Financial Media Articles
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Richmond [CA] city officials took a giant leap forward for everyday people last week when they announced a program to purchase ailing residential mortgages and refinance them through a financial partnership and a bold new initiative that's already begun. To accomplish the task, the city said it will use its eminent domain powers in reverse: To save a home instead of condemn it. Much to the displeasure of the banking industry, the city sent offer letters to more than 600 homeowners whose mortgages are held by nongovernment lending institutions. The program offers to pay lenders the current market value of the property, not the higher value of the mortgage. Under the Richmond program, a bank that approved a $500,000 mortgage would be paid roughly 80 percent of its investment. Already, some lenders contend that such a law violates constitutionally protected property rights and sets a precedent that could open the floodgates for other cities in the same predicament. The mere exploration of similar programs in a half-dozen California cities and counties provoked a strong reaction from the banking industry. Financial experts have warned that the Richmond policy is certain to spawn legal challenges and a backlash from lenders who recalculate higher mortgages in Richmond to offset the risk of the city using a local law to claim a foreclosed property. That's interesting, because no measure was too extreme, no taxpayer sacrifice too great to come up with and fund a new financial model to bail out the bankers and brokerage firms in 2008. But that's what the federal government - and American taxpayers did.
Note: For more on financial corruption, see the deeply revealing reports from reliable major media sources available here.
JPMorgan Chase & Co. has agreed to pay federal regulators $410 million to settle allegations that the giant bank manipulated energy markets in California and Michigan. About $285 million of the settlement will go to the U.S. Treasury for civil penalties, and about $124 million will be refunded to California ratepayers. The remainder will be refunded to Michigan ratepayers. If this story sounds familiar, that's because it is. Californians who remember the Enron energy debacle of 2000-01 won't be surprised to learn that JPMorgan's traders have been accused of fraudulent behavior. Once again, the fraud was performed by manipulating the auction system that was developed by a quasi-state agency, the California Independent System Operator, to handle California's electricity needs. The Federal Energy Regulatory Commission found that JPMorgan engaged in 12 manipulative bidding strategies, which wound up forcing ratepayers to pay higher amounts than they should have - all because the bank wanted to find a cheap way to profit off of aging power plants in Southern California. JPMorgan used a variety of bait-and-switch strategies - duping Cal-ISO into paying exorbitant fees for running the plants at a low level, for instance, or manipulating the bidding system so that Cal-ISO was forced to pay rates that were many times higher than market rate. The fact that this kind of manipulation is still happening is upsetting. And while $410 million is a record settlement for the FERC, it's a drop in the bucket to JPMorgan, which reported $6.5 billion in quarterly profits this month.
Note: Remember Enron, which scammed millions and then went bankrupt, wiping out pensions of its many employees? To read CBS reports on how Enron purposely shut down power plants so they could cause and then cash in on the energy crisis, click here.
The tale of how the Obama economic team was recruited en masse from Robert Rubin acolytes who either facilitated Wall Streets pre-crash recklessness while in the Clinton administration or cashed in on it later (or, like Rubin, did both) never loses its power to shock. Michael Froman, Rubins chief of staff as Clinton Treasury secretary, not only served as the Obama transition teams personnel director but moonlighted as a Citigroup managing director while doing so. Obama essentially entrusted the repairing of the china shop to the bulls whod helped ransack it, [Jeff] Connaughton writes [in The Payoff: Why Wall Street Always Wins]. [In This Town Mark] Leibovich updates the story of the tacky prehistory of the Obama White House with its aftermaththe steady parade of Obama alumni who traded change we can believe in for cash on the barrelhead as soon as they left public service. The starry list includes, among many others, Peter Orszag (director of the White Houses Office of Management and Budget, now at Citi), Jake Siewert (the Treasury Department counselor turned chief flack for Goldman Sachs), and David Plouffe (the campaign manager and senior presidential adviser who did consulting for Boeing and General Electric). When I am president, Obama had said in 2008, I will start by closing the revolving door in the White House thats allowed people to use their administration job as a stepping-stone to further their lobbying careers. Puzzling over how so many colleagues have strayed from this credo, the former press secretary Robert Gibbs has theorized that either somehow we have all changed or, alternatively, maybe Washington changed us.
