Whip the Senate on SAFE Banking

On May 5, 2010, In Background and Research, Congress, Corporations, Current Leadership, The Public, By Tiffiniy Cheng

The Brown-Kaufman SAFE Banking amendment (S.3241) has become the single most important amendment to the financial reform bill to end bailouts. It is the most transformative bill because it addresses the problem that too big to fail banks are too big to regulate properly and are able to capture votes in Congress like nobody’s business. (UPDATE: Our data crunching shows that Senators who are currently opposed to breaking up the banks receive twice as much in campaign contributions from the finance sector than those who are for “SAFE Banking.”)

It is going to be voted on by the Senate soon, possibly by the end of this week. We’re making tons of progress — MoveOn is on board, New York Times is supporting it, the Senate’s #2 Democrat, Dick Durbin, is supportive — and we have a real chance here to limit the size of the biggest banks so they don’t distort our politics and put out economy at risk any longer.

But here’s the problem. We don’t know where to focus our our calls to Congress to secure the last few votes we need to get the amendment passed. We’re totally outgunned here by the moneyed special interests that oppose fixing too big to fail, but we have the momentum and we are closer than ever to pulling it off.

Here’s what we need to do.

  1. Go to this link and enter your zip code to get the phone numbers for your two senators.
  2. Make a quick call to each asking if they support the Brown-Kaufman SAFE Banking Act. Tell them they should.
  3. If they don’t give you a straight answer, do a quick Google search (for example: “too big to fail” John Kerry) and see if you can find any public statements indicating where they stand on the issue.
  4. Record your findings in the comments section of this blog post and we’ll update a running tally of what we know about where each senators stands.

We need at least one person from each state to do this. This is the single most important thing you can do right now to help the effort to break up the big banks. If you know anyone in another state who supports breaking up the banks please email this blog post to them so they can help out too. Thank You!! (UPDATE: We helped deliver 50,000 of the petitions for breaking up the banks featured in this picture and article and now Reid is a leaning yes!)

Supportive

Ted Kaufamn [D, DE]
Sherrod Brown [D, OH]
Bob Casey [D, PA] and this
Tom Harkin [D, IA]
Jeff Merkley [D, OR]
Bernie Sanders [I, VT]
Sheldon Whitehouse [D, RI]
Dick Durbin [D, IL]
Roland Burris [D, IL]
Byron Dorgan [D, ND]
Al Franken [D, MN]
Russ Feingold [D, WI] and this
Harry Reid [D, NV]
Jim Webb [D, VA]
Mark Pryor [D, AR]
Chuck Schumer [D, NY]
John Kerry [D, MA]

Lean “Yes”

Pat Leahy [D, VT]
Patty Murray [D, WA] (and this) and this
Ben Cardin [D, MD]
Jim Bunning [R, KY]
Ron Wyden [D, OR]
Debbie Stabenow [D, MI] and this
Robert Byrd [D, WV]
Barbara Mikulski [D, MD] and this and this
Robert Menendez [D, NJ] and this
Tom Coburn [R, OK]
Maria Cantwell [D, WA] and this and this

Undecided

John Kerry [D, MA] and this
Scott Brown [R, MA]
Jack Reed [D, RI]
Barbara Boxer [D, CA] and this
Dianne Feinstein [D, CA] and this
Lindsey Graham [R, SC]
John Cornyn [R, TX] (also this) and this
Jack Reed [D, RI]
Richard Chambliss [R, GA]
Tom Udall [D, NM]
Jeff Bingaman [D, NM]
Carl Levin [D, MI] and this
Frank Lautenberg [D, NJ]
Johnny Isakson [R, GA]
Daniel Akaka [D, HI] and this
Daniel Inouye [D, HI] and this
Jon Tester [D, MT]
Max Baucus [D, MT]
Patty Murray [D, WA]
Benjamin Cardin [D, MD]
Joseph Lieberman [I, CT]
Chris Dodd [D, CT]
George Voinovich [R, OH]
Roger Wicker [R, MS]
Kay Hutchison [R, TX]
Susan Collins [R, ME]
Olympia Snowe [R, ME]
Herbert Kohl [D, WI]
Kirsten Gillibrand [D, NY]
Blanche Lincoln [D, AR]

