Posts tagged with 'amy goodman'
Weekly Audit: Are Handouts For Billionaires More Important Than Feeding Children?
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by Zach Carter, Media Consortium blogger
The crazy conservative assault on government spending has become one of the most irrational economic policy debates in recent years.
The Republican Party is trying to maintain the fiction that direct economic relief for millions of working Americans is a fiscally irresponsible splurge, while simultaneously backing hundreds of billions of dollars worth of economically useless tax cuts for the wealthy. The demands are staggering: cut food stamps for the poor, but preserve perks for billionaires.
As Tim Fernholz notes for The American Prospect, serious economists do not believe that President George W. Bush’s tax cuts for the rich are an effective way to stimulate the economy. Rich people don’t spend money, they save it. We need lots of consumer spending to reinvigorate economic growth and put people back to work.
If we want to create jobs, we need to put money in the hands of people who will spend it. At minimum, that means directing aid to the unemployed and providing federal assistance to states, so that local governments don’t lay off hundreds of thousands of teachers and cops. This is not only the decent, humane thing to do when the economy is struggling, it actually helps. Money the government spends to save a teacher’s job goes out into the economy to pay bills and buy products. For states, this also means that basic public infrastructure is preserved—kids learn and the streets stay safe.
Stonewalling aid
But as the editors of The Nation highlight, Republican politicians have made it nearly impossible to get that critical aid out to American families. They’ve demanded strict measures for these benefits, forcing Democrats to cut food stamps—that’s right, food stamps—in order to keep teachers in school and cops on the street.
Millions of families all over the country depend on food stamps. In the middle of the worst recession since the Great Depression, Republican politicians took a stand to take food from the mouths of children—and they did it while supporting a $300 billion a year in handouts for the rich.
There is no immediate budget crisis. The government can borrow money at record low interest rates, meaning that investors don’t believe the federal budget deficit is too big. But if conservatives were really serious about shrinking the deficit, they’d be encouraging economic growth, not backing billionaire giveaways.
Banking on predation
Our perverse economic policy preferences aren’t limited to budget priorities. As Amy Goodman and Juan Gonzalez emphasize in a segment for Democracy Now!, inadequate rules governing bank lending practices were a fundamental cause of the recession, and are actively hampering the economy’s recovery today.
The Community Reinvestment Act of 1977 (CRA) required banks to make good loans to credit-worthy borrowers in the bank’s community. The idea was simple: If a bank wants to benefit from a community’s resources, it has to give something back and help strengthen the local economy.
Conservatives have lashed out at CRA, blaming it for the mortgage crisis, but the truth is that CRA loans had almost nothing to do with the subprime disaster. CRA loans are affordable loans to creditworthy borrowers—the whole point of subprime lending was to charge outrageously high rates to borrowers with poor credit.
In reality, policymakers’ refusal to expand CRA exacerbated the crisis. Only traditional banks are subject to CRA guidelines, and during the past two decades a host of independent mortgage companies have taken over large swaths of the mortgage market. These unregulated firms issued a lot of lousy loans, often working under direct, explicit instructions from bigger banks, who outsourced their lending in order to get around CRA rules and rip off whole neighborhoods.
Lending is critical to moving the economy out of the recession, and CRA provides reliable, proven rules to get banks back in the business of helping our communities and our economy.
Overdrafting the banks
But a host of other banking policies are also making the recession worse. One of the most egregious is the overdraft fee, which, as Annie Lowrey notes for The Washington Independent, scored banks over $38 billion in 2009 alone. To put that in perspective, the entire banking industry earned a combined profit of $12.5 billion last year, which means that the banks are making their money from gotcha fees, not from productive lending.
