WHO IS TALKING ABOUT WHAT MATTERS?

On August 23, 2010, In Corporations, Current Leadership, free markets, By Danny Schechter

Aren’t job losses and foreclosures as important as a “Ground Zero Mosque” (that isn’t a mosque, hasn’t been built or even at ground zero?)

By Danny Schechter, Author of The Crime Of Our Time

We know we live in hard times that are on the verge of getting harder with 500,000 new claims for unemployment last week, a recent record.

The stock market may be over for now as fear and panic drives small investors out. Big corporations hoard stashes of cash rather then hire workers. The D-Word (depression) is back in play.

Foreclosures are up, and the Administration’s programs to stop them are down, well below their stated goals, only helping 1/6th of those promised assistance.

And here’s a statistic for you: 300,000. That’s the number of foreclosure filings every month for the past 17 months. This year, 1.9 million homes will be lost, down from 2 million last year. Is that progress? In July alone, 92, 858 homes were repossessed.

At the same time, the number of cancelled mortgage modifications exceeded the number of successful ones.  According to  MI-Implode, last month, “the number of trial modification cancellations surged to 616,839, greatly outnumbering the 421,804 active permanent modifications.”

And don’t think this is only a problem that affects the homeowners about to go homeless. The New York Times quotes Michael Feder, the chief executive of the real estate data firm Radar Logic to the effect that we are all at risk.

“My concern is that if we have another protracted housing dip, it’s going to bring the economy down,” Mr. Feder said. “If consumers don’t think their houses are worth what they were six months ago, they’re not going to go out and spend money. I’m concerned this problem isn’t being addressed.”

The larger point is that even if you believe the economy is already down, it can go lower. No one knows how to “fix it” either just as BP couldn’t plug the “leak” that, truth be told, is still oozing oil.
So what are we doing about it? Are we demanding debt relief or a moratorium on foreclosures? Are we shutting down the foreclosure factories?
Nope.

Progressives are spending time and wasting passion this August debating on an Islamic Cultural Center near Ground Zero, invariably responding to the provocations and agenda of adversaries. They are always on the defense, never taking the offense.
Who is beating the drum for job creation and a new economic policy? Maybe the unions, but their voice is muted and ignored in the electronic noise machine.  Marches are planned by the UAW and Rev. Jesse Jackson on August 28th in Detroit and in  Washington on 10.02.10. But the expected war of the words between Rev. Al Sharpton and Glenn Beck over the legacy of the March on Washington is expected to generate more heat.

Meanwhile, even as the Administration seems to be finding signs of a “recovery,” a parade of failures march on from the discovery that there is an oil slick the size of Manhattan in the Gulf to the persistence of frauds in finance from state pension funds in New Jersey to the case against the head of the Bank of America.
Even worse, Shorebank, one of the banks that community activists considered a national model of social responsibility has gone down in Chicago, the 104th bank to fail this year with 15 branches including some in Detroit and Cleveland. It was also active in 40 countries. In June, it reported over $2 billion in deposits. By August, it was gone.

In all, 349 US banks have disappeared since 2007.

ShoreBank promoted itself as a community development and environmental bank. It was based in Michelle Obama’s old neighborhood with the slogan “Lets Change The World.”  Now the world of Wall Street has changed the bank with a partnership of investors including American Express, Bank of America and Goldman Sachs taking over under the name “United Partnership.”

Hundreds of other banks are on the FDIC hit parade and may be next.

There were many worse casualties in banking in the past according to Barry James Dyke’s informative book, Pirates of Manhattan. He notes that ten thousand banks failed during the depression and 2,900 bit the dust in the S&L crisis. The current number may have been higher had Congress not bailed out the Banksters who used some of our money to play PacMan, gobbling up smaller institutions.