Note: For more on government corruption, see the deeply revealing reports from reliable major media sources available here.
Were coming up on the fifth anniversary of Wall Streets meltdown. Banks have rarely had it this good. Earnings for financials, the second-biggest group in the S&P 500 after technology, soared 26 percent last quarter, more than any other industry, analyst estimates show. Housing is back. The stock market is at an all-time high. Investors are finally wiring in cash. The 25 financial firms in the S&P 500 that have so far reported second-quarter results posted earnings totaling $31.6 billion, exceeding estimates of $29.1 billion, Bloomberg data show. Finance is on track to surpass tech again as the most profitable industry in the country. First-half revenue at the six biggest U.S. banks climbed for the first time in four years. Goldman Sachs, Morgan Stanley, Citigroup, JPMorgan Chase, Bank of America, and Wells Fargo reported $43.3 billion in total first-half profit, the most since 2007. The S&P 500 Financials Index is up 26 percent this year, compared with the S&P 500's 18 percent gain. Flush banks cannot sell their bonds fast enough: Almost 60 percent of high-grade debt sales in the U.S. this month are from banks, the biggest ratio in two years, according to Bloomberg. Banks are somehow making gigatons of money despite onerous new regulations and capital requirements, writes HuffPos Mark Gongloff. Why, its almost like theyre not telling the truth when they warn, repeatedly, that these new rules will destroy their profits and the economy.
Note: For more on financial corruption, see the deeply revealing reports from reliable major media sources available here.
Group of 20 nations, [which account] for almost 90 percent of the global economy, fully endorse the ambitious and comprehensive plan presented by the Organization for Economic Cooperation and Development to prevent the largest companies from using complicated ownership structures and transfer pricing to avoid paying taxes where they do most of their business. Strategies used at U.S. companies including Google, Apple and Yahoo! have been targeted in legislative hearings as governments look to improved tax collection to fill state coffers. Low tax rates paid by large multinational companies means smaller businesses and individuals are left with a disproportionately larger burden, OECD Secretary-General Angel Gurria told reporters yesterday. The OECD published its 40-page report as deficit-laden governments attempt to increase revenue collected from profitable enterprises. It follows hearings in the U.S. and U.K. that revealed how companies have avoided billions in taxes by attributing profits to mailbox subsidiaries in places like Bermuda and the Cayman Islands. Under current law, such offshore subsidiaries can take credit for profits arising from patents developed in countries like the U.S. and U.K. -- generally with cash the parent companies provided. Mountain View, California-based Google has avoided as much as $2 billion in worldwide income taxes annually by attributing profits to a subsidiary in Bermuda that holds the rights to its intellectual property for sales outside the U.S..
Note: For more on corporate corruption, see the deeply revealing reports from reliable major media sources available here.
CNBCs BRIAN SULLIVAN: Is there anyone else in the Senate that is a professor? ELIZABETH WARREN: I don't think so. ... We had the big crash in 2008. What does everyone say about it? They say too much concentration in financial services creates too big to fail. It puts us at bigger risk. And what's happened since 2008? The four biggest financial institutions are now 30% bigger than they were in 2008. The central premise behind a 21st century Glass-Steagall is to say if you want to get out there and take risks, go ahead and do it. But ... you can't get access to FDIC insured deposits when you do. That way ... at least one portion of our banking sector stays safe. From 1797 to 1933, the American banking system crashed about every 15 years. In 1933, we put good reforms in place, for which Glass-Steagall was the centerpiece, and from 1933 to the early 1980s, thats a 50 year period, we didnt have any of that none. We kept the system steady and secure. And it was only as we started deregulating, [you hit] the S&L crisis, and what did we do? We deregulated some more. And then you hit long-term capital management at the end of the 90s, and what did we do as a country? This country continued to deregulate more. And then we hit the big crash in 2008. You are not going to defend the proposition that regulation can never work, it did work. SULLIVAN: I didnt say regulation never worked, Senator. By far and away, and I agree, there were fewer bank failures in that time after Glass-Steagall. ELIZABETH WARREN: Fewer, as in, of the big ones, zero.
