In These New Times

How Corrupt is the Economic System of the U.S.A. Today?
By Bob Kendall
08/05/2009
Political Cortex

That is the question. At one time the high standards of the American lifestyle were the envy of the world. That day is gone with the wind.
The 30 nation survey of the Organization for Economic Cooperation and Development in 2008 placed the poverty rate of the U.S.A. only above Mexico and Turkey. The economic gap between rich and poor in the U.S.A. was explained in this report in the Seattle Times December 15, 2008:

“In the United States, the richest 10 percent earn an average of $93,000 — the highest level in this 30 nation survey. The poorest 10 percent earn an average of $5,800 — about 20 percent lower than the average of the 30 nation survey.”

The top executives throughout the world all earn much less than the top executives in business than is the case with top U.S.A. executives.

Now the U.S.A.’s top executives are earning in some cases as high as 400 percent more than the average employee. This has demolished health care and pensions at many corporations.
An August 3 New York Times editorial revealed current U.S. economic statistics:

“Andrew Cuomo, the New York attorney general, revealed that Citigroup paid $5.33 billion in bonuses in 2008, despite losing $27.7 billion, and taking $45 billion bailout from TARP (government bailout money).

“Bank of America got $45 billion bailout from TARP, and paid $3.3 billion in bonuses.

“In all 738 Citigroup employees and 172 at Bank of America took bonuses of one million dollars or more last year.

“The Wall Street Journal reported that Citigroup paid the head of its energy trading unit $98.9 million in 2008, and could award him as much as $100 million this year.”

Some former bank executives at Washington Mutual are now suing Chase Bank, which took over Washington Mutual when the 119 year old, once stable banking institution collapsed.

It isn’t enough that Washington Mutual was brought to its tragic collapse through those high risk mortgages. These same bank executives were providing cash to borrowers, which destroyed Washington Mutual when they defaulted, contributing mightily to the two and a half millions foreclosures that occurred as a result of these risky practices.

Now they are suing Chase, claiming that contracts they executed with Washington Mutual entitled them to bonus money.

They demand this money, regardless of the obvious fact that their bank management brought about Washington Mutual’s collapse.

In the U.S.A. today, over 34 million people are on food stamps. In many cities their food banks are empty.

The U.S. banking system, which was bordering on collapse, was salvaged through a $700 billion plus bailout, which will be paid through taxpayer money. This bailout is on borrowed money which must be paid back with interest.

Does it make sense for the same executives who demolished the U.S. bank system to be awarding themselves multi-million dollar bonuses? When the Republican led Congress passed the first $700 billion plus bailout package no caps were put on bank executive bonuses.

There was a re-run of no caps on bonuses for bankers when the Democratic led Congress passed the second $700 billion plus bailout package. This is what makes these multi-billion dollar bonuses possible for bank executives who generated this crisis, which destroyed the U.S. banking system.

Since when did rewarding colossal failure become the American way?

In Seattle, Washington, the city’s homeless live in tents. Tragically, these so-called tent cities have no permanent location to pitch their tents. Some Seattle churches have granted temporary use of their church parking lots, but after a couple of months, they are told to move on.

When a Seattle food bank ran out of food one day with 137 hungry people waiting in line for their daily sustenance, a riot almost broke out.

The day the food bank ran out of baby food, a local television station made an urgent appeal for baby food. Generous Seattle residents came to the rescue with enough baby food to last a few days.

Wouldn’t it be wonderful if some of those bank executives’ million dollar bonuses, paid for in many instances by taxpayers, could have been diverted to keep U.S. food banks supplied?

California, which had a $29 billion budget gap, was forced to cut off some health care for children pay some creditors 15 percent less than originally agreed to, and even close down all locations for battered women.

While there are 14 million unemployed in the U.S. now, another segment of the U.S. population luxuriates in a lavish lifestyle.

When the North American Free Trade Agreement took the U.S. manufacturing base to the cheapest labor locations worldwide, the U.S. manufacturing base vanished.

The U.S. has suffered economically ever since!