Have We Not Learned That Bigger Is Not Better When It Comes to Banking?

10 largest banks

How can this be a good thing?

The very people who legally crashed our economy – and those who did it illegally and still haven’t gone to jail – and have kept their bonuses are now even bigger than before.

This is when our government needs to – HAS TO – step in and say….

“You are a danger to the rest of society. You are no longer going to operate in this manner. You have abused the rights and privileges afforded to you in the law, and now the law is changing. You will be broken up, and you will be regulated such that your actions cannot threaten the global economy and the financial well-being of all of the rest of us ever again.”

If there was ever an industry that has repeatedly proven that it is populated with and largely led by people incapable of policing themselves, it’s the financial services industry. This isn’t a personal attack. It’s just the facts, and it’s just history.

There can’t be opportunity and protection without a balance between the private sector and the government. There is no balance today. The scales have been tipping for far too long toward Big Money. This is why it’s so important that we strike at the root of all of our problems – money in politics.

Caseyoncampaigning

We must change campaign finance laws in order to get the influence of Big Money out of our political processes and out of the halls of government. It’s the only way we can expect to have any influence as ordinary citizens over our elected officials.

What can we do? Plenty.

Join up with other concerned citizens who have come together to make their voices heard.

Here are some of my favorites. Please feel free to share this and to add others.

 

https://movetoamend.org/
https://movetoamend.org/
http://anticorruptionact.org/
Join the fight. Become a Citizen Co-Sponsor of the American Anti-Corruption Act at http://bit.ly/CitizenCoSponsor
http://www.wolf-pac.com/
http://www.wolf-pac.com/
https://represent.us/
https://represent.us/
Support MAYDAY.US Together we can end the corruption of money in politics. Pledge now: https://mayday.us/pledge
Support MAYDAY.US Together we can end the corruption of money in politics. Pledge now: https://mayday.us/pledge

Let’s #NeverForget915 and the Lies of Trickle-Down Economics

NeverForget915On this, the 5th anniversary of the bankruptcy of Lehman Brothers, Americans should take time to pause and remember this as yet another heinous crime of historic proportions perpetrated on Americans on a day in September.

It wasn’t terrorists and it wasn’t Main Street who killed our economy. No, this crime was perpetrated on us by a conspiracy forged between Big Money on Wall Street and Small (not Big!) Government politicians who carry their water and actually pass rules and laws that make the crime legal.

That means we’re also to blame. Actually, it’s not all of us who must share the blame.

There’s no other way to say this. It’s Americans who vote for politicians who want to further deregulate all kinds of industries, including the financial services industry, who share in the blame. By electing people who work to shrink government and deregulate industries, we’re actually creating a “Socialism of Wall Street” where the gains of capitalism are privatized to an infinitesimally small number of people while all the losses are socialized to all the rest of America.

How much more proof is needed that deregulation, coupled with greed and power, leads to terrible outcomes for everyone except those with wealth and power? I consider myself to be a capitalist, but I also know from experience that corporations have proven time and again that they cannot be trusted to police themselves alone.

For an excellent accounting and timeline of events that led up to the crash of ’08, I recommend reading this 2011 Forbes piece, Lest We Forget: Why We Had a Financial Crisis.

In it, Steve Denning writes:

Many actors obviously played a role in this story. Some of the actors were in the public sector and some of them were in the private sector. But the public sector agencies were acting at behest of the private sector. It’s not as though Congress woke up one morning and thought to itself, “Let’s abolish the Glass-Steagall Act!” Or the SEC spontaneously happened to have the bright idea of relaxing capital requirements on the investment banks. Or the Office of the Comptroller of the Currency of its own accord abruptly had the idea of preempting state laws protecting borrowers. These agencies of government were being strenuously lobbied to do the very things that would benefit the financial sector and their managers and traders. And behind it all, was the drive for short-term profits. <emphasis added>

I think “…being strenuously lobbied…” is too polite a euphemism.