AP reported, “ShoreBank lost $39.5 million in the second quarter amid soured real estate loans. The bank had been under a so-called cease and desist order from the FDIC for more than a year, requiring it to boost its capital reserves. ShoreBank was able to raise more than $146 million in capital this spring from several big Wall Street institutions. It was unable, however, to secure federal bailout funds it sought from the Treasury Department’s Troubled Asset Relief Program.”
Republicans are “investigating” alleged Administration support for the Bank, AP explained, “Rep. Darrell Issa of California, the senior Republican on the House Oversight and Government Reform Committee, sent a letter to a White House legal adviser asking specific questions on possible contacts between administration officials and executives of ShoreBank or potential investors.
The White House has said no administration officials met with ShoreBank concerning its rescue or requested help from financial institutions on its behalf.”
Questions raised by Republicans, of course, seek to politicize the issue when it is the FDIC ‘s deal with the big banks that needs to be probed, as Zero Hedge explains:

“As it stands, Goldman and 11 other banks are receiving a multimillion dollar gift to conduct a portfolio liquidation run-off of ShoreBank’s assets, while merely making sure existing deposits are serviced.”
(Note: the FDIC is led by a Republican. Hmm.)

Blogger Mike, “Mish” Shedlock concludes: “The FDIC’s handling of Shore Bank smells as bad as a pile of dead alewives on a Chicago beach in mid-July.
My question is: Why didn’t the Administration help shore up ShoreBank (if it could be shored up) as they did so many of the “too big to fail” banks?

Their hands-off attitude, perhaps in fear of being criticized, as they were anyway, helped doom the bank and, by extension, the idea that we could have socially responsible lending institutions.

So much for the priorities and power of Obama’s “Chicago Mafia.”

If they don’t have the guts to save a bank in their own hometown they know has meant so much to so many, is it any wonder they won’t take on the crimes on Wall Street?

Last week, Treasury Secretary Tim Geithner was complaining that he is being falsely identified as a “Goldman Guy,” insisting he never worked for the financial institution that was recently branded a “Giant Squid On The Face Of Humanity.”

He doesn’t seem to realize that the speculation is not based on the details of his resume but on an assessment of his track record as a toady for the pals he worked with when he ran the Federal Reserve Bank in New York.

And by the way, Tim, why the hold–up on the appointment of Elizabeth Warren to run the new Consumer Financial Protection Bureau in your old institution?  Is she too smart and popular for you?
Why the fiddling while our modern Rome burns?

News Dissector Danny Schechter directed Plunder The Crime of Our Time, a DVD and a companion book, The Crime Of Our Time on the financial crisis as a crime story. Comments to: “mailto:dissector@mediachannel.org” dissector@mediachannel.org

 
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COUNTDOWN TO COLLAPSE: The Recovery is Not Recovering

On August 13, 2010, In Congress, Corporations, By Danny Schechter

From the author of The Crime Of Our Time

Financial journalist Charles Gasparino whose career trajectory took him from Newsweek to CNBC to Fox News was on with Bill O’ Reilly doing what the host of the factless Factor likes to do the most: promote Fox News.  In the course of their self-promotional banter, Gasparino let sip an unverifiable story about a meeting of top CEOs speculating about whether President Obama really is a secret Socialist.

Stories like this, invented or not, freak a White House ever eager to reassure the business world of their loyalties. That is no doubt why Robert Gibbs, the  President’s Press  Secretary took a whack at the “professional left,” a statement he later said had been “inartful” but did not withdraw.

Writing on OpEd News, Kevin Gosztola was not surprised:

“While circumstantial, the best evidence for why Gibbs would feel like uttering the aforementioned remarks is the shift of money from Wall Street to Republicans ahead of the election… The Democrats earned 57 percent of campaign contributions from securities and investment industries.

The situation compels the Obama Administration, especially White House press secretary Gibbs, to whip the left and the sections that are most listened to by voters into line not only because money from business interests needs to swing back the other way but because disappointed and disillusioned voters will likely stay home, not donate to Democratic Party campaigns, not make phone calls, and refuse to go door-to-door canvassing prior to Election Day if they do not fall in line.”

According to a preliminary analysis, the Center for Responsive Politics reports that “individuals and political action committees linked to the financial and real estate sectors swung hard to the Republicans with their giving since last year….
In March 2009, 70 percent of money from the sector went to the governing party, but by this summer, 68 percent was going to the opposition, as Democrats fought to pass some version of a financial overhaul.”
The motivation for Gibbs’ remarks may or may not be tied to signaling Wall Street but the deeper truth is that everyone, right and left alike, seem frustrated and at the same time powerless to check the continuing economic decline.

