‘Socialism’ rises in the polls — but do Americans even know what it means?
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Former U.S. Senator Ernest F. (“Fritz”) Hollings on “Silent Conspiracies”
by Richard C. Cook | www.RichardCCook.com
I met Senator Ernest F. “Fritz” Hollings (D-SC) in 1985 in the aftermath of the Space Shuttle Challenger disaster. I had testified before the Rogers Commission after I leaked documents to the New York Times about NASA’s past knowledge of flaws with the O-ring joints whose failure caused Challenger to blow up. Later I told commission investigators and the press it was political pressure from the Reagan White House that likely caused NASA to overrule the engineers who tried to stop the launch.
Senator Hollings, then senior Democratic member of the Republican-controlled Senate Commerce Committee, thought the same thing. He wanted the Senate to conduct its own investigation, but the Republicans blocked it.
How Geithner forged ties to finance club: Treasury secretary's relationships with banking giants raises questions
By Jo Becker and Gretchen Morgenson | NYTimes
Timothy F. Geithner, who as president of the New York Federal Reserve Bank oversaw many of the nation’s most powerful financial institutions, stunned the group with the audacity of his answer. He proposed asking Congress to give the president broad power to guarantee all the debt in the banking system, according to two participants, including Michele Davis, then an assistant Treasury secretary.
The proposal quickly died amid protests that it was politically untenable because it could put taxpayers on the hook for trillions of dollars.
“People thought, ‘Wow, that’s kind of out there,’ ” said John C. Dugan, the comptroller of the currency, who heard about the idea afterward. Mr. Geithner says, “I don’t remember a serious discussion on that proposal then.”
But in the 10 months since then, the government has in many ways embraced his blue-sky prescription. Step by step, through an array of new programs, the Federal Reserve and Treasury have assumed an unprecedented role in the banking system, using unprecedented amounts of taxpayer money, to try to save the nation’s financiers from their own mistakes.
The centerpiece of President Barack Obama's plan to keep thousands of people from losing their homes amid the worst economic crisis in decades is headed for defeat next week in the Senate.
Allowing people to seek mortgage relief in bankruptcy court is opposed by Republicans and enough Democrats to block it. They remain worried that the legislation would unleash a torrent of loan defaults, ultimately driving up mortgage rates and introducing fresh uncertainty to an already ailing economy.
The rejection would deal a blow to the popular president pushing an ambitious agenda to stabilize the economy.
The global financial crisis could become "a human and development calamity" for many poor countries, the World Bank said, urging donor nations to speed delivery of money they have pledged and consider giving more.
Developing countries, its main constituency, face "especially serious consequences with the crisis driving more than 50 million people into extreme poverty, particularly women and children," the bank said Sunday.
Bank President Robert Zoellick said some of the poorest economies are being hit by "second and third waves of the crisis." He said no one knows how long it will last or when recovery will begin.
"There is a widespread recognition that the world faces an unprecedented economic crisis, poor people could suffer the most and that we must continue to act in real time to prevent a human catastrophe," Zoellick said.
Do you remember the TV cartoon show “Pinky and The Brain”?
The show was about two white mice. Pinky was a gangly nutcase who talked like the Walt Disney character Goofy, with a similar personality. The Brain was this little conniving, scowling kind of guy who woke up every morning with his latest plan to take over the world.
Each episode of “Pinky and The Brain” showed how The Brain tried and failed on a given day to implement his nefarious intent. Sometimes he would try to get elected as president of the U.S. or stage a military coup or put something in the drinking water so the people would obey his will, or whatever.
In other words, “Pinky and The Brain” was not far from the truth! Today we have a cabal of financiers centered mainly in London and New York who have been trying to take over the world for the last 500 years. One term for this conspiracy is the New World Order.
With today’s worldwide economic crash, the plan is moving to its latter stages. The cabal works through the world financial system, with the world’s central banks like the Bank of England and Federal Reserve playing major roles and the Bank of International Settlements in Basel, Switzerland, at the top. They maintain control by assuring that every bit of currency used in the world derives at some point through a debt owed to a bank. That’s why it’s called a debt-based monetary system.
