Tag Archives: wall street

Mic Check

Occupy Atlanta at the State CapitalSaturday was a day of occupation and solidarity in cites around the world. In Atlanta, there was a march from “Troy Davis Park,” the name used by the occupying residents of Woodruff Park, to the state capital.

Economic Refugee Camps
Occupy Atlanta is a populist movement. It is not affiliated with any political party and vows not to be hijacked either. It is, at least by intent, neither liberal or conservative. Those in the camps are, generally, young or homeless. They are symbolic refugees in the richest country in the world. They are our surrogates.

Occupy Atlanta at Troy Davis/Woodruff ParkThey represent the tens of millions of Americans who are unemployed or underemployed and cannot find work to sustain their lives. They represent the millions of homeless men and women who have lost everything in their path to the American dream. They represent all of those whose lives have been upended by the richest one percent among us who have gamed the system. They represent those who fought for our nation and returned to find there were no opportunities in the land of opportunity. They are standing in for those of us who live off peanut butter and oatmeal. Those of us who live day to to day and are just one missing paycheck from being homeless. Those of us whose homes have been repossessed or sold by bankers with fake documents. Those of us who borrowed tens of thousands or more for college tuition, only to find no work. Those of us whose homes are worth less than we paid. Those of us who put their faith in the system and were betrayed by their leaders who have been bribed by lobbyist shills of the one-percenters. Those of us who had the audacity of hope and had it crushed by compromise and a just-say-no Congress. Those of us who believed in the Republicans or the Democrats to do the right thing and were lied to. They may not look like us, but they are us. They are “we the people.” They are the 99%.

Violinist at Occupy Atlanta at Troy Davis/Woodruff ParkThe urban campers seem to be motivated by the deep sense that something is fundamentally wrong in our nation and the world. That something must to be changed. They are earnest and brave. They have given up their lives to stand in and stand up for us.

The rally to the capital was “organized” by MoveOn.org, and not without some discontent from the folks at Occupy Atlanta who expressed concern that MoveOn was attempting to subvert the Occupy movement to support President Obama.

The march and rally was a diverse crowd. Aging activists. Middleclass believers. People of all walks, skin color, origin, hair length, wardrobe choice and life experience.

Occupy Atlanta is not the sixties antiwar movement. The sixties may have been easy in comparison – one real issue, one solution. This time, the issues are complicated.

Signs at Occupy Atlanta rally at the Capital StepsI had a deep feeling that something was different while listening to those on the capital steps who walked up to the microphone or took the people’s mic, and said, “mic check.” This was the real deal. The speakers were not polished. The talking points were largely unrehearsed. Anyone could take the mic. It was messy. There was chaos – confusion, sure, but more in the definition of “the infinity of space or formless matter supposed to have preceded the existence of the ordered universe.”

The goal of the rally was not to convince, but to be heard. Some at the mic sounded eerily like the tea partiers. Some seemed awkward Obama apologists. Some had watched too many television pundits or listened to too much talk radio.

All, however, were seeking change. All were challenging each other to find solutions. Some argued that we the people can make the jobs and change America and the world. Others just told stories of hardship and overcoming since the economic collapse. The banksters and multi-national corporations were a consistent target of the anger. The bailout money was blamed as a missed opportunity. The war a terrible waste of our people and our treasure. That the wealth disparity was terribly wrong and had to be fixed. They spoke of the need for justice – social, and for those on Wall Street. But each came back to the need for jobs.

Occupy Wall Street’s goal is not to overthrow the government, but a revolution to overthrow the status quo. The movement is seeking the people’s solution from the people’s voice.

I don’t pretend to know what it takes to motivate one person to get off their couch and into the street. Perhaps, it will take a second wave of bank failures and layoffs. Or another Selma moment. Or a leader who could emerge inspired by yesterday’s dedication of the MLK memorial, realizing the civil rights movement is part of the human rights movement and so much work is left to be done. But as Chris Hedges wrote today in Truth-Out.org, it is “A Movement Too Big to Fail.”

One month old today:
Occupy Wall Street is a people-powered movement that began on September 17, 2011 in Liberty Square in Manhattan’s Financial District, and has spread to over 100 cities in the United States and actions in over 1,500 cities globally. #OWS is fighting back against the corrosive power of major banks and multinational corporations over the democratic process, and the role of Wall Street in creating an economic collapse that has caused the greatest recession in generations. The movement is inspired by popular uprisings in Egypt and Tunisia, and aims to expose how the richest 1% of people are writing the rules of an unfair global economy that is foreclosing on our future. – OccupyWallSt.org

 

 

 

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Post updated 10.18.11 9:53 am. Author’s note: It has come to my attention that I, nor my editors, could save me from my embarrassing blunder that my “playfully anthropomorphizing” [NYT] of microphone, should not be “Mike,” it should be “Mic.” The post has been updated to make sure every reader knows the potential that I have for stupid.

