Hold Wall Streeters Accountable for Recession

Monday, 27 Sep 2010 03:40 PM

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There is an old Chinese curse that goes, "May you live in interesting times." Today, we live in very interesting times. Governments and individuals alike are faced with monumental issues.

For the individual, no problem is more serious than finding and keeping a job. When I was mayor of New York City, I used to say, "When you give people jobs, you solve 90 percent of their problems. The other 10 percent they can solve themselves."

Surely, the most humbling and distressing event that can happen to a person, particularly the “breadwinner” of the family, is losing one’s job and finding it difficult or impossible to get another one.

Over the last two years this personal disaster has happened to millions of men and women who, as a result of the Great Recession have seen their family fortunes — savings, 401(k) plans, stock market investments, the value of their homes, wither away and their jobs disappear.

Losing one’s job — not having a destination each morning to which to go, no longer being occupied during the day, not working with colleagues and being seen as needed by your firm — has to be devastating.

One’s pride, one’s sense of responsibility and failure to carry out that responsibility to your family is undoubtedly causing millions of Americans to daily weep.

Here we are, according to the National Bureau of Economic Research, out of the Great Recession since June of 2009 and unemployment in the country is at 9.6 percent, representing 14.9 million unemployed Americans; in addition, there are 8.9 million underemployed.

Everyone knows that millions of these people in their 50s and 60s will never get another job. What will become of them and their families?

I don’t know. What is even worse is that it appears no one in our government’s leadership appears to know.

Millions more, if they do get jobs, will earn far less than they did before they lost their previous jobs, and their standard of living will be permanently and substantially reduced.

One disturbing aspect of all this misfortune is that the men who brought the country to its knees through Wall Street manipulations in pursuit of greed, and through political and business manipulations of the mortgage market, were bailed out by our government leaders in both parties — Democratic and Republican.

In many cases they are now not only fully recovered from their losses, but are doing better than they were doing before the debacle.

Further, those who surely committed crimes in creating these losses of trillions of dollars to the American public have not, with few exceptions, been punished by being tried criminally and subject to prison.

Of course, most acts by those involved with the economic debacle were not criminal in nature — some were negligent, crass, or greedy — but surely many were, for example, providing mortgages euphemistically referred to as subprime, taking advantage of unsophisticated consumers, making suckers of them, luring them into situations where they were taking on debt that the brokers and bankers knew they could never repay, encouraging false statements from applicants that would ultimately cause them devastating losses.

Then there were the Wall Streeters who played and gambled with other people’s money; the members of Congress who passed laws enabling the rich and privileged to legally abuse their less-sophisticated fellow Americans.

The Congress favored and I believe still favors those rich and privileged who contribute to their campaigns. Imagine this: If a millionaire (and there are many in this country) dies this year, his or her estate will pay no estate tax because Congress has not addressed the issue. It was left open because of the Bush law ending all estate taxes over a 10-year period, while restoring them in full in year 2011.

The expectation was that Congress would provide a new and more equitable estate tax as opposed to the confiscatory 55 percent estate tax that existed when Bush and the Congress enacted the then-new declining tax.

Next year — 2011 — the estate tax will automatically be restored to the original 55 percent tax. One of the very worst measures favoring the rich was when the Congress allowed the hedge fund managers to have their income received from these funds taxed at 15 percent, defining it as long-term capital gains, instead of at the much higher rate to which people in their income brackets are normally subject were it to be defined as regular income.

The lyrics of the popular 1921 song “Ain’t We Got Fun,” go, “There’s nothing surer: the rich get rich and the poor get — children.”

Those living below the poverty line, according at Census Bureau, are now 14 percent of the population. One in five children is below the poverty line.

My intent when I started this commentary was not to write a populist screed. My intent was to write a cri de coeur demanding justice, as so many others have unsuccessfully demanded and millions more have prayed for.

I know this plea will fall on deaf ears. Sometimes, I feel as though we are living once again in the days of Louis XVI and Marie Antoinette. The French public broke the hideous enthrallment of the French people by their king and his court. They did it with the tumbrels and the guillotine.

Fortunately, we have a democracy and can throw the rascals out and demand that our law enforcement officials hold criminally responsible those who over the last several years, have committed crimes against the American public.

To reword Patrick Henry’s phrase: If this be populism, make the most of it.

I am reminded of another phrase that seems particularly applicable. “Revenge is a dish best served cold.” Well, winter is coming, so let’s get on with it.



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