February 14, 2012
Why are the Greek people forced to take big wage cuts, lose pensions, etc., as well as forced to privatize -- sell off their public holdings into the hands of wealthy 1%ers who will then rent the services back to them for a profit?
They are forced to do this to bail out banks. These banks made loans and charged fees and high interest rates according to their own evaluations of the risk of making those loans. They understood when they made the loans that people in Greece had pensions, etc. But now that the banks crashed the economy of the world, it is the fault of the lazy people of Greece for having pensions and living high on the hog, and they have to suffer so that the banks can get all their money.
Once again, banks made loans based on valuations of risk and charged fees meant to cover losses of potential defaults. They made loans to lots of people, expecting a certain default rate, and charged money according to that risk. But now that the risk is realized, they are not happy just making what they charged (which as based on the risks they understood), and want the people of Greece to cut jobs, wages, pensions, to make sure the banks are paid.
Now, watch this carefully, especially starting at 3:50. This is about Ireland, but it may as well be Greece, or here. From What Wolf and You Can Learn from the Irish Press for the GOP Debate,
"Now, why are the Irish people required to pay billions to unguaranteed bondholders under threat to the ECB." "You people are intervening in this society causing huge damage, by requiring us to make payments, not for the benefit of anybody in Ireland, but for the benefit of European financial institutions. Now could you explain why the Irish people are inflicted with this burden."
Also - and this is very important, note the difference between this journalist, and what we have here in the US. This journalist is willing to press the real question and is not kowtowing to the big corporate 1%er spokesman. You won't see that on the American corporate media, not ever, if the reporter wants to keep his or her job.
August 9, 2011
Just ten years ago this country was running huge surpluses and paying off its debt. But then we elected Obama and all hell broke loose. Oh, wait...
Between the time ten years ago when we had big surpluses and were paying off the debt and now when we are told the "Obama spending and deficit" mean we have to cut back on the things We, the People do for each other, something happened. Something changed. The things that happened, the things that changed, are being ignored in the current DC discussion about what we need to do to fix things.
Separation From Reality
This DC/Tea Party argument over deficits and the Reagan/Bush debt is completely separated from facts and history. And it is completely separated from what the public wants. There are things that we are supposed to just not remember and which seem to be taboo in the national media. There are things that are "off the table" for discussion, and certainly for solving our problems.
But here is some reality anyway, even if we're not supposed to see it. Just ten years ago we were paying off debt at a rate that would have completely paid it all off by now. But under George W. Bush we cut taxes for the rich and more than doubled military spending. We deregulated and stopped enforcing laws. We let the big corporations run rampant. Our federal budget turned from huge surpluses to massive deficits, and Bush said it was "incredibly positive news" because it would lead to a debt crisis they could use to shock people into letting the corporate right privatize and thereby profit.
And then, under and because of Bush, our economy collapsed.
Deficits From Tax Cuts And Military Spending
Once again: the deficits are the direct result of tax cuts for the rich, and huge increases in military spending. Then that huge jump in already-large deficits up past the trillion-dollar level that occurred in Bush's last budget was the result of the Bush-caused financial collapse. The economy collapsed and the government stepped in with hundreds of billions, even trillions, to rescue the wealthy, with "bailouts," while doing little, even cutting back, on what our government does for We, the People. That all happened in Bush's last budget year, not Obama's first.
To Fix The Damage, Undo The Cause
The way to fix deficits is to undo the damage Bush did, by raising taxes on the rich, and cutting back the huge, bloated, extreme, massive, astonishing, incredible, stratospheric military budget. And we have to boost the economy by investing in rebuilding our infrastructure to get people employed. We have millions of jobs that need doing, while millions are looking for jobs. Then those people will be paying taxes instead of collecting unemployment and food stamps. And the infrastructure improvements will bosst our economy's competitiveness. This is all so simple and obvious that only DC insider types could miss it.
Taxes And Spending = Democracy
Cutting spending doesn't cut the need, it shifts the burden. Cutting government spending does not cut the costs to society and the overall economy of meeting those needs. Cutting government spending just shifts -- or privatizes -- those costs onto the backs of people who can't afford to spend that money. That need and cost is still there in the economy, except without government -- democracy -- handling it, doing it for all of us, less expensively. Cutting government's role opens those functions up to private profit, instead of We, the People taking care of and watching out for each other -- and making the decisions.
Do you really think that if you phase out Medicare, that old people won't still need the medical care? Of course they will still need it, but the government won't be negotiating cost-savings for them, they'll be on their own, up against the giant insurance monopolies.
In the 1950s the top tax rate was 90%, and the country's economy worked a lot better for a lot more of us. We didn't have big deficits. We certainly weren't piling up huge debt. With high tax rates at the top, predatory, sell-the-farm business models didn't make sense. We were investing in infrastructure, and that infrastructure made us competitive in world markets. We as a people were doing better every year, paying our bills, getting educated and becoming more civilized. This empowerment led to demands for equal rights for all of us.
Ignored By Media
The "both sides do it" major media is simply ignoring the majority of the public. But people aren't fooled. Poll after poll (did I already say that?) shows that the public "gets it." Poll after poll shows that the public wants our government to address jobs, not deficits, to restore top tax rates, to invest in America's infrastructure, to leave Social Security and Medicare alone (or increase them,) and to put more money into education. Poll after poll.
The Public Wants Jobs
The public gets it. Poll after poll shows that Americans want their government focused on jobs, not deficits. The latest, from CNN, taken August 5-7, shows 49% of Americans think unemployment is the biggest issue facing the country, while only 27% say deficits. Only 16% say the deficit is the country's biggest problem.
Rebuild The Dream
The The American Dream Movement is rolling out their Contract for the American Dream. The Tea-Party-fascinated press is largely ignoring this, but this movement represents the majority of the public, and can't be ignored for long. I'll be writing more about it later.
Also the Take Back the American Dream conference is coming up on Oct. 3. Click through and learn more.
November 3, 2010
Today begins the days of John Boehner, aka the Orange Man. Listen, you can hear his horse approaching. Oh my, it's like a new Marlboro commercial. Guess he and Obama can grab a smoke together outside the Oval Office. Yikes! That's a real Hallmark moment.
Early this morning, Progressive blogger, Dave Johnson extolled the virtues of the Progressive bloggers that "were right," and he and they were correct. "It was about the jobs, jobs, and jobs." But let's be blunt -- there are no jobs; there is no money being loaned; employment is rampant; the banks are paying a whopping 1% interest on savings; and now there is NO hope and the inmates have taken the keys!
Yeah, we know that a loss was anticipated in an incumbent year, but not one that lost hope. Sadly, the American people either stayed home, or voted for the lunatics that were responsible for the situation. Obama and all those Democratic spin masters blew it big time. They allowed the Tea Party -- fueled by Frank Luntz's rhetoric-- to harness this rage and win the day. How the heck did that happen? Now, the every person in this country has just had a profound temper tantrum, and the collateral damage is huge.
Please note that a version of this article was published earlier today in the Huffington Post.
October 10, 2010
The 911 of the Middle Class is the consumer credit debacle. It is the gift that keeps on giving. The reality is that the housing crisis is just one piece of this really big, ugly mess. It seems to me that our President MUST call for immediate reform and take action through executive order. Call me politically naïve, but we need action. Unemployment continues to hover close to 10%, and higher in badly hit areas. Interest paid by the banks on savings ranges from less than 1% to maybe 2.5% on a good day. The consumer credit card companies, though regulated now sort of, ran naked through the streets jacking up everyone's interest rates to over 15 to 30%. Yes they have to notify the poor, irresponsible slobs now before they do things, but the banks still get to burn kerosene in the town square with no permits. And we haven't even gotten to the health insurance yahoos that have four more years for their trickery. Oh Nelly, bar the door! It's the Wild West again as the cattle are corralled - only this time it's the American people being herded to ruin by the giddy-up bankers and health insurance companies, not just the mortgage guys.
People are getting sick from worry. Their backs hurt, their necks are out, and they are grinding their pearly whites. Few sleep well at night. Pharmaceutical sales are up. The banks we saved are savaging us. They are bulldozing the Middle Class under mountains of debt. People are losing their homes, divorces are up, businesses are closing, and unemployment is rampant. The consumer credit world and their FICO scores are broken. They are based on a world that no longer exists. In two short years, many consumers have watched their scores collapse under an avalanche of debt. The FICO scores were calibrated for a different time when consumer credit cards were not the only source of money available, mortgages were not under water, and unemployment was not soaring. If we are ever to unwind this situation, these algorithms must be reset. Otherwise the banks will never lend again. The Middle Class needs a do-over, just like the banks got.
