- Volcker Rule, Once Simple, Now Boggles, NYT, October 2011. Click here
- This working paper from the NY FED is beyond disturbing. http://www.newyorkfed.org/research/staff_reports/sr458.pdf
- VERY bad news: The most crucial element in the re-regulation of Wall Street has been gutted. At least for now, there will be no limits on how much money Wall Street can borrow to do its business. It’s an invitation to dare a new meltdown or financial crisis. More from Forbes
- The Bottomless Pit of Freddie and Fannie, Forbes. Click here.
- Boeing chooses Charleston and brings JOBS! Click here.
- Taxpayers are paying dearly for public pensions. Click here.
- Click for Lobbyists Unlimited in Honoring Lawmakers. USA Today. June 8, 2009
Memorial Day Thoughts on National Defense
By Robert Reich: American political economist, professor, author, and political commentator. He served in the administrations of Presidents Gerald Ford and Jimmy Carter and was Secretary of Labor under President Bill Clinton from 1993 to 1997.
We can best honor those who have given their lives for this nation in combat by making sure our military might is proportional to what America needs.
The United States spends more on our military than do China, Russia, Britain, France, Japan, and Germany put together.
With the withdrawal of troops from Afghanistan, the cost of fighting wars is projected to drop – but the “base” defense budget (the annual cost of paying troops and buying planes, ships, and tanks – not including the costs of actually fighting wars) is scheduled to rise. The base budget is already about 25 percent higher than it was a decade ago, adjusted for inflation.One big reason: It’s almost impossible to terminate large defense contracts. Defense contractors have cultivated sponsors on Capitol Hill and located their plants and facilities in politically important congressional districts. Lockheed Martin, Raytheon, and others have made spending on national defense into America’s biggest jobs program.
So we keep spending billions on Cold War weapons systems like nuclear attack submarines, aircraft carriers, and manned combat fighters that pump up the bottom lines of defense contractors but have nothing to do with 21st-century combat.
For example, the Pentagon says it wants to buy fewer F-35 joint strike fighter planes than had been planned – the single-engine fighter has been plagued by cost overruns and technical glitches – but the contractors and their friends on Capitol Hill promise a fight.
The absence of a budget deal on Capitol Hill is supposed to trigger an automatic across-the-board ten-year cut in the defense budget of nearly $500 billion, starting January. But Republicans have vowed to restore the cuts. The House Republican budget cuts everything else — yet brings defense spending back up. Mitt Romney’s proposed budget does the same.
Yet even if the scheduled cuts occur, the Pentagon is still projected to spend over $2.7 trillion over the next ten years.
At the very least, hundreds of billions could be saved without jeopardizing the nation’s security by ending weapons systems designed for an age of conventional warfare. We should shrink the F-35 fleet of stealth fighters. Cut the number of deployed strategic nuclear weapons, ballistic missile submarines, and intercontinental ballistic missiles. And take a cleaver to the Navy and Air Force budgets. (Most of the action is with the Army, Marines, and Special Forces.)
At a time when Medicare, Medicaid, and non-defense discretionary spending (including most programs for the poor, as well as infrastructure and basic R&D) are in serious jeopardy, Obama and the Democrats should be calling for even more defense cuts.
has won. http://www.washingtonpost.com/wp-dyn/content/article/2010/12/28/AR2010122800322.html
Since we made the commercial pictured to the left in 2008, not one piece of financial reform legislation has been passed. Not one. All the vulnerabilities that created the financial melt down are still present today.
Has our government become so corrupt that lobbyists “own” both parties and the American people are left with few-to-no champions? Is it a disturbing lack of focus? Is it ineptitude?
From the economy to the oil spill, Congress seems to be digging us deeper rather than raising us up. We need solutions and action … now.
Wall Street Journal
Is it time for U.S. to consider going back to the future and bringing back some Great Depression-era regulation to help fix the current economic mess?
As Floyd Norris points out, Thursday’s slide in the Dow Jones Industrial Average and Standard & Poor’s 500 stock index means today’s markets have fallen as far as in the first few years of the Great Depression. And the job losses “from this recession are now worse than in 1981-1982, which is generally considered to have been the most severe economic downturn in the U.S. since the Great Depression,” writes Justin Fox.
So is it time for the government to consider bringing back Glass-Steagall? That piece of Great Depression regulation separated commercial banks from investment banks. Congress repealed it in 1999 so Citicorp and Travelers could get together.
Paul Volcker, who heads President Barack Obama’s Economic Recovery Advisory Board, thinks instituting something similar to the separations created under Glass-Steagall might not be such a bad idea, Bloomberg reports. Volcker wants to create a two-tiered banking system. On one tier would be commercial banks, which provide customers with depository services and access to credit and would be highly regulated. On the other would be securities firms, which would have the freedom to take on more risk and practice trading, “relatively free of regulation.” There is at least one difference, in Volcker’s plan commercial banks would be able to do stock-and-bond underwriting and provide merger advice.
Post & Courier, October 12, 2011
Save the middle class
Let’s look at class warfare from another perspective with another set of facts — facts omitted in your Sept. 23 editorial “Poor logic in taxing rich,” and in an opinion piece placed in the news section on Sept. 25, “It’s not as easy to be rich as it used to be.”
Except for the time right before the Great Depression, the gap between rich and poor in this country has never been greater. The typical American household made less money last year than a full decade ago (adjusted for inflation). That hasn’t happened in 80 years.
Over 46.2 million of us live in poverty, the highest number in the 52 years of the Census Bureau, while at the same time, the richest 1 percent of us (those making $380,000 or more) have seen incomes grow 33 percent.
And those living off the stock market (capital gains, dividends, investment and hedge fund managers) pay taxes at 15 percent. That is the same rate as those with taxable income over $8,500 to $34,500.
