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I have a weakness for quoting from the best. This has become my raison d’être in doing the research for this blog every day.
Please forgive me.
The following short essay is from the Comment section attached to the Paul Krugman essay on the egos and illogical vanity of the financial crime crowd. I'm running this because I think it's about the most instructive short treatment of this very long, problematical history.
Someone should be paying attention to those who know the history of this bad lot because it is getting ready to bite us hard again. (As the essay below it shows all too clearly.)
And as I've said dozens of times on this blog, big money stolen doesn't disappear (no matter how the scoundrels try to obfuscate). It goes into hiding . . . until it finds another sucker.
And the USA has been played for the ultimate suckers. At least since it was "Morning in America" in the early 80's public fantasy.
I mean, really. What did you think those trips to China by Bush and Kissinger were all about?
And Bush the 1st running the CIA? And Bush the 2nd being found eligible for any job at all.
Come onnnnnnn. Think!
Comments:
David Underwood, Citrus Heights
There was a time when Wall Street financed industries and capitalist ventures. The firms that did this were owned by partners. They shared in the losses and profits. Then Solomon Brothers conceived the idea of taking the company public. As an investment bank, they could not engage in commercial banking. On the other side was Citibank, one of the banks that led the country in fraud in 1929. Citibank then known as National City Bank of New York, led by their president Charles Mitchell had been selling worthless stock it owned, to its customers.Smiling Charlie as he was known was one of the most trusted people in the country. By the time Ferdinand Pecora finished with him, he was shown to be just another charlatan. That brought us the Glass-Steagal Act.
When Soloman Brothers went public the financial community was well on its way to convincing congress that times had changed, that the market was self regulating. They and Alan Greenspan convinced congress to nullify Glass-Steagal. The next step was collateralizing debt, which led to what we can call Financial Engineering, a new way to harvest money. To make this palatable to the public, it was labeled Capitalism.
These manipulations of the financial market are not Capitalism. They are closer to the control exercised by the European Banks that financed wars for hundreds of years. They do not build anything, or create anything, they just accumulate money for those who can convince others to buy their financial instruments.
It's no secret that there have been no jobs created by those so-called "job creators" with the billions (several trillion, actually) given to them by the taxpayers after they crashed the system. What is known by even small children is that they have had no compunction (that's morality for the rest of us) in awarding and accepting even more bribes, which they called bonuses.
And we call laugh-in-our-faces corruption.
It's amazing to me every time it crosses my mind that children can look at their parents today with anything but contempt. And loathing.
How the “Job Creators” REALLY Spend Their Money
Paul Buchheit
In his "Gospel of Wealth," Andrew Carnegie argued that average Americans should welcome the concentration of wealth in the hands of a few, because the "superior wisdom, experience, and ability" of the rich would ensure benefits for all of us. More recently, Edward Conard, the author of "Unintended Consequences: Why Everything You've Been Told About the Economy Is Wrong, said: "As a society, we're not offering our talented few large enough rewards. We're underpaying our 'risk takers.'"
Does wealthy America have a point, that giving them all the money will ensure it's disbursed properly, and that it will create jobs and stimulate small business investment while ultimately benefiting society? Big business CEOs certainly think so, claiming in a letter to Treasury Secretary Timothy Geithner that an increase in the capital gains tax would reduce investment "when we need capital formation here in America to create jobs and expand our economy."
They don't cite evidence for their claims, because the evidence proves them wrong. Here are the facts:
1. The Very Rich Don't Like Making Risky Investments
Marketwatch estimates that over 90% of the assets owned by millionaires are held in a combination of low-risk investments (bonds and cash), the stock market, and real estate. According to economist Richard Wolff, about half of the assets of the richest 1% are held in unincorporated business equity (personal business accounts). The Wall Street Journal notes that over three-quarters of individuals worth over $20 million are invested in hedge funds.
Angel investing (capital provided by affluent individuals for business start-ups) accounted for less than 1% of the investable assets of high net worth individuals in North America in 2011.
The Mendelsohn Affluent Survey confirmed that the very rich spend less than two percent of their money on new business startups. The last thing most of them want, apparently, is the risky business of hiring people for new innovation.
2. The Very Rich Don't Like Taking On Risky Jobs
CEOs, upper management, and financial professionals made up about 60 percent of the richest 1% of Americans in 2005. Only 3 percent were entrepreneurs. A recent study found that less than 1 percent of all entrepreneurs came from very rich or very poor backgrounds.
In fact, the very rich may not care about U.S. jobs in any form. Surveys reveal that 60 percent of investors worth $25 million or more are investing up to a third of their total assets overseas. Back home, the extra wealth created by the Bush tax cuts led to "worst track record" for jobs in recorded history. The true American job creator, as venture capitalist Nick Hanauer would agree, is the middle-class consumer.
3. The Very Rich Corporations Don't Like Spending On America
How do corporations spend their money? To a good extent, they don't. According to Moody's, cash holdings for U.S. non-financial firms rose 3 percent to $1.24 trillion in 2011. The corporate cash-to-assets ratio nearly tripled between 1980 and 2010. It has been estimated that the corporate stash of cash reserves held in America could employ 3.5 million more people for five years at an annual salary of $40,000.
The top holders of cash, including Apple and Google and Intel and Coca Cola and Chevron, are spending their money on stock buybacks (which increase stock option prices), dividends to investors, and subsidiary acquisitions. According to Bloomberg, share repurchasing is at one of its highest levels in 25 years.
Apple claims to have added 500,000 jobs to the economy, but that includes app-building tech enthusiasts and Fedex drivers delivering iPhones. The company actually has 47,000 U.S. employees, about one-tenth of General Motors' workforce in the 1990s.
The biggest investment by corporations is overseas, where they keep 57 percent of their cash and fill their factories with low-wage workers.
Commerce Department figures show that U.S. companies cut their work forces by 2.9 million from 2000 to 2009 while increasing overseas employment by 2.4 million. They also tap into a "brain drain" of foreign entrepreneurs, scientists, and medical professionals rather than supporting education in America.
One last way corporations see fit to spend their money: executive bonuses. Especially at the banks, where the extra stipends are often paid for with zero interest loans from the Federal Reserve.
The richest individuals and corporations are really good at building up fortunes. They're even better at building up their "job creator" myth.
And on a serious person note, if anyone could contribute a few bucks to the further operation of this blog, it will be wholeheartedly appreciated. Thank you for reading and for your support.
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