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TechnoratiChange Wall Street Can Believe In
Wall Street is doing to America what private equity firms did to Simmons Bedding and many other productive companies. Taking control with borrowed money, stripping assets, slashing jobs and cashing out.
Taxpayer bailouts saved Wall Street from choking on its own greed. Now, as the Wall Street Journal reports, "Major U.S. banks and securities firms are on pace to pay their employees about $140 billion this year -- a record high."
$140 billion is more than the combined budgets of the U.S. Departments of Commerce, Education, Energy, Housing and Urban Development, the National Science Foundation and the Environmental Protection Agency.
Typical workers, meanwhile, make less today adjusting for inflation than they did in the 1970s. Wall Street rewarded CEOs who cut employee wages and benefits and offshored manufacturing, services, and research and development; feasted on Bush's tax cuts; turned mortgages into loan sharking; and vacuumed up home equity, college funds, retirement funds and other private and public investments into their rigged casino.
Goldman Sachs, for example, "peddled billions of dollars in shaky securities tied to subprime mortgages on unsuspecting pension funds, insurance companies and other investors when it concluded that the housing bubble would burst," McClatchy reports in a new investigative series.
The Great Depression gave way to the New Deal. The Great Recession has become the Great Ripoff.
The TARP inspector general's latest report to Congress says, "The firms that were 'too big to fail' ... are in many cases bigger still, many as a result of Government-supported and -sponsored mergers and acquisitions; the inherently conflicted rating agencies that failed to warn of the risks leading up to the financial crisis are still just as conflicted; and the recent rebound in big bank stock prices risks removing the urgency of dealing with the system's fundamental problems."
Enabled by the Bush and Obama administrations, the megabanks are lending less and gambling more -- using taxpayer money to pay bonuses, float a new stock market bubble and make even riskier bets.
The U.S. Treasury and Federal Reserve have become Wall Street's ATMs, while unemployment, foreclosures and homelessness rise, states slash public services, and small businesses are starved of credit.
Outside the TARP, trillions of dollars are flowing to the banksters in the form of near-zero interest loans, bond guarantees and extreme leverage for toxic assets. You can follow the money at www.nomiprins.com. Nomi Prins, a former managing director at Goldman Sachs, is author of "It Takes a Pillage."
The megabanks are not too big to fail. They're too big and irresponsible to exist.
Just months after taking office in 1933, President Roosevelt signed into law the Glass-Steagall Act, which separated the commercial banking of savings, checking and loans from investment banks doing underwriting and speculative trading. The former got depositor insurance, not the latter.
Glass-Steagall lasted until Citigroup and other power players killed it in 1999 through the Financial Services Modernization Act, taking us back to the pre-New Deal casino economy on steroids. Now former Citigroup CEO John Reed has joined the growing call to split commercial banking and investment.
In 2000, Congress passed the Commodity Futures Modernization Act, ignoring the warnings of Commodity Futures Trading Commission head Brooksley Born who said that unregulated trading in derivatives could "threaten our regulated markets or, indeed, our economy."
By 2002, the four largest bank holding companies -- Bank of America, JP Morgan Chase, Wells Fargo and Citigroup -- had 27 percent of FDIC-insured bank assets. Now, reports the Economic Policy Institute, they have nearly half. They overlap with the biggest derivatives dealers -- JP Morgan, Goldman Sachs, Bank of America, Morgan Stanley and Citigroup.
The government heavily subsidizes the megabanks, but it's the small banks that provide higher savings interest, lower fees, lower loan and credit card rates, and do much of the lending to small business, who in turn create most new jobs.
Behind their Main Street rhetoric, Congress and the Obama administration have so far been the change Wall Street can believe in. The administration and Federal Reserve are loaded with revolving door Wall Streeters and their proteges. Campaign donors and lobbyists are working Congress to minimize and distort reform.
Make your voices heard. We need to enact tough regulations and bust the banks who busted our economy -- before they do it again.
32 Comments so far
Show AllThe Republicans had their incompetent ex-cokehead in the White House. Now we've got ours.
17.5% unemployed believe the economy remains "busted"
As its Empire Crumbles is America Ready for a Third Party?
