The political fallout from the bank bailouts has manifested itself in the inevitable social unrest of street protests at the Seattle office of Chase Bank, leading to arrests and TV-worthy emoting amongst the unruly denizens expressing difficulty with the political events that have taken place in recent years.
Bearing signs such as “Where’s my bailout?” and “No tax breaks,” the protesters are expressing the sentiments of a great number of individuals who feel that the federal support given to failing (wealthy) institutions such as major banks was a major mistake, and the consumers are the ones who are in need of a major bailout, given the harsh realities of chronic, widespread unemployment, stagnant wages, higher prices, crushing debt, and other difficulties.
Without any bankers having gone to jail for their likely fraudulent behavior (and the impending settlement by Bank of America that will exonerate them from such difficulties), it is easy to see why consumers are so upset at the banking industry for having crippled the economy and then siphoning money away from the taxpayers, when that money could have been put into industries that would have helped the economy, whereas the banks didn’t bother lending, which was a major purpose of the bailouts in the first place.
During this entire debacle the CEO of JP Morgan Chase has come out allegedly claiming that further regulation on the banking or other industries is not American, one of the easiest ways in the United States to repress debate over any sort of issue; calling out the patriotism of any political opponent and his or her plan does nothing to determine the efficacy of such a plan, but will no doubt enrage nationalist sentiment and infuriate those who have been told their country is being taken over by foreign spies. Simply saying something is American or not has actually become a political strategy. No economic analysis; no numbers; no deep understanding of the issues. Simply whether or not something is American.
Despite such claims, it is rather effortless to point toward a time not too far back in American history (the 1970s) when executive pay was approximately ten times lower than it is today. If such circumstances were not American, they would not have occurred at all. But they did; and for a rather extensive period of time, as well.
CEO and other executive pay has gone up, even while the broader economy has floundered, and bank bonuses have continued unabated, which is part of the reason for the distaste of organizations like JP Morgan Chase and others. During the economic downturn, many banks, both American or otherwise, have been laying off employees, while doing nothing to curb the growth of executive salary and bonus pay, which is now approximately 30 times higher than that of low-level employees, when 30 years ago it was only 10 times higher. An opportunity for cost cutting, perhaps?
These events come on the heels of Moody’s downgrading the debt ratings of Bank of America, Wells Fargo and Citigroup, on the (likely correct) assumption that if the banks ever need a bailout again, they won’t get it. There’s no money to do it, and no one will want to prop them up again. CEOs handing themselves exorbitant salaries while their employees are receiving pay cuts should take note. Something’s gotta give.
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