Wall Street Executives Don't Get How Angry Main Street Is

A humorously serious look at life’s trials & tribulations,
American politics, religion, and other social madnesses by Beth Isbell.

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Wall Street Executives Don't Get How Angry Main Street Is

Post by roxybeast » October 23rd, 2009, 1:16 pm

<center>Wall Street Executives Just Don't Get How Angry Main Street Is
by Beth Isbell
</center>
Main Street is angry. Really angry. Wall Street executives excessive risk taking almost caused the biggest financial collapse since the Great Depression. If it weren't for a huge taxpayer funded government bailout, it would have. It still feels to most of America like it has despite the bailout. You would think that their near fatal behavior would cause them to reform their ways. Wrong. Instead they have taken taxpayer money, refused to dole out loans to deserving businesses as intended to boost the economy, and instead continued to stuff their pockets with it while continuing to take excessive risks with an attitude that hey, we're too big too fail, so we don't have to worry about it. Anger is probably an understatement for what Main Street thinks. If murder and lynching weren't illegal, Wall Street executives would be hanging from every tree in Central Park. And who could blame the angry mob?

Despite having their butts saved by taxpayers, Wall Street executives continue to engage in outrageous and shocking behavior. Consider these recent articles ...

AIG Executives in the unit responsible for causing it's downfall promised to return bonuses they had been paid using TARP money, ... now they are refusing to keep their promise:

http://www.bloomberg.com/apps/news?pid= ... nr.OOkoPRg


Meanwhile, Bank of America & AIG, and other firms who are subject to pay restrictions because of taking large amounts of bailout/TARP money or new government ownership, are reporting that their top executives are leaving in droves to work for other firms not so restricted ...

http://www.washingtonpost.com/wp-dyn/co ... c-business


Despite now being 1/3 owned by the Government/taxpayers and still owes the Govt $45 billion, Citigroup continues to spend millions to lobby against financial reform:

http://www.bloomberg.com/apps/news?pid= ... HYY4kjRgrA


So the Administration will reveal a new bill on Monday "which would give the government the power to dismantle large financial companies that get into crises. The new draft bill is expected to take a tougher stance toward troubled financial firms than the administration's original plan, and may take out some language that would allow for temporary bailouts."

http://www.reuters.com/article/governme ... 4420091023


Now I get that when executives pay is cut they are not happy and may wish to seek employment elsewhere, what I don't get is why these other non-restricted firms would hire them after their piss-poor performance that caused the collapse of their former employer. Also, the Administration's policy ought to be to impose pay restrictions on persons working at these firms that might have had a hand in the collapse, but not to restrict pay for new hires that have no ties to any of the failed firms - i.e., to encourage the bad apples to leave and encourage good new apples to come on board to fix the mess.

But it certainly is outrageous how these executives that caused their employers to fail act like they should not take any of the hit ... in my view, they ought to lose their savings, investments, stocks, luxury cars & big houses ... just like happened to a lot of their customers.

Former US Labor Secretary Robert Reich explains why Wall Street reform efforts are not making progress and the problems that caused the original collapse may even be getting worse:
Why Wall Street Reform is Stuck in Reverse
by Robert Reich

Huffington Post, October 22, 2009

At a conference in London, a Goldman Sachs international adviser, Brian Griffiths, praised inequality. As his company was putting aside $16.7 billion for compensation and benefits in the first nine months of 2009, up 46 percent from a year earlier, Griffiths told us not to worry. "We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all," he said.

Eight months ago it looked as if Wall Street was in store for strong financial regulation -- oversight of derivative trading, pay linked to long-term performance, much higher capital requirements, an end to conflicts of interest (i.e. credit rating agencies being paid by the very companies whose securities they're rating), and even resurrection of the Glass-Steagall Act separating commercial from investment banking.
Today, Congress is struggling to produce the tiniest shards of regulation that would at least give the appearance of doing something to rein in the Street.

What happened in the intervening months? Two things. First, America's attention wandered. We're now focusing on health care, Letterman's frolics, and little boys who hide in attics rather than balloons. And, hey, the Dow is up again. The politicians who put off Wall Street regulation for ten months knew that the public would probably lose interest by now.

Second, the banks keep paying off Congress. The big guns on Wall Street increased their political donations last month after increasing their lobbying muscle. Morgan Stanley's Political Action Committee donated $110,000 in September, for example, of which Democrats got $43,000.

Official Wall Street PAC donations are piddling compared to the tens of millions of dollars that Wall Street executives dole out to candidates on their own (or with a gentle nudge from their firms). Remember -- the Street is where the money is. Executives and traders on the Street have become the single biggest sources of money for Democrats as well as Republicans. And with mid-term elections looming next year, you can bet every member of Congress has a glint in his or her eye directed at the Street.

That's why the President went to Wall Street to raise money Tuesday night, gleaning about $2 million for the effort. He politely asked the crowd to cooperate with reform -- "If there are members of the financial industry in the audience today, I would ask that you join us in passing necessary reforms" -- but those were hardly fighting words. It's hard to fight people you're trying to squeeze money out of.

Which is the essential problem.

Ken Feinberg, the President's "pay czar" came down hard on executive pay yesterday, for those banks still collecting money under TARP, as well he should. But Feinberg isn't trying to pass new financial reform legislation, and TARP no longer covers several of the biggest banks with the highest pay and bonuses -- although they're still getting subsidized by the government with low-interest loans.

Wall Street and the Treasury want us to believe that the TARP money will be repaid to taxpayers, but Neil Barofsky, the special inspector general keeping watch over TARP, said yesterday that just 17 percent of the TARP money has been repaid, and "t's extremely unlikely that taxpayers will see a full return on their investment." Later he told a reporter that it's unlikely "we'll get a lot of our money back at all."
Brian Griffiths, the Goldman international adviser who told us inequality is good for us, doesn't know what he's talking about. America is lurching toward inequality once again, led by the financial industry. The Street is back to where it was in 2007, but most of the rest of us are poorer than we were then -- largely due to the meltdown that occurred because Wall Street overreached. The oddity is that we bailed out the Street, including Griffiths and his colleagues, but apparently won't even be repaid.

And now that Griffiths et al, knows his firm and the other big ones on the Street are too big to fail, he and his colleagues will make even bigger gambles in the future with our money.

Source: http://www.huffingtonpost.com/robert-re ... 30105.html


So what else can be done to reign in Wall Street excessive risk taking and obnoxious pay excesses even in the face of dismal performance. One suggestion being considered is a financial transactions tax ...

The $200,000 Insult: Come to Chicago
by Dean Baker, Co-Director of Center for Economic & Policy Research

Huffington Post, October 22, 2009

Kenneth Feinberg, President Obama's compensation czar for bailed out banks, appears to have taken some genuine steps to rein in excessive executive compensation at the basket case banks that received the most TARP money. He cut cash salaries by 90 percent in some cases and reduced overall compensation for the top executives at the seven institutions that received the most government money.

This is a good first step, but it is only a first step. The pay caps involve only a relatively small number of people in an industry where hugely bloated salaries are the norm. Even in these cases it is too early to know that the pay caps will actually prove to be binding. After all, Wall Street's main craft is evading regulations and taxes. It is entirely possible that those clever Wall Street boys will find a way to get around whatever pay restrictions Mr. Feinberg puts in place.

Whatever happens to the pay of this small group of executives the real problem goes much deeper. The Wall Street folks view the wreckage from last year as a minor distraction and are eager to get back to business as usual. This attitude was best expressed by "a person close to A.I.G.'s board," who said of plans to restrict pay at the AIG division that wrecked the company to $200,000: "that's insulting ... why wouldn't anybody quit?"

Of course, this "insulting" pay package would still give our AIG executives more pay than 99 percent of the work force. They would be getting more than three times as much as the average teacher, firefighter, or nurse. They would be getting more than five times as much as the average factor worker and more than ten times as much as minimum wage worker.

Furthermore, if anyone among these other groups of workers mess up so badly that they bring down their employer, they lose their job. They don't get to go somewhere else because a $200,000 paycheck is "insulting."

Wall Street badly needs fixing. Fortunately we have the tool to do the job. It's called a financial transactions tax (FTT) - a modest tax on trades of stock, futures, options and other financial instruments. Such a tax could easily raise $100 billion a year, while cutting the financial sector down to a manageable size.

An FTT is not an alien concept. We actually had a tax on stock trades until 1964. The United Kingdom still has a 0.25 percent tax on stock trades that, relative to the size of its economy, raises the equivalent of $40 billion a year in the United States.

If we follow the lead of the UK, we will a great revenue source that will barely touch most of the population. Investors who buy and hold stock for 10 years will barely be affected, as is the case of a farmer hedging her wheat crop. However, someone who buys stock at 2:00 with the intention of selling at 3:00 would pay a substantial price.

There are many other good arguments for an FTT, including that it is the fairest way to fix the damage to the budget caused by the recession and the bailout, but an FTT will not get an airing in a Congress where the banks continue to wield enormous power. Congress will only consider an FTT, as opposed to more regressive proposals like a national sales tax, if the public demands it.

The public will have an opportunity to express their outrage at the banks and the need to rein them in at the Showdown in Chicago beginning on October 25. If this protest proves successful, and there are hundreds more like it around the country, then Congress may start thinking more clearly about measures to change Wall Street culture and to get back our money.

Source: http://www.huffingtonpost.com/dean-bake ... 31038.html
Perhaps it may actually take a mob of pitchforks and ropes marching into Wall Street and gathering up the executives responsible for this mess before they finally understand how angry Main Street actually is. Let's hope they get the message before that happens.