It is obvious that the United States in in a kind of governmental gridlock and that the Congress and Executive Branch are unable to respond to world threats- whether climate change, peak oil, health care, financial regulation, water scarcity, rampant militarism social justice, etc. The Republican party is now in the hands of extremists who are bankrupt both morally and in the realm of ideas. Corporate America dominates the Republican party. The Democratic party consists of a progressive wing that is ready for bold change and a moderate/conservative wing that enforces corporate interests not unlike the Republican party, but does so under the guise of a helping hand.
Perhaps we are looking at the beginning of a third party. A progressive party that would truly represent the interest of workers, minorities, woman, etc. One that would never accept a Barack Obama as its leader- a man who equivocates on almost every issue and has no understanding of how to effect his campaign slogan- real change.
Some would argue that splitting the Democratic party would result in a right wing majority- with the coalescing of Republicans and right leaning Democrats into one party. However, the truth is that we already in effect have this. What a separate party would do is become a rallying point to those that believe in meaningful change. Right now- there is nothing.
There may be no way to avoid an even deeper crisis than exists now. Perhaps this is the only way that the American people would fully turn over the reins to genuine progressives. Sadly, by the time that crisis is reached- the damage to the environment and the economy may be too much to recover from. The United States is not the United States of post World War II. Its domination of the world's economic system and ultimately its military domination will end in the coming decades. Responsible and bold action now could lessen and soften the fall- unfortunately this is unlikely to take place. The United States is in very deep trouble. The concept of American exceptionalism is a joke- it is now and it always has been.
Thanks for this great summary. That McClatchy series looks like a good workup of GS, here a link to it, and another recent article on GS:
http://www.mcclatchydc.com/goldman/
http://www.timesonline.co.uk/tol/news/world/us_and_americas/article6907681.ece
I believe the people inside the system of the wealthy are complete believers in the fairness and 'correctness' of it.
The solution, imo, is to start going to your local Dem party meetings. Get involved and run for something; anything to get started. As the late, great Frank Zappa advised young people: "register to vote and run for something"
We still have a democracy, we just need participators. Here's a list of a few things that need to be in place asap. Once we get these, others issues (like financial) will follow.
1. Accurate voting systems. Paper ballots only. Scientific exit polling as a quality control check.
2. Public financing of all federal elections. No one should ever be allowed to take $ from lobbyists or corporations.
3. Some kind fairness doctrine that guarantees propaganda does not go unchallenged on any major market or website.
4. Instant run-off elections for all federal elections.
5. Eliminate revolving door of government and private industry, with a minimum 'cool-off' period of 15 years.
Term limits, replacing or screaming at pols won't do any good. They are already 'compromised' ;)
There are no "Federal Elections". The highest level in the US is State.
Thanks, make that 'Elections for federal office'. Although nation-wide election standards is what I'm getting at.
sierra7
Our country is running out of what is required for a true working democracy: Historical Memory.
I also remember when so much of the government publications/information was FREE at regional government offices. After Reagan, we had to start paying for what we paid for in the first place.
Preaching to the choir, we are a totally corrupt country...and I agree that while we are/were slaughtering the innocent in Iraq, Afghanistan and other places in this world, so many Americans were gleefully on a spending spree, a spree that has contributed to the total corruption of our nation.
Poor education, not caring, greed, narcissism; that is our dish.
We will pay (I'm 79 and remember "....what it was like") and pay dearly.
From anecdotal evidence, so many now can't believe what is happening. What did you expect???????
How about this as an original thought.
"Clean Sweep", as in turn EVERY congressman, senator, and Mr. President out when their times come.
Elect new pols with a mandate: Do the peoples work; that is what you are there for. If you don't, out you go!
How to enforce this? One 6-year term for all / no re-elections.
Anyone in congress who opposes this = VOTED OUT - no questions ...
Lipstuck Bushogs, Bernanksters and Wall Street-walkers: pitiless profit-takers from their fellow Americans, ALL!
sarayakat, it's already happened. Everyone I talk with under the age of 45 has never heard of free higher public education, free public parks, zoos and museums, free community clinics,free recreational centers, free after school sports, free band classes (including instruments), middle class families supported by one wage earner, and on and on.