Yes sir, Obama stood up against the broad sweeping foreclosure legislation, and Bank of America seized the moment halting foreclosures nationwide. But we're all holding our breath waiting for the other shoe to fall as even Progressive strategist Mike Lux gens up the netroots to re-engage with the President and Congress. It is inconceivable that people have not taken to streets in protest over their lost pensions, and the absence of any kind of interest bearing bank account -- except on consumer credit cards. In fact, this week Robert Sheer wrote brilliantly about Obama's "No Banker Left Behind" -- while every normal person has been thrown under the bank bus. How did we allow the bail-out of every financial institution, while abandoning the common folk? Why are Democrats -- whether conservative, moderate or netroots - not able to channel this collective anger, rage and disappointment other than to take aim at one another? Given the data, there is no way out for the once resilient Middle Class without a do-over. Instead of "No Banker Left Behind" let us heal the Middle Class by fixing the credit industry; restricting the health care industry now, not in four years; and making those banks lend the money we gave them and not hide behind FICO scores. All of the Democrats are writing, but no one is demanding change now. The Tea Party has successfully harnessed the anger and rage, but has no plan. Frankly, they are just another distraction taking our attention away from the gravity of the problems.
Mr. President, come back to us as Mike Lux laments. We need you. We, in the Middle Class, are living this nightmare everyday of our lives. Figure it out, and get the Middle Class out from under. The numbers do not lie. This is our emergency, our call to action, our 911. Friends and neighbors are collapsing from the stress when they can ill afford it. Unemployment is not going away. Consumer debt is skyrocketing. Mr. Obama, Americans are not being frivolous and irresponsible as Dr. Summers would like you to believe. They are boxed in with no escape hatch. Consider enacting a nationwide job core like the WPA, putting the banks on real notice, corralling those nasty health insurance folks, redoing the credit industry, and loosening up cash. No one is sleeping at night. People are nervous and cannot see a future.
Please, inspire us again, show emotion, get messy, and let the wrinkles show. Mr. President raise your voice in outrage. Give us voice. Come back to us. The time is now.
This was originally published on the Huffington Post earlier today.
See the pearltree below for the references for this article.
June 29, 2010
The real deficit is jobs. That is one more of those things that everyone can see in front of their faces, but we're told it isn't what it is. There aren't enough jobs, and we're being told this is our fault because we wanted pensions and good wages and vacations and respect and dignity and please, sir, just a little slice of the pie.
In case you haven't noticed, the world's economy is suddenly undergoing a classic "Shock Doctrine"-style, coordinated propaganda attack. The wealthy and powerful, having insisted that countries cut their taxes and run up debt, now insist that the middle class and poor must work harder, have their pensions reduced, sell off (to them) their publicly-held resources, and take other "austerity" steps to pay off the debt that these lazy, parasitic peasants dared to run up.
The excuse is that "the markets" will “lose confidence” in us. Apparently we aren't working the salt mines hard enough. "The markets" -- that's the crowd who got in trouble and insisted that the world would end unless we immediately handed over to them all the rest of the money in the world -- will "lose confidence" in our ability to work the mines hard enough, and will cut us off, unless we cut our pensions, sell off (to them) our resources, and promise never to be lazy and make demands for better wages, pensions, workplace safety, and do it now.
The real deficit is jobs.
History teaches that the way out of an economic slowdown is to invest in infrastructure, education and modernizing manufacturing.
Slactivist said it best the other day,
This calls to mind an old story:But knowing their hypocrisy, he said unto them, "Why are you putting me to the test? Bring me a dime and let me see it."
And they brought one. Then he said to them, "Whose head is this -- FDR's or Herbert Hoover's?"
They answered, "Roosevelt's."
And he said unto them, "Right. So shut up. Have you morons already forgotten the 20th Century? When the choice is between imitating what worked and what really, really didn't work, why are you pretending it's terribly complicated?"
And after that, no one dared to ask him any question.
I'm not an economist, but we've got five applicants for every single job opening. If you tell me that the best response to that situation is to lay off hundreds of thousands of teachers, I will not accept that this means that you're smarter and more expert than I am. I will instead conclude -- regardless of your prestige or position or years of study -- that you're a moral imbecile.
According to the Labor Department,
By the end of 2009, the jobless rate stood at 10.0 percent and the number of unemployed persons at 15.3 million. Among the unemployed, 4 in 10 (6.1 million) had been jobless for 27 weeks or more, by far the highest proportion of long-term unemployment on record, with data back to 1948.
That's right, it was the policies of austerity that created a depression, and the policies of job-creation, infrastructure investment and taxing the wealthy to pay for it that got us out. But that was back when We, the People were still in charge.
In other news:
The rich grew richer last year, even as the world endured the worst recession in decades.
Top 1 Percent of Americans Reaped Two-Thirds of Income Gains in Last Economic Expansion, Income Concentration in 2007 Was at Highest Level Since 1928, New Analysis Shows,
Two-thirds of the nation’s total income gains from 2002 to 2007 flowed to the top 1 percent of U.S. households, and that top 1 percent held a larger share of income in 2007 than at any time since 1928, according to an analysis of newly released IRS data by economists Thomas Piketty and Emmanuel Saez.
During those years, the Piketty-Saez data also show, the inflation-adjusted income of the top 1 percent of households grew more than ten times faster than the income of the bottom 90 percent of households.
According to his analysis, the top 1% held 34.6% of all national wealth in 2007. By Dec. 31, 2009, they held 35.6%.
Meanwhile, share of national wealth held by the bottom 90% fell to 25% from 27%.
In 2003 the top 1 percent of households owned 57.5 percent of corporate wealth, up from 53.4 percent the year before, according to a Congressional Budget Office analysis of the latest income tax data.
. . . For every group below the top 1 percent, shares of corporate wealth have declined since 1991.
. . . Long-term capital gains were taxed at 28 percent until 1997, and at 20 percent until 2003, when rates were cut to 15 percent. The top rate on dividends was cut to 15 percent from 35 percent that year.
See if you can make the connection. They want us to cut back our pensions, cut our wages, sell off our resources and work harder, to pay back the money that was borrowed and handed to them.
April 23, 2010
Watch as the most corrupt "Too Big To Fail" bank CEOs play a spirited game of "Taxpayer Hold 'Em" ... Not with their money ... but with yours! And sign our petition to send the message to Congress that it is time to put an end to taxpayer bailouts once and for all by breaking up the big banks and putting an end to "Too Big to Fail."
April 21, 2010
A regulator from the S&L crisis - when almost 2,000 people went to jail -- talks about the difference between then and now. You MUST watch this!
April 1, 2010
I have been helping out a bit with their new project, which was announced today:
$4.6 TRILLION IN FEDERAL FUNDS DISBURSED
New Tally Focuses on Expansive Role of Federal Reserve
Today, the Real Economy Project of the Center for Media and Democracy (CMD) released an assessment of the total cost to taxpayers of the Wall Street bailout. CMD concludes that multiple federal agencies have disbursed $4.6 trillion dollars in supporting the financial sector since the meltdown in 2007-2008. Of that, $2 trillion is still outstanding.
CMD's assessment demonstrates that the Federal Reserve has provided by far the bulk of the funding for the bailout in the form of loans amounting to $3.8 trillion. Little information has been disclosed about what collateral taxpayers have received in return for these loans. CMD also concludes that the bailout is far from over as the government has active programs authorized to cost up to $2.9 trillion and still has $2 trillion in outstanding investments and loans.
Learn more about the 35 programs included in our tally by visiting our Total Wall Street Bailout Cost Table, which contains links to pages on each bailout program with details including the current balance sheet for each program.
"While the Treasury Department is patting itself on the back for recouping Troubled Asset Relief Program (TARP) funds and allegedly making money off of its aid to Citigroup, our accounting shows that these programs were a relatively small portion of the federal funds that have gone out the door in support of the financial sector. Far more has been done to aid Wall Street through the back door of the Federal Reserve than through the front door of Congressional appropriations," said Mary Bottari, Director of CMD's Real Economy Project.
"The tally shows that more scrutiny needs to be given by policymakers and the media to the role of the Federal Reserve especially as the Fed has accounted for the vast majority of the bailout funds, yet provides far less disclosure and is far less directly accountable than the Treasury," said Conor Kenny, the researcher who collected the data on the bailout.
CMD has presented its work in a table that shows: funds disbursed, maximum funds that were at-risk at the height of the bailout, and actual funds still outstanding for each program. CMD is also making available a Financial Crisis Tracker, a widget for the table that can be downloaded to websites to get up-to-date numbers on the financial crisis and the bailout. The Wall Street Bailout table will be updated monthly and will be a tremendous resource for reporters and the public alike.
WALL STREET BAILOUT COST TABLE can be accessed here.
KEY FINDINGS can be accessed here.
FINANCIAL CRISIS TRACKER can be accessed here.
March 9, 2010
Low interest rates are a tax on people who save money. And they are a subsidy for the big banks. They are just one more Wall Street bailout.
Holding interest rates as low as they are causes hardship for many. It makes savers look for higher returns. Retired people who were lucky enough to put money away can't afford to get by. It causes people to take risks like putting money in the stock market, where it can be lost. It makes people susceptible to scams.
But the consequences can be a lot worse than that. Read this: Public Pensions Are Adding Risk to Raise Returns
But states and other bodies of government are seeking higher returns for their pension funds, to make up for ground lost in the last couple of years and to pay all the benefits promised to present and future retirees. Higher returns come with more risk.
