looks at the myriad of ways that average and lower-income Americans have been systematically robbed of their monetary wealth through deliberate government policy. That wealth has been given to the top 1 percent of the people, in terms of income, by a group of elites and super-rich that the author calls the Bush Gang. The Bush family has been at, or near, the seat of American power for 16 of the last 24 years.

To give one example, from 1982 to 2002, the number of Americans without health care jumped from 25 million to 43 million, a rise of more than 50 percent. In that same period, the number of American billionaires rose from 13 to 229.

The Bush Gang’s plan looks something like this: Give tax relief to corporations and the very rich. Build up the military with big increases in defense spending. Be very aggressive in international relations. Deregulate business as much as possible. Overlook the criminal actions of those businessmen who support this agenda. Ignore the real possibility of large deficits. Also, attack labor and working Americans as much as possible.

This book covers a number of topics. The Bush remedy for a sick economy is CEOs who will drive up a company’s stock price by laying off thousands of workers. There has been a systematic plan to keep wages low for most Americans in order to transfer wealth to the richest. The famous Skull and Bones club at Yale was originally endowed in the 1830s by the Russell Trust. It was connected to a company that, at the time, was the premier American smuggler of opium. The media, especially Rupert Murdoch and Fox News, can be counted on to keep up the fear level. One of the justifications for tax cuts is that the money will be used for new investment. Has that happened over the last 25 years?

What is to be done? The Democratic Party needs to get a backbone. It should not blame Ralph Nader for the results of the 2000 election, but itself. It needs to push its vision for America: higher minimum wage, federally funded health care for all, full employment, public works spending that fixes America’s infrastructure, good public schools, etc.

This is a gem of a book. Can’t get ahead financially? This book gives part of the reason. It’s highly recommended.

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Archive for the ‘Robber Barons’ Category

Terrorist (Noun): Anyone Who Disagrees With the Government

There are two key social control myths in America: one, that everyone is equal before the law, and two, that similar fundamental opportunities are available to all. Using the Socratic method, let’s see if these hypotheses are true or false.http://www.zerohedge.com/news/guest-post-social-fractals-and-corruption-america

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International Business — Davos Style

The first lesson of international business is that the monopolies that drive the commercial trading system only hold loyalty to the god of capital. Making money means retaining a profit on trading transactions of business companies. The notion of MAKING MONEY means something very different to the financial empires that speculate on currencies, commodities, bonds and equities. When the two worlds come together to celebrate the common interest of their pirate culture, the Davos port of call, is a necessary winter holiday.http://www.batr.org/negotium/020112.html

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Everything You Need to Know About Wall Street, in One Brief Tale

If there was ever a news story that crystalized the moral dementia of modern Wall Street in one little vignette, this is it. Newspapers in Colorado today are reporting that the elegant Hotel Jerome in Aspen, Colorado, will be closed to the public from today through Monday at noon. Why? Because a local squire has apparently decided to rent out all 94 rooms of the hotel for three-plus days for his daughter’s Bat Mitzvah. The hotel’s general manager, Tony DiLucia, would say only that the party was being thrown by a “nice family,” but newspapers are now reporting that the Daddy of the lucky little gal is one Jeffrey Verschleiser, currently an executive with Goldman, Sachs.http://www.rollingstone.com/politics/blogs/taibblog/everything-you-need-to-know-about-wall-street-in-one-brief-tale-20120113

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Incredible14U

Some people work for company’s that use ponzi schemes to make money, LOTS OF IT YAH!, and others run hotels during a recession/depression and need the money cause a lot of rooms may be empty. That is capatalism. Warts and all.

