Obama's Speech, His Banks, Our Jobs
Wednesday, September 7, 2011 at 12:20PM Before tomorrow's 2012 pre-election speech in which President Obama's vocal elocution will be earnest, and results - to put it mildly - tepid, about about how he could create jobs dammit, if only the Republicans would behave, it's interesting to note who's supporting Obama keep his job.
A cursory look at the early stages of his campaign fundraising reveals that the same group of people that benefitted from policies (bi-partisan) that lavished them with cheap money, secret loans, debt guarantees and other forms of perks not available to the average citizen, are backing him for President. Big Time.
And whereas it's true, Obama's most recent poll numbers look as abysmal as any President (save FDR who he will never, ever be) facing a depressed economy and a near double-digit 'official' unemployment rate (worse if you get beneath its massaged surface), this isn't effecting his most important support, the financial kind. To date, Obama's Presidential bid dosh comes largely from - wait for it - the financial sector.
Yes, the same sector that screwed the country over, and that, despite some unpleasant lawsuits they will likely settle, remains as powerful, unrepentant, unaccountable, selfish and Main-Street-destabilizing as before Obama took office. No wonder he's been able to keep Treasury Secretary, Tim Geithner by his side - someone has to allay Wall Street concerns that true retribution or meaningful regulatory repercussion will befall them.
So far, Obama has raised $49 million dollars. (More than all the GOP wannabes combined, but that's largely because he's got the head-start and incumbent factor going for him. Plus, he's a hit at fundraising events. Here in Los Angeles, he's tied up traffic several times with those already.) Nearly $35 million has come from 'bundlers', those wealthy, connected, folks that circumvent the caps on their individual donations by pooling their dough together. And just over a third of that, or $11.8 million, comes from the Finance Sector (and yes, one of the sector's 44 bundlers is from Goldman Sachs, his number two contributer in the 2008 election).
Now, it's not shocking that the banks are banking on Obama. Until they see a surer bet on the Republican side emerge, they're not going to be diffusive with their capital that way. And, beyond some scolding words a couple years ago around election time, followed by a Wall Street speech to which none of the CEOs showed, Obama has done zero to expose, denounce, or change the specific fraudulent actions of his supporters - that would be - political suicide for him. Plus, in the game of politics today, the issue for both parties is slamming each other, Wall Street ire has been replaced with entitlement spending cut banter, whether this results in meaningful policy is not even an afterthought.
Meanwhile, Obama will release details of a new $300 billion jobs stimulus program and urge the GOP to allow him to do his job by creating the nation's jobs. He might even throw in a sentence or two about helping downtrodden borrowers refinance, which will require bank approval and facilitation, which therefore will be as successful as HAMP. And the GOP will balk and say we must cut spending not increase it, refusing to acknowledge the extent of debt we created to float a criminal banking system.
Stalemate to the nth degree. Big yawns all around.
What Obama will not discuss, is the private lending problem that caps the ability of individuals to stay afloat and small and mid-size businesses to hire. Though they have been treated with kids gloves and deep pockets by Washington, the big banks have not shared the joy they received. Small business loans remain anemically at late 2008 levels inhibiting hiring or expansion - and these are the companies that don't offshore in a heartbeat. Refinancing and mortgage restructuring, despite record low interest rates making the transaction sensible and reducing risk all around, are negligible, thus home movement is impossible and consumer confidence and construction jobs are hit in the process as well. Personal and business bankruptcies continue to mount absent opportunity. This isn't a healthy scenario for job growth.
You can blame it on 'the economy', 'tough times' 'all of us struggling together' or any other generic poli-sound bites. Or you can blame it on the biggest banks sitting on extra capital, which either a) is stored at the Fed in the form of $1.6 trillion worth of Treasury bonds that receive interest in excess of the cost of borrowing the money to purchase them, b) is used to trade and speculate, or otherwise derive ways to make a 'quick' buck, or c) is set aside to deal with lawsuits they brought upon themselves. Again, none of this is nationally productive or job inducing.
The private banking system is holding people's homes, potential jobs, and general confidence and economic well-being hostage. Thus, however Obama phrases whatever he says tomorrow, and even if his plan for a job stimulus package is verbalized in a more coherent strategy than last time - without a loosening of credit - new or re-negotiated or otherwise more befitting the low rate environment that the Fed offers banks, it's just one tiny piece of a giant puzzle that won't be able to do squat to turn the tide.
Reader Comments (13)
Good words, Nomi. Sense making words.
Oh my God you are so hot! Hubba hubba!
sing it sista!
as far as I can tell Obama has raised more than twice the amount, that Mitt Romney has. But it does seem to be true that most of Romneys Top contributors are from banks and Investment companies.
This is not the case with Obama. Or maybe you can explain why it is..