“In effect, they’re going to Las Vegas,” said Frederick E. Rowe, a Dallas investor and the former chairman of the Texas Pension Review Board, which oversees public plans in that state. “Double up to catch up.”
. . . Most have been assuming their investments will pay 8 percent a year on average, over the long term. This is based on an assumption that stocks will pay 9.5 percent on average, and bonds will pay about 5.75 percent, in roughly a 60-40 mix.
They assume 8%? Who is kidding who? Everybody knows this is not realistic, but they are allowed to keep the assumption on the books.
“Nobody wants to adjust the rate, because liabilities would explode,” said Trent May, chief investment officer of Wyoming’s state pension fund.
This is the same thing as allowing banks to not "mark to market" their mortgage portfolios. Everyone knows the banks are insolvent, but they are allowed to keep from writing down these toxic assets. Or the government buys them up from the ones with political influence...
Just HOW bad is the problem?
Colorado has been assuming its investments will earn 8.5 percent annually, on average, and on that basis it reported a $17.9 billion shortfall in its most recent annual report.
But the state also disclosed what would happen if it lowered its investment assumption just half a percentage point, to 8 percent. ... the plan’s shortfall would actually jump to $21.4 billion.
So they are reporting a $17.9 billion shortfall if the assumption is a fantasy 8.5% return. If they lower that to a still-fantasy 8% assumption they would have to report a $21.4 billion shortfall.
So just how bad would it be if they reported an honest assumption?
We are not out of the financial crisis until all of the accounts are honest and transparent.
February 10, 2010
In the Bloomberg story today, Obama Doesn’t ‘Begrudge’ Bonuses for Blankfein, Dimon, President Obama, spoke up about the huge Wall Street bonuses handed out this year,
“I know both those guys; they are very savvy businessmen,” Obama said in the interview yesterday in the Oval Office with Bloomberg BusinessWeek, which will appear on newsstands Friday. “I, like most of the American people, don’t begrudge people success or wealth. That is part of the free- market system.”
Free-market system? These huge bonuses are for the Wall Street robber-barons that caused the financial collapse, took taxpayer dollars to prop up their fortunes, and get free money from the Federal Reserve with which to "trade" -- speculate, gamble, call it what you want. Meanwhile they spend hundreds of millions of dollars "lobbying" (bribery) to fight any kind of financial reforms or consumer protections from enactment, and to make sure that no such think as a "free market" with honest competition never threatens their dominance of business and government.
So why is the President talking like this [note: see update below], at a time when so many Americans are out of work, losing their homes, and falling into poverty? Because he doesn't want to be perceived as "anti-business." From the story,
Obama sought to combat perceptions that his administration is anti-business and trumpeted the influence corporate leaders have had on his economic policies. He plans to reiterate that message when he speaks to the Business Roundtable, which represents the heads of many of the biggest U.S. companies, on Feb. 24 in Washington.
Meanwhile a Senate filibuster blocked the President's great nominee, Craig Becker, from serving on the National Labor Relations Board. So the Labor Board remains non-functional. The filibuster kept workers from being fairly represented, and the Board itself from having a tie-breaking vote so they can resolve labor disputes so the "free market" can function as it should, with workers able to bargain for better wages, benefits and working conditions.
These two stories this week present quite a contrast, and send mixed and demoralizing signals to the country. President Obama doesn't want to "appear" to be "anti-business." Meanwhile giant, monopolistic corporations and Wall Street are chewing up Main Street and keeping smaller businesses from competing, while their lobbyists keep the legislature from getting anything done at all.
Let's talk about this "anti-business" label and how it is used.
I wrote a post the other day titled, Tax Cuts HURT Small And Medium Businesses, championing small and medium businesses in their struggle to survive against the giant monopolistic corporations that are crushing them. Summary: struggling businesses don't pay taxes, so tax cuts only give more ammunition to the giants that are crushing them. In the comments at one of the places it was posted I was accused to being “anti-business.”
Apparently championing small and medium businesses - America's job-creating, innovative engine - is "anti-business." If you look around, being anything but a servant to Wall Street and the giant monopolistic corporations earns you the label, "anti-business."
The Power Of Words
This got me thinking about the ways this label, "anti-business," gets used. It is always used by corporate/conservative types, against anyone who questions the power of Wall Street and the giant monopolistic corporations that are strangling smaller businesses, workers and democracy.
The President nominates a great candidate for the Labor Board, then worries that he is perceived as "anti-business." Labels like "anti-business" are powerful accusations and come from very, very powerful people. (Like this or this.)
Last year, in the post Misuse Of The Words Protectionism And Trade Is Making Us Poorer I wrote,
Language has tremendous power. People like George Lakoff and Drew Westin, who study the use of language in political discussion, say that our choice of words has the power to actually affect the “wiring” or neuron circuits that our brains use to think.
The corporate marketers and political persuaders have certainly learned the power of language to influence us. It has even gotten to the point where “neuromarketing” uses MRI and EEG to study how our brains react to certain stimuli so they can be used to market and persuade.
In politics I think that we have even reached a point where we give words more power and importance even than the ideas the words represent. In the Bush years we learned that the persuaders believed they could “create their own reality.”
[. . .] words are used as weapons by professionals who wish to distract us from things that are in front of our own faces.
So how do we fight this? One way is to recognize our own power as citizens in a democracy. In America the people – Main Street – are supposed to be in charge of things, and the purpose of business and finance is supposed to be to serve our interests and needs, not the other way around. Why else would We, the People have set this system up, anyway? So we need to internalize this understanding, and believe in it. We are supposed to be in charge. We, the People are supposed to be telling businesses how they are supposed to operate, setting the rules and regulations, defining the playing field on which they operate. We need to have a sense that it is improper for businesses to be involved at all in the decision-making about the rules under which businesses operate. It must be this way because business interests will always, always try to tilt the rules against the free market and in their own favor, giving them advantages over other businesses.
This isn't about being "anti-business" at all, it is about being in favor of a level playing field, where the innovative small and medium companies have a fair chance to compete. It is the giant monopolistic corporations that are "anti-business."
Update - Greg Sargent looked at the transcript and has a more nuanced interpretation.
February 6, 2010
From Open Left
When you sell the farm, the farm's gone.
Is it already too late for America? I’m starting to think that the anti-tax, anti-government conservative movement that started in the mid-70s, elected Reagan and led to the terrible Bush Presidency may have effectively destroyed the country, leaving it bankrupt, corrupt,ungovernable, ruled by a wealthy elite -- and we're only now just starting to realize it. To cover tax cuts we stopped maintaining the infrastructure and started borrowing. To satisfy their hatred of government we increasingly stripped away rule of law, regulation, and belief in one-person-one-vote. We are seeing the consequences of all of that coming back to roost now.
Reagan left us with massive debt and ever-increasing interest payments. Bush left us with $1.3 trillion deficits and a destroyed economy that would force further increases in the borrowing for years - to be blamed on Obama. The "free marketers" gave away our manufacturing base that will take decades and massive capital investment to recover. Obama can try, but it may just be too late to do anything about the borrowing. We need massive investment in jobs and infrastructure, and a national economic/industrial plan. But, with their own Reagan/Bush debt as ammunition, conservative ideologues continue to block every effort at investment to get out of the mess we are in.
The conservatives destroyed the regulatory structure of the government. They removed the inspectors, administrators, regulators and replaced them with corrupt cronies.
The conservatives killed off, contracted out or sold off - "privatized" - so much of our in-common resources and heritage of public structures. Water systems, oil and mineral leases, government functions, elements of the military, etc.
The conservatives destroyed the rule of law, leaving behind public perception of rule by cronyism, favoritism and mob.
The conservatives destroyed public understanding of democracy, leaving behind a one-dollar-one-vote system that their Supreme Court just formalized, along with a corporate media that works to keep people uninformed. And to make matters worse, now the telecoms can argue before Federalist Society judges that their "speech rights" are violated by rules making them carry labor and progressive websites over the internet lines they control. And forget about the idea of them ever letting anti-corporate-rule candidates raise money on "their" internet.
I hate to reference Friedman but this from last week has been sticking in my mind. He says the world is looking at the mess in the US and is turning away from democracy as a result.
[Foreigners] look at America and see a president elected by a solid majority, coming into office riding a wave of optimism, controlling both the House and the Senate. Yet, a year later, he can’t win passage of his top legislative priority: health care.
“Our two-party political system is broken just when everything needs major repair, not minor repair,” said ... who is attending the forum. “I am talking about health care, infrastructure, education, energy. We are the ones who need a Marshall Plan now.”