Fixing the Ecomony #1

Open the Federal Reserve discount window to states and local government. This initiative uses no taxpayer money, requires no action from Congress, could be implemented immediately and should save state and local governments, as much as $80-$100 billion, each year while providing badly needed economic stimulus or tax relief. In DC, this would be spun, “a trillion dollar stimulus over ten years.”

We already give access to the Fed’s discount window to banks – even non-member foreign banks (yes, among many others, Gaddafi-controlled, Central Bank of Libya-owned, Arab Banking Corp.); Wall Street and insurers of Wall Street including Goldman-Sachs, Morgan Stanley and AIG; and pseudo-banks/auto lenders including GMAC. Why not allow access for our sovereign state governments that are bound by balanced budget amendments –  many of whom now have higher credit ratings than the US government?

Can we do that? Sure. The Federal Reserve has long held the authority to lend to anyone or anything during unusual and exigent circumstances – and the Fed defines the circumstances. Under the 2010 Dodd-Frank Act, the Fed’s authority of extending credit has been changed from “specific individuals, partnerships and corporations” to also give access to “any program or facility with broad-based eligibility.”* Further, the Fed has authority to buy state and municipal securities directly (known as: quantitative easing).

Even without the emergency authority or the expanded authority, states have long been able to simply set up publicly-owned banks** for the specific purpose of Fed discount window access.

The Fed currently lends money from .015% to 1.25%. States and local government now have more than $2.8 trillion in bond debt*** – used to build roads, hospital, schools and universities, football stadiums for NFL teams, the infrequent mass transit project (liberal areas, only), infrastructure projects, attract industry, and other purposes. The Center on Budget and Policy Priorities reports that these bonds cost 4-5% of annual expenditures and recently, typical rates are from 4%-6%.

The potential for fixing the economy, however, doesn’t stop there. Individual states would have authority to use its access to the Fed discount window to finance utility construction and lower costs for consumers (according to the AJC, those in Georgia who will be subject to a $9 a month financing charge for the expansion at Plant Vogtle are ideal beneficiaries). Each state could use lower rate access to provide businesses with capital to expand and create jobs, financing to consumers for environmental improvement, offer lower cost student loans to its citizens, financing for non-profits and a host of other initiatives.

Is it inflationary? Sure, but when growth is at 1%, no worries.

Does it compete with the private sector financing? Yes, but to consider that bad, one should consider that most private financing is done with access to the Fed window and one would also have to answer why taxpayers should pay more?

Will it take a chunk of most lusted-after income out of the pockets of the greedy “masters of the universe” Wall Street investment bankers and hedge funders? Sure, and wouldn’t that be great?

As a by-product, wouldn’t it increase state and federal tax revenues, since so many wealthy investors use municipal bonds to make tax free income? Yep.

Wouldn’t former mayors, council people, senators and legislators who go into the lucrative bond business leveraging their former patronage to call in favors have to find another way to fleece taxpayers after they get out of office? Yes, that, too.

Wouldn’t it help Democrats more than Republicans? I doubt it. The Fed is not political and there are an awful lot of Republican governors who’d jump at the chance to have a little more room in their budgets. Most of those helped would be in the jobs it would save and the new jobs that could be created – jobs regardless of party affiliation.

Author’s note: This is first in a series of commonsense things we can do to fix our economy during this time when the House and Senate can agree on nothing. I invite your comment and suggestions.

Update: The article was updated on 8/8/11 at 1:42 PM.

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* Whatever the hell this could possibly mean will eventually be known when Congress approves the 4,000 rules to govern implementation of this bill. Until then, it is anyone’s guess.