On Monday, April 27th we will follow up our nationwide End the Fed! rallies with an "Audit the Fed! Melt the Switchboard Day".
We must all call in on that day and get EVERYONE we know to also call in to our Congressional Representatives.
The Congressional Switchboard number is: 1-877-851-6437.
Let's focus particularly on the members of the House Financial Services Committee, listed below. The Democratic Staff phone number is: (202) 225–4247. Linked listing of Committee Members below. Read the petition below. Sign the petition here.
In recent weeks, President Obama has gotten great press for winning speeches and handshakes globally, as well as for setting a new tone for American policy abroad, while administration figures, including Secretary of the Treasury Geithner and the President himself, have begun talking up "glimmers of hope" on the economic horizon. The International Monetary Fund (IMF) was setting another tone entirely, however -- no smiles, no handshakes, no glimmers, lots of gloom.
It issued a sobering report last week indicating that the global financial sector has lost a staggering $4.1 trillion (yes, you read that right) in value in the last 20 months. The report also predicted a global "credit famine," and sharply lowered its previous predictions of global economic health. The IMF now expects the world economy to contract by 1.3% in 2009 (previously it had suggested a 0.5% growth rate). It also suggested that 30 of the world's 34 most advanced economies would actually shrink this year. It indicated as well that it believes the U.S. economy is set to contract by 2.8% and the European Union's by a startling 4%, far worse than expected.
Closer to home, U.S. job losses and cutbacks continue to pour in as "mass layoffs" rose to record levels and initial claims for unemployment insurance jumped for the 12th straight week. There are now a total of 6.1 million applicants and the official U.S. unemployment rate, now at 8.5%, is expected to crest above 10% early next year, if not before. (The unofficial rate, including all those out of work or significantly underemployed, is far higher.) Similarly, rents and apartment occupancy nationwide dropped for the third straight quarter.
Warning: Graphic language
Wall Street’s Best Investment: Ten Deregulatory Steps to Financial Meltdown
By Robert Weissman and James Donahue | Multinational Monitor
Wall Street has no one but itself to blame for the current financial crisis. Investment banks, hedge funds and commercial banks made reckless bets using borrowed money. They created and trafficked in exotic investment vehicles that even top Wall Street executives — not to mention firm directors — did not understand. They hid risky investments in off-balance-sheet vehicles or capitalized on their legal status to cloak investments altogether. They engaged in unconscionable predatory lending that offered huge profits for a time, but led to dire consequences when the loans proved unpayable. And they created, maintained and justified a housing bubble, the popping of which has thrown the United States and the world into a deep recession, resulted in a foreclosure epidemic ripping apart communities across the country, and caused the financial crisis itself.
But while Wall Street may not have anyone else to blame, and is culpable for the financial crisis and global recession, others do share responsibility.
For the last three decades, financial regulators, Congress and the executive branch have steadily pulled back the regulatory system that restrained the financial sector from acting on its own worst tendencies. The post-Depression regulatory system aimed to force disclosure of publicly relevant financial information; established limits on the use of leverage; drew bright lines between different kinds of financial activity and protected regulated commercial banking from investment bank-style risk taking; enforced meaningful limits on economic concentration, especially in the banking sector; provided meaningful consumer protections (including restrictions on usurious interest rates); and contained the financial sector so that it remained subordinate to the real economy. This hodge podge regulatory system was, of course, highly imperfect, including because it too often failed to deliver on its promises.
But it was not its imperfections that led to the erosion and collapse of that regulatory system. It was a concerted effort by Wall Street, steadily gaining momentum until it reached fever pitch in the late 1990s and continued right through the first half of 2008. Even now, Wall Street continues to defend many of its worst practices. Though it bows to the political reality that new regulation is coming, it aims to reduce the scope and importance of that regulation and, if possible, use the guise of regulation to further remove public controls over its operations.
