CEO Council demands cuts to poor and elderly, while reaping billions in government contracts and tax breaks. During the past few days, CEOs belonging to what the campaign calls its CEO Fiscal Leadership Council – most visibly, Goldman Sachs’ Lloyd Blankfein and Honeywell’s David Cote – have barnstormed the media, making the case that the only way to cut the deficit is to severely scale back social safety-net programs – Medicare, Medicaid, and Social Security – which would disproportionately impact the poor and the elderly. As part of their push, they are advocating a “territorial tax system” that would exempt their companies’ foreign profits from taxation, netting them about $134 billion in tax savings.
Yet the CEOs are not offering to forgo federal money or pay a higher tax rate, on their personal income or corporate profits. Instead, council recommendations include cutting “entitlement” programs, as well as what they call “low-priority spending.” Many of the companies recommending austerity would be out of business without the heavy federal support they get, including Goldman Sachs and JPMorgan Chase, which both received billions in direct bailout cash, plus billions more indirectly through AIG and other companies taxpayers rescued. Just three of the companies – GE, Boeing and Honeywell – were handed nearly $28 billion last year in federal contracts alone.
Blankfein said Social Security “wasn’t devised to be a system that supported you for a 30 year retirement after a 25 year career.” Who are these people that only have 25 year careers? The key to cutting Social Security, he said, was simply a matter of teaching people to expect less. Really? Blankfein and Goldman Sachs don’t have to worry about lowering expectations. After receiving a $10 billion federal bailout in 2008, and paying it back a few years later, Goldman Sachs recently exceeded Wall Street analysts’ expectations by announcing $8.4 billion in third quarter revenues for 2012. On the heels of a great year, Blankfein is expected to take home an even larger salary than he did in 2011, when he made $16.1 million.
We can see from the market’s recent “risk on” trade, it looks like the fix is in. The 1%ers will reluctantly pay a tiny bit more, while we gut the middle class for trillions. The markets are popping up on this prospect, but longer term it will just continue the economic malaise we are in. Do you really believe this will create jobs and a vibrant economy? Of course not. Obama will get the blame, setting up the Republicans for the 2014 and 2016 elections. When will the people finally rise up and demand real change?
I am reminded by a video clip from the late George Carlin, an American comedian, on “The American Dream” (click here for the now not so funny video), he predicted years ago – that they were going to come for your social security. It was supposed to be a joke – he also predicted that they will get it – its no joke is it? The American dream, you have to be asleep to believe it.
Daily Market View: (click here for the video)