The private sector is not creating jobs. The GOP is blocking the government from doing more stimulus programs while the system seems to be unraveling. All the talk of cutting deficits by conservatives or ending tax cuts by liberals will not give the economy the boost it needs. There is a paralysis of analysis and a stalemate.

The markets were more freaked by the recent pessimism oozing from the Fed than any partisan punditry. The slowdown they are worried about has already doomed any heavily-hyped “recovery.”

And the public knows it, according to the recent polls.

What’s worse is the tea leaves offer few signs of a turnaround any time soon even if General Motors is selling more cars—many, may we be reminded,  in China. (The GM CEO who last week took a nasty ingrate smack at GM being perceived as “Government Motors,” demanding the government sell all of its shares, has just announced he is leaving!  I wonder why?)

The Carlysle Group is taking over while the automaker launches a new program of subprime lending, the very predatory dealmaking that got them in trouble in the first place.

Does anyone ever learn from history, or care about how communities are being destroyed as a financial crisis becomes a social crisis at the grass roots level?

Check out what happened at that mall in Atlanta where thousands of people nearly rioted to get on a public housing waiting list. The Congress returned from its recess to pass new monies to keep teachers teaching and cops patrolling. They did so by slashing food stamps so the unemployed and poor –some 41% of people who rely on them—will have to cut back further.

What a trade-off.

As for insuring the stability of an increasingly volatile system, will the new financial reforms make any difference?  It doesn’t look like it. The LA Times reported, “As Wall Street scrambles to find the best and most profitable way to operate under the new financial reform law, Goldman Sachs Group Inc. — the firm that was expected to suffer the most under the legislation — could emerge practically unscathed…

“…we think we are well positioned to be a market leader under the new rules,” said Jack McCabe, co-head of Goldman’s derivatives clearing service business.

Richard Bove, a bank analyst at Rochdale Securities, said he had changed his view of the law’s effect on Goldman.

“I thought this company was going to be really harmed by this bill; now I’ve figured out that it’s not going to happen,” he said. “They should win big here.”

That’s Goldman’s reason to celebrate its “big win” What about the others? The truth is we will not know for a awhile, for a long while, for many, many years. So much for any sense of urgency even after former Fed Head Paul Volcker said we are running out of time.

Bloomberg News explained why,

“Many of the measures ordered by Congress and global regulators, aimed at cushioning the financial system in future crises, are years away from being implemented. The Basel Committee on Banking Supervision plans to give the world’s banks until 2018 to comply with limits on how much they can borrow. Parts of the Volcker rule, a provision of the new Dodd-Frank Act that would force firms to cut stakes in in-house hedge funds and private-equity units, may not go into effect for a dozen years…

“Based on our experience of government’s ability to execute these things effectively and in a timely way, we are almost uncovered now from any future financial risk for at least another 8 or 10 years, and that’s a little scary,” said Roy Smith, finance professor at New York University’s Stern School of Business and a former banker at Goldman Sachs Group Inc

Economist Nouriel Roubini, one of the first to forecast our crisis, worries that major economies in Europe are at risk and could fall. At the same time I am reading articles that contend, “The US is more bankrupt than Greece.”  Another reports the IMF saying the US is bankrupt but most Americans don’t know it.
What else don’t we know?

At the same time, the folks who brought us this crisis are still riding high, making multi-million dollar “settlements’ to cover up fraudulent practices.  In recent weeks, Goldman Sachs, Countrywide and, now, Wells Fargo have just done that in part to avoid prosecutions.

Their CEOS are going on vacation to spend their ill-gotten gains, not to jail to pay for their crimes. And the “professional left”—whatever that is supposed to be—is more pissed at Robert Gibbs blathering at that podium than the banksters maneuvering behind the scenes.

Can anyone tell me what’s wrong with this picture?