Law enforcement sources said David Kellermann, acting chief financial officer of mortgage company Freddie Mac, was found hanging in the basement of his Reston, Va., home, dead from an apparent suicide early this morning.
The death was "an active investigation" and there were "no signs of foul play," Fairfax County police officer Sabrina Ruck said.
Local police said they were called to Kellermann's home at 4:48 a.m., but would not say who'd placed the call to 911.
Kellermann, 41, and a 16-year veteran of Freddie Mac, had been the company's CFO since September, after a government takeover of the company following the housing crisis.
Freddie Mac had been criticized for reckless business practices that some argued contributed to the housing and financial crisis. The company is controlled by the government and owns or guarantees about 13 million home loans.
Freddie Mac and sibling company Fannie Mae, which together own or back more than half the home mortgages in the United States, have been hobbled by skyrocketing loan defaults and have received about $60 billion in combined federal aid.
Kellermann was named acting chief financial officer in September 2008, after the resignation of Anthony "Buddy" Piszel, who stepped down after the government takeover.
Geithner Defends Bank Rescue Program Amid Warnings
Geithner faces questions about bailout amid warning it could expose taxpayers to losses
By Jim Kuhnhenn | ABCNews
Treasury Secretary Timothy Geithner defended the bank rescue program devised by the Obama administration Tuesday as the International Monetary Fund predicted U.S. financial institutions could lose $2.7 trillion from the global credit crisis.
Geithner, testifying before the rescue plan's Congressional Oversight Panel, faced several questions about how Treasury is using the $700 billion Troubled Asset Relief Program and how it intends to help rid financial institutions of their bad loans and securities.
His testimony came in the wake of a watchdog agency report that warned Obama administration initiatives could increasingly expose taxpayers to losses and make the government more vulnerable to fraud.
A special inspector general assigned to the bailout program concluded in a 250-page quarterly report to Congress that a private-public partnership designed to buy up bad assets is tilted in favor of private investors and creates "potential unfairness to the taxpayer."
Geithner said the new plan "strikes the right balance" by letting taxpayers share the risk with the private sector while at the same time letting private industry use competition to set market prices for the assets.
"If the government alone purchased these legacy assets from banks, it would assume the entire share of the losses and risk overpaying," Geithner said in his remarks. "Alternatively, if we simply hoped that banks would work off these assets over time, we would be prolonging the economic crisis, which in turn would cost more to the taxpayer over time."
Putting Finance Capitalism "Back in Its Box"
by Stephen Lendman
So writes Philip Augar in an April 13 Financial Times (FT) op-ed. He's a former UK investment banker/broker and author of The Death of Gentlemanly Capitalism, The Greed Merchants, and most recently Chasing Alpha: How Reckless Growth and Unchecked Ambition Ruined the City's Golden Decade. More on his newest book below.
He quotes Nicolas Sarkozy, a questionable choice, at the G 20 summit saying "The all-powerful market that is always right is finished," then on departure adding "a page has been turned." For Augar, that depends on whether a "free-market" successor is constructed, something "entrenched interests in America and Britain would be well-advised to encourage if they wish to remain centre stage."
SF, CA Holds 'Bail-Out Working People - Not the Banks' Teach-In, May 5th As A Powerful Model for Public Action
A Powerful Model for Public Action
When: SATURDAY, MAY 9, 2009 - 1 to 5 p.m. - (registration begins at 12:30 p.m.)
Where: Plumbers Hall
1621 Market St. @ Franklin St.
(3 blocks from Civic Station BART stop; @ Van Ness MUNI stop)
San Francisco, CA 94103 - Map
What: TEACH-IN & MASS MOBILIZATION PLANNING MEETING
Without joining together for our common interests, we don't have the strength to change our government's priorities. We must begin to build a massive movement that will have the power to impact government policy and give people genuine hope for a better future.
Help organize a mass mobilization and ongoing action campaign around the following demands:
- No layoffs. Massive job-creation program.
- Tax the rich -- don't bail out the banks.