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Class War Coming to America

Never mind the budding war between America and Iran. A skirmish could be coming a lot closer to home and it might even be as centrally located as your own city. In only two years, tensions have grown greatly between the upper and lower classes. http://rt.com/usa/news/class-war-america-inequality-645/

COMMENTS:

LabMan

The effects of sanctions are beginning to show on the Iranian people,the middle class being destroyed,jobs lost,medical care diminishing,a society being forced into desperation,sound like anything happening here?,maybe it’s time to admit that the American people have been the victims of sanctions also for quite some time,and the effects are chillingly close to what is happening in Iran,we are all Palestinians now!

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The Equality Racket

Our mainstream media have discovered a new issue: inequality in America. The gap between the wealthiest 1 percent and the rest of the nation is wide and growing wider. http://www.vdare.com/articles/the-equality-racket

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The Second Gilded Age

Writer Mark Twain coined the phrase “the Gilded Age” to describe that period of rapid growth, a time when the dazzling exterior of American life actually concealed mass unemployment, poverty and a society ripped in two. Economists and political scientists believe the US has entered a new Gilded Age, a period of systematic inequality dominated by a new class of super-rich. The only difference is that, this time around, the super-rich are hedge fund managers and financial magnates instead of oil and rail barons.http://www.spiegel.de/international/spiegel/0,1518,793896,00.html

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A Conspiracy of Counterfeiters

Schooled economists such as Rogoff, Krugman and Bernanke know how to shelter their wealth from the ravages of inflation – and even to get rich. But what about widows whose husbands leave a nest egg of savings in cash and bonds? What are they supposed to do as the value of their savings is wiped out at 4, 5 or 6 percent a year – or whatever annual rate of ruin the Rogoffs and the Krugmans decide upon? This is not only an economic issue but a moral issue. To inflate a currency is to steal the money citizens have earned and saved and entrusted their government to protect. Any government that betrays that trust and steals that wealth is not only unworthy of support. It is worthy of being overthrown.http://lewrockwell.com/buchanan/buchanan183.html

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jaredsparks

Meaning the rate of return on safe investmens like money markets.

jaredsparks

Try zero percent, as the banksters attempt to force the seniors to lose their money in hi-risk scams.

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Real People Say “Screw You” to the Markets

Don’t even try to “invest” in this market folks, and if you decide to trade, realize that you’re playing in a rigged casino and the entire force of the government is not only behind rigging the casino but explicitly endorses and permits the rigging to go on and continue, despite being fully-aware of it. Remember, “Wall Street is Main Street” to them – and if that means your retirement and investments get destroyed that’s just fine provided that big buildings in downtown Manhatten continue to be infested by the thieves guild that pumps tithes into campaign coffers. Oh, if you think that liquidity was bad, you should have seen it on the release of the speech. There were double-digit bid and offers up and down the stack, and the collapse of about 1% you saw was a direct consequence of an illiquid market. So was the subsequent ramp job, roughly 2% in minutes. This chainsaw is more than happy to cut your arms and legs off with both sides of the bar. Make sure you thank Congress and our wonderful “President”, all of whom are far more interested in making sure that the banksters simply rob you blind than anything else when it comes to the economy.http://www.market-ticker.org/akcs-www?post=193037

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Illegal Foreclosure Epidemic: Until We Put A CEO In Jail Bankers Will Never Learn Their Lesson

To foreclose on someone’s home, an authorized bank employee must sign the foreclosure document, swearing that the facts in it are true. But that requires hiring people to review each case. To avoid that cost, they take an illegal shortcut by signing the name of someone who has not read the document and might not even exist.http://blog.alexanderhiggins.com/2011/08/16/illegal-foreclosure-epidemic-put-ceo-jail-bankers-learn-lesson-57591/

COMMENTS:

LabMan

Are people fighting back legally?,the “Linda Green”signature situation is a red flag that should be followed up on,I don’t know the number of homes forclosed on in the U.S.,but I hope a battle is going on in this area,we as citizens,have come under attack in so many areas that it is clear that our demise is planned,if our racial surrender is any indication, things do not look promising,the elite cause and watch these events very closely,they then draw opinions as to our resistance level,if they feel that we are “easy marks”,another assualt is started on our way of life.

