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Post details: The Unsung 47%

The Unsung 47%

Reams of paper have been sacrificed at the altar of partisanship since Mitt Romney's infamous 47% comments burst onto the tense pre-election scene. So many in fact that I suspect that 47 is the most famous percentage today, easily bumping yesteryear's 1% of the Occupy Wall Street fame.

Romney labeled almost half of the population as government free loaders who exercise very little personal responsibility over their lives. Rather predictably, implications that much of Obama's constituency belongs in this category and lives off government largesse created a brisk firestorm in the political blogosphere. Some have shredded the allegations to pieces, some extolled them as self evident, and some defended them with elaborate statistics, whose bottom line correlated remarkably well with their position on the political spectrum. Opulent partisan cliches were flying left and right. No pun intended.

What puzzles me a bit though is that in the cacophony of reactions I never really found a piece of analysis which would state the obvious. There is another slice of the population that would be left stranded on an island of their own greed without the government support. These unsung moochers somehow fell through the cracks of Romney's presentation, although their dependence on public funds is just as notorious. Except they do not use it for subsistence, like those who found themselves on the wrong side of automation and globalization, but rather for protection and multiplication of their ill-gotten gains.

This group of non traditional cadgers is the Wall Street. It may sound mildly surprising until you start asking yourself some fairly simple questions: Where is their wealth coming from? Would they thrive or even survive on their own? Do they use public finances for their own benefit? And I am not just talking about the unprecedented bailout we gave them in their hour of need. Nor am I alluding to tons of toxic debt they managed to offload onto public balance sheets via the central bank or the government sponsored enterprises such as Freddie Mac and Fannie Mae. This group is continuously being subsidized by our zero interest rate policy, whereby they get free money from the Fed and then use it to buy the Treasuries, pocketing the spread (basically risk free money at the expense of taxpayers). And fractional reserve banking, which they implemented to magnify their profits, is not without sin either. They essentially conjure up money that should belong to all of us, and then use it for their own benefit.

I would really love to see a parallel Universe where the Wall Street would be left on their own to swim through the rapids of the free market economy without a dime of our support. I think they would emerge from this thought experiment soaking and limp.

Perhaps Mitt Romney could organize a follow up lunch and slightly expand his definition of government moochers so that it also covered institutions that are regularly receiving taxpayer funded corporate welfare.


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