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Citigroup's Football Madness
Citicorp executives are using $45 million corporate jets for luxury family vacations in Baja at $12,000-a-night hotel rooms, all courtesy of bailout money from you and me.
Banks across America are laying off Americans by the tens of thousands and replacing them with workers in India, The Philippines, and imported foreign highly-trained white collar workers who'll do work for less than half the prevailing wage for Americans.
Meanwhile, most of the banks getting our bailouts have overseas tax shelters to hide their profits; the practice is so pervasive that worldwide corporate tax rates have dropped from 38 percent in 1993 to 26 percent last year, and a significant number of Fortune 500 companies in America pay no corporate income taxes whatsoever. (While we have the second highest corporate income tax rate in the industrialized world at 35 percent, we also have the second lowest percentage of taxes actually paid because of tens of thousands of loopholes drilled into federal tax laws by lobbyists, and these offshore tax havens.)
But our problem isn't "greedy" bankers and corporate executives. The problem we have is structural.
Thirty years ago, America was still held together by policies, laws, and systems put into place during the last Republican Great Depression to prevent a repeat. But since Reagan's election, in the name of "free trade," "the free market," and "freedom" - euphemisms for destroying the New Deal - those structures have been systematically dismantled by four successive administrations and their attendant congresses.
We've lost the wall of separation between banking and gambling (investment). We've lost the ability to tax American corporations on their profits (globalism). And we've lost the ability to protect our domestic industries (particularly our small businesses) and American workers from the predation and unfair competition of companies and countries that use fifty-cent-an-hour labor as a weapon against us ("free trade").
It's easy to take potshots at Citigroup's Sandy Weill for ripping us (and Citigroup) off. But he's just a symptom of a larger problem that has gone by a variety of names over the past thirty years. Reagonomics. Thatchernomics. Clintonomics. Free Trade. Globalization. The World Is Flat. Economic Freedom.
All are just fancy ways of saying that we should play the game of business without any rules other than those defined by the businessmen.
Imagine if this same logic was applied to football:
Goalposts? Yard Lines? Those limit the freedom of players!
Fouls? You're trying to stifle creativity!
Referees? You must be some kind of protectionist, a gestapo who wants to over-regulate everything!
The fact is that we give businesses a lot of special privileges, tax advantages, and liability protections when we set up the game of business. We do so because we want entrepreneurs to play the game of business in a way that makes them money but also - and, actually, first and foremost - serves the public good. Which means having a reasonable playing field, transparent rules that everybody plays by, and referees who catch malefactors and actually throw them out of the game or penalize them.
Thirty years of repeating the 1921-1933 Warren Harding/Calvin Coolidge/Herbert Hoover Republican mistake of "deregulating" business has led to the exact same result it would if we "deregulated" football - chaos.
We must immediately reinstitute our structures. Enforce the Sherman Act (no more "too big to fail" companies, from autos to banks to media). Reenact Glass-Stegall (no more gambling by banks). Pull out of the WTO and go back to the National Industrial and Trade Policy put into place by Alexander Hamilton in 1792 that worked just fine for this country until Reagan, Bush, Clinton, and Bush tore it apart piece by pice.
If we rebuild our field, repaint the lines, reinstall the goalposts, and give whistles and enforcement power back to the referees, we may again have a nation where the business of business is a net positive to We The People. Until that day, Sandy Weill and his cronies are laughing all to the bank...in Liechtenstein.
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21 Comments so far
Show AllYesterday on TV I saw a Democrat and Republican agree that Corporate Tax Rates in America are the highest in the world and need to be lowered to 25%.
Neither of them mentioned all the loopholes which exclude most Corporations from EVER paying any taxes whatsoever.
Until the airwaves are returned to the public this is the type of garbage which will become mainstream thought.
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Whoever controls the media controls the country. Period.
This is the best analogy: sports with no rules. How very clear and simple. Thank you, Thom.