Note: Sen. Warren is one of the few bright lights in Congress. Watch this interview to see why. To read about later censorship of this interview by NBC, click here.
HSBC Holdings Plcs $1.9 billion agreement with the U.S. to resolve charges it enabled Latin American drug cartels to launder billions of dollars was approved by a federal judge. U.S. District Judge John Gleeson in Brooklyn, New York, signed off yesterday on a deferred-prosecution agreement. HSBC was accused of failing to monitor more than $670 billion in wire transfers and more than $9.4 billion in purchases of U.S. currency from HSBC Mexico, allowing for money laundering, prosecutors said. The bank also violated U.S. economic sanctions against Iran, Libya, Sudan, Burma and Cuba, according to a criminal information filed in the case. The bank, Europes largest, agreed to pay a $1.25 billion forfeiture and $665 million in civil penalties under the settlement, prosecutors announced in December. At a hearing the same month, Gleeson told prosecutors there had been publicized criticism of the agreement, which lets the bank and management avoid further criminal proceedings over the charges. Lack of proper controls allowed the Sinaloa drug cartel in Mexico and the Norte del Valle cartel in Colombia to move more than $881 million through HSBCs U.S. unit from 2006 to 2010, the government alleged in the case. The bank also cut resources for its anti-money-laundering programs to cut costs and increase profits, the government said in court filings. Under a deferred prosecution agreement, the U.S. allows a target to avoid charges.
Note: HSBC was founded to service the international drug trade, and is considered too big to criminally prosecute. Big bank settlements often amount to "cash for secrecy" deals that are ultimately profitable for banks. For more along these lines, see concise summaries of deeply revealing news articles about financial industry corruption.
A Vatican cleric, a spy, and a financier are accused of conspiring to smuggle 20 million ($26 million) out of Switzerland aboard a private jet. In fact, its the latest scandal to hit the Vatican bank, prompting Pope Francis to make sweeping management changes. The Holy See removed the banks longtime director and deputy director on July 1, three days after Monsignor Nunzio Scarano and two other men were arrested in connection with the alleged smuggling scheme. Perhaps the most colorful twist in the saga was the arrest on June 28 of Monsignor Scarano. The 61-year-old cleric, a former banker for Bank of America (BAC) in Italy, joined the priesthood in 1986 and most recently headed a Vatican financial department called APSA. Italian media outlets have dubbed him Don 500, because of a reported fondness for carrying large banknotes. John Thavis, a longtime Vatican correspondent for the Catholic News Service, says that while Scarano didnt work at the Vatican Bank, he had accounts there. His arrest appeared to confirm suspicions that the bank, which oversees about 7.1 billion in assets, continues to be used as an offshore haven, Thavis writes. Scarano is accused of conspiring with a member of Italys secret services and a financial broker to move 20 million from Switzerland to Italy. The latest scandal indicates that the bank may be irreformable, Vatican journalist Thavis writes.
Note: Could Pope Francis be serious in his efforts to reform the corrupt Vatican Bank? For more on financial scandals, see the deeply revealing reports from reliable major media sources available here.
