{"id":719,"date":"2010-05-03T00:23:24","date_gmt":"2010-05-03T05:23:24","guid":{"rendered":"http:\/\/civilsocietytrust.org\/blog\/?p=719"},"modified":"2010-07-21T22:06:47","modified_gmt":"2010-07-22T03:06:47","slug":"afl-cio-enters-twilight-zone-finds-wall-street","status":"publish","type":"post","link":"http:\/\/civilsocietytrust.org\/blog\/2010\/05\/03\/afl-cio-enters-twilight-zone-finds-wall-street\/","title":{"rendered":"AFL-CIO enters Twilight Zone, finds Wall Street"},"content":{"rendered":"

Perhaps you also caught CNBC’s Erin Burnett and Mark Haines interviewing AFL-CIO President Richard Trumka<\/a> last Thursday morning in front of the New York Stock Exchange, prior to a labor union rally near Wall Street later in the day<\/a>.\u00a0 Talk about shock and awe!<\/em><\/p>\n

Shock<\/em> at the blatant hypocrisy.\u00a0\u00a0 Awe<\/em> at the depth and breadth of economic illiteracy.\u00a0\u00a0 This was populist demagoguery at it’s finest, and one could write a book on the distortions, fallacies and misinformation in just this one seven minute interview. \u00a0\u00a0 Let’s take a look at some highlights:<\/p>\n

Haines:\u00a0\u00a0 What do you want?\u00a0 What are you trying to prove or point out today?<\/em><\/p>\n

Trumka:\u00a0 Well there’s three things that we want to say.\u00a0\u00a0 These guys destroyed eleven million jobs.\u00a0 They wrecked the economy.\u00a0\u00a0 They got bailout money.\u00a0\u00a0 And they haven’t learned a lesson.\u00a0\u00a0 So we want them to do three things.\u00a0\u00a0 We want them to pay their fair share, to create the jobs that they destroyed.\u00a0\u00a0 Two, we want them to stop fighting Wall Street reform, because they send a legion of lobbyists to D.C. to stop it from happening.\u00a0\u00a0 Three, we want them to start lending to small and mid-size banks so they can create jobs.<\/em><\/p><\/blockquote>\n

Have we entered the Twilight Zone?<\/a> A person takes on a NINJA loan (No Income, No Job or Assets), pushed by a lender that is ultimately implementing Congress’ push to increase home ownership. \u00a0 Their mortgage payment rises, they default on the loan, and it’s Wall Street’s fault? \u00a0 \u00a0 Aided and abetted by legislators, union contracts and guaranteed benefits accelerate the growth in state and local budgets, pushing many to near bankruptcy,<\/a> and it’s Wall Street’s fault?\u00a0\u00a0 The Federal Reserve and Treasury tell banks to boost their capital ratios, and everyone complains about bad risk management.\u00a0 Banks respond by tightening lending requirements, and Wall Street has destroyed eleven million jobs as a result?\u00a0\u00a0 What the?<\/p>\n

Yes, Wall Street got bailout money, money which many of the banks didn’t want.\u00a0\u00a0 Just as some firms didn’t want to mark some of their positions to market, the Fed and Treasury didn’t want to mark entire firms to market<\/em> either, so they tried to hide the more vulnerable companies in and amongst the stronger ones.\u00a0\u00a0 This is a taking-one-for-the-team the bank industry will never live down, TARP repayments notwithstanding.<\/p>\n

Regarding Wall Street reform, didn’t Sarbanes-Oxley<\/a> solve that problem in 2002?\u00a0\u00a0 Never mind, that’s a whole other story.<\/p>\n

But sending “a legion of lobbyists to D.C.” — now that’s golden.\u00a0\u00a0 This from an organization whose stated goal, along with the other unions, is to pull out all of the lobbying stops to get Card Check passed, to use the force of government to try to slow the unmistakable downward trend in union membership.<\/p>\n

It continued…<\/p>\n

Trumka:\u00a0 We’re fighting to create jobs.\u00a0 There’s nobody out there right now except the labor movement that is fighting to create jobs and taking these guys on.\u00a0\u00a0 They destroyed eleven million jobs.\u00a0 America needs those jobs back.\u00a0 The labor movement is out fighting for them.<\/em><\/p><\/blockquote>\n

Without a doubt, labor unions have saved<\/em> jobs.\u00a0\u00a0 They’ve saved them by ensuring that capital that might have better been re-directed away from the control of bad management and\/or into more productive uses stayed where it was, preserving jobs in companies that should have shed them, or even preserving whole companies.\u00a0 But how about actually creating jobs, as in, truly new jobs?\u00a0\u00a0 It seems like Mr. Trumka doesn’t understand that first and foremost, governments, unions or even small and mid-size banks, do not create jobs. <\/em> Risk-taking entrepreneurs create jobs.\u00a0 And when the legislative outlook is as cloudy as it is right now<\/a>, they do the prudent thing, which is to say, they preserve their capital by hunkering down.<\/p>\n

Trumka: They destroyed $13 trillion worth of wealth for the rest of America.<\/em><\/p><\/blockquote>\n

I suppose that Mr. Trumka is making some generalized reference to the total reduction in stock market valuations, reflected in peoples’ 401K’s, pensions and other savings vehicles. \u00a0 Markets may have dropped, but is Mr. Trumka actually claiming that these Wall Street firms had the power to move the markets to that magnitude, all the while resisting the obvious opportunity to profit wildly as they controlled its every move?\u00a0 Evidence would seem to prove the contrary.\u00a0\u00a0\u00a0 But wait a second. \u00a0 Don’t the unions lead the class-warfare chant that says that most of the stock-market wealth in this country is held by the “rich”?\u00a0\u00a0 So then it would be the “rich” that took most of the $13 trillion dollar hit.\u00a0\u00a0 What are we complaining about then? \u00a0\u00a0 They can afford it, right?<\/p>\n

