« Spinning the Israeli/Palestinian Peace ProcessFukushima: Uncontainable »

Wall Street Take-Off: 2012 – 2013

August 13th, 2013

James Petras

On July 16, 2013, Goldman Sachs, the fifth largest US bank by assets announced its second quarter profits doubled the previous year to $1.93 billion. J. P. Morgan, the largest bank made $6.1 billion in the second quarter up 32% over the year before and expects to make $25 billion in profits in 2013. Wells Fargo, the fourth largest bank, reaped $5.27 billion, up 20%. Citigroup’s profits topped $4.18 billion, up 42% over the previous year.

The ruling elite, the financial CEOs pay is soaring: John Stumpf of Wells Fargo received $19.3 million in 2012; Jamie Dimon of J. P. Morgan Chase pocketed $18.7 million and Lloyd Blankfein of Goldman Sachs took $13.3 million.

The Bush-Obama Wall Street bailout has resulted in the deepening financialization of the US economy: Finance has displaced the technology industry as the profitable sector of the US economy. While the US economy stagnates and the European Union wallows in recession and with over 50 million unemployed, US financial corporations in the Standard and Poor 500 index earned aggregate profits of $49 billion in the second quarter of 2013, while the tech sector reported $41.5 billion. For 2013, Wall Street is projected to earn $198.5 billion in profits, while tech companies are expected to earn $183.1 billion. Within the financial sector, the most ‘speculative sectors’, i.e. investment banks and brokerage houses, are dominant and dynamic growing 40% in 2013. Over 20% of the S and P 500 corporate profits are concentrated in the financial sector.

The financial crash of 2008-2009 and the Obama bailout, reinforced the dominance of Wall Street over the US economy. The result is that the parasitic financial sector is extracting enormous rents and profits from the economy and depriving the productive industries of capital and earnings. The recovery and boom of corporate profits since the crises turns out to be concentrated in the same financial sector which provoked the crash a few years back.

The Crises of Labor Deepens – 2013

The new speculative bubble of 2012 – 2013 is a product of the central banks’ (the Federal Reserve in the United States) low (virtually zero) interest policies, which allow Wall Street to borrow cheaply and speculate, activities which puff up stock prices but do not generate employment, and furthermore depress industry and polarize the economy.

The Obama regime’s promotion of financial profits is accompanied by its policies reducing living standards for wage and salaried workers. The White House and Congress have slashed public spending on health, education and social services. They have cut funds for the food stamps program (food subsidies for poor families), day care centers, unemployment benefits, social security inflation adjustments, Medicare and Medicare programs. As a result the gap between the top 10% and the bottom 90% has widened. Wages and salaries have declined in relative and absolute terms, as employees take advantage of high unemployment (7.8% official) underemployment (15%) and precarious employment.

In 2013 capitalist profits , especially in the financial capital, are booming while the crises of labor persists, deepens and provokes political alienation. Outside of North America, especially in the European periphery, mass unemployment and declining living standards has led to mass protests and repeated general strikes.

In the first half of 2013 Greek workers organized four general strikes protesting the massive firing of public sector workers; in Portugal two general strikes have led to calls for the resignation of the Prime Minister and new elections. In Spain corruption at the highest level, fiscal austerity leading to 25% unemployment and repression have led to intensifying street fighting and calls for the regime to resign.

The bi-polar world of rich bankers in the North racking up record profits and workers everywhere receiving a shrinking share of national income spells out the class basis of “recovery” and “depression”, prosperity for the few and immiseration for the many. By the end of 2013, the imbalances between finance and production foretell a new cycle of boom and bust. Emblematic of the demise of the “productive economy” is the city of Detroit’s declaration of bankruptcy: with 79,000 vacant homes, stores and factories the city resembles Baghdad after the US invasion – nothing works. The Wall Street-devastated city, once the cradle of both the auto industry and the organized industrial workers’ leap into the middle-class, now has debts totaling $20 billion. The big three auto companies have relocated overseas and to non-union states while the billionaire bankers “restructure” the economy, break unions, lower wages, renege on pensions and rule by administrative decree.