It's long been suspected that ratings agencies like Moody's and Standard & Poor's helped trigger the meltdown. A new trove of embarrassing documents shows how they did it. Everybody else got plenty of blame: the greed-fattened banks, the sleeping regulators, the unscrupulous mortgage hucksters. But what about the ratings agencies? Thanks to a mountain of evidence gathered for a pair of major lawsuits by the San Diego-based law firm Robbins Geller Rudman & Dowd, ... we now know that the nation's two top ratings companies, Moody's and S&P, have for many years been shameless tools for the banks, willing to give just about anything a high rating in exchange for cash. In incriminating e-mail after incriminating e-mail, executives and analysts from these companies are caught admitting their entire business model is crooked. Ratings agencies are the glue that ostensibly holds the entire financial industry together. Their primary function is to help define what's safe to buy, and what isn't. But the financial crisis happened because AAA ratings stopped being something that had to be earned and turned into something that could be paid for. The Financial Crisis Inquiry Commission published a case study in 2011 of Moody's in particular and discovered that between 2000 and 2007, the agency gave nearly 45,000 mortgage-backed securities AAA ratings. One year Moody's doled out AAA ratings to 30 mortgage-backed securities every day, 83 percent of which were ultimately downgraded. "This crisis could not have happened without the rating agencies," the commission concluded.
Note: This is another great, well researched article by Rolling Stone's Matt Taibbi. Why isn't the major media coming up with anything near the quality of this man's work? For deeply revealing reports from reliable major media sources on financial corruption, click here.
Senior employees at U.K. banks may face a 10-year wait for bonuses under proposals put forward by a committee investigating the failures of the industry, which also recommended making reckless management of lenders a crime. The Parliamentary Commission on Banking Standards' ... proposal to introduce a criminal offence for mismanagement, which could see executives of failed firms facing jail time, was endorsed by Prime Minister David Cameron. The potential rewards for fleeting short-term success have sometimes been huge, but the penalties for failure, often manifest only later, have been much smaller or negligible, the authors of the report said. "Performance should be assessed using a range of measures rather than just return on equity, which creates perverse incentives, the committee said. "Taxpayers have bailed out the banks. The public have the sense that advantage has been taken of them, that bankers have received huge rewards, that some of those rewards have not been properly earned, and in some cases have been obtained through dishonesty, and that these huge rewards are excessive, bearing little or no relationship to the value of the work done. The committee recommended introducing an offence for reckless misconduct and potential prison time for bankers found responsible for the worst mismanagement, the first such sanctions."
Note: For a related article in the London Review of Books, which starts "the blame in Spain falls mainly on the banks as it does in Ireland, in Greece, in the US, and pretty much everywhere else too," click here. For more on financial corruption, see the deeply revealing reports from reliable major media sources available here.
The probe of Libor manipulation is proving to be the tip of the iceberg as inquiries into assets from derivatives to foreign exchange show that if theres a chance to rig benchmark rates in world markets, someone is usually willing to try. Singapores monetary authority last week censured 20 banks for attempting to fix interest rate levels in the island state and ordered them to set aside as much as $9.6 billion. Britains markets regulator is looking into the $4.7 trillion-a-day currency market after Bloomberg News reported that traders have manipulated key rates for more than a decade, citing five dealers. Its happened time and again: all of these markets have been influenced by major market-makers, which is a polite way of saying theyve been rigged, Charles Geisst, a finance professor at Manhattan College in Riverdale, New York, said. While the indexes under scrutiny are little known to the public, their influence extends to trillions of dollars in securities and derivatives. Barclays, UBS and Royal Bank of Scotland have been fined about $2.5 billion in the past year for distorting the London interbank offered rate, which is tied to $300 trillion worth of securities. Regulators are also probing ISDAfix, a measure used in the $370 trillion interest-rate swaps market, as well as how some oil products prices are set. Inquiries are broadening into the transparency of benchmarks whose levels can be determined by the same people whose income they affect. In the case of Libor, traders who stood to profit worked with bank employees responsible for submissions for the benchmark to rig the price.
Note: To read highly revealing major media articles showing just how crazy and unregulated the derivatives market is, click here. For deeply revealing reports from reliable major media sources on financial corruption, click here.