Banks have spent years charging overdraft fees without telling their customers that they’re subject to such gouging. Lowrey notes that the average fee is $35 on an average charge of $17. But they also have engaged in a backdating scam, rearranging the order of their customers’ purchases in order to charge more overdraft fees. As I explain for AlterNet:
“Say you’ve got $80 in your checking account, and you decide to pay some bills and run some errands. You spend $30 on gas and another $20 on your water bill. Later, you head to the grocery store and spend $81—oops!—on groceries. To reasonable people, it looks like you’re going to get hit with an overdraft fee. That last purchase put you over the line. But instead, the banks reorder your transactions, processing the groceries first. Now you’re below zero, and they can charge additional fees for your gas and water bills. Wells Fargo charged up to $39 per overdraft. This one mistake cost you $117, and nobody even bothered to tell you it was going to happen.”
Fortunately, a federal judge in California just ruled that this backdating scam was grossly illegal, and ordered megabank Wells Fargo to pay back every penny that it swindled from its California customers with the practice since 2004. But Wells Fargo was not alone—every large bank in the United States does the exact same thing, and it’s allowed them to score billions in deceptive profits. A similar ruling in a larger case against all of the big banks could end a transparent outrage, and restore an enormous amount of unfairly seized wealth to citizens all over the country.
We don’t need to be pushing policies that benefit billionaires at the expense of everyone else. The Bush tax cuts are an unnecessary economic waste. Financial policy that puts the interests of a few giant predatory banks above those of the entire citizenry makes no economic sense.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.
Weekly Audit: Why Elizabeth Warren Should Head New Consumer Financial Protection Bureau
by Zach Carter, Media Consortium blogger
With the Wall Street reform bill finally cleared through Congress, activists and intellectuals are pushing hard to make sure that this bill isn’t the last word Congress utters about Big Finance. We need deeper and more robust reforms, but it’s also critical to ensure that the new bill is implemented as effectively as possible. Part of that means appointing officials with a proven record as robust reformers—people like Elizabeth Warren.
Too-big-to-fail lives on
What more do we need to keep Big Finance from ravaging the middle class? As Stacy Mitchell notes for Yes! Magazine, the bill Congress just signed off on doesn’t really address the core problems posed by our out-of-control banking system. Too-big-to-fail is alive and well, and lawmakers must push to break up the megabanks during the next legislative cycle or risk another economic calamity. Mitchell writes:
“Since the collapse, giant banks have only grown bigger and more powerful, and less responsive to the needs of the real economy. While the financial reform bill includes several worthwhile measures, it will not set the industry right or entail a fundamental alteration of its scale and structure.” (more…)
Weekly Audit: How Deregulation Fueled Goldman Sachs’ Scam
by Zach Carter, Media Consortium blogger
Last week, the Securities and Exchange Commission filed fraud charges against Goldman Sachs and underscored what most Americans have believed for some time: Wall Street has rigged the economy in its own favor, and will stop at nothing—not even outright theft—to boost its profits. What’s worse, Goldman’s scam could have been completely prevented by better regulations and law enforcement.
Goldman’s heist
Let’s be clear. “Financial fraud” means “theft.” Goldman Sachs sold investors securities that were stocked with subprime mortgages and had been cherry-picked by a hedge fund manager named John Paulson. Paulson believed these mortgages were about to go bust, so he helped Goldman Sachs concoct the securities so that he could bet against them himself.
Goldman Sachs, like Paulson, also bet against the securities. But when Goldman sold the securities to investors, it didn’t tell them that Paulson had devised the securities, or that he was betting on their failure. By withholding crucial information from investors, Goldman directly profited from the scam at the expense of its own clients. If ordinary citizens did what the SEC’s alleges Goldman did, we’d call it stealing. (more…)
Weekly Audit: How Superhero Hilda Solis is Winning the Fight for Workers’ Rights
By Zach Carter, Media Consortium blogger
While the poor judgment of top-level officials at Treasury and the Office of Management and Budget frequently makes the news, there is another, unrecognized economic crew doing terrific work: Officials at the Department of Labor are restoring workers’ rights after nearly a decade of neglect.
To top it all off, President Barack Obama appears ready to make another set of strong, though less high-profile, economic appointments that will help rein in Wall Street excess.
