I wrote earlier with respect to the Greek debt crisis that the banks that were described by the phrase ‘too big to fail’ were not a loose and undefined category but that there is an actual list of 29 banks that governments feel obliged to bail out if they get in trouble. Of these 17 are based in Europe, eight in the US, and four in Asia. Of course, knowing that they are too big to fail only encourages these banks to thumb their noses at the normal rules of the marketplace and take excessive risks with other people’s money for their own benefit, which is what has caused all these problems in the first place.
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It is interesting how the Occupy Wall Street movement has triggered so much interest and discussion about wealth and income inequalities in the nation. Now comes a study that shows that the wealth of households headed by people over 65 has increased to 47 times that of households headed by people 35 and younger, compared to a ratio of just 10 in 1984.

It is natural for older people to have more wealth since they have had more time to earn and save. But this rapid rise in inequality is not healthy. What is even more disturbing is that the median net wealth of the younger group has actually declined dramatically in this period. A society that has a minority of old and very rich people and a large number of young and poor people is not a healthy or stable society.

The financial news of recent weeks has been consumed with the so-called Greek debt crisis. Whenever there is news that a deal has been reached to bail out that government, stock markets rise. When the deal seems to have collapsed, the markets fall. Although the reports act as if the Greek government or people are being bailed out, it is actually international banks that are the benficiaries. What I find extraordinary is that news reporters and commentators talk as if ‘calming the markets’ is the most important thing in the world and thus governments must do everything they can to make stock markets go up, even if those moves have devastating effects on ordinary people. This is why we need massive protests against the financial oligarchy, to show governments that there are other important elements of society whose interests need to be considered.
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Matt Taibbi makes the case that removing our money from Bank of America is one concrete action that we can take to show our disgust with the banking industry. Targeting one of the worst culprits is a better strategy because we cannot boycott the entire industry. If we can shake one of the main institutions, it will cause other banks to fear if they will be the next to have a bull’s-eye painted on them

I used to feel the same way about earlier boycotts of gas companies to protest gouging practices. General boycotts will fail because people eventually need gas. It would be better to pick a particular gas company and boycott only them because such an action can be continued indefinitely. After the BP oil spill, if people stopped buying only BP gas, that would have forced them to take the public outcry more seriously.

The Congressional Budget Office released a report yesterday looking at the changes in the distribution of household income from 1979 to 2007. The graph on the very first page tells the whole story: The top 20% has increased its share of the national income at the expense of the other 80%, whose shares have all gone down.

Jared Bernstein of the Center for Budget and Policy Priorities digs deeper into the report:

Between 1979 and 2007, incomes grew by 275 percent for the wealthiest 1 percent of households, 37 percent for the middle 60 percent of households, and 18 percent for the poorest 20 percent of households. These figures adjust for inflation and account for the impact of taxes and government transfer payments such as Social Security and unemployment benefits.

In media coverage of this report, I have heard phrases like incomes of the top 1% have ‘doubled’ or ‘almost tripled’. This is wrong. A 275% increase means that they increased by a factor of 3.75, i.e., almost quadrupled!

Kevin Drum comments that what has happened is that “For all practical purposes, every year about $700 billion in income is being sucked directly out of the hands of the poor and the middle class and shoveled into the hands of the rich.”

Matt Taibbi, in a must-read article with the above title says that what drives the Occupy Wall Street protests is not envy of the rich but the fact that the system is corrupt and unfair.

Americans for the most part love the rich, even the obnoxious rich. And in recent years, the harder things got, the more we’ve obsessed over the wealth dream. As unemployment skyrocketed, people tuned in in droves to gawk at Evrémonde-heiresses like Paris Hilton, or watch bullies like Donald Trump fire people on TV.
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Success is the national religion, and almost everyone is a believer. Americans love winners. But that’s just the problem. These guys on Wall Street are not winning – they’re cheating. And as much as we love the self-made success story, we hate the cheater that much more.

In this country, we cheer for people who hit their own home runs – not shortcut-chasing juicers like Bonds and McGwire, Blankfein and Dimon.

That’s why it’s so obnoxious when people say the protesters are just sore losers who are jealous of these smart guys in suits who beat them at the game of life. This isn’t disappointment at having lost. It’s anger because those other guys didn’t really win. And people now want the score overturned.

He lists all the swindles that are currently going on in favor of the rich banks and against ordinary banking customers, and ends, “These inequities are what drive the OWS protests. People don’t want handouts. It’s not a class uprising and they don’t want civil war — they want just the opposite. They want everyone to live in the same country, and live by the same rules. It’s amazing that some people think that that’s asking a lot.”

Thanks to reader Mark, I came across this report by US Senator Bernie Sanders about a GAO audit of the Federal Reserve that reveals that it secretly loaned out over $16 trillion dollars to American banks and businesses all over the world. The audit also revealed that there were people on the board of the Fed who seemed to be benefiting from the Fed’s actions.

Such audits of the Fed are a new thing this year, thanks to legislation sponsored by Sanders. It is ridiculous that such secrecy has been allowed for so long to institutions that are publicly funded and use public money.

Herman Cain took a beating for the fact that his 9-9-9 tax plan would raise taxes on low and middle income people while giving rich people a huge tax break.

So he has tweaked it and now says that for the poor it will be a 9-0-9 plan. You can be sure that such ad-hoc lurches due to pressure has produced another half-baked plan that will also be roundly attacked. So what’s next?

This gives me an excuse to cue up the Beatles.

Sarah Jaffe and Joshua Holland list them (Bank of America, JP Morgan Chase, Citigroup, Wells Fargo, and Goldman Sachs) and explain why they are so bad and how they get their way.

Currently, Bank of America is engaged in yet another effort to swindle the taxpayers. When it took over Merrill Lynch it also acquired all the toxic derivatives the latter owned. Bank of America is an FDIC-insured institution, which means that its deposits are taxpayer-insured, while Merrill Lynch is not. Now Bank of America is apparently trying to quietly shift the Merrill Lynch liabilities over to Bank of America so that the taxpayers will bear whatever loss occurs,

Of course the Federal Reserve, which has already used enormous amounts of taxpayer funds to bail out the banks, supports the move but the FDIC is balking, fearing getting stuck with a huge bill.

Jon Stewart interviews Ellen Schultz, an editor at the Wall Street Journal and author of Retirement Heist, who explains how corporations, with the connivance of the government that was willing to provide them with the necessary loopholes, looted the pension funds of 44 million of its workers to enrich their top executives, thus transforming pension fund surpluses of $250 billion into deficits.

The behavior of the oligarchy and their total lack of scruples in destroying the lives of ordinary hard-working people go well beyond greed. They are sociopaths.