Indeed, speaking of phrases I’ve never heard here before, another goes like this: “Is the ‘Beijing Consensus’ replacing the ‘Washington Consensus?’ ” Washington Consensus is a term coined after the cold war for the free-market, pro-trade and globalization policies promoted by America. ... developing countries everywhere are looking “for a recipe for faster growth and greater stability than that offered by the now tattered ‘Washington Consensus’ of open markets, floating currencies and free elections.” And as they do, “there is growing talk about a ‘Beijing Consensus.’ ”
The Beijing Consensus, ... is a “Confucian-Communist-Capitalist” hybrid under the umbrella of a one-party state, with a lot of government guidance, strictly controlled capital markets and an authoritarian decision-making process that is capable of making tough choices and long-term investments, without having to heed daily public polls.
It is too late to recover?
Accountability is a first step. If the current administration would hold the corrupt actors accountable, maybe we could begin to restore governance. And the public would know who to blame for what has happened to us, enabling them to support policies that will get us out of this. But so far they won't. If they won't even investigate torture and illegally invading a country why should we expect any accountability for the financial collapse, corrupt government contracts, bribery, embezzlement, corruption and other crimes of the Bush era?
More equitable distribution of the fruits of our economy is another step. Our system worked so much better back when the top tax rate was 90%. The returns from our investment in infrastructure were more widely shared. And back when it took many years to build a fortune businesses had an interdependence with their communities. Executives needed the schools and roads and other public structures functioning well. They needed long-range business and community planning. But just imagine trying to do something about the concentration of wealth today.
So where do we go from here. Is democracy over? Is rule of law a thing of the past? Is predatory monopoly control by the largest corporations the way things are and will be? Does the world now move to governance by a wealthy elite?
Or is the winter and the rain and the snow just getting to me?
What are your thoughts?
February 4, 2010
Last week, House Minority Leader John Boehner of Ohio made a pitch to Democratic contributor James Dimon, the chairman and chief executive of J.P. Morgan, over drinks at a Capitol Hill restaurant, according to people familiar with the matter.
Mr. Boehner told Mr. Dimon congressional Republicans had stood up to Mr. Obama's efforts to curb pay and impose new regulations.
In case it is lost on Tea Party readers, John Boehner, the REPUBLICAN leader, was the one bragging to Wall Street that REPUBLICANS have been blocking efforts to reign in the bonuses and consumer protections.
February 3, 2010
Tonite we watched the 2006 documentary movie MAXED OUT. This movie came out two years before the financial collapse and you see it coming every second as you watch people being scammed into taking on more and more debt, and the tricks that are played on them, the fees, the lies, the bush complicity, the lobbyists...
And now that the bank lobby is buying off Congress to keep the Consumer Financial Protection Agency from becoming law, please watch this movie to understand why it is so badly needed.
February 1, 2010
How long now since the financial crisis, and not one reform has passed? But they're giving themselves $150 billion in bonuses this year.
January 29, 2010
Guest Post by Mary Bottari.
The debate over banks and banking came front and center this week. In his toughest language yet, President Barack Obama vowed to veto financial reform legislation that is not tough enough on Wall Street. “The lobbyists are already trying to kill it,” Obama told Congress in his State of the Union address. “Well, we cannot let them win this fight. And if the bill that ends up on my desk does not meet the test of real reform, I will send it back."
The President’s rhetoric offers an important measure of progress. Now we can be assured that the political elite are paying attention to the poll numbers showing an unprecedented anger at the big banks and the Wall Street bailouts. Democrats are starting to figure out if they don’t take up this populist message and run with it in November, the Republicans will.
But the rest of the President’s speech and the other dramatic developments in the banking world this week indicate that Democratic actions are falling far short of their rhetoric, a pattern that voters are sure to notice.
First, the speech. Many had anticipated a big announcement on jobs. With jobless rates in the double digits and a projected 5-10 year haul to get employment back to normal levels, workers were hoping for something big and bold. Instead, Obama proposed $30 billion in TARP funds to get credit flowing to small businesses. $30 billion to put 16 million Americans back to work? $30 billion when the Wall Street bonus pool for a few thousand bankers was $140 billion this month? Democrats will live to regret this missed opportunity.
Also on Wednesday, U.S. Treasury Secretary Tim Geithner was called on the carpet once again by irate members of the House for his mishandling of the AIG bailout. To their credit, several Democrats asked the toughest questions. But Geithner bobbed and weaved and no knock-out punches were landed. This is a problem for the Democrats. The whole incident paints an ugly picture of the federal response to the financial meltdown, best described by Representative Edolphus Towns (D-NY): "The taxpayers were propping up the hollow shell of AIG by stuffing it with money and the rest of Wall Street came by and looted the corpse."
On Thursday, Federal Reserve Chairman Ben Bernanke was reconfirmed by the Senate for another four year term. His nomination had been in trouble and a record number of senators voted no, but Obama stood by his man and pushed him through. The problem with Bernanke is best summarized by economist Simon Johnson: “Bernanke is an airline pilot who pulled off a miraculous landing, but didn’t do his preflight checks and doesn’t show any sign of being more careful in the future – thank him if you want, but why would you fly with him again (or the airline that keeps him on)?” While Bernanke may have saved Wall Street, he has shown little interest in using his power as Fed Chairman to aggressively aid Main Street. He is not the man for the job in these tough economic times and that will soon be apparent to the detriment of the Democrats who secured his confirmation.
Ultimately, however, the most important developments of the week were played out behind closed doors in the Senate. Senate Banking Chairman, Chris Dodd, made the decision some time ago to try to devise a bipartisan financial reform package. His package of reforms was then handed over to four bipartisan working groups. With thousands of bank lobbyists swarming the hill, it is no surprise that these groups are busily making the Dodd bill worse.
The derivatives language is being weakened and bankruptcy is emerging as the preferred method of unwinding financial institutions, which could leave taxpayers to foot the bill for this expensive procedure. To truly end the "too big to fail" problem and crack down on the reckless behavior of the biggest banks, we need strong, specific preventative measures such as leverage limits, capital and margin requirements, limits on counterparty exposures, a ban on proprietary trading and limits on bank size through a low cap on total liabilities. Even Obama’s signature reform, an independent consumer agency is in danger of being whittled down to a corner desk in a failed federal agency.
The President understands that the Wall Street bailout was “about as popular as a root canal.” But if Democrats continue to peddle this type of rhetoric while neglecting meaningful reform as they have done this week, the Republicans will run away with the anti-bailout message and with the election in November.
January 28, 2010
Read about why bankers are claiming "hardship" because of England's new tax on banker bonuses:
...it's a hardship," Gary Goldstein, who runs Whitney Group, a financial-services job-search firm in New York, told the paper. What with multiple residences, private school tuitions, domestic employees, and various membership fees, a banker's expenses can demand a lot of cash.
They have to:
1) Maintain multiple residences
2) Pay hundreds of thousands in tuition for exclusive private schools
3) Pay all the servants
4) Pay membership at all the exclusive clubs to hang out with the other rich fucks.
May I suggest:
1) Live in only one house.
2) The kids can go to the same schools everyone else goes to.
3) Answer your own door drive your own car, clean your own house and cook your own dinners.
4) Quick the clubs and go to the pubs. Expose yourselves to some of the people whose lives you ruined.
January 21, 2010
Reuters reported two hours ago that multiple financial industry sources claimed that Treasury Secretary Tim Geithner was unhappy with the President's plan he announced today to rein in the banks. The sources said that Geithner thinks Obama is sacrificing good policy for politics.
This is a BIG deal, and if true should mean immediate firing of Geithner.
January 19, 2010
Guest post by Mary Bottari of Bankster
Senate Banking Chairman Chris Dodd (D-Conn.) was considering dropping the idea of creating an independent, stand-alone consumer protection body, empowered to crack down on banking abuses, in order to get a regulatory revamp passed this year with bipartisan support. Dodd is apparently considering shrinking the CFPA into a division of an already existing federal agency (no doubt one with a proven track-record of failing consumers.)
On January 6th, facing an impossibly tough re-election fight, Dodd announced that he was stepping down at the end of 2010. Analysis was mixed about what this would mean for bank reform, but Politico reported that one financial service lobbyist crowed: "Now that Dodd is retiring, he can ignore the demands of the special interests on the left (consumer groups, trial bar, unions) and dance with the special interests that brought him to the dance in the first place. Us, his loyal donors in the banking community."
Today, BanksterUSA released its new video, which calls upon Senator Dodd to dance with the people and not the special interests. The video features Harvard Law Professor Elizabeth Warren, who came up with the idea of a Consumer Financial Protection Agency. Warren makes the simple argument, that if America has an independent regulatory body to police toasters so they cannot burn down your house, why don't we have an independent regulator to police deceptive mortgages that can put you out on the street?
The video also features Jamie Dimon of JPMorgan Chase, the largest bank in America based on market capitalization. The focus on Dimon is particularly timely. Dimon's firm survived the great meltdown, absorbed the failing WaMu and Bear Sterns, received billions in bailout funds and other government benefits which allowed the firm to prosper in 2009. Dimon has been lobbying hard against any size cap on big banks and he has been touted as a replacement for U.S. Treasury Secretary Timothy Geithner who has come under fire for his mishandling of the AIG bailout while head of the New York Fed.
