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One Year After the Bank Bailout, We Still Need a People’s Economic Recovery
One year ago Jobs with Justice, a coalition of labor and community organizations, took to the streets to oppose the Bush Administration's bailout of Wall Street's banks and other financial institutions. We warned against transferring public money to private banks through Bush's Troubled Asset Relief Program (TARP) without some level of public ownership and control. But the TARP passed as is, entrusting the banks to put money back into the economy and help put the brakes on the recession.
Instead, these corporate criminals stole our money.
The banks said they needed taxpayer money to continue lending and to keep the economy running, yet they refuse to extend credit to viable companies like Hartmarx and Republic Windows and Doors. They are forcing small businesses to close and costing thousands of workers their jobs. Today, unemployment stands at 9.7%.
Mortgage lenders have failed to work with homeowners to curtail foreclosures, even those who qualify for refinancing. Today, nearly 1 in 25 homes is in foreclosure.
So what have the banks spent our taxpayer dollars on? Over the last year, we've watched one corporate scandal after another unfold. The bailed-out financial industry has paid outrageous executive salaries and bonuses, thrown lavish parties on foreclosed properties, and spent millions lobbying against health care reform, banking regulations, and workers' rights legislation. We must put an end to these corporate crimes.
Today, some pundits are starting to talk about the "end of the recession." Wall Street seems to be back to business as usual, and some banks are even turning profits. But what about the rest of us? One year later, what do your finances look like?
This week marks the one-year anniversary of the Wall Street bailout. Jobs with Justice will be in the streets again to demand that the banks stop using our taxpayer dollars to lobby for corporate interests instead of financing the recovery. The banks must extend credit to companies facing short term economic problems in order to stop unnecessary layoffs and plant closings. They must work with people at risk of foreclosure, and stop evicting them from their homes.
When Obama took office, he and Congress passed an economic stimulus package, the American Recovery and Reinvestment Act, which included programs to help working people weather the economic downturn. This was a good start, but was clearly not enough to turn our economy around for working people.
We believe that our government can and must pass legislation that creates a better economy for everyone. The bailed-out banks are lobbying against the reforms that could help kick-start our economy and prevent future crises - financial reform, workers' rights legislation, health care reform, and mortgage regulation. We must not let the banks dictate an economic recovery for the top only. We need a people's economic recovery for us all.
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11 Comments so far
Show All" . . .an economic stimulus package, the American Recovery and Reinvestment Act, which included programs to help working people weather the economic downturn . . . "
It was never meant to help ordinary people. It's a "there, see" designed to be pointed at to show that "efforts are being made."
Obama had a secret lunch meeting in NY with Bubba Clinton.
It was Bubba who sold out our industrial base to China in a move that has ruined our economy and turned what is left of our industrial base into a slave economy. If you love walmart you should love the Clintons and Obama.
Remember when Hillary was on the board of directors at Walmart?
The Clintons are pulling in Millions of dollars a day in Bubba's effort for his supposed Library and whatever else he is promoting today. AS for you housewives who have to work to support your unemployed husbands, enjoy Bubba and his destruction of our work force, where your husbands were working and making a decent living as It has been destroyed and removed by the Clintons and Obama has become an enabler in his refusal to admit what the Clintons have done to our society.
Obama is simply to naive and uneducated in the ways of our democracy. His pulling in a large salary will keep him happy and uneducated on the new standards that have been forced upon us..
The windows company that the author mentions is the one in Chicago that did not get credit from Bank of America and the workers, with the help of local policitians, staged a lock out.
The documents that were kept inside due to this, showed that the owner was sifting money of the top, and was moving the entire option to Iowa while simultaneously pretending not have any funds to pay his workforce.
The greed never stops. The only people who suffer are those who are not in the loop, and take their wage for granted on a day to day basis. These workers didnt. They may have found criminal conduct in the companies behavior.
The employees of any corporation must have complete transparent access to the companies workings.
Love
Zero
It is a rip-off, plain and simple.
The world is crashing in three ways: economic, climatic, politic. Each group has subsets. In all ways the rich are padding their nests. I'm sure the poor cannot. They will be left to die.
Look at Kenya in this same posting by Common Dreams.