Opposed

Kent Conrad [D, ND]
Bill Nelson [D, FL]
Mark Begich [D, AK]
Mark Warner [D, VA]
Judd Gregg [R, NH]
Chuck Grassley [R, IA]
Mike Enzi [R, WY]
Jeff Sessions [R, AL]
Mike Crapo [R, ID]
John Ensign [R, NV]
Lamar Alexander [R, TN]
Thad Cochran [R, MS]

 
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Auditing the Fed – Democratize Power

On May 4, 2010, In Background and Research, Congress, Corporations, Current Leadership, free markets, The Public, By Tiffiniy Cheng

Why can’t we have accountability to the public, especially when we’re talking 2 trillion dollars outstanding from the Federal Reserve? Auditing the Fed should be about stopping big power tricks. But, why? Yesterday, Fed Chairman Ben Bernanke said that the Fed created $1.3 trillion out of thin air — he did.

Here’s something I’ve been itching to write about and it requires more time and space, but why should the Fed be democratized, de-powered in its current state, and more accountable to the public? Why should we expect that the $1.3 trillion thin paper be ensured for the public’s interest rather than the big banks? Well, that’s part of the answer there – no government should be favoring one set of elites over the equal treatment of all parts of the industry (the small banks and medium-banks), even if the elites create many jobs because the non-elites can create those jobs too and actually do, but the basic principle is strong — everyone needs a chance to be able to create jobs.

We as country believe in equal treatment and equal opportunity — we should not have erected an institution that picks winners and losers, instead the Fed should have been erected as it originally was intended by the farmers in the 1890′s, in the interest of creating an institution that would create equal opportunity in the marketplace to replace the big banks holding all the gold then.  Instead, in 1913 the big banks erected the populist’s idea but for their own sake, this is now what we call the Fed. Equal opportunity is supposed to be what a free market is intended to create, but it doesn’t when the Fed is picking winners and losers and when big is favored over small and especially when big begets bigger and the Fed picks them even more and sets up a discount window for them too and there is a legislated bailout plan for them when they fail.

USAWatchdog reports, “Fed Chairman Ben Bernanke admitted the central bank created $1.3 trillion out of thin air to buy mortgage backed securities.  This shocking admission came from the Joint Economic Committee hearing on Capital Hill last week.”‘ You can help audit the Fed here.

So, why shouldn’t an institution that has the power of government behind it be democratized, and if not de-powered. Dean’s great on this, too, but on a purer note about independence, etc.

So, as there is a push for auditing the Fed, what is the real goal that we want from the audit? Why are we asking you to support no new powers for the Fed here? Why are we following Dean Baker on democratizing the Fed? Is it just so that the Fed can’t inflate away debt? I think there is an end-goal that anyone who cares about uhh.. about your own mother and father and your friends and people on the street around you over a few can agree on. The issue is not debt or money in actuality. Money is interesting but focus on it doesn’t get at the root of the issue, it’s power plays.

It’s about power because power gets all the money and then is able to manipulate the way whatever system works. So, to state explicitly, I don’t believe that those with the most money have the right to determine the way our politics or society works. I don’t, society woudn’t work and many know that society is not working — 300,000 + in foreclosure every month. But big powers will game any system, and have gamed gold, so make it so the system isn’t prone to being gamed.

Money is complicated. There are activist campaigns for a new Monetary Act. Money is complicated.  I can see it going somewhere.

All of money essentially comes out of thin air and evaporates that way too, or rather money is complicated.
To reform money you can’t think about money per se, but about the power to create money and to inflate/deflate it.
So, if we make the Fed elected regionally or democratically elected, accountable to the public’s interest, and if transparency can lead to that accountability, we will have a Fed that is subject to political pressure and must show us that they are not picking winners and losers themselves.
Different groups throughout time rail against this monetary system and that one — we must instead end the big bankers’ piggy bank of whatever form is has taken and is in now, especially those funded by taxpayers. The system we have is irrelevant, rather we must set up the system to be democratic. Yes?
We can make auditing the Fed an accountability measure, one step closer to making whatever system of money we have democratically accountable. We must accept that people will start moving to the top in any system, then those on top are going to game whatever it is we have. Thus, we need to make the system that we have resistant to being gamed.
I think economist, Nassim Taleb may well agree — he’s a top-notch dude, as far as I can tell.
 
