I'd like to say a couple words about one of those "Regulatory Agencies" under the criminal bastard, Bush; the Pension Benefits Guarantee Corporation (PBGC).

The PBGC was established, under strong Union pressure, after Studebaker went under and all the workers lost their pensions in the mid 60'd. It's job was to guarantee the defined benefit pensions that were negotiated, hence the Guarantee in PBGC. Their job was to take over the existing pension plan when a company goes under, seizing the funds and administering the plan (paying out the pensions, according to an actuarial chart). The PBGC actually did its job pretty well, until the early part of this decade.

I am one of about 10,000 Republic Steelworkers who suffered through a bankruptcy of Republic Technologies, Inc. in 2002. The company called off the night turn, and called in the day turn, as always, but on day turn, declaring themselves "bankrupt, but opening as a 'new company,' Republic Engineered Products, Inc." This "new" company had all the same old bosses, in fact, everything was the same except they were now "bankrupt" and filing to scrap the Union (USW) contract.

The PBGC had, until that point (August, '02) done its job pretty well. However, right after that corporate action, Bush replaced the PBGC head (a Clinton appointee) with a right-wing ideologue, Steven Kandarian. The Union contract actually had boiler plate language that provided for just such an occurence. If the company were to shut down, go bankrupt, then a section kicked in which would provide workers who at that point did not yet have 30 years seniority (and thus eligible for an immediate pension), would be eligible for an immediate pension if they're years of service and age were equal to 80, thus that type of pension was called a 70/80 pension. However, Kandarian's first official act was unprecidented. He refused to honor the 70/80 language, and instead stated that the PBGC "would recognize the bankruptcy date as June, rather than August, thus no 'shut-down' occured."

While this stinking asshole disallowed the pensions to the workers who'd worked their entire lives to earn, he did allow a $6 million payment to Republic's top bosses. These were called "retention bonuses" since they were supossed to "retain" the same bastards that had already run the company into bankruptcy!

Our Union fought like hell! Congressman (now Senator) Sherrod Brown (D-Oh)carried the ball well, fighting for us. However, the workers lost their health care and most lost a large percentage of their pensions, if not all. We had 5 suicides at my local union, local 1104, USW, in Lorain, Ohio. I lost about 1/3 of my pension at that time.

About 6 hours ago, I picked up the mail, finding out that Bush's PBGC has now "recalulated" our pensions, "discovering" that we were being "overpaid." The PBGC portion of my pension is to be slashed from $1,100/month to $125. These thieving bastards are now going to "recoup the overpayments," but only until 2099!

We will fight. Sherrod Brown, as is his way, was there for us before anyone asked him. He, along with Congressional rep Betty Sutton (D-Oh), are organizing official hearings, and are fighting to stop any further theft of our pensions. Also, they are attemkpting to stop any theft of our hard-earned pensions now, at least until appeals are finished. As well, we plan to address this, and so many other issues at the offical Senatorial Hearings. We are planning to have Obama present, and address our issues at that time.

This is what has happened to literally all of the so-called "regulatory" agencies under this filthy, stinking criminal administration. Bush has either appointed vicious, evil pro-corporate nazis like Kandarian to fuck us, or has appointed imbeciles like Brown (of the race track) to head other agencies like FEMA, that are so important to regular folks. The NLRB, meanwhile, has become nothing but an anti-union agency.

We MUST defeat these corporate bastards in November if we are to have ANYTHING left of the safety net that the New Deal put in place for working people in our nation!

Simply return it to the system it was supposed to be by design, with government in control of the money, i.e. the people and by government I don't mean that pathetic excuse for a government that's pretending to be one that is currently in office. Abolish the Federal Reserve.

"Instead, let's please have a serious discussion about the nature of the banking system structure itself: its complexity, its responsibility, and the proper role of the federal government in regulating it."

Yes, Nomi,let's do have this discussion! In fact, why don't we begin with the allegedly legal Federal Reserve Act of 1913 and how it became law; and then move on to the Glass-Steagal Act which was an effort to keep the Federal Reservists (private owners of the Federal Reserve Bank) under "some" form of control. From there, we could move on to the Gramm-Leach-Bliley Act of 1999 which literally destroyed any form of control over Federal Reserve Bankers and the financial industry in general.

And finally, we could ask Congress why they have chosen to ignore Anti-Trust Laws like the Sherman Act which makes "attempts" to monopolize, illegal. There is also the Clayton Act which deals with "exclusive-dealing contracts", among other regulations.

Is Congress so busy with baseball steroids that they don't have time to enforce the laws in this country?

