The Rich Have Stolen the Economy


Bloomberg

reports
that Treasury Secretary Timothy Geithner`s
closest aides earned millions of dollars a year working
for
Goldman Sachs,
Citigroup and other Wall Street
firms. Bloomberg reports that none of these aides faced
Senate confirmation. Yet, they are overseeing the
handout of hundreds of billions of dollars of taxpayer
funds to their former employers.

The gifts of billions of dollars of
taxpayers` money provided the banks with an abundance of
low-cost capital that has boosted the banks` profits,
while the taxpayers who provided the capital are
increasingly unemployed and homeless.

JPMorgan Chase announced that it
has earned $3.6 billion in the third quarter of this
year.

Goldman Sachs has made so much
money during this year of economic crisis that enormous
bonuses are in the works. The
London Evening
Standard


reports
that Goldman Sachs`
"5,500 London
staff can look forward to record average payouts of
around 500,000 pounds ($800,000) each. Senior executives
will get bonuses of several million pounds each, with
the highest paid as much as 10 million pounds ($16
million)."

In the event the banksters can`t
figure out how to enjoy the riches, the
Financial Times
is offering a new magazine —

"How To Spend
It."
New York City`s retailers are praying for
some of it, suffering a 15.3 percent vacancy rate on
Fifth Avenue. Statistician John Williams (shadowstats.com)
reports that retail sales adjusted for inflation have
declined to the level of 10 years ago:
"Virtually 10
years worth of real retail sales growth has been
destroyed in the still unfolding depression."

Meanwhile, New York City`s homeless
shelters have reached the all-time high of 39,000,
16,000 of whom are children.

New York City government is so
overwhelmed that it is paying $90 per night per
apartment to rent unsold new apartments for the
homeless. Desperate, the city government is offering
one-way free airline tickets to the homeless if they
will leave the city and charging rent to shelter
residents who have jobs. A single mother earning $800
per month is paying $336 in shelter rent.

Long-term unemployment has become a
serious problem across the country, doubling the
unemployment rate from the reported 10 percent to 20
percent. Now hundreds of thousands more Americans are
beginning to run out of extended unemployment benefits.
High unemployment has made 2009 a banner year for
military recruitment.

A record number of Americans, more
than one in nine, are on food stamps. Mortgage
delinquencies are rising as home prices fall. According
to
Jay Brinkmann
of the Mortgage Bankers Association,
job losses have spread the problem from subprime loans
to prime fixed-rate loans. On a Wise, Va., fairgrounds,
2,000 people waited in lines for free dental and health
care.

While the U.S. speeds plans for the
ultimate bunker-buster bomb and President Obama prepares
to send another 45,000 troops into Afghanistan, 44,789
Americans die every year from lack of medical treatment.
National Guardsmen say they would rather face the
Taliban than the U.S. economy.

Little wonder. In the midst of the
worst unemployment since the Great Depression, US
corporations continue to offshore jobs and to replace
their remaining US employees with lower paid foreigners
on work visas. While jobs decline, high rates of legal immigration continue, bringing more competition for fewer jobs.

The offshoring of jobs, the bailout
of rich banksters and war deficits are destroying the
value of the U.S. dollar. Since last spring, the U.S.
dollar has been rapidly losing value. The currency of
the hegemonic superpower has declined 14 percent against
the Botswana pula, 22 percent against Brazil`s real and
11 percent against the Russian ruble. Once the dollar
loses its reserve currency status, the U.S. will be
unable to pay for its imports or finance its government
budget deficits.

Offshoring has made Americans
heavily dependent on imports, and the dollar`s loss of
purchasing power will further erode American incomes. As
the Federal Reserve is forced to monetize Treasury debt
issues, domestic inflation will break out. Except for
the banksters and the offshoring CEOs, there is no
source of consumer demand to drive the U.S. economy.

The political system is
unresponsive to the American people. It is monopolized
by a few powerful interest groups that control campaign
contributions. Interest groups have exercised their
power to monopolize the economy for the benefit of
themselves, the American people be damned.

Paul Craig Roberts [email
him
] was Assistant
Secretary of the Treasury during President Reagan`s
first term.  He was Associate Editor of the
Wall
Street Journal.  He has held numerous academic
appointments, including the William E. Simon Chair,
Center for Strategic and International Studies,
Georgetown University, and Senior Research Fellow,
Hoover Institution, Stanford University. He was awarded
the Legion of Honor by French President Francois
Mitterrand. He is the author of


Supply-Side Revolution : An Insider`s Account of
Policymaking in Washington
;
 Alienation
and the Soviet Economy
and

Meltdown: Inside the Soviet Economy
,
and is the co-author
with Lawrence M. Stratton of


The Tyranny of Good Intentions : How Prosecutors and
Bureaucrats Are Trampling the Constitution in the Name
of Justice
. Click

here
for Peter
Brimelow`s
Forbes Magazine interview with Roberts
about the recent epidemic of prosecutorial misconduct.