Six former Bank of America Corp. employees have alleged that the bank deliberately denied eligible home owners loan modifications and lied to them about the status of their mortgage payments and documents. The bank allegedly used these tactics to shepherd homeowners into foreclosure, as well as in-house loan modifications. Both yielded the bank more profits than the government-sponsored Home Affordable Modification Program, according to documents recently filed as part of a lawsuit in Massachusetts federal court. The former employees, who worked at Bank of America centers throughout the United States, said the bank rewarded customer service representatives who foreclosed on homes with cash bonuses and gift cards to retail stores such as Target Corp and Bed Bath & Beyond Inc. At the same time, the bank punished those who did not make the numbers or objected to its tactics with discipline, including firing. About twice a month, the bank cleaned out its HAMP backlog in an operation called "blitz," where it declined thousands of loan modification requests just because the documents were more than 60 months old, the court documents say. The testimony from the former employees also alleges the bank falsified information it gave the government, saying it had given out HAMP loan modifications when it had not. Borrowers filed the civil case against Bank of America in 2010 and are now seeking class certification.
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Traders at some of the worlds biggest banks manipulated benchmark foreign-exchange rates used to set the value of trillions of dollars of investments, according to five dealers with knowledge of the practice. Employees have been front-running client orders and rigging WM/Reuters rates by pushing through trades before and during the 60-second windows when the benchmarks are set, said the current and former traders, who requested anonymity because the practice is controversial. Dealers colluded with counterparts to boost chances of moving the rates, said two of the people, who worked in the industry for a total of more than 20 years. The behavior occurred daily in the spot foreign-exchange market and has been going on for at least a decade, affecting the value of funds and derivatives, the two traders said. The Financial Conduct Authority, Britains markets supervisor, is considering opening a probe into potential manipulation of the rates, according to a person briefed on the matter. The $4.7-trillion-a-day currency market, the biggest in the financial system, is one of the least regulated. The inherent conflict banks face between executing client orders and profiting from their own trades is exacerbated because most currency trading takes place away from exchanges. The WM/Reuters rates are used by fund managers to compute the day-to-day value of their holdings. While the rates arent followed by most investors, even small movements can affect the value of [the] $3.6 trillion in funds including pension and savings accounts that track global indexes.
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An estimated $750 million is missing from Angola's treasury [after] a deal with Russia facilitated by a Swiss bank and a shell company registered in Britain's Isle of Man, a report by a corruption watchdog group said. Russian and French arms dealers got away with $263 million, Angola's president reportedly stashed away more than $36 million, and three Angolan officials and a former Russian legislator got away with smaller amounts. Another $400 million is unaccounted for, according to Corruption Watch UK. The Angolan expos is the latest of a slew of reports on corruption, its cost to development, and how it is aided by bankers and shell companies that keep secret the identities of owners. Angola has long been accused of siphoning off payments from its massive oil production, worth about $40 billion in 2011 according to Revenue Watch. They enrich a small coterie surrounding President Jose Eduardo dos Santos, while nearly half the population lives below the poverty line. Dos Santos has ruled Angola for 33 years. The $750 million that disappeared from Angola was supposed to repay a $1.5 billion debt to Russia for help in its 27-year civil war. Angola paid with promissory notes on future oil shipments, but those notes went through shell companies that milked much of the money, the report said. Russian and French arms dealers took most of the money owed to Russia, the report said. The illegal transfer of capital from Africa has surpassed $50 billion a year.
Note: Global arms dealers work feverishly behind the scenes to enflame wars so that their huge profits keep rolling. Yet governments around the world seem reluctant to try to stop or even monitor this lucrative trade. Do you think there might be any collusion here?