But if they don't ...
Last edited by roxybeast on October 23rd, 2009, 1:37 pm, edited 4 times in total.

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Post by roxybeast » October 23rd, 2009, 1:20 pm

The Bonuses and the Damage They Do
by Dave Johnson

Huffington Post, August 26, 2009

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.

Source: http://www.huffingtonpost.com/dave-john ... 69308.html

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Post by roxybeast » October 23rd, 2009, 1:39 pm

Executive Pay Cuts? Hold the Standing Ovation
by Stuart Whatley

Huffington Post, October 23, 2009

The Obama administration's move this week to slash the pay of top executives at 'too big to fail' firms under TARP should be applauded. And that ovation should last for about one second. The pay cuts are certainly just and good, given the current state of things, but ultimately it's the psychologically palliative equivalent of swearing when you stub your toe.

Again, the administration may be buying time with a symbolic and cosmetic tactic that ignores the forest for a few trees -- and whether they're redwoods or saplings is irrelevant. Predictably, administration spokespeople are saying that the cuts were the "independent" decision of Kenneth Feinberg, and that the president had no direct role. Never mind the fact that Feinberg was appointed to Treasury by Obama as pay overseer last summer for this exact purpose.

Yes, the new rules are a significant step forward. But it's micro policy reform when we need macro, such as what Bernanke is now finally alluding to. Allowing the current media hullabaloo and any populist elation to belie the intense challenge facing real efforts to comprehensively reform our broken systems themselves would render these small gains moot.

While the firms in question -- Citigroup, AIG, Bank of America, Chrysler and GM -- are finally getting their due smack-down, Goldman Sachs, JP Morgan and Morgan Stanley are reporting record profits -- which surely will lead to record bonuses down the road -- all while continuing to hoard money with too few loans to Main Street to show for it.
And while the much-reviled (deserved or not) Bank of America CEO, Ken Lewis, has been pushed out of his job by the White House, Citigroup -- another bailout firm -- is inexplicably hiking credit card rates to vertiginous heights, just in time for an already economically lugubrious holiday season.

Look at the big economic picture: As has been the case for months now, it's characterized by an obscene trend of simultaneous climbs in both the Dow and unemployment.

Restricting pay at already or nearly sunk firms will do little to change this. Or to close the chasm of wealth disparity in this country that's been widening year by year. It will do nothing for the fact that the median family income has remained stagnant for the better part of a decade. Or for the fact that just under 50 million people remain without health insurance, while many who do have it can still go bankrupt from one serious ailment.

And in the nation's capitol, to think that restricting bailout firm pay will be felt as any kind of blow to the swarms of dedicated industry lobbyists laboring everyday (with some even funded by taxpayer money)to quash financial consumer protection and financial industry regulation reform legislation risks renaming oneself 'Pollyanna'.

Entrenched, institutionalized special interests are always at a natural advantage in the fight for real, comprehensive reform -- whether it's health care, finance, climate change, or anything else. Only when the barons of Capitol Hill and the White House (which itself is stacked with Goldman alumni) feel equal pressure from 'the rest of us' will the incentive to implement real change have any chance of surpassing the incentive to raise campaign funds and please political donors.

For a litmus test of where the government-Wall Street relationship will end up, one need only look to health care. The end product of health care reform -- whether it helps millions of Americans or solely insurance companies -- will be the first indicator for everything else to come.

So yes, a quick round of applause for Kenneth Feinberg for performing the job with which he was tasked. But hold off on the standing ovation; the Obama era does not need a "Mission Accomplished" moment.

Source: http://www.huffingtonpost.com/stuart-wh ... 30482.html

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Post by roxybeast » October 23rd, 2009, 1:45 pm

Wall Street and Their Seductive Loan Promotions Tricked Many on Main Street
by Rep. John Conyers, Chair of the House Judiciary Committee

Huffington Post, October 23, 2009

In Wayne County, Michigan, 195 homes go into foreclosure each day. According to the Congressional Oversight Panel, nationally, 1.8 million homes were lost to foreclosure from July 2007 through August 2009. And yet, in spite of these haunting numbers, as the New York Times blogged last week, bank executives seem more concerned about winning the blame game than anything else. Testifying before the House Financial Services Committee, the CEO of JP Morgan Chase insisted the foreclosure crisis is really the fault of the mortgage brokers. However, the New York Times revealed details of JP Morgan Chase's circulation of subprime loan advertisements advocating the loans' loose requirements to mortgage brokers back in 2005. The headlines of the leaked ads [pdf] read, "The Top 10 Reasons to Choose Chase for All Your Subprime Needs," "Chase No Doc," "Got Bank Statements?" and "Get Approved!"

Too many companies like JP Morgan Chase rushed into this sub-prime mortgage spotlight of praise and profit to the demand of the investors, but now after being invited to take their rightful places on the stage of reality and responsibility, nobody's walking. The stage is too bare and the call too faint. Such seems to be precedence. The call to rewards and favor is always loud and clear while the call to justice resounds barely above a whisper. It is mind-boggling to believe that with such a vast chain operation, banking giants like JP Morgan Chase were not the least bit aware of the wrongful lending practices being undertaken.

Nonetheless, now we know that JP Morgan Chase was more than hands on. They advertised and promoted this unscrupulous lending scheme. They were hands on when the money was flowing and hands off when critics were looking. Not only should they own up to the responsibility and take their rightful places of shame, but they should change their modus operandi to make sure that this doesn't happen again.

While last week's annual Dow Jones record high may breed optimism for many, I cannot help but be fearful of a possible repeated cycle emerging in which the run of record high revenues may continue to fuel these greedy practices that create inevitable losses, disproportionately felt by the hard-working individuals on Main Street. Sadly, a year after the supposed push for heightened financial reform, countless individuals are still left unemployed and financially plagued with burdensome mortgage loans. We cannot continue to allow Wall Street greed to solely drive revenue at the expense of others' welfare. Something must be done not only to stop this cycle, but most importantly, to provide relief. And I have a plan.

With Detroit being among the worst hit cities of this crisis, I have been tirelessly and intimately engaged in getting out better tools for people who are stuck in this downward spiral. First, since countless individuals facing foreclosure lack legal representation to protect their rights, I am working to increase funding for Legal Services Corporation (LSC) and lift the restrictions on whom LSC can service. LSC provides civil legal assistance for low-income individuals, but currently inadequately funded, in the category of foreclosures -- LSC-funded programs have been projected to turn away two for every person served. Should such restrictions get lifted and funding increased, more people will be empowered with the necessary resources to battle these scheming banking giants. In fact, next Tuesday, I will be holding a hearing on the fine points of these needed changes.

Second, Treasury Secretary Timothy Geithner recently announced that approximately 500,000 American families were participating in the home loan modification program first initiated in March by the Obama Administration. Paling in comparison to the great number of those facing foreclosure, this rather skim number indicates the mere few who have broken down the barriers to qualify for the program. The Home Affordable Modification Program (HAMP) neglects a large portion of those in need, because it requires unreasonably complex paperwork and unfair qualification restrictions. Revamping the program's administrative process will allow the program to carry out its intended purpose. To make matters worse for borrowers, bankruptcy judges are prohibited in modifying home mortgages, such as reducing excessive interest notes and hidden charges. Eliminating this anomaly in law will encourage more lenders to voluntarily modify mortgages and broaden bankruptcy foreclosure relief for the larger sums.

I will continue to fight and demand for all these remedies in the coming weeks in order to get out better solutions to help those facing such financial hardships. Like many of the other nationwide debates we find ourselves immersed in today, this debate on the subprime mortgage crisis is sadly shifting in focus at the detriment of people's welfare. We must now refocus and bring back into the spotlight the need for change and aid those who have fallen victim during these financially perilous times.

Source: http://www.huffingtonpost.com/john-cony ... 31496.html

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Post by roxybeast » October 23rd, 2009, 1:49 pm

My Action Plan: 15 Things Every American Can Do Right Now
by Michael Moore

Huffington Post, October 22, 2009

Friends,

It's the #1 question I'm constantly asked after people see my movie: "OK -- so now what can I do?!"

You want something to do? Well, you've come to the right place! 'Cause I got 15 things you and I can do right now to fight back and try to fix this very broken system.

Here they are:

FIVE THINGS WE DEMAND THE PRESIDENT AND CONGRESS DO IMMEDIATELY:

1. Declare a moratorium on all home evictions. Not one more family should be thrown out of their home. The banks must adjust their monthly mortgage payments to be in line with what people's homes are now truly worth -- and what they can afford. Also, it must be stated by law: If you lose your job, you cannot be tossed out of your home.

2. Congress must join the civilized world and expand Medicare For All Americans. A single, nonprofit source must run a universal health care system that covers everyone. Medical bills are now the #1 cause of bankruptcies and evictions in this country. Medicare For All will end this misery. The bill to make this happen is called H.R. 3200. You must call AND write your members of Congress and demand its passage, no compromises allowed.

3. Demand publicly-funded elections and a prohibition on elected officials leaving office and becoming lobbyists. Yes, those very members of Congress who solicit and receive millions of dollars from wealthy interests must vote to remove ALL money from our electoral and legislative process. Tell your members of Congress they must support campaign finance bill H.R.1826.

4. Each of the 50 states must create a state-owned public bank like they have in North Dakota. Then congress MUST reinstate all the strict pre-Reagan regulations on all commercial banks, investment firms, insurance companies -- and all the other industries that have been savaged by deregulation: Airlines, the food industry, pharmaceutical companies -- you name it. If a company's primary motive to exist is to make a profit, then it needs a set of stringent rules to live by -- and the first rule is "Do no harm." The second rule: The question must always be asked -- "Is this for the common good?" (Click here for some info about the state-owned Bank of North Dakota.)