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The Great Contradiction of American Politics

On March 24, 2010, In Background and Research, Congress, Corporations, By Joe Costello

Bloomberg has released a poll(tx yves) with the headline “Wall Street Despised in Poll Showing Most Want Regulation“. It is very interesting to say the least. Some of the highlights:

  • Most people interviewed in the Bloomberg National Poll say they don’t like Wall Street, banks or insurance companies and favor letting the government punish bankers who helped cause the worst financial crisis since the Great Depression.
  • 57 percent of Americans have a mostly unfavorable or very unfavorable view of Wall Street.
  • Banks are viewed badly by 54 percent of poll respondents.
  • 60 percent have a negative opinion of insurance companies.
  • The majority of poll participants — 56 percent — say big financial companies are more interested in enriching themselves at the expense of ordinary people.

Fairly substantial numbers against the ruling doctrines and institutions of the past thirty years. However, there’ a catch:

  • Almost seven out of 10 people surveyed support using current bank regulators for consumer protection, backing positions held by the financial industry and Republicans over President Barack Obama’s proposal to establish an independent agency.
  • More than 40 percent of Americans say the government has gone too far in measures to fix the financial industry; 37 percent say it hasn’t done enough.
  • “Anything the government gets their fingers in, they mess it up,” said poll participant Norman White, 60, a community college electronics instructor who lives in Colfax, Lousinia. “I don’t have a very high opinion of the government running anything.

What this poll reveals is the great contradiction in American politics. We are at the end of the Reagan Revolution, the great reactionary movement of American politics against the New Deal and “big government.” The heroes and myths of the era, such as Wall Street and “free markets”, lay shattered on the ground. But just as importantly, the distrust of government, not only in this poll, but all polls, is at record levels. Thus, simply mouthing platitudes from 70 years ago or trying to instill faith back in government with massive bills filled with subsidies for mega-corporations isn’t going to get you far.

The poll also shows most Americans don’t like the nation’s top corporate bosses. Almost two-thirds say they have an unfavorable opinion of business executives, a rating that rivals the public’s disdain for Congress, which was viewed with disfavor by 67 percent of respondents.

Having followed this issue for a long time, neither of these numbers are new, however they are historically high. The question of whether large corporations have too much power in this country has been at or above 70% for a couple decades, in fact, the power of giant corporations has always been an issue since their inception a century and half ago. But today, with both parties in the pockets of the mega-corporations, it is never realized as an issue. Nonetheless, this is the sweet spot of American politics at this point, yet one party will insist on helping the corporations and eventually you through more centralized government, while the other will continue their bankrupt philosophy of laissez faire, thus, political advantage to neither.

What we need is to revive and evolve the principles and institutions of this republic, understanding the people are sovereign. We need to revive the imperative of self-government, now lost to history, that if we are to have democracy, it must be decentralized. If we advocate the use of government, we must first revive its legitimacy, and the only way that is going to be done is by bringing the American people back into politics and into the decision making processes of government.

Cross-posted from Archein: The Great Contradiction of American Politics

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Lehman as Enron 2.0

On March 13, 2010, In Corporations, By Joe Costello

If you have a society where it becomes foolish not to steal, then only fools don’t steal, and that society has not much of a future. The bankruptcy examiner’s report on Lehman reveals the fraud behind too much that goes for business on Wall Street. The fact is nothing really is new, many of the transactions were exactly what Enron “innovated”, validated by a major accounting firm with the active collusion of Tim Geithner’s NY Fed.

The only question, when is someone going to jail? Begging the question, when is our government going to do something? Of course, when you have a Congress that has been bought and sold five times over, one shouldn’t hold their breath. Talk of financial reform out of the Congress makes health care reform look like Public Citizen good government. How can you have any take on financial reform when you have no idea about what occurred, well if you’re in Congress you let Wall Street write the laws, then you don’t have to know.

The Journal has a good piece on the scam, along with the FT. Yves Smith is on BNN here about Geithner NY Fed’s culpability. And Eliot Spitzer was on Dylan Ratigan here(tx zh):

Ratigan:

This report comes just short of suggesting this is by no means an accident but instead one of the greatest crimes ever perpetrated by a group of people, and enabled by the US government.

