by Pam Martens and Russ Martens, Wall St On Parade:
Yesterday, billionaire Larry Fink, Chairman and CEO of the giant investment manager BlackRock, released his annual letter to shareholders. In it, Fink revives the same ole trope that billionaires Kenneth Langone and Stanley Druckenmiller were taking on a road show in 2013. Back then the billionaire propaganda was called: “Generational Theft: How Entitlement Spending is Stealing Opportunity from America’s Youth.”
Every time there is talk of raising taxes on the super-rich, some of whom pay less in taxes than plumbers and teachers through a tricked-up tax dodge known as “carried interest,” the billionaires launch a concerted effort to scapegoat struggling seniors living on an average monthly Social Security retirement benefit of $1772.51.
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The inability of younger Americans to save enough for retirement couldn’t possibly have anything to do with Wall Street gobbling up two-thirds of lifetime retirement savings in fees, as Frontline documented back in 2013. The late John Bogle explained in the program that if a person works for 50 years and receives the typical long-term return of 7 percent on their 401(k) plan and Wall Street’s fees are 2 percent, almost two-thirds of their retirement account will go to Wall Street. Wall Street On Parade checked the math and documented it for our readers.
The dramatic wealth and income inequality in the United States and the inability of young people to save enough to buy a home or build an adequate retirement account couldn’t possibly be because the “top 1% of American earners now control more wealth than the nation’s entire middle class,” according to federal data.
We’ll take a hard look at what Fink is spewing out as retirement savings advice in a moment, but first a hard look at this man’s adoption of crony capitalism as a business model.
In 2020 and 2021, as the Federal Reserve fashioned unprecedented bailout programs for Wall Street to address the economic downturn from the COVID-19 pandemic, Fink was engaging in numerous phone calls with Fed Chair Jerome Powell. That information comes from Powell’s publicly-released daily calendars.
On March 1, 2021, there was a bizarre hour-long virtual meeting between Fink and the Board of Governors of the Federal Reserve and Fed staff.
At the time of that strange virtual meeting, BlackRock was managing upwards of $11.6 million of Powell’s personal wealth in its iShares Exchange Traded Funds (ETFs) according to Powell’s financial disclosure form; BlackRock had received multiple no-bid contracts from the Fed to manage bailout programs during the pandemic; BlackRock had been allowed to buy up its own iShares ETFs to prop up their share prices under one of the Fed’s bailout programs; and it had a contract to manage hundreds of billions of dollars for more than five million federal government employees in their retirement plan, known as the Thrift Savings Plan (TSP).
And the Fed was not the only central bank receiving direction from BlackRock during the pandemic bailouts. (See our report: BlackRock Authored the Bailout Plan Before There Was a Crisis – Now It’s Been Hired by three Central Banks to Implement the Plan.)
And this was not the first time BlackRock had been tapped by the Fed to oversee unprecedented bailouts on Wall Street. During the Wall Street financial crisis of 2007 to 2010, the Federal Reserve gave BlackRock no-bid contracts to manage the toxic assets held in three programs known as Maiden Lane, Maiden Lane II and Maiden Lane III. These were Special Purpose Vehicles (SPVs) set up by the New York Fed. (See These Are the Banks that Own the New York Fed and Its Money Button.)
Maiden Lane purchased $30 billion of toxic assets from Bear Stearns as an inducement by the New York Fed to get JPMorgan to purchase the good parts of Bear Stearns. Maiden Lane II purchased mortgage-backed securities from the giant insurer, AIG, as part of a program to bail out its securities lending to Wall Street banks. Maiden Lane III purchased collateralized debt obligations (CDOs) on which AIG Financial Products had written credit default swaps that it couldn’t make good on to the Wall Street and foreign global banks to whom it owed the money. (Thus, the AIG bailout was actually a bailout of mega banks.)
BlackRock was also one of the investment managers for the Fed’s mortgage backed securities purchase program during the 2007-2010 financial crisis. It also advised the Fed on the $300 billion pool of assets of Citigroup that the Fed ring-fenced and guaranteed. Additionally, the Federal government turned to BlackRock to evaluate the toxic assets of Fannie Mae and Freddie Mac after the government seized the entities in 2008 to prevent their collapse.
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