Who will pay for their lawsuits? Are they liable to be sued by international investors? What are all these trade agreements on financial transactions?
if there are any doubts about our one party, two headed system, the fact that Bill Clinton, a democrat, is listed right up there with Reagan and the Bushes should make it clear.
So wonderfully put. Thom Hartmann always come through!
Thom, Thanks for keeping up the "good fight". I feel that at some point "they" might hear you and keep reminding me to call them out when they stray off the Progressive track!
Thom's analogy to a deregulated, un-refereed football game is apt. It also illustrates another dimension of the Bush era's lame duck Wall Street meltdown that merits emphasis.
Once you blindfold the umpires and let the teams make up new rules as the game is being played, in the ensuing chaos the difference between hard, fair play and dirty play (cheating) gets blurred beyond all recognition. Pretty quickly, the participants who still try to play by the rules (including the new ones made up while the game is in progress) find themselves getting mugged, victimized, and kicked around unmercifully by the cheap shot artists - players like Bernie Madoff.
Citicorp's broad daylight diversion of federal bailout money into luxury business holiday expenses and executive bonus packages can best be seen in that light.
After eight years of having the fox guard the henhouse, nearly everybody involved could see the handwriting on the wall by the fall of 2008. The grounds crew was gradually assembling to repaint the lines, restore the goalposts, give the refs back their whistles, and revise the official rule book.
Last chance to pack up that golden parachute, take the money, and run.
Catch me if you can.
Bill from Saginaw
Regulated capitalism, along with small "d" democratic components of our government, have been dismantled and reconfigured into the corporatism that is now bankrupting our country.
Unfortunately corporatism is now a global system.
This is a desperate situation that requires an open public debate. However with the nexus of corporate media and corporate government dominating the discussion, this will be almost impossible.
The idea of merely reverting to Reagan era taxes is branded as the scary socialism monster. We can't have much of a debate when the same people who dismantle the rules also define the very terms of the debate.
http://davedubya.com
Corporate greed, strutural avarice are the seeds of Revolution.
France 1789
Russia 1917
USA 2009?
I think we're all gonna need Peak Oil to cure this football madness very badly.
Excuse me, but Obama voted for the initial bail out without any oversight. If you leave a ten year old home alone strange things are going to happen. If you put a fox in charge of the hen house, your chickens will most likely disappear before your return. Why do the pundits always slant the problem instead of putting it where it belongs? Blame the politicians both Democrat and Republican who voted for a Bill void of oversight. And ignore pundits who can only offer a Democratic Apologetic.
Our corporate controlled government has looted our treasury and enslaved our children for generations.
What's this nonsense about fighting terrorists 'over there' - these financial terrorists are right here!
To really stimulate our economy we should take ten percent up to their penthouse offices ... and push.
Our so-called leaders are cowed by the mega-powerful and rich financial institutions that exist because THEY created the conditions that allow them to exist IN THE FIRST PLACE.
The Citigroups of the world are NOT immutable laws of nature.
Citibank raised the limit on my card (always paid early, more than minimum, high credit score) 9 percent last month. I was told this was because of the company's difficulties. They received 83 billion of taxpayer money to ease credit--and now are driving people out, or under, by unilaterally-imposed usury. And they did this to most of their customers, apparently.
They want to squeeze money out of us all while they can, and then run like the devil.
Criminals.
We need to protest their actions, and those of the other greed-besotted banks, en masse to seek congressional protection. How and where? If anyone knows, please do tell. I want to join!
okfalcon -
Our two-person law practice had a continuous line of business credit with a local bank for over twenty years. Never late. Never over limit. Never paid less than the minimum monthly stroke. Not once in over twenty years.
Out of the blue, in early September 2008 we got a form letter declaring that our loan had "matured" and was to be immediately paid off in full. When I called to get some clarification (and/or protest) about what the hell was going, I was urged to jump through all the necessary hoops to apply for a new line of business credit with the same bank, at what was to be a greater credit limit, and a lower interest rate, than the $5,000 balance that had suddenly and mysteriously "matured."