Wall Street investors hungry for advance information on upcoming federal health-care decisions repeatedly held private discussions with Obama administration officials, including a top White House adviser helping to implement the Affordable Care Act. The private conversations show that the increasingly urgent race to acquire political intelligence goes beyond the communications with congressional staffers that have become the focus of heightened scrutiny in recent weeks. White House records show that Elizabeth Fowler, then a top health-policy adviser to President Obama, met with executives from half a dozen investment firms in 2011 and 2012. Among them was Kris Jenner, a stock picker with T. Rowe Price Investment Services who managed its $6 billion Health Sciences Fund. Separately, [Andrew Shin,] an official in the agency that oversees Medicare and Medicaid spoke in December with managers of hedge funds, pension plans and mutual funds in a conference call. That call and the White House meetings Fowler attended were arranged by political-intelligence firms, an expanding class of consultants in Washington that specialize in providing government information to Wall Street. Hedge fund executives and other investors are increasingly interested in the timing and nature of health-policy decisions in Washington because they directly affect the profits and stock prices of pharmaceutical, insurance, hospital and managed-care companies. Similar interest surrounds other industry sectors, such as defense, agriculture and energy, whose fortunes are especially dependent on government decisions.
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[In 2012,] financial speculator Goldman Sachs, the archetypal villain of the global economic meltdown, bailed out by US taxpayers to the tune of $5.5bn ... made an estimated $400m from speculating on food. The World Bank estimated in 2010 that 44 million people were pushed into poverty because of high food prices, and that speculation is one of the main causes. Since Goldman led the drive to deregulate commodity markets in the 1990s ... they've been at the vanguard of creating and promoting complex commodity instruments, from which they've raked in huge profits. Wallace Turbeville, a former vice president and the inventor of commodity index funds, has been outing the company's methods. He says that in his time at Goldman, investment increased from $3bn in 2003 to $260bn in 2008, and commodity prices rose dramatically during the same period, increasing from 2006 to 2008 by an average of 71%. In 1996, speculators held 12% of the positions on the Chicago wheat market, with most of the market being made up of the legitimate users of food from farmers to producers. But the legitimate hedging element of commodity markets has virtually disappeared in the intervening years. By 2011, pure speculators made up a staggering 61% of the market. Of course, Goldman Sachs isn't the only player, but it is certainly the largest. For several years, it was hotly debated whether speculation in food commodities drives up prices. But the evidence now firmly says it does, and that there's little correlation between rising prices and actual supply and demand. There are now well over 100 studies which agree.
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One of the world's most respected economists has said Wall St is full of "crooks" and hasn't reformed its "pathological" culture since the financial crash. Professor Jeffrey Sachs told a high-powered audience at the Philadelphia Federal Reserve earlier this month that the lack of reform was down to a docile president, a docile White House and a docile regulatory system that absolutely cant find its voice. Sachs, from Columbia University, has twice been named one of Time magazines 100 Most Influential People in the World, and is an adviser to the World Bank and IMF. What has been revealed, in my view, is prima facie criminal behavior, he said. Its financial fraud on a very large extent. Theres also a tremendous amount of insider trading. We have a corrupt politics to the core, I am afraid to say, and . . . both parties are up to their neck in this. This has nothing to do with Democrats or Republicans." Sachs described an environment of Wall Street influencing politicians with growing campaign contributions. In the 2012 election cycle, political contributions by the securities and investment sector hit $271.5 million, compared with $176 million in 2008, according to the Center for Responsive Politics. I am going to put it very bluntly: I regard the moral environment as pathological. They have no responsibility to pay taxes; they have no responsibility to their clients; they have no responsibility to people, to counterparties in transactions, he said. They are tough, greedy, aggressive and feel absolutely out of control in a quite literal sense, and they have gamed the system to a remarkable extent.
Note: For deeply revealing reports from reliable major media sources on criminal practices of Wall Street corporations, click here.