Mass murder is being planned as if passive nonchalance is not an accessory to murder. Nevermind, they were already dying slowly--this way is will be quicker. You can blame lots of this on the human preconditioning--greed, self-absorbtion, etc.
But the one most glaring culprit is institutional capitalism.
The world's major evil today.
The cold war was between two evils...
we need a new way which includes limits on wealth, income, asset accumulation, and even intent.
Yes, Virginia, there is an ownership society, and it is evil.
It's worse than what has been covered in the press from start to finish. So 1)finance company top execs and sales people made tens of millions in commissions by giving loans for houses to people without qualifying them 2) billions more was made by bundling and selling the mortgages all over the world 3) after these bundles were given triple A ratings 4) the crash of these companies have led to expensive bailouts with taxpayer money, etc.
But, what has not been covered is that a couple of people planned the whole racket coming and going, anticipating, even envisioning the huge real estate bubble and the crash of the whole game.
Fannie Mae, Freddie Mac, the big brokerage houses and banks were hyped into the scheme from before the time the first unchecked, collateral-less mortgage was written. W. was known to be going to be fixed into place to be naturally supportive of the general goal of home ownership.
Sound like an impossible conspiracy? So was how your mother gave it up to your father to wind up with you.
The world shaking sub prime mortgage crisis was set up from day one and I was privy to the intentionality of it and the design stages.
60% of federal prosecutions involve conspiracy, but the press and the public automatically reject conspiracy as the modus operandi of all the biggest political and systematic economic scandals including the S&Ls, which were intentionally set up to crash and the NASDAQ of the late nineties, which was set up to crash.
American society is like a vulnerable computer being hacked by masterminds. It really is simpler than you think.
Sioux Rose
MARCOS: I agree with your thesis and was thinking about this recently. I remember moving to Key West where these homes divided into 4 units and very cheaply made originally sold for $59,900 when I arrived (l986) and by l995 they were selling for more than $150,000 each. What goes up that percentage in a mere 10 years? Certainly not salaries. I had friends with beaten up mobile homes on canals that they paid about $59-79,000 for, that were supposedly worth $250,000! And the trend was everywhere.
It was clear that the so-called worth of just about any form of real estate was being artifically jacked up. Then people borrowed against their equity. Like any balloon, it eventually would burst and that's where the consumer-home owner side of the short fall recently manifested. The right wing blames the homeowners as opposed to those who engineered the balloon/crisis.
One really sickening item is that it was one thing for credit cards to charge 18-20% interest when banks were paying 5-6%. Now with banks paying around 2% how DARE they keep those usurous rates of interest on our cards! Many were forced to use their credit cards when emergenies crept up, or when the equity they thought they had in their (over-priced) homes suddenly dried up.
I think those who want to get rich at others' expense learned from the S & L scam, that anyone can set up shop as an S & L, and speculate on land deals with the knowledge their contracts will be covered by FDIC insurance, i.e. the taxpayer. Add that to the way Enron did "business," and how scarcity arranged on the basis of false pretenses naturally drives up profits. Combine both with all the insights Naomi Klein delineated in "The Shock Doctrine" and we get intimations of how it was that the wise guys devised very efficient ways to cook the books.By developing their own nifty product involving the ABSENCE of substance (derivatives), while also recognizing how easy it was to pay off the congressional representatives to bring inordinately dangerous deregulation about; and the whole flim flam grand scam became a piece of VERY expensive cake.
My daughter, who put herself through college and graduated in 3 years to find a job with a corporation as an event planner, bought her condo at the tender age of 25. She is attracted to the world of finance and is drawn to status-objects since she was raised in a humble home and didn't have these items. In any case, her condo was purchased for $250,000 and now due to what's happened to real estate in South Florida it's valued at $90,000. It makes me sick because based on the business model, one still connected to ethics, she did all the right things and has effectively been punished. Just as what was let loose in the way of biotechnology will infect nature for decades, derivatives spread throughout the global banking system will do likewise. It's hard to say what anything will be worth, including the buying power of the US dollar when all this crap comes full circle. We have hardly seen the full boomerang yet. The same voices that say the recession is over are like the commentators who tell us how groovy everything is now in Iraq. The parameters used to define value or well-being depart so far from any genuinely healthy depiction as to make everything for the most part uttered from the MIC a contrivance, fiction, or mortal sin. Small wonder why so many just ingest their antidepressants...