5. Save this fragile planet and declare that all the energy resources above and beneath the ground are owned collectively by all of us. Just like they do it in Sarah Palin's socialist Alaska. We only have a few decades of oil left. The public must be the owners and landlords of the natural resources and energy that exists within our borders or we will descend further into corporate anarchy. And when it comes to burning fossil fuels to transport ourselves, we must cease using the internal combustion engine and instruct our auto/transportation companies to rehire our skilled workforce and build mass transit (clean buses, light rail, subways, bullet trains, etc.) and new cars that don't contribute to climate change. (For more on this, here's a proposal I wrote in December.) Demand that General Motors' de facto chairman, Barack Obama, issue a JFK man-on-the-moon-style challenge to turn our country into a nation of trains and buses and subways. For Pete's sake, people, we were the ones who invented (or perfected) these damn things in the first place!!

FIVE THINGS WE CAN DO TO MAKE CONGRESS AND THE PRESIDENT LISTEN TO US:

1. Each of us must get into the daily habit of taking 5 minutes to make four brief calls: One to the President (202-456-1414), one to your Congressperson (202-224-3121) and one to each of your two Senators (202-224-3121). To find out who represents you, click here. Take just one minute on each of these calls to let them know how you expect them to vote on a particular issue. Let them know you will have no hesitation voting for a primary opponent -- or even a candidate from another party -- if they don't do our bidding. Trust me, they will listen. If you have another five minutes, click here to send them each an email. And if you really want to drop an anvil on them, send them a snail mail letter!

2. Take over your local Democratic Party. Remember how much fun you had with all those friends and neighbors working together to get Barack Obama elected? YOU DID THE IMPOSSIBLE. It's time to re-up! Get everyone back together and go to the monthly meeting of your town or county Democratic Party -- and become the majority that runs it! There will not be many in attendance and they will either be happy or in shock that you and the Obama Revolution have entered the room looking like you mean business. President Obama's agenda will never happen without mass grass roots action -- and he won't feel encouraged to do the right thing if no one has his back, whether it's to stand with him, or push him in the right direction. When you all become the local Democratic Party, send me a photo of the group and I'll post it on my website.

3. Recruit someone to run for office who can win in your local elections next year -- or, better yet, consider running for office yourself! You don't have to settle for the incumbent who always expects to win. You can be our next representative! Don't believe it can happen? Check out these examples of regular citizens who got elected: State Senator Deb Simpson, California State Assemblyman Isadore Hall, Tempe, Arizona City Councilman Corey Woods, Wisconsin State Assemblyman Chris Danou, and Washington State Representative Larry Seaquist. The list goes on and on -- and you should be on it!

4. Show up. Picket the local branch of a big bank that took the bailout money. Hold vigils and marches. Consider civil disobedience. Those town hall meetings are open to you, too (and there's more of us than there are of them!). Make some noise, have some fun, get on the local news. Place "Capitalism Did This" signs on empty foreclosed homes, closed down businesses, crumbling schools and infrastructure. (You can download them from my website.)

5. Start your own media. You. Just you (or you and a couple friends). The mainstream media is owned by corporate America and, with few exceptions, it will never tell the whole truth -- so you have to do it! Start a blog! Start a website of real local news (here's an example: The Michigan Messenger). Tweet your friends and use Facebook to let them know what they need to do politically. The daily papers are dying. If you don't fill that void, who will?

FIVE THINGS WE SHOULD DO TO PROTECT OURSELVES AND OUR LOVED ONES UNTIL WE GET THROUGH THIS MESS:

1. Take your money out of your bank if it took bailout money and place it in a locally-owned bank or, preferably, a credit union.

2. Get rid of all your credit cards but one -- the kind where you have to pay up at the end of the month or you lose your card.

3. Do not invest in the stock market. If you have any extra cash, put it away in a savings account or, if you can, pay down on your mortgage so you can own your home as soon as possible. You can also buy very safe government savings bonds or T-bills. Or just buy your mother some flowers.

4. Unionize your workplace so that you and your coworkers have a say in how your business is run. Here's how to do it (more info here). Nothing is more American than democracy, and democracy shouldn't be checked at the door when you enter your workplace. Another way to Americanize your workplace is to turn your business into a worker-owned cooperative. You are not a wage slave. You are a free person, and you giving up eight hours of your life every day to someone else is to be properly compensated and respected.

5. Take care of yourself and your family. Sorry to go all Oprah on you, but she's right: Find a place of peace in your life and make the choice to be around people who are not full of negativity and cynicism. Look for those who nurture and love. Turn off the TV and the Blackberry and go for a 30-minute walk every day. Eat fruits and vegetables and cut down on anything that has sugar, high fructose corn syrup, white flour or too much sodium (salt) in it (and, as Michael Pollan says, "Eat (real) food, not too much, mostly plants"). Get seven hours of sleep each night and take the time to read a book a month. I know this sounds like I've turned into your grandma, but, dammit, take a good hard look at Granny -- she's fit, she's rested and she knows the names of both of her U.S. Senators without having to Google them. We might do well to listen to her. If we don't put our own "oxygen mask" on first (as they say on the airplane), we will be of no use to the rest of the nation in enacting any of this action plan!

I'm sure there are many other ideas you can come up with on how we can build this movement. Get creative. Think outside the politics-as-usual box. BE SUBVERSIVE! Think of that local action no one else has tried. Behave as if your life depended on it. Be bold! Try doing something with reckless abandon. It may just liberate you and your community and your nation.

And when you act, send me your stories, your photos and your video -- and be sure to post your ideas in the comments beneath this letter on my site so they can be shared with millions.

C'mon people -- we can do this! I expect nothing less of all of you, my true and trusted fellow travelers!

Yours,
Michael Moore
MMFlint@aol.com
MichaelMoore.com

Source: http://www.huffingtonpost.com/michael-m ... 29664.html
Note--Mike included some really useful & helpful active links in his original article on Huffington Post, so I encourage you to go to the original letter posted to check out & save the links for your files ... And to go out and see his new film: Capitalism: A Love Story
http://www.huffingtonpost.com/michael-m ... 29664.html

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Post by roxybeast » October 24th, 2009, 5:40 pm

Soros says taxpayers right to resent bank bonuses
Reuters, October 23, 2009

LONDON (Reuters) - Billionaire investor George Soros said U.S. taxpayers were entitled to resent bankers' bonuses because their profits were funded by government bailouts, according to an interview published in the Financial Times.

"Those earnings are not the achievement of risk-takers. These are gifts, hidden gifts, from the government, so I don't think that those monies should be used to pay bonuses," the paper quoted him as saying in its Saturday edition. "There's a resentment which I think is justified."

The U.S. government committed hundreds of billions of dollars to bailing out financial firms, some of which have since reported surging profits.

Soros said there was a need to regulate payments to employees, even if that meant banks found it difficult to retain talented risk-takers.

"That would push the risk-takers who are good at taking risks out of Goldman Sachs into hedge funds, where they actually belong, because hedge funds take risks with their own capital, not with deposits and not with government guarantees."

Soros also said he believed the decline of the U.S. dollar would be limited by its tie to the Chinese currency. "As long as the renminbi is tied to the dollar, I don't see how the decline in the dollar can go too far," he said.

"There is a general lack of confidence in currencies and a move away from currencies into real assets ... There is a push in gold, there's a strength in oil and that is a flight from currencies."

Soros said the rally in the U.S. stock market would continue for the rest of the year, but warned that "the hope of a rapid recovery in the U.S. is misplaced."

(London World Desk)

Source: http://www.reuters.com/article/business ... K720091023

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Post by roxybeast » October 24th, 2009, 7:46 pm

I don't necessary agree that this next article presents the answer to the problem, but a limited form of what he is suggesting may serve useful ...
Why Billionaires Should Pay for the Jobless Recovery
by Les Leopold

Huffington Post, October 24, 2009

We are entering the billionaire bailout society.

For the past thirty years we have minted billionaires, and we have created the most unequal distribution of wealth since 1928-29. This didn't happen by accident. We deliberately deregulated the financial sector and we deliberately eliminated the steep progressive taxes on the super-rich that had kept in check our income distribution.

By unleashing capital and finance we were supposed to get an enormous investment boom in real goods and services. Instead we got a fantasy finance boom as Wall Street marketed derivatives to those with excess capital.

We also got the biggest crash since the Great Depression.

Perhaps the most dramatic measure of our emerging billionaire bailout society is seen by comparing compensation for the top 100 CEOs and to that of average workers (the 100 million or so non-supervisory production workers). In 1970 the ratio was 45 to 1. By 2006 it was 1,723 to one.

Another critical feature of the billionaire bailout society is the creation of institutions that are too big to fail. Historically, our anti-trust division was supposed to prevent that. But it became another casualty of our grand deregulatory experiment. So financial institutions grew to the point where their failure would bring down our system. We tested that idea last fall when we let Lehman Brothers go under: It crashed global financial markets and moved us to the brink of a depression.

So in our billionaire bailout society we bail them out instead of breaking them up. We bail out all of them - not just the basket cases like A.I.G, Citigroup, GM etc. The popular media line is that once a financial institution repays TARP, it no longer is on government welfare. No so.

TARP is only one of the many government bailout programs that pours billions into the coffers of Goldman Sachs, JP Morgan Chase and, Morgan Stanley. Their bottom-lines and bonuses, for example, were fattened when we allowed A.I.G. to pay off its bets (with our money) at par value to these large financial institutions. Had A.I.G. gone under they all would have been on the edge of collapse.