Just one footnote: In this week of growing economic despair, an 81 year old senior citizen named Bernard Stone stood outside the unemployment office in Harlem with a flyer of his own making calling on President Obama to issue an executive order closing all American-owned factories outsourcing jobs. If they don’t do it, their executives should, he suggests, lose their citizenship and be deported  to the countries to which they exported American jobs.

“The hundred or so people who read my leaflet liked that part,” he told me.

News Dissector Danny Schechter directed the film “Plunder: The Crime of Out Time” to investigate the financial crisis as a crime story. (Plunderthecrimeofourtime.com) Comments to dissector@mediachannel.org

 
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Call-in Days to Keep The Big 3 No Bailout Reforms

On June 10, 2010, In Background and Research, Congress, Corporations, Current Leadership, The Public, By Tiffiniy Cheng

OUR CALL-IN DAYS ARE OUR LAST HOPE FOR “NO BAILOUTS REFORMS”

LATEST UPDATES: Tell us how your call went in the report back section right here, or scroll down below. We have had so many calls and so many reports back, it’s really great to watch the staffers start to get it and know we’re around. This week, our targets are Sen. Johnson, Rep. Frank, Sen. Corker, and Sen. Reed. TPM reports on the four New Dems weakening measures behind closed-doors, can you call them and report back?: Rep. Luis Gutierrez (D-IL), (202) 225-8203; Rep. Gregory Meeks (D-NY), 202-225-3461; Rep. Mel Watt (D-NC), 202-225-1510; Rep. Dennis Moore, Chair (D-KS), (202)225-2865. Rep. Frank has tried to gut provisions to reform credit rating agencies, showing where he is going with the bill… The Senate agreed to expand auditing of the Fed – 1 BIG WIN SO FAR. Our #2 reform discussed now, seems like a win.. Thank you for making the calls! (Follow on @wayfwd, FaceBook, riski)

We’re going to make sure there are no backroom deals that effectively gut the best reforms currently in the bill — we’ve launched “Call-in Days for the Big 3 No Bailouts Reforms” to put every decision maker in the spotlight for gutting or keeping the Big 3. We have 14 days until June 24 to influence the financial reform bill to be something worth passing. So, yesterday on Tuesday, today on Wednesday (6/16), and tomorrow on Thursday (6/17), please help us get enough people so it’s like we’re walking right into the backroom with them and slapping their hands if they do something bad. We’ll update our list on the slimiest and worst on financial reform. Full list below.

Sign up for a day that works for you — you just need a 5 minute chunk of time free — and we’ll make your call effortless. If you’ve already signed up and when you finish your call, add what you find out in the report back section here. As soon as we hear back from you, we’ll update who is acting the sleaziest (you can also report back at #finreg #716 on twitter).

We need to call as much as each of us can to stop government support and incentives for banks to become bigger and riskier – this is structural reform.

WHAT’S HAPPENING IN THE LAST LEG OF FINANCIAL REFORM? The financial reform bill is going into the final stage in the legislative process this week and bought-out members of Congress are trying to stealthily remove all the provisions in it that the big banks oppose. The financial reform bill would be a pure product of lobbying and big banking if it were not for the just a handful of “No Bailout Reforms” that are still in the bill as we speak. Can you join us in making sure that conferees don’t gut the strongest provisions in the financial reform bill behind closed doors?

No-Bailout Reform #1, is Section 716, “PROHIBITION AGAINST FEDERAL GOVERNMENT BAILOUTS OF SWAPS ENTITIES”. Currently, the Senate financial reform bill still has language in it that will stop the biggest, most dangerous banks from getting federal bailouts for their riskiest gambling. The provision that provides for this would require banks to spin off the derivatives activities into separate entities without access to discount Fed money and FDIC guarantees. It is structural reform. This is the main provision that our conference committee members are being asked to gut by the lobbyists. 716 literally says this in its own bill text. Without this language financial companies that turned themselves into banks for the purpose of receiving bailouts under the TARP will get to stay bailout recipients in perpetuity. Without this language, the 2008 crisis will lead to a permanent situation where the government continually subsidizes derivatives trades, which were at the heart of what caused the crisis. Here’s more from Bankster.

