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A shareholder sued Goldman Sachs Group Inc's (GS.N) board for excessive bonuses and wants bank executives to pay the $500 million in charitable donations that Goldman is making after being criticized for its compensation policy.
Goldman Sachs bonuses substantially exceed what competitors pay "even though, on a risk-adjusted basis, Goldman's officers and managers have performed over the past several years in a manner that is, at best, only average," the lawsuit says.
The Southeastern Pennsylvania Transportation Authority (SEPTA), which runs public transit in the Philadelphia area, filed the lawsuit on Wednesday in Delaware's Chancery Court.
SEPTA said Goldman has been allocating nearly half of its revenues to staff bonuses even though the company's performance has been less a benefit of management skill than risks it has taken with investors capital.
"Goldman's employees are unreasonably overpaid for the management functions that they undertake, and shareholders are vastly underpaid for the risks taken with their equity," it said. Read more.
By Dave Lindorff
Flash! The Supreme Court’s latest 5-4 decision overturning the over 60-year-old ban on corporations giving money to political campaigns is not the end of democracy as we know it, or the onset of fascism in America, as some of hyperventilating progressives have been claiming.
Sure it’s an outrage to say, as the court majority did, that corporations have the same rights as people. But let’s face it: Corporations have long dominated the American political scene. They didn’t need to be free to donate in their own corporate names. They have had their political action committees to do the job, and that’s worked just fine for them, as witness the current state of the two pro-corporate parties in Congress, and the string of blatantly pro-corporate presidents we’ve had for as far back as I can remember.
The Federal Reserve has four main responsibilities: to conduct monetary policy in a way that leads to maximum employment and stable prices; to maintain the safety and soundness of financial institutions; to contain systemic risk in financial markets; and to protect consumers against deceptive and unfair financial products.
WASHINGTON, January 20 – Sen. Bernie Sanders (I-Vt.) said today he senses growing opposition to a second term for Federal Reserve Chairman Ben Bernanke.
“I sense that many Democrats see the Massachusetts election as a wake-up call,” Sanders said. “There is a growing understanding that our economy is in severe distress, a greater appreciation that people are disgusted with the never-ending greed on Wall Street, and a better recognition that we need a new direction at the Fed.
“People do not want another term for the man whose major job as Fed chairman was to protect the safety and soundness of our financial system but instead was asleep at the switch,” he added. “I am confident that more and more senators understand that we need a new Fed and a new Wall Street and will oppose Bernanke’s confirmation.”
Sanders on December 5 placed a hold on Bernanke’s nomination. The term of the central bank chief, first appointed by President George W. Bush, runs out on January 31.
By Dave Lindorff
The Democratic Party’s embarrassing electoral disaster in Massachusetts, losing a seat held for 46 years by the late Sen. Ted Kennedy, provided a clear warning that the party, and President Obama’s presidency, are headed for an epic trouncing this November, when all members of the House and a third of the Senate face re-election.
But all the frantic strategizing within the sclerotic Democratic Party leadership ignores the bigger crisis yet to come for this party that once brought the nation Social Security, unemployment compensation, public jobs programs and Medicare. That crisis is the economy, which is now showing signs of falling off a second cliff instead of beginning to recover.
US: Democrats agree on commission to cut Social Security, Medicare
By Patrick Martin | WSWS
The dimensions of the cuts being prepared is suggested by the commission’s mandate to propose a path to reduce the federal deficit from the current level of 10 percent of gross domestic product to 3 percent by 2015. This would amount to a reduction in the annual deficit of about $700 billion—an amount, not coincidentally, roughly equivalent to the bailout of Wall Street—to be subtracted from federal social spending every year.
Obama administration officials and Democratic congressional leaders reached agreement Tuesday on the establishment of a bipartisan commission that would put recommendations for drastic budget cuts to a vote in Congress before the end of 2010. The commission would have unprecedented legal authority to propose changes in both the tax code and major entitlement programs like Social Security, Medicare and Medicaid, with Congress required to hold an up-or-down vote on its recommendations.
The exact method for establishing the commission depends on congressional action. The Senate and House could vote to establish the commission, as an amendment for legislation to raise the national debt ceiling to $13 trillion.
