There’s a good petition for you to sign, but first some bankster news.
Health care reform suffered the torments of partisan obstruction. Now gird yourself for financial reform and the perils of bipartisan blight.
In health care, lockstep Republican opposition caused months of delay, and empowered the likes of Connecticut's embittered Senator Joe Lieberman and Nebraska's compromised Ben Nelson to exact cankerous concessions to forge a super-majority.
So Washington pundits rail against bitter partisanship. Republican Senator John McCain charges that Obama is to blame for the partisan divide, even though the President wasted months while Max Baucus courted coy Republicans. Senator John Cornyn, the most rabid of Republican obstructionists, damns the partisan process as a reason to oppose the health care bill. This is akin to a gang of thieves lamenting crime in the streets.
Next year, assuming that this health care bill, like a large kidney stone, must eventually be passed, the Congress will turn to financial reform. In the House, Republicans remain in lockstep opposition, providing not one vote for a measure that would take the first steps towards limiting the ability of banks to fleece us again. But in the Senate, we may well witness not the price of partisan rancor, but the blight of bipartisan cooperation.
Senate Banking Committee Chair Chris Dodd put forth a strong legislative proposal, one far better than the administration's plan. When the Committee's senior Republican, Alabama's Richard Shelby, scorned that in an extended rant, Dodd decided to pair up Democrats and Republicans on the committee to come up with bipartisan solutions. And now reports suggest that a bipartisan plan may well be unveiled in January, with Dodd pushing for an early vote.
Hold onto your wallets. We don't yet know what is in the bipartisan bill, but we do know what has been kicked to the curb. Shelby announced one price for his cooperation: no new agency to protect consumers from financial fraud or abuse. Want Republican cooperation? Then the proposed Consumer Financial Protection Agency - with a mandate to police everything from mortgage fraud to preposterous bank overdraft charges - is verboten. Grateful banking lobbyists will insure him a lucrative retirement.
We continue to suffer a pandemic of bank fraud and abuse. In the housing bubble, mortgage companies rewarded brokers for peddling exotic mortgages to customers that the brokers knew couldn't afford them and didn't understand them. Now, banks are raking in record sums from overdraft charges, credit card fees, and preposterous ATM charges. Payday lenders are pocketing the equivalent of 1000% interest from the poorest working people.
The White House has sensibly championed a new agency devoted not to the health of the banks but to the protection of consumers. Already the banking lobby succeeded in weakening the proposal in the partisan House, exempting auto dealers - hell, we know they are honest, right? - and over 90% of all lending institutions, and eliminating the mandate to offer "wonder bread" or plain vanilla loans along with the exotica banks prefer to peddle.
But that was with House Republicans in opposition. In the Senate, the price of bipartisanship is to trash the whole concept. Caveat emptor, baby… [emphasis added]
Inserted from <Huffington Post>
There’s a black sheep in every family. Cousin FatCat, pictured above, is thrilled that his bankster owner will be able to keep him on a generous diet of 100% caviar, because the Repuglicans know only one definition for bipartisan: Democratic cave-in. I’m sure there will be a petition circulating on this bill, and when it surfaces, I will put it up for you. In the meantime, here’s one to tax Wall-Street speculation:
…Reckless Wall Street gambling collapsed the economy. The big bankers, like Mr. Potter, got theirs – an unbelievable $3 trillion in government help! It worked so well that Wall Street will pay out some $140 billion in bonuses this year.
But what about George Bailey and the rest of us? Where is the help for the 16 million Americans who are now out of work? The millions of unemployed facing foreclosure? The millions more teetering on the brink of personal bankruptcy?
The banks were aided on the condition that they free up credit, modify mortgages and help put America back to work. They have not kept the bargain. Tell Congress, it’s time to take some of the big bailout bucks back and pass a small transaction tax on stock market speculation to pay for new job creation. Leftover bailout funds should also be put to work creating jobs.
Please sign our New Year's petition calling on Congress and the President to "Repo the Dough" by taxing speculation and putting Wall Street to work rebuilding Main Street! And, please ask your friends to join in this petition from BanksterUSA.org and CMD, by sharing this link: http://tinyurl.com/RepotheDough.
Lisa Graves is the Executive Director of the Center for Media and Democracy based in Madison, Wisconsin.
Inserted from <Center for Media and Democracy>
To sign just click the link above.
28 comments:
Bankers Get $4 Trillion Gift From Barney Frank: David Reilly (Bloomberg) -- To close out 2009, I decided to do something I bet no member of Congress has done -- actually read from cover to cover one of the pieces of sweeping legislation bouncing around Capitol Hill.
Hunkering down by the fire, I snuggled up with H.R. 4173, the financial-reform legislation passed earlier this month by the House of Representatives. The Senate has yet to pass its own reform plan. The baby of Financial Services Committee Chairman Barney Frank, the House bill is meant to address everything from too-big-to-fail banks to asleep-at-the-switch credit-ratings companies to the protection of consumers from greedy lenders.
