Banking American Style

Former Federal Reserve Chairman Alan Greesnspan (1987-2006) who was against financial regulation, said in October 2008 he didn’t know the financial markets couldn’t regulate themselves, and yet here we are in 2010 with Senator Mitch McConnell still against regulatory reforms.

Evidently, the Senator is against the fifty billion dollar pool the bill wants to enact so that in the future banks can be wound down slowly, saying it will only lead to more bailouts. It is the banks who would be paying into this fund, not the taxpayer. After the trillions the tax payer has given banks, 50 billion seems like a drop in the bucket so what’s the big deal other than to make another misleading talking point by the Senator.

The FDIC insurance was enacted by the New Deal and is an insurance pool which banks pay into, and where the FDIC obtains its funds. If the Senator wants to be against “bail out pools”, then why doesn’t he elaborate on the fact that the FDIC sold the failed bank it had to take over, IndyMac, to a hedge fund? A hedge fund is billionaires who pool their money to invest. A hedge fund is more interested in short term gains than it is in the welfare of a nation. This is more dangerous than banks coughing up some of the billions in profits they reap.

Larry Summers economic advisor to the president and who was all for the repeal of Glass Steagall which allowed banks to own insurance companies and oil companies, said we shouldn’t bust up the banks and take away these other profitable industries. If one industry isn’t doing well then another industry the bank owns could help to offset their losses. If this is true then why didn’t the banks use their other profitable industries to bail themselves out?

They didn’t have to, it’s become the American way to allow banks to have us cowered from cradle to coffin.

Restoring many of the financial regulations enacted by the New Deal is the place to start in financial regulation, but that’s not going to happen with the control the bankers have amassed over us and our politicians since the seventies.

American Dreamin'

There’s an ongoing crusade to blame the poor for the worldwide financial fiasco.

Just recently Goldman Sachs came out and said the problem with the mortgages was the mortgage companies. But who’s gonna believe that when Alan Greenspan testified that Fannie and Freddie were responsible for this sub prime mortgage fiasco? Actually, Fannie & Freddie got into the game late, after the major Banks had been profiting for years on the rule changes.

According to the book “It Takes a Pillage”, in July 2008 the Kansas City Federal Reserve calculated that nationally, in 2006 the sub prime loan origination alone was as high as 38 percent of the market.

This occurred in large part due to the to repeal in 1999 of financial rules like Glass Steagall (which deregulated separation of deposit banks and risk taking banks from merging). Six weeks later Treasury Secretary Robert Rubin went to work for Citigroup in the same industry he just helped to deregulate.

Henry Paulson championed to repeal the rules on how much banks could borrow against their capital before he became Treasury Secretary. This led to investment banks who over-leveraged themselves by 30 and 40 to one.

In 2001 former Senator Phil Gramm said “some people look at sub prime lending and see evil. I look at sub prime lending and I see the American dream in action.” Now the former Senator no longer sees us as a nation of dreamers but as a nation of whiners.

By singling out Freddie Mac and Fannie Mae as the sole proprietors for this sub prime mortgage failure, they’re letting the real crooks off the hook, the bankers who for decades hammered politicians to set up the conditions for the lawless financial times which enabled those same bankers to take advantage of the masses desire of achieving the “American dream“. After all, it wasn’t the poor or the “dead beats” who rewrote the banking rules.

Game's Over Kids

It’s easier for us to blame this health bill for the ruination of our country, than it is to blame the economic meltdown and ruination on the bankers, who along with their political puppeteers have for decades been changing the rules to favor themselves with less transparency and bigger bonuses through shadier dealings.

Because our politicians enacted banking deregulation during the seventies, we had the Savings and Loan bailouts in the eighties. The rules were changed so depositor banks were allowed to invest in anything, and they did. Bankers used the savings and loans banks as their own personal piggy banks. This deregulated greed led to more banks failing, and when they failed, they were bought up by bigger banks leading to further bank consolidation.

