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Bob Samuels

Bob Samuels

Posted: April 13, 2010 12:09 PM

Our False Recovery: Why Wall Street Is Up and Everyone Else Is Down

What's Your Reaction:

The gap between Wall Street and Main Street is growing everyday. While people continue to lose their jobs, houses, and savings, financial markets are seeing record profits. In other words, the very people who produced the global economic meltdown are being rewarded with increased compensation and inflated market returns. In fact, in order to avoid new restrictions on pay, investment bankers are taking their profits through stock options, and they are using taxpayer dollars to help them buy up their own stocks in order to inflate the value of their holdings. Furthermore, since stock profits are only taxed at 15%, the high earners are able to keep more of their money as our national tax base is eroded.

Obama's stimulus plan has only exaggerated this fake recovery by funneling money into tax breaks and the short-term alleviation of state deficits, and now that the states are not getting another fix of federal aid, they will be forced to impose massive layoffs and reductions to needed social services. Over 150,000 K-12 teachers stand to lose their jobs, and thousands of college and university faculty also face layoffs. Moreover, the feds have taken on over a trillion dollars of bad mortgages, which has resulted in allowing the banks to look very healthy, while taxpayers are left holding most of the toxic assets as foreclosures continue to mount.

Since Americans believe that the New York Stock Exchange represents the national economic thermometer, they have been seduced into thinking hat we have fixed our financial problems, and we are on the road to a real recovery. What is really going on is an increased concentration of wealth and power, while most people now face declining wages coupled with growing costs in housing, education, and housing.

What Obama should have done is to use the federal stimulus money to create a national jobs program. Some of these funds could have been channeled to states in order to support teachers and social services, but much of the money should have gone into construction since this industry was one of the hardest hit by the bust in the housing market. We could have put Americans to work by fixing bridges and building public transportation, but instead, hundreds of billions went to tax cuts and plugging the holes of state deficits.

It may seem that there is a contradiction in my argument because I am asking for federal dollars to go to the states to create jobs, while I am complaining about the use of stimulus money as a temporary fix to state budget deficits. However, my point is that the money should have been restricted to job creation because when you put people to work, you not only expand the tax base, you also feed the local economies.

 
 
 
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01:52 PM on 04/14/2010
The money goes to the banks and not the people for one simple reason--

They want the banks to survive!
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edejan
01:24 PM on 04/14/2010
I thought we were investing in American green jobs. Unfortunately the only jobs I've heardof were created in China making windmill parts. Another theft from the American taxpayer.
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07:10 AM on 04/14/2010
When you know that you are dealing with deliberate fraud, it simply does not pay to spend public money based on -their- accounting. When you are dealing with a compulsive gambler, the very last thing in the world that you should do is to give him more money.

Unless ... you are a criminal yourself.

Article 2, Section 4 of the US Constitution flatly declares that "all civil officers" who take bribes are Felons and stipulates that they "shall be removed from office." Period. It doesn't use an eight-letter word beginning with "LOBB," or a phrase beginning with "CAMPA--- CONTRI------," and it does not anywhere contain the word "CORPOR-----."

It only contains the seven-letter word, "BRIBERY."

The very fundamental reason why these crimes and falsehoods continue is "because there is a stupendous amount of cash in it ... for me." More than $1 million per person per day, in fact.

And the irony of it all is this: in their greed, they do not understand that "all that money" isn't real.
06:01 PM on 04/13/2010
< Obama's stimulus plan has only exaggerated this FAKE RECOVERY by FUNNELLING MONEY INTO TAX BREAKS.... [but] now that the states are NOT getting ANOTHER RIX of federal aid, they will be forced to impose MASSIVE LAYOFFS & REDUCTIONS of NEEDED SOCIAL SERVICES.
Over 150,000 K-12 teachers stand to lose their bobs, and thousands of college and university faculty also face layoffs. Moreover, the feds have taken on over a trillion dollars of bad mortgages, which has resulted in ALLOWING the BANKS TO LOOK HEALTHY,
while TAXPAYERS are left holdin TOXIC ' ASSETS' AS FORECLOSURES CONTINUE to mount....