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The Decline and Fall of the American Empire

The United States Government and its presstitute media have wasted time and energy creating hysteria over a non-existent “debt ceiling crisis.” After reading the “news” in the Ministry of Propaganda and witnessing the stupidity of the U.S. government, the rest of the world is struck dumbfounded by the immaturity of the “world’s only superpower.” What kind of superpower is it, the world wonders, that is willing to go to the eleventh hour to convince the world, which holds its banking reserves in U.S. Treasury debt, that the U.S. government will default on the debt? Every country in the world now worries about the judgment and sanity of the country with the largest nuclear arsenal in the world.http://www.informationclearinghouse.info/article28730.htm

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$230,000 For a Guard Dog: Why the Wealthy Are Afraid Of Violence From Below

As inequality in the U.S. grows, the ultra-rich are pouring their spare cash not just into private jets, but into private security. Think there’s a connection?http://www.alternet.org/economy/151837

COMMENTS:

jaredsparks

What these sleazebags really fear is good old American Populism; someone to come along with the ability to gather middle and working class of all political persuasions under one big tent. Case in point – what happened to Sen.Huey Long.

LabMan

The wealthy are beginning to look over their shoulders,but will not have to worry much until after football season,but wait,then basketball starts……AH!

Reinhardt

Justified paranoa! However, I think the ones who have the most to fear, are the politicians. But then, they are among the ultra rich due to stealing from the populace!

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The Ultimate Goal of the Bankster-Led Political-Economic Warfare Being Waged Against Us

What these banksters and their cohorts are really trying to do is to roll back the Enlightenment, roll back the moral philosophy and social values of classical political economy and its culmination in Progressive Era legislation, as well as the New Deal institutions that embody such legislation. They’re not trying to make the economy more equal, and they’re not trying to share power — just the opposite: Their aim is to implement a kind of pre-industrial and even feudal socioeconomic system. What this means is that our economy is being pushed back and put on the road to debt peonage. Hence forth, most manufacturing will be done in Asia and Europe. http://www.opednews.com/articles/The-Ultimate-Goal-of-the-B-by-Richard-Clark-110714-667.html

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Former Fox News Executive: Americans’ Phones Were Hacked

Roger Ailes (left) and zionist robber baron Rupert Murdoch

Former Fox News executive Dan Cooper has claimed that a special bunker, requiring security clearance for access was created at the company’s headquarters to conduct “counterintelligence” including snooping on phone records. http://www.dailykos.com/story/2011/07/17/995568/-Fmr-Fox-News-Executive:-Americans-Phones-Were-Hacked?via=tag

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Greed, Excess and America’s Gaping Class Divide

It also works the other way — the poor have no idea what real rich people are like. They apparently never see them, which is why the political champions of middle America are at this very minute campaigning in congress to extract more revenue from elderly retirees and broke-ass students while simultaneously fighting to preserve a slew of tax loopholes for the rich, including the carried-interest tax break that allows hedge fund billionaires to pay about half the tax rate of most Americans. This is also going on because both parties are betraying the desires of the actual voters, who by and large actually do favor taxing the wealthy (they favor it intellectually anyway, when asked by pollsters). But we don’t see mobs on the street demanding Stevie Cohen and John Paulson and George Soros give up their special 15 percent tax rate, because no actual people have ever seen Stevie Cohen, John Paulson or George Soros in the wild. http://www.readersupportednews.org/off-site-opinion-section/83-83/6598-greed-excess-and-americas-gaping-class-divide

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Robber Baron Watch: Over The Past Four Years Rupert Murdoch’s News Corp Generated $10.4 Billion In Profits And Received $4.8 Billion In ‘Taxes’ From The IRS