No-Bailout Reform #2, STRONG CAPITAL REQUIREMENTS FOR BIG AND SMALL BANKS: When banks make their bets, they’re supposed to put some money down. Over the years, the largest banks received exemptions to how much, and therefore their bets got riskier. This time around, Senators Collins and Representative Speier have introduced complementary amendments in the Senate and House to make sure that the money these banks put down for their bets is real capital and is enough to keep the big banks from taking risks they can’t pay for and need to be bailed out by taxpayers. For strong capital requirements, the best of the House and Senate version need to stay. Here’s more from Rortybomb.

No-Bailout Reform #3, A NEW CONSUMER PROTECTION AGENCY: A signature reform of the Obama Administration and TARP watchdog Elizabeth Warren, an independent consumer watchdog agency can stop financial corporations from abusing consumers. “Subprime mortgages. Abusive and arbitrary rate hikes on your credit card. Payday loans. If you’re wondering who lets banks get away with this crap, there are more people at it than you think. There are no less than four federal regulators responsible for overseeing consumer protection in finance, and all of them are terrible,” writes Zach Carter. The Senate bill would house the CFPA in the Fed and allow the Fed to veto their rules proposal. That’s unacceptable. We need an independent CFPA, via the House bill, with full rule-making authority. More from HuffPo.

BIG REFORM #4: First and foremost, we’re advocates of breaking up the big banks. We fought for the Brown-Kaufman amendment to cap the size of banks before they get too big to fail, but it didn’t pass with the Senate bill. Therefore, we agree with Dr. Simon Johnson that Rep. Kanjorski’s amendment to allow regulators to break up the banks is an important part of the finreg bill and are happy to push for it. To see more reforms, see our blog post from Stephanie and Ruth.

Supporters of these measures are Nobel Laureate Economist Joseph Stiglitz and Paul Krugman, renowned Economists Robert Reich, Jane D’Arista, Dean Baker, Simon Johnson, Jennifer Taub, David Moss, Michael Greenberger, financial writers and advocates, Rortybomb/Mike Konczal, Ilan Moscovitz of the Motley Fool, Zach Carter of CAF/Alternet, Public Citizen, CAF, David Dayen/FireDogLake, BanksterUSA, McJoan of Daily Kos. Join them!

Latest movements for the strongest reforms: Simon Johnson, Rortybomb, FireDogLake. CNBC says banks will lose on 716. Fed Chiefs support 716. NYTimes editorial.

AND NOW, WHO IS WATERING DOWN THE BILL? We have figured out who is trying to water down the bill thanks to the many people who have told us what they have heard in the comments of this post and what has been said in public.

Who of the 28+ are running the sleaziest deals (today the top 4 are Frank, Reed, Johnson, and Corker)?:

Big Bank Defenders (they would love to hear from you):
* Rep. Luis Gutierrez (D, IL) (202) 225-8203 here, here
* Rep. Spencer Bachus (R, AL) 202-225-4921 report, report
* Sen. Jack Reed (R, RI) (202) 224-4642 here, CFPA
* Rep. Dennis Moore, Chair (D, KS) 202-225-2865 blue dog, here
* Rep. Mel Watt (D, NC) 202-225-1510 bank cash, pro-CFPA, here
* Rep. Gary Peters (D-MI), (202) 225-5802 here, here
* Sen. Saxby Chambliss (R-GA) 202 224 3521 here

* Rep. Scott Garrett (R, NJ) 202-225-4465 C-SPAN, this
* Sen. Mike Crapo (R-ID) 202-224-6142 here
* Rep. Judy Biggert (R, IL) 202-225-3515 bad
* Rep. Gregory Meeks (D, NY) (202) 225-3461 bad, here
* Rep. Jeb Hensarling (R, TX) 202-225-3484 bad
* Rep. Edward Royce (R, CA) 202-225-4111 here, here
* Sen. Judd Gregg (R-NH) 202 224 3324 report, article
* Sen. Richard Shelby (R-AL) 202 224 5744 here, here
* Sen. Bob Corker (R-TN) 202 224 3344 here