On Friday, JPMorgan Chase announced $11 billion in earnings for 2009, and an eye-popping $27 billion in bonuses. The New York Times dryly reported that the bonus numbers "underscored the gaping divide between the financial industry and the many ordinary Americans who are still waiting for an economic recovery.
Senator Dodd is considering having his first hearings on financial reform at the end of January. Now is the time to "Fill Dodd's Dance Card" by signing our petition to send Dodd the message that the American people expect him to make protecting Main Street his legacy, not dancing with Wall Street. Dodd's committee must pass meaningful reform, even if that means kicking big bankers like Jamie Dimon out of the ballroom and telling Senate Republicans "no deal" on a weak package of reforms.
January 17, 2010
Corporate governance is a big part of what happened. One needed regulatory fix is simple: Federal Corporate Charter. Apply federal standards for incorporation so Delaware's lowest-common-denominator incorporation laws stop screwing up other state effort to regulate. See The Big Picture: Failure of Corporate Boards Is Ruining America.
January 15, 2010
The big bankers say they shouldn't have to pay any taxes because they have paid back the government's bailout loans. What they are missing is the cost to the world of what they did. The unemployment costs, the foreclosures - people losing their homes, the lost pensions, the suicides... they don't even see this or care. They certainly aren't taking any responsibility.
But they are getting huge bonuses. And paying hundreds of millions to lobby to block any reform.
January 14, 2010
Is anyone at all surprised that the big banks are skimming off the top of Haiti relief donations? See As Wallets Open For Haiti, Credit Card Companies Take A Big Cut
January 8, 2010
How giving all of our money to the big banks helped the economy.
January 7, 2010
What the hell is Geithner still doing in the Obama administration?
January 6, 2010
How many have gone to jail after the biggest financial crisis since the great depression? Bernie Madoff doesn't count, so that make's ... zero, I think.
But how many got bailed out with our money and continue to make million-dollar bonuses while people are being thrown out of their houses and jobs because of what they did?
And Democrats think that ANYONE is going to vote for them in 2010????
January 4, 2010
What consequences have been suffered by the ratings agencies - Fitch, Standard & Poors and Moodys - for fraudulently giving AAA ratings to all of those securitized bundles of bad loans?
These fraudulent ratings masked what was going on, and helped lead to the financial collapse.
So far: none? Just like everything else.
And the executives that bankrupted Lehman Brothers and others get to keep the money.
So what are the lessons learned from the financial collapse?
This post by Ian Welsh is one of the best articulations of what is going on with the economy and the Democratic Party, that I have come across: Open Left:: Why Democrats Are Trying to Commit Electoral Suicide. I encourage you to read it.
Moreover they understand that with a few exceptions, the financial economy is the American economy. It's what the US sold to the rest of the world: pieces of paper in exchange for real money which could be used to import real goods, so Americans could live beyond their means.
Shut that down and what's going to replace it? How are you going to avoid an immediate meltdown of the US standard of living? How are you going to avoid a large part of the elite being wiped out? You or I may have answers to that, except to wiping out a large chunk of the elite, which is something which needs to be done, but those who grew up under the system, who believe in the system, and who ran the system don't. What they've done all their lives is what they understand. And more to the point the system has been good to them. The last 35 years may have been a bad time to be an ordinary American, but the elite has seen their wealth and income soar to levels even greater than the gilded age. The rich, in America, have never, ever, been as rich as they are now.
And if you're a member of the elite, your friends, your family, your colleagues—everyone you really care about, is a member of the elite or attached to it as a valued and very well paid retainer. For you, for everyone you care about, the system has worked. Perhaps, intellectually, you know it hasn't worked for ordinary people, but you aren't one of them, you aren't friends with them, and however much you care in theory about them, it's a bloodless intellectual empathy, not one born of shared experience, sacrifice and the bonds of friendship or love.
There is much more, so go read.
December 29, 2009
I just came across this over at Huffington Post
The post and the video both send you over to http://moveyourmoney.info/
December 17, 2009
This is the must-see video for the week: Happy Bonusmas! : NPR
Click through to see it!
Then watch this:
December 6, 2009
I strongly recommend listening to this radio interview (click to download/listen) on Madison's "Sly In The Morning" show. Mary Bottari of BanksterUSA.comtalks about what is going on with banking reform and regulation.
Here is the original post about it, with a media player that lets you listen without downloading: Sly In The Morning: Mary Bottari On New Banking Laws
Here is BanksterUSA's video:
December 1, 2009
November 27, 2009
Remember, I'm blogging over at Open Left instead of here.
November 4, 2009
At a meeting with bloggers before last week's Building The New Economy conference, AFL-CIO President Rich Trumka talked about how we have developed two economies, one real and one financial. As he said, originally the financial sector was designed to support the real economy by providing capital as needed for building manufacturing facilities, public infrastructure, etc. But in recent decades the power of Wall Street has twisted that relationship until the real economy now feeds the financial economy.
As I have been writing about, for decades the real economy has been "financialized" by the Wall Street types -- sold off piece by piece providing short term profits for a very few. We lost more than 50,000 manufacturing facilities in just the last decade! If you sell your house you might have some cash in your own pocket for a while but your family doesn't have a place to live and the present state of our economy demonstrates the long term cost of this kind of short-term thinking: a few Wall Street types have a bunch of cash and the rest of us don't have an economy anymore.
As each factory closes and its jobs are eliminated the companies that supplied machines, parts and supplies also go away. The effect on those of us still employed (for now) has been profound as we work longer hours for less pay and fewer benefits with ever-higher stress levels. A few get ever richer, the rest of us have ever-lower standards of living and quality of life. And our country's ability to bounce back becomes ever more compromised.
Along with others at CAF I have been exploring how We, the People became the servants of Wall Street and what to do about it. The post Companies As Buy-And-Sell Commodities - Workers, Customers and Country As Costs laid out the pattern of company buyouts and takeovers since Reagan. Here is the company-buyout pattern that has turned into a machine with no human concerns:
buying up good companies, shedding and outsourcing the workers, cutting their pay and benefits, outsourcing and cheapening the product or service, fleecing and mistreating the customers, closing the offices and factories and running up debt.
The post Caught In A Machine That Grinds Us Up talked about the incentives that created this inhuman machine:
I have described here a destructive, unsustainable system that creates company- and society-breaking machines. These exist because of the economic and social incentives that our government has set up and we allow to stay in place. Breaking unions, stealing pensions, outsourcing jobs and squeezing customers all depend on government not enforcing laws and regulations – especially labor, consumer and environmental rules. …
Certainly there is no incentive at the top to stop this. This system helps a wealthy few get ever wealthier and not feel the consequences. The people who do this are celebrated as "successful." And if they don’t like the resulting devastation to the economy, community, country and world they can just hop into their private jet or yacht to retire to their private island or tax haven.
This is conservative economics and the long-term consequences. Since Reagan supposedly stopped government from "picking winners and losers" our government has indeed been picking winners and losers with Wall Street winning and the rest of us losing. This brought about a concentration of wealth so severe that a very few now control almost all of the wealth of the country.
Over and over again we see the consequences of conservative economics and Wall Street domination: Short-term profits for a very few with devastating long-term consequences for the rest of us.
We see these consequences now as the economy supposedly enters “recovery” – Wall Street is reaping vast profits and paying astonishing bonuses – enabled by taxpayer dollars – while the taxpayers themselves face loss of houses, raises or jobs, pensions, health care, etc. Gains for a few at the expense of the rest of us.
Wall Street vs Costco
Just as with the private equity game, Wall Street and market ideology has been at war with any part of our economy that benefits customers or workers. For example, in 2005 the NY Times took a look at Wall Street’s war against Costco, How Costco Became the Anti-Wal-Mart. The complaint? Costco treats its customers and workers well. The article quotes one after another Wall Street “analyst” complaining that Costco is “altruistic” or “overly generous.” One makes it clear, saying the company “could force employees to pick up a little more of the burden.” In their eyes a business serving customers or employees is wrong. From the article,
Some Wall Street analysts assert that Mr. Sinegal is overly generous not only to Costco's customers but to its workers as well.
Costco's average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam's Club. And Costco's health plan makes those at many other retailers look Scroogish. One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco "it's better to be an employee or a customer than a shareholder."
The head of Costco explained that they take a longer-term view:
Mr. Sinegal, whose father was a coal miner and steelworker, gave a simple explanation. "On Wall Street, they're in the business of making money between now and next Thursday," he said. "I don't say that with any bitterness, but we can't take that view. We want to build a company that will still be here 50 and 60 years from now."
And how does he do for himself?
Despite Costco's impressive record, Mr. Sinegal's salary is just $350,000, although he also received a $200,000 bonus last year. That puts him at less than 10 percent of many other chief executives, though Costco ranks 29th in revenue among all American companies.
"I've been very well rewarded," said Mr. Sinegal, who is worth more than $150 million thanks to his Costco stock holdings.