Press accounts suggested this was unlikely, given divisions over policy between Republicans and Democrats, as well as within both parties. If Congress fails to act, Obama would issue an executive order to create the commission, although this would leave its decisions with less legal force.
The 18 members of the commission would be appointed: six each by the congressional Democratic and Republican leaderships, and six by Obama, of which only four could be Democrats. This would give the commission a 10-8 Democratic majority. Read more.
A “run on the dollar,” or any currency, for that matter, takes place when the currency is losing its value. This happens when a country’s debt becomes so great that there is danger of a major default–that is, large scale or even national bankruptcy. At that point, people whose wealth is in that currency, or in relatively liquid assets denominated in the currency, try to get rid of them as fast as they can. Today, that includes foreign countries like China or Russia that are holding large quantities of U.S. government bonds.
The U.S. currently is at risk. We see it in personal and business bankruptcies and foreclosures. One result can be a high rate of inflation in certain products like food or gasoline, even while asset prices, as with homes and stocks, are going down. The question is now whether the “recovery” that is underway can be sustained or will there be another crash like there was in late 2008 to early 2009.
Forecasters are projecting this recovery to last until June 2010 but are foreseeing slippage at that point. Investors at this time are still putting money into the stock market and getting out of dollars. By June, the U.S. government had better come up with a strategy for real economic growth–which means jobs–or we will likely see the “double-dip” recession many have predicted. Personally I see no way growth can be sustained unless the national debt burden shrinks. This can only be done through an orderly process of debt forgiveness, a resurgence of economic production, or a default that could be catastrophic.
In response to a question from a reader I sent this out today:
Yes, I think a run on the dollar is coming. A lot of people are saying this, including a man named Dmitri Orlov who recently came out with a book entitled “Reinventing Collapse” that compares the crash of the Soviet Union in the 1990s with what he believes is coming here within a short period of time. I heard that at the last meeting of the G20 the U.S. asked Russia and China if they would agree to an orderly devaluation of the dollar, and the answer was “Nyet.” So something big is likely to happen. I don’t know what it will be. A worst case scenario is a wild hyperinflation of the dollar and a total collapse of the monetary system, followed by skyrocketing gasoline prices, etc., and another Great Depression. But the Federal Reserve is too smart just to let that happen, so they will likely try in some way to keep the economy afloat while engaging in an orderly devaluation that will reduce the overall levels of debt. There are many ways to tackle this but it will require strong central planning and maybe even “monetary reform.” The possible scenarios are endless and much depends on the political will of Obama and Congress as to how much control they can exert over the financiers. I am hesitant to predict total gloom and doom, though it is certainly a possibility. One thing that could trigger it would be if the U.S. can no longer buy oil from abroad. That depends also on whether “Peak Oil” really exists or not. But clearly big changes are coming. Our country has become so fragile. Most of our population is a month away from starvation when you look at the food pipeline.
It's one of those numbers that's so unbelievable you have to actually think about it for a while...
Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that's not counting any additional deficit spending, which is estimated to be around $1.5 trillion.
Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That's an amount equal to nearly 30% of our entire GDP. And we're the world's biggest economy. Where will the money come from? Read more.
By Dave Lindorff
The media punditry, corn-fed on conventional wisdom, are all atwitter about the looming Democratic debacle in Massachusetts, saying that win or lose, the poor showing by the Democratic candidate for the late Sen. Edward Kennedy’s seat, state Attorney General Martha Coakley, means Democrats in Congress should abandon plans to push through a House-Senate compromise health bill, and instead just go with the Senate’s version of health “reform” legislation, thus circumventing a certain Republican filibuster attempt.
GIVE ALL THE BANK BONUS MONEY TO HAITI
Necessity and Justice demands it!
A PETITION TO THE HEADS OF WALL STREET'S BIG BANKS:
John Mack of Morgan Stanley, Lloyd C. Blankfein of Goldman Sachs, Jamie Dimon of JP Morgan Chase, Brian Morgan of Bank of America, Robert H. Benmosche of AIG, and Piyush Gupta of Citibank
We call on the major banks to give all of the money that they have set aside for bonuses to the people of Haiti in their hour of desperate need. Justice and dire necessity demands that those who have profited while others have lost everything now bail out the people of Haiti.