DoL All-Stars
As Esther Kaplan documents in a masterful piece for The Nation, the Department of Labor (DoL) has been transformed from an agency that enabled corporate excess to one that holds companies accountable. In less than a year, Labor Secretary Hilda Solis and her team of deputies significantly leveled the playing field between ordinary workers and high-flying executives.
For decades, when conservatives have attempted to confront social problems, they’ve relied on the mantra of enforcement. If we had more cops, we’d fix everything. But as Kaplan documents, under President George W. Bush and his Labor Secretary Elaine Chao, the DoL simply stopped enforcing worker protection laws. From wage theft to mine safety, the Department essentially allowed corrupt employers to do anything they wanted.
That neglect has already ended. Armed with a budget of just $1.5 billion—that’s roughly 0.2% of the Troubled Asset Relief Program—Solis and company have cultivated a list of economic accomplishments that seemed impossible when they took office. As Kaplan details:
“Facing badly depleted enforcement ranks, Solis hired 710 additional enforcement staff, including 130 at OSHA and 250 for the crucial wage-and-hour division, upping inspectors by more than a third. Another hundred will come on next year to staff a crackdown on the misclassification of millions of employees as “independent contractors”–a dodge to avoid paying taxes and benefits–a move that has set off enormous buzz on business blogs. Her team took a plunger to the stagnant regulatory pipeline, moving forward new rules on coal mine dust, silica, and cranes and derricks. She restored prevailing wages for agricultural guest workers and is poised to restore reporting rules on ergonomic injuries.”
Fixing the Fed
Obama also appears ready to make another slate of strong economic appointments at the Federal Reserve, an agency stuffed with free-marketers who helped engineer both an economic catastrophe and resulting bailouts. Obama’s rumored picks—economists Janet Yellen and Peter Diamond and bank regulator Sarah Bloom Raskin—are aggressive about making the economy work for everyday citizens, as I emphasize for AlterNet.
If Congress passes financial reforms similar to what Senate Banking Committee Chairman Chris Dodd (D-CT) has proposed, the Fed’s regulatory responsibilities will actually expand, despite its failures over the past decade. The Fed has never effectively regulated anything and it’s not very concerned with unemployment as an economic problem.
That makes Obama’s pending slate of officials who prioritize bank regulation and broader employment very important. Raskin, in particular, stands out with her strong record as a state banking regulator. If Obama ultimately nominates her, she’ll be the first pure regulator ever appointed to the Fed. The potential picks don’t make up for Obama’s reappointment of bailouteer Ben Bernanke as Federal Reserve Chairman, but they do show that the President is capable of sound judgment.
Strengthening the Dodd bill
But the strength of Obama’s potential Fed nominees doesn’t justify the weakness of Dodd’s financial regulation bill. As Amy Goodman and Juan Gonzalez of Democracy Now! reveal in interviews with economist Robert Johnson and ColorLines Editorial Director Kai Wright , the bill leaves plenty to be desired. Dodd is currently making the rounds and declaring that his bill will end the abuses giant banks deployed against the broader economy, but the truth is, the bill has largely been gutted by bank lobbyists. Here’s Johnson:
“We’re engaged in a Kabuki theater right now, hoping the material is too complex for the American people to understand, declaring victory, and yet basically encoding into law current practices of the banks. Every one of your listeners should ask the question, given this legislation, if the President, House and Senate pass it, will we be in a place where AIG couldn’t have happened, Lehman Brothers couldn’t have happened, Bear Stearns couldn’t have happened, and, more importantly, nine, ten percent unemployment caused by the banking crisis couldn’t have happened? I argue this bill does very little.”
The importance of trust-busting
So Dodd’s bill needs to be substantially strengthened as it moves through the Senate. But there’s plenty of other economic work to be done outside of Wall Street. As Barry C. Lynn and Phillip Longman explain for The Washington Monthly, the steady expansion of corporate monopolies has resulted in a fundamentally unstable economy.