Spitzer:

There is no doubt civil cases will be brought. We had a failure of CEO, the CFO, the accountants, and indeed the regulators, the Fed and the Treasury, that were inside these banks, and the question has to be asked: where were they.

The question to the former NY AG, who by the way was the only elected official in this whole

damned country taking on the financial industry back when they were all being celebrated as masters of the universe, but the question, what about criminal cases? And remember fellow taxpayers, it’s all your money in the amount of trillions that that has been poured in to paper over the still existing mess, and if we don’t hold our government officials accountable, that pretty much makes us all unindicted co-conspirators to our own looting — Hey, Hey, Hey, Hey.

Cross-posted from Archein: Lehman as Enron 2.0

 
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Big Four is Now a Term on Wikipedia

On March 4, 2010, In Background and Research, Corporations, By Tiffiniy Cheng

As of December 2009 the Big Four is something you can search for and read about on Wikipedia. It’s still a stub article, but it’s there. I can’t go in and fill it out because I am worried about conflicts of interest now that I campaign on the issue. Someone reading this post should feel more than welcome to though.

If Wikipedia status means anything, it at least means an idea or word has been said enough times to become a meme. And so, after all my work with A New Way Forward and the work of thousands of people, normal and fancy, over the past year, the Big Four is at least a meme. (For full disclosure, we’re now asking people to break up with their banks at bankbreakup.org and canvass with BanksterUSA.)

What does the Big Four mean? It’s the big 4 banks — Wells Fargo, Citigroup, Bank of America, and Chase — who together are a dangerous entity in society. Together, they pose danger to society, the economy, and our politics. They each have past the size of a company that makes a company more efficient and have become giants that hold the strings to our country. They have gone into the territory of overpricing, dominating political debate, and taking down the country without remorse when they fail.

I talked about this on Danny Schechter’s radio show on the Progressive Radio Network today (archive will be posted on Media Channel as well).

How are the big 4 banks dangerous? When you’re a corporation you put more money into investing in your future to beat out the competition. These big 4 banks did this in the 90′s, and back in the 80′s, and back in the 20′s, and have won. They beat out all competition and now anything they want, including the dangerous stuff, is deemed okay.

Most likely, your wages haven’t gone up in the past 20 years, we have around 20% unemployment and underemployment, we have millions of foreclosures, we have $700 billion of household debt, young Americans spend 29% of their income on debt, we have lack of individual political power with the decline of unions and what they stand for and, our state and local budgets have just been bamboozled and taken away by the big banks.

We have a janitor facing eviction cleaning up after the CEO whose bank bought her house

“At first, Minneapolis janitor Rosalina Gomez said she didn’t realize she was cleaning up after the CEO of the bank that bought her foreclosed home in a September sheriff’s sale. “At the beginning I didn’t know he was the guy,” said Gomez through an interpreter in an interview with HuffPost.”

We have made-up rules and gouging prices created to make you trip up and make the big four more money: You can get on a blacklist for something you might do without thinking. “Disputing a credit card charge by asking for a “chargeback” can lead to being put on a blacklist that merchants can check for customers who might try to defraud them. Getting off the list costs $99, although the fee is waived if the customer didn’t know they were committing “friendly fraud,” said Brien Heideman, founder of BadCustomer.com, which keeps such a customer list for retailers that don’t want to get hit with costly credit chargebacks.”

We have Greece’s debt turned into a money-making insurance policy by a Big 4 and a Big 6. Bankster’s blog explains Greece, and here is a summary: “It’s “like selling a car with bad brakes and then taking out an insurance policy on the driver.” Greece is “too-big-to-fail”, is in heavy debt and can default. Goldman Sachs helped get them into debt by helping to hide the debt so they can loan even more money from others. Goldman, JP Morgan and others also sold “insurance policies” on Greece’s debt – their buyers will make a bunch of money if Greece goes totally bust.”

So, we’re at the beginning of realizing the answer to “Why are the Big 4 Banks dangerous to society and what’s a better way to do banking in this country?” Reuters knows why. They have a great graphic on the increase in size.

Simon Johnson beat me to it and layed out three reasons why “Big Banks are Bad”

“First, the economic advantages of bigness were not as great as claimed. In many cases big firms did well because they used unfair tactics to crush their competition. John D. Rockefeller became the poster child for these problems.