Whatever the full amount of the money that the Bank of America, Goldman Sachs, JP Morgan Chase, Morgan Stanley, Citibank, and AIG have set aside for bonuses, that sum will easily be between 10 to 100 times the amount of the combined aid that the People of Haiti will receive from the entire world.
With that kind of money, still very small by comparison to the bail out money that the U.S. government has given to the big banks, the people of Haiti may actually have the possibility of recovering from the unimaginably devastating blow that has cause so much death, destruction and suffering. Wall Streets bonus money could rebuild Haiti.
Federal regulators sued Bank of America Corp. on Tuesday, accusing the company of failing to disclose "staggering financial losses" at Merrill Lynch before shareholders approved a combination of the companies.
The lawsuit filed by the Securities and Exchange Commission in U.S. District Court in Manhattan sought an order requiring Bank of America to pay a civil penalty for not telling shareholders it was losing $15.3 billion in the fourth quarter of 2008.
Bank of America spokesman Robert Stickler called the charges "totally without merit."
He said the company believes it provided sufficient and appropriate disclosure to shareholders prior to their vote approving the combination.
"We look forward to presenting the facts in court," Stickler said. "What we would note is that there were no charges against individuals and no charges of fraud. We were pleased with that." Read more.
All eyes are on Wall Street this week as the big banks get ready to report their earnings and bonuses. Rebounding banks are preparing to pay out bonuses that rival those of the pre-crisis boom years.
During the first nine months of 2009, five of the largest banks that received federal aid — Citigroup, Bank of America, Goldman Sachs, JPMorgan Chase and Morgan Stanley — together set aside about $90 billion for compensation.
To avoid pitchforks and public outrage most banks are tamping down on the cash payouts and beefing up long-term stock options. One bank is taking an even more novel approach, dare we call it, greedwashing?
Goldman Sachs is coming off one of its most profitable years in its 141-year history. This profitability was made possible through extraordinary government interventions. Goldman was given $10 billion in TARP funds, repaid with interest, but that was just the beginning. After the $182 billion taxpayer bailout of bankrupt AIG, Goldman received $12.9 billion without having to take a discount. This was due directly to the intervention of the New York Fed, headed by Tim Geithner. The continuing drip, drip, drip of revelations of this deal threatens Geithner’s tenure as the Treasury Secretary. The Fed also allowed the investment firm to reorganize as a bank holding company giving their investors the backing of FDIC insurance and access to the Fed’s discount window. Now Goldman can borrow at very low interest rates and lend at 10 percent or more. Even worse, it continues to act like an investment bank, but now its risky moves are backed by the American taxpayer.
As Goldman gets ready to announce bonuses, anticipated to be worth around $595,000 per employee, the press team at Goldman Sachs has been working overtime to come up with clever ideas on how to defray public anger at firm. Remember when they announced their plan to mentor and loan to small businesses? Now they are thinking of creating a rule that would require all their top employees to engage in charitable giving. Read more.
Washington D.C. (January 12, 2010) – Congressman Dennis Kucinich (D-OH) today introduced legislation to impose a 75% tax on the extraordinary bonuses that bankers are planning to pay themselves using windfall profits earned from massive taxpayer support of the financial services industry. The “Responsible Bankers Act” will not penalize banks for making a profit, but rather will tax the bonus pools that are set aside.
This is the follow up to announcement made by Kucinich on December 10, 2009.
Kucinich, who has been a leading critic of the government’s unlimited support to Wall Street, remarked; “Bankers are preparing to pay themselves record bonuses rather than lending and investing in American economic prosperity. They could use their profits to do many things to improve the prospects of economic recovery, like strengthen their capital base, reduce fees charged to customers, or increase lending to small and medium sized-companies.
“Bankers’ failures to self-regulate, let us remember, were the direct cause of the crisis we are in today; they need to be told that the money they are making is a public trust, not something they have earned for good behavior.”
Other bills being discussed fall short of the Kucinich measure, which taxes all banker bonuses whether the bank has received or repaid TARP funds or not. “The aim of federal policy is to give banks the opportunity to clean up the mess they have created,” Mr. Kucinich said today, “but bank executives still don’t get it. They think the profits they are making are for themselves.”