-###-

James Petras is a Bartle Professor (Emeritus) of Sociology at Binghamton University, New York. He is the author of 64 books published in 29 languages, and over 560 articles in professional journals, including the American Sociological Review, British Journal of Sociology, Social Research, Journal of Contemporary Asia, and Journal of Peasant Studies. He has published over 2000 articles in nonprofessional journals such as the New York Times, the Guardian, the Nation, Christian Science Monitor, Foreign Policy, New Left Review, Partisan Review, Temps Moderne, Le Monde Diplomatique, and his commentary is widely carried on the internet. His most recent books are: The Arab Revolt and the Imperialist Counterattack (Clarity Press 2012) 2nd edition, The Power of Israel in the United States and Rulers and Ruled in the US Empire: Bankers, Zionists and Militants, (acquired for Japanese, German, Italian, Indonesian, Czech and Arabic editions), Zionism, Militarism and the Decline of US Power, Global Depression and Regional Wars: The United States, Latin America and the Middle East, and War Crimes in Gaza and the Zionist Fifth Column in America. He has a long history of commitment to social justice, working in particular with the Brazilian Landless Workers Movement for 11 years. In 1973-76 he was a member of the Bertrand Russell Tribunal on Repression in Latin America. He writes a monthly column for the Mexican newspaper, Le Jornada, and previously, for the Spanish daily, El Mundo. He received his B.A. from Boston University and Ph.D. from the University of California at Berkeley.

No feedback yet

Voices

Voices

  • By Mark Aurelius “When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another… “ It’s that time again, actually way past due, as the lists of grievances are even fatter…
  • Dr. Vladislav B. Sotirovic The 2018 Skripal Attack Case The current orchestrated Western policy of total Russophobia, directed by Collective West, can be recorded to start by the British Cabinet of Theresa May – the focal servant-dog to US global…
  • By Sally Dugman This proactive Palestinian Pulverizers of humans, D. Trump who is indirectly responsible for the deaths of many thousands of Palestinian people of all ages, has no standing to say something like this utterly stupid statement about Putin:…
  • Tracy Turner When the Republic Betrays, the Body Must Answer Protest is not a right—it is a judgment passed upon power. A corrupt state standing above law and beyond justice forfeits its legitimacy, and we, the people, are compelled to answer—not with…
  • Tracy Turner The Reclamation of the Republic When, in the Course of human events, it shall become absolutely necessary for the People to dissolve the political ties which have united them to a government that has betrayed its trust to obtain their…
  • Tracy Turner SMELE's (Slow-Motion-Extinction-Level-Events). Not yet common in academia, but it should be. I. Introduction: The Timebombs We Ignore "Not with a bang but a bureaucratic shrug, the world ends." - Revisionist reading of Eliot by the…
  • By David Swanson I wish U.S. academics would spend less time fantasizing choices between various murders with trollies, or playing games with theories about how greedy robots might do diplomacy, and more time on the impeachment problem. The United…
  • Cathy Smith Hidden Bombshells in Trump’s “Big Bodacious Pill” “The most dangerous place to be is between power and its reckoning.” —Rewritten maxim of Beltway survival In the dark guts of Trump’s 2025 legislative monolith—cheekily christened the Big…
  • Robert David A global exposé of how corporations distort science, erase truth, and turn human death into quarterly growth. I. Introduction: When Truth Becomes a Liability In an age when algorithms dictate belief and lobbyists author legislation, truth…
  • Robert David Polluters don’t just dump toxins. They dump stories—engineered by billion-dollar PR firms. They Poisoned the Planet—Then Hired Spin Doctors to Make You Forget When a chemical spill poisons a town, when a pipeline ruptures in a fireball,…
July 2025
Sun Mon Tue Wed Thu Fri Sat
 << <   > >>
    1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31    

  XML Feeds

b2evo
FAIR USE NOTICE: This site contains copyrighted articles and information about environmental, political, human rights, economic, democratic, scientific, and social justice issues, etc. This news and information is displayed without profit for educational purposes, in accordance with, Title 17 U.S.C. Section 107 of the US Copyright Law. Thepeoplesvoice.org is a non-advocacy internet web site, edited by non-affiliated U.S. citizens. editor
ozlu Sozler GereksizGercek Hava Durumu Firma Rehberi Hava Durumu Firma Rehberi E-okul Veli Firma Rehberi