Billionaire Dmitry Rybolovlev, Russias 14th-richest person, and his wife, Elena Rybolovleva, have been brawling for almost five years in at least seven countries over his $9.5 billion fortune. In a divorce complaint originated in Geneva in 2008, Rybolovleva accused her husband of using a multitude of third parties to create a network of offshore holding companies and trusts to place assets -- including about $500 million in art, $36 million in jewelry and an $80 million yacht -- beyond her reach. She has brought legal action against the 48-year-old Rybolovlev in the British Virgin Islands, England, Wales, the U.S., Cyprus, Singapore and Switzerland, and is seeking $6 billion. The suits provide a window into the offshore structures and secrecy jurisdictions the worlds richest people use to manage, preserve and conceal their assets. According to Tax Justice Network, a U.K.-based organization that campaigns for transparency in the financial system, wealthy individuals were hiding as much as $32 trillion offshore at the end of 2010. Fewer than 100,000 people own $9.8 trillion of offshore assets. More than 30 percent of the worlds 200 richest people, who have a $2.8 trillion collective net worth ...control part of their personal fortune through an offshore holding company or other domestic entity where the assets are held indirectly. These structures often hide assets from tax authorities or provide legal protection from government seizure and lawsuits.
Note: For deeply revealing reports from reliable major media sources on failure of governments to regulate great accumulations of wealth, click here.
Conspiracy theorists of the world, ... we skeptics owe you an apology. You were right. The world is a rigged game. The world's largest banks may be fixing the prices of, well, just about everything. You may have heard of the Libor scandal, in which ... perhaps as many as 16 ... banks have been manipulating global interest rates, in the process [manipulating] the prices of upward of $500 trillion ... worth of financial instruments. Now Libor may have a twin brother. Word has leaked out that the London-based firm ICAP, the world's largest broker of interest-rate swaps, is being investigated by American authorities for behavior that sounds eerily reminiscent of the Libor mess. Regulators are looking into whether or not a small group of brokers at ICAP may have worked with up to 15 of the world's largest banks to manipulate ISDAfix, a benchmark number used around the world to calculate the prices of interest-rate swaps. Interest-rate swaps are a tool used by big cities, major corporations and sovereign governments to manage their debt, and the scale of their use is almost unimaginably massive. [It's] a $379 trillion market, meaning that any manipulation would affect a pile of assets about 100 times the size of the United States federal budget. It should surprise no one that among the players implicated in this scheme to fix the prices of interest-rate swaps are the same megabanks including Barclays, UBS, Bank of America, JPMorgan Chase and the Royal Bank of Scotland that serve on the Libor panel that sets global interest rates.
Note: For deeply revealing reports from reliable major media sources on the criminal practices of the financial industry, click here.
Were now witnessing what happens when all of the economic gains go to the top. Four years into a so-called recovery and were still below recession levels in every important respect except the stock market. A measly 88,000 jobs were created in March, and total employment remains some 3 million below its pre-recession level. Labor-force participation is its lowest since 1979. The underlying problem is the vast middle class is running out of money. They cant borrow more and shouldnt, given what happened after the last borrowing binge. Real annual median household income keeps falling. Its down to $45,018, from $51,144 in 2010. All the gains from the recovery continue to go to the top. Widening inequality is not inevitable. If we wanted to reverse it and restore middle-class prosperity, we could. We could award tax cuts to companies that link the pay of their hourly workers to profits and productivity, and that keep the total pay of their top 5 executives within 20 times the pay of their median worker. And impose higher taxes on companies that dont. We could raise the minimum wage to half the average wage. We could increase public investment in education, including early-childhood. We could eliminate college loans and allow all students to repay the cost of their higher education with a 10 percent surcharge on the first 10 years of income from full-time employment. And we could pay for all this by adding additional tax brackets at the top and increasing the top marginal tax rate to what it was before 1981 at least 70 percent.
Note: For deeply revealing reports from reliable major media sources on the collapse of the global economy assisted by speculation and profiteering by financial corporations, click here.
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