Quis custodiet ipsos custodes?

While the US thinks it's dandy to bail out these corporate gangsters, Iceland has other ideas. Iceland called these miscreants for the thugs that they really are; and accused them of destroying their island economy with speculative hooliganism. Iceland is heavily dependent on investing in the global economy, and there are corporate market thugs and hooligans that are all to keen to destroy her economy. One of Iceland's Bank's is threatening to sue Bear Sterns. The Iceland Krona has been trashed, but Iceland, unlike the US is doing something about it. The US doesn't defend it's own currency, it destroys it. Iceland is standing up and will not except this market thuggery while the US rewards lying thugs like Bear Sterns with US taxpayer money. Iceland is profile in courage in my book. I hope Turkey and South Africa will also follow Iceland's example. Their emerging market currencies are currently being trashed by these hooligan speculators, and their citizens will left to pick up the pieces. South Africa should remember what these criminals did to the Rand in 2001. The US sends bombs to destroy Iraq and thuggish market hooligans to destroy emerging markets. Iceland says "enough is enough". May Iceland's economy prosper and grow. May the US get what it deserves for rewarding criminals.

Here's more on Iceland:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=arSACxBR9m6A

thanks, once again, to nomi prins for writing clearly, and incisively, about financial matters that used to leave me dizzy. her analysis last week on "democracy now" regarding the fed's bitch slap of bear stearns was the sharpest i had heard or read all week, better than anything in the corporate piss. thanks, nomi.

and, yes, we DO have bill clinton/robert rubin to thank for finishing up reagan's work and dealing the coup de grace to glass-steagall.

Does anyone else think this move to empower the Fed smells funny? Seems like a variation of disaster capitalism: cause a financial crisis, to give cover to granting more power to the Fed.

♪ You're out of the woods
You're out of the dark
You're out of the night
Step into the sun, step into the light ♪

I have yet to see a self-regulated industry that actually does that; to expect the Fed, of all organisations, to do that is utter lunacy.

Hey, but no problem, Wall Street is up so the crisis must be over. Mustn't it?

rebelnow - "In 1929 information moved fairly slowly, yet banks collapsed overnight. In 2008 information moves in nanoseconds but banks collapse over months."

This actually makes sense. 80 years ago, it would have taken far too long to recognize a single failure, come up with a "plan" and then whip up and deliver enough "liquidity" to get that domino off the table before it caused more trouble.

According to Big_Money's Theorem of Protracted Collapse, the rate at which money can be magically created can always be greater than the rate at which money will be needed to stave off a sudden collapse. This is also the principle behind Ben Bernanke's "Helicopter" Theorem.

This is a nice safe theorem, in that once it no longer holds true, the sudden collapse will have already taken place...

There's only one way to fix the fed; that is to totally get rid of it. The fed exists to serve only one set of purposes.
1, loan fictitious "dollars'" at interest
2, debase our money supply through inflation
3, collect interest for the member banks

Andrew Jackson said it right when he addressed the banker's delegation.
"You are a den of vipers and thieves; I intend to root you out and by the eternal God, I will root you out."

C'mon, folks, lets return this great nation to honest "dollars" and get rid of this fiat garbage that we call "money!"

The War on Cooperate

We made lot's of headway in 2008
We declared war on cooperate

The green backs were floating on an ocean of slime
with non entity persons pushing their bottom line

We closed yellow ribbons colored them infinity green
so the war machine would never be lean
as debt's and the DOW rose above the mean

and the dick of all dicks threatened the button of doom
while the have's and the have mores bunkered in tombs

The apple pie sky puffed like turds from on high
while the pursuit of happiness just said goodbye

It seems that every day I read about yet another writedown from a major bank. Today UBS announced another $19 Billion writedown bringing their total to $37 Billion in the last nine months. Also $4 Billion from Deutsche Bank today, and they were supposedly immune from the credit crisis.

Predictions are being made that up 200,000 US banking jobs may be lost over the next year.

In 1929 information moved fairly slowly, yet banks collapsed overnight. In 2008 information moves in nanoseconds but banks collapse over months.

And once again the powers that be (in this case the Fed) utilize a crisis to consolidate their power.

If "self regulation" was anything more than propaganda, we wouldn't need any laws at all. Hell, most people can't even stop themselves from gorging on fast food - but we're supposed to believe they won't steal millions when they know they will face no consequences even if caught?

This supposed "reform" is designed to make it easier to steal, period:

"Another one of the blueprint's immediate goals is to ease how the Securities and Exchange Commission approves securities, such as mortgage-backed bonds, so financial firms do not try to elude the agency's oversight."