It was the Big Money One-Percenters exercising their control over politicians who got agencies to do their bidding. 2008 was the result of the lies Reagan told America about trickle-down economics and the size of government, and the perpetuation of those lies coming from Republicans, extreme neo-cons, and the One Percent ever since. They are the ones who killed our economy in 2008, and they will do it again unless we do something to stop them.

Need more evidence?

Here are some facts about the 2008 bailout, courtesy of Public Citizen.

  • Amount the crash cost the U.S. economy: $22 trillion
  • How much everyone would get if that $22 trillion were divided equally among the U.S. populace: $69,478.88
  • Assets of the four biggest banks in America — JPMorgan Chase, Bank of America, Citigroup and Wachovia/Wells Fargo — when they were “too big to fail” in 2008: $6.4 trillion
  • Assets of those four banks today: $7.8 trillion
  • Of the 63 former Lehman Brothers employees identified by a bankruptcy examiner as being aware of an accounting scheme Lehman used to mask its true finances, number who are employed in senior financial services positions today: 47
  • Number of the 25 banks responsible for the bulk of risky subprime loans leading up to the crash that are back in the mortgage business: 25
  • Chances that an American voter thinks that regulating financial products and services is “important” or “very important”: 9 in 10
  • Chances that an American knows the Earth orbits the sun: 8 in 10
  • Amount spent in 2012 by Wall Street and other finance industry behemoths on lobbying to roll back, water down and weasel out of the Dodd-Frank Wall Street Reform and Consumer Protection Act: $487 million
  • Number of registered financial industry lobbyists in 2012: 2,429
  • Number of lawsuits filed as of April of this year by Eugene Scalia, son of U.S. Supreme Court Justice Antonin Scalia, to hold up implementation of Dodd-Frank rules on legal technicalities: 7
  • Rank of finance industry among all corporate election spending by sector in 2011 and 2012: 1
  • Amount the industry gave to political candidates in 2011 and 2012: $664 million
  • In 2012, rate at which revenues of JPMorgan Chase, the largest bank in the U.S., matched Public Citizen’s operating expenses for the entire year: Every 80 minutes

To my friends on the right, isn’t it time to wake up to the reality that trickle-down economics is a lie? The One Percent don’t care about you, and you are extremely unlikely to ever become one of them.

Isn’t it time to join forces as average, middle class Americans to make our voices heard about getting big money and it’s corrupting influence out of politics, and to get our democracy turned back over to us ordinary citizens?

You can start by joining and supporting CoffeePartyUSA and by becoming a Citizen Co-Sponsor of the American Anti-Corruption Act.

UPDATE 9/16/2016:

I am no longer a supporter of any kind of Coffee Party USA. To understand why, click here.

http://anticorruptionact.org/
http://anticorruptionact.org/

One Person’s Perspective on the Federal Debt as a % of GDP


What’s been the history of the Federal debt, what’s been happening over time, and who’s been in power when it happened?

Initial searches weren’t very efficient and it was hard to find a reasonable summary. Here’s one of them: http://zfacts.com/p/318.html. The web site owner claims to be an economist who does this in his spare time. Take it for what it’s worth.

Ever the skeptic, I decided to check further and to account for Congress and the role they play. I decided to create my own chart. It’s attached. The Sources at the bottom include a link to the actual Federal debt tables used to generate the underlying line graph.

Conclusions? Here are mine.
1. Federal debt as a % of GDP went through the roof due to WWII

2. Federal debt marked a steady decline after WWII regardless of who was in the White House and through 35 years of a mostly Democratically-controlled Congress until…….

3. Reagan, a terrific actor (which some mistake for intelligence and oratory skills) and famous co-star to trained monkeys, got elected…yes, I hate the stupid f***…
AND Republicans took control of the Senate

This next point is, IMHO, probably the single most important fact to remember about all of this.

