I am opening the Shrine today for a wonderful new essay for our prophetess of economy and finance, Professor Athena. The topic is Occupy Wall Street, which (as Tammy Bruce notes) is actually the opening of Team Obama’s 2012 campaign!
The financial services industry is responsible for over 6% of our GDP. Yes, we know taxpayers are still being told they “bailed out the banks”, despite the inconvenient truth that TARP was a loan, has been paid back almost in entirety, and which taxpayers actually have made money on. We know popular psychology is to vilify the financial industry and especially banks, blaming them for not lending money as one of the main reasons why we see stubborn unemployment. Yet recent money sent to the Occupy Wall Street protestors was somehow not placed under the sleeping bags of the demonstrators, but instead placed on account in a bank. Whoa, dude, you put the money on deposit in a financial institution? No doubt that bank can’t wait to begin charging debit card swipe fees and account maintenance transactions, all of which is greedy and unfair of them. You should be more careful. Perhaps buy gold and bury it in the ground.
It would be nice at some point to hear even the conservative media explain how many jobs since 2008 the financial services industry has lost. In fact, entire firms have disappeared off Wall Street, brokers and salespeople and operations administrative personnel have all lost their jobs. The economic excesses of the housing meltdown and its spinoff of structured securities on leveraged capital had huge cost, bourn most immediately and severely by the financial industry. Estimated jobs lost in 2008 alone eclipsed 200,000. The bleeding continues, as recent announcements by many of the nation’s largest banks have shown. In similar fashion to the oil and gas industry, no one wants to feel gratitude for such important products and services we all depend upon daily, and what appear to be flashy income and profit numbers often obscure costs which are never reported. It may be a challenge to acknowledge that we are repeating mistakes of the 1930’s in blaming banks and other financial institutions for an economic meltdown which was a blend of cyclical market phenomenon and political policy mistakes, but acknowledge it we must or we lose a very valuable part of our economy and a business where we set the standard on the world stage in the process.
Imagine for a second that you can’t do without your I-Phone. I know I can’t do without mine! And it shouldn’t have to be so expensive, right? Because we all know that Apple sells millions of these per day and they make huge profits. Let’s imagine for a moment that the government tells Apple not only how much it may charge for the new I-Phone, but it also taxes upcoming “windfalls” from any new products which turn an unusually large profit. In addition, regulators will be around occupying the largest Apple outlets to assure compliance with all consumer laws, part of the new consumer fraud division and which will cost Apple big dollars in hiring accounting people and auditors and lawyers to manage. But we are not done, not by a long shot. The federal government has passed a law citing Apple for “overcharging” its App developers for inclusion in the App Store, and Apple must now cut those fees in half. No problem for earnings, right? We still are not done. Several Apple customers decide to write bad checks and use fraudulent credit cards for purchases, for which the government says Apple must now be held responsible. The government indicates it might settle, if Apple will agree to pay somewhere in the neighborhood of 20 billion dollars to the government to apportion among states where the most Apple I-Phones were sold. What they are going to use the 20 billion for is nobody’s business. Oh, and one more thing. A new plan is being kicked around where people who cannot afford a new I-Phone will get one anyway, because dangit, they deserve it!!! A number of prominent Senators are up-in-arms about this very thing on the Senate floor. People can’t play Angry Birds! Texting is dropping nation-wide! The President of the United States uses his office on almost a daily basis to denounce the greed of Apple and all information technology companies. A new Occupy Apple movement has been organized, and they are camping out in Cupertino. They are not all in agreement about what they want, but world peace is of course important and, failing that, the newest I-Phone App that finds them a job where deodorant is not that essential. Meanwhile Apple’s profits are down, it eliminates 98,000 jobs, and decides China might be a location worth looking into.
The above situation seems far-fetched, but not to banks. We were around when you did it all to us.
Follow this up with a look at the 53%, via W.C, Varones.The website name comes from the percentage of Americans with “skin in the game” — that is, those of us who pay income tax.
Beers with Demo has a take about how OWS is going to like being mentioned in the same breath as Tea Party: Hey, #OWS… Ya like apples?
Finally, as B-daddy points out, it is the crony and not the capitalism.