{"id":276420,"date":"2010-02-04T11:35:04","date_gmt":"2010-02-04T16:35:04","guid":{"rendered":"http:\/\/firedoglake.com\/?p=65065"},"modified":"2010-02-04T11:35:04","modified_gmt":"2010-02-04T16:35:04","slug":"the-lords-of-finance-don%e2%80%99t-allocate-capital-in-the-national-interest","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/276420","title":{"rendered":"The Lords of Finance Don\u2019t Allocate Capital in the National Interest"},"content":{"rendered":"

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One of the many untruths mouthed by all of the Lords of Finance is that financial markets allocate capital to its best use, and that any interference by the government is always disastrous. Here\u2019s an example from Goldman Sachs CEO, Lloyd Blankfein, from the London Times<\/a>:<\/p>\n

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“We\u2019re very important,” he says, abandoning self-flagellation. “We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It\u2019s a virtuous cycle.” To drive home his point, he makes a remarkably bold claim. “We have a social purpose.”<\/p>\n<\/div>\n<\/blockquote>\n

The facts say otherwise. Most of Goldman Sachs revenue comes from trading securities. See Chart<\/a>. Very little of Goldman Sachs\u2019 revenue and profit comes from underwriting securities<\/a>, and what little there is comes from securitizations and debt offerings.<\/p>\n

There is little evidence in their financial statements that they raised any capital for wind or solar energy, high tech, or anything that might be an engine of growth for the nation. It is true that GS has invested a few million<\/a> here and there in clean energy businesses that they buy and sell. But the big picture is that for years, they and all of their Wall Street buddies poured money into the housing markets, betting every which way<\/a> on the outcome of the bubble.<\/p>\n

The U.S.-China Economic and Security Review Commission explained how the Chinese plan to dominate the clean technology industry. FDL covered<\/a> that report. Now the New York Times<\/a> offers its take on the subject. China is now the world\u2019s largest maker of wind turbines and solar panels. It is pushing those products into export markets, using the weak Yuan to choke off those industries in the US. According to the Commission, 95% of its solar panel manufacturing output is exported.<\/p>\n

China\u2019s domination of wind power turbines and solar panels is a story of government-driven allocation of capital. China has used all of its tools to force development of manufacturing and installation of clean energy machines. One such tool, according to the Commission, is to restrict access to rare earth minerals, used in manufacturing the magnets needed by wind turbines. Another tool is its tight control over its internal market. In Spring 2009, China sought proposals for 25 large contracts to manufacture wind turbines. Six multinational companies bid. All were disqualified. The NYT describes another tool: a renewable energy fee charged to all electricity users. That is used to reduce the cost difference between cheap coal and more expensive renewable energy.<\/span><\/p>\n

The Commission traveled to Upstate New York to look at the impact of China\u2019s aggressive behavior there.<\/p>\n

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The New York State government is trying to invest in the clean energy sector and other sunrise technologies and industries, but funding is fragmented and difficult to obtain, and small entrepreneurs and parts suppliers remain almost entirely dependent upon the individual decisions of larger producers and assemblers who outsource much of their operations overseas.<\/p>\n<\/div>\n<\/blockquote>\n

So, there isn\u2019t any money for these new industries, and small businesses are dependent on the giant conglomerates for whatever is left after the jobs of the future are sent to China.<\/p>\n

Where are the Lords of Wall Street now that their nation needs jobs in clean industries? Why they\u2019re \u201cmanufacturing\u201d credit default swaps, investing in their proprietary trading \u201cindustry\u201d, and selling their \u201cproducts\u201d to each other and their clients in a sterile frenzy.<\/p>\n

In the accompanying video, Sherrod Brown points out that Toledo, OH has the nation\u2019s largest solar manufacturing jobs base, but when Oberlin College built a large solar powered building, the solar panels came from Germany. We\u2019re behind, admits the President.<\/p>\n

And we\u2019ll stay there if we wait for Wall Street to do something.<\/p>\n

\"Share <\/a>\n<\/p>\n


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One of the many untruths mouthed by all of the Lords of Finance is that financial markets allocate capital to its best use, and that any interference by the government is always disastrous. Here\u2019s an example from Goldman Sachs CEO, Lloyd Blankfein, from the London Times: “We\u2019re very important,” he says, abandoning self-flagellation. “We help […]<\/p>\n","protected":false},"author":4416,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-276420","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/276420","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4416"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=276420"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/276420\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=276420"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=276420"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=276420"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}