Burnett:\u00a0 How can they create those jobs?\u00a0\u00a0 I mean, that’s my question.\u00a0 What would you say to them today, if you had Lloyd Blankfein standing here from Goldman Sachs?\u00a0 Mr. Blankfein I need you to do X, to create a job, what do you do?<\/em><\/p>\n

Trumka:\u00a0\u00a0 I’d tell him to do a couple X’s. \u00a0 One, pay your fair share.\u00a0 Give us a transaction tax of a quarter of a penny, we’ll get 150 billion to 300 billion dollars, and we’ll start creating jobs in America.\u00a0\u00a0 Two, start lending to small and mid-size organizations and businesses out there so they can start creating jobs.\u00a0\u00a0 And three, starting paying your fair share, pay the same level of taxes that they rest of us do, so that we have the revenue in this country to save teachers, to save firemen, save police officers and get this country back on track.<\/em><\/p><\/blockquote>\n

Ah… now we’re seeing the prize.\u00a0 Somebody get the drool buckets. \u00a0 Hundreds of billions of dollars of additional revenue to be brought into government control, so they (and their union buddies, presumably) can direct the money as they see fit.\u00a0 But of course!<\/p>\n

And regarding paying the same level of taxes that the rest of us do, let’s see:\u00a0\u00a0 First, nearly 50% of filers don’t pay income taxes, but my guess is that that’s not what Mr. Trumka would have the banks emulate. \u00a0 Second, all the income of the banks’ employees gets taxed like “the rest of us” — because it’s all the Same Street.<\/a> But lastly, all of the corporate taxes that the banks (or any company) pays represent funds that could have been spent on something else, such as higher wages, benefits, capital investments, even hiring new employees (i.e., creating jobs<\/em>).<\/p>\n

Burnett:\u00a0 …a lot of these people are tellers, right? \u00a0 And it seems like you’re saying just because you work for a bank you’re a bad person.\u00a0 That’s the feeling… that people get…<\/em><\/p>\n

Trumka:\u00a0 No, I’m not saying that.<\/em><\/p>\n

Burnett:\u00a0 Okay, so, so what are you saying though?\u00a0 Because you keep gesturing that these guys destroyed, that these guys did this.\u00a0 Can I get to the point?<\/em><\/p>\n

Trumka:\u00a0 The banks.\u00a0 The banks and the people that control the banks.\u00a0 Wall…\u00a0 Citibank.\u00a0 Citibank.\u00a0 Citibank.<\/em><\/p><\/blockquote>\n

A slip of the tongue perhaps? \u00a0 Vikram Pandit really isn’t nearly as powerful as you think, Mr. Trumka. \u00a0 Who really controls the banks?\u00a0\u00a0\u00a0 That would be the Federal Reserve, the US Treasury, the FDIC, the SEC and a host of other agencies and regulatory bodies that altogether make up the tail of the dog that is our federal government.\u00a0 So let’s direct all of that passion to the right place.<\/p>\n

Trumka:\u00a0 They [the banks] need to start lending.\u00a0\u00a0 Everyone agrees that the lending market is still locked up, that these guys aren’t lending.<\/em><\/p><\/blockquote>\n

Here’s an idea Mr. Trumka: \u00a0 Organizations like yours take in billions each year<\/a> in “deposits” from your “customers” (the forced dues of your union members, to be perfectly clear). \u00a0 Loan some of it out.\u00a0\u00a0 If there are so many worthy businesses out there in dire need of loans, and the banks are doing such a terrible job at meeting that need, surely you must be implying that you know of a better way.\u00a0\u00a0 So do it yourself. \u00a0\u00a0 Between your union, and Andy Sterns’, and Randi Weingarten’s, and Ron Gettlefinger’s and the rest of them, you could probably scrounge up capital on par with many of the supposedly non-lending Wall Street banks, so it seems like a huge opportunity has been laid at your feet.\u00a0\u00a0 President Obama would probably go for it.\u00a0\u00a0\u00a0 Stealing the Wall Street bank’s customers would be the sweetest revenge, would it not?<\/p>\n

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Perhaps you also caught CNBC’s Erin Burnett and Mark Haines interviewing AFL-CIO President Richard Trumka last Thursday morning in front of the New York Stock Exchange, prior to a labor union rally near Wall Street later in the day.\u00a0 Talk about shock and awe! Shock at the blatant hypocrisy.\u00a0\u00a0 Awe at the depth and breadth […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11,7],"tags":[],"_links":{"self":[{"href":"http:\/\/civilsocietytrust.org\/blog\/wp-json\/wp\/v2\/posts\/719"}],"collection":[{"href":"http:\/\/civilsocietytrust.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/civilsocietytrust.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/civilsocietytrust.org\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/civilsocietytrust.org\/blog\/wp-json\/wp\/v2\/comments?post=719"}],"version-history":[{"count":24,"href":"http:\/\/civilsocietytrust.org\/blog\/wp-json\/wp\/v2\/posts\/719\/revisions"}],"predecessor-version":[{"id":890,"href":"http:\/\/civilsocietytrust.org\/blog\/wp-json\/wp\/v2\/posts\/719\/revisions\/890"}],"wp:attachment":[{"href":"http:\/\/civilsocietytrust.org\/blog\/wp-json\/wp\/v2\/media?parent=719"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/civilsocietytrust.org\/blog\/wp-json\/wp\/v2\/categories?post=719"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/civilsocietytrust.org\/blog\/wp-json\/wp\/v2\/tags?post=719"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}