As Joe Nocera put it in the New York Times :
So let's add it up: the $12.9 billion in A.I.G. help, the $10 billion in TARP, the F.D.I.C. guarantee program, the easy money trading distressed securities into the TALF program. I can't say for sure how much of the $16 billion the firm has set aside for bonuses can be attributed to government assistance of one form or another. But it's got to be a fairly substantial amount -- at least $2 billion or $3 billion.
And that's a very conservative estimate. It might be the case that the entire bonus pool is equal to the subsidies pulled in from taxpayer support. But this is to be expected in our billionaire bailout society.

Perhaps the most damaging feature of our billionaire bailout society is the "jobless recovery." This oxymoron refers to an economy that is growing, but that can't produce nearly enough jobs to reach full employment (an unemployment rate below 5 percent). Our current jobless recovery will be the worst ever. Right now the BLS (U6) jobless rate stands at 17.0 percent -- and climbing. (This counts those without work plus those who have part-time jobs because they can't find full-time work.) If the billionaire bailout society becomes permanent, we may never see full employment again.

Why is that? Because you don't need a full employment society to mint billionaires. Reflect for a moment on Goldman Sachs. They do not have individual depositors. They are not public brokers. They do not make loans to small business. They are in the business of making money by playing the financial markets, from mergers and acquisitions, from trading, and from creating and selling fantasy finance instruments.

In our billionaire bailout society these are unquestioned positive activities. But what value do they produce in the real economy? What is their contribution to market efficiency? How do they lower the cost of capital? How do these activities create jobs in the real economy? Good luck answering those questions because they don't do any of that. They just make money for themselves while producing little or no value to our society.

It's obvious we need to break up these large institutions so that we won't have to bail them out the next time around -- which may come sooner than expected given the lack of jobs and the fact that the financial casino is open again.

But we can't solve the bailouts without addressing the billionaire part of the equation.

Two years ago the richest 400 Americans had a combined wealth of $1.57 trillion. Last year during the crash their wealth dropped to "only" $1.27 trillion. Now they are set to rise again. We need to tie their wealth of our richest to putting our people back to work.

Here's the simplest and most controversial approach: a 10 percent wealth tax on all those with more than $500 million -- until unemployment drops below 5 percent. The money collected would come to about $150 billion a year. That money should be directly invested in public works programs to put our people to work -- a Green Corps to weatherize every home and office in the country -- a Youth Corps to provide work for unemployed high school and college graduates.

(I realize that many Americans detest the idea of taxing anyone's assets, even billionaires'. But let's be realistic: That's where our society's wealth has gone and we need that wealth to put people back to work. Some billionaires do create large numbers of jobs, but not enough. They can contribute more and not feel a bit of pain or suffering.)

To break away from the billionaire bailout society we need to tie the creation of wealth to the creation of work. We no longer have a system that can produce an adequate number of jobs through the normal working of the business cycle. The invisible hand of the market just won't do it. That's why it's called a jobless recovery. We need direct intervention.

But more importantly, we need to end our pell-mell slide into the billionaire bailout society in which everyone is out for themselves. We need to pull together to create a full employment society that can tackle our most pressing needs. Billionaires, no matter how thoughtful, kind, generous and inventive, can't do that for us.

We once understood that the common good required full employment. We once understood that the common good was more precious than individual riches. We once believed that public service to achieve such goals was a high calling. I hope that spirit still lies within us.

Les Leopold is the author of The Looting of America: How Wall Street's Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It, Chelsea Green Publishing, June 2009.

Source: http://www.huffingtonpost.com/les-leopo ... 32768.html

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Post by roxybeast » October 25th, 2009, 1:58 am

Sen. Specter is right. The Government has to take the lead in creating new jobs and re-training workers. Righting the economy is one reason. Another is that with the advent of new technology that replaces human labor with machines, creation of new jobs and new types of jobs is and will become more and more critical to maintaining full employment.
The Government Needs to Take the Reins In Job Creation
by Sen. Arlen Specter

Huffington Post, October 21, 2009

It is time for the government to take more direct action to stem the tide of joblessness that is hampering the recovery and demolishing the hopes of millions of unemployed workers.

A tax credit to encourage employers to create new jobs or extend hours worked is just the kind of direct subsidy that worked so well with the cash-for-clunkers program. That was about cars. This is about jobs and people, an unquestionable priority. The moral imperative to act aggressively is clear.

One proposal would provide companies with a $4,000 credit, paid out over two years, for every employee hired. Another proposal by the Economic Policy Institute, a research group, would provide a two-year credit worth twice the first-year payroll tax for each new hire. This could amount to several thousand dollars, depending on the salary of the new employee.

Tax credits would add another weapon to the government's arsenal in its battle against joblessness. The American Recovery and Reinvestment Act is providing billions of dollars in direct grants for shovel-ready jobs to rebuild America's highways and bridges and to jumpstart efforts in alternative energies like wind and solar power. Tax credits could encourage job creation in industries that do not now receive money under the economic stimulus.

Recent signs of recovery and those who say the recession is over are cold comfort for the millions who are still searching for work or have stopped looking. For many, their world is bound by paying the bills and raising families.

As New York Times columnist Bob Herbert wrote recently, "America needs jobs now, and if the economy on its own is incapable of putting people back to work - which appears to be the case - then the government needs to step in with aggressive job-creation efforts. "
Franklin Roosevelt knew what was at stake. The man who helped launch a massive public works program told a Depression-burdened nation in his first inaugural that "Our greatest primary task is to put people to work," a job he compared to the "emergency of a war."

We could all take a lesson from FDR.

Source: http://www.huffingtonpost.com/sen-arlen ... 28317.html

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Post by roxybeast » October 25th, 2009, 2:16 am

Republicans Must Stop Playing Politics With Unemployment Benefits
by Sen. Kirsten Gillibrand (D-NY)
Huffington Post, October 19, 2009

More than 7,000 people across the country are losing their unemployment benefits every single day because Republicans are playing politics. Hardworking, middle class families, who are already cutting coupons and squeezing pennies to make ends meet, are now going to have the last strand of the safety net pulled right out from under them, simply because Republicans are obstructing progress.

Last week, the majority of my colleagues and I moved twice to extend unemployment benefits for millions of hardworking Americans who have been laid off and unable to find work in this difficult economy. These are our families, our friends, our neighbors. We all know someone who has been thrown into this situation.

But rather than do what is right, Republicans did what was politically convenient, twice blocking the extension in an effort to derail other economic recovery programs.

This week my colleagues and I will try again to extend the badly needed payments for another 13 weeks. It is my hope that Republicans will drop their obstruction and join with us to extend unemployment benefits to tens of thousands of hardworking Americans.

With almost 14 million people unemployed around the country, the U.S. unemployment rate is approaching 10 percent; right here in New York, it's 8.9% and 10.3% in New York City. Without an extension, tens of thousands of New Yorkers and about a million of our long-term unemployed nationwide will lose benefits by the end of the year. We must not allow this to happen, especially as the holidays approach. As our economic recovery continues to take shape, it's crucial that we not forget about those families who are hurting the most, still struggling to find work in a very difficult job market.

When I travel throughout New York, I speak to many who are struggling. They tell me how hard they are looking for jobs, that there simply aren't any. When there is a job opening, hundreds of applicants show up and line up around the block for a chance to get hired. These are hard working people who would much prefer to work to put food on their table rather than accept a check from the government. But until our economy recovers to a point where it's creating jobs at a sustainable pace, we must step in to help.

Extending unemployment benefits is not only the morally right thing to do, it is good economic policy in a recession. These unemployment benefits not only put money in the hands of those that need it most, but they are immediately stimulative to the economy, as families use the funds for the most critical needs.

So far this year in New York alone, 70,000 people in the Rochester/Finger Lakes region have collected unemployment benefits, 78% of whom relied on those benefits for their basic necessities; in the Hudson Valley region, more than 90,000 collected the benefits, 68% of whom relied on that income for their basic needs; more than 125,000 Long Island residents collected unemployment benefits, 76% of whom relied on that money to support their families; and in New York City, nearly 400,000 people collected unemployment benefits, 67% of whom relied on that money for their basic needs.

The job market is historically the last step of an economic recovery, forcing the unemployed to bear the brunt of the recession the longest and making it increasingly difficult to find new work. It's simply unfair and unreasonable to ask them to bear this burden without assistance, and I hope Republicans will stop obstructing and join us in helping our fellow Americans in their time of need.

Source: http://www.huffingtonpost.com/rep-kirst ... 25822.html

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Post by roxybeast » October 26th, 2009, 3:16 pm

<center>Some Additional Articles:</center>

The Nation: Anger, At Last ... http://www.thenation.com/blogs/notion/4 ... er_at_last

Huffington Post: Ed Yingling: Banking Industry's Top Defender Got It Wrong Over and Over Again ... http://www.huffingtonpost.com/2009/10/2 ... 33481.html

Website Urging Bank Protests: http://www.showdowninchicago.org/

Huffington Post: Showdown in Chicago (photos of protest) ... http://www.huffingtonpost.com/2009/10/2 ... 33245.html

Huffington Post: Opening Night in Chicago: Senator Durbin Denounces Unfairness; Calls for Reform ... http://www.huffingtonpost.com/rob-johns ... 33720.html

Huffington Post: Showdown In Chicago: Sheila Bair Speaks To Protesters, Backs Consumer Protection Agency (VIDEO) ... http://www.huffingtonpost.com/2009/10/2 ... 33969.html

Huffington Post: Mark Fisher On Morning Meeting: Taxpayers Need To Get "Their Pound Of Flesh" From Bailout Banks ... http://www.huffingtonpost.com/2009/10/2 ... 34077.html

Huffington Post: Executive Compensation: The Best Halloween Costume ... http://www.huffingtonpost.com/jill-schl ... 33755.html

Huffington Post: Arriana Huffington - Sunday Roundup
... http://www.huffingtonpost.com/arianna-h ... 32699.html

And finally ...
Trying to Rein In ‘Too Big to Fail’ Institutions
by Stephen Labaton

New York Times, October 25, 2009

WASHINGTON — Congress and the Obama administration are about to take up one of the most fundamental issues stemming from the near collapse of the financial system last year — how to deal with institutions that are so big that the government has no choice but to rescue them when they get in trouble.