4. The Republican-controlled 106th Congress takes Ronny’s “smaller government” religion to its fatal extreme by passing the Gramm-Leach-Bliley Act in November of 1999 which is signed into law by another RWMF and career politician, Bill Clinton.

For those who need a little history review, GLB repealed many of the regulatory safeguards which had been put into place by the Glass-Steagall Act of 1933 which was the federal government’s response to the unfettered and unregulated bankers who caused the * FIRST * Great Depression.

Go back further (http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html) and understand how Glass-Steagall was coming under serious attack during Reagan’s administration in 1986-1987….at the same time a former J.P. Morgan director and life-long disciple of Ayn Rand, Alan Greenspan, was being made Fed Chairman.

“In the spring of 1987, the Federal Reserve Board votes 3-2 in favor of easing regulations under Glass-Steagall Act, overriding the opposition of Chairman Paul Volcker. The vote comes after the Fed Board hears proposals from Citicorp, J.P. Morgan and Bankers Trust advocating the loosening of Glass-Steagall restrictions to allow banks to handle several underwriting businesses, including commercial paper, municipal revenue bonds, and mortgage-backed securities.”

Do you see those words, “mortgage-backed securities”?

5. The upward trend continued on Bush 41’s watch and with a Democratically controlled Congress (Dems can be such pussies…or are they just RWMFs of a different stripe? Both, I’d say.)

6. Yes, Clinton was in some ways the benefactor of a booming economy and, yes, some credit for reducing the Federal debt has to go to a Republican Congress
(In case anyone would like a quick primer on how the Federal budgeting process actually works, the roles various branches and departments play, etc., see http://useconomy.about.com/od/fiscalpolicy/p/Who_budget.htm)

7. Finally, it was without a single shred of doubt in my mind or any possibility for any sort of fact-based denial that a Republican-controlled Congress and a half-witted Republican son of a Texas oilman is who put us on this disastrous financial path.

The list of fiscal failures since 2001 is long, but we can start with cut taxes that primarily benefit the wealthiest Americans while waging 2 wars off the books. Add to that, the bottom dropping out of an unregulated financial services sector based too heavily on an overly-speculated real estate market that had so much credit and investment capital tied to it and what did those geniuses think would happen? It leads to a reality in which Wall Street and RWMFs everywhere get all the reward with none of the risk and we taxpayers are left to bail out the whole friggin’ mess….

My point is the current pathetic state of our economy and the federal budget is something that began long before Obama came into office, before voters turned Congress back to Dems, and really began when Rs were in charge and is rooted in the desire of RWMFs everywhere to deregulate and get rich.

I have no problem with fiscal responsibility, but to think that a president and Congress can fix the mess of previous administrations overnight – or even in a single year – just isn’t realistic. And I don’t think we’d be in this mess if the justifiable and now obviously needed regulations and oversights of the financial services industry had not been repealed.

If anyone has a better plan than what is being done now, I’d like to hear it. Was allowing all the TARP recipients, GM, and any other recipients of federal money to fail the better plan? In a perfect Randian world, I guess the answer would be, “Yes.”

Additional Sources
http://www.gpoaccess.gov/usbudget/fy10/hist.html
http://online.wsj.com/article/SB122156561931242905.html
http://www.reuters.com/article/idUSTRE60U09L20100131
http://www.factcheck.org/2010/02/the-big-bank-bailout-bill/
http://topics.nytimes.com/topics/reference/timestopics/subjects/g/glass_steagall_act_1933/index.html
http://www.taxpolicycenter.org/briefing-book/background/bush-tax-cuts/ignore.cfm

Don’t Blame the Borrower – How a Republican Congress Helped to Create the Current Economic Crash and Continues to Erode the Middle Class

As I see it, the reality is that our current economic problems stem directly from deregulated financial markets. We can thank Alan Greenspan, appointed by Reagan, and the pro-business, deregulatory belief system of the Republican party for that.