So in 2005 Wall Street’s short-term view of how Costco should operate was to squeeze the workers, cheapen the products, fleece the customers and grossly overpay the CEO. Costco did none of that, and now it is 2009 – the long term. How is Costco doing? I looked over their annual report and they are going just fine. According to The Motley Fool,
The retailer of pianos, coffins, and, yes, 30-pound jars of mayonnaise -- along with hundreds of other goods in bulk -- has managed to continue growing during the recession, impressively avoiding any layoffs in the process.
By the way, last year Sinegal’s salary was still $350,000. And a week ago US News and World Report wrote about Sinegal that he still “has a habit, which sometimes irks stockholders and almost certainly annoys his competitors, of taking excellent care of his employees.”
So Costco, a real company, was under attack from Wall Street for providing actual service to customers and actual pay and benefits to employees who were actually in the United States. And Costco came out OK through the 2008 financial crisis and aftermath.
But then, what we call Wall Street came out of this OK as well. Thanks to their stranglehold on our political and economic systems Wall Street came out of all this enriched and emboldened, using taxpayer dollars to pay bonuses and increase their lobbying. Many of the individuals who might have looted and destroyed companies and communities are rich and gone, others are still collecting bonuses. As far as the public sees, few of them have faced negative consequences for what they did -- virtually guaranteeing that such activities will continue.
What lesson should we take away from this? Costco is a rare exception to the new rules. How many companies can get away with ignoring the demands of Wall Street that they cheapen the products, squeeze the employees and drain their surrounding communities? Why do we allow a system that enriches a very few in the short term while harming the rest of us, and how do we change this? Why do we tolerate IBG-YBG, the "I'll be gone - you'll be gone" take-the-money-and-run attitude that understands that there are no consequences when you take as much as you can from everyone else?
Now that Wall Street and short-term, unsustainable profit-taking have brought us to inevitable collapse, where do we go from here? Well obviously too-big-to-fail is just too big and that is a starting point. We were forced by their size to bail out these institutions, actually making them even bigger, and now they use our money to lobby against taxpayer interests, lobby for more bailout dollars, lobby against compensation curbs and taxes, lobby against politicians who want to change things, against rules to protect consumers, and anything that might change the short-term destructive approach. Using our dollars to do this - did I mention? We should break them up, like England is doing. But our government is, for whatever reasons, not doing so.
The recent Building The New Economy conference provided some guidelines that we can follow as we look for paths out of this. Take a look at the blog posts from conference participants that try to tackle these questions. (There is also a highlights video and should be more video when available.) The themes from the conference included the need for the Obama administration to develop a national industrial/economic policy, a rebalancing of trade, increasing the manufacturing that we do IN the U.S., a new emphasis on increasing research and development, modernizing and maintaining our infrastructure, an infrastructure bank to finance public projects, improving education and access to education including vocational education, and passing the financial reforms currently before Congress.
And how about using taxpayer stimulus dollars to actually stimulate OUR economy?
So how do we reign in Wall Street? Leave a comment.
November 2, 2009
This is an important read, to understand the bug crash that is building up: Mother of all carry trades faces an inevitable bust,
Since March there has been a massive rally in all sorts of risky assets – equities, oil, energy and commodity prices – a narrowing of high-yield and high-grade credit spreads, and an even bigger rally in emerging market asset classes (their stocks, bonds and currencies). At the same time, the dollar has weakened sharply , while government bond yields have gently increased but stayed low and stable.
[. . .] Investors who are shorting the US dollar to buy on a highly leveraged basis higher-yielding assets and other global assets are not just borrowing at zero interest rates in dollar terms; they are borrowing at very negative interest rates – as low as negative 10 or 20 per cent annualised – as the fall in the US dollar leads to massive capital gains on short dollar positions.
. . . Yet, at the same time, the perceived riskiness of individual asset classes is declining as volatility is diminished due to the Fed’s policy of buying everything in sight – witness its proposed $1,800bn (£1,000bn, €1,200bn) purchase of Treasuries, mortgage-backed securities (bonds guaranteed by a government-sponsored enterprise such as Fannie Mae) and agency debt. By effectively reducing the volatility of individual asset classes, making them behave the same way, there is now little diversification across markets – the VAR again looks low.
So the combined effect of the Fed policy of a zero Fed funds rate, quantitative easing and massive purchase of long-term debt instruments is seemingly making the world safe – for now – for the mother of all carry trades and mother of all highly leveraged global asset bubbles.
Essentially the Fed is giving out free money, while forcing the dollar down. (A lower dollar is a good thing for American manufacturing.) At the same time they are guaranteeing a price for assets. They are forcing the financial sector to make huge profits.
The problem is that the financial sector is doing this with huge leverage again, borrowing on top of borrowing, which is the kind of massive risk that led to last year's crash. It is inevitable that the bubble will pop, and maybe soon. At the same time, they have guaranteed that the too-bigger-to-fail banks will be bailed out.
So get ready for another round.
October 29, 2009
At the New Economy Conference, Leo Gerard of the United Steelworkers just said that deregulating Wall Street was like leaving a 3 year old in a candy store unsupervised for a day. When you come back the kid is stuffed full of candy, candy falling out of the pockets -- but when you are driving home the kid pukes on your shoes. It's time to stop Wall Street from puking on our shoes.
October 26, 2009
October 21, 2009
Here is another project I have been involved with lately:
Fight the Big Boys on Wall Street at www.BanksterUSA.org
The Banksters have pulled off the biggest heist of all time. They have crashed the global economy, throwing 7.5 million Americans out of work, emptying retirement and college funds and forcing many into hardship and homelessness. Yet they continue to be rewarded with trillions of taxpayer dollars that underwrite their Bankster bonuses, they prey upon the vulnerable with ballooning bank fees and macabre investment schemes such as "death bonds" and their taxpayer-subsidized lobbyists swarm Capitol Hill to prevent the passage of any meaningful reform of the financial system.
The Smackdown Starts Now
This fall is a critical time. Congress is now taking up a series of bills to restore confidence in the financial sector. If you want to rein in the Banksters and if you think America deserves better than a "boom and bail" economy, you need to muscle up and weigh in. Only you can tell Congress to prioritize the interests of Main Street over the interests of Wall Street.
Bust the Banksters at BanksterUSA
www.BanksterUSA.org is the go-to site for updates on the financial services re-regulation fights in Congress and for progressive netroots campaigning against the big boys on Wall Street.
Our "Action Center" is a hotbed of popular campaigning on the crisis.
We know that it is wrong that a full year since the Wall Street meltdown no employee of any major American bank or blue chip financial institution is behind bars. Compare this to the Savings and Loan crisis 20 years ago. No less than 1,852 S&L officials were prosecuted and 1,072 were jailed.
Our motto? Too big to fail, but not too big for jail! Click here to email the U.S. Department of Justice and the FBI and tell them to get cracking!
This week Congress is debating a key Obama administration reform proposal, one that would create a new "top cop" for consumers in the form of a Consumer Financial Protection Agency (CFPA). This new agency will tackle abusive lending practices and protect consumers from the deceptive tricks and traps of the financial services industry. We need to pass a strong bill to empower the agency to do battle with the Banksters, but the Banksters have promised to "kill" it.
Click here to tell Congress to ignore the Banksters and "Put a New Sheriff on the Block" with a Consumer Financial Protection Agency!
Our Action Center highlights the upcoming "Showdown in Chicago" which promises to be the largest grassroots protest against the Banksters of the American Bankers Association. The Action Center will also help us ramp up the campaign against Goldman Sachs' despicable "death bonds" - an investment scheme you have to see to believe.
Sign up to get the latest news and receive regular email alerts and action items. The Banksters may have the big bucks, but we have the big numbers. The only way to win reform is to make our voices heard!
Don't Let the Banksters Write the History of These Turbulent Times!
The Banksters may be whitewashing, but we can Wiki! We need your help to build a fully-sourced research companion to BankstersUSA.org on the web. It is a collection of editable Wiki profiles of the financial institutions, CEOs, lobbyists, front groups, issues and legislation related to the crisis and the bailout. It builds on our powerful Sourcewatch Wiki with its proven capacity to raise critical information in the Google-sphere so it can be easily found and used by citizens and journalists. We need citizen journalists to help us build this important resource and document the truth about these turbulent times. This Wiki is not a place for editorializing, but for quality research based on top-notch source material. Please visit the "Help Out" section of our Real Economy Project Wiki portal to learn more. It is easy and fun! Our motto? "Fair, accurate and documented."
The www.BanksterUSA.org site and our larger Real Economy Project are part of the Center for Media and Democracy (CMD). CMD was founded in 1993 as an independent, non-profit, non-partisan, public interest group focusing on exposing corporate spin and government propaganda. CMD brought you the book "Weapons for Mass Deception" before the Bush team failed to find weapons in Iraq, and we exposed "Fake News" in the media and the "Pentagon Pundits" on cable news. With this new effort, we will debunk the spinmeisters of the powerful financial services industry and help ordinary Americans take positive action on the financial crisis and the real economy.
