Wall Street issues its orders to Obama, Romney

October 20th, 2012

Published on World Socialist Web Site WSWS, by Patrick Martin, 19 October 2012.

The top bosses on Wall Street have issued their demands for action from the Obama administration and Congress to slash the federal deficit, in a letter warning that failure to take action by January 1 could produce renewed financial crisis and economic slump.  

While not spelling out any particular measures to be adopted, the letter calls for “concrete steps to restore the United States’ long-term fiscal footing” and “legislation that truly restores the nation’s long-term fiscal soundness.” These are political code words for the gutting of Social Security, Medicare, Medicaid and other social programs.

The bankers echoed the threats by bond-rating agencies S&P and Moody’s, which have said they would downgrade US debt even further if there is not a bipartisan agreement to avert the so-called “fiscal cliff” on January 1. S&P first downgraded US debt in August 2011, and Moody’s has issued a warning of similar action.

The letter was signed by 15 CEOs of banks, brokerages and insurance companies and by the head of the Financial Services Forum, the industry lobby. Among the signatories are Jamie Dimon, CEO of JP Morgan Chase; Lloyd Blankfein, CEO of Goldman Sachs; Michael Corbat, the newly installed CEO of Citibank; John Stumpf, CEO of Wells Fargo; and Brian Moynihan, CEO of Bank of America.

In other words, it was a manifesto by the financial criminals who caused the 2008 crash and the four years of mass unemployment and social misery that have followed, the heads of institutions that received trillions of dollars in federal support during the bank bailout, pressing their demand that no such support should be available to tens of millions of working people and retirees.

The “fiscal cliff” is media jargon for a series of tax and fiscal measures now scheduled to take place automatically on or just after January 1. These include:

The expiration of the Bush tax cuts, first enacted in 2001 and extended in 2010 for two years. Taxes would rise across-the-board, both for low- and middle-income families and the wealthy.
An across-the-board spending cut, imposed by the debt-ceiling bill passed by Congress and signed by Obama in August 2011, which begins to hit in January 2013, totaling $1 trillion over ten years.
The expiration of the payroll tax cut, enacted in December 2010 and extended through 2012, which would amount to a 3.1 percent increase in taxes on every American worker.
The expiration of extended unemployment benefits, adopted during the economic slump that followed the 2008 crash.

Both the Obama administration and congressional leaders of both parties have indicated they will seek no further extension of extended unemployment benefits, despite the continued record levels of long-term unemployment.

Instead of seeking to avert the mass suffering that such a cutoff will produce, both parties seek to use the supposed fiscal emergency as a battering ram against popular opposition to cuts in Social Security and Medicare—a position that is completely in line with the demands of Wall Street.
In that sense, the bankers are not calling the Democrats and Republicans to order; they are merely reminding them that time is short, and that the next administration, whether headed by Obama or Romney, and the next Congress, whichever party is in control, must get on with the job of attacking the working class.
Both parties are responding as obedient servants of the financial aristocracy, albeit observing the established division of labor: a fig leaf of populist demagogy from the Democrats, adamant defense of wealth and privilege from the Republicans … //

… (full text).

Links:

Factoids of the day: Target2 accounts of the German and Dutch central banks, on RWER Blog, Oct. 18, 2012;

EU leaders agree on banking supervisor: The deal, reached at a summit of EU leaders in Brussels, represents a shaky compromise between France and Germany, on AlJazeera, Oct. 19, 2012;

Ennis’ song: The Bank Attack, 5.56 min, on Zcommunications.org, by Antonio Ennis, October 17, 2012 – (onYouTube: Twice Thou – The Bank Attack: Official Video).

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