Austerity, G8/G20, Retirement, Wall Street and Little Shop of Horrors

[suffragette]

I’m not an economist.

I am trying to understand what’s occurring nationally and globally from the perspective of a citizen, an interested party who has been and will be impacted by these decisions, or in the terms of this time, a consumer.

I guess that’s part of the problem, the shift in view of the populace from the citizen, defined in the context of rights and responsibilities from and to our government, to the consumer, defined in the context of our dependency upon and need to spur the growth of corporations and by extension Wall Street.

I’ve been seeing austerity crop up more and more as “the plan” major governments including ours, have decided on as the next phase. And I see articles about current, proposed and possible cuts in social services in general and people’s retirement in particular being a central proposal in this plan.

That seems to be the agreement that came out of the G8/G20 meetings, though many major economists are warning this is the wrong direction:

World leaders embracing austerity are playing with fire

http://www.thestar.com/article/827625--olive-world-leaders-embracing-austerity-are-playing-with-fire

Which leaves government, as it was at the beginning of the Great Recession in 2008, alone in its ability to promote economic recovery. The real threat is that the long-term unemployed will “become permanent underclass,” says Nobel laureate economist Paul Krugman. “Penny-pinching at a time like this isn’t just cruel; it endangers the nation’s future.”

In Europe, the eurozone debt crisis earlier this year has nations differing only in the speed and severity of their austerity measures. Affluent Germany and France are moving gradually but with resolve. Spain, Portugal and Ireland are quickly imposing painful cuts.

The irony, of course, is that slashing public payrolls and pensions, as major European economies are doing, reduces tax revenue for deficit reduction. And it forces governments to spend heavily even on newly minimal welfare assistance or risk social upheaval.


Many of the articles about the austerity measures to one degree or another are about linking reducing deficits to raising retirement ages and reducing and/or privatizing pensions and/or social security.

http://online.wsj.com/article/SB10001424052748704067504575304800122192006.html
France Targets Deficit, Retirement Age

http://www.france24.com/en/20100708-greeks-strikers-set-protest-over-pension-reform-general-nationwide-strike