September 24, 2009
Britain’s Top Financial Regulator Takes On Banks
By LANDON THOMAS Jr.
LONDON — “Crackers.” “Insulting.” “Stupid.”
Those epithets and more have been hurled at Adair Turner, the blue-blooded scold of City of London, Europe’s Wall Street.
But after the financial debacles of the past year, Mr. Turner, Britain’s chief financial regulator, refuses to back down. He insists on posing some uncomfortable questions for London financiers — and he is raising a bit of a ruckus in the process.
Mr. Turner is daring to ask the very question that many Britons, and indeed, many Americans, are asking themselves: What good are banks if all they do is push money around and enrich themselves? As he sees it, the City takes too much from British society and gives back too little. It has grown too big and too powerful. And, he contends, the bankers have co-opted many of the regulators who watch over them.
So Mr. Turner is proposing a few changes, none of which would make the bankers very happy. Tax financial transactions. Increase capital requirements. Shrink the financial industry, which, at its peak, accounted for roughly 11 percent of the British economy. Only then, he argues, can banks’ excessive profits — and bankers’ pay — be curtailed.
Mr. Turner, 54 years old, took up his banner again on Tuesday night, lecturing City financiers and lawyers about the dangers of reckless banking at an industry dinner held at Mansion House, the grand Georgian residence of the Lord Mayor of London. He said his agency, the Financial Services Authority, would recommend to leaders of the Group of 20 nations, who are meeting this week in Pittsburgh, that banks use their new profits to strengthen their finances, rather than to pay out lavish bonuses or stock dividends.
Banks “need to be willing, like the regulator, to recognize that there are some profitable activities so unlikely to have a social benefit, direct or indirect, that they should voluntarily walk away from them,” Mr. Turner told the group. When the dinner broke up and the crowd spilled out into the foyer, many bankers shook their heads.
Mr. Turner’s critique of modern finance is turning heads on both sides of the Atlantic. His central thesis — that banking has assumed an outsize role in economic life — is anathema to many of his establishment peers. And his proposed tax, known as a “Tobin tax,” after James Tobin, the economist, strikes many of them as downright dangerous. Such a tax would siphon jobs and business from the City, his detractors say.
Labour and Conservative politicians seem to have finally found a point on which they agree: The City is vital to Britain, and imposing the kind of tax that Mr. Turner suggests would threaten London’s status as a premier financial center.
B
But to Mr. Turner, the point has been less about his proposal — a pragmatist, he realizes that there is little chance such a tax would win international support — than the reaction to it. The uproar shows that the “quasi-religious” dogma of finance — that the markets are always right and that governments should let money flow freely around the world — is as ingrained as ever, he said. But now more than ever, given the events of the past year, regulators must challenge such notions, he said.
“We have begun to accept this idea that liquidity is the new God,” Mr. Turner said in an interview earlier this month.
“The ideology of efficient markets became deeply embedded within the regulatory community,” he continued. “And if you are of the belief that we have to challenge this, then you can’t help not to make speeches about it.”
And that is exactly what Mr. Turner has done, almost from the day that he took over as chairman of the Financial Services Authority during the very week that Lehman Brothers collapsed.
Part Cambridge don, part moralist, he has, in effect, been running a tutorial on the origins of the crisis, and what must be done, to a class consisting of his fellow regulators, politicians, bankers and the broader public.
In March, he published the Turner Review, a 126-page report that combined eye-catching charts, intricate economic analysis and an overlay of thinly veiled disgust. It became required reading in the City, as well as on Wall Street and in Washington. On Capitol Hill, Mr. Turner has established a working rapport with Representative Barney Frank of Massachusetts, the chairman of the House Financial Services Committee.
Mr. Turner is certainly an unlikely rebel. He became wealthy working at McKinsey, the consulting company, and in 1995 became head of the Confederation of British Industry, Britain’s main business lobby.