DESCRIPTION The original J.P. — that is, John Pierpont — Morgan.

Second, even well-run businesses became immensely powerful politically as they grew.

J.P. Morgan was without doubt the greatest financier of his day. But when he put together Northern Securities — a vast railroad monopoly — he became a menace to public welfare, and more generally his grip on corporations throughout the land was, by 1910, widely considered excessive.

Third, there was a blatant attempt to use the political power of big banks to shape the financial playing field in ways that would help them (and their close allies) and hurt the remainder of the private sector — including farmers, small businesses and everyone else.”

Any results-based, research-heavy, social-issues aware economist will tell you that they agree a level playing field is what all good things flow from. That’s all we’re asking for. I want a Democrat in Congress to show me how they aren’t keeping at bay the level playing field.

We’re at the beginning of the fight and wikipedia is showing that we can win over our collective hearts and minds.
Published on FireDogLake’s The Seminal here.

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JP Morgan and The Way Forward

On March 2, 2010, In Background and Research, Corporations, By Tiffiniy Cheng

JP Morgan has an ad campaign called “The Way Forward”.

Marketplace covered it, wondering, “what the heck are they doing?”

PR Watch wrote a short blurb on it after having seen the ad in NYTimes toaday.

This is JP Morgan’s site.

Send in ads if you got them — we’ll post them here.


JP Morgan Ramps Up Greedwashing


Today’s New York Times features a pricey, full-page ad by JP Morgan Chase on a new charitable project. “We believe it’s important to listen to our customers and communities. That’s why we created Community Giving and let the Facebook community vote on which local charities will receive $5 million in grants from Chase,” the ad proclaims. JP Morgan Chase is one of the largest banks in America and played a critical role in the 2008 financial crisis. It received $25 billion in bailout funds in 2008 enabling the company to get back on its feet and pay eye-popping bonuses to top executives in 2009. Five million is a small fraction of the $17 billion the firm payed Jamie Dimon its CEO in stock bonuses in 2009. Amusingly, the ad capitalizes on the phrase “A New Way Forward for Giving” echoing the theme of the net-roots bank reform group A New Way Forward, who has been leading an internet campaign to get consumers to “break up” with the big banks like JP Morgan and start accounts at small, local community banks. Stay tuned for many more “greedwashing” campaigns like this as the big banks try to convince the American public that their practices are changing even while they spend millions lobbying against financial reform, continue to raise bank fees and aggressively foreclose on American families.

i think our job of having a political system that worked would be easier if i could trust that most people see through these fake campaigns. Sometimes, it seems like people will be convinced by fake measures, but polls show that often times people do see through fakeness.

The situation the banks have set up are: 1. we set arbitrary rules so we can fleece you as much as we want 2. we change regulatory rules so we can continue fleecing and take on more risky activities that make us a lot of money in the meantime 3. and then when we fail, we won’t own up to it and pretend we’re really good for society. This situation is exactly like when a bully sets arbitrary rules for a game that make it so there is no way you can win, and calls it fair, gets the girl/boy, and then burns down your house and the insurance company doesn’t pay you for it.

 
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Daily Show Covers Credit Card Fees

On February 24, 2010, In Background and Research, Corporations, By Tiffiniy Cheng

Amazing, pass it on:

The Daily Show With Jon Stewart Mon – Thurs 11p / 10c
Make it Rain – Bank of America
www.thedailyshow.com
Daily Show
Full Episodes		 Political Humor Health Care Crisis
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From the horse’s mouth

On February 22, 2010, In Background and Research, Corporations, By Tiffiniy Cheng

We can’t have extremely large, gargantuan even, institutions, protected by the public treasure to believe it is okay to simply get larger. JP Morgan Chase is going to have an investors’ day on Febraury 25 talking about how they are in a good position to get bigger. The too-big-to-fail institutions have only gotten bigger from crashing the economy through their dangerous behaviors.

