Tuesday, January 26, 2010

The One Percent Solution

The One Percent Solution

The top thirty Wall Street banks have awarded themselves 145 billion in bonuses and that amount comprises one percent of the US GDP. This is not corporate earning but just executive bonuses. The US GDP or Gross Domestic Product counts everything from the money your babysitter makes to the sales of F-16’s to Saudi Arabia. And, GDP is only as big as it is because it multiplies as the money moves through the economy, the baby sitter spends the money and it gets counted again and so on. The money spent on an F-16 for the Saudi Royal Air Force stops circulating when it leaves on the boat for the future site of Armageddon.

The top tier of bankers and traders who got most of that one percent of our entire economy is a group so small that it wouldn’t give you a good crowd in a basketball arena. They could however, afford to buy the NBA outright with what for them would be pocket change and have them play just for their amusement.

President Obama is going to make cuts to the budget in a vain attempt to pander to the three million profoundly un-informed people who watch Fox News. These people make up one percent of the population and Democrats don’t understand why they lose elections when they appeal to them and ignore the other 99%. To be fair to the President he did say all through the campaign that he intended to cut spending to balance the budget. It was the media that hammered the notion into us that he was a tax and spend Liberal. So far he has cut taxes and will now cut spending at a time when the main street economy desperately needs an influx of cash.

Republicans will rightly point out that Obama’s spending cuts amount to less than one percent of the long term deficit and will come right out of the middle class. Who needs National Parks, food safety or air traffic control? Nothing that benefit’s the rich will be affected. Roll back the Reagan tax cuts, not even one percent. Billionaires that were taxed at 74% will continue to be taxed at 15%.

Obama has not and will not do anything about the trade deficit which represents money that stops building the economy the moment that the money leaves for China. The Chinese are able to circulate our money through the rest of the world buying up resources and building a trading network for their exports, notice their growth balloons as we decline. The money doesn’t come back here since we export nothing but raw materials that cost a fraction of what we import. The trade deficit would be even worse but they are strip mining our resources to export. China doesn’t allow the export of essential metals so that foreign companies have no choice but to manufacture high value goods like electronics and green technologies such as high efficiency motors, batteries and solar cells in China.

Putting USD into the world markets allows the bankers to do proprietary trading worldwide but that doesn’t bring any money back here either, that’s what Swiss banks are for. But, it works just fine for the Wall Street bankers who are one percent of one percent of the population and take one percent of the economy for themselves destroying the wealth of the other 99% in the process. The Republicans don’t think the rest of us should even count on eating let alone expect to have any wealth. www.prairie2.com


RobertM said...

Funny how when the marginal tax rate for those one-percenters was above 80% the country did great. Too bad no one dares to suggest that we tax the shit out of them.