I quickly discovered why members of Congress rarely read legislation like this. At 1,279 pages, the “Wall Street Reform and Consumer Protection Act” is a real slog. And yes, I plowed through all those pages. (Memo to Chairman Frank: “ystem” at line 14, page 258 is missing the first “s”.)
The reading was especially painful since this reform sausage is stuffed with more gristle than meat. At least, that is, if you are a taxpayer hoping the bailout train is coming to a halt.
If you’re a banker, the bill is tastier. While banks opposed the legislation, they should cheer for its passage by the full Congress in the New Year: There are huge giveaways insuring the government will again rescue banks and Wall Street if the need arises.
click the link for the rest of the story...
As far as I'm concerned, Wall Street (and their conservative Republican enablers) are all parasites engaged in extortion from middle class, working American taxpayers for the sole benefit of themselves and the ultra wealthy. In 1933, FDR wisely declared a bank holiday, and then promptly cleaned house with sweeping reorganizational and regulatory reforms. This move paid dividends to the entire country for the next 70 years. Obama should today CLOSE DOWN WALL STREET and kick their asses around until THEY are put back in shape so we can end this utter nonsense which has been going on in recent years. WALL STREET IS A PONZI SCHEME IN NEED OF A MASSIVE OVERHAUL!
The system is broken. Plain an simple. There is no political will on either side to fix it completely. Cash is the mothers milk of politics. As long as politicians receive cash from the Banksters, and the Corps. It will be a race to the bottom.
I agree with all of the above; in addition to the massive giveaway of taxpayer money, we have the foxes (Geithner, Bernake, Summers, et. al.) protecting the banks/financial systems in an unprecedented fashion while simultaneously screwing Main Street. Never before have the banksters had it so good.
Actually the Banksters had it much better under the Shrubster, Greenspan, and Paulson.
Lets remember it was under their watch that these criminal activities started. This did not start on 01/20/09
RealityZone, you are correct, but Obama is turning into Bush lite, so I don't have much hope.
Oso,
Quincy is a boy, but he's not fixed, so unless Dulce is fixed...well, you know how bunnies are. You turn around one day, and there are 10 bunny/cat mixes, and the next day, there will be 50, and so on. Since he doesn't talk, I don't think he'll have any objections to interspecies dating, but I'll ask him just to be sure.
But we'll have to wait a couple of days until he's better. We'll want him in top form to meet Dulce. He is a dwarf bunny (about the size of my husband's fist) and only weighs about 2 lbs.; so Dulce probably out weighs him by at least 4 lbs. Putting them together should be very interesting to say the very least. :)
Thanks, RJ, but the link is bad.
Jack, in my heart I agree with you, but in reality, our economy and Wall Street are so tightly intermeshed that every time Wall Street farts, Mani Street holds it's nose for a couple years. Instead, Wall Street needs to be reigned in with serious regulation and elections need to be 100% publicly financed.
RZ, I hear you, but instead of saying the system is broken, can you propose a solution?
Lisa, I have to agree with RZ. Banksters are joyful now because Obama is a small thorn in their side when they expected a flaming sword at their throats. Under Bush, they wrote the rules.
Lisa and Oso. You must put an end to this CATastrophic plan to breed a cat and a bunny. The moral integrity of America depends on feline purity!! ;-)
tomcat, i didnt make it up...here's the url right out of my browsing history:
http://www.businessweek.com/news/2009-12-29/bankers-get-4-trillion-gift-from-barney-frank-david-reilly.html
which yeilds a 404...hmmm...maybe i still can get at it offline...
RJ, I knew you dodn't make it up. :-)
nope; it was bloomberg posted on businessweek; looks like they pulled the article...double hmmm...
ok, i did a search on the title, and it shows up at both bloomberg and businessweek, but both search links return to the home page of each...and there are 2800 other links, ie from time, huffpost feeds, chinese, german papers, etc...
If you Google the title, you might find it cached there.
Hi guys,
Just wanted to chime in with something I was just a victim of.
BB&T here in NC, and everywhere else I think, has eliminated the float. Period.
I deposited a small check which would have covered a small grocery bill I incurred afterward last week and the charge bounced. Yes, the deposit showed up on time, but a $35 charge was made the day (get this - THE DAY), the grocery bill was incurred.
This means that there is no more float. I have to check the laws still, but it looks like one of the law changes under the 'thugs lets them get by with something that was never legal before.
They can charge you for an overdraft BEFORE the charge hits the account.
It's a disaster for me as it also incurred overdrafts on three others charges that came in later (which would have been covered by my deposit without the first overdraft).
And no one cares that they just traded away the consumer protection part of the finance bill?
S
the proposed Consumer Financial Protection Agency - with a mandate to police everything from mortgage fraud to preposterous bank overdraft charges - is verboten.
ok, i got it from a german search site: herewith is copied the rest of the article:
Here are some of the nuggets I gleaned from days spent reading Frank’s handiwork:
-- For all its heft, the bill doesn’t once mention the words “too-big-to-fail,” the main issue confronting the financial system. Admitting you have a problem, as any 12- stepper knows, is the crucial first step toward recovery.
