‘Socialism’ rises in the polls — but do Americans even know what it means?
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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."
Selected Audio of Panel Discussions from the Left Forum April 18, 2009
- Panel Chairman: Suzi Weissman, St. Mary's College (off mike, not included in -audio)
- Jack Rasmus, Economics and Politics, St. Mary's College
- Nomi Prins, Author, "Other People's Money"
- Michael Hudson, Institute for the Study of Long Term Trends
- Hillel Ticktin, Critique
- "The Obama Campaign & Presidency: Lesson for the Left"
- Panel Chairman: Bill Fletcher Jr., Center for Labor Renewal
- Gihan Perera, Miami Workers Center, Right to the City Alliance
- Stanley Aronowitz, Sociology, Graduate Center, CUNY
- Barbara Epstein, History of Consciousness, University of California, Santa Cruz
It's natural, whether as a website or an individual, to get caught up in issues that are immediate and urgent. The wars in Iraq and Afghanistan that have been the focus of so many TomDispatch columns are happening right now. People are dying now. The economy is melting down now. The foreclosed and homeless are waking up now in ever-growing numbers. Unemployment lines are getting longer as you read this. Children are hungry this very minute, and the anxiety of a middle-class in freefall is palpable right now almost anywhere you go.
But now and then, it's also useful to take a step back and ask some longer term questions. Even if we could stop the wars, put people back to work (and back into their homes), even if we could get consumers spending again, there's always the "what-for" question. What have we accomplished if all we've done is reset the clock on the next war, the next bubble, the next bust... and if, all the while, the ice is melting and the globe warming?
Chip Ward, a TomDispatch contributor since 2003, spent 16 years confronting corporations that pollute and run, leaving sickness and suffering in their wake. He was focused on urgent and immediate tasks that made a difference right away (and, while he was at it, running a library system in Salt Lake City that was slowly filling up with homeless people). Recently, he took a break and retreated to the remote canyons of southern Utah where he's been reflecting on that bigger picture and, as it happens, on the nature of bigness itself at a moment when "too big to fail" is the phrase du jour. Tom
Too Big to Fail
Ecological Ignorance and Economic Collapse
By Chip Ward
"Too big to fail." It's been the mantra of our economic meltdown. Although meant to emphasize the overwhelming importance of this bank or that corporation, the phrase also unwittingly expresses a shared delusion that may be at the root of our current crises -- both economic and ecological.
In nature, nothing is too big to fail. In fact, big is bound to fail. To understand why that's so means stepping away from a prevailing set of beliefs that holds us in its sway, especially the deep conviction that we operate apart from nature's limits and rules.
Here's the heart of the matter: We are ecologically illiterate -- not just unfamiliar with the necessary scientific vocabulary and concepts, but spectacularly, catastrophically, tragically dumb. Oh yes, some of us now understand that draining those wetlands, clear-cutting the rainforests, and pumping all that CO2 into the atmosphere are self-destructively idiotic behaviors. But when it comes down to how nature itself behaves, we remain remarkably clueless.
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."
Florida food stamp jobs in India aggravate recipients, officials
By Michael C. Bender | Palm Beach Post
After selling real estate for two decades in Palm Beach County, Michelle Brown picked up a baby-sitting job when the housing market tanked. Then the children's parents had their hours cut at work, so she turned to the state for help in buying food.
When Brown called the customer service line for the state's food stamp program, a phone rang in India.
"It's like a slap in the face," said Brown, 52, of Jupiter. "That's a job I'd be qualified for."
Under pressure for questionable industry practices, top executives of 14 of the nation's largest credit card companies are heading to the White House on Thursday for a meeting with senior administration officials.
The executives plan to talk about their efforts to increase transparency and help the economy, according to an industry official and a Capitol Hill aide, both of whom spoke on condition of anonymity because the meeting has not been announced.
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.”
Robert Corsini sent this note:
I've run across several things focusing on the relationship between AIG and the Iraq and Afghan occupations. AIG insures over 80%, that's OVER EIGHTY-PERCENT of the non-military, military contractors in Iraq! ie KBR, Blackwater, Haliburton (NYT article 2007). Since well over 1200 contractors have been killed and thousands more wounded and with all the other liabilities going on over there, if AIG is insolvent, what's going to happen with all the claims? Clearly AIG drank its own koolaid believing that the occupation was going to be a cake-walk. They never imagined the scope of the liabilities. It's striking that AIG has underwritten all the construction in Iraq as well. If virtually none of the public infrastructure is functional -- AIG is essentially liable for every dollar that has already been spent.
Here is a link to an AIG document that drips with gorgeous irony: PDF.
Donald Duck and Taxes You Pay to International Bankers
By Kurt Nimmo | InfoWars
It’s that time again, time to pay the bankers what is owed at gunpoint. Back in the day, when fear of the IRS was not as prevalent as it is today, the government employed Hollywood propaganda to make the plebs feel good about forking over their hard-won earnings.
In the cartoon here, produced in 1943 during the Second World War, Donald Duck is pressed into service to make Americans feel good about paying taxes. Donald’s cartoon was rolled out the same year Milton Friedman, a Treasury Department economist at the time, came up with the idea of imposing a withholding tax.