The U.S. simply does not create jobs at the rate it once did, and companies aren’t held accountable to market forces like competition. Many of our monopolies are hidden, as Lynn and Longman note. Macy’s and Bloomingdale’s seem like competitors, but they’re owned by the same holding company. The same dynamic holds true in auto manufacturing, banking, pet food, health care and IT. Consumers think they’re choosing between competing goods and services, when in fact they’re shopping in different divisions of the same corporate Goliath.
All hope is not lost. As Laura Flanders emphasizes for GRITtv, the passage of health care reform proves that the Obama administration and Congress can make substantive progressive changes when they put their minds to it. The question is whether Obama is willing to limit his economic accomplishments to lower-level issues, or go big and take on the deep-pocketed corporate campaign contributors.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.
Weekly Pulse: Bayh-Partisanship=Giving Your Seat to a Republican
By Lindsay Beyerstein, Media Consortium Blogger
You will be shocked, shocked to hear that a Blue Dog Democrat who made a career out of undermining his own party is sucker-punching them on his way out. Sen. Evan Bayh of Indiana abruptly announced this week that he would not seek reelection in November. Bayh’s departure is ratcheting up insecurity in the Democratic caucus at the very moment they need to take decisive action to pass health care reform.
Bayh could easily have won a third term, but it’s unclear whether any other Democrat can hold the seat. To add insult to injury, Bayh waited until 24 hours before the filing deadline for Democratic primary candidates, sending Indiana Dems scrambling to find a candidate to run in his place. Bayh’s tardiness was calculated. Since no Democrats were ready to file by the deadline, the Indiana Democratic establishment will get to handpick Bayh’s successor.
In a call with state Democratic officials, Bayh said his abrupt departure is for the best, as Evan McMorris-Santoro reports for TPMDC. According to Bayh, he’s doing the party a favor by sparing them a contentious primary process. Thanks a lot.
What does this mean for health care reform?
What does Bayh’s departure portend for health care reform? Monica Potts of TAPPED argues that replacing a conservative Democrat like Bayh with a moderate Republican won’t make that much difference. Bayh was never a reliable Democratic vote.
But Tim Fernholtz of TAPPED dismisses this view as naive. Fernholtz predicts that, for all of Bayh’s faults, the senate will be much worse without him: “In essence, the difference between this insubstantial Hoosier and, say, [GOP hopeful] Dan Coats, is simple: You can buy off Bayh.” Bayh voted for health care reform and the stimulus, no Republican, no matter how “moderate” is going to vote that way.
Anyone who expects a moderate Republican from Indiana to support any part of the Democratic agenda is deluded. On the other hand, the Senate Democrats already passed their bill, their only remaining task would be to pass a “fix” through budget reconciliation to make changes in the legislation that would be acceptable to the House. Of course, reconciliation will be a bitter political fight. One wonders whether the demoralized Senate Democrats will have the stomach for it.
About that health care summit…
Note that congressional Republicans have yet to commit to attending the “bipartisan” health care summit that they called for. Christina Bellatoni of TPMDC reports that yesterday White House Press Secretary Robert Gibbs wondered why the Republicans were for the summit before they were against it:
“Right before the president issued the invitation, the—the thing that each of these individuals was hoping for most was an opportunity to sit down on television and discuss and engage on these issues. Now, not accepting an invitation to do what they’d asked the president to do, if they decide not to, I’ll let them leap the—leap the chasm there and try to explain why they’re now opposed to what they said they wanted most to do,” Gibbs said.
Busting the filibuster
On the bright side, the Democrats still have a sizable majority in the Senate, with or without Bayh. Republicans would have to beat all 10 vulnerable Democratic incumbent senators in the next election in order to regain control of the Senate. The more immediate threat to health care reform and the Democrats’ ability to govern in general is the institutional filibuster. Structural reform is needed to break the impasse. Lawyer and author Tom Geoghegan talks with Amy Goodman on Democracy Now! on strategies for busting the filibuster.