** “In North Dakota, the publicly owned Bank of North Dakota (BND) acts as a “mini-Fed” for the state. Like the Federal Reserve of the 1930s and 1940s, the BND makes loans to local businesses and participates in loans made by local banks. The BND has helped North Dakota escape the credit crisis. In 2009, when other states were teetering on bankruptcy, North Dakota sported the largest surplus it had ever had. Other states, prompted by their own budget crises to explore alternatives, are now looking to North Dakota for inspiration.” – ZeroHedge.com

*** General obligation bonds (GOs), Revenue bonds, Conduit bonds, Insured bonds, Original Issue Discount bonds, Taxable bonds, Zero coupon bonds, Pre-Refunded bonds, Escrowed-to-Maturity (ETM) bonds, Housing bonds, Municipal Notes. Current total outstanding is a very difficult figure to come up with. The figure of $2.8 trillion is from Wall Street investment company estimates. The US Census Bureau’s Statistical Abstract was last updated for state and local government debt in 2007 (totaling almost $2.5 trillion), but does not include many types of municipal debt. Dependent upon the purpose, these instruments may or may not be tax free.

The Elephant in the Room

Elephant in the roomWe’ve all heard the mind-numbing numbers:  $14 trillion of national debt that will grow to $20 trillion by 2010, but is it real?

Technically, and by the political definition, yes. It is the cumulative difference between actual revenues and spending. But by any reasonable accounting standard, our definition of national debt is hoax. More precisely, it is a political hoax within a hoax.

Almost two-thirds of the national debt is owed to us – mostly to our own government and its agencies. So when the pundits of doom talk about the impending explosion of interest on the national debt, one should smirk, a bit. We have systematically plundered Social Security, Civil Service and Military retirement funds (and other trusts) – like corporate America, we are never going to pay our pensions back, we’re going to change the rules. The Federal Reserve has purchased trillions of our national debt (quantitative easing) – in effect, it has already been paid by devaluing our currency. We have also allowed “banks” to go to the Fed money window for trillions of dollars at almost no cost that they have turned around and used to buy huge amounts of our debt making incredible profits – paying them back is little more than accounting.

Only about one-third of our national debt is owned by American and overseas investors. Were the Fed sponsored debt already paid with imaginary dollars subtracted from the $14 trillion, we owe far less than than the 76% to GDP ratio we hear so often. It would be more like 25% – an amount that would rank us among the most solvent countries in the world.

How did we get in this situation? You know. The Bush, now Obama, tax cuts for the rich when combined with the unfunded wars, the bailout of Wall Street and the stimulus bill, total almost all of it. To their credit, the Dems, in passing the “Affordable” Health Care Act and losing the mid-terms, will save a couple of trillion in the next decade, but we trillions on the table as bribes to health insurance companies and big pharma to get the bill passed. The surplus to debt happened in less than ten years. It could be undone in less than 151.

Except… for the non-debt debt – the elephant2 in the room – our unfunded liabilities. It would take, perhaps, $100 trillion to fully fund our pension and veterans obligations while continuing to fund Medicaid and other off-the-book obligations. A $38 billion cut, which almost forced a government shutdown, is stomping on ants while the elephants are jumping over the wall. Silly politics. Televised sport and nothing else. Look for the reruns to begin airing in a few days.

The only responsible way to address the real debt, is to get politicians out of our accounting and health care3. Treat Social Security, Disability and Medicare as tax financed programs – without a cap, not pretend trust funds. Require all tax cuts, breaks and subsidies have a sunset provision that forces a new and separate vote to continue. Stop treating earned and unearned income differently. Plug the loopholes. Send all corporate lobbyists to Guantanamo subject to military tribunals. Pass legislation limiting political contributions so they can only be made by individuals. Require competitive bidding for all government contracts. Give the states access to the Fed money window. Get out of the wars, slash the Pentagon, NSA/CIA budgets, require a two-thirds vote in Congress to wage war and support the UN to be the world’s peace keeper. Pass immigration reform to get the 20 million here undocumented, to pay legal taxes and Social Security and have access to better paying jobs. Create a Roosevelt-like works program that offers an alternative to long-term unemployment. Require two years of community or military service for our young people and offer college as a reward. Invest in a national system of medical clinics, private or public, to implement much of Medicaid. Do something. Don’t just cut something. The systems, political, economic and accounting, are unsustainable and broken.

 

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1 By going back to historically low top rates, getting the hell out of the wars, requiring those too big to succeed without taxpayer funds to fail and getting people back to work. Duh.
2 Yes, it is ironic that the elephant is the symbol of the GOP.
3 I know, I know, I know, you are thinking, what the hell does he want to go and write about this for? Ignorance is bliss. Leave it to Nobel prize winning economists and people running for office to make this stuff up. Just couldn’t help myself.

