When it was announced that the giant insurance company AIG had rewarded its executives with more than $170 million in bonuses at the end of 2008, people took to the streets to demonstrate.
The public outrage was predicated on the fact that AIG had received $170 billion in taxpayers’ money from the so-called Troubled Assets Recovery Program. As it turns out, the AIG bonuses were just the tip of the biggest scandal in contemporary times. Last week, New York State Attorney General Andrew Cuomo disclosed the bonuses that were awarded to executives in other banks that had been bailed out by the TARP.
The only reason Citibank exists today is that it received $45 billion from the TARP. Cuomo’s report reveals that Citibank paid $5.33 billion in bonuses in the same period to its executives. Bank of America also received $45 billion from taxpayers through the TARP, and it paid its executives $3.3 billion in bonuses.
Seven hundred thirty-eight Citibank bankers received more than $1 million each in bonuses paid for by working people’s taxes. More than 5,000 bankers each received at least $1 million or more in bonuses at the same time that their institutions were receiving unprecedented bail-out funding from the government.
Now the country’s biggest banks, which are still receiving massive amounts of government welfare in order to survive, will ask on Aug. 13 for permission from the Obama administration to pay out the next round of massive bonuses for their executives. These banks include Citigroup and Bank of America, among others.
The bankers blew up the economy. It was the unprecedented price gouging, speculation, predatory lending and profit-taking—and outright thievery—by the capitalist banks that were the catalyst to an economic crisis that has left more than 20 million people in the United States without jobs or so severely underemployed that they are on the verge of losing everything.
The cascading impact of the economic crisis has been a catastrophe for millions of families, and it will be felt for years to come. From California to Texas to New York State, local and state governments, having lost huge sums in revenues, are shuttering day care centers, slashing vitally needed social programs, laying off tens of thousands of workers and reducing health care payments for the elderly as they enter an imposed austerity mode.
The Wall Street Journal reports that Citibank paid the head of its energy-trading department nearly $99 million for his “work” in 2008. He may receive $100 million in 2009 if the Obama administration grants Citibank’s request to begin another round of bonus payouts.
Who rules in a capitalist democracy?
Modern-day capitalism in the United States permits working people to vote every two or four years for a narrowly selected group of politicians who are acceptable to the bankers and corporate moguls. The form of government is democratic and republican.
In its essence, however, it is a dictatorship of a narrow class of super-rich property owners. Through their control and ownership of the banks, they exercise a dominating influence over the government regardless of which group of politicians happens to hold office in any given moment.
The government’s providing a massive subsidy to the bankers is labeled “socialism” by right-wing demagogues like Rush Limbaugh. Like the fascists in Nazi Germany, contemporary right wingers agitate against the banks and the Obama administration in order to curry favor and support from sectors of society being pauperized by the capitalist economic crisis.
But the bankers are not simply a bad category of “greedy” capitalists. They are the core force in modern capitalism. The stage of competitive capitalism, so-called “free market capitalism,” belongs to a past era. It has been swept away by “monopoly capitalism,” represented especially by the fusion of the state and the largest monopoly banks.
The first act of a genuinely socialist government would be to confiscate the banks and the wealth of the bankers. Those vast resources would immediately be used to benefit and support the working people. The banks are already completely centralized. A handful of giant monopolies or semi-monopolies dominate modern-day banking and credit. Confiscating and nationalizing the banks is now a relatively simple measure.
Simple, that is, following a revolutionary overturn. No task is more urgent than to begin the political preparation so that the vast majority of people in this country, more than 150 million workers and their families, realize that the revolutionary overturn of capitalism is the only mechanism that will guarantee the right of society to full employment, free education, free universal health care and an end to poverty and homelessness.