Public Defenders (so far):

* Rep. Paul Kanjorski (D, PA) (202) 225-6511 here
* Sen. Blanche Lincoln (D, AR) (202) 224-4843 gutting, reverting, report
* Rep. Collin Peterson (D-MN) 202-225-2165 prefers House version, maybe
* Sen. Tom Harkin (D, IA) (202) 224-3254 here
* Sen. Patrick Leahy (D, VT) (202) 224-4242 here
* Sen. Tim Johnson (D-S.D.) 202-224-5842 pro-CFPA
* Rep. Maxine Waters (D, CA) (202) 225-2201 here, here

MYSTERIOUS (they need calls ahora)

* Sen. Chris Dodd (D, CT) (202) 224-2823 report, and report, report
* Sen. Charles Schumer (D-NY) 202 224 6542 report, most fin cash, here
* Rep. Mary Jo Kilroy (D, OH) 202-225-2015 neutral
* Rep. Shelley Capito (R, WV) 202-225-2711 (against)
* Rep. Carolyn Maloney (D, NY) (202) 225-7944 unclear, here
* Rep. Barney Frank (D, MA) (202) 225-5931 no, yes, yes, here, YES

We hope that you are helping to call, join us for the next day or call right now, and further target the few people we need to reach. Then, help us finish the job — we can’t wait to hear from you so we can update our list of sleaziest deals — tell us what you hear in the comments of this post. Thanks for making it happen!

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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 Background and Research, 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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“Markets poised to punish Spain”

On March 1, 2010, In Background and Research, Corporations, free markets, By Joe Costello

Well it’s the lay of the land, my son.

The FT warns Spain today as the currency crisis gathers steam. The first paragraph states:

Miguel Angel Fernández Ordóñez, governor of the Bank of Spain, needed only one sentence to summarise the daunting scale of the challenges facing his country. “Unfortunately,” he told a conference last week, “we find ourselves at a historic moment.”

Ain’t that the truth. Those who romanticize history too often forget the very heavy lifting involved in epics of change, and for a modern world addicted to convenience, there’s the matter of simple fitness in rising to the challenge. The first matter at hand is to begin taking off the blinders and destructing the myths which have led us to down a path that has come to an end. Unfortunately, it doesn’t look like the FT will be of much help here.

The first myth we need to destruct is the one called “markets”, particularly when it is used in relation to the financial system. Some might feel a little indignant that those who created the whole mess, the “financial markets” are now calling the tune for the supposed solutions. Let’s understand, the “financial markets” are an extremely small group of institutions. Five giant corporations control the majority of the US banking system, add a few more players, such as Goldman, the Fed, and a handful of institutions in Europe and Asia, and you pretty much have the aristocracy of finance the FT and the WSJ like to call “the financial markets.”

Let’s remember, in the past two years, the system these institutions created failed at every level, and the only reason any of them exist today is because the massive infusion of your tax dollars that continues to flow into their coffers. So when they tell the little people of Europe and across the globe that’s its time for them to live within their means, there really is only one response, “Bullshit!”

Nonetheless, our financial overlords are in full blown hypocritical arrogance. The FT states:

The bad news for Mr Zapatero and other deficit-burdened European prime ministers is that the markets, impersonal yet fickle, do not give a damn about paradoxes or who was to blame yesterday for a problem today.

Yes indeed, the same institutions who over the past couple decades couldn’t create enough garbage debt, now want it to be made good. The FT itself, not above editorializing in its stories states:

Spain must, for its own sake and that of the eurozone, implement the measures announced with unwavering determination – and make them even tougher if the recession lasts longer than expected.

At some point, we’re going to have conclude the path we’ve been on for the past couple decades has ended. We have to dethrone our financial overlords and the way to begin doing that is destructing the debt to which they have us chained. Of course, that’s only the first step. It also means each of us are going to have to change how we do things. We can do that and still live better, but not the way we do now. Then In the future, people can gratefully romanticize our unfortunate historic times.

Cross-posted from Archein: “Markets poised to punish Spain”


 
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