A senior administration official said on Sunday that after extensive consultations with Treasury Department officials, Representative Barney Frank, the chairman of the House Financial Services Committee, would introduce legislation as early as this week. The measure would make it easier for the government to seize control of troubled financial institutions, throw out management, wipe out the shareholders and change the terms of existing loans held by the institution.

The official said the Treasury secretary, Timothy F. Geithner, was planning to endorse the changes in testimony before the House Financial Services Committee on Thursday.

The White House plan as outlined so far would already make it much more costly to be a large financial company whose failure would put the financial system and the economy at risk. It would force such institutions to hold more money in reserve and make it harder for them to borrow too heavily against their assets.

Setting up the equivalent of living wills for corporations, that plan would require that they come up with their own procedure to be disentangled in the event of a crisis, a plan that administration officials say ought to be made public in advance.

“These changes will impose market discipline on the largest and most interconnected companies,” said Michael S. Barr, assistant Treasury secretary for financial institutions. One of the biggest changes the plan would make, he said, is that instead of being controlled by creditors, the process is controlled by the government.

Some regulators and economists in recent weeks have suggested that the administration’s plan does not go far enough. They say that the government should consider breaking up the biggest banks and investment firms long before they fail, or at least impose strict limits on their trading activities — steps that the administration continues to reject.

Mr. Frank, Democrat of Massachusetts, said his committee would now take up more aggressive legislation on the topic, even as lawmakers and regulators continue working on other problems highlighted by the financial crisis, including overseeing executive pay, protecting consumers and regulating the trading of derivatives.

Illustrative of the mood of fear and anger over the huge taxpayer bailouts was Mr. Frank’s recent observation that critics of the administration’s health care proposal had misdirected their concerns — Congress would not be adopting death panels for infirm people but for troubled companies.

The administration and its Congressional allies are trying, in essence, to graft the process used to resolve the troubles of smaller commercial banks onto both large banking conglomerates and nonbanking financial institutions whose troubles could threaten to undermine the markets.

That resolution process gives the government far more sweeping authority over the institution and imposes major burdens on lenders to the companies that they would not ordinarily face when companies go into bankruptcy instead of facing a takeover by the government.

Deep-seated voter anger over the bailouts of companies like the American International Group, Citigroup and Bank of America has fed the fears of lawmakers that any other changes in the regulatory system must include the imposition of more onerous conditions on those financial institutions whose troubles could pose problems for the markets.

Some economists believe the mammoth size of some institutions is a threat to the financial system at large. Because these companies know the government could not allow them to fail, the argument goes, they are more inclined to take big risks.

Also, under the current regulatory structure, the government has limited power to step in quickly to resolve problems at nonbank financial institutions that operate like the failed investment banks Lehman Brothers and Bear Stearns, and like the giant insurer A.I.G.

As Wall Street has returned to business as usual, industry power has become even more concentrated among relatively few firms, thus intensifying the debate over how to minimize the risks to the system.

Some experts, including Mervyn King, governor of the Bank of England, and Paul A. Volcker, the former chairman of the Federal Reserve, have proposed drastic steps to force the nation’s largest financial institutions to shed their riskier affiliates.

In a speech last week, Mr. King said policy makers should consider breaking up the largest banks and, in effect, restore the Depression-era barriers between investment and commercial banks.

“There are those who claim that such proposals are impractical. It is hard to see why,” Mr. King said. “What does seem impractical, however, are the current arrangements. Anyone who proposed giving government guarantees to retail depositors and other creditors, and then suggested that such funding could be used to finance highly risky and speculative activities, would be thought rather unworldly. But that is where we now are.”

The prevailing view in Washington, however, is more restrained. Daniel K. Tarullo, an appointee of President Obama’s, last week dismissed the idea of breaking up big banks as “more a provocative idea than a proposal.”

At a meeting Friday at the Federal Reserve Bank of Boston, the Federal Reserve chairman, Ben S. Bernanke, said in response to a question by a former Bank of England deputy governor that he would prefer “a more subtle approach without losing the economic benefit of multifunction, international firms.”

Republican and Democratic lawmakers generally agree that the “too big to fail” policy of taxpayer bailouts for the giants of finance needs to be curtailed. But the fine print — how to reduce the policy and moral hazards it has encouraged — has provoked fears on Wall Street.

Even before Mr. Frank unveils his latest proposals, industry executives and lawyers say its approach could make it unnecessarily more expensive for them to do business during less turbulent times.

“Of course you want to set up a system where an institution dreads the day it happens because management gets whacked, shareholders get whacked and the board gets whacked,” said Edward L. Yingling, president of the American Bankers Association. “But you don’t want to create a system that raises great uncertainty and changes what institutions, risk management executives and lawyers are used to.”

T. Timothy Ryan, the president of the Securities Industry and Financial Markets Association, said the market crisis exposed that “there was a failure in the statutory framework for the resolution of large, interconnected firms and everyone knows that.” But he added that many institutions on Wall Street were concerned that the administration’s plan would remove many of the bankruptcy protections given to lenders of large institutions.

Source: http://www.nytimes.com/2009/10/26/busin ... 26big.html

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Post by roxybeast » October 27th, 2009, 10:28 am

Barack Obama Is Doing My Job; Why America Needs Him to Do His
by Arianna Huffington

Huffington Post, October 26, 2009

When it comes to dealing with Wall Street, President Obama seems to have traded in his position as our economy's commander-in-chief for a different role: pundit-in-chief. He and his top advisors are suddenly very big on urging, advocating, recommending, strongly suggesting, and cajoling.

During his weekly radio address, which focused on the need to get America's banks lending to small businesses again (wasn't that the reason we bailed out the banks in the first place?), the president declared that "it's time for those banks to fulfill their responsibility to help ensure a wider recovery, a more secure system, and more broadly shared prosperity." But "it's time for" is the kind of thing we pundits say: "It's time for the banks to do this and that... It's time for Congress to do this and that... It's time for the president to do this and that."

Then the president laid out his plan of action: "We're going to take every appropriate step to encourage them to meet those responsibilities."

Encourage them? How about make them? Columnists and bloggers encourage. Presidents execute. It's in the job description. Hence: the executive branch.

But when it involves America's banks, the White House all-too-frequently sounds as if it's just an innocent, helpless bystander -- and we get declarations like the one David Axelrod delivered on This Week: "We have limited sway other than moral suasion with some of these [banks]."

Is moral suasion really all we can do?

And take this attempt by Robert Gibbs to show that the administration realizes that talk isn't enough -- while failing to realize that just realizing that talk isn't enough is, in fact, also not enough.

"This is not hope," he said at a daily briefing. "This is more."

He continued: "I think the president... has extremely strong views on this topic, on the topic of lending. And I think we hope that the actions of the bank will be demonstrated."

So I guess sometimes it's actually not more than hope. And as for Gibbs' comment that the president has "strong views": again, I have strong views. The president has the power to turn strong views into transformative policies.

And even when the president does move from hopes and views to actions, the actions he chooses are less than muscular.

Take the aforementioned central question of how to get banks lending to small businesses again. During his radio address, the president lamented the fact that "too many small business owners are still struggling to get the credit they need. These are the very taxpayers who stood by America's banks in a crisis -- and now it's time for our banks to stand by creditworthy small businesses, and make the loans they need to open their doors, grow their operations, and create new jobs."

So what does President Obama intend to do about it? He's going to (wait for it)... convene a conference.

"I've asked Tim Geithner and Karen Mills," the president announced last week, "to convene a conference in the coming weeks that will bring together regulators, congressional leaders, lenders and small businesses to determine what additional steps we can take to get credit flowing to small businesses that want to expand and create more jobs."

Convene a conference? You hear that small business owners? Your problems are about to be solved, because the most powerful person on the planet is going to "convene a conference," which means selecting the conferees, picking the location, handing out press releases, writing reports and then, my favorite part, ignoring the reports and patting each other on the back for a job -- or conference -- well done. I'm sure executives up and down Wall Street are shaking in their loafers.

Of course, we all know that in Washington-speak "I'm going to convene a conference" is somewhere up there with "I'm going to establish a blue ribbon commission" in terms of kicking an issue down the road.
Because if this were really a high-priority for the administration, it could, you know, actually do something about it. Right now. The executive branch has plenty of weapons at its disposal to force banks still dependent on billions of dollars in taxpayer funds and guarantees to change behavior (yes, including Goldman Sachs, which still has $21 billion in FDIC guarantees).

For starters, the president controls who runs the Fed. Instead of just giving Ben Bernanke the green light for a second term, he could have made it contingent on forcing Bernanke to open up the Fed to full transparency. In fact, there is a proposal for an audit of the Fed in the House now. It is, not surprisingly, being fought by the Fed. And the White House is silent on the subject.