October 18, 2009
Learn about the upcoming protests in Chicago: Showdown In Chicago http://www.showdowninchicago.org/
October 17, 2009
Spending in the U.S. on luxury goods and services spurted 29 percent in the third quarter from the previous three months, as consumers with the highest incomes unleashed pent-up demand, according to Unity Marketing.
[. . .] “No question that this quarter’s spending increase is good news for luxury marketers,” Danziger said in a telephone interview today. “Many affluent consumers returned after sitting on the sidelines for a year. However, the richest are few in number, 2.5 million households, so competition will be fierce to win their attention.”
File this under Concentration of Wealth, Bailouts
October 5, 2009
The twin crises of the economy and health care exposing to all the control corporate money exerts over political decisionmaking in America.
Providing health care for citizens is ruled out because it would interfere with insurance company profits.
Wall Street gets bailed out and uses the money to give out huge bonuses to a few -- enough to pay for health care for everyone else!
And then there is the real crisis. We cannot do anything at all about climate change because the oil and coal companies are flooding the political sphere with cash.
What to do about it?
October 3, 2009
Banks that received government bailout money gave $33 Billion of that taxpayer money out as bonuses just this year. How much taxpayer money will be given out as bonuses next year and the year after that?
Meanwhile the apparent solution to people not being able to afford health insurance is they will be ordered to buy it. That is what a "mandate" means. Even with subsidies the poor will have to pay up to 13% of their income. The rest of us have no upper limit on what we will have to pay.
Insurance companies are ecstatic about this. Bankers are feeling pretty good, too.
I wonder how the voters are going to feel about all of this next year?
August 31, 2009
The "stimulus plan" included a 9-month subsidy that paid 2/3 of COBRA for newly-unemployed people.
That subsidy runs out in a couple of months and millions of people will lose their health care.
In my opinion the reasons we did not enter a depression had less to do with bailing out the big banks than with the following:
1) FDIC Insurance meant that people felt safe keeping their money in banks and didn't "run" to remove deposits. THIS is why the banks didn't all close.
2) Unemployment insurance kept millions of people from losing all of their income and having to turn to breadlines. This starts running out soon for the people laid off during the crash.
3) The stimulus plan subsidized COBRA for millions of people. This starts running out soon for the people laid off during the crash.
August 26, 2009
For those who need some background: Goldman Sachs announces they plan to give out record bonuses this year, despite taking billions in TARP money from the Fed to "survive," soaring unemployment and companies collapsing coast-to-coast. In his memo, Goldman CEO Lloyd Blankfein tells his employees to keep a low profile and not to spend lavishly when they get their massive bonuses!
Comedian Matt Rittberg creates a hilarious spoof of "Goodfellas" based on Goldman Sachs outrageous compensation. Lloyd Blankfein, Goldman's CEO, sent out a memo recently telling his top employees not to buy anything flashy with their bonuses. Remind anyone else of the scene from Goodfellas where De Niro tells his gang the same thing after the big heist?
Written and Directed by Matt Rittberg
Director of Photography - Matt Kohn
This is a story we are all too familiar with: Wall Street vs. Main Street. Irresponsible behavior leads to bonuses for Wall Street while working hard and playing by the rules leads to unemployment and foreclosure for Main Street.
You've heard the elements of the story: For quite some time Wall Street and the banks were operating irresponsibly, fomenting a huge credit bubble which led to the financial collapse. At the end of 2008 millions and millions of regular people – popularly known as “Main Street” – began losing their jobs, losing their houses, losing their savings and forgetting about ever retiring.
Wall Street: Huge Wall Street bonuses are in the news: Bank Bonus Tab: $33 Billion
Nine banks that received government aid money paid out bonuses of nearly $33 billion last year -- including more than $1 million apiece to nearly 5,000 employees -- despite huge losses that plunged the U.S. into economic turmoil.
… The nine firms in the report had combined 2008 losses of nearly $100 billion. That helped push the financial system to the brink, leading the government to inject $175 billion into the firms through its Troubled Asset Relief Program.
The Cost: The same amount, used for the people, would bring over 2.5 million good-paying jobs.
The "financial collapse" bonus pool is $33 billion. For comparison, look at what $30 billion could buy for We, the People, if only we had some control over things. $30 billion is the amount requested in Senator Sherrod Brown’s (D-Ohio) Impact Act. $30 billion = more than 2.5 million jobs:
“IMPACT (Investments for Manufacturing Progress and Clean Technology) creates a $30 billion Manufacturing Revolving Loan Fund to help small and medium-sized manufacturers finance retooling, shift design, and improve energy efficiency.
. . . the IMPACT Act could create 680,000 direct manufacturing jobs nationally and 1,972,000 indirect jobs over the next five years.”
Gas Prices and Bonuses: Do you remember those soaring gas prices that hit Main Street so hard last year. They play a part in this bonus story. For some background, see Matt Taibbi's Rolling Stone piece, Inside The Great American Bubble Machine,
So what caused the huge spike in oil prices? Take a wild guess. . . . [Wall Street] persuad[ed] pension funds and other large institutional investors to invest in oil . . . The push transformed oil from a physical commodity, rigidly subject to supply and demand, into something to bet on, like a stock. Between 2003 and 2008, the amount of speculative money in commodities grew from $13 billion to $317 billion, an increase of 2,300 percent. By 2008, a barrel of oil was traded 27 times, on average, before it was actually delivered and consumed.
[. . .] But it wasn't the consumption of real oil that was driving up prices — it was the trade in paper oil. By the summer of 2008, in fact, commodities speculators had bought and stockpiled enough oil futures to fill 1.1 billion barrels of crude, which meant that speculators owned more future oil on paper than there was real, physical oil stored in all of the country's commercial storage tanks and the Strategic Petroleum Reserve combined. It was a repeat of both the Internet craze and the housing bubble, when Wall Street jacked up present day profits by selling suckers shares of a fictional fantasy future of endlessly rising prices.
This fits our story because the top bonus-getter this time around is Andrew J. Hall. Hall "earned" it by helping to run up the price of oil last year. Hall is getting a $100 million bonus. (Thanks to previous years' bonuses Hall already owns a 1000-year-old castle called Schloss Derneberg. Go look at some of the pictures of what these nice Wall Street bonuses can buy.)
Here's some more bonus news: Goldman may pay out largest bonus pool ever,
Looks like things are back to normal, or perhaps even better, at Goldman Sachs Group Inc. (NYSE:GS) as the firm is reportedly on track to pay out its largest bonus pool in the firm's 140-year history thanks to soaring profits in the first half of 2009.
Yes, that’s right "back to normal." Huge bonuses, in some cases the largest ever.
Main Street: Also back to "normal," the rest of the country remains mired in debt, unemployment, foreclosures, budget cuts and a health care crisis looks on, helpless to do anything about it because the functioning of their government has been captured by a wealthy few. Even before the financial collapse things were pretty bad. Wages had been near-stagnant for decades while costs rose, resulting in soaring credit card and other household debt. The savings rate had actually gone below zero. But not for Wall Street. While this was happening the finance sector had quadrupled to nearly 40% of all corporate profits and insiders were reaping tens and hundreds of millions and even billions for themselves.
There are many who say that these problems of debt and stagnant wages are because of Wall Street. Wall Streeters encourage companies to focus on maximizing short-term profit rather than investing in long-term stability. Wall Street pressure encourages companies to cut benefits, outsource jobs, increase workloads and eliminate customer services as much as possible.
These changes in business practices occurred partly because of the huge cuts in the top tax rates from the Reagan through the Bush years. It used to be that people built fortunes over time by carefully building businesses. But the tax cuts enabled "get rich quick" schemes that let a few benefit from chopping up and selling off once-stable companies, raiding pension funds, and so many of the business practices that have destroyed Main Street livelihoods.
This also happened because of deregulation. People were convinced that regulation of business "cost jobs," or a hundred other things we were told. Well it turned out that regulation was important. And it turned out that a few people reaped massive fortunes from the experiments in deregulation and tax cuts.
The Damage Done: While the bonuses are the largest ever, for public trust in their government and elected leaders this may equate to some of the most damage ever. People see these bonuses being handed out, paid for with taxpayer money, and they understand that their money is going out to the very people who destroyed the economy and their dreams. This kind of unfairness and injustice can tear apart the fabric of society. We are seeing elements of this in the disruptions at the Town Hall meetings on health care. People are angry at the way they are being treated, and the corporate right is channeling that anger into further demands for deregulation and favors for a few at the top.
While the stage was set for the bailouts and bonuses by the Bush administration, President Obama was elected to change things. Immense damage has been and continues to be done to the Obama administration in the public mind by these huge Wall Street bonuses. This set the stage for opposition to the health care plan. People feel that the President should find a way to stop this travesty. But instead he is seen as continuing it. His advisors are seen as being from Wall Street and unwilling to stand up against their friends and social and professional circles in which they live.
The Hope: President Obama has appointed a "Pay Czar." Kenneth Feinberg, who previously worked for free as head of the September 11th Victim Compensation Fund, has the job of "Special Master for Compensation." He will look at the compensation of the top 25 executives at these firms and decide if it is fair.
