News and views from the award-winning author of the Class H Trilogy: AMERICA LIBRE, HOUSE DIVIDED and PANCHO LAND

Wednesday, November 3, 2010

Goldman Sachs breaks out the bubbly while the rest of us drink snake oil

Few will argue the U.S. economy is sick. The cavernous difference of opinion lies in how we got that way – and most importantly – where to find the best treatment. Judging from yesterday's elections, it seems the crucial independent swing vote “refudiated” the Democrats’ cure for the nation’s economic ills and chose to take a large dose of snake oil instead.

In some ways, blaming the Democrats seems understandable. After two years of Democratic control in congress and the White House, there is little doubt we are still hurting from the Great Recession which hit bottom under George W. Bush.

Many Americans are still out of work, worried about their jobs or nervously watching a 401K that looks like a snowman in early April. Median income for U.S. households dropped again in 2009 with the average wage declining by $457. So it seems logical to blame the Democrats, right?

However, there are some who have managed to do quite well under Obama and the Democrats. And you might be surprised to find out just who they are.

While the national wage average fell again in 2009 (a trend which began under Bush), executive bonuses at the nation’s largest 38 companies reached a record-setting $140 billion last year. Goldman Sachs had the best year in its history with employee bonuses averaging $600,000 per person. (Seems the $750 billion in TARP money Bush doled out to his friends during his last days in office has sure helped them "weather the recession.") And here is the icing on the cake. The income of those earning over $50 million a year increased five times in 2009. That’s right. The super-rich saw their wealth increase five times in 2009—while the rest of us saw our income drop. So if Obama and the Democrats are really at fault for the continued economic downturn, then why are these the same people who are now celebrating the Republican gains in yesterday’s elections?

Yes, the corks on bottles of Dom PĂ©rignon are popping at Goldman Sachs, AIG, and the other large investment firms. These are the same people who created the now-infamous credit default swaps that fueled our economic collapse. Also joining in the merriment are the CEOs at large insurance companies (that saw profits rise 56% in 2009). Perhaps giddiest of all are those individuals in the wealth stratosphere. All these folks know the good times are really going to roll now.  And if they can keep using the Dems as scapegoats for their greed and blunders and elect a Republican president in 2012 … well, you ain’t seen nothing yet when it comes to disparity of wealth, America.

Meanwhile, I hope all you independent voters enjoy the snake oil you ordered. Because you – and the rest of us poor saps – will eventually be picking up the tab on the champagne flowing right now in the penthouses and yachts.

Raul Ramos y Sanchez