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trans pacific partnership
Wall Street Had a Merry Christmas. The New Year's Still Up For Grabs.
Dec 26, 2014
The Banking Committee, and Fighting Wall Street (w/ Sen. Sherrod Brown)Subscribe to The Zero Hour with RJ Eskow for more: https://bit.ly/TheZeroHour If you liked this clip of The Zero Hour with RJ Eskow, ...
They're calling it a "Christmas gift" for Wall Street. Last week the Federal Reserve announced that it's giving U.S. banks yet another extension on the "Volcker Rule" provision in the Dodd-Frank financial reform bill. As a result of this latest decision, banks won't have to comply until mid-2017.
The Dodd-Frank bill was passed in 2010.
Banks wanted a delay because they claimed they needed the time to prepare. Does anybody really think the nation's largest and most powerful financial institutions need seven years to restructure the casino-like aspect of their operations? It would be easier to imagine them doing in seven days - at least if there were money to be made from it.
What's really going on? For one thing, every year that the rule is delayed is another year the banks can maximize their earnings. But the game may be even deeper than that. The Fed delay makes a kind of sense - if you believe Congress plans to revoke the Volcker Rule altogether.
The Ghost of Big-Bank Futures
It's almost as if Wall Street's been expecting a break all along - but then, maybe it has. After all, instead of shoring up Dodd-Frank by restoring Glass-Steagall and breaking up too-big-to-fail banks, lawmakers have looked the other way. The Fed and other regulators have routinely dragged their feet on the rule-making that accompanies a law like Dodd-Frank. The Justice Department has ignored overwhelming evidence of banker criminality and given a free pass to lawbreakers on Wall Street.
And this month Congress ran the same game it's used in the past: It attached a corporate-friendly provision to a "must pass" bill, using the implicit threat of a shutdown and the shallow reporting of a compliant news media to slip its machinations past the American people.
This time it was the "cromnibus" funding measure, and the corporate giveaway was the "Citigroup" amendment - literally written by lobbyists for that bank. The amendment revoked a provision removing taxpayer insurance protection from risky derivatives investments by large financial institutions. That provision, originally set to take effect in 2013, had been delayed until July of 2015. Now it won't take effect at all.
If you want a dark glimpse of the coming year for this holiday season, the "cronybus" deal points its bony finger toward 2015 like the Ghost of Christmas Future. Ask not for whom the bell tolls. It tolls for thee ... and thy economy.
Running Out the Clock
It's government of Wall Street, by Wall Street, and for Wall Street. The lesson of the "Citigroup amendment," which only benefited a handful of our largest banks, seems to be this: If the rule-making is delayed long enough, there's a good chance Congress will eventually repeal the rule altogether - that is, if it gets in the way of Wall Street's profits.
At the close of last year, Citigroup held $63.5 trillion in derivatives, and $62.3 trillion was protected by Federal insurance. That's "trillions," with a "t." And while the bank isn't on the hook for the full amount, you can believe that these bets involve enormous sums of money.
We're on the hook for those sums too - and now that's not going to change.
Whose Fed?
That gets us to the Fed's decision. The Volcker Rule was designed as a milder alternative to the Glass-Steagall protections that kept our banking system safe for nearly 75 years. It limits banks' ability to gamble on risky investment instruments like those which contributed to the financial crisis.
The "Citigroup" amendment showed us how likely the new, more Republican Congress is to roll back portions of the Dodd-Frank law - and how much cooperation it will receive from Wall Street Democrats when it does.
It's easy to be angry at the Fed, and it's often understandable. An institution created by the American people to serve the greater good has instead become enmeshed in the banking industry it was meant to regulate. (See "The People's Fed" for more.)
Nevertheless, although we are often ill-served by this public institution, in this case the blame may lie elsewhere. Even a relatively well-intentioned officer of the Federal Reserve might reasonably conclude that it would be disruptive to force banks to prepare for a rule that will never take effect.
And if there's one thing that Congress demonstrated this month, it's that it is ready, willing, and able to eliminate rules that displease Wall Street.
Pushback
When it comes to Wall Street reform, this month was bad news. But there were sprigs of green among December's funereal shades. A few feisty lawmakers fought back against the "cromnibus" deal. Sen. Elizabeth Warren (D-Mass.) led the charge in the Senate, slamming both Wall Street's Republican water-carriers and Citigroup's cronies in the Clinton and Obama administrations. On the House side, progressives found an ally in a reinvigorated Democratic leader Nancy Pelosi.
Sen. Bernie Sanders (I-Vt.) says he will introduce a resolution to break up the big banks. It's not likely to pass, but it's a start. Democrats who resist the Wall Street takeover may find some allies among the Republicans as well, where Sen. David Vitter (R-La.) and others have sometimes taking populist economic stands.
