THE BLOG
03/18/2010 05:12 am ET Updated May 25, 2011

Stop Whining: Wall Street's Record Profits, Pay, Dow 10,000 Are Great News

For some of us.

It's time to recognize what it means to be part of the billionaire-bailout nation. Citizenship comes in three distinct flavors.

If you are wealthy, it's fantastic to take part in the resurgent Wall Street boom. You are thrilled to see the trillions in taxpayer dollars successfully prop up the financial sector. After all it's not really your money -- your tax shelters take care of that. You love the rise in the markets. You are now reaping the rewards of investing in a sector that rests firmly upon government welfare, and in which the largest institutions are guaranteed from failure. It feels good to see double-digit returns again, which you feel you truly deserve. The gap between your wealth and the average American's is utterly fantastic. Life is good.

If you have a job, you are feeling better than a year ago. Your 401k is coming back from the dead. The stimulus program seems to be helping with your employment. You may even get some relief from health care reform. But you are not seeing your wages increase. (Overall the average production workers real wages are down more than 18 percent since the mid-1970s.) It's not easy to maintain a middle-class existence or get anywhere near one if you're not already there. Layoffs might be slowing down but you are still petrified that your job will soon disappear. You are unsure you can provide for your children's education and your own retirement. The future seems much less secure than it did for your parents' and grandparents' generations.

If you don't have a job you're in deep trouble. You are a "lagging indicator." You are one of the 29 million who are without work or forced into part-time jobs (the BLS U6 Jobless rate stands at 17 percent). You are gobbling up what savings you have or already digging a deep hole of debt. You are hoping other family members can keep the ship afloat until you find employment. You've worked hard all your life only to watch your industry pack up and leave or shut down all together. You've drawn the short straw.

Well so what: life is unfair. And maybe there's nothing we can or should do about it. Then again it's very hard to make the case that we've tried all that hard. Here's the scorecard:

Too big too Fail? The top 20 or so financial institutions got even bigger. No effort is being made or even being contemplated to break them up so that they are small enough to fail.

Risky Derivatives? Still totally deregulated and poised to re-emerge. Bank lobbyists are working hard to block serious reforms. Keep your eye on high fee, high profit specialty derivatives which are likely to remain deregulated forever.

Executive Pay? The Pay Czar has limited powers and seems ineffective. He's even having a tough time reining in AIG's Financial Product group's bonuses, even though that group was responsible for sinking AIG and costing the taxpayer more than $150 billion in bailout funds. (See New York Times and Wall Street Journal "Wall Street on Track to Award Record Pay.")

Shrink the size of Wall Street? President Obama said last May that he wanted a smaller Wall Street with lower pay so that the best and the brightest would be lured into science, medicine and education rather than into concocting new casino games. Fat chance. Record profits will lead to higher pay, which in turn will draw more talent into fantasy finance. PS. Andrew J. Hall, the oil speculator, will get his $100 million payday.

Windfall Profits Taxes on Wall Street? Forgetaboutit. Now that we've given Wall Street upwards of $13 trillion in taxpayer funds and guarantees, they are keeping the profits. Neither the White House nor Congress has the stomach for taxing it away.

Progressive income taxes on the super-rich? Off the table. We have the worst income distribution since 1929. The Eisenhower era 91 percent marginal tax rate on incomes over $3 million (today's dollars) is far too radical for our billionaire-bailout nation.

Programs to employ our people after the stimulus ends? Nada. The unemployed will have to fend for themselves in the marketplace, while the super-rich feast on the Wall Street bailout bonanza. We could go a decade before we come near full-employment again. In fact look for the economics profession to redefine full employment as 7 percent rather than 4.5 percent.

Won't it all work out as long as the markets keep improving?

I think we played that song again and again over the past thirty years. It's a mirage. We deregulated just about everything, crushed the middle class and crashed the whole shebang.

But, complaining about the billionaires and the bailouts (which perhaps was greatest transfer of wealth since slavery) just isn't good enough. We need to recognize that underlying all of these problems is the lack of a progressive response.

Unless I'm missing something, almost all the pressure on Congress and the White House is coming from the right: from banking community and from those who detest government intervention in the economy (which is easy to do, now that such intervention seems to have saved it).

The progressive community has developed no coherent voice, no national movement, no effective lobbying. We are tied up in a myriad of important, yet isolated issues, and seem to have forgotten what a movement looks like. Populism belongs to the tea baggers, not the populists of old. When it comes to finance, the very heart of our economy, we seem to be waiting for Obama to do it all for us. No such luck.

Yet most Americans understand that something has gone terribly wrong. They truly sense that Wall Street is running away with our nation's wealth. It's a precious organizing moment.

We're at the fork in the road: Either we build on this moment to dramatically change the way the super-rich dominate our economy or we'll be leaving to our children a billionaire-bailout nation with a hollowed-out middle class.

Hopefully, we still have a little moxie left in us.

Les Leopold is the author of The Looting of America: How Wall Street's Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It, Chelsea Green Publishing, June 2009.