Chairmanships to high-level policy panels followed, covering topics from the minimum wage, pensions and climate change — all sandwiched between a job as vice chairman of Merrill Lynch Europe from 2000 to 2006.
Some suspect that Mr. Turner — who was nicknamed Red Adair in the 1990s after he wondered aloud if British workers had an adequate share of the economy — takes a dim view of free markets in general and enjoys railing against them.
Asked about Mr. Turner’s views, a top civil servant in the Treasury smirked and rolled his eyes. Prime Minister Gordon Brown has played down Mr. Turner’s tax proposal. Such a tax would be impossible without international cooperation, the prime minister maintains. He made it clear that the British government would not be pushing for the tax at the Group of 20 meeting.
And if, as expected, the Conservatives win this spring’s general election, the Tories will end the F.S.A.’s autonomy and squeeze the agency into the Bank of England.
Even Mr. Turner’s peers in the academic community remain skeptical.
“The Tobin tax is an old and bad story,” said Richard Portes, a professor of economics at the London Business School. “It wouldn’t curb speculation, and it would have no effect on the size of the banking sector.”
Mr. Turner, in the interview, conceded that the odds for his tax were slim. But he said bankers and regulators should not be so quick to dismiss it. “I can understand if you have really looked at it. But they are saying it will never work,” Mr. Turner said. “And sometimes there are things that may not work that are quite worth investigating.”
Julia Werdigier contributed reporting.
I tried reading the economist magazine this week in a store.
First Three Articles
One was critical of the UN report on Israeli actions in Gaza suggested the UN notorious for being Anti_semitic. .
The next was opposed to tariffs Obama levied on Chinese Tire Imports. They claimed that not only should there be less impediments to free trade but that Obama should move quickly on forming agreements with South Korea and latin American Countries.
The Third Article was on the Tobin tax. They were again opposed claiming it would cripple innovation and act as an impediment to investment.
They still push the Corporate, business as usual agenda even as all their predictions as to how MORE deregulation and more "Free trade" would end poverty and lift all boats is shown as farce.
PEOPLE:
"We must not let the banks dictate an economic recovery for the top only." ??????
THE BANKS??? I THOUGHT THE PRESIDENT WAS IN CHARGE HERE. THE DEMOCRATS ARE IN POWER NOW.
IN LESS THAN A YEAR, OBAMA AND THE DEMOCRAT PARTY HAVE:
PROVIDED WELFARE TO BANKS WITH THE PEOPLE'S MONEY (THAT THEY STOLE IN THE 1ST PLACE)
INTRODUCED MANDATES FOR INSURANCE COMPANIES FORCING PEOPLE TO BUY INSURANCE (THAT DO NOT HAVE THE MONEY IN THE 1ST PLACE)
CONTINUED FUNDING FOR WAR IN IRAQ AND AFGHANISTAN
VOTE FOR THE INDIVIDUAL, NOT THE PARTY.
VOTE FOR DENNIS KUCINICH NEXT TIME.
AND YES, IT WAS ROD BLAGOJEVICH, ILLINOIS' GOVERNOR THAT HELPED THE REPUBLIC WINDOWS EMPLOYEES. HE WAS THERE AND PUBLICLY THREATENED TO CUT OFF ILL BUSINESS WITH BANK OF AMERICA IF THEY DID NOT COMPLY WITH THE UNION RULES.
BLAGOJEVICH WAS ANOTHER INDIVIDUAL THAT WORKED FOR THE PEOPLE BUT GOT F"D BY THE BASTARDS IN ILL CONGRESS THAT HAD THEIR HANDOUTS CUT OFF BY THE GOVERNOR AS WELL. HE PROVIDED FOR THE PEOPLE WITH THE PEOPLE'S MONEY, NOT THOSE FAT BASTARDS IN CONGRESS.
"Today, some pundits are starting to talk about the "end of the recession." Wall Street seems to be back to business as usual, and some banks are even turning profits."
What the pundits didn't tell the sheeple who swallow their every word, is that the recession appears to be ending on Wall Street, but getting worse on Main Street.
“Central bankers have revealed themselves to be not masters of finance but the co-conspirators of investment bankers who looted government treasuries for the benefit of Wall Street’s parasitic plundering.” – Darryl Schoon