Over the last 10 years the United States has experienced a net loss of 3.5 million jobs in those sectors of the economy outside of health, education and government. And the only thing that kept that figure from being much much larger is the huge number of McJobs that were created, in the service of fast food and the like. How did this huge job exodus take place? It had a lot to do with the approximately 42,400 factories whose operations were moved to places like China and Mexico where labor is dirt cheap. (For more details, read this article, where you will find that according to a new study conducted by the Economic Policy Institute, if the U.S. trade deficit with China continues to increase at its current rate, the U.S. economy will lose over half a million jobs this year alone. You will also read that according to Tax Notes, between 1999 and 2008 employment at the foreign affiliates of U.S. parent companies increased an astounding 30% (2.3 million), from 7.8 million to 10.1 million. Meanwhile, during that same time period, U.S. employment at American multinational corporations declined 8% (1.8 million), from 22.9 million to 21.1 million.
Also read about how, during the George W. Bush administration's final months of plunder, leaders dedicated to a doctrine of government by entrepreneurship proceeded to sell off the state, channeling the profits to cronies and loyalists. Survey the federal agencies doomed to failure by the inept and even hostile staff appointed to run them. Read a compelling account of the devastating results of wholesale deregulation. From political scandal to mortgage meltdown, understand the consequences of enshrining the free market as the logic of the state.
Yet during this same 10 years, since Duhbya stole the White House, the OTC (over the counter) derivatives market, where banks traded their exotic financial innovations, grew from relative insignificance to a $600 trillion dollar death star. A portion of this secretive market finally exploded, causing the greatest economic crisis since the Great Depression. The people who agree with Larry Summers that the recession is over should pay a visit to Michigan, where I just spend the holidays. My home town is a disaster area.
However, during those same 10 years, the major financial institutions, 5 of which -- Citi, BofA, JPM, Morgan and Goldman -- hold 95% of all derivatives exposure, paid themselves hundreds and hundreds of billions in bonus pay, skimming the short-term profit off the frothy asset bubbles they were inflating while they cleverly transferred the risk to us taxpayers. Their game was, literally, selling us down the river.
And what we are now experiencing, aside from the pain of national foreclosure, massive cuts in services, state defaults, federal bankruptcy, etc., is the cover-up of what happened, criminal or quasi-criminal, as well as the cover-up of the negotiated governmental response to the banking crisis, which some feel is also criminal.
One of the main things Obama promised during his campaign was transparency, but we have had ZERO transparency on this issue at every level. He even suspended mark-to-market accounting so that we wouldn't find out about the insolvency of the "surviving" financial institutions -- institutions that are now paying themselves huge bonuses again, USING OUR TAX DOLLARS to do so! Without most of them even knowing, taxpayers have been forced to purchase or guarantee multiple trillions of dollars of toxic assets -- without even being informed about what those assets actually are! "Our" government doesn't want us to know! Why not? Because that might well prevent the scam from being implemented.
So, tell me please: how can real financial regulatory reform be worked out BEFORE a full understanding of the depths to which corrupt banking practices have sunk? (The complicity of the Obama administration, not to mention Senate Finance Committee and House Financial Services Committee members of both parties, in this obstruction of transparency, is nothing less than a national scandal. And yet, so far, it is successfully being kept hidden from the vast majority of Americans!)
The entire country has just endured endless months of discussion about the intricacies of health care reform, and what we ended up with was a joke. What we SHOULD have been talking about during this time was how our government should respond legislatively to a once-in-a-century financial calamity. Instead, they desperately changed the subject to health care, and did their negotiating on financial reform in private. There's been no discussion about reforming the credit rating agencies, whose fraudulent ratings provided the glue for the house of cards, and no discussion of the merit of breaking up the banks, or re-imposing Glass-Steagall, spiting the experienced wisdom of people like Paul Volcker and, dare I name him, Alan Greenspan. Instead, our legislators let bank lobbyists draft the legislation themselves(!), so that enough loopholes will remain, to allow business-as-usual to continue.