The president also has the power to make other key appointments, including the head of the Office of the Comptroller of the Currency (who supervises the nation's commercial banks); the head of the Federal Deposit Insurance Corporation; the head of the Office of Thrift Supervision (the primary regulator of savings and loans); the head of the Securities and Exchange Commission; and the head of the Commodity Futures Trading Commission (which oversees derivatives).

He also controls who runs the Treasury Department -- which, believe it or not, is not legally mandated to be overseen and staffed by former Goldman Sachs executives and their friends. And there is nothing in the Constitution that says the Treasury Secretary has to be in near-constant contact with the heads of Goldman, Citigroup, and JP Morgan, often taking their calls late at night.

And then there is the president's power to regulate. There are currently a number of proposals making their way through Congress to reform our financial regulatory system. And they all have something in common. Loopholes and exemptions. And lots of 'em.

For example, in an editorial on Sunday, the New York Times said that two bills looking to regulate derivatives, which have passed out of committee, are "weak and unlikely to prevent another fiasco" and "carve out far too many exceptions," while another derivative-focused bill "denies regulators powers they need to fully police the market."

Meanwhile, the fundamental structural problems that led to the collapse are still not being addressed. A sense of urgency and crisis was exploited when it was useful in persuading taxpayers of the need to bail out the banks. But now that the banks are no longer in crisis -- and it's just the rest of the country that is in trouble -- the sense of urgency has faded. Because nothing says lack of urgency like "convene a conference."

Elizabeth Warren sums it up ominously: "All the things we were talking about that were serious, serious problems for the financial institutions seem to me are still serious, serious problems."

And Neel Kashkari, the former overseer of the TARP program under Bush, knows a lack of change when he sees it. "I think that the way that a Democratic administration talks about certain issues is probably a little different than the way a Republican administration does, and that's appropriate," he said. "But the substance of the actions, I think, are very consistent, and that's been important."

Important for Wall Street. And tragic for the rest of us -- both in terms of what hasn't been accomplished, and in terms of how much more misery it will lead to down the road. Misery that is avoidable -- if only Barack Obama would stop acting like a pundit, egging on change from the sideline, and start acting like the president, dictating the game from the middle of the field.

Source: http://www.huffingtonpost.com/arianna-h ... 34631.html

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Post by roxybeast » October 27th, 2009, 10:41 am

Eighty years ago this week the Stock Market crashed on Black Tuesday ...

http://www.npr.org/templates/story/stor ... =114163098

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Post by roxybeast » November 1st, 2009, 5:50 pm

<center>JUSTIFIABLE ANGER IN THE STREETS: MAIN ST v. WALL ST</center>
Interesting interview by Bill Moyers this week with leading progressive economist James K. Galbraith, son of the legendary economist John K. Glabraith, on the causes of the current US economic collapse and the potential remedies and pitfalls along the planned road to recovery.

WATCH VIDEO OF THE INTERVIEW:
http://www.pbs.org/moyers/journal/10302009/watch.html

TRANSCRIPT OF INTERVIEW:
October 30, 2009

BILL MOYERS: Welcome to the JOURNAL. Americans are mad at bankers. Just Google the three words "I hate banks," and see what comes up. But nowhere has the anger been more palpable than outside the annual convention of the American Bankers Association in Chicago this week.

PROTESTERS: We're fired up, can't take no more! We're fired up, can't take no more!

BILL MOYERS: These demonstrators wanted to know why regular folks are facing foreclosures, rising credit card and checking fees, while bankers are laughing all the way-- well, all the way to the bank.

PROTESTERS: We're fired up, can't take no more! We're fired up, can't take no more!

BILL MOYERS: They protested Wall Street's outrageous bonuses, subsidized with trillions -- and I do mean trillions -- of taxpayer dollars, after their reckless gambling with other people's money brought down the economy a year ago.

There's some historical irony in the timing of this meeting and the protests. 80 years ago this week, on October 29, 1929, the stock market crashed, bringing the Roaring Twenties to a screeching halt. The Roaring Twenties -- that era of flappers, bathtub gin, and dancing 'til dawn, of reckless speculation and living it up while raking in money from the stock market and buying on credit as if there were no tomorrow.

The ultimate judgment came from Al Capone, the city's celebrated gangster. The market's "a racket," he said. "Those stock market guys are crooked."

Black Tuesday, as the crash was called, saw already-shaky shares plunge twenty-five percent in just two days. Fortunes were wiped out in minutes and small investors saw dreams of prosperity, even security, disappear. As the weeks and months went by, the nation slipped deeper and deeper into the abyss of the Great Depression.

All these years later we're still arguing over what brought on the hard times. If you want to join the argument, you need to start with this classic: THE GREAT CRASH, 1929 by the noted economist John Kenneth Galbraith. First published in 1955, it has never been out of print, in part because its analysis is so prescient and, excuse the expression, on the money.

A new edition is out, as timely as today's headlines. And it comes with a new introduction by another noteworthy economist, James K. Galbraith. That's right, the son of John Kenneth.

James K. Galbraith, onetime executive director of Congress' Joint Economic Committee, teaches economics at the University of Texas, where he holds the Lloyd M. Bentsen Chair at the LBJ School of Public Affairs. He also directs the university's Inequality Project, which analyzes wages and industrial change around the world. His own seven books include this one, THE PREDATOR STATE: HOW CONSERVATIVES ABANDONED THE FREE MARKET AND WHY LIBERALS SHOULD TOO.

James Galbraith, welcome back to the Journal.

JAMES GALBRAITH: Thank you very much.

BILL MOYERS: How does this last year compare with what happened after the Great Crash in '29?

JAMES GALBRAITH: It's similar in important respects and different in others. If you look at the trends in world trade and manufacturing, they're very similar. There's been a massive collapse, a collapse which is comparable in scale to 1930. The overall economy hasn't come down nearly as much, and the reason for that is that we have the institutions that were created in the New Deal and the Great Society, institutions of the welfare state, social security. And, of course, there has been the influence of John Maynard Keynes, which gave us the very quick reaction in the form of the expansion bill of the stimulus package. And that also has kept the damage from being as large as it was in 1930 to '32.

So what we're seeing today is distress of a different kind. And I think it's playing out on a longer timeframe. The great wealth that the American middle class built up, over 70 years, largely in their homes, has been terrifically impaired. In many cases, wiped out.

People are upside down in their mortgages. Their mortgages are worth more than the houses that they live in. And that doesn't mean that they're going to default or millions will be foreclosed, but many millions more simply can't sell, can't move, can't change their circumstances, don't have a cushion. And that is a factor that will bring stress into their lives over time.

BILL MOYERS: A long time, right? And this is--

JAMES GALBRAITH: Over a long time, yes.

BILL MOYERS: --not something from which people recover. I mean, my father was about 24, 25, maybe at the time of the Great Crash of 1929 and he never recovered from it for the rest of his life. He never got over that experience. Is that likely to be the case with all these people suffering out across the country now?

JAMES GALBRAITH: The same was true of my grandfather on my mother's side, who was a lawyer whose practice depended upon the prosperity of the 1920s. My mother who lived until last year, never really overcame the attitudes that were inculcated in her in the Great Depression. It will have a -- if something is not done to provide particularly young people, who are looking for work and cannot find it, with an opportunity to move on in life at this stage, it will mark them for the rest of their lives. I think there's no doubt about that.

BILL MOYERS: The NEW YORK TIMES had a story just the other day about community colleges being so crowded right now that they're holding classes up until two o'clock in the morning. What do you make of that? What does that say to us?

JAMES GALBRAITH: It says that first of all, people cannot find jobs. And secondly, they are looking to the educational system to provide them with something to do, and some way out of this dilemma. But until jobs are created, and in great numbers, there will not be places for those people to come out of the community college system and find useful work. That's the problem.

We have a stimulus package, which is helping now, but it will be over with at the end of next year. Will there be a basis for another strong, privately financed expansion at that point? I don't see the evidence for that now. And that seems to me to be something we should be worrying about.

BILL MOYERS: So what should we do?

JAMES GALBRAITH: We need to find another path for economic expansion. We need to set a strategic direction.

Our problem now, our big social and environmental problem, is energy. It's climate change. It's the greenhouse gas emission issue. If we built a set of institutions that could deal with that problem effectively, you could employ a large part of the labor force for a generation, dealing with that. And you'd then make that profitable for private enterprise to get into in a serious way.

BILL MOYERS: The candidate Obama talked a lot about this, green energy, in the campaign. And he's talked a lot about it since he became president. Do you see signs that those aspirations are being implemented, in institutional ways?

JAMES GALBRAITH: They made a start, and certainly in the stimulus package, there were important initiatives. But the stimulus package is framed as a stimulus, as something which is temporary, which will go away after a couple of years. And that is not the way to proceed here. The overwhelming emphasis, in the administration's program, I think, has been to return things to a condition of normalcy, to use a 1920s word, that prevailed five and ten years ago. That is to say, we're back to a world in which Wall Street and the major banks are leading, and setting the path--

BILL MOYERS: To restore what was.

JAMES GALBRAITH: To restore what was--

BILL MOYERS: Instead of reform what is.

JAMES GALBRAITH: And I don't think what was can be restored.

BILL MOYERS: And you say that's the objective of the administration's policies? Geithner, Bernanke, Summers, the President himself?

JAMES GALBRAITH: To the extent that there's a defined objective, that's it, yes. I think in the immediate day-to-day work, they've largely been preoccupied with keeping the existing system from collapsing. And the government is powerful. It has substantially succeeded at that, but you really have to think about, do you want to have a financial sector dominated by a small number of very large institutions, very difficult to manage, practically impossible to regulate, and ruled by, essentially, the same people and the same culture that caused the crisis in the first place.