Are y'all getting that? An "immediate goal" is to ditch the laws so "financial firms" don't have to spend so much money trying to break them.

That would be like tasking the IRS to audit only the working classes and not the "elites," and then publicly announcing that so the "elites" can get on with the stealing... oh, wait...

'Hank' Paulson's stage performance this morning did not have the dramatic effect of FED Chair Charles Mitchell rushing onto the floor of the NYSE in 1929 and shouting that "there is organized support from the banks' as he placed 'buys' for $10M in stocks.

Fortunately, neither will Paulson's staged performance be as effective as FDR's in "saving capitalism from itself."

After all, one must keep in mind that Paulson's pledge of financial reform "focused on the public good", as he said, comes from the key financial member of the Bush administration, which Al Gore, in his fabulous new book, "The Assault on Reason" accurately characterized as a "radical right-wing corporatist 'faction' which holds in utter contempt the very concept that such a thing as 'a public interest' even exists."

No, Paulson's cheap melodrama will not save crony capitalism from itself again --- and it is probably only intended to try to save the 'capital markets' of the US in any case.

The Bush administration's 'Vichy' façade hiding this corporatist Empire, and arguably the corporatist Democrats also, don't give a damn about 'the public interest' of average Americans, and would be delighted if they could only save the few tens of thousands of elitist investors in New York City, Greenwich, and the Hamptons, who control their precious 'capital markets', while watching the vast working-class neighborhoods and factories of the US disappear.

As the ruling-elite class of Britain says more honestly than their guileful American peers, "Bloody good show, Hank". "Capital idea, Paulson. Capital idea!"

Yes, the only idea that Paulson revealed is just that, the 'capital idea' of maintaining American's 'capital markets' while the rest of our country, our economy, and our population of average citizens decays to third world standards.

But fortunately, this 'corporatist faction' (as Gore tags it), this 'corporatist Empire' (as I call it) hiding behind the two-party 'Vichy' faux government that has almost totally captured our country, is not going to make a successful Willie Sutton get-away from the bank this time.

No, the good people of the US recognize crooks, even those wearing three-piece suits and talking the kind of phony economic jive that's only based on zero-sum, negative externality 'gaming' of the system. No, economic benefits don't 'trickle down' hill, and we now recognize that the warm feeling on our leg is just elitist crooks' trickle.

If Paulson, Bush and the like are fondly envisioning acquiescent, patient, and well-behaved soup-lines queuing up for GD II as they did in Great Depression I they are due for a rude awakening. Paraguay is not far enough away, George. Think more in terms of 'thumbs' and 'rope'.

"Having ignored or been unduly confused by the complexity of the banks already under its jurisdiction, the new, improved Fed would get more books to examine for undue risk, adding in brokers and insurance companies."

Before we proceed with beefing up "The Fed" wouldn't it be a good idea to audit "The Fed's" books? This has not happened since its inception in 1913. Supposedly "The Fed" owns some gold but no one living has ever seen it. Ah, hell, just trust 'em, they wouldn't lie to us.

This is all part of the "Final Act."

Part I: Ensure the country remains tethered to a hopeless and chaotic situation in the ME

Part II: Bankrupt the country, and plunder it so all of the loot goes to the superwealthy. Fix it for good by giving the Fed "extraordinary power"

Part III: Find another stooge to distract the cops while the robbers continue plundering the country

GRAND FINALE: The country collapses. Bush, McCain and Co. go to Paraguay, and the United States becomes a Third World country.

THE END

Let's just en-Federate the FED -- nationalize 'em, and then we can control the oil industry too.

Ha Ha, April's Fool

The international banking system is collapsing. Isn't it time to move to what P.J. Proudhon termed "banks of the people"?

In modern parlance, they are called "credit unions".

"Unfortunately, they have used their power to create opportunity for 1% of Americans to make obscene profits at the expense of the other 99% of Americans"

In the long run there is no other way in the capitalist system. Capitalism works only when capital is accumulated, and the Fed since at least the early 1980's has had an anti-inflation policy. What that means in practice is that inflation will be low, which means interest rates will be higher than inflation and high relatively speaking (by definition higher than inflation but not TOO high because of the bond market), which benefits big business at the expense of small business and causes the poor and middle class to go into debt to the upper class, which is exactly what has happened.