Sen. Sherrod Brown (D-Ohio) will become the ranking Democrat on the Senate Banking Committee (which also handles housing and urban affairs, two other sensitive financial areas). In the clip above, Sen. Brown told us that he plans to use this position to keep calling for more comprehensive Wall Street reform. Brown says he'll reach across the aisle for allies. He notes that some conservatives want Wall Street reform, but adds that even the most ardent among them are often seduced by its money when they come to Washington.
The senator also notes that, when it comes to "keeping Wall Street in check," his committee "didn't have a majority for that (even) when Democrats were in the majority." That's where the public comes in.
Whose 2015?
We live in a cash-driven political age. We won't get the reform we need if we rely on elected officials to enact it for us. That will take an independent movement that isn't beholden to any party or special interest. Building it will be a major challenge, and nobody else will do it for us.
It won't be easy. Banks are already gearing up for a "lobbying blitz" aimed at rolling back more of Dodd-Frank. The President is likely to renominate banker Antonio Weiss to a key economic position. Wall Streeters are likely to join with other wealthy interests in another attempt to cut Social Security, a move which could keep their tax bills low while bringing new investment income to their coffers.
There will be other economic battles. The President will be pushing for the Trans-Pacific Partnership, an onerous and destructive trade bill, and he'll be asking Congress to prevent debate on its controversial provisions by using a parliamentary trick known as "fast track." Congress will be fighting to give even more tax breaks to corporations and wealthy individuals, and to undermine even more employee protections for working Americans.
Some in Congress will make positive and even brave proposals - to break up the big banks, increase Social Security benefits, raise wages, and take other much-needed steps to repair our damaged economy. But, overall, our elected officials will only have as much courage as the public demands of them. It will take a reinvigorated movement, on the scale of the Occupy movement and the transformative movements that preceded it, to enact major populist reforms.
If you're looking for an easy political ride, 2015 isn't likely to be your favorite year. But if you're looking for political challenge and purpose, you'll find more than enough to engage you in the next twelve months. Happy holidays - and see you at the barricades.
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Moyers & Company: Democrats, Not Just Republicans, Are Bowing Down to Wall Street
John R. MacArthur of Harper’s Magazine talks with Bill Moyers and argues that both major parties are abandoning the republic in pursuit of big bucks.
Dec 12, 2014
Negotiators from the 12-nation Trans-Pacific Partnership (TPP) were in Washington this week for a new round of talks which they hope will lead them closer to agreement on the trade deal. President Obama has called passage of TPP a "high priority."
This week, Bill speaks with outspoken veteran journalist John R. MacArthur, president and publisher of Harper's Magazine, about the problems with TPP, which is being negotiated in secret, behind closed doors. MacArthur says that the "free trade" agreement will take jobs away from Americans: "I guarantee you, this is a way to send more jobs [abroad], particularly to Vietnam and Malaysia."
Obama's commitment to trade is just another example of his indebtedness to Wall Street for massive campaign contributions. Hillary Clinton, who MacArthur describes as to the right of Americans' political beliefs, may be scaring off progressives looking to run in 2016 as she is "very much in harmony" with Wall Street.
"There are a lot of people who would make good candidates, but they're intimidated by the Clinton fundraising machine."
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TPP/Fast Track Trade Fight Is On
One after another "trade" agreements come along that, rather than helping lift the working people of the world, instead help the multinationals use exploited workers to break unions and lower wages.
Oct 30, 2013
You've probably been hearing warnings about the Trans-Pacific Partnership (TPP) "trade" agreement that is being negotiated. And you might have heard that the big corporations are going to push to use something called "fast track" trade promotion authority (TPA) to push it through.
It's time to learn about TPP and fast track, and then call your member of Congress to let them know if you want them to hand the giant multinationals an end-run around democracy and national sovereignty.
The Fast Track Push Is Coming
"Fast track" trade promotion authority, if passed, means Congress yields its constitutional authority and obligation to review and amend trade agreements. A "fast track" treaty has to be voted on quickly, cannot be amended, and Congress has to give it an up-or-down vote.
The U.S. Trade Representative (USTR) Michael Froman is pushing Congress to pass "fast track," in hope of pushing through the TPP agreement by the end of the year. Politico lays it out, in " Froman pushing Congress to finalize trade deals,"
President Barack Obama was often criticized in his first term for moving too slowly on trade, but now his chief negotiator is pressing Congress to pick up the pace as the White House pushes to conclude a landmark trade deal in the Asia-Pacific by the end of the year.
[. . .] Froman and his team at USTR are pushing to finish the TPP talks by the end of the year, putting pressure on Congress to move a TPA bill to set the stage for the final phase of talks.