We bit. My law partner and I submitted a new credit line application with a couple of tax years' supporting documentation on our business and personal taxes, assets, and liabilities. The bank's committee rejected the application with a form letter, based solely upon our personal credit scores.
The collection department then steered us over to the "work out loan" division of the bank. They turned around and processed the business's $5,000 debt into (guess what!) an unsecured personal loan guaranteed jointly by the two of us supposedly unworthy credit risks - at 14% interest.
We of course severed all further ties with this particular bank in the aftermath of this treatment. A couple of the lower echelon functionaries involved in the scam acknowledged that the abrupt "maturing" of our modest, two decade long business debt had nothing to do with actual payment histories, and everything to do with the bank's internal balance sheet. Big deal.
As a commercial banking corporation operating on a nationwide scale (and dabbling in mortgage-backed investment packages bundled up for sale on Wall Street), the powers-that-be at the top of this lending institution absolutely did not give one sweet shit about their ostensible role in facilitating the viability of a small business on Main Street which had been operating continuously in the community for over thirty years, with an impeccable installment payment record for the last twenty.
Bill from Saginaw
What's the name of the bank that "called in " your loan? Why so hesitant to let us know who these creeps are?
Bill
Apparently what you describe is now common practice among commercial banks. They're also doing it with other kinds of loans, too, suddenly increasing the interest for customers who have excellent credit and payment records.
The internet is full of complaints and news of lawsuits against large commercial banks. If you haven't done it yet, Google "bank complaints".
As the result of one lawsuit, recently CitiBank had to pay its customers miniscule amounts whom they'd bilked of untold monies with late charges/overdraft fees, charging debits to accounts before crediting deposits (made before the debits) so that charges mushroomed hundreds of dollars daily. Customers lost thousands of dollars through this legal but unethical practice.
I recently closed my Wachovia account and opened an account in a stable credit union, a non-profit entity owned by the depositors. I think many huge commercial banks are going to fail anyway, no matter what the government does. And where's the money to pay the FDIC insurance on deposits? It's gotta' come from somewhere, and I haven't heard any news that the FDIC is stable and solid and can cover the claims when that happens.
To paraphrase Mr MK Gandhi - Good people want laws in place in order to create a safe and ordered society so that all may fourish. Bad people do not want laws in place, so that only they may flourish, irrespective of the means employed to do so!!!
What I fail to understand, is why is Prez Obama skirting around the issue of holding these scoundrels accountable. The current crisis can be placed squarely at the feet of the following:
1. Repeal of Glass-Steagal - the Banks paid $300m in lobbying efforts since 1983 to get this repealed.
2. Credit act of 2002 - huge lobbying from so-called financial institutions - further entrenched fin insts as casinos.
As of last Friday, it was reported that Financial Institutions had upped their lobbying efforts (more dollars) using the first round of bailouts in order to get more bailouts in round 2.
Cygnus - heard the same garbage from senator allen (R) of VA - small letters used in name to emphasise my feelings for this con-man.
A wire service story today reports US banks submitted thousands of visa requests in 2008 in an attempt to lure foreign MBA's here to replace American workers at a substantially lower wage. To borrow a phrase from the right wing, "Why do bankers hate America?"
.... why is Prez Obama skirting around the issue of holding these scoundrels accountable.
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Whatever his original agenda (and we'll probably never know what it really was), it and he have most likely been coopted by powers behind the seat of government. There are Democrats in his cabinet that are the guardians and directors of their agenda, not Obama's.
For the last 50-70 years, I'm not convinced that any president has been his "own man", maybe not even Ike, who warned America about the MIC, which now appears in full power.
Pro football also shares revenues, offers universal health care for all player-employees - who are all union members - and even harshly punishes player-employees (as well as coaches and support staff) for 'unsportsmanlike conduct" off the field.
And the NFL is the most financially successful sports organization in history.
Damn socialist fascist anti-American commie bastards!!!