The Responsible Bankers Act has already received the early endorsement of Public Citizen, a national, nonprofit consumer advocacy organization founded in 1971.
Pundits of all stripes are calling this past decade a thoroughgoing disaster, one of the worst in our nation's history. True, but there's another way of evaluating the CheneyBush era.
Sure, lots of horrific things happened in the years between 2000 and 2010: a massive terrorist attack, our country lied into a disastrous war in Iraq, the Administration colluding with corporations in looting the treasury and polluting the air and water, a great recession brought into being at least partially by refusing to enforce oversight regulations on financial institutions, eight years lost in the fight against global warming. Yes, all those things, and many more dark episodes, including the strengthening of a kind of native fascism, happened during the CheneyBush era.
But those shameful ashes of the past eight years can, Phoenix-like, also yield a momentous rebirth of American democracy, a more rational foreign policy, and economic justice. What leads me to this contrarian conclusion?
The essence of my guarded optimism rests on the Removal of the Veils.
THE RARE MOMENTS OF REVELATION
Stick with me here. Most of the time, governmental corruption, moral and ethical lapses, wrongheaded economic and foreign/military policies take place in secret, hidden behind the veils designed to keep the truth of what's really going on from the public. But once every 10 or 20 years, at least in America, the veils part a bit and we can see the scarefying reality of how our government really work: the Army/McCarthy hearings in the 1950s, Watergate and the Pentagon Papers in the early-1970s, Iran-Contra in the early-1980s, and the CheneyBush era of the past eight years.
Suddenly, the citizenry is permitted at least a long, partial glance at the true corporatist/extremist forces at work in our society. The pictures are not pretty. Historically, out of those revelations comes anger, activism, at least some reforms and, at least for a while, a new and often better crop of politicians. The GOP found out about that pattern in 2006 and 2008, when their misrule led to Democratic majorities. Now Obama's the object of anger. There is major anti-Administration activism coming from both the Left and the Right, including even a budding Know-Nothing party or faction forming on the tea-bagging extreme -- all signs that indicate the presence of major seismic activity under the tectonic plates of the American political process.
Let's use America's foreign/military policy as our first demonstration model for this Removal of the Veils:
By Dave Lindorff
If you want to see the unvarnished, true nature of our latest president, you need look no farther than two issues: whether to tax health plans that are deemed “too generous” and whether or how to tax the banks that brought about the financial crisis.
In late 2009, former Merrill Lynch economist, now with the Canadian firm, Gluskin Sheff, said the following:
"The credit collapse and the accompanying deflation and overcapacity are going to drive the economy and financial markets in 2010. We have said this repeatedly that this recession is really a depression because the (post-WW II) recessions were merely small backward steps in an inventory cycle but in the context of expanding credit. Whereas now, we are in a prolonged period of credit contraction, especially as it relates to households and small businesses."
Summarizing his 2010 outlook, Rosenberg highlighted asset deflation and credit contraction imploding "the largest balance sheet in the world - the US household sector" in the amount of "an epic $12 trillion of lost net worth, a degree of trauma we have never seen before," even after the equity bear market rally and "tenuous" housing recovery likely to be short-lived and illusory with a true bottom many months away.
As a result, consumer spending will be severely impacted. "Frugality is the new fashion and likely to stay that way for years," highlighting a secular shift toward prudence and conservatism because households are traumatized, tapped out, and mindful of a bleak outlook. It shows in new consumer credit data, contracting $17.5 billion in November, the largest monthly amount since 1943 record keeping began.
Thank God McCain & Palin Lost
By Philip A. Farruggio
This new year, anyone who is either a true progressive or a true conservative is lucky. Can you imagine if McCain & Palin won the White House? Just think, the Bush / Cheney neo con agenda would have moved forward with the advent of a McCain-Palin administration. Wow? Are you folks who voted for Obama / Biden happy now, right? Let’s look at how some of the key national issues that a McCain-Palin administration, with support from a Republican Congress, would effect:
- More troops sent to Afghanistan.....No exit in sight from Iraq
- Increases in our military ....Oh, excuse me, defense spending
- Giving away the store on any real health care reform to the greedy and inept private health insurance industry. No chance for a universal Medicare for All option for American families.