The Glass Steagall Act kept Commercial (deposit accounts) and investment banks (risk takers) separate. In the nineties when it was repealed, Investment banks (now merged with commercial banks) bought all kinds of financial institutions; including insurance companies and non bank mortgage lending companies.

Then these mega-banks used our deposits as collateral to over borrow and risked it all on sub prime junk bonds. Then when no one wanted to buy these sub prime junk bonds, the bottom fell out, and in steps the tax payer with trillions.

Reinstating the Glass Steagal Act would keep banks on a smaller level and unable to negatively control our economy. It would prevent banks from engineering gargantuan profits for themselves while bringing financial ruin to so many Americans.

This should be a top priority of the Administration, but unfortunately the way things look, this is unlikely to happen. Frank Lutz, a Republican pollster advised Republicans to associate the health reform legislation with bail outs. With this sneaky twisting of issues and political adherence to his advice, how can citizens even begin to understand what’s at stake here?

As Mayer Rothschild founder House of Rothschild said “Let me issue and control a nation’s money, and I care not who writes the laws“. It doesn’t matter what new financial laws they write, the banks are in control of our money and our government.

Elizabeth Warren currently in charge of TARP oversight, said, “either we get this financial regulation right, or it’s game over.” The bankers along with their lobbyists will see to it that we get this financial regulation “wrong”, but it won’t be “game over” for them, only for us.

Talking Point Reform

Citizens repeat the TV talking points about the health reform bill, such as the threat that our premiums will go up. Health insurance premiums have risen for decades, and now, many Americans don’t work for a company able to absorb the rising premiums. The increase is always passed onto the employee, so workers take home less in their paychecks. This is a sneaky transference of wealth into the pockets of health insurance executives. The CEO of Coventry Health Care makes eleven million dollars per year with his financial planning, tax preparation and auto expenses reimbursed by the company. People are angry over this health bill but they‘re not angry over CEOs whose million dollar perks they support.

And how ‘bout that death panel’ taking point, now that gained a lot of traction. The NewsHour reported that an American soldier in Afghanistan said, the US Army is fighting with one hand tied behind its back! The report went on to say that if the Americans are taking fire from inside a house our soldiers cannot fire back. We’re not outraged over our soldiers’ ‘death panel‘, but we are over fabricated, spin-city death panels.

Speaking of war, where is the anger over a war that was “crammed” down our throats? That lie will cost us trillions, but that’s not a TV talking point so those trillions don’t count. Besides, that‘s other people‘s kids “over there” so we’re not up in arms over that.

The TV has convinced us that Health Care Reform will bankrupt the country and leave debt to future generations. How much anger is out there over the 13 trillion the US Treasury and Federal Reserve have given to the banks? How much debt will that leave to future generations? But because the media is controlled by the corporations, these trillions spent don’t have the country up in arms because it‘s not publicized. Thirteen trillion would pay for this health bill 13 times, but it won’t because the banks have all that money.

The real “health care crisis” that isn’t on TV, is that health insurance companies are monopolies, allowed to fix prices to the max and eliminate competition. Do any of these talking points address this outrageous corporate control? No!

Nothing will change until either the government breaks up these monopolies or more Americans are dying in the streets. 　

Deficit Deceit Part 2

Quoting William Greider in the Nation magazine, retired mogul Pete Peterson who accumulated his wealth at Blackstone Group, the notorious takeover firm, has now invented a “news service” to promote his advocacy about shrinking Social Security, the only retirement system available to working people. Social Security is actually a savings account where we all pay while we work, so we’ll have a pittance when we retire.

Now, “The retired mogul has created a digital news agency he dubs the Fiscal Times while hooking up with the Washington Post, who has agreed to “jointly produce content focusing on budget and fiscal issues“.

According to the article, Peterson believes Congress should create a commission of eighteen, empowered to make the “tough decisions” politicians are loathe to face; slashing benefits; raising payroll taxes or both.”

