‘Socialism’ rises in the polls — but do Americans even know what it means?
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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.
Three generations of job seekers — more than 10,000 — descended on a job fair at a New Hampshire college gymnasium Thursday, jamming traffic for miles and forcing organizers to cut off admission to the event after just two hours.
Officials shut down shuttle bus service from a nearby mall to the overwhelmed Southern New Hampshire University campus by noon, several hours before the heavily publicized event was to end.
Job applicants ranging from college students to unemployed executives in their 60s waited in seemingly endless lines for buses to the event, then to speak with recruiters, then for buses back to their cars. Police Lt. Maureen Tessier gave an unofficial crowd estimate of more than 10,000, and many hundreds more were turned away.
"People are very serious about employment and not just running around grabbing goodies for the sake of filling up goodie bags," said Don Legere, who was looking to hire people for his financial services firm Modern Woodmen of America.
Two weeks ago, we told you about an exciting, youth-led grassroots movement to break up the banks called A New Way Forward.
On Saturday, A New Way Forward is sponsoring a nationwide day of action to demand that our leaders (1) nationalize (2) reorganize, and (3) decentralize the banks as a first step toward building a more just economy.
On Saturday, come to a rally near you for speeches, street theatre, petition gathering, and phonebanking to Congress. Add your voice to this growing movement to demand our tax dollars be used to fix our problems, rather than preserve the fortunes of those who created them.
For too long we have been told to sit passively and watch as our country's financial elite run the economy into the ground - taking our jobs, our homes, and our pensions down with them. And when we get outraged about using our tax dollars to pay their huge bonuses, they tell us to shut the **** up.
The time has come for us to demand change. Treasury Secretary Timothy Geithner must stop wasting trillions of our tax dollars on a broken rescue plan that only benefits those who created this crisis. Last week's enthusiastic rally on Wall Street was a great start.
But if you can't come, make sure our Senators and Representatives hear us by signing our petition to Break Up the Banks:
Please help us build a powerful nationwide movement on Saturday. And share your thoughts in our blog:
Thanks for all you do!
By Gaither Stewart
(Rome) Protests, broken heads and hundreds of arrests at the G20 in London, bloody demonstrations in Kehl and Baden Baden and Strasbourg at celebrations marking the 60th anniversary of NATO, workers uprisings across the face of France, and on Saturday in Rome’s Circus Maximus a mammoth manifestation organized by the CGIL trade union underline the abyss separating the New Class of capital from labour. The current and spreading revolt of labour against capital seems to mark the second phase of the crisis of capitalism, as a consequence of the financial crisis caused by the New Class of an elite that has illogically chosen to separate itself from labour in the Occidental world.
Tiffiniy Cheng, 29, never imagined she'd help spark a populist movement influenced by a former IMF banker. Three weeks ago Cheng and her co-founding partners launched A New Way Forward, a volunteer-run website that advocates for a new approach to bank bailouts and is organizing a nationwide protest on April 11. Cheng and her friends are not new to online organizing. In 2006, some of them launched OpenCongress.org, a nonpartisan website that lets people track legislation in Congress, and Downhill Battle, a music activism website, but they never had a burning desire to study and reform the financial system. Then, as 350 billion dollars of taxpayer money went to the same CEOs who helped bring the global economic system down, Cheng and her friends, like many in America, became angry. Why reward the same people who broke the system, they asked.
On February 19, the co-founders of A New Way Forward heard the former chief economist of the International Monetary Fund (IMF) interviewed on PBS's Bill Moyers' Journal argue for an alternative bailout plan. Simon Johnson spent 20 years at the IMF working on international bank bailouts, among other things. Dissatisfied with the current bailout process, he decided to show his ex-colleagues at the IMF the balance sheets of some of America's leading banks receiving bailouts (concealing their names). Every one of his former colleagues gave a similar prescription: Recovery will fail unless America breaks up the financial oligarchy. In the short term, that means the failing banks would have to be temporarily taken over by the government, cleaned up, broken up and sold off in the private markets. The board members and CEOs of those banks would have to be fired and replaced. This is not the administration's current plan.
Marxist Geographer David Harvey on the G20, the Financial Crisis and Neoliberalism
By Amy Goodman | Democracy Now! | Watch Video | Submitted by Michael Munk | www.MichaelMunk.com
For some analysis on the G20 summit and the financial crisis, we speak to a leading thinker on the global economy. David Harvey is a Marxist geographer and distinguished professor of anthropology at the Graduate Center of the City University of New York. He is the author of several books, including The Limits to Capital and A Brief History of Neoliberalism.
Many cities and towns across this country rise and fall with military spending. And with Defense Secretary Robert Gates' announcement earlier this week of new defense spending priorities, many communities are bracing for drastic cuts or a windfall.
From Seattle to St. Louis to Fort Worth, communities are closely watching how the $534 billion spending plan for the 2010 fiscal year plays out in Congress.
Lawmakers Slam Administration Efforts to Sidestep Limits on Executive Compensation
By Amit R. Paley, Washington Post
A congressional oversight committee opened an investigation yesterday into whether the Obama administration is circumventing a law that limits lavish pay for executives at firms benefiting from the $700 billion federal bailout.
Rep. Edolphus Towns (D-N.Y.), chairman of the House Oversight and Government Reform Committee, sent a letter to Treasury Secretary Timothy F. Geithner asking for records on any special entities that the government believes it can use to funnel bailout money without requiring firms to abide by congressional restrictions.
By Dave Lindorff
The accounting profession might seem like the last place that you’d find serious political hanky-panky going on, and it’s probably not on very many people’s A-list of fun subjects to read about, but the Financial Accounting Standards Board, a quasi-governmental body that has statutory authority to regulate and establish the rules by which public companies, including banks, do their books, has just caved in to pressure from those banks and from the large number of members of Congress who pocket huge piles of campaign swag and perks from those banks and other public companies, and gravely undermined the integrity of corporate balance sheets.