Call it the gift that keeps on giving (if one is a corporation that is): the U.S. tax system, so effective at extracting income tax from America’s working class, is just as “effective” at redistributing said income tax at the corporate level. Case in point: News Corp, which after generating $10.4 billion in profits over the past 4 years, and which would have been expected to pay the IRS $3.6 billion at the statutory corporate tax rate, instead received $4.6 billion back from Uncle Sam. Bottom line: Murdoch’s corporation had a cash paid tax rate of -46% between 2007 and 2010.http://www.zerohedge.com/article/over-past-4-years-news-corp-generated-104-billion-profits-and-received-48-billion-taxes-irs

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The Corporate Royalists and Right-Wing Groups Propelling the GOP’s Assault on the Middle Class

A handful of rich, right-wing families and corporate chieftains are dedicated to returning America to the days when robber barons ruled.http://www.alternet.org/teaparty/151213

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Banker Confesses Regret

December 2nd, 2011
in econ_news

Econintersect:  Nicholas Kristof wrote an Op-Ed column Wednesday, November 30 in The New York Times.  In that column he does get around to an opinion, but the important parts of the column are news items.  One most notable is the mea culpa of James Theckston, a former JP Morgan Chase (NYSE:JPM) bank executive who worked in the mortgage branch of the firm (Chase Home Finance) where he was a regional vice president in South Florida.  Kristof says that at the end of the housing bubble, in 2007, the bank was “shoveling money” at home borrowers.  (Click on cartoon for larger image.)

Follow up:

Here is some of what Kristof wrote (with quotes from Theckston), emphasisadded by Econintersect:

“On the application, you don’t put down a job; you don’t show income; you don’t show assets,” he said. “But you still got a nod.”

“If you had some old bag lady walking down the street and she had a decent credit score, she got a loan,” he added.

Theckston says that borrowers made harebrained decisions and exaggerated their resources but that bankers were far more culpable — and that all this was driven by pressure from the top.

“You’ve got somebody making $20,000 buying a $500,000 home, thinking that she’d flip it,” he said. “That was crazy, but the banks put programs together to make those kinds of loans.”

Especially when mortgages were securitized and sold off to investors, he said, senior bankers turned a blind eye to shortcuts.

“The bigwigs of the corporations knew this, but they figured we’re going to make billions out of it, so who cares? The government is going to bail us out.  And the problem loans will be out of here, maybe even overseas.”

Other things that Theckston revealed included:

  • Commissions were seven times higher from subprime loans, rather than prime mortgages. So mortgage bankers looked for less savvy borrowers — those with less education, without previous mortgage experience, or without fluent English — and nudged them toward subprime loans.
  • His corporate award in 2006 recognized his success in increasing high-risk loans.
  • The high risk loans were made disproportionately to minorities, which senior executives tried frantically to cover up.

Kristof concludes that the process that ensued from the financial crisis involved a basic unfairness of rescuing the bankers, their shareholders and creditors while turning a “cold shoulder” to some of the “most vulnerable and least sophisticated people in America.”

There have been other items published expressing opinions that disagree with some of Kristof’s conclusions.  For one, Kristof wrote, regarding the trillions the Fed used to rescue banks that were otherwise insolvent:

The Federal Reserve action isn’t a scandal, and arguably it’s a triumph. The Fed did everything imaginable to avert a financial catastrophe — and succeeded. The money was repaid.

Economics blogger Steve Waldman characterized the action of the banks during and following the rescue as fraud.  Waldman says that the government “triumph,” as Kristof called it (yes, he did say “arguably”), was a transfer of weak assets from the banks hands to the taxpayer to the benefit of the banks and their stakeholders.  Specifically, Waldman said this:

We can get into all kinds of arguments over what would have been practical and legal.  Regardless of whether the government could or could not have abstained from making the transfers that it made, it did make huge transfers.  Bank stakeholders retain hundreds of billions of dollars against taxpayer losses of the same, relative to any scenario in which the government received remotely adequate compensation first for the risk it assumed, and then for quietly moving Heaven and Earth to obscure and (partially) neutralize that risk.