And presto look, there’s a presidential commission on the budget.The article goes on further to say that Peterson has two Senate advocates- Kent Conrad and Judd Gregg. Two Senators slated to be on the commission are lo and behold Conrad and Gregg. What a coincidence.

Money talks and when it does politicians listen. It’s billionaires like Pete Peterson doing the talking while the rest of us do the walking.

By the most galling point is; where do the people like Peterson amass these billions? From us, the same citizens whose Social Security benefits he wants to slash. Then they turn around and buy Congress with our money and call it democracy in action. Our democracy is bankrupt already, most just don’t know it.

But now it’s too late, the Pete Petersons of the nation own our government. We the people no longer have a government of the people, by the people and for the people. It’s now a government ‘of the corporations, by the corporations and for the corporations.’

Just watch the Financial Times or read the Washington Post and you’ll see only the news the billionaires want us to hear, rather than informing us on how these same billionaires are bringing financial ruin and enslavement to the rest of us.

So when the findings of this commission are out, of course they will be Pete Peterson’s findings recommending the re-organization, (dismantling) of our Social Security system, which will be the final Death-throes of our Democracy.

Deficit Deceit

Thomas Jefferson said to question everything, which is why I question this new concerted effort by the administration to look into the federal deficit.

One area the task force will be looking at are reductions in “entitlement” programs or raising taxes or both. By calling Medicare and Social Security entitlement programs, it makes it sound like a government hand-out when in fact these programs funds are due to what tax payers have already paid into the system. Rather than entitlements they should call them obligations. The government is obligated to give the citizens the money they’ve paid into these insurance programs.

Another question is the deceit in looking at these programs in the first place. William Greider writes in the Nation magazine-”Does the government have money problems? Don’t restore the progressive income tax on the wealthy or capital: don’t cut away corporate boodle in the budget, too difficult politically. Instead, let’s whack Social Security while folks aren’t watching”.

Never mind the 13 trillion this administration has given to the banks and the trillions we’re spending on war, it‘s entitlement programs which are the problem.

Decreasing taxes on the wealthy while increasing our bills and we can see why the country has a soaring deficit.

Corporations create the issues and own the media. Precisely why we should question this quest to concentrate on the deficit.

Big Brother is certainly here now, and he's broadcasting with his bull horn.

Supreme Control

A Century of Law was over turned by the Supreme Court when they ruled that corporations have as much right to political free speech as an American citizen.

Now, elections will be tightly controlled by corporations representing the private interests of billionaire hedge fund and private equity firms.

No wonder the Supreme Court went all the way back to 1907, the same year Teddy Roosevelt signed the Tillman Act, which banned corporate donations to federal campaigns.

From an article in the Nation magazine; ”Teddy Roosevelt a Republican president who was so worried about the power of trusts that he called for public financing of elections and told Congress “All contributions by corporations to any political committee or for any political purpose should be forbidden by law”.

Spring forward to today and quoting from the Washington Spectator; ”When corporations or unions finance attack ads directly, they must publicly disclose their contributions. Corporations and unions can dodge disclosure, however, if they fund a trade group or non profit to mount their political attack ads for them. In Orwellian fashion, an attack ad funded by ExxonMobil, for example, might be disclosed as being paid for by an entity called something like “Americans for Clean Air”.

Too many people allow themselves to be fooled by TV. Logic cannot combat the onslaught of Orwellian double speak and mind numbing advertisements the Supreme Court has just unleashed.

The Washington Spectator reports the lobbying group Patton Boggs released a memo on the day of the ruling stating; ”While the limits and prohibitions on contributions remain in place, much more spending by outside groups throughout the election cycle specifically praising or criticizing candidates should be expected.” It’s no holds barred now and the corporations know it.

And that’s how we loose our vote. Not that it mattered much before, but they had to throw us a few bones or we’d vote them out. As the Romans used to say “give them bread and circuses“. Now, we’re not getting any bread, nor will we get the few bones thrown our way; it’s more corporate circuses convincing us to vote against our own self interest.