- Pass the Employee Free Choice Act.
- Single-payer healthcare for all.
- Affordable housing for all. Tenants' rights. Moratorium on foreclosures & evictions.
- Funding for jobs and for social services & infrastructure, not for war.
- Stop the ICE raids and deportations. Legalization for all!
Barack Obama: Crime Boss
by Stephen Lendman
Since taking office, Obama, wittingly or otherwise, has headed the largest criminal enterprise in history - the mass looting of national wealth to enrich his Wall Street benefactors. He assembled a rogue economic team of Clinton/Robert Rubin retreads - to fix the current crisis they engineered.
In a March 13 article, (author and former Republican strategist) Kevin Phillips called them "recycled senior (Clinton administration) Democrats (responsible for the) tech mania, deregulation binge and (1997 - 2000) stock market bubble and crash. (Obama) extend(ed) the (disastrous) mismanagement and pro-Wall Street bias of the 2008 Bush regime bailout."
He called Geithner and Bernanke "hapless," the result of their ruinous misjudgments (and, along with Alan Greenspan, complicit) with finance-sector malfeasance."
Mr Barofsky said he was investigating whether banks had “cooked their books” to get some of the $700bn (€540bn, £475bn) in Tarp fund bailout money. He declined to go into specifics but said possible criminal offences included “securities fraud, wire fraud, false statement”....“One of our strongest recommendations of the last report was do not expand the Talf to buying legacy assets. If its structure is not changed considerably it’s very, very dangerous,” he said. “We know the triple A rating [ascribed to the securities by credit rating agencies] was a sham. We could be buying securities that are backed with assets that we know were likely riddled with fraud.”
The Securities and Exchange Commission is examining whether Bank of America improperly failed to tell shareholders about $3.6 billion in bonuses that Merrill Lynch gave employees before the companies merged and may penalize the bank if it finds wrongdoing, SEC Chairman Mary L. Schapiro said in a letter to Cleveland Democratic U.S. Rep. Dennis Kucinich.
"Where the SEC believes that there has been an omission of material facts necessary in order to make the statements not misleading, we will carry out our enforcement responsibilities with vigor and vigilance," said the letter, which Kucinich released on Monday.
Tucked away inside the small print of the latest Federal Reserve report on its balance sheet is a jaw-dropping nugget of information. A year ago, American banks had $1.8 billion on deposit with the Fed above and beyond the regulatory requirements. This month, these excess deposits have soared to $771.2 billion.
This is not just massive evidence of hoarding of funds by the banks. It also means that the banks are undermining the Obama administration's attempts to stimulate the economy. Just as President Obama pumps $787 billion of deficit spending into the economy, the banks take $771 billion out of it and sock it away in the Fed's vaults.
Marylanders Invited to David Korten's "Agenda for a New Economy" - Tomorrow Evening, April 13, 7:30 PM
Agenda for a New Economy - Video and Discussion
David Korten discusses how pouring money back into the "phantom wealth" of Wall Street will not heal all our economic woes. The "new economy" he envisions is locally based, community oriented, and devoted to a better life for all - not simply increasing the profits of the rich. It is a compelling agenda for our time, as we question how we should change the direction of our country.
When: Monday, Apr 13, 7:30 pm
Location: Paint Branch Unitarian Universalist Church, 3215 Powder Mill Road, Adelphi, Maryland 20783 Map
Does it strike you as odd that the American government has invested $115 billion in TARP money alone in Citibank, JPMorgan Chase, and Bank of America, fully 70 percent of their market cap ($164.5 billion, as of March 30), yet we have virtually no say in the management or behavior of these banks? Does it seem even odder that these banks are getting along extremely well with the government regulators who should be picking them apart for having destroyed the economy and financial system?
