What I am about to write in this article is not a proven fact. History may decide whether it is, but as we continue to live through this crisis, the evidence is there to make the assumptions that I’m about to lay out. Looking back over 40 years, all the moves made by both Wall Street, Corporate America and the U.S. Government are there to be interpreted and the more you look at them, they loom larger and larger, leaving room for little doubt that this was “The Plan!”
In the 1970s, more that 62% of all working Americans were enrolled in a pension system, which along with their Social Security benefits would more or less guarantee that they could enjoy a stable retirement. There was no promise of extravagant living, but the promise of a secure retirement at the end of life gave most Americans something to work for. People were also saving. Private savings stood about 10 to 12% of the Gross National Product. Life was good and wages were at their highest. This “national nest egg” did not go unnoticed by Wall Street, as well as Corporate America, which many were becoming more concerned about their bottom line than the benefits of their workers. In 1978, Congress passed the Revenue Act of 1978, which allowed for employees to participate in the 401K Plan of deferred compensation, named for the Code of the IRS for its provision. It was first conceived as supplemental to a retirement plan but Corporate America saw the opportunity for them to turn the responsibility of providing a retirement from them to the employees themselves. And what better way to invest in this new plan was to invest in Wall Street. It was a golden opportunity for big business to get out from under previous retirement provisions, such as pensions as well as a golden opportunity for Wall Street to begin to pick the pockets of the average working American.
The promises of “Instant Riches” made this an attractive alternative, and investment seemed to be the wave of the future. This did not go unnoticed by the Banks, who already had begun to offer the American Worker the “fast track” to “The American Dream.” The Bank of America had issued a new way of purchasing on the cuff as early as 1958 with the Bank AmericaCard. Several California banks decided to get into the action with the new MasterCharge card. We now know them as MasterCard and Visa. The only thing that was holding them back from making real money was the Usury Laws, which were established as a result of the Great Depression. This was solved by the Depository Institutions Deregulation and Monitory Control Act, which lifted the limits of the interest that banks could charge. Not satisfied, the banks decided that they were limited with fixed term mortgages and wanted to offer more exotic ones to entice new homebuyers. The result was the Alternative Mortgage Transactions Parity Act of 1982, which now allowed them to offer the American worker the house he, up to now, could never afford. The Commercial Banks were left out in the cold, as the Glass-Steagall Act of 1933 had separated investment banking and commercial banking. This was repealed in 1999, so the stage was set for highway robbery!
The stage is set for the biggest heist in history. It was to drain the savings of the Middle Class into the coffers of Wall Street Corporate America and the Banks. The first thing to go was the pension system in private industry. With the help of the IRS and legislation such as the Tax Reform Act of 1986, the Economic Growth and Tax Reconciliation Act of 2001, private pensions were gone and your only real choice was the 401K. Billions were free to go into Wall Street, with the promise of good times ahead for all. Now, commercial banks such as J.P. Morgan Chase, Citibank, Lehman Brothers and others could now participate in private investment, just as Bank of America had with “Glass Stteagall” gone. President George W. Bush told Americans in 2002 that “Owning a home lies at the heart of the American Dream!” With fixed mortgages gone, the Banks were free to become inventive with sub-prime mortgages and other exotic opportunities to own a home, especially if you couldn’t afford it. The savings of a lifetime went into the coffers of both Wall Street and the Banks. Corporate America’s sales were booming, as more and more people believed, as did the government, that debt wasn’t a bad thing! There had been some warnings, such as the Crash of 1987 when Wall Street lost 23% of its total value, and the Dot Com Crash of 2000, as NASDAQ lost well over $1 trillion dollars. In the crash of 2008, Wall Street lost close to $7 trillion dollars at the end of that year. Worldwide losses for that year were over $30 trillion dollars. What I’ve described is the loss of the wealth of the Middle Class. What caused it? Greed! We can’t get our money back, but we can dump the people who helped get us where we are! Both the Republicans and the Democrats are to blame. However, in 2011, who represents the best interests of Wall Street, Corporate America and the Banks? It is the Republican Party and barring the emergence of a third party, the Democrats are our last hope, providing we keep their nose to the fire!
To read entire article with photos and video click here: Really Pissed Off! Thanks, Tom