BILL MOYERS: Well, that's what we're getting, because after all of the mergers, shakedowns, losses of the last year, you have five monster financial institutions really driving the system, right?

JAMES GALBRAITH: And they're highly profitable, and they are already paying, in some cases, extraordinary bonuses. And you have an enormous problem, as the public sees very clearly that a very small number of people really have been kept afloat by public action. And yet there is no visible benefit to people who are looking for jobs or people who are looking to try and save their houses or to somehow get out of a catastrophic personal debt situation that they're in.

BILL MOYERS: But when President Obama came into office, people said, "This is a Rooseveltian moment. This is a moment to seize a crisis and do what FDR did." How do you-- how do you trace the comparison in the last 40 weeks, of Obama with Roosevelt?

JAMES GALBRAITH: Well, the public is way ahead of the political system. The public certainly wanted a Rooseveltian moment. The Congress, the Washington press corps, wanted a return to their familiar patterns of activity. And I'm not saying-- the Congress did, in fact, respond quickly on the stimulus package, but in general, they're always more comfortable dealing with the issues they know, than framing ideas, with respect to new challenges. And so, Obama's objective situation is much more like Herbert Hoover's than it is like Roosevelt's.

BILL MOYERS: What do you mean?

JAMES GALBRAITH: In the sense that Roosevelt was-- when Roosevelt came in, in March, 1933, and there were machine guns nests on the rooftops of Washington for the inaugural parade, everybody knew, the banks were closed, everybody knew that you needed immediate action. Roosevelt's cabinet was sworn in on the first day. He had initiatives ready to go. This was not the situation that faced President Obama, by any stretch.

BILL MOYERS: Suppose that your father were around today, and '08 had happened, the Great Collapse. Do you think he might have said, "Aha. Told you so?"

JAMES GALBRAITH: He did say, "I told you so," in this book, in--

BILL MOYERS: THE GREAT CRASH?

JAMES GALBRAITH: --in THE GREAT CRASH. He talked about the conditions under which it would recur, and he said, "No one can doubt that the American people remain susceptible to the speculative mood, to the conviction that enterprise can be attended by unlimited rewards in which they, individually, were meant to share. A rising market can still bring the reality of riches. The government preventatives and controls are ready. In the hands of a determined government, their efficacy cannot be doubted. There are, however, a hundred reasons why a government will determine not to use them."

And that's the point about the crisis, is that it could have been prevented. The people in authority two, three, five years ago, knew how to prevent it. They chose not to act, because they were getting a political and an economic benefit out of the speculative explosion that was occurring.

BILL MOYERS: You mean, the people who could have prevented the dam from breaking were too busy fishing above it, and reaping big rewards to want to fix the crack in it?

JAMES GALBRAITH: Sure. The Federal Reserve, in particular, knew that the dam was cracking. Alan Greenspan, I think, almost surely knew this, and chose to wait until it had washed away.

BILL MOYERS: Why?

JAMES GALBRAITH: They let all of this run, because they were getting a superficially stronger economy out of it. The ownership society, all that was a scam, basically, designed to lure people who could never afford these mortgages into accepting them. And yes, I think they, any rational person, certainly people in the industry, knew that this was not going to last. There was a little industry code, I've learned, IBGYBG. "I'll be gone. You'll be gone."

BILL MOYERS: Really?

JAMES GALBRAITH: Yeah.

BILL MOYERS: The industry being the securities industry?

JAMES GALBRAITH: Well, and the mortgage originators and the bankers, generally.

BILL MOYERS: But that's criminal fraud.

JAMES GALBRAITH: Oh sure. There was a huge amount of it. The Bush administration did not actively investigate the fraud that they knew, that the FBI knew was occurring, from 2004 onward. And there will have to be full-scale investigation and cleaning up of the residue of that, before you can have, I think, a return of confidence in the financial sector. And that's a process which needs to get underway.

BILL MOYERS: The perplexing question to me is whether or not you can reform a system that is so infiltrated by the money from the people who are benefiting from what's going on, who have a vested interest, and use their money to promote that vested interest to make sure nothing changes.

JAMES GALBRAITH: I think you can. I think the law is powerful. I think you cannot legalize financial fraud. You cannot fully conceal the tracks of financial fraud. You have to put the resources in to uncover it. You have to prosecute it. You have to give appropriate punishments, but we have a system, in this country, for doing that. It is a question of a decision to use the judicial resources that we have, to clean up the system.

BILL MOYERS: Timothy Geithner wants to provide a super-regulator to keep those big five firms in line. Will that work?

JAMES GALBRAITH: No, it will not work. The super-regulator will not be able to control those institutions. And probably will make all of the mistakes that the, if it's the Federal Reserve, that the Federal Reserve made in the run-up to the last crisis.

BILL MOYERS: Under Greenspan.

JAMES GALBRAITH: Yes, because the priorities of the Fed are always going to be with the larger problem of economic growth, monetary policy. The culture is dominated by its economists. The regulators are down in the hierarchy. So it may have the authority, but as in 1929 it will, in the crunch, choose not to use it.

I think what you have to do is to aim to reduce the market power of these enormous, strategically, systemically dangerous institutions. And the way to do that is by re-imposing some internal barriers, the Glass-Steagall separation of commercial and investment banking. And by resolving, auditing and resolving the institutions that are really close to failure. Those institutions, if they're taken out of the picture, that would permit smaller banks who did not get caught up in this dreadful business, to grow into their market roles. And you would have a more competitive and healthier financial system, as a result.

BILL MOYERS: But as you speak, Congress is watering down the legislation proposed to regulate the ratings agencies that were such a part of the problem.

JAMES GALBRAITH: Well, the fact that there is lobbying going on, from financial institutions that were only yesterday bailed out by the taxpayer, is just egregious. It's an outrage. And I know the administration has said this. And I applaud them for having said it, but the political position of the banks, to me, is just totally unacceptable. The public was obliged to rescue them. It is not their role, now, to be trying to tell Congress what shape and direction of the reform should take. This really should be out of their hands entirely.

BILL MOYERS: So you can understand that anger on the streets, outside the American Bankers Association's meeting in Chicago this week.

JAMES GALBRAITH: Of course. It's entirely justified.

BILL MOYERS: Where do you think that anger might go? It could go either direction.

JAMES GALBRAITH: Well, of course. I mean, that's the great danger, is that if there is not a constructive program that people can identify with, there will be a destructive program that they will identify with. And it will come along quite soon. And what form it will take, and it's anybody's guess, but the result will be, very well could be disastrous.

BILL MOYERS: So we're not out of the woods yet.

JAMES GALBRAITH: No, not by any means. I think we're in an extremely dangerous period. And which, as I said, everybody can see that a few, very small number of people have come out of this. And they cannot see how this is bringing any benefit to their own lives. It's not saving their houses. It's not providing them with jobs.

BILL MOYERS: Is our system so vulnerable that this is going to keep happening, '29, the savings and loan scandals in '89, and now the great collapse of '08.

JAMES GALBRAITH: It's clear that it's vulnerable and that this is a cyclical problem. This is something which comes back after a few decades, because--

BILL MOYERS: Because we forget?

JAMES GALBRAITH: Because people forget, and because when the system succeeds, then you build up prosperous institutions and they start lobbying. They say, "Everything's fine. Things are going well." And they start lobbying for a relaxation of the rules. So you have-- it's never going to go away. But you want to have these 20, 30, 40-year periods when you have relatively stable growth.

And when you're focused on achieving a certain goal, you can eliminate poverty. You can deal with the environmental questions. You can, in fact, do this if you can sustain a course of policy for, let's say, a 30 or 40-year period. That's--and then you may have strong institutions which can carry you even further. Social Security, for example, is a nice example. It keeps the elderly population of the country largely out of poverty.

If I had one thing I could add to the health care debate, I would lower the age of eligibility of Medicare, say, to 55.

And the reason for that is that it would help workers who are only hanging onto their jobs because they don't want to lose their medical benefits, to move out of the labor force. And there are a fair number of those, and it's a fairly heavy burden on the business sector. So what you want to do, you want to create jobs.

But you've got to recognize. We've lost 7 million jobs. Many of those are older workers, and the jobs that you create, you want to give the first crack at those jobs to people who have started their careers. You want to get them into the work force.

BILL MOYERS: Young people.

JAMES GALBRAITH: Young people, sure. Let older people, you know, some of them, anyway, a fair number of them, pass to retirement comfortably, a little earlier than they otherwise would. I mean, you've got to think about every possible way to make getting through this crisis tolerable for the population. Recognizing that a year, even two years from now, we are not going to be through it. The official forecasts say we're not going to go back to five percent unemployment till 2014.

BILL MOYERS: The headline this week. "Recession unofficially ends as economy grows."

JAMES GALBRAITH: That means we're at the bottom. But from the standpoint of the population, the bottom is going to go on for a long time.

BILL MOYERS: Didn't you recommend recently that anybody who wants a job should be able to get a job, paid eight dollars an hour or something like that?

JAMES GALBRAITH: I think it's a very sensible idea. Why not have a large job core involving, among other things, neighborhood conservation efforts, or health home care efforts or--

BILL MOYERS: Shades of the New Deal, right?

JAMES GALBRAITH: Of course. Of course. But--

BILL MOYERS: But when you talk like that, you immediately bring chills to the back of the deficit hawks, who say, "Wait a minute. We can't afford to what we're doing now. We're putting it all on our grandchildren's credit card. How can Jamie Galbraith be arguing for more deficit spending now?"