ASSume the position

WADR for those in romantic relationships with a banker and actually want it in the ass, the banking industry, aka: we caused the greatest depression since the last and are too big to fail this election cycle so we get money from the Fed for as close to nothing as is measurable and may or may not lend it to you for 33.3% plus fees, are, surprise, taking advantage of real, or will be real loopholes in the passed, but not litigated, totally ruled or commented, but well-monikered Credit Card Responsibility and Disclosure Act of 2009.

Duh? Just what do you think more than a million lobby dollars a day will buy in DC? Dinners? Jets? Sex? Condos in Puerto Rico? Elections? Sure, but the money is really for the details and the details are for loopholes.

Sure, the new law, aka: just another in a long string of Obama’s historic legislative achievements surely to pay off for one party this fall, has some truly wonderful consumer reform spins. Of course, only the banking industry has enough federally subsidized lawyers to turn reform into form instead of substance. The Wall Street Journal, not exactly a bastion of kiss ass progressive advocacy, has detailed some of the new ways the banking industry, aka: we aren’t as bad as Wall Street, because try harder to convince you we will love you in the morning, plus we offer KY jelly with each new qualifying account.

Here are some of the low lights from the low lifes:

  • Annual fees are up 18%.
  • Cash-advance and balance-transfer fees up 33%.
  • Promoting “professional” cards – similar to corporate cards and almost identical to credit cards, but somehow, not under the new law.
  • Issuing “rebate” cards – credit cards not covered by the law that issued at maximum allowable state rates which are promised to be rebated to very low rates until the nefarious bastards catch you doing something that violates line 47 on page 23 of their 6 point type disclosure at which point you are to assume the position.
  • Shortening the billing cycle before late payment and higher charges.
  • Setting the due date on a weekend or holiday, accepting payments, but not opening their mail.
  • Charging “inactivity” fees.
  • Charging upfront “processing” fees so that they can charge more than 25% of your credit limit before you’ve even used it.

Grab your ankles and smile.

What would Pat Robertson say?

Goldman SucksLet’s take a quick look at recent legislative initiatives and the relationship of opposition-killing news events:

  • Health care reform – dead in the house and frozen in the senate until Anthem/Blue Cross announces billions in earnings along with huge policy price increases and the tea party takes the Kennedy senate seat.
  • Wall Street reform – seemingly dead in the Senate, then record-breaking Wall Street profits, revelations of sinister-sounding, but all too routine conflicts and manipulation, then Goldman Sachs was indicted.
  • Immigration reform – no one thought this could get a breath of political air during this partisan election season, then along comes Arizona’s xenophobic immigration law.
  • Energy bill – not a hope in hell for Senate action this year and, boom, BP/Transocean’s Gulf oil platform explodes, drill-baby-drill turns to spill-baby-spill and the oil-version of Katrina makes landfall.

Acts of god? A conspiracy of the non-working liberal press? Greed and hubris metastasizing naturally? Or, is Rahm, just that good?

Did you see The Warning?

For anyone who would like to know how the economic meltdown could happen and when it will happen it again, you just have to see this show: PBS Frontline: The Warning. As you’d expect, it stars a bunch of rich powerful middle-aged white men in courageous battle to protect Ayn Rand’s dream of unfettered capitalism against one woman, Brooksley Born, who dared to raise her hand and suggest that the super secret, totally unregulated, multi-trillion dollar derivatives markets needed adult supervision. It is riveting. Find out how we hunted down those responsible and made sure they can’t do it to us again. Spend a few minutes strolling memory lane with the greatest leaders of our lives: Ford, Reagan, Greenspan, Clinton, Rubin, Gramm and others. Here’s a 4 minute preview:



In The Warning, veteran FRONTLINE producer Michael Kirk unearths the hidden history of the nation’s worst financial crisis since the Great Depression. At the center of it all he finds Brooksley Born, who speaks for the first time on television about her failed campaign to regulate the secretive, multitrillion-dollar derivatives market whose crash helped trigger the financial collapse in the fall of 2008.

“I didn’t know Brooksley Born,” says former SEC Chairman Arthur Levitt, a member of President Clinton’s powerful Working Group on Financial Markets. “I was told that she was irascible, difficult, stubborn, unreasonable.” Levitt explains how the other principals of the Working Group — former Fed Chairman Alan Greenspan and former Treasury Secretary Robert Rubin — convinced him that Born’s attempt to regulate the risky derivatives market could lead to financial turmoil, a conclusion he now believes was “clearly a mistake.”