From the horse’s mouth:

On Feb 25 JPM is hosting its annual investor day.
We expect the overriding theme to be similar to
prior years: that its earnings power and balance
sheet strength position should continue to grow
and take market share as it benefits from a diverse
business mix (none of its 6 units more than 1/3 of
revs), strong balance sheet (10.2% tier 1), large
deposit base ($0.9T) and continued profitability
(yet to loose money in a qtr). We continue to view
JPM as both an offensive (top tier player, taking
share, scale) and defensive (well-capitalized,
conservative, strong management) play. Still,
near-term several regulatory (Volcker, TBTF,
Basel, HR 4173, derivatives) and asset quality
(mortgage repurchases, 2MP) related
uncertainties appear to be weighing on the shares.

 
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The Illusion that the Rich Will Save Us

On February 19, 2010, In Corporations, The Public, By Tiffiniy Cheng

Sure, I’d say yes to a progressive tax code, a rollback on all the tax breaks and loopholes that allow the MEGA to beat out all competition and a yes to tax breaks for small and medium businesses. But, our democracy can’t count on the rich even though we have been.

Because we believed that our economy is best run by the technocrats and the wealthy, we have a situation where the rich players and the financial elite are able to uphold their dignity more than they should after helping to crash the economy through ballooned financing. The traction they get in blaming the buyers, the people who took out the loans when they know almost nothing about finance, is not grounded in reality. The bankers who know everything about finance, which is exactly the point that they understand the loans they are giving out and understand best how to transfer debt, make money off of interest, package up bad loans, sell securities and collaterized debt obligations, are still the ones making decisions about where our shared resources should go. Why we don’t have more objective, more research-heavy academics, is a product of the human race for the top. We, the people, are attracted to the rich and the powerful and have let them run the country for too long. This is the dilemma of the middle class, those who have some but are closer to almost having more, look to the rich as the older bigger brother/sister.

Yet, these big brothers are less wise, our academic output or innovation level is more focused on profit-making. Our corporate-controlled academia is working against the public, money does not solve all issues so not everything can be run according to the law of money. Democracy in America is being gauged on how much money a few individuals can make

If you look at banking, the economy, finance, corporations, power, etc. for too long, you start to become an unbeliever in what a world run by the rich can really give you and the poor. Sure, they can donate to charity, but they spend hundreds of millions every year on lobbying against reason. How is this efficient? Sure, they have enough capital to incubate important social projects, but they don’t and that’s not their focus anyway. The rich foundations are few and far in between. Taibbi says in his most recent article, “There’s even a term in con-man lingo for what some of the banks are doing right now, with all their cosmetic gestures of scaling back bonuses and giving to charities. In the grifter world, calming down a mark so he doesn’t call the cops is known as the “Cool Off.”"

With the corporate rich running the country, our money has less and less to do with our reality, the real economy. As detailed in a long article on VISA in the NYTimes, we learn that the idea of a dollar is becoming untethered to value of the things they are supposed to buy: “A dollar is no longer a dollar in this country,” said Mallory Duncan, senior vice president of the National Retail Federation, a trade association. “It’s a Visa dollar. It’s only worth 99 cents because they take a piece of every one.”

As the Fed increased the interest rate for emergency loans to the big banks, which help to keep the current banking system going, the stock market has reactions because it bets on the banking system. The way finance works hardly has much to do with the way the real economy works — it’s not grounded in jobs and production but rather phantom numbers on projections about jobs and production among other things. Paul Krugman has this to say about this happening a few months ago; he writes, “Still, what about the possibility of a squeeze, in which rising rates for whatever reason produce a vicious circle of collapsing balance sheets among the carry traders, higher rates, and so on? Well, we’ve seen enough of that sort of thing not to dismiss the possibility. But if it does happen, it’s a financial system problem — not a deficit problem. It would basically be saying not that the government is borrowing too much, but that the people conveying funds from savers, who want short-term assets, to the government, which borrows long, are undercapitalized. And one last point: I just don’t think the inner circle gets how much danger we’re in from another vicious circle, one that’s real, not hypothetical. The longer high unemployment drags on, the greater the odds that crazy people will win big in the midterm elections — dooming us to economic policy failure on a truly grand scale.” Again, the model of the rich, can’t save us, but the rich should pay higher taxes because they exact a lot of wear and tear on society.