From "Open Secrets.Org'
Goldman Sachs $293,250
Credit Suisse Group $172,000
Morgan Stanley $128,850
Vivint Inc $85,750
PricewaterhouseCoopers $78,000
HIG Capital $62,500
Bank of America $59,200
The Villages $57,500
Sullivan & Cromwell $54,750
Bain Capital $54,500
Marriott International $48,000
Wells Fargo $45,000
JPMorgan Chase & Co $44,000
Bain & Co $41,500
UBS AG $38,250
Affiliated Managers Group $38,000
Ropes & Gray $36,000
Perella Weinberg Partners $36,000
Blackstone Group $35,300
Citigroup Inc $33,000
I think, it means that the finance community, is beginning to hedge itself and so far, sees Romney as the likely GOP nominee.
Excellent opinion piece, Ms. Prins, and several corollary items:
http://www.alternet.org/economy/142603/priceless:_how_the_federal_reserve_bought_the_economics_profession
http://www.zerohedge.com/contributed/unemployment-claims-give-fed-more-ammo
The banksters, with their zero interest rate to borrow from the Fed, then to buy Treasuries at interest rates (borrowed by the gov to pay them), then use their money in proprietary trading (which faux econ Simon Johnson of MIT claims Dodd-Frank Act forbids, except for that giant loophole allowing for it) truly are strangling the workers of America.
Thank you.
yes on the corollary items - SD...and double yes on the Simon Johnson mis-interpretation of the Dodd-Frank Act.
Analysis mostly spot-on. The real scandal is that a super-majority of "African-Americans" are still either so naive, or so dumb, as to believe that this imposter is "..looking out for the folks..." and they will pull the lever for this half Black..and entirely corrupt..political monster again in '12.
Our only salvation lies in the white, independent vote. In '08, many voted for Barry Hussein Soetoro to prove they're not "racist." In Twenty Twelve, they'll vote for anyone BUT Barry to prove they're not MORONS!
Nomi,
I have your site 'favourited' (for want of a better word!) and look forward to your new posts. Eloquent and spot-on, thank you.
DavidC
A neighbor recently accosted me with questions on the banksters, and as to what they are doing wrong as she was unclear from the myth-media she was viewing.
Having studiously poured over Ms. Prins' books, as well as those excellent tables she provides at this site, I gave her a quick rundown:
There was $1.5 trillion loaned out on subrime market mortgages between 2003 - 2007, of that $14 trillion was created in mortgage-backed securities and CDOs, and the most conservative estimate was that it was leveraged at least 10 times (various credit derivatives were loaned on top of that) to $140 trillion (although given the extraordinary number of categories in credit derivatives, it was probably 50 to 100 that amount).
So when the 4% mortage default hit in 2004, it shouldn't normally have brought down the national economy, let alone the global economy, but that wasn't simply a 4% on $1.5 trillion, but thanks to layer upon layer of leveraging, it was 4% default on $140 trillion, equating to around $5.6 trillion.
Now, since the Fed (which we know from the recent GAO audit) pumped out $16.1 trillion to banks and corporations in America, and around the planet, there still remains, conservatively speaking, maybe $120 trillion outstanding in debt --- although that is still an incredibly lowball number.
And my neighbor further inquired as to the robosigning, to which I replied:
Since the banksters were filing hundreds of thousands, most likely well over one million, false affidavits (that robo-signing), then had committed exactly that number of felonies, and independent of that, since they didn't follow the proper procedures, they were in violation of Article 3 of the Uniform Commercial Code (although probably in violation of more articles than just that one), and further they had violated the Internal Revenue Code regarding tax-exempt REMIC status, so they at least owed the US government certainly hundreds of millions, although more likely hundreds of billions, in unpaid taxes now.
And that, I tactfully explained to my neighbor, is a whole bunch of crimes to answer for.
Exasperated, i made a short youtube cartoon on Obama's bizarre speech. The message is clear; we have no money so let's print more!
http://youtu.be/89PTuP-B5V8?hd=1
I'm afraid what ails the US economy goes way beyond either monetary or fiscal remedy. It's a livid corpse, but a corpse nonetheless. 25 years of open borders labor sweatshopping has killed the real purchasing power of working class people, and 25 years of free-trade job outsourcing has done the same to the middle class. So TPTB have attempted to force demand by ZIRP and monetization. Nomi explains why the credit/$ aren't getting to Main St. but, even if it did, I'm not sure it would do much...except feed into an already galloping price inflation of day-to-day consumables. Small/medium business simply will not hire w/o increased demand for their goods and services. The ultimate solution is going to be political, not economic: Civil War II. 1860------>2012.
As my long-dead papa used to say, "There's no point discussing morals in a whorehouse."