Believe it or not, this is from NPR.
Fresh Air from WHYY, April 15, 2009 · Former International Monetary Fund chief economist Simon Johnson has advised many countries in financial crisis. When it comes to America's current economic woes, Johnson says that U.S. suffers from "financial oligarchies" — government officials and elite members of the financial sector that run the country like a profit-seeking company.
In his article "The Quiet Coup" in the May issue of The Atlantic Monthly, Johnson explains that the close connections between government officials and financial leaders are a major part of the U.S.'s economic problems:
"We face at least two major, interrelated problems," Johnson writes. "The first is a desperately ill banking sector that threatens to choke off any incipient recovery that the fiscal stimulus might generate. The second is a political balance of power that gives the financial sector a veto over public policy, even as that sector loses popular support."
Johnson insists the U.S. must temporarily nationalize banks so the government can "wipe out bank shareholders, replace failed management, clean up the balance sheets, and then sell the banks back to the private sector." But, Johnson adds, the U.S. government is unlikely to take these steps while the financial oligarchy is still in place.
Unless the U.S. breaks up its financial oligarchy, Johnson warns that America could face a crisis that "could, in fact, be worse than the Great Depression — because the world is now so much more interconnected and because the banking sector is now so big."
Johnson was the chief economist at the International Monetary Fund during 2007 and 2008. He is a professor at MIT's Sloan School of Management.
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Lehman Brothers Sitting on a Stockpile of Uranium 'Yellowcake'
The rump of the bankrupt bank Lehman Brothers is sitting on a stockpile of 450,000 lb of uranium "yellowcake" which could be used to power a nuclear reactor or, theoretically, to make a bomb.
Lehman's potentially explosive asset is a hangover from a commodities trading contract undertaken before the Wall Street bank went bust in September. The substance, yellowcake, is a solid form of mined uranium which is yet to be enriched.
Liquidators have been trying to offload the stuff for months. But the price of uranium has been dropping steadily, leaving Lehman's yellowcake languishing in a variety of secure storage facilities, some of which are in Canada.
Bryan Marshal, Lehman's chief executive, who was appointed to salvage value for creditors, told Bloomberg News that the stockpile, which is worth about $18m, would be sold responsibly.
"We plan on gradually selling this material over the next two years," he said. "We are not dumping this on the market and have no fire-sale mentality."
The price of uranium has slumped from $65 per pound to $40.50 over the last six months as pressure on recession-hit commodity investors to liquidate their assets has eased.
Yellowcake can be purified and enriched to fuel nuclear reactors or, notionally, weapons. A lively financial market in uranium trading has developed in recent years. While commodities such as oil and precious metals are dealt in futures contracts which rarely see delivery, the relative immaturity of uranium trading means that trading firms sometimes end up taking ownership of the stuff.
"Uranium is a liberalising marketplace. It's not as mature as most other exchange-traded commodities," said Scott Lawrence, head of nuclear fuel trading at MF Global in London. "It's certainly not unusual for a wide range of parties to have legal title to the material."
Lehman's ownership is governed by tight regulations. Its yellowcake must be stored at licensed facilities and the substance cannot be transported around freely. One trader said:
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.
By Rinku Sen, Huffington Post
Last week, the New York Times reported that President Obama intends to push immigration reform, welcome news to the millions of undocumented people who need legalization in that package. Cecilia Muñoz, the Adminstration's Director of Inter Governmental Affairs, is managing this project for the White House. Muñoz was known as a dogged advocate while she was VP of Policy at the National Council of La Raza, and her experience of the five-year immigration debate that ended with no change in 2007 is some of the most moving stuff in my book, The Accidental American.
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.
Bailed-out banks face probe over fee hikes
David Enrich and Marshall Eckblad, The Wall Street Journal
THE US committee overseeing federal banking-bailout programmes is investigating the lending practices of institutions that received public funds, following a rash of complaints about increases in interest rates and fees.
Since the Troubled Asset Relief Program was launched in October, banks bolstered by capital infusions have boosted charges on a wide range of routine transactions, hiked rates on credit cards and continued making loans criticised as predatory by consumer advocates.
The TARP funds are intended to open lending spigots and make it easier for people to borrow money.
Last week, for example, Bank of America told some customers that interest rates on their credit cards will nearly double to about 14 per cent. The bank, which got $US45 billion ($62.6 billion) in capital from the US Government, also is imposing fees of least $US10 on a wide range of credit-card transactions.
On Tuesday, a congressional panel headed by ex-Harvard law professor Elizabeth Warren released a report on Treasury Secretary Timothy Geithner's handling of the Troubled Assets Relief Program (TARP). Warren was appointed to lead the five-member Congressional Oversight Panel (COP) in November by Senate majority leader Harry Reid. From the opening paragraph on, the Warren report makes clear that Congress is frustrated with Geithner's so-called "Financial Rescue Plan" and doesn't have the foggiest idea of what he is trying to do. Here are the first few lines of "Assessing Treasury's Strategy: Six Months of TARP":
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.