YOU CAN’T BLAME ME FOR ASKING
Let’s start with the mortgage crises since that seems to be something most people can agree is at the root of our current economic problems. The notion that we should blame the person applying for a mortgage that they can’t afford versus the people and systems that are supposed to screen applicants and then say, “No” is just silly, but that seems to be the position of social and fiscal conservatives.

Let’s see where the argument for blaming the applicant takes us……

  1. Let’s say I go to a bank or lender and apply for a mortgage suspecting – or even knowing – I can’t pay it back.
  2. The bank decides not to check me out and deny my application. Why? They know they won’t be holding my loan very long. Why not? Because they don’t have to and aren’t motivated to thanks to the Gramm-Leach-Bliley Act, a law passed in 1999 while Clinton was president but Congress was controlled by Republicans. Remember that it is, after all, Congress who makes law, not presidents. GLBA was authored by Republican Senator Phil Gramm and Republican Representative Jim Leach, with contributions from Republican Rep and House Commerce Committee Chairman, Tom Bliley. It effectively removed regulations on banks created in 1933 by the Glass-Steagall Act which, itself, was a response to conditions not at all unlike today that caused the Great Depression – an unregulated financial services industry.
  3. Because sufficient regulations no longer exist thanks to the GLBA, lenders of all kinds – including banks – can now package and sell my loan with thousands of others to someone else and wash their hands of the initial risk of lending me money. No reason to deny my application if they aren’t worried about me paying it back – that’s someone else’s worry now.

So what should we expect will happen? No one will deny my loan application because there’s money to be made quickly by writing the loan and selling the now infamously “toxic asset” to someone else. Well, here’s what will and did seem to happen…

  1. I and lots of people will get mortgages we don’t qualify for
  2. The re-packaged investments will be sold to someone else
  3. Those packaged securities will become worthless because not enough people can pay them back, and
  4. The financial services companies who used to be regulate banks but who no longer fall under enough regulation and scrutiny will go crying to the very same government who stopped regulating them in the first place to now bail them out.

The Rich make and pass laws to benefit the Rich, and when things go bad we as citizens pay for it through weaker markets and inflated government debt. If we were real Capitalist, we’d let them all fail just like Bear Stearns and Leahman Brothers, but that would create complete anarchy…..actually, it would mean a lot of rich people would lose a lot of money, and that will NEVER happen.

So if you’re blaming Clinton for perpetuating the idea of broader home ownership as the reason for our current problems, you really need to look at the simple truth of the matter.

If you’re somehow trying to make a connection between broader home ownership and too many unqualified loan applicants, then you really have to blame GLBA and greed for that. Home ownership is still a great idea for our society, but deregulating the lenders and blaming the borrower doesn’t make sense.

RICH REPUBLICANS AND THE MIDDLE CLASS
Plain and simple, the current economic problems can be traced back to when Republicans had a Congressional majority and could create laws that allowed their supporters and constituents in big business and especially big finance to maximize return and minimize risk. As a result of GLBA, their big money supporters were able to create Bank of America, Citigroup, and J.P. Morgan Chase.

Pretty soon, financial markets were a free-for-all, just as they had been before the Great Depression. Firms that had once been regulated so that they wouldn’t fail were now buying and selling every imaginable type of security without rules, including mortgages that never would have been approved to begin with which are now re-packaged as some kind of investment vehicle.

The American Middle Class once again allowed themselves to be duped by the wealthy and powerful. It’s not the borrowers fault if they are lent money they can’t repay. The lender is supposed to say, “No” if they know the only way they make money is if the borrower pays them back. The lack of regulation allowed – hell, encouraged – those loans to written and then sold off as investments so that the rich could get richer off of the transaction without any regard for the borrower or the affects that so much failed lending could have on everyone and the economy.

The lack of regulation on the banking industry is the classic fox in charge of the hen house. It’s easy to see that a few very smart and very rich people understood how to make a great deal of money out of the house of cards that was the real estate bubble.