Fast Track To Push TPP
The next "trade" treaty will be the Trans-Pacific Partnership (TPP). This is a huge treaty with only a small part covering trade. Most of the agreement (according to leaks) sets down a new kind of regulatory structure for the giant corporations that would supersede the ability of any country to rein them in. The treaty is being negotiated in secret with only business interests "at the table." Representatives of others with a stake in the outcome are not part of the process. Groups representing the interests of consumers, labor, human rights, the environment, democracy or even smaller and innovative companies that might want to compete with the giant multinationals are not part of the negotiations.
Economist Dean Baker explains that TPP is not about "free trade" and growth, writing,
Of course the TPP is not about free trade, in most cases the formal trade barriers between the countries negotiating the pact are relatively low. The main thrust of the negotiations is to impose a regulator structure in a wide range of areas -- health, safety, environmental -- which will override national and sub-national rules. This has little to do with trade and in some cases, such as the increased patent protection for prescription drugs being pushed as part of the deal (which is noted in the article), will actually involve increased barriers to trade.
In The Trans-Pacific Partnership: A Trade Agreement for Protectionists, Baker writes, "The
TPP is about crafting rules that will favor big business at the expense of the rest of the population in both the United States and in other countries.
... The world has benefited from the opening of trade over the last four decades. But this opening has been selective so that, at least in the United States, most of the gains have gone to those at the top. It is possible to design trade deals that benefit the population as a whole, but not when corporate interests are literally the negotiators at the table.
Other "Trade" Agreements Have Cost Us Dearly
One after another "trade" agreements come along that, rather than helping lift the working people of the world, instead help the multinationals use exploited workers to break unions and lower wages. These agreements also let companies manufacture in countries that do not require environmental protection while bringing the resulting lower-priced goods here with no added cost at the border, undermining our own protections. Allowing these things makes our democracy, and its good wages and protections, a competitive disadvantage in world markets.
Previous trade agreements were passed with the promise of increases in growth and wages here, but the opposite has resulted. And they have increased rather than reduced our trade deficits. They have only served to enrich the already-wealthy.
NAFTA: According to the Economic Policy Institute (EPI) briefing paper " Heading South: U.S.-Mexico trade and job displacement after NAFTA," "As of 2010, U.S. trade deficits with Mexico totaling $97.2 billion had displaced 682,900 U.S. jobs." (That is net jobs, taking into account jobs gained.)
China: In August, 2012 EPI estimated that the U.S. lost 2.7 million jobs as a result of the U.S.-China trade deficit between 2001 and 2011, 2.1 million of them in manufacturing. Aside from job losses wages US wages fell due to the competition with cheap Chinese labor costing a typical household with two wage-earners around $2,500 per year.
Columbia - "murders and threats": A report issued Monday by Reps. George Miller (D-Calif.) and James McGovern (D-Mass.) titled The U.S.-Colombia Labor Action Plan: Failing on the Ground says,
Despite the LAP, murders and threats against union members and harmful subcontracting persist in Colombia largely unabated. At a minimum, 413 threats were documented, and 22 trade unionists were murdered for their union involvement in 2012.1 On April 1, 2013, the 991st death threat against a member of the labor movement was received since President Juan Manuel Santos became president in June 2011.2 Because of the fear of violence or employer retaliation associated with organizing or joining a union and the prevalence of anti-union and anti-worker prejudice, only four percent of Colombian workers are union members.
[. . .] "The members of the delegation conclude that the Government of Colombia is woefully falling short of compliance with the Labor Action Plan, and in many cases, these shortfalls have made working conditions for workers worse than before it came into effect," the report said. "Before asking Congress to approve another trade agreement, such as the TPP, which poses similar labor and human rights issues, the Administration must first demonstrate concrete and effective improvements in workers' rights on the ground in Colombia under the Labor Action Plan."
Korea: EPI reported in July that the U.S.-Korea free trade agreement had already cost the U.S. 40,000 jobs and increased our trade deficit by $5.8 billion. According to EPI,
The tendency to distort trade model results was evident in the Obama administration's insistence that increasing exports under KORUS would support 70,000 U.S. jobs. The administration neglected to consider jobs lost from the increasing imports and a growing bilateral trade deficit. In the year after KORUS took effect, the U.S. trade deficit with South Korea increased by $5.8 billion, costing more than 40,000 U.S. jobs. Most of the 40,000 jobs lost were good jobs in manufacturing.
Promises, Promises
The Politico story quoted above claims that President Obama is criticized for "moving too slowly on trade." If anything, President Obama is criticized for promising in his 2008 campaign to renegotiate NAFTA, and reneging once in office.
Get Informed
If you want to help stop "fast track," call your member of Congress today!
Sign up for action alerts on fast track and TPP at Trade Watch.
Visit Stop TPP.
Visit the Eyes on Trade blog
Expose the TPP is a great action oriented site.
There's also Flush the TPP.
The AFL-CIO recent convention passed a plan for people-oriented trade. Read the resolution here.
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