This is all they've known, this is all they think there is. Mission accomplished. I have a neighbor who was passive politically, but when I told her how it once was, she got outraged and is now paying (some) attention. She still thinks Obama will save us, but at some point she will become disabused of that idea. As time goes on, there are fewer of us who know what we once had. And I have never seen such successful sedation of a population. At this point, too many Americans are still too comfortable. An unemployment and underemployment rate of 25% still leaves 75% employed and not ready to rock the boat. At present. But the rich know what's coming. They are lining up their private security forces and the government is preparing for riot control.
I think the line from Revelations will be coming home to roost: Hurt not the earth, neither the sea, nor the trees. When that was written, the occupancy rate on this planet was negligible. But somebody knew something.
When the people fear their government there is tyranny,
when the government fears the people there is liberty.
~ Thomas Jefferson
I only fear that all the anger and confusion of a prolonged crisis will be too much en masse for people like your neighbor to not be swept up into something like what happened in Germany or Imperial Russia. I've always maintained that the best thing we had going for us was human nature: Greed leads our masters to overreach, while hunger brings the people to the streets. Now, I wonder if technology doesn't give "them" a real edge for the first time in human history. Refinements in cognitive theory, pharmacology, even simple things like urbanization and the ramifications of what it means to control transportation networks and seed stocks. It's a new world out there for our species...Or maybe I've been watching too much "Torchwood". :)
Repealing Glass-Steagall was done by replacing it with Gramm-Leach-Bliley Act of 1999. I assume that the author meant monetary change Wall $treet can believe in. Not to worry though, chump "change" is on the way ! :(
Until the end of the article, the author got it right. If the health care fiasco taught us any lessons, it was that the only way they will hear our voices will be to vote them out of office. Her last sentence that starts out with "We need to enact tough regulations" is wrong. People don't enact regulations. Enacting regulations is the responsibility for members of Congress the electorate votes for. We also pay taxes for them to do their job, not for them to churn our money with Wall $treet like they always do.
It's now every man and women and dog/cat for himself/herself in CORP. controlled Amerika. The Class war is over and WE the People have LOST BIG time. The Obama admin. is not going to do squat for the great majority of us. They'll throw just enough crumbs @ us like extending our UI benefits a few more time and thats it. They've sold us out folks and they care no more about us then the GOPERS do.
Oh, don't think it ends here. You don't tell a tapeworm "OK, game over, let's go home."
the only way to "change" Wall street is to occupy it with homeless people. kick out the bankers and institutions pretending to be banks and make their colluding masses work for real -- such as
sweeping the streets, collecting garbage, wiping the asses of old people, washing dishes ...etc...
all at NON-UNION wages, BELOW "market price".
This, and health care, and war, and everything else considered, if it weren't for the immense honor of being an american...I'd really rather be in Denmark (where I would pretend to be Canadian).
With all due respect, make our voices heard by whom? Congress and the POTUS are well aware of the need for regulation if the casino capitalist system which feeds and sustains them is to be reined in. See what I did there?
I've now seen this "make your voices heard" thing on issue after issue, from supplemental appropriations, to healthcare, bankruptcy law, torture, Gitmo, Afghanistan, you name it. So far I am getting the sneaking suspicion that we are being ignored. Every time the progressive community makes a fuss it just seems to mean that our elected officials do a bit more maneuvering than they otherwise would have, with the same end result, corporate-friendly crap from the "what's good for business is good for Amerika" crowd. All very much imho of course...
I don't do advise, but if I did I would say: Take care of your family, agitate your neighbors, and hope that the powers that be f#ck up badly and discredit themselves completely while there are still enough people left alive who remember our democratic traditions to offer a chance at renewal. A couple more generations of Palins, Bushes, Obamas, and Clintons and it's all over for us, as our descendants will have been raised on corporatism, and most will not understand the difference between what is and what might have been.
Let us not confuse ". . . make our voices heard" with "inform our representatives of what we want."
Representatives do read polls, and they are perfectly aware that the electorate dislikes their actions.
However, "make your voices heard" may mean remove support from those who fail to serve: stop business with the businessmen; vote the politicians out of office; cease whatever other cooperation allows them to continue; harangue them; get in their way.
Politicians and businessmen are not powerful by virtue of being athletic, but strictly through the cooperation of others. Let's just knock it off.
You may not do advice, but the course of action you outline is the only one left. They have certainly been working very hard at discrediting themselves.