THE FATHER OF SMALLER GOVERNMENT
The lack of regulation actually brings us to Mr. Smaller Government himself, Ronald Reagan, and his fed chairman, Mr. Greenspan, who convinced us that smaller was better. No need to regulate banks as had been done since the Depression and the Glass-Steagall Act of 1933. This is America, land of free markets! Let the markets decide! (Translation: Let Rich Republicans Decide)

Yes, this is America and so that means we have only ourselves to blame or thank for who we elect, the markets we create, and the consequences of our decisions. So if anyone is going to go back and blame Clinton for wanting more people to own homes, we must go back just a little further to Ronald Reagan.

Reagan ballooned the federal deficit to it’s largest amounts ever (to that point in time) after getting elected on the “government’s not the answer to the problem, government is the problem” fable. Clinton left office with a federal surplus which W proceeded to totally squander by giving it to the rich in the form of tax cuts. Remember, too, the invasion of Afghanistan and Iraq have never been accounted for in the federal budget. The piper isn’t even close to being paid when it comes to the federal deficit.

So who really is the party of fiscal responsibility? Make no mistake, Republicans talk a grass-roots, family values game but that’s a ruse intended – and seemingly working extremely well – to convince middle America that they are the Republican party core. Wrong. The wealthy is the real Republican party core. The religious-right, pro-life, Creationist, white-bread American is just the uniformed and ill-advised pawn in their game. They are easily convinced that so-called tax-and-spend liberals, job-stealing illegal immigrants, and unfair (meaning unregulated) foreign markets and labor practices are to blame for our troubles.

We only have ourselves to blame.

A FINAL THOUGHT ON CONSUMERISM, FOREIGN LABOR, AND OUR ECONOMY
When it comes to foreign and domestic markets and labor, we only need to look in the mirror. Consider the goods and services we consume, how that affects the economy, and what it means to domestic and overseas markets and societies, including China.

Any business is in business to do something profitably. Businesses who outsource everything possible to overseas markets like China do so in order to lower operating expenses and maximize profits on the goods and services they sell and we buy from them.

Hey, we don’t want government to tell them or us what we can and can’t do, right? No need to regulate business, right? This is America, land of the free and free markets! Let us as producers and consumers drive the market!

So if we as consumers….

  1. weren’t always encouraging businesses to lower costs by constantly demanding and buying cheaper and cheaper goods (the WalMart affect)
  2. were more willing to elect leaders who put the needs of the American middle class worker ahead of the corner office CEO maybe with proper tariffing and changes to NAFTA – George H.W. Bush’s baby, by the way, and
  3. stopped believing red herrings like illegal aliens taking all of the good paying jobs (yeah, like picking vegetables and raking lawns) thrown at us by right-wing news sources like Fox, Rush Limbaugh, Michael Savage and Quinn and Rose as the cause of our economic problems,then maybe we wouldn’t be in such a mess.

In a democracy, we have some power by virtue of our ballot. So long as we allow ourselves to be fooled into thinking that the Republican party in this day and age is anything but a party of the rich, we’ll keep going through cycles where they come to power every so often, make changes that only benefit the rich like deregulating markets and cutting taxes for the wealthy under the total lie of Reagan’s failed “smaller government” and “trickle-down economics” theories, and we’ll be stuck once again holding the short end of the stick.

It really is something to see – middle class Americans somehow thinking that Republicans are in our corner. I don’t get it. The past 3 Republican administrations – Reagan, Bush 41, and especially the last 8 years under W have proved that to me. Look at how W took Reagan’s failed philosophies – and the deficit – to heights unimaginable. When were we last really prospering? Wasn’t it under Clinton?

For now it seems the majority of Americans have awoken from the nightmare of Republican dogma and are at least willing to try something different. After all, you know the definition of insanity, right? – doing the same thing over and over and expecting different results.