"Trump’s massive tax cut for his fellow billionaires"

 

Something truly awful may be happening to our economy — at least for average Americans — as the result of Trump’s billions in tax breaks for billionaires, looting of our treasury and economy, $38 trillion national debt, and his corrupt embrace and promotion of foreign autocracies and digital currencies. If it happens, it’s going to hurt many of us, all while making Trump’s billionaire buddies massively richer.

I remember the look on Treasury Secretary Hank Paulson’s face when the economy crashed in 2008. The former Goldman Sachs CEO’s hands trembled as he stood at a podium and confessed that the GOP’s banking deregulation had blown up the American financial system and very nearly the global economy.

Millions of Americans lost their homes, their jobs, and their retirements that year, but the barons of Wall Street lost nothing — except a brief moment of embarrassment — and then paid themselves tens of billions in bonuses.

About $430 billion was initially shoveled out the federal door and into the banks in just one month. And, tragically, both Bush and Obama decided that not one top donor executive should go to prison, and not even one major bank was broken up. We coughed up $430 billion to make them whole. And now, it appears, the banksters are at it again.

According to a new report from Lever News, over the past few months the Federal Reserve has quietly extended more than $420 billion in emergency support to Wall Street’s biggest banks in near silence, with minimal scrutiny, and no serious conditions attached. This isn’t an accident: it’s the predictable end point of a system that punishes working people for falling behind and rewards billionaires for their political connections.

As headlines today warn of layoffs spreading through U.S. manufacturing (100,000 job losses since Trump took office) and the Federal Reserve is quietly extending hundreds of billions of dollars in emergency support to Wall Street, it’s worth remembering a sobering but basic rule of history: when economies break, the rich make out like bandits. That’s because recessions are basically shopping sprees for people like Trump and the 13 billionaires in his cabinet.

When Wall Street banks crashed the American economy in 2008, home prices (and, thus, homeowner equity) collapsed by 21%. Over 10 million Americans lost their homes to banking predators like “Foreclosure King” Steve Mnuchin, and tens of millions of others were underwater. The stock market plummeted by over 50% in the last year of Bush’s presidency. On October 9, 2007 the Dow was at its all-time peak of 14,164 but by March 5, 2009, it had collapsed to 6,594.

While millions of Americans lost their jobs and were wiped out as the Bush Crash started today’s homelessness crises, the top 1 percent saw it as one of the finest buying opportunities of the new century. Working-class people were desperately unloading stocks in their 401Ks at a loss just to pay the bills, as wages plummeted in the face of a loose labor market. But the morbidly rich were doing great.

Between 2009 — the bottom of the Bush Crash — and 2012 when the recovery finally began under Obama, the top 1 percent of Americans saw their income grow by over 31 percent. Fully 95 percent of all the income increases in the country were seized by the top 1 percent of Americans during that period.

As the economy recovered, rich people who’d used their increased income to buy stocks at the market bottom rode the S&P 500 up by 462 percent to 2020. A billion dollars invested in 2009 became $4.62 billion in just 11 years, a period during which the combined wealth of American billionaires went up by over 80 percent.

Then they did it again 10 years later! The Trump/Covid Crash of 2020, “mismanaged” in a way to create maximum pain for working people, presented America’s morbidly rich with another brand new and huge opportunity to get richer on top of a crisis brutalizing the rest of America. The market collapsed under Republicans and Trump, and working people, now out of work, were again selling their stocks at a loss just to pay the mortgage and buy food. But for the wealthy, it was a gift from God.

March 16, 2020 — just after Trump declared a pandemic and lockdown — the Dow sustained the largest single-day crash in its entire history. For the investor class, Trump and his billionaire buddies, this was an even better opportunity than the Bush crash of 2008! Fewer than three months later, on June 4th, we learned that the seven richest people in America had seen their fortunes increase by fully 50 percent.

And with Trump’s massive tax cut for his fellow billionaires, they could keep most all of it: by that time the average American billionaire was paying less than 3 percent in income taxes (a situation that persists to this day). Just during that one single terrible pandemic year of 2020, the Institute for Policy Studies documents, U.S. billionaires saw their net worth surge 62 percent by $1.8 trillion. Average billionaire wealth worldwide increased 27% in that one year alone.

American billionaires’ real taxes have fallen by 79 percent since Reagan’s election in 1980, and a 2012 analysis found that as much as $32 trillion is safely squirreled away in tax-fraud offshore shelters, about the same amount as their tax avoidance has left us as a national debt. Which is why average Americans should stop pretending that downturns are random acts of God. They’re predictable outcomes of Republican policy choices that get repeated over and over again — ten of the last eleven recessions happened when a Republican was president — and this one is being engineered in plain sight.

Deregulation weakens guardrails. Trade chaos disrupts production. Inequality hollows out demand. And when the system finally buckles, the losses to average working-class people mean huge profits for the morbidly rich. So no, this warning isn’t fringe: it’s historical and empirical. And it’s being quietly confirmed by the behavior of the people like Warren Buffett — now sitting on $314 billion in cash — who know the markets best and are waiting for the crash to cash in.

So, get ready. Reduce your debt as much as possible, nail down your employment and assets, prepare your garden, and get ready to live simply as Trump crashes our economy again just like he did in 2020, and then tries to use that as an excuse to consolidate his power while he and his billionaire buddies again make off like the bandits they are.

Louise’s Daily Song: “They’re Looting the Economy Again”

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