By Pam Martens: October 12, 2012
Watching the Presidential and Vice Presidential debates, it’s easy to get caught up in personality over substance, rhetoric over reality. The reality check is to remind ourselves what industry is giving massive, lopsided support to the Romney/Ryan ticket: Wall Street.
According to the Center for Responsive Politics, the top five funders of Romney’s campaign are all Wall Street firms. The PACs, employees and their immediate family members have given the following to the Romney campaign: Goldman Sachs – $891,140; Bank of America (which owns Merrill Lynch) — $668,139; JPMorgan Chase — $663,219; Morgan Stanley — $649,847; Credit Suisse Group — $554,066. No Wall Street firm is among the top five donors to the Obama campaign.
This level of support suggests two things: Wall Street has been assured by the Romney/Ryan campaign that they will repeal the Dodd-Frank financial reform legislation and they will privatize Social Security. Either of these moves would spell disaster for this Nation. If both were enacted, the economically destabilizing wealth concentration that is currently called the Great Recession would rapidly evolve into the second Great Depression. That is because both of these moves would exacerbate the already strangling level of wealth concentration.
Approximately 70 percent of our Nation’s economic activity comes from consumer spending. It does not come from Goldman Sachs or JPMorgan or Citigroup. It does not come from hedge fund billionaires or private equity/leveraged buyout kingpins. Without well paid workers confident of their job security who are willing to spend, consumption collapses along with the economy. We learned that lesson in the Great Depression but have forgotten it 80 years later.
Both Romney and Ryan would like Americans to forget how we got to the Great Recession and in a hair’s breadth of the Great Depression. It was the deregulation of Wall Street together with the repeal of the Glass-Steagall Act, which led to the mass leveraging up of everything from housing to commodities to bundled mortgages, fueled by Wall Street’s cheap access to capital from buying up banks holding insured deposits.
That mega casino still exists and the idea that we would hand it more savings accounts to manage via privatizing Social Security is not just reckless thinking, it would be fatal to this country. The Dodd Frank legislation is, indeed, an unwieldy mess. But that’s because it was forced to put in place regulations to oversee an unwieldy mess of an industry structure – today’s Wall Street. But it serves the purpose of slowing down reckless gambling on Wall Street until there is enough momentum to restore the Glass-Steagall Act and separate the casino from insured deposit banks.
During the runup to the 2008 election, I called attention here and here to the heavy influence that Wall Street was having on the Obama campaign and the dangers that posed for the country. That Wall Street has now dramatically shifted its support to the Romney/Ryan ticket tells me all I need to know — that Wall Street understands that President Obama and Vice President Joe Biden are four years wiser about Wall Street than the day they took office.