There is a grand, implicit bargain being struck in our multitrillion-dollar bailout of the financial-services sector. Those in power in D.C. and New York are pretending the bargain is: You give us trillions, and in return, we fix this industry so the economy recovers and this never happens again. In fact, the bargain is much more alarming: Trillions of dollars of taxpayer money will be invested to rescue the banks, without the new owners—taxpayers—being allowed to make any of the necessary changes in structure, senior management, or corporate behavior. In return, the still-private banks will help the D.C. regulators perpetuate the myth that regulators didn't have enough power to prevent the meltdown. In sum, banks get bailed out with virtually no obligations imposed; regulators get more power and a pass on their past failures. The symbiosis of the past decade continues.
Not long ago, a group of skeptical Democratic senators met at the White House with President Obama, his chief economic adviser, Larry Summers, and Treasury Secretary Tim Geithner. The six senators—most of them centrists, joined by one left-leaning independent, Vermont's Bernie Sanders—said that while they supported Obama, they were worried. The financial reform policies the president was pursuing were not going far enough, they told him, and the people Obama was choosing as his regulators were not going to change things fundamentally enough. His appointed officials and nominees were products of the very system that brought us all this economic grief; they would tinker with the system but in the end leave Wall Street, and its practices, mostly intact, the senators suggested politely. In addition to Sanders, the senators at the meeting were Maria Cantwell, Byron Dorgan, Dianne Feinstein, Carl Levin and Jim Webb.
That March 23 gathering, the details of which have gone largely unreported until now, was just a minor flare-up in a larger battle for the future—one that may already be lost. With the financial markets seeming to stabilize in recent weeks, major Wall Street players are digging in against fundamental changes. And while it clearly wants to install serious supervision, the Obama administration—along with other key authorities like the New York Fed—appears willing to stand back while Wall Street resurrects much of the ultracomplex global trading system that helped lead to the worst financial collapse since the Depression.
By Tobin Harshaw | NYTimes | Submitted by Michael Munk | www.MichaelMunk.com
Perhaps the most telling line in the Oxford English Dictionary’s definition of “socialism” is this one: “The range of application of the term is broad.” That’s something to bear in mind as we consider a much-discussed poll, released by Rasmussen on Thursday, that found that “Only 53% of American adults believe capitalism is better than socialism.” For the record, here is the primary O.E.D. definition:
A theory or system of social organization based on state or collective ownership and regulation of the means of production, distribution, and exchange for the common benefit of all members of society; advocacy or practice of such a system, esp. as a political movement. Now also: any of various systems of liberal social democracy which retain a commitment to social justice and social reform, or feature some degree of state intervention in the running of the economy.
As for Rasmussen’s definition, well, there isn’t one: “The question posed by Rasmussen Reports did not define either capitalism or socialism.”
Some of the healthier banks want to pay back their bailout loans to avoid executive pay and other restrictions that come with the money. But the banks are balking at the hefty premium they agreed to pay when they took the money....there is increasing anxiety in the industry that the administration could use the stress tests of the 19 biggest banks, due to be completed in the next three weeks, to insist on management changes...Both large and small banks have pressed the Obama administration to make it less costly for them to exit the bailout program by waiving the right to exercise stock warrants the banks had to grant the government in exchange for the loans.
Assessing Treasury’s Strategy: Six Months of TARP
The April oversight report for COP is entitled Assessing Treasury’s Strategy: Six Months of TARP. In this report, COP offers a preliminary look at Treasury’s strategy and offers a comparative analysis of previous efforts to combat banking crises in the past. Over the last six months, Treasury has spent or committed $590.4 billion of the TARP funds. Treasury has also relied heavily on the use of the Federal Reserve’s balance sheet which has expanded by more than $1.5 trillion (not including expected TALF loans) in conjunction with the financial stabilization activities it has undertaken beyond its monetary policy operations. This has allowed Treasury to leverage TARP funds well beyond the funds appropriated by Congress.
The total value of all direct spending, loans and guarantees provided to date in conjunction with the financial stability efforts (including those of the FDIC as well as the Treasury and the Federal Reserve) now exceeds $4 trillion. This report reviews in considerable detail specific criteria for evaluating the impact of these programs on financial markets. (Bolding mine).