Lawmakers are expected to vote later on Thursday on the pension bill, a key condition for an austerity deal agreed with the European Union and the IMF in return for a 110-billion-euro ($138.6 billion) aid package.
~~~
The pension bill also incorporates clauses that make it easier and cheaper to fire workers and allow firms to pay young first hires less than the minimum wage.

http://blog.aflcio.org/2010/05/26/wall-street-propaganda-blame-social-security/

Wall Street Propaganda: Blame Social Security



That plan is already being done in Europe while in the U.S. we have a commission “studying” that while we are once again seeing more articles in the media about Social Security being “in trouble” and needing “fixing.” And part off that fix could be privatizing it to one degree or another, with Wall Street prominently in the mix.

It seems to me, again no economist here, that the financial conglomerates’ (Wall Street, mega banks, etc) problems, problems that by all the accounts I’ve read they brought on themselves by quick profit choices, have a way of getting solved by gaining more access to the public coffers and, in particular retirement funds. Need help? Ok, let’s switch from pension plans to 401k plans for people. More help? Well, there’s a pile of what are now dedicated funds sitting over here, let’s see if we can direct some of that your way. In the largest sense, they are the real consumers here. I picture them as the plant in “Little Shop of Horrors” continually saying “Feed Me!” And like that plant, they grow larger and larger, but keep wanting more.

We already had a direct bail out of Wall Street, but this all looks to me like continued but more indirect bailing of them out and all done on the backs of the citizens and already agreed to by key nation's leaders.

Is that what this is?

[RKP5637]

1. Next they will be promoting Soylent Green. URL below if not familiar.

http://en.wikipedia.org/wiki/Soylent_Green

Doesn't this sound like our future on the current track...

"it depicts the investigation into the brutal murder of a wealthy businessman in a dystopian future suffering from pollution, overpopulation, depleted resources, poverty, dying oceans and a hot climate due to the greenhouse effect. Much of the population survives on processed food rations, including "soylent green"."

http://en.wikipedia.org/wiki/Soylent_Green

[suffragette]

9. I do remember Soylent Green

though I think we're edging closer to "He, She and It."
http://www.margepiercy.com/books/heSheIt.htm
"The time is the middle of the twenty-first century. The place is what used to be North America, now Norika: a vast toxic wasteland dotted with huge environmental domes, enclaves of the monolithic corporations-the "multis"-that have replaced governments and whose employees have become an indentured citizenry; the far fewer "free towns," independent settlements where the remarkable technology of the age has not yet been turned against the individual; and the "Glop," the overwhelmed stretches of megalopolis where nine-tenths of the Norikans live - violent, festering warrens unprotected from the poisonous atmosphere and ruled by feuding gangs and warlords."

If you're tempted to read it, don't look at the Wiki page - it gives too much away.

[RKP5637]

11. Thanks!!! n/t

[Starry Messenger]

2. I'm not an economist either.

But I think the little guy is getting fucked (again). Greece isn't taking this lying down. I wonder what the reaction here will be.

[suffragette]

3. That's my take on it as well

What glares to me is that so much of this seems directed to Social Security and pensions having "problems" and "needing solutions." What I don't see are articles about Wall Street having on-going systemic problems that seem to periodically require directing public funds to them to keep them solvent.

I, too, wonder what the reaction will be here.

[Starry Messenger]

4. I don't think our usual technique of manufactured consent is going to fly this time

Although you never know, Americans have taken a lot of punishment in the past without much of a squeak. I'm hoping for a loud and angry reaction myself.

[suffragette]

5. Manufactured consent is a good description for the process

Europe proposed those measures up front and has faced up-front protest.
Here, we have a persistent drumbeat about the need to "fix" Social Security and a commission full of people who seem to have long wanted this opportunity.
And the connection to propping up and enriching Wall Street, which is not discussed much.

By the way, the image I included is from the original ending to "Little Shop of Horrors," which was rejected for not testing well with audiences because it was much harsher. We have a tendency to look away from brutal outcomes, even when we see we're headed in that direction.

I'm hoping for a sustained, loud reaction, too. But it needs to get rolling before anything's finalized.

[Starry Messenger]

6. It's going on in Education too. Many more places too, I'm sure

It's like someone opened the floodgates to all of these "opportunities". The raiding of Social Security will have the most public impact, so I'm sure this will garner the most notice. If we had a left in this country that really meant something, we could really get rolling. Here's some inspiration from Greece:




(<08.07.2010> Strike of PAME on 08/07: Workers’ direct militant response to the demolition of the social security system)

[suffragette]

8. And public funding is being redirected to Wall Street

from Education now, too. And, of course, they want more.

Funny how so many other systems are depicted as needing major repair but Wall Street isn't, yet it seems to require mass infusions of money from all these other systems to sustain itself. Wall Street seems to me to be the system that is broken, and the methods that prop it up are breaking social systems.