Public option resurfacing
Mike Lillis of the Washington Independent reports that four senate Democrats have thrown their lot in with progressives clamoring for a public option through reconciliation. Sens. Sherrod Brown (OH), Jeff Merkley (OR), Kirsten Gillibrand (NY) and Michael Bennet (CO) argue for the public option in an open letter to Majority Leader Harry Reid. The letter reads:
There are four fundamental reasons why we support this approach – its potential for billions of dollars in cost savings; the growing need to increase competition and lower costs for the consumer; the history of using reconciliation for significant pieces of health care legislation; and the continued public support for a public option….
Big pharma’s lobby
That’s nice, but let’s not forget who’s really in charge. In AlterNet, Paul Blumenthal recaps the sorry history of collusion between the White House, the pharmaceutical lobby group PhRMA, and the Senate. According to Blumenthal the White House steered pharmaceutical lobbyists directly to Sen. Max Baucus (D-MT), chair of the powerful Finance Committee, who was entrusted with crafting the White House’s favored version of health care reform.
Abortion and health care reform
As if we didn’t have enough to worry about, Nick Baumann of Mother Jones notes that the National Right to Life Committee (NRLC) is making abortion is an obstacle to passing health care reform through reconciliation. The NRLC is insinuating that Bart Stupak (D-MI) and his coalition of anti-choice Democrats will vote against the Senate health care bill because it it’s slightly less restrictive of abortion than the bill the House passed. The good news is that it’s procedurally impossible to insert Stupak’s language into the Senate bill through reconciliation. The bad news is that Speaker Nancy Pelosi (D-CA) needs every vote she can get to pass the Senate bill and anti-choice hardliners could be an obstacle.
This post features links to the best independent, progressive reporting about health care by members of The Media Consortium. It is free to reprint. Visit the Pulse for a complete list of articles on health care reform, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Audit, The Mulch, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.
Weekly Audit: Don’t Let Citizens United Wreck Our Economy
By Zach Carter, Media Consortium Blogger
In a landmark decision last week, the Supreme Court ruled that corporations could spend unlimited funds to influence American elections, overturning a century of legal precedent. The Court’s ruling in Citizens United v. FEC undermines the integrity of the U.S. government, as President Barack Obama emphasized at his State of the Union address. But the decision also deals a damaging blow to the U.S. economy by encouraging lawmakers to write economic rules that benefit specific companies at the expense of everyone else.
The editors of The Nation lay out the High Court’s hubris in no uncertain terms:
The Citizens United campaign finance decision by Chief Justice John Roberts and a Supreme Court majority of conservative judicial activists is a dramatic assault on American democracy, overturning more than a century of precedent in order to give corporations the ultimate authority over elections and governing. This decision tips the balance against active citizenship and the rule of law by making it possible for the nation’s most powerful economic interests to manipulate not just individual politicians and electoral contests but political discourse itself. (more…)
Weekly Audit: Unemployment Fueling Political Storm
By Zach Carter, Media Consortium Blogger
Unemployment figures in the U.S. are staggering: The official rate stands at 10.2%, the highest in 26 years. A broader measure that includes people who are involuntarily working part-time or who have given up looking for work is at 17.5%. That’s a full-blown economic emergency.
But, as Joshua Holland explains for AlterNet, President Barack Obama’s response to the unemployment crisis has not matched the urgency of his response to the crisis on Wall Street. This isn’t just unfair, it’s bad economics. (more…)
Weekly Mulch: Autumn Fools
By Raquel Brown, Media Consortium Blogger
After several prominent members left the Chamber of Commerce over its prehistoric climate change policies, the organization appeared to do an about-face on its climate stance during a press conference on Monday. Sound too good to be true? It was. Members of the Yes Men, a group of satirical, anti-corporate activists, posed as Chamber of Commerce officials and held a fake press conference claiming that “There is only one sound way to do business: That’s to support a strong climate-change bill quickly, so that this December in Copenhagen, President Obama can lead the entire business world in ensuring our long-term prosperity.” In reality, the Chamber has not changed their climate stance and continues to oppose climate change legislation. The Yes Men’s stunt is just one more in a chain of hoaxes this Autumn, including a boy in a balloon, death panels on health care reform, and recent allegations that radical Islamists are using interns to infiltrate Capitol Hill. (more…)