By Pam Martens: March 4, 2013
Last November, one of Europe’s largest publications, the German news magazine Der Spiegel, splashed a terminally ill Uncle Sam on its front cover. Inside we are told that “Many developing countries are now looking to China instead of the US as a role model on how to structure a country. They are no longer seeking the light of the American beacon on the horizon.”
One of the reasons cited by the article for America’s decline is that our best and brightest no longer focus their talents and energies on enriching America’s future, but rush to Wall Street to line their own pockets: “About a third of the students in every graduating class at Harvard University accepts jobs in investment banking and consulting, or with hedge funds — that is, industries that produce one thing above all: fast money…” reads the article.
Last week, Wall Street’s insufferable fixation on fast money without regard to the dimming American beacon came into focus when the Chairman and CEO of our country’s largest bank, Jamie Dimon of JPMorgan Chase, actually bragged in public of his outsized wealth by putting down a lower salaried Wall Street employee at the company’s own investor conference.
The question was a hypothetical one, posed by banking analyst Mike Mayo, regarding whether higher capital at rival bank UBS might create a competitive advantage against JPMorgan. Dimon responded:
Dimon: “You would go to UBS and not JPMorgan?”
Mayo: “I didn’t say that; that’s their argument.”
Dimon: “That’s why I’m richer than you.”
Dimon is the man who less than 9 months ago was sitting before two Congressional panels explaining how his bank had lost billions gambling with its customers insured deposits. The losses the company has disclosed now total over $6 billion. In just the last three years, JPMorgan has paid over $16 billion in litigation expense, defending itself against charges of looting the public and its customers. Notwithstanding any of that, Jamie Dimon has not been demoted or fired and has grown even richer and more arrogant; sending another clear signal that America has lost its moorings and any basis for calling itself a meritocracy.
In the meantime, the country in which Dimon’s children will raise his grandchildren, is sinking toward developing nation status in many critical respects.
According to a September 2012 report from the Organization for Economic Cooperation and Development (OECD), the U.S. ranks 14th among 37 OECD and G20 countries in the percentage of 25 to 34 year olds boasting higher education attainment, putting the U.S. 20 percentage points behind the leader, Korea, at 65 percent. The report also found that American students struggle more than their foreign peers to top their parents. The report said that the odds of a young person in the U.S. attaining higher education if his or her parents did not do so are 29 percent, ranking as one of the lowest levels among OECD countries.
The OECD study also found that the U.S. ranks 26th in the percentage of 4-year olds enrolled in early childhood education programs.
In the area of high childhood poverty rates, the U.S. ranks 34th out of 35 economically advanced countries surveyed in a May 2012 UNICEF study. Only Romania had a higher relative childhood poverty rate.
According to the 2012 World’s Mothers report from Save the Children, which examined the well-being of mothers and their children in 165 countries, mothers in the U.S. face a one-in-2,100 risk of maternal death, the highest of any industrialized nation. Forty countries were ahead of the U.S. for lower childhood deaths before age 5.
The report noted that maternity leave policies in the U.S. are “among the least generous of any wealthy nation. The United States is the only developed country that does not guarantee working mothers paid leave.”
The deplorable statistics can be laid to rest directly at the feet of Wall Street’s institutionalized wealth transfer machine which has hollowed out the middle class, thrown millions into poverty for the first time in their lives, redirected tax revenues to Wall Street bailouts and away from social safety nets, and continues to thrive because of insane campaign finance laws which allow Wall Street to maintain an iron grip on the reins to the U.S. government and its regulators.
According to studies done by Branko Milanovic, an economist at the World Bank’s Development Research Group, the U.S. has a higher level of income inequality than Europe, Canada, Australia and South Korea. The depth of the inequality is underscored by a study released last year by the National Bureau of Economic Research, showing that 50 percent of the U.S. population would not be able to come up with $2,000 within 30 days for an unexpected expense.
The U.S. Census Bureau reports that 46.2 million people in America, the highest number in the 52 years the bureau has been publishing figures on poverty, are living at or below the poverty line, defined by the government as $23,021 annual income for a family of four.
How can a family living on $23,021 a year compete for a voice in Washington when under current campaign finance laws, one rich individual can contribute a total of $117,000 within any two-year period to Federal elections ($46,200 to candidates and $70,800 to all PACs and parties). If you’re a wealthy couple, that means you can spend $234,000 in any two-year period – almost a quarter of a million dollars – making sure your voice is heard in Washington over the poor and middle class. (Check out the Goldman Sachs graph below to see why America is sinking fast as a democracy.)
So blinded by personal wealth are people like Jamie Dimon that they can’t see that they have charted a course to leave to their grandchildren the nightmare legacy of a crippled Nation that sends a beacon of hope to no one.