COTW: Pigs in Heaven

US Person was recently disturbed by an article in a popular national magazine claiming the wealth gap is a myth. The author wrote that perceptions of wealth inequality were not entirely justified when middle-class upward mobility can be found in studied tax returns over time. Anyway you want to slice the pie and especially if financial wealth is considered [above], the American rich are becoming obscenely wealthy at the expense of the middle class. The expanding pie myth is one perpetrated by the author. The wealthiest are becoming wealthier at a rate that far exceeds that experienced at lower percentiles [lower charts].

This is not merely happenstance but a direct result of government policy and the domination of the national economy by a private central bank using a monetary regime of low-interest loans and declining dollar value. Woodrow Wilson explained succinctly: "A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all of our activities are in the hands of a few men...a government by the opinion and the duress of small groups of dominant men." Our government shelled out $27 billion for GM; $23 billion for AIG; $91 billion for Fannie Mae; and $51 billion for Freddie Mac. (2012 figures). Yes, a few of these aid packages, notably to the big banks who were able to re-inflate the stock markets with the free money, returned profits of $19 billion, but that is outweighed by the losses and future costs of the bailout program. CIT's bankruptcy less than a year after its rescue cost us $2.3 billion. Chrysler came in second at $1.3 billion. The auto industry will post losses close to $20 billion eventually according to the Treasury Department and Congressional Budget Office estimates.

One bank, Central Pacific Financial in which former Senator Daniel Inouye (HI-D) owned stock, received $135m in aid under TARP. The program is reserved for otherwise healthy institutions experiencing cash flow difficulties. Central Pacific Financial was not a healthy institution, but got TARP money anyway after a call from Inouye's office.  The bank promptly collapsed, costing taxpayers $61m--chump change thrown in the pig trough that is TARP.  Another example of how political influence trumps common sense in Washington is South Financial Group. The bank received $347m in 2008 about a month after its CEO Mack Whittle retired with a $18m "golden parachute". Taxpayers lost $200 on their investment in that bank, but Whittle kept his $18m. US Person will be cancelling his subscription because of this bit of shallow analysis. Amos,2:6: They sell a just man for silver and the poor man for a pair of sandals.