by the Barefoot Accountant
Appointing Jacob Lew as the new Chief of Staff is further and continued evidence that President Barack Obama is working for Wall Street instead of Main Street. Recall that Jacob Lew once argued against deregulation, asserting that the cause of the subprime mortgage originated before deregulation in 1999 with the repeal of the Glass-Steagall Act. Well, Jacob, what caused it? The Bogeyman?
For those unaware, the Glass-Steagall Act originated in 1933 in response to the Great Depression since economists believed that permitting commercial banks to function as investment banks led to casino-like gambling in the stock market, creating that irrational exuberance of driving stock prices ridiculously above their economically justifiable market values based on earnings per share. So it’s no small coincidence that merely eight years after its repeal in 1999 that the stock market suffered a collapse reminiscent of that of the Great Depression.
With the continued repeal of the Glass-Steagall Act we have four big banks sitting on $2 trillion, investing in treasury bills and stocks, instead of loaning that money to small businesses to create jobs here in America. And the stocks that the big banks are investing in are those of the multinational corporations, who are, in turn, investing overseas where labor is dirt cheap. In other words, Wall Street is investing in Asia and not Main Street USA! Consequently, don’t expect that unemployment rate to return to normal in your lifetime. Better hold onto that $8/hour job at Walmart.
Jacob Lew is not in favor of Glass-Steagall either. You may wonder why Jacob Lew is against deregulation of the commercial and investment banking industry. Because he is a Wall Streeter, just like Timothy Geithner and Larry Summers and William Daley, Obama’s former Chief of Staff, who was formerly Vice Chairman of J P Morgan. Did you know that Jacob Lew was the chief operating officer of Citigroup’s Alternative Investments unit? You know, that very same Citigroup that is a big commercial and investment banker who betted against the subprime mortgages.
Obama keeps going to Wall Street for his economic advisors. So even though it’s election season and Obama is talking tough about band-aid cures for our depression–e.g., two month extensions of our unemployment benefits and a patry $108 billion in infrastructure investments when some economists are urging the need for a $2 trillion investment–we have the same President Obama serving the interests of Wall Street and the 1% over Main Street and the 99%.
Isn’t it time to send a protest vote against Obama, the Democratic National Committee, and all representative pawns of Wall Street?
Connecticut Politics 