- Close to a one trillion dollar bailout of the corrupt and greedy Wall Street banks and investment houses. No indictments. No prosecutions of the liars and con men.
Foreclosures continuing as the federal government refuses to negotiate with the troubled (ready to go kaput) Wall Street banks for their sick assets. Thus, the sub prime mortgages are not bought by Uncle Sam for dimes and quarters on the dollar. Thus, foreclosed homes stay on the market.....And all the rest of the homes across America continue to remain low low low in value. All the businesses connected to the housing market continue to go......broke!
'Fight the Power'? Americans Move Their Money From Big to Small Banks
How Can You Fight Rising Credit Card Rates? The Answer Might Be at Your Local Bank
By David Muir | ABC News
After "World News" reported Monday on banks raising interest rates on credit cards before new consumer protection rules take effect, ABC News heard from you.
"We bail them out and they raise rates. Priceless," one viewer e-mailed.
But many viewers took it a step further.
"Fight the power," wrote one.
"My secret ... very simple, a credit card from a credit union," said another.
It turns out that thousands of Americans are doing the same thing -- trading their banks based on Wall Street for the ones on Main Street.
One woman, Stephanie Frost, documented her move on YouTube. She closed her account at Bank of America after her credit card rate jumped 27 percent.
The Huffington Post is on the bandwagon, urging its readers to, "Move Your Money."
The Web site even posted a video with clips from the movie classic, "It's a Wonderful Life," to support the cause. Remember that film's iconic small-town banker with a big heart, George Bailey?
“To all whom it may concern ! Sluggishly circulating money has provoked an unprecedented trade depression and plunged millions into utter misery. Economically considered, the destruction of the world has started. – It is time, through determined and intelligent action, to endeavour to arrest the downward plunge of the trade machine and thereby to save mankind from fratricidal wars, chaos, and dissolution. Human beings live by exchanging their services. Sluggish circulation has largely stopped this exchange and thrown millions of willing workers out of employment. – We must therefore revive this exchange of services and by its means bring the unemployed back to the ranks of the producers. Such is the object of the labour certificate issued by the market town of Wörgl : it softens sufferings dread; it offers work and bread.”-Inscription on the back of Worgl alternative money (1932)
As the stock market crashes and economic turmoil seems all but inevitable many have been thinking back to the days of the great depression. Alas, it seems we little people can do nothing but wait on the Federal Government,
and its official monetary policy producer and the privately owned and operated Federal Reserve to rescue us from the sins of the fat cats on Wall Street.
We might be waiting until a certain nether world freezes over.
Back in 1931-32 the small town of Worgl, Austria was suffering from the result of the 1929 stock crash. There was no investment, no spending, 30% unemployment and civil unrest (When Hitler came through 5 years later and annexed them, they greeted him as an economic savior). Read more.
By Dave Lindorff
So much for economic “green shoots.”
The Obama administration and the Federal Reserve, along with the servile corporate media, have been quick to grasp at and trumpet every little suggestion that things might be improving, as they did when the Labor Dept. announced last week that new unemployment claims had dropped to “just” 434,000, from a high of 684,000 in the week ended March 28 or last year.
Or when the Commerce Dept. reported last month that November housing starts had risen by 8.9% compared to the prior month.
Of course, what none of the rosy analysts and politicians mention is that the number of new unemployment claims would be bound to fall even if the economy were getting worse, because so many of the people who are covered by unemployment insurance have been laid off already for months, or even for more than a year already, and so the total pool of those eligible to file claims is much smaller.
Jackie Ramos, Bank Of America Employee, Fired After Helping Customers
By Arthur Delaney | Huffington Post
Bank of America fired Jackie Ramos after she took a stand against the bank's $15 "convenience" charges and $39 over-the-limit fees so she could sleep better at night.
"There was something inherently evil about my job," the 23-year-old said in a YouTube video she uploaded on Nov. 27, two days after her termination.
Ramos, of Fairburn, Ga., worked as a "customer advocate," which involved calling people who fall behind on credit card payments and either encouraging them to pay or modifying their accounts. But not all customers qualify for modification programs that will help them, and Ramos grew tired of saying no after six months on the job.