I think I speak for a lot of people when I say I want Mr. Feinberg to be aware that this bonus pool comes from taxpayer money, that the firms giving these bonuses wouldn't even be here if the taxpayers hadn't bailed them out, that the rest of the country - Main Street - hasn't seen a raise in a very long time, largely because of the policies of Wall Street, and that the bonus pool just happens to match the amount that would create 2.5 million jobs on Main Street through the IMPACT Act.
Mr. Feinberg, claw it back. Don't let these people get these bonuses, and be very public about it. The public needs to have their trust restored.
But more than that, the conditions that enabled Wall Street to benefit from destroying the livelihoods of the rest of us need to be reversed. Strong regulation needs to be reintroduced by the administration and backed up as necessary by the Congress. Top tax rates need to be increased back to where they were before Reagan to discourage this terrible "get rich quick" behavior and to reverse the concentration of the country's wealth among a top few. Most important: strong campaign finance and lobbying rules need to be implemented to remove Wall Street's ability to influence government. Truest and fairness need to be restored to our system.
August 22, 2009
The anxiety is expressed over health care, but the opening for the mistrust came from Obama's favoring of Wall Street.
“I go to church. I hear it at church. They’re just afraid. They don’t trust this administration,” Webb said.People don't know the difference between the bailouts and the stimulus. People don't know that it was the Bush administration that bailed out Wall Street. And people don't understand why the Obama administration allowed those bonuses.
Exactly why is tougher to pin down, but it often returns to the same litany, a mix of conservative and populist frustrations. Webb cited the stimulus before wondering in his next breath: “I don’t understand how a company can fail and then the head of that company gets a $3 or $4 million bonus.”
June 4, 2009
Wow, someone is throwing a LOT of money into this "tea party" thing. Maybe this is how the big banks are using their TARP money. I just got a robo-telemarketing call from 402-982-0883 and all it was was a short mesage saying something along the lines of "pay attention to the tea party movement." And that was ALL, no pitch to give money or call a number of go to a website!
May 31, 2009
Anyone can see the care and feeding of bankers and financiers, while treating much of the rest of the economy with an iron fist.Sums it up.
May 15, 2009
I have questions about the bailouts and I can’t seem to get answers. This by itself means there are big problems with the bailouts and the rest of this effort to restore the economy. I am a citizen in a (supposed) democracy and I am not getting enough information to allow me to do my job. As a citizen I’m in charge of all of this, yet I don’t know where my money is going, how it is being used, what alternatives were considered, who is profiting, who is gaming the system, and I can’t find out.
Like the old Soviet Union, when the institutions that are supposed to provide information are not trusted – or are not there – rumors and alternate explanations (read: “conspiracy theories”) abound. And so it is with the national discussion of the bailouts. Ask anyone on the street about the bailouts, read almost any blog, op-ed page, letter to the editor: people do not understand why these particular corporations are so special that they should get this special access to our money after they got themselves into trouble, and no one is doing a good job of explaining to the public-at-large just what is going on. “Trust us” is not democracy.
Take a look at this short video clip of Representative Alan Grayson (D-Fla) asking the Federal Reserve Inspector General what she knows about the trillions that the Fed has put up and the IG saying she doesn’t know:
Q: “You’re the Inspector General … do you know who received that one trillion dollars plus…?”
A: “I do not know.”
And there are reports that the Congressional Oversight Panel headed by Elizabeth Warren is having trouble getting sufficient information from the Treasury Department. So as far as I can tell, no one is getting sufficient information and reporting back to us citizens what is being done in our name and with our money. And it is a lot of money. Right-wing radio and blogs are certainly taking full advantage of this information gap to stir up anger and trouble. As David Sirota wrote the other day,
According to Bloomberg News, the White House, the Congress and the Federal Reserve have committed almost $13 trillion to the financial industry in one bailout form or another. If even more resources continue to be devoted to bailing out the same financial con artists who got us into this economic mess, that means far less resources will be available to tackle all of the nation's other challenges (health care, infrastructure, education, etc.). And when those challenges aren't met, conservatives will have a set of failures to cite as a powerful rationale for their own political revival.
So let me ask a few of my questions:
Are the stress tests being gamed as rumored? If so, why? They used 8.9 percent unemployment as their “worst case” and, as Dean Baker wrote, “The unemployment rate hit 8.9 percent last week and it is undoubtedly going higher.”
Is the Public/Private Investment Partnership (PPIP) plan being gamed as rumored with big banks using bailout funds to trade toxic assets at inflated prices and again fraudulently boost their balance sheets (BBuBfBBs)? (The dual-alliteration test might be just as valid as a stress test that used a sure-to-be-topped unemployment number as its worst case.) But seriously, is someone looking into this and stopping it if true?
Is it true that, as rumored, individuals at AIG are offering sweet deals (backed by taxpayer dollars) in exchange for very-high-paying jobs down the line with the recipients of those deals? Again, is someone looking into this and stopping it if true?
Why was it essential that those particular corporations be bailed out to get credit flowing? Couldn’t other banks take over their lending subsidiaries or departments with government help? Instead we’re giving billions to already-too-big corporations followed by rumors that they are using the money to acquire other companies and get even bigger. Are we making too-big-to-fail corporations into too-bigger-to-fail corporations?
Why do Treasury Secretary Timothy Geithner and others in the Obama administration appear (at least from the information I get) to think their employer is the financial sector instead of the People of the United States? For example, in the restructuring of GM they are allowing jobs to be outsourced. How does this match up with the idea that in our democracy those workers are their employer?
Along the same lines, why didn’t the legislation authorizing the bailouts prohibit the companies receiving taxpayer money from lobbying? Why didn’t it limit pay and bonuses at all levels to the amount earned by the President of the United States? Why did it have so many loopholes that allow these companies to game the system with our money? In other words, why does it seem like the people writing the legislation felt they worked for the banking industry instead of the people?
And here is a big question: Didn’t we go through something just like this with the S&L crisis not that long ago? What lessons did we learn from that? The causes of the S&L crisis were deregulation, “unsound real estate lending,” and connected insiders (with names like Neil Bush) gaming the system. I wrote about the connection between the S&L crisis and this one the other day,
People got really, really rich looting financial institutions, and then when the taxpayers came in to fix it connected insiders got really rich from that, too. … Valuable properties were sold to connected insiders for pennies on the dollar. Pretty much everyone was allowed to keep what they made from what we think of as bad practices.
So look at the results of the current crisis. A few got really rich by looting financial institutions, taxpayers on the hook to bail everyone out, and the cleanup looks like it involves connected insiders getting really rich. ...
So maybe the lesson WAS learned. For example, we think Lehman was a failure? But a few people made millions, even hundreds of millions from those decisions. ... And they were all allowed to keep the money.
So the lesson for US to learn is that this stuff works out really well for the people making the decisions. If we want these things to stop we need to get the money back … and put enough of them in jail. Otherwise the incentive structure guarantees this will happen over and over. It is set up that way.
Yes, these are a lot of questions.
And one last one: Do we want to “restore” our financial system, or change it? What we had didn’t work. In fact what we had demonstrated the most extreme example of “didn’t work” that any of us have experienced in our lifetimes. So why do we want to “restore” it? The words imply a wish to return to the way things were. Ryan Avent writes,
Many progressives want to use the actual process of crisis resolution to reshape the financial system, but this is like trying to install a sprinkler system while one’s home is on fire.
Ryan, this fire burned down the whole town. What I want is a complete investigation of how the fire started, who started it, why there wasn’t a sprinkler system, why the fire department wasn’t making them install a sprinkler system (and was someone paid off), and how much the fire department is spending on fighting the fire. And then I want complete accountability: who will go to jail for starting this fire and who will be fired because there was no sprinkler system. And when all that is out of the way I want new management at the fire department and a completely overhauled fire code that protects the public and never lets this happen again.
Shouldn’t we instead learn from what happened and make some fundamental changes to bring it more in line with our ideas about democracy and who is supposed to be in charge here? As I have been asking for years, who is our economy for anyway? Shouldn’t we see that too-big-to-fail is too big and limit by law the size of corporations – as well as limit the allowed percentage of ownership any person or entity can as they grow larger? Shouldn’t we realize that corporate money should stay in the corporation and not be allowed to influence our decision-making? Shouldn’t we all be asking more questions and getting answers?
If anything needs to be “restored” it is the understanding that We, the People are in charge here and have a right to all the information we want and need from our government and our elected officials. They work for us. Under our system We, the People are supposed to be telling the corporations what to do, not the other way around.
March 23, 2009
When an investor group takes advantage of the new plan, doesn't that set a market price for assets of the type they buy?
If that sets a market price, doesn't that mean that all the banks have to mark their own assets of that type to that price?
And doesn't that mean that many of them might find out they are insolvent?
And, since they are all banks for, doesn't this force the hand of the FDIC?
Since the plan is designed to create a market, does the plan have something in it to prevent mark-to-market?