There is constant and increasing downward pressure for this because of "globalization". If interest rates AREN'T higher than inflation, or aren't higher than other countries, investors will go elsewhere. What causes inflation? The fractional reserve banking system mainly, but also people making more. So the Fed has had a policy really of decreasing wages, to cut back inflation, while allowing insane amounts of FINANCIAL inflation, which seems to be just fine with them. The fact that the financial markets is losing touch more and more over time with underlying economic value is of little concern it seems. So there is a pressure the world over now for people to go into debt to the investor class and for small business and farmers to get destroyed by big business, which is subsidized by our tax dollars. We are not only causing wealth disparity to shoot up thanks to the policies we allow the Fed to implement (or as a result of the fact that we allow the Fed to exist at all), we're subsidizing a large portion of it!

andersdl, don't forget the rest of the world...

A quote from Nixon's Treasury Secretary, John Connally, telling 29 U.S. trading and banking allies, "It may be our currency, but it's your problem."

See, the whole world uses the stuff as their "savings". Long ago, they did this because it was dependable and paid fair returns. But now they're in a position where they're stuck with it - they can't easily unload much without trashing the purchasing power of what they, and everyone else, has left.

Unfortunately, the Bush administration loves to quote select scripture while ignoring the many biblical passages that address hypocrisy and crooked money lenders.

The Federal Reserve DOES NOT need more power. They already have plenty of power. The Federal Reserve DOES need to use their power to create a stable economy for 99% of Americans.
Unfortunately, they have used their power to create opportunity for 1% of Americans to make obscene profits at the expense of the other 99% of Americans

I'll tell you what I don't understand logically: The Fed is not technically part of the government, it's owned and operated by the banks themselves (as horrible and an un-democratic set up as you can get). We're seeing now how self-regulation is a disaster in practice, which was obvious before it was even attempted. So how is increasing the power of the Fed, and not the government who isn't TECHNICALLY owned by the banks and TECHINICALLY is supposed to be democratically controlled by us all, going to help when it's nothing more than STRONGER self-regulation? I understand that the Fed is independent of the financial markets but it is no more than the revolving door in DC overall. How many departments are stocked with people from the industries they're regulating, with an ideology of benefiting the industries they come from and will return to? This is ALWAYS the case with the Fed. The banks pretty much say who is going to be in charge of the Fed, directly and in-directly through politicians, the people in charge come from the financial industry and almost always have an ideology that serves the big banks at the expense of everyone else. So how is more self-regulation going to solve a problem caused by self-regulation?

The problem is that banks can create wealth out of nothing what so ever, they can create debt for people who actually do produce things, without ever adding a thing to society. The only real money created is the original dollars that enter into the system after the Fed buys bonds, everything beyond that is debt to the banks. THAT is the problem with the financial and monetary system. It's not only immoral but outdated and logically ridiculous.

tj, yes, but all in all that's just another brick in the wall. Both it's creation and it's destruction are just a wee part of the rise and fall of a "Reserve Currency".

The Federal Reserve is not Federal (it is a bank) nor does it have any reserves (although it can turn just about anything, or any promise of just about anything, into "Legal Tender").

Napoleon Bonaparte said:
When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.

Wow, let the Big Money interests police Big Money interests. No conflict of interest there. :)

We should bear in mind that the current Bush and Paulson plan was borne over a year's time and started with complaints of over-regulation of the financial industry, not started by any hindsight realization that the "system" is under-regulated or even mis-regulated. Therefore you are getting 200 pages of Republican lobbyists' wishes, to be sold to us in a time of crisis---just like other examples of power grabs in "shocks" (The Shock Doctrine.)

Included, I think, is the idea of letting some insurance companies sell health insurance under a federal charter and bypass state regulation (citizens' underwriting requirements) for instance, something that is a backward step having little to do with Bear Stearns or financial meltdown. Democrats, to the extent Congress is involved, need to SLOW DOWN and insist on enacting changes one by one and only if they make sense. No package legislation!

Wasn't it the Clinton Administration Secretary of Commerce/Wall St exec Robert Rubin who effectively gutted Glass Steagall?

Well, how utterly typical here at the dawn of the 3rd millenium, and the dusk of Western Economic Domination.

We've let the fox guard the henhouse for so long that there is now no denying that this has not been the best thing for the hens. So what does the fox suggest? Well, maybe if the fox not only guarded the henhouse, but inspected it regularily and took over responsibility for auditing the hens and reporting on their well-being, people's confidence that all is well in the henhouse could return.

Certainly the fox will want to stay, as long as there are hens. And where will the fox want to be when there are no hens left? By then, there's no point in guarding it, even for a fox.

Pssst... Wanna buy some hen futures?