Wall Street and Costco are a good example. There have been many articles on how Wall Street has repeatedly put pressure on Costco to change its policies to ones that favor share holders over employees. Their valuation of Costco has more to do with Wall Street's callous view on how companies should be run than on Costco's success.

http://abcnews.go.com/2020/Business/story?id=1362779
Sinegal admits that "paying high wages is contrary to conventional wisdom."

And conventional wisdom in this case comes from Wall Street. Analysts seem to be the only critics of Costco and Sinegal. They think the company could make even more money if it paid its workers less -- like Wal-Mart does.

Sinegal is unfazed by his critics. "Wall Street is in the business of making money between now and next Tuesday," he said. "We're in the business of building an organization, an institution that we hope will be here 50 years from now. And paying good wages and keeping your people working with you is very good business."

What Sinegal has proven is that a company doesn't have to be ruthless. Being humane and ethical can also make you money.


But most companies have gone along with the pressure.
We have so few strong unions left and some of those, like the teacher's unions, are busy fighting for their lives. It makes sustained marches like the ones in Greece, sadly, unlikely.

[Starry Messenger]

10. The invisible hand is actually a punch in the face.

Would we really miss Wall Street if it were dismantled? I've never seen a real answer to that question. I suspect that we would not. We would have to make some changes but I think in the long run we would be better off without this huge greedy casino squatting over all of us and plucking away what little we have left in the commons.

[suffragette]

12. I haven't seen the answer to that either.

I haven't actually even seen the question raised much.

And I think it needs addressing.

You did that well.

[Starry Messenger]

15. There were a few conversations around the time of the bailout.

The "too big to fail" posters drowned out the conversation. A couple of them aren't here anymore, so maybe it's time to raise the question again...




http://www.commondreams.org/view/2010/02/21-2

Wall Street's Bailout Hustle
Goldman Sachs and other big banks aren't just pocketing the trillions we gave them to rescue the economy - they're re-creating the conditions for another crash

by Matt Taibbi

On January 21st, Lloyd Blankfein left a peculiar voicemail message on the work phones of his employees at Goldman Sachs. Fast becoming America's pre-eminent Marvel Comics supervillain, the CEO used the call to deploy his secret weapon: a pair of giant, nuclear-powered testicles. In his message, Blankfein addressed his plan to pay out gigantic year-end bonuses amid widespread controversy over Goldman's role in precipitating the global financial crisis.

The bank had already set aside a tidy $16.2 billion for salaries and bonuses - meaning that Goldman employees were each set to take home an average of $498,246, a number roughly commensurate with what they received during the bubble years. Still, the troops were worried: There were rumors that Dr. Ballsachs, bowing to political pressure, might be forced to scale the number back. After all, the country was broke, 14.8 million Americans were stranded on the unemployment line, and Barack Obama and the Democrats were trying to recover the populist high ground after their bitch-whipping in Massachusetts by calling for a "bailout tax" on banks. Maybe this wasn't the right time for Goldman to be throwing its annual Roman bonus orgy.

Not to worry, Blankfein reassured employees. "In a year that proved to have no shortage of story lines," he said, "I believe very strongly that performance is the ultimate narrative."

Translation: We made a shitload of money last year because we're so amazing at our jobs, so fuck all those people who want us to reduce our bonuses.

Goldman wasn't alone. The nation's six largest banks - all committed to this balls-out, I drink your milkshake! strategy of flagrantly gorging themselves as America goes hungry - set aside a whopping $140 billion for executive compensation last year, a sum only slightly less than the $164 billion they paid themselves in the pre-crash year of 2007. In a gesture of self-sacrifice, Blankfein himself took a humiliatingly low bonus of $9 million, less than the 2009 pay of elephantine New York Knicks washout Eddy Curry. But in reality, not much had changed. "What is the state of our moral being when Lloyd Blankfein taking a $9 million bonus is viewed as this great act of contrition, when every penny of it was a direct transfer from the taxpayer?" asks Eliot Spitzer, who tried to hold Wall Street accountable during his own ill-fated stint as governor of New York.

Beyond a few such bleats of outrage, however, the huge payout was met, by and large, with a collective sigh of resignation. Because beneath America's populist veneer, on a more subtle strata of the national psyche, there remains a strong temptation to not really give a shit. The rich, after all, have always made way too much money; what's the difference if some fat cat in New York pockets $20 million instead of $10 million?

[socialist_n_TN]

13. Well, we had to spend a LOT of money to bail out

the banksters and stimulate to economy after the banksters tanked it. $1.5 TRILLION or so as I recall between the two. Of course, bailing them out and stopping their induced economic slide put us into heavier debt, so now that the banksters are solvent again, we have to cut our social spending so that the banksters will think that we're a good credit risk. Makes perfect sense doesn't it?

Fuckin' capitalists. EVIL fucks.

[JDPriestly]

7. All the U.S. needs to do is to let the Bush tax cuts run out.

I wish I could trust our Democratic Congress to do that.

[suffragette]

14. I think that's certainly a big part of it

and, as I've noted, I thin Wall Street is also a factor.

I wish, too.