The boom-bust-bailout cycle is the doom loop. Many highly profitable companies cut jobs in 2009 and are shuffling the untethered poor in ways that make them less qualified for new jobs. The research group, Cambridge WInter remarks in their report,
“Perhaps even more troubling than the auto dealer exemption [in the financial reform bill] itself, given the large, bi-partisan majority of the House Financial Services Committee that supported it, is what it implies more broadly:  The bipartisan zeal for, and growing comfort with, special interest subsidies that distort free markets in favor of the largest and most politically entrenched participants.” The rich won’t save us.

The Rich are Too good to be true
The transfer of wealth to the rich from the poor is unsustainable, even if the rich or the corporate are the ones that are offering the products and solutions the poor want to buy now. Contrary to popular economic belief, the products on the market now are not what are best for people or what people actually want; they are overwhelmingly determined by a society controlled by big media, big advertising, the big players on the internet, existing and emerging memes of the elite and the rich, big finance, the big in education, the big in food, car, home, the big in government. Thorstein Veblen knows this himself. Contrary to their economic well-being, the poor and the middle class get poorer buying all the stuff they don’t need and paying for all the interest that the giants demand.

Looking at the big picture market, more people lose and a few win in the free market that the big banks want, even if the rhetoric is that the poor have every opportunity to win and compete. But, starting a business or a bank is harder than it should be, the poor and middle class put more and more of their capital and flattened wages into the blackholes of the rich by buying their goods and buying on credit and taking out loan after loan, which makes it harder to start up their own businesses. The poor and the middle class think they need to be more and more like the rich, look and dress and smell like them, do business like them. Subconsciously there is a belief that by contributing to the extremists’ free market system, they are giving themselves a chance to compete and win too. This extremist form of a free market seems like it is open to anyone and anyone can join, but it really just exists for the super rich. Competition is dwindling, markets are becoming more over-concentrated, the banking industry already is. The idea to deregulate, give tax breaks and loopholes to the super rich as a way to create competition is more of a propping up of a free market in the realm of the elitist regime through tax payer dollars and is a short term fix for an addiction to growth and money that is also untenable. We need microeconomies which tend to have better pricing, and can be based on real value. An economy that nurtures the new, spontaneous, ingenious, decentralized can actually allow the poor to benefit from the spread of goods because the production of these goods are more directly related to the work, well-being and existence of the person.

The big, the rich are too good to be true. For some of the efficiencies they introduce in the world, they have created many more inefficiencies in order to stay on the top. We can’t have a sustainable system that is about a stay on the top and the feeding of a giant that stopped innovating for the public good long ago.

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Obama’s darling JP Morgan is defiant, getting bigger

On February 18, 2010, In Corporations, Current Leadership, By Tiffiniy Cheng

JP Morgan Chase has long been known as the promise child of the Obama and Geithner administration. Unfortuntely, JP Morgan is just going to get bigger and we’re going to get angrier.

Like other giant banks, JPMorgan Chase & Co. has been criticized for being “too big to fail.” But that isn't stopping the company from getting even bigger.

The country's second-largest bank said Tuesday that it had agreed to buy, for $1.7 billion, part of a commodity trading business jointly owned by San Diego-based Sempra Energy and Royal Bank of Scotland.

The acquisition comes as President Obama and former Federal Reserve chief Paul Volcker have been pushing a proposal to make banks like JPMorgan smaller. Could the bank, led by Chief Executive Jamie Dimon, be thumbing its nose in the direction of Obama and Volcker? At least one widely followed bank analyst thinks so — and likes it.

“I believe that Mr. Dimon is demonstrating a courage sorely lacking elsewhere among other leaders of American banks,” Richard Bove of Rochdale Securities wrote in a note to clients. Bove has been critical of the Obama administration's efforts to rein in banks.

Bove said the acquisition seemed to run contrary to the White House's agenda not only because it would make JPMorgan bigger but also because it would add to the company's capacity to conduct securities trading with its own money, known as proprietary trading.

Obama wants to stop commercial banks from doing any proprietary trading, saying it is too risky for institutions that benefit from federal deposit insurance and other safeguards.

“Is it possible that JPMorgan Chase does not see these proposed rules and laws going into effect for any sustained period or perhaps not at all?” Bove wrote.

In a sign of possible restraint, JPMorgan declined to buy all of the joint venture, RBS Sempra Commodities, opting instead to acquire only its global operations. The unit's domestic business is to be sold separately.

via JPMorgan expansion defies Obama’s agenda – latimes.com.

 
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