"So I stopped denying people," said Ramos. "I helped people get on programs that they didn't necessarily qualify for but who definitely needed the help." Read more.
Arianna Huffington just posted an article on the Huffington Post that has sparked a remarkable wave of interest, evoking nearly 5,000 comments in less than a week. Called “Move Your Money,” the article maintains that we can get credit flowing again on Main Street by moving our money out of the Wall Street behemoths and into our local community banks. This solution has been suggested before, but Arianna added the very appealing draw of a video clip featuring Jimmy Stewart in It’s a Wonderful Life. In the holiday season, we are all hungry for a glimpse of that wonderful movie that used to be a mainstay of Christmas, showing daily throughout the holidays. The copyright holders have suddenly gotten very Scrooge-like and are allowing it to be shown only once a year on NBC. Whatever their motives, Wall Street no doubt approves of this restriction, since the movie continually reminded viewers of the potentially villainous nature of Big Banking.
Pulling our money out of Wall Street and putting it into our local community banks is an idea with definite popular appeal. Unfortunately, however, this move alone won't be sufficient to strengthen the small banks. Community banks lack capital – money that belongs to the bank -- and the deposits of customers don’t count as capital. Rather, they represent liabilities of the bank, since the money has to be available for the depositors on demand. Bank “capital” is the money paid in by investors plus accumulated retained earnings. It is the net worth of the bank, or assets minus liabilities. Lending ability is limited by a bank’s assets, not its deposits; and today, investors willing to build up the asset base of small community banks are scarce, due to the banks’ increasing propensity to go bankrupt.
It’s a Wonderful Life actually illustrated the weakness of local community banking without major capital backup. George Bailey’s bank was a savings and loan, which lent out the deposits of its customers. It “borrowed short and lent long,” meaning it took in short-term deposits and made long-term mortgage loans with them. When the customers panicked and all came for their deposits at once, the money was not to be had. George’s neighbors and family saved the day by raiding their cookie jars, but that miracle cannot be counted on outside Hollywood.
The savings and loan model collapsed completely in the 1980s. Since then, all banks have been allowed to create credit as needed just by writing it as loans on their books, a system called “fractional reserve” lending. Banks can do this up to a certain limit, which used to be capped by a “reserve requirement” of 10%. That meant the bank had to have on hand a sum equal to 10% of its deposits, either in its vault as cash or in the bank’s reserve account at its local Federal Reserve bank. But many exceptions were carved out of the rule, and the banks devised ways to get around it. Read more.
the highest percentage of Democrats to date (45%) indicated this week that they are either unlikely to vote, or certain not to vote.
Once more, doing things badly (health care “reform”, an inadequate stimulus, refusing to properly take on the banks) or doing things the base opposed (escalating in Afghanistan) has a price.
In 1994 Clinton lost Congress. He lost it in large part because of NAFTA, failing at health care reform and the the Don’t Ask, Don’t Tell fiasco. Democratic base voters stayed home and Republicans were motivated. Doing “moderate” things didn’t make Republicans not vote against Democrats, but it did make Democrats not vote Democrats.
Clinton may have gone on to win re-election in 1996, but after losing Congress, he did very few truly progressive things and did or signed off on many non-progressive things, like Welfare “reform” and gutting Glass-Steagall (a major reason for the financial crisis.)
Obama stands to repeat. Read more.
Along with Wall Street’s resurgent bonuses will come a jump in an ancillary benefit: tax breaks.
For all banks and Wall Street firms, “I’m sure we’re talking $200 billion total compensation, which would create a tax savings for the firms of $80 billion,” said Robert Willens, an accounting and tax analyst in New York who runs a consulting firm, Robert Willens LLC. The figure does not include bonus plans by hedge funds, which are likely to reduce their payouts after a down year.
The tax deductions, which will increase the bottom line of the banks, are perfectly legal and not new. They come as compensation for 2009 has roared back after the largest banks paid back billions of dollars in federal aid, an outlay still fresh in the minds of taxpayers. As pay goes up, so do the deductions.
Many American banks already pay minuscule federal income taxes, because of various deductions and clever tax planning; the payout-related breaks will reduce their tax bills further in coming years.
