By Pam Martens: April 24, 2013
We used to be a country with a rich heart. Now we’re the land of the heartless rich.
In one of the worst economic downturns since the Great Depression, the billionaire Koch brothers who habitually rail against government’s unfair burden on the wealthy, have almost doubled their net worth to a combined $68 billion. On March 10, 2010, Forbes listed the net worth of Charles and David Koch at $17.5 billion each. This year, Forbes says the Koch brothers are individually worth $34 billion.
During that same time period, some of the bleakest economic news has been reported for the rest of America. Just yesterday, the Pew Research Center released a study showing that between 2009 to 2011 the richest 7 percent of Americans increased their wealth by 28 percent while the remaining 93 percent of households lost 4 percent of their net worth. The study analyzed Census Bureau data for the period.
Last June, the U.S. Department of Education reported that there were 1,065,794 homeless children enrolled in America’s preschools, kindergarten and grades 1 to 12 in the 2010-2011 school year — the highest number on record, and a 13 percent increase over the 2009 to 2010 school year. The figure does not capture the total number of homeless children since school data excludes infants and toddlers and homeless children not attending public schools.
According to the Department of Housing and Urban Development (HUD), it would cost $20 billion to end homelessness in the United States. The Kochs have enough money to do that with $44 billion left over to funnel to their plethora of right wing front groups who serially bellyache about how unfair things are for the affluent in America.
New York City’s Mayor Michael Bloomberg, also on the Forbes billionaire list with a net worth of $27 billion, owns at least 11 homes around the world. While the Mayor is adding to his country estates and horse stables, the Coalition for the Homeless reported this month that there are more than 21,000 homeless children living in New York City, an increase of 22 percent in the last year and the greatest homeless crisis since the Great Depression.
As we reported last year, Michael Bloomberg owes his wealth to Wall Street, having created the Bloomberg data terminal for pricing and executing stock, bond and derivative trades. There are an estimated 290,000 Bloomberg terminals on trading floors around the globe, generating approximately $1500 in rental fees per terminal per month. That’s a whopping $435 million a month or $5.2 billion a year.
The Koch brothers’ source of wealth derives from their majority holdings in Koch Industries, a private company traditionally thought of as an oil, chemicals and paper products firm. But a search of public records shows that one unit of the company, Koch Supply and Trading, is a speculative trading operation with a decidedly inside view of the oil and gas markets as a result of the parent company’s operating businesses. One biography for a Koch trader lists the following as his job functions:
January 2008 – April 2011: Koch Supply and Trading
Develop point of view for proprietary basis trading book within multi-billion dollar, multi-national corporation.
Calculate return of capital of potential and current assets.
Aggregate pipeline flow data and generate regional supply and demand models for 9 basis regions in the United States.
Analyze regional supply and demand balances in order to identify trading opportunities.
Collaborate to develop financial basis and timing point of view trading.
Compose and present management documents to Koch Industries Risk Control.
Generate drawdown scenarios and assess fundamental risk.
Recommend trade sizes to maximize portfolio and profit and minimize potential draw.
After the 1929 crash, it took just four years to enact the Glass-Steagall Act to break up the Wall Street casino that was using bank deposits, pass the Securities Act of 1933, create the Civilian Conservation Corps to get people working again. In this Great Recession, the trillions of dollars in relief has flowed to Wall Street — not the homeless or unemployed or those defrauded by Wall Street. Instead of reigning in Wall Street speculation, the most dangerous banks have been allowed to become even larger and more dangerous. The Dodd-Frank securities reform legislation of 2010 was tepid to begin with and has yet to be implemented in any meaningful way. And that has happened because Washington now marches to the beat of the rich and powerful while turning a deaf ear to the concerns of its citizens.
It is no accident that the rich are getting richer and more aloof while over a million children in America curl up at night in a cold car or tent or homeless shelter. Do the children wonder, as I, what happened to that President of hope and change.