Corporations are earning record profits and sitting on more than $2 trillion in cash reserves, which could be used to create jobs.
American corporations currently pay less tax than any of the member nations of the international OECD (Organization for Economic Cooperation and Development). Our rates are higher, but between loopholes and deductions, our effective rate (the amount actually paid) is lowest.
Last year, 25 of the largest and most profitable corporations paid their CEOs more than their entire corporations paid in taxes.
Between the second quarter of 2009 and the fourth quarter of 2010, our nation’s income grew by $528 billion. Eighty-eight percent of that went to corporate profits, while 1 percent went to wages and salaries.
In contrast, when we were recovering from a downturn in the 1990s, 50 percent went to wages and salaries.
How can that sound fair, smart or even moral?
Great thinkers since Aristotle warned us that a healthy middle class is a necessity to maintaining a democracy. The deteriorating status of our middle class is seriously
endangering our future. Cutting waste and taxing fairly is the way out of this morass and on to a healthy future. Urge your representatives not to kill the goose (the middle class) that laid the golden egg.
FINANCIAL BAIL OUT #2
I didn’t like the first bank bail out, nor do I like this one. The first was written over a weekend, by one of the former perpetrators of irresponsible financial instruments (Paulson was head of Goldman Sachs before becoming U.S. Treasury Secretary). It was then sold to a people and Congress that didn’t understand it (the people had a reason, the Congress did not) as something that must happen immediately or the sky would indeed fall.
Because there was no regulatory oversight written into that bail out, money was spent on acquisitions and was hoarded rather than loaned.
Now, Americans out of work look at the tax dollars being spent on bonuses, acquisitions, etc. – see no relief in loosening credit … and are rightfully furious, rightfully suspect about yet another bailout.
Whose fault is it?
Number 1: Congress. They put no rules and regulations on the first bail out money. Paulson’s “trust me” didn’t work out. In December 2009, Congress also passed the bills which removed the protections instituted by Franklin Roosevelt during the first Great Depression.
Number 2: Us. We re-elected 89% of that very same Congress in 2008 and sent them back to mess up some more.
Number 3: Financial Institutions … but they come in third. They did what they do. You don’t blame a guard dog if it bites. Treasury Secretary Geithner’s (also of Goldman Sachs) second plan is seemingly as vague as the first and gives too much power to the financial institutions which took our money and abused it the first time. At this writing they haven’t fixed the structural holes in the regulations that led us to this disastrous state: namely the bipartisan repeal of the Glass Stegall Act which had protected us from the inevitable since the Great Depression (see excellent article sent in by reader below).
Action We Can Take
WRITE YOUR Natioinal REPRESENTATIVES AND SENATORS (Link to Representatives Contact Information) :
- Tell them they still haven’t attacked the source of the problem. They must reinstate the protections of the Glass Stegall Act, separating banks from securities companies from insurance companies.
- If they don’t reinstate the protections against speculators buying commodities (responsible for gas price increases), we’ll see gas prices rise unpredictably once more.
- Explain that it’s YOUR money they are handing out. And, to remember that your children are having to borrow money in order for them to hand it out to very wealthy people who have behaved irresponsibly and wasted theirs. Ask them to behave accordingly.
- Insist that they eliminate every ounce of pork in the Stimulus Bill and all other Bills passed in this 111th Congress.
- Stop re-electing Senators and Representatives who have played a role in this disaster. If he (there are no she’s in SC) can’t see beyond the next PAC donation, send him home. If he isn’t strategic, doesn’t understand the questions to ask, the leadership to exhibit, send him home.
- Check out where your Senators and Representatives are getting their money. Follow the money. Link here to Open Secrets.
Stay on top of your Senators’ and Representative’s votes. Link here to follow their votes: Open Congress.
Comments From Readers (send to yoursiteSC@comcast.net)
March 23, 2009
Treasury Plan for Toxic Assets . CLICK HERE.
Check here for your predicted foreclosures: Foreclosure Predictions In Your District
Buck From Myrtle Beach
Why isn’t the media covering this? Why isn’t the government talking about it? Here’s a good article on it excerpted from William Kaufman.
If you’re looking for a major cause of the current banking meltdown, you need seek no farther than the 1999 repeal of the Glass-Steagall Act. The Glass-Steagall Act, passed in 1933, mandated the separation of commercial and investment banking in order to protect depositors from the hazards of risky investment and speculation. It worked fine for fifty years until the banking industry began lobbying for its repeal during the 1980s.
The main cheerleader for the repeal was Phil Gramm, McCain’s chief economic advisor. But wait — fully 38 of 45 Senate Democrats voted for the repeal (which passed 90-8).
This disgraceful bow to the banking industry, signed into law by Bill Clinton in 1999, bears a major share of responsibility for the current banking crisis.
The ‘finance, insurance and real estate industries together are regularly the largest campaign contributors and biggest spenders on lobbying of all business sectors [in 1999]. They laid out more than $200 million for lobbying in 1998, ‘ according to the Center for Responsive Politics. ‘ These industries succeeded in their two decades long effort to repeal the act. ‘ “
Dana Beach, Executive Director of the South Carolina Coastal Conservation League
Editorial in the Post and Courier: Build New Economy Not Resurrect Old
View An Explanation of this Deep Recession and Who Is Responsible
Reader Joanna H. from Myrtle Beach has a solution!
You can call it the Patriotic Retirement Plan:
There are about 40 million people over 50 in the work force. Pay them $1 million apiece severance for early retirement with the following stipulations:
- They MUST retire. Forty million job openings – Unemployment fixed.
- They MUST buy a new American CAR. Forty million cars ordered – Auto Industry fixed.
- They MUST either buy a house or pay off their mortgage – Housing Crisis fixed.