The biggest tax break will go to Goldman Sachs. It expects to award its employees $23 billion in bonuses — the most in its history — after having paid back $10 billion. Because most employee compensation is a deductible expense under tax laws, Goldman Sachs, which is technically taxed at a top corporate rate of 39 percent, will save about $9 billion in federal income taxes on the bonuses it pays out for 2009, Mr. Willens said. Read more.
Last week, over a pre-Christmas dinner, the two of us, along with political strategist Alexis McGill, filmmaker/author Eugene Jarecki, and Nick Penniman of the HuffPost Investigative Fund, began talking about the huge, growing chasm between the fortunes of Wall Street banks and Main Street banks, and started discussing what concrete steps individuals could take to help create a better financial system. Before long, the conversation turned practical, and with some help from friends in the world of bank analysis, a video and website were produced devoted to a simple idea: Move Your Money.
The big banks on Wall Street, propped up by taxpayer money and government guarantees, have had a record year, making record profits while returning to the highly leveraged activities that brought our economy to the brink of disaster. In a slap in the face to taxpayers, they have also cut back on the money they are lending, even though the need to get credit flowing again was one of the main points used in selling the public the bank bailout. But since April, the Big Four banks -- JP Morgan/Chase, Citibank, Bank of America, and Wells Fargo -- all of which took billions in taxpayer money, have cut lending to businesses by $100 billion.
Meanwhile, America's Main Street community banks -- the vast majority of which avoided the banquet of greed and corruption that created the toxic economic swamp we are still fighting to get ourselves out of -- are struggling. Many of them have closed down (or been taken over by the FDIC) over the last 12 months. The government policy of protecting the Too Big and Politically Connected to Fail is badly hurting the small banks, which are having a much harder time competing in the financial marketplace. As a result, a system which was already dangerously concentrated at the top has only become more so. Read more.
By Dave Lindorff
You know, the year 2009 started out kind of nicely. We watched Barack Obama take the oath of office, serenaded by the awesome Aretha Franklin (wearing her awesome hat), after first hearing Pete Seeger sing the real Woody Guthrie verses to "This Land Is Your Land" on the steps of the Lincoln Monument.
And we saw Congress pass the Lilly Ledbetter Fair Pay Act, to correct a scum-sucking decision by the US Supreme Court's conservative woman-hating, corporation-loving majority that said women (and minorities and the elderly) couldn't sue for pay discrimination unless they acted within six months of the initiation of the violation, even if they didn't learn about it until years later.
Fighting Wall Street’s Abuse: Responding to Bruce E. Levine’s Abuse Syndrome
By Les Leopold
“Can people become so broken that truths of how they are being screwed do not "set them free" but instead further demoralize them? Has such a demoralization happened in the United States?” Bruce E Levine “Are Americans a Broken People? Why We've Stopped Fighting Back Against the Forces of Oppression.”
Bruce Levine’s thoughtful piece about why we’re not fighting back has hit a responsive cord among readers. I thank him for initiating this critical discourse about activism. In the spirit of open dialogue, I feel compelled to respectfully disagree with his basic analysis.
Political action doesn’t fall from the sky: It requires deliberate political infrastructure.
Bruce reminds us of how passive we seem to have been in the face of obvious injustices hurled our way. As he points out there was little to protest against the theft of the 2000 election by the Bush forces. He further points out that we are again missing the moment concerning health care -- that “despite the current sellout by their elected officials to the insurance industry, there is no outpouring of millions of U.S. citizens on the streets of Washington, D.C., protesting this betrayal.” (I recently asked similar questions about the lack of protest against the current Wall Street rip-offs. See, “Have We Forgotten How to March?")
Why aren’t we in motion? His deeply disturbing analysis deserves a closer look:
“U.S. citizens do not actively protest obvious injustices for the same reasons that people cannot leave their abusive spouses: They feel helpless to effect change. The more we don't act, the weaker we get. And ultimately to deal with the painful humiliation over inaction in the face of an oppressor, we move to shut-down mode and use escape strategies such as depression, substance abuse, and other diversions, which further keep us from acting. This is the vicious cycle of all abuse syndromes.”