Saturday, January 25, 2014

More "job-creator" wackiness from the World Economic Forum in Davos


 (There used to be a time, believe it or not, when we didn't rely on free market fairy dust, the almighty job-creators, or the comic books of Ayn Rand, to solve the problems of unemployment. In other words, we understood the concepts of market failure and market imperfection. And so we hired and trained jobless Americans in various government work programs. The worker above acquired her machine operating skills in the National Youth Administration (NYA). During the difficult times of the Great Depression, when private business had no interest in them, America's young adults could find jobs and training in the NYA, and also in the Civilian Conservation Corps. Photo courtesy of the Library of Congress Prints and Photographs Division.)

Recently, HuffPost Live had a discussion about "the role banks can play in the fight against income inequality." This seems like asking locust about the role they can play in saving crops, but let's play along for a moment.

So, HuffPost Live wanted to get some sage advice from Larry Di Rita, who is a former aide to Secretary of Defense Donald Rumsfeld, a former policy wonk at the Heritage Foundation, and the current spokesperson for Bank of America. Yes, this is who they asked for solutions to income inequality.

Di Rita's wise words to us? "What we can do and other financial services companies [can do] to spur economic growth [is] to lend and invest. [That] should ultimately lead to job creation, and job creation is the ultimate antidote to income inequality. We very much see that as an important objective." (See video here, relevant discussion starts at about 3 minutes in.)

The funny thing is, in recent years the super-wealthy (the so-called "job creators") have acquired even more wealth, through investments, but, oh-my-God!, shockingly, job-creation isn't happening. As Richard Eskow correctly points out, "investment income is increasingly divorced from the real-world economy of jobs, goods and growth." Indeed, "job-creator" investments have led to (a) 202 million jobless people around the world and (b) a level of income & wealth inequality so massive that the richest 85 people in the world now have more wealth than the entire bottom half of the global population. And we know that the bottom half isn't living well. They're either jobless, homeless, incarcerated or, for those that are "lucky" enough to have crummy service sector jobs, they're the working poor--workers who labor at pathetic & stagnant wages so that the 85 rich people can live in an insulated world of ever-increasing luxury and opulence. The "rising tide" of supply-side economics did not lift the boats of these three and a half billion people. It rammed into, and sank them.  

(WPA workers creating a playground in Chicago, 1941. The WPA created over 3,000 new playgrounds, and over 1,600 new parks, many of which are still in use today. They also repaired or improved thousands more. Today, there are no programs like the WPA for the unemployed. Instead, we are told (for 5-6 years now), that our job-creation saviors are right around the corner, right on the verge of making great jobs for us...but...well...um...they just need another round of tax cuts! Photo courtesy of the Library of Congress Prints and Photographs Division.)

The very fact that a spokesperson for Bank of America is giving advice on job creation and income inequality is outlandish. Bank of America, like other large financial institutions, played a key role in the financial and economic collapse that destroyed so many jobs and so many lives. And consider these headlines, some of which relate to activity that occurred before Bank of America acquired certain assets but still highlight the behavior of America's financial sector:

"Bank Of America Will Pay $20 Million For Illegal Foreclosures On Active-Duty Soldiers" (6-4-2011)

"Bank of America to pay Freddie Mac $404 million in mortgage settlement" (12-2-2013)

"Bank of America settles municipal bond rigging lawsuit" (12-4-2013)

"Bank of America settles $1.7bn over faulty mortgage disputes" (5-7-2013)

"BofA Coughs Up $335 Million To Settle Discriminatory Lending Case With DoJ" (12-21-2011)

"Bank of America Settles Suit Over Merrill for $2.43 Billion" (9-28-2012)

"Bank of America Sold Card Debts to Collectors Despite Faulty Records" (3-29-3012)

"Bank of America Settles Excessive Overdraft Fee Lawsuit for $410 Million" (11-8-2011)

"JPMorgan, Bank Of America Probed Over Money-Laundering Allegations" (9-15-2012)

"Bank of America whistle-blower’s bombshell: 'We were told to lie'" (6-18-2013)

If these are the type of people and organizations we're asking to help create jobs and reduce insane levels of income & wealth inequality, then it's clear we're in deep doo doo; and it's clear we're about as close to effectively addressing poverty, homelessness, and unemployment, as we are to starting a colony on the planet Neptune.

(Instead of seeking job-creation advice from organizations with lengthy records of civil and criminal wrongdoing, maybe we should just create the jobs ourselves. Is that such an outrageous proposition, especially considering the fact that our Constitution gives us permission to help ourselves? Hint: the General Welfare Clause: Article I, Section 8. Image courtesy of the Library of Congress Prints and Photographs Division.)

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