The so-called recovery has benefited only the top 1% of income earners who are otherwise known as the ruling plutocracy of which Goldman Sachs is the exemplar.
The Untouchables: Masters of Fraud
By Rob Urie - Counterpunch. . . .
With the remainder of Mr. Obama’s Grand Bargain on (temporary) hiatus, the question for the moment is: five years into a purported economic recovery, why would re-instating the payroll tax to its prior level cause undo hardship among America’s working poor? Mr. Saez provides the answer—in 2007 the incomes of rich and poor alike fell off the proverbial cliff. The incomes of the rich have largely recovered thanks to bank bailouts, stealth transfers, ‘Quantitative Easing’ that lifts financial asset prices and ongoing government guarantees of the financial system, while the incomes of the lower 99% have continued to decline. The only source bridging this shortfall for all but the very rich has been the Federal government. Re-instating the full (regressive) payroll tax appears to be causing a near instantaneous reaction from the American ‘consumers’ who, because of its regressive nature, would be expected to be most affected by the change. Until there is a recovery in the ‘private’ economy that boosts incomes and employment, any reduction in government payments will quickly become evident in the economies of the growing numbers of poor and near poor. And any suggestion from the wealthy that they, the wealthy, are not the ‘dependent’ class is an ignorant lie. Remove government support for the financial economy and stealth wage subsidies for the rich and this would be evident within minutes.
What then is the relation between the bank lending fraud behind the housing bubble, the continuing decline in the economic fortunes of the great majority of the population and government ‘efforts’ to restore a functioning economy? Bank lending fraud produced three main outcomes—(1) wildly inflated house prices, (2) the placement of a significant proportion of the population into permanent debt servitude against houses now worth far less than the money owed against them and (3) crashing the global financial system, and with it the global economy. In the aggregate, those with mortgages now earn less than they did when they took out the mortgages and the houses they bought / re-financed in the housing bubble are worth less than the mortgage amounts owed against them. In this context, government efforts to restore the Wall Street banks behind this fiasco while doing little / nothing to extinguish the ill-gotten debts leaves most Americans (and peripheral Europeans) in a debt-deflationary spiral. Put another way, companies won’t hire despite alleged government efforts to ‘fix’ the economy because as they see it, the economy has still not been fixed. Those that are hiring are systematically underpaying labor because of weak labor market conditions. And banks (thankfully) won’t lend because they’ve turned their prospective retail customers into debt slaves unqualified for additional credit because of the economic circumstances they (the banks) created.Read the whole essay here