| Wall Street firms started looking at the way things were going and felt that the modest returns being realized weren't enough. They considered different ways to up the ante and hyper-stimulate profits. But how? Workers weren't going to accept pay cuts just because Wall Street wanted more money for their gambling habits. But what to do?
Then a clever fellow or group of fellows came up with a clever idea; "We need to get to Asia!" They could start relying more on low cost labor pools in Asia to cut manufacturing costs and increase profits. They even came up with a clever title, "Globalization". "But what about the people working in America?" they asked, "Won't they and their unions rebel? Let's not forget how much trouble they caused when they doubled down on Unionization on the businesses at the turn of the century! They won't go down easy."
That started the ball of middle deconstruction. Businesses started creating fiscal failure to justify sending jobs overseas. Where that failed to impress, they worked to decertify unions and "Promote" members out of unions, exposing them to layoffs and firings. Companies started small by mirroring worksites for manufacturing into "right to work" states then claiming they couldn't sustain both locations. Of course, the unionized sites were shut down.
Then they took the next step and started shuttering these surviving plants by making the workers pack up their own equipment for transportation to the Far East, where the average worker worked for a week's salary equal to 1 hour of an American workers earnings.
Then Ronald Reagan gave the gift that keeps on giving: firing the Air Traffic Controllers. That was the 2nd feather in the "anti-Union / anti-Labor" cap. So, now businesses see that the President, a former union president, has no problem throwing labor and collective bargaining under the bus and they start funneling more money into the GOP in order to garner more pro-corporate tax breaks and business deregulation.
Now the soup of a crash is really boiling! Jobs are hemorrhaging to points around the globe for what can essentially be called "Slave Wages". Exposes on companies utilizing the child and slave labor markets abound but seem to fall on deaf ears as cheap products placate families being squeezed tighter and tighter. How does this get fixed?
The housing bubble!
The masters of the Universe on Wall Street come up with a new plan. "Let's convince Democrats and Republicans (Already on board since the idea started in their corporate think tanks) that loosening and deregulating banking and homes lending will boost the economy and get people spending again! How can we lose? We loan them their own tax money at ridiculously low rates then sell them on adjustable rate mortgages they can't refuse. They are struggling so we just show them how to leverage their house to buy more debt. It's a win-win for us!"
Now you have a weakened workforce looking for any life raft and banks ready to give them "Interest-only" loans (Sub-Primes) that won't roll over to principle before their houses are "worth 10 times more. We promise!". Then they could just sell the house (flipping) for a HUGE profit, pay off the loan and buy something new. How could that go wrong? Worst case scenario, keep the house, refinance the loan, "Rates are ALWAYS dropping!" and they'd still be golden!
Well, now we are facing the monster that these business and banking interests created, with a little help from their bought-and-paid-for friends in government.
But wait! There's more!
All those really bad idea "Sub-Prime" loans were just sitting around doing nothing much and another Wall Street brain trust came up with a new and clever idea to make even MORE money on the backs and futures of the working class families that took out the loans. Put them all into pretty little investment packages (Collateralized Debt Obligations (CDO)) and sell them back and forth among themselves and collective nice commissions on the trades. Some of these folks were bright enough to wave a hand and remind everyone that the loans they were packaging and passing back and forth were going to implode as soon as enough underpaid workers started coming face to face with the adjusted rates and principle heavy lead balloons. How were they going to protect their glass castles from that explosion of failure?
Yup! Insurance Policies! Better known as Credit Default Swaps (CDS). And they could make money off these TOO!! WOW!! It's a gold rush on Wall Street!
Well, guess what all those CDO's and got tied up in? Pension funds. State Pension funds, private pension funds and myriad other retirement packages.
Guess what happened next. You got it! The "Bubble" burst. Did Wall Street go broke? You would think that with all that "Bad Paper" they would have lost their shirts, right? Nope. They sold all that paper to YOU! Your retirements were left holding the proverbial bag. States were buying into this game with employee pensions and bonds investments. "Wealth Managers" were using your money to gamble on this toxic bag of bad bets and collecting commissions from you while doing it.
So, now we sit here and listen to people like Chris Christie (former Wall Street Lawyer, wife a Wall Street exec.) and Scott Walker (Campaign paid for by Koch Industries) telling you that it is on the public sector and their unions (they already decimated private sector unions years ago. Remember the Asian Migration?) to take the hit for the bad decisions they, their friends and their contributors made with your money. They are spending billions, a lot of that made off your debt and retirements, to inundate the airwaves with misinformation and outright lies about whose fault this all is and who should sacrifice to fix it.
And there you have it, my view of what went wrong.
How do we turn this ship around? We start by protecting the working persons only real voice at the table, the unions that represent and protect them, by putting the brakes on all this anti-labor legislation that the right wing is shoving down the throats of the hard working American middle class.
Then we demand an accounting from Corporate American and Wall Street. We start upping the marginal tax rate, rolling back tax breaks for business, penalizing American businesses that employ more foreign labor and manufacturing forces than they do domestic employees. Raise import tariffs to encourage more domestic manufacturing and development. Basically remove many of the incentives that drove jobs and investments off-shore.
Business and Wall Street are sitting on several trillion dollars but claiming they can't afford current conditions and need more give back fro the working class?
It is time to stop calling for more middle class sacrifices and to start asking the ones that made all the money on our pain to sacrifice.
Fair is Fair! |
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