Waldman says that the net of what has happened is that $3 – $4 trillion has been gained by banks and their stakeholders by adding that amount to the federal debt.

There are those who have argued that actions of the banks, including the highest executive levels, constituted criminal fraud and should be prosecuted.  A notable voice in this group belongs to William K. Black (a GEI contributor), one of the nation’s leading experts on white collar crime.  Black, now a professor at the University of Missouri Kansas City, was a leading member of the legal team that obtained more than 1,000 convictions of top executives in the Savings & Loan scandal of the late 1980s and early 1990s.

Black has written that the government has been guilty of systematically ignoring fraud and this constitutes a continuing systemic risk.  Black agrees with Theckston’s assessment that “bankers were far more culpable” in the issuance of fraudulent mortgages, and described his own assessment in the article “Lenders Put the Lies in Liar’s Loans and Bear the Principal Moral Culpability.”  In a TV interview about six months ago, Black called what has happened in the wake of the crisis as bailing out fraud.

Finally, a number of readers have been discussing (by e-mail) an article fromSmithsonian.comThe Man Who Busted the ‘Banksters’.  The man is Ferdinand Pecora who conducted the famous commission hearings that have come to bear his name.  He acted as the chief counsel to the U.S. Senate Committee on Banking and Currency.  Although his name is associated with the Roosevelt era, he was actually appointed near the end of the Hoover administration.

Immediate results of the Pecora Commission hearings were the passage of the act establishing the SEC (Securities and Exchange Commission) and the Glass-Steagall Act, which separated investment banking from deposit/commercial banking, including the establishment of the FDIC (Federal Deposit Insurance Corporation).

The hearings were quite contentious, not the polite affair that was the FCIC (Financial Crisis Inquiry Commission) headed by Philip Angelides whose members could not agree on a final report due to political dissention.  Yves Smith of Naked Capitalism reported that insiders from the FCIC staff said that because of the politics of those named to the commission the FCIC was set up to fail.

The Pecora commission, on the other hand, was no polite gathering.  The term “bankster” resulted from the procedings and the nation’s most powerful banker, JP Morgan, called Pecora a “dirty little wop” and one who “bore the manners of a prosecuting attorney who is trying a horse thief.”

It was reported that members of the FCIC forwarded prosecution recommendations to federal authorities but no action has been taken eleven months later.

What would Pecora have done with this line-up?

Two brief excerpts from the Smithsonian article:

  • By investigating Wall Street business practices and calling bankers in to testify, Ferdinand Pecora exposed Americans to a world they had no clue existed. And once he did, public outrage led to the reforms that the lords of finance had, until his hearings, been able to stave off.
  • In 1939, Pecora published Wall Street Under Oath, which offered a dire warning. “Under the surface of the governmental regulation, the same forces that produced the riotous speculative excesses of the ‘wild bull market’ of 1929 still give evidences of their existence and influence.… It cannot be doubted that, given a suitable opportunity, they would spring back into pernicious activity.”

In recent years the SEC has been weakened by lack of funding and encouragement “not to interfere with the free market system” by some political powers.  The Glass-Steagall Act was repealed under President Clinton in 1999.

Following those actions, history has run its predictable course, if you believe the 1939 quote from Pecora.

Sources:  The New York TimesSmithsonian.com and Global Economic Intersection (links embedded in the article).

Hat tips to Roger Erickson and Russell Huntley.

http://econintersect.com/files/text_ad.htm

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The Second Gilded Age

Has America Become an Oligarchy?

By Thomas Schulz

Photo Gallery: The Winner-Take-All Society

Photos
AFP

The Occupy Wall Street movement is just one example of the sudden outbreak of tension between America’s super-rich and the “other 99 percent.” Experts now say the US has entered a second Gilded Age, but one in which hedge fund managers have replaced oil barons — and are killing the American dream.