JAMES GALBRAITH: With all respect to the deficit hawks, they don't understand the situation. And they don't know what they're talking about, in terms of federal finances. The United States is a large and powerful country. And it can, if it chooses, employ its work force in a useful way. But the point I would make about jobs programs is that the alternative is not spending nothing. The alternative is keeping people on the dole, the term Roosevelt hated.

BILL MOYERS: And Lyndon Johnson hated--

JAMES GALBRAITH: And Lyndon Johnson, keeping them on the dole, which is costly. But it's also debilitating to those people. And you don't get anything out of it, from the standpoint of the country. The obstacle here is not fiscal, federal finance. The federal government can finance what it wants to finance. It's, as I say, the most powerful financial entity in the world.

The problem here is organizational. It's a matter of will. It's a matter of creating appropriate institutions that are in the public sector, and incentives in the private sector, to get certain jobs done. When you approach it with that frame of mind, we wouldn't be asking about the budget deficit.

We'd be asking about the unemployment rate. We'd be asking about how we're doing in getting down, meeting our energy and our environmental goals.

BILL MOYERS: So what is the fundamental question, the one question you think all of us should be thinking about right now?

JAMES GALBRAITH: Where do we want to be in 30 years time? How do we get there? It's not a question of how do we return to full employment prosperity in five years. But how we solve the fundamental problems that we face, in a way which gives us a generation of steady progress.

And living standards that people can accept, that they'll live with, that they'll be happy with, while at the same time, achieving sustainability and reestablishing the American position as a leading and responsible country in the world. So that we are developing the technologies and the practices that other countries will then adopt, something which we have done very effectively for a century, but which we are certainly not doing now.

BILL MOYERS: I want to show you something that resonates with what you're saying. I've been looking at it for a while now. It's an excerpt from a speech that Franklin Delano Roosevelt made in 1944, in the midst of war, a speech that not many people have seen, but take a look at this excerpt.

FRANKLIN DELANO ROOSEVELT: In our day certain economic truths have become accepted as self-evident. A second Bill of Rights under which a new basis of security and prosperity can be established for all regardless of station, or race, or creed. Among these are: The right to a useful and remunerative job in the industries or shops or farms or mines throughout the nation. The right to earn enough to provide adequate food and clothing and recreation. The right of every farmer to raise and sell his products at a return which will give him and his family a decent living. The right of every businessman, large and small, to trade in an atmosphere of freedom, freedom from unfair competition and domination by monopolies at home or abroad.

The right of every family to a decent home. The right to adequate medical care and the opportunity to achieve and enjoy good health. The right to adequate protection from the economic fears of old age, sickness, accident and unemployment. The right to a good education. All of these rights spell security. And after this war is won we must be prepared to move forward in the implementation of these rights to new goals of human happiness and well-being. For unless there is security here at home there cannot be lasting peace in the world.

BILL MOYERS: What do you think about, listening to that?

JAMES GALBRAITH: It's wonderful. It's splendid. It defined what we should have achieved in the last 50 years and in many ways, what we still need to achieve.

It's a test. It's a test for the country as a whole, as to whether we have the capacity to state and pursue a truly public purpose. We've come through a generation where we have really denied the existence of a common good or a public purpose. And I think we've recognized that that path leads to collapse, the collapse that we've seen. And that the way out is to somehow reestablish for ourselves this vision of what we really could be.


BILL MOYERS: James K. Galbraith, thank you for being with me again on the Journal.

JAMES GALBRAITH: My pleasure.

Source: http://www.pbs.org/moyers/journal/10302009/watch.html

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Post by roxybeast » November 18th, 2009, 3:56 am

Dems Want Unspent TARP Funds For Main Street Bailout
Huffington Post, November 18, 2009

Democrats in Congress want to use unspent TARP funds to support homeowners and struggling workers, according to The Hill.

More than half of the Democrats in the Senate want to use the remaining money to provide small businesses with easier access to credit. Rep. Barney Frank (D-Mass.) has proposed using $2 billion of it to give aid to homeowners facing foreclosures. Reps. Peter DeFazio (D-Ore.) and Earl Blumenauer (D-Ore.) have proposed using some of the money for infrastructure projects, which they say would lead to more jobs.

A decision to spend the $210 billion in unused TARP money on a bailout for main street would pit congressional Democrats against president Obama, who hopes to use the leftover bank bailout funds to pay down the the nation's deficit, according to a report published last Friday in the Wall Street Journal. The newspaper reports that the Obama administration is under pressure to prove that it's serious about reducing the deficit:

Agreeing not to spend a certain amount of TARP money will enable the White House, in its budget projections, to assume less money out the door and, therefore, less debt issued. The move would also reduce the deficit by an unknown amount since a certain level of spending and borrowing is already factored into estimated future deficits.
According to The Hill, there are some Democrats who are "hopeful" that leftover TARP funds could go toward both deficit reduction and aid for average Americans.

http://www.huffingtonpost.com/2009/11/1 ... 61628.html

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Post by roxybeast » December 3rd, 2009, 2:44 am

<center>America Without a Middle Class</center>
An excellent article that encapsulates the point of this column and series of posts about why Main Street is angry and why Wall Stree doesn't get it! I encourage you to check out her original article on HuffPost which contains charts & graphs that you might also find interesting. Well said, Elizabeth Warren!! :)
America Without A Middle Class
by Elizabeth Warren

Huffington Post, December 3, 2009

Can you imagine an America without a strong middle class? If you can, would it still be America as we know it?

Today, one in five Americans is unemployed, underemployed or just plain out of work. One in nine families can't make the minimum payment on their credit cards. One in eight mortgages is in default or foreclosure. One in eight Americans is on food stamps. More than 120,000 families are filing for bankruptcy every month. The economic crisis has wiped more than $5 trillion from pensions and savings, has left family balance sheets upside down, and threatens to put ten million homeowners out on the street.

Families have survived the ups and downs of economic booms and busts for a long time, but the fall-behind during the busts has gotten worse while the surge-ahead during the booms has stalled out. In the boom of the 1960s, for example, median family income jumped by 33% (adjusted for inflation). But the boom of the 2000s resulted in an almost-imperceptible 1.6% increase for the typical family. While Wall Street executives and others who owned lots of stock celebrated how good the recovery was for them, middle class families were left empty-handed.

The crisis facing the middle class started more than a generation ago. Even as productivity rose, the wages of the average fully-employed male have been flat since the 1970s.


But core expenses kept going up. By the early 2000s, families were spending twice as much (adjusted for inflation) on mortgages than they did a generation ago -- for a house that was, on average, only ten percent bigger and 25 years older. They also had to pay twice as much to hang on to their health insurance.

To cope, millions of families put a second parent into the workforce. But higher housing and medical costs combined with new expenses for child care, the costs of a second car to get to work and higher taxes combined to squeeze families even harder. Even with two incomes, they tightened their belts. Families today spend less than they did a generation ago on food, clothing, furniture, appliances, and other flexible purchases -- but it hasn't been enough to save them. Today's families have spent all their income, have spent all their savings, and have gone into debt to pay for college, to cover serious medical problems, and just to stay afloat a little while longer.


Through it all, families never asked for a handout from anyone, especially Washington. They were left to go on their own, working harder, squeezing nickels, and taking care of themselves. But their economic boats have been taking on water for years, and now the crisis has swamped millions of middle class families.

The contrast with the big banks could not be sharper. While the middle class has been caught in an economic vise, the financial industry that was supposed to serve them has prospered at their expense. Consumer banking -- selling debt to middle class families -- has been a gold mine. Boring banking has given way to creative banking, and the industry has generated tens of billions of dollars annually in fees made possible by deceptive and dangerous terms buried in the fine print of opaque, incomprehensible, and largely unregulated contracts.

And when various forms of this creative banking triggered economic crisis, the banks went to Washington for a handout. All the while, top executives kept their jobs and retained their bonuses. Even though the tax dollars that supported the bailout came largely from middle class families -- from people already working hard to make ends meet -- the beneficiaries of those tax dollars are now lobbying Congress to preserve the rules that had let those huge banks feast off the middle class.

Pundits talk about "populist rage" as a way to trivialize the anger and fear coursing through the middle class. But they have it wrong. Families understand with crystalline clarity that the rules they have played by are not the same rules that govern Wall Street. They understand that no American family is "too big to fail." They recognize that business models have shifted and that big banks are pulling out all the stops to squeeze families and boost revenues. They understand that their economic security is under assault and that leaving consumer debt effectively unregulated does not work.

Families are ready for change. According to polls, large majorities of Americans have welcomed the Obama Administration's proposal for a new Consumer Financial Protection Agency (CFPA). The CFPA would be answerable to consumers -- not to banks and not to Wall Street. The agency would have the power to end tricks-and-traps pricing and to start leveling the playing field so that consumers have the tools they need to compare prices and manage their money. The response of the big banks has been to swing into action against the Agency, fighting with all their lobbying might to keep business-as-usual. They are pulling out all the stops to kill the agency before it is born. And if those practices crush millions more families, who cares -- so long as the profits stay high and the bonuses keep coming.

America today has plenty of rich and super-rich. But it has far more families who did all the right things, but who still have no real security. Going to college and finding a good job no longer guarantee economic safety. Paying for a child's education and setting aside enough for a decent retirement have become distant dreams. Tens of millions of once-secure middle class families now live paycheck to paycheck, watching as their debts pile up and worrying about whether a pink slip or a bad diagnosis will send them hurtling over an economic cliff.

America without a strong middle class? Unthinkable, but the once-solid foundation is shaking.

Elizabeth Warren is the Leo Gottlieb Professor of Law at Harvard and is currently the Chair of the Congressional Oversight Panel.

Source: http://www.huffingtonpost.com/elizabeth ... 77829.html

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