‘Socialism’ rises in the polls — but do Americans even know what it means?
You are hereEconomy
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.
Related NPR Stories
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.
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).
KU professors found companies realized big tax savings by spending for lobbyists
By Dave Helling | The Kansas City Star
Ninety-three of the country’s biggest multinational firms pulled in tax savings of more than $62 billion — after spending just $283 million to lobby for the bill....“Is policy being decided on the merits, or is it being unduly influenced by the money spent?” she asked. “And then do the non-moneyed interests … lose a valuable seat at the table?”....Companies and interest groups spent more than $3 billion lobbying Congress and the federal government in 2008, according to the Center for Responsive Politics. That was a 14 percent jump from 2007.
A 22,000 percent return on investment?
MORE men at the expense of machines; more drones rather than top-end fighter jets and future bombers; more helicopters for combat troops rather than a replacement for the presidential chopper; more coastal vessels and fewer aircraft-carriers; better cyberdefences, but scaled-back missile defences and laser weapons. In short, the new American defence budget would spend more on today’s wars in Iraq and Afghanistan and less to stave off future threats from China or Russia.
A new form of currency could help us in economic crisis
How a complementary currency helped save Switzerland from economic ruin in the 1940s—and could do the same for us today.
By Bernard Lietaer | Ode Magazine
The travails of the banking crisis have been front-page news for months, and the biggest bailout in human history is underway. However, the real economy—the one in which businesses manufacture and sell goods and services—is turning out to be the next victim. Whatever governments do for the banks, credit will be a lot harder for businesses to obtain for many years to come.
Obama's New World Order
by Stephen Lendman
This article addresses Washington's financial coup d'etat in the context of discussing Michael Hudson's important, very lengthy and detailed April 5 Global Research.ca one titled: "The Financial War Against Iceland - Being defeated by debt is as deadly as outright military warfare." It reviews its key information in advance of Hudson's April 14 scheduled appearance on The Global Research News Hour to discuss.
What's true for Iceland holds everywhere, including the developed world, the idea being to enrich finance capitalism through state-sponsored debt bondage and neo-feudal impoverishment. The global economic crisis was no accident. It was long ago hatched, and has been brewing for years, gestating, percolating, then bubbling into the 2000 tech crash, a mere prelude for today's greater one spreading everywhere like a cancer but hitting the developing world and most indebted nations hardest.
Chant sheet PDF.
6 percent want to give banks more
We're from the other 94*
Lawrence Summers is a hack
Give us our children's money back
When I say banks, you say bust em
banks, bust em - banks, bust em
When I say cranks, you say don't trust em
cranks, don't trust em - cranks, don't trust em
When I say banksters, you say gangsters
banksters, gangsters - banksters, gangsters
When they want bail, you say jail
bail, jail - bail, jail
hey hey ho ho, zombie banks have got to go
Money for healthcare, jobs, and schools
Not for banks and cranks and fools
The people are too big to fail
Put the CEOs in jail
Banks get bailed out
People get sold out
Banksters are Gangsters
Give Em Jail With No Bail
Wall Street feels no pain
Nothing trickles down but rain
JP Morgan Chase
Wipe that big grin off your face
Too big to fail?
Throw 'em in jail!
Hey, hey, what’s the fuss?
Make the economy work for us
Hey, hey, what’s the fuss?
Make our government work for us
By David Sirota
Feeling sorry for yourself? Struggling to get by? Wondering how you can get a bailout? Well, stop moping, because it's not too late!
I may not have Suze Orman's verve or Billy Mays' voice. But I've discovered a revolutionary risk-free investment plan straight from those who brought us the economic meltdown. So in this column-fomercial, I won't waste your time with Ginsu knives or cash-for-timeshare schemes — I'm going to help make you rich beyond your wildest dreams!
Look, we've all heard about Wall Street's losses. But you probably didn't hear about Corporate America's newest sure thing: a path to financial freedom far more reliable than any decent-paying job. It's something so old-fashioned that even amateur investors can understand it!
More than four unemployed workers for every job opening
by Heidi Shierholz | Economic Policy Institute
This morning the Bureau of Labor Statistics released the Job Openings and Labor Turnover Survey (JOLTS) data for February 2009 (note that while employment and unemployment numbers for March are already available, the JOLTS data are released with a one-month lag). Job openings increased by 86,000 in February, though downward revisions to earlier data erased nearly all of those gains. In February, there were 3.0 million job openings. Since the start of the recession in December 2007, job openings have declined by 1.4 million, a drop of 31.4%. The dramatic decline in job openings reflects a loss of business confidence and decisions by struggling firms both to not hire new workers and to not replace workers who leave.