Since Americans believe that the New York Stock Exchange represents the national economic thermometer, they have been SEDUCED into thinking that we have 'FIXED' our financial problems, & we are on the road to a real recovery.
WHAT is REALLY going on, is an INCREASED CONCENTRATION OF WEALTH & power, while most people now face DECLINING wages coupled with GROWING COSTS in housing, education,

It may seem that there is a contradiction in my argument because I am asking for federal dollars to go to the states to create jobs, while I am complaining about the use of stimulus money as a temporary fix to state budget deficits. However, my point is that the Money SHOULD HAVE BEEN RESTRICTED to [ONLY] JOB CREATION [NOT "bailouts" of FRAUDULENT bankers' DEBTS] because when you put people to work, you not only expand the tax base, you also feed the local economies. >
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TonyOnly
Truth matters.
05:27 PM on 04/13/2010
Many people believe since the global recession was made in the U.S.A., America should pay the heaviest price. More and more, shareholders are becoming the corporate equivalent of taxpayers and executives the equivalent of politicians. Excecutive responsibilty to shareholders is fading just as political responsibility to taxpayers has faded. It's becoming a circle where corporate lobbyists buyout the politicians with shareholder money, then the politicians bailout the executives with taxpayer money. Wall St no longer needs Main St.
04:48 PM on 04/13/2010
So far, everything that the government has done during the economic crisis has only postponed the real collapse. None of the country's economic problems have been fixed. As long as Geithner and Summers are still in the government, the problems will continue. As we have seen, overwhelming criticism will not convince Obama to fire them. We must organize giant protests, strikes or tax revolts for the specific purpose of making Obama fire Geithner and Summers.
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guveqzero
Inventor and Innovator
04:20 PM on 04/13/2010
It is quite troubling that the experts are only looking at a graph that looks like we are at a bottom. But in all reality, the bottom could still be zero employment. We have a country that doesn't value its citizens enough to insure that those that want a job can get a job. We have a stimulus system that doesn't care whether we are creating jobs within the US or creating them in China. If we actually have another economic fall before an employment recovery, it will take twice as much money to stop the free fall. My expectations for our inept government are low. A new jobs bill will most likely be flawed and inefficient. Why should I expect anything else? But it's OK to be inefficient, as long as the money is spent here in the US and not overseas. Creating jobs overseas, however, takes jobs away from Americans, so how stupid are we to promote that?
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pjwrites
03:10 PM on 04/13/2010
Debtor's revolt.
jhNY
Mercy.
02:51 PM on 04/13/2010
Mr. Samuels, I agree with your assessment and with your proposal for jobs aid. But just take a gander at the Magnetar-Emanuel story elsewhere on the HuffPo today. You will see why things happened the way they did-- why those who got help got it-- and why your prescription will fall on deaf ears all over DC, and most especially at the White House, photo ops with working people notwithstanding.
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FogBelter
Illegitimis non carborundum
01:43 PM on 04/13/2010
"Since Americans believe that the New York Stock Exchange represents the national economic thermometer, they have been seduced into thinking hat we have fixed our financial problems, and we are on the road to a real recovery."

Reality check. I recently saw a letter from a school Principal asking for contributions for groceries for a family within the school that has been adversely impacted by the economy. This is in the San Francisco Bay Area. It really doesn't matter what the media spin on the economy is when reality confronts you like this. This Principal's request for aid for one of the school's families carries more weight than any news conference or article by economic experts. I'd add, that the same people trying to convince us that the economy is better are trying to convince of the perception of the American People on the economy. I'd say, people have eyes. People may watch television or read the paper, but at some point they leave their homes and interact with the real world, and that's when reality trumps spin.
01:11 PM on 04/13/2010
If you want to support local economies, use sites like craigslist or localpricemap to find local producers. All wars are won economically. Support the farmers around you rather than the fatcat CEOs at Walmart or Walgreens