Born’s battle behind closed doors was epic, Kirk finds. The members of the President’s Working Group vehemently opposed regulation — especially when proposed by a Washington outsider like Born.

“I walk into Brooksley’s office one day; the blood has drained from her face,” says Michael Greenberger, a former top official at the CFTC who worked closely with Born. “She’s hanging up the telephone; she says to me: ‘That was [former Assistant Treasury Secretary] Larry Summers. He says, “You’re going to cause the worst financial crisis since the end of World War II.”… [He says he has] 13 bankers in his office who informed him of this. Stop, right away. No more.'”

Greenspan, Rubin and Summers ultimately prevailed on Congress to stop Born and limit future regulation of derivatives. “Born faced a formidable struggle pushing for regulation at a time when the stock market was booming,” Kirk says. “Alan Greenspan was the maestro, and both parties in Washington were united in a belief that the markets would take care of themselves.”

Now, with many of the same men who shut down Born in key positions in the Obama administration, The Warning reveals the complicated politics that led to this crisis and what it may say about current attempts to prevent the next one.

“It’ll happen again if we don’t take the appropriate steps,” Born warns. “There will be significant financial downturns and disasters attributed to this regulatory gap over and over until we learn from experience.” – PBS Frontline

It is a tough time to be anything

believe_0001It is an awful time to passionately believe in something. Be it liberal, conservative, or independent. No one is happy.

For all our freedom, America is a lousy place to be a zealot. Sure, you can talk the talk almost as loud as you wish. You can carry signs, march, demonstrate, blog, tweet, harangue, chant, argue, and pontificate – but in the end, it will be decided by politicians, pollsters and lobbyists.

  • Anti-war? 30,000 more troops are going to Afghanistan. We’ll assess the situation on the ground before bringing our troops home and it will take at least 3 years after that.
  • A hawk on defense? We are only sending 30,000 more troops to Afghanistan and we’re getting out in 18 months.
  • Health care reform with or without public option? It won’t be a true public option and we’ll spend more because of it, but actually pay for it less. There is something in it for everyone to love and everyone to hate.
  • Immigration reform? We’re still building a wall with Mexico. There’s no path to citizenship for people who are here illegally, but we still pay for their emergency health care and now provide alternatives to detaining those who are caught.
  • Wall Street regulation? Tough regulation is planned, but it will take another meltdown to get it out of committee.
  • Deficit reduction? In this tough economy, we can’t cut spending or raise taxes – or won’t. The deficit doesn’t matter – or it does.
  • Unemployment and the economy stupid? We’ll extend the benefits for those who get unemployment; provide some food stamps, but little else for others unemployed or underemployed; give trillions to the banks so they’ll make loans which they won’t; spend hundreds of billions on works projects that are subverted by states to help their budgets; and do nothing to re-capitalize small business.
  • Alternative energy and domestic production? We bailed out GM. Wasted billions then abandoned Chrysler. We provided incentives to buy cars that get “at least 22 mpg,” continue to subsidize oil with taxes, but created no new tax or incentive to reduce consumption. We have provided some, but not much, stimulus money for alternative energy, conservation and light rail.
  • Equal rights and discrimination? We are still “studying” don’t ask, don’t tell. It is still okay to discriminate based on sexual orientation except where it isn’t. You cannot hire or fire someone because of their race, age or gender, but it is fine to do so if you can make up some other reason. Racial, religious and ethnic profiling is wrong, but okay if it protects us.

I could go on, but let me just ask: is there any issue anyone outside of Washington is happy with?

Mindlessness must be the route to happiness. Things are great as long as you don’t care. Stay away from the news and just watch another survivor or gossip show (or anything on television). Grey is the new black. Grey is the new white. We know the economy is making a comeback because fewer people lost their jobs last week. President Obama accepts the Peace prize the same week he announces escalation of the war.

“A good compromise, a good piece of legislation, is like a good sentence; or a good piece of music. Everybody can recognize it. They say, ‘Huh. It works. It makes sense.’” – Barack Obama

“All compromise is based on give and take, but there can be no give and take on fundamentals. Any compromise on mere fundamentals is a surrender. For it is all give and no take.” – Mohandas Gandhi

“So then because thou art lukewarm, and neither cold nor hot, I will spue thee out of my mouth.” – Revelation 3:16 (King James)

“Don’t worry, be happy” – Bobby McFerrin Bobby McFerrin - Best of Bobby McFerrin - Don't Worry, Be Happy