At first, the outraged members of the Occupy Wall Street movement in New York were mainly met with ridicule. They didn’t seem to stand a chance and were judged incapable of going up against their adversaries, Wall Street’s bankers and financial managers, either intellectually or in terms of economic knowledge.

“We are the 99 percent,” is the continuing chant of the protestors, who are now in their seventh week of marching through the streets of Manhattan. And, surprisingly, they have hit upon the crux of America’s problems with precisely this sentence. Indeed, they have given shape to a development in the country that has been growing more acute for decades, one that numerous academics and experts have tried to analyze elsewhere in lengthy books and essays. It’s a development so profound and revolutionary that it has shaken the world’s most powerful nation to its core.

Inequality in America is greater than it has been in almost a century. Those fortunate enough to belong to the 1 percent, made up of the super-rich, stand on one side of the divide; the remaining 99 percent on the other. Even for a country that has always accepted opposite extremes as part of its identity, the chasm has simply grown too vast.

Those who succeed in the US are congratulated rather than berated. Resenting other people’s wealth is viewed as supporting class struggle, which is something very frowned upon.

Still, statistics indicate that the growing disparity is genuinely overwhelming. In fact, the 400 wealthiest Americans now own more than the “lower” 150 million Americans put together.

Nearly two-thirds of net private assets are concentrated in the hands of 5 percent of Americans. In comparison, the upper 5 percent of Germany hold less than half of net assets. In 2009 alone, at the same time as the US was being convulsed by mass layoffs, the number of millionaires in the country skyrocketed.

Indeed, if you look at the reports it compiles on every country in the world, even the CIA has concluded that wealth disparity is greater in the US than in Tunisia or Egypt.

A New ‘Gilded Age’

In a book published in 2010, American political scientists Jacob Hacker and Paul Pierson discuss how this “hyperconcentration of economic gains at the top” also existed in the United States in the early 20th century, when industrial magnates — such as John D. Rockefeller, Andrew Carnegie and J. P. Morgan — dominated the upper stratum of society and held the country firmly in their grip for years.

Writer Mark Twain coined the phrase “the Gilded Age” to describe that period of rapid growth, a time when the dazzling exterior of American life actually concealed mass unemployment, poverty and a society ripped in two.

Economists and political scientists believe the US has entered a new Gilded Age, a period of systematic inequality dominated by a new class of super-rich. The only difference is that, this time around, the super-rich are hedge fund managers and financial magnates instead of oil and rail barons.

A Threat to the World Economy

The academics fear this change could have serious consequences for the country’s economic future. As they see it, this extreme inequality threatens to dramatically slow growth in the world’s largest economy. This is part of a development, they argue, that has been under way for years but remained largely hidden in the years of cheap credit, rising real estate prices and excessive consumption — when it seemed everyone was on the way up. And the problems only came to light with the arrival of the financial crisis.

Through the 1970s, income for Americans across all social classes rose nearly in lockstep, by an annual average of roughly 3 percent. Starting in the 1980s, however, this trend underwent a fundamental transformation. Granted, the economy continued to grow — but almost exclusively to the benefit of the country’s top earners. The major economic expansion under President Ronald Reagan benefited only a few, and the problem only grew worse under George W. Bush.

At least since the beginning of the millennium, it has no longer been a simple matter of two societal extremes drifting further apart. Instead, the development is also accelerating. In the years of economic growth between 2002 and 2007, 65 percent of the income gains went to the top 1 percent of taxpayers. Likewise, although the productivity of the US economy has increased considerably since the beginning of the millennium, most Americans haven’t benefited from it, with average annual incomes falling by more than 10 percent, to $49,909 (€35,184).

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Inequality is only a symptom of the severe erosion of democracy and fair government in the US, and don’t believe for a moment that this is not true for the rest of the Western world. The article mentioned “the news” of […] more…

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One Response to Robbing Us Blind – Bush Gang’s Robber Barons

  1. Celesta Hackner says:

    As I website owner I think the subject matter here is very excellent , thanks for your efforts.

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