Out of one side of their mouths they are demanding progressives pressure Obama and out of the other they are gushing (see Katrina Vanden Heuval)if not lecturing and accusing progressives of "whining" when they express any out outrage...
Meanwhile, over at Huffington Post they are screeching at anyone who dares utter a word reflecting on the growing evidence condemning their pop idol:
He is only one man! You have to give him time! You can't expect him to fix all the problems in the world!
Teabagger!
Why don't you grow up like us mature responsible adults!
Otherwise, this is why the stimulous is useless:
"Wall Street rewarded CEOs who cut employee wages and benefits and offshored manufacturing, services, and research and development; feasted on Bush's tax cuts; turned mortgages into loan sharking; and vacuumed up home equity, college funds, retirement funds and other private and public investments into their rigged casino..."
Is it just me or are the comments sections over at Huffpo getting more ill-informed and inarticulate by the day? It's like redstate.com over there, only in reverse (sometimes in reverse). so far, since Nov I have had to drop Huffpo, Dkos, and any number of more casual lefty news and opinion sources, all of whom have become knee jerk defenders of every manner of skulduggery (though Dkos was already fairly annoying at times). Now if I can only find a good place to use the word "hobnob" my day will be complete.
They are disgusting. Inarticulate, ill-informed, idol-worshiping Obamanistas. Whenever someone posts an intelligent, well-thought-out argument -- with facts and links -- they are blasted. At this point I can even name names of some of the more egregious one-line posters. It's amazing that some of the good bloggers haven't been lynched over there, including A. Huffington herself, when they speak out against the O. When I saw the reaction from this crowd to the passage of the House health insurance reform that was pretty much it. I defended Kucinich and Massa a couple of times reading many posts of "any Dems who voted against" blah-blah-blah. And then I gave up. Stupid is stupid. These are not people who want to learn anything. They are worse than their counterparts the Bushies.
Yes, it is getting visibly worse with each passing day.
Fluffpost and Dkos have always been filled with the worst of the Obamabots. The GE Koolaid won't allow them to compute or think. I would barely glance at whatever articles they have worth even reading. As for comments, I say stay away from them. Even Alternet has some reasonable people just like here.
Trust us, sarayakat. This site is the best and is as close to true progressive/liberal as it will get. I don't know if we met but if not, pleased to meet you and welcome to CD. Most people on this site have true critical thinking skills and are not lame-brained party loyalists. You'll even meet more people regretting their votes for Obama and most of them really mean it as they back up their regrets by taking the issues straight to the heart.
Jennifer: I agree with you. This forum is much more open, and the writers and readers are more likely to take the time to post other informative articles, books, etc., that might be relative to the discussion.
Thank you, pleased to meet you as well.
I'm one of those idiots who believed Obama's speeches, and I'm also slowly weaning myself off of Huffpost as it degrades in front of my eyes.
You are not an idiot as long as you are willing to correct your misperceptions and improve. Some people take longer than others to overcome those kinds of seductions thrown at them. I forgive you. :)
Usually I have trouble even accessing it--the site always gives me problems--but they rarely accept my comments anyway. I checked in earlier when CD was doing some maintenance of some kind.
Class Warfare has now shifted decidely back here to the United States. The American economic elite plundered the world and most of the idiots back home cheered them along and went on shopping sprees with easy credit. But like all empires, this one over extended itself, and for the past several years has been turned in on itself and eating the poor in the form of the credit bubble. They are only going to squeeze us harder now. Saturday the Democrat congress voted to impose a CORPORATE TAX on every American citizen. Today the AFL-CIO had the nerve to send me an email telling me to thank them, for caring more about "working families" than "big insurance companies." The cognitive dissonance is nearly overwhelming.
Nothing will save us now but organizing locally, in our neighborhoods and communities, from the grass roots up. We are in a war for our lives, and if we don't accept that and convince our friends, neighbors and families, than the game is up and nothing but full-fledged corporate enslavement and ecological ruin await. The days of "looking upward" for help are long since past. Washington is the home of the millionaires and near millionaire, and they all work together to turn our misery, our suffering, even our death, into profit for the billionare elite at the very top of the pyramid.
Briggs Seekins
briggsseekins.wordpress.com