-- Instead, it supports the biggest banks. It authorizes Federal Reserve banks to provide as much as $4 trillion in emergency funding the next time Wall Street crashes. So much for “no-more-bailouts” talk. That is more than twice what the Fed pumped into markets this time around. The size of the fund makes the bribes in the Senate’s health-care bill look minuscule.
-- Oh, hold on, the Federal Reserve and Treasury Secretary can’t authorize these funds unless “there is at least a 99 percent likelihood that all funds and interest will be paid back.” Too bad the same models used to foresee the housing meltdown probably will be used to predict this likelihood as well.
More Bailouts
-- The bill also allows the government, in a crisis, to back financial firms’ debts. Bondholders can sleep easy -- there are more bailouts to come.
-- The legislation does create a council of regulators to spot risks to the financial system and big financial firms. Unfortunately this group is made up of folks who missed the problems that led to the current crisis.
-- Don’t worry, this time regulators will have better tools. Six months after being created, the council will report to Congress on “whether setting up an electronic database” would be a help. Maybe they’ll even get to use that Internet thingy.
-- This group, among its many powers, can restrict the ability of a financial firm to trade for its own account. Perhaps this section should be entitled, “Yes, Goldman Sachs Group Inc., we’re looking at you.”
Managing Bonuses
-- The bill also allows regulators to “prohibit any incentive-based payment arrangement.” In other words, banker bonuses are still in play. Maybe Bank of America Corp. and Citigroup Inc. shouldn’t have rushed to pay back Troubled Asset Relief Program funds.
-- The bill kills the Office of Thrift Supervision, a toothless watchdog. Well, kill may be too strong a word. That agency and its employees will be folded into the Office of the Comptroller of the Currency. Further proof that government never really disappears.
-- Since Congress isn’t cutting jobs, why not add a few more. The bill calls for more than a dozen agencies to create a position called “Director of Minority and Women Inclusion.” People in these new posts will be presidential appointees. I thought too-big-to-fail banks were the pressing issue. Turns out it’s diversity, and patronage.
-- Not that the House is entirely sure of what the issues are, at least judging by the two dozen or so studies the bill authorizes. About a quarter of them relate to credit-rating companies, an area in which the legislation falls short of meaningful change. Sadly, these studies don’t tackle tough questions like whether we should just do away with ratings altogether. Here’s a tip: Do the studies, then write the legislation.
Consumer Protection
-- The bill isn’t all bad, though. It creates a new Consumer Financial Protection Agency, the brainchild of Elizabeth Warren, currently head of a panel overseeing TARP. And the first director gets the cool job of designing a seal for the new agency. My suggestion: Warren riding a fiery chariot while hurling lightning bolts at Federal Reserve Chairman Ben Bernanke.
-- Best of all, the bill contains a provision that, in the event of another government request for emergency aid to prop up the financial system, debate in Congress be limited to just 10 hours. Anything that can get Congress to shut up can’t be all bad.
Even better would be if legislators actually tackle the real issues stemming from the financial crisis, end bailouts and, for the sake of my eyes, write far, far shorter bills.
sorry tomcat, & everyone, for spinning outta control here, but my tinfoil hat was sparking something fierce...
Ouch, Suzan! I'm sorry!! I understand that the banks are now holding all deposits that come in each day until after they apply all the day's debits to the account in order to generate more overdraft fees. So not only is there no float; there is a negative float. The House legislation outlaws this practice, but that's before it goes to the Senate to be trashed.
That's OK, RJ. Thanks for chasing it down. Anyway, it's my fault. I short circuited you hat by telling you the kink is bad. ;-)
Hola, TomCat!
I swear, I do believe the word "bipartisanship" is becoming a most despised word in my world...
Wonder how many times we'll hear it during SOTU this year?
Shudder to think of it.
Bipartisanship means this.
Dems cower.
RUSHpukes laugh.
Happy upcoming New Year's, TomCat!
And with that, off to read and sign the petition.
:)
You know the Republicans trying to make Obama fail! I am also sick of those idiots gumming up the works until they get what they want. I am sick of their games.
Love the fat cat! Can't wait to show Trice. Want to wish you a happy New Year Bud. I think this was a good one for you and may 2010 be much better!
rjs,
wow lotta reading man! I'd read somewhere the resolution gave the Executive Branch the power to overrule any attempt at "taxing" the bigger banks to bail out a TBTF and dump it back onto the public.
IMO since Obama got record amounts of F.I.RE $ he saw it as a down payment and is handing the banks the financial plan they want the same way IMO he handed the health insurance gang the HCR they wanted. I don't buy the Babe in the Woods act.
The Repubs say no to everything cause they have to, they can't agree with a Black big govt Democrat even though he's delivering the Wall St/Health packages they wish they could have delivered.
Obama will appear to have delivered HCR and financial reform. Everything both lack will be blamed on those mean Republicans. The DLC's triangulation begun under Clinton is paying off for them but us people are screwed.
Lisa Dulce is about 10 lbs with big feet and a big J-Locat butt and she's kind of a bully, she picks on the older male cat here.
Quincy sounds like a good little guy and he's probably better off being a batchelor.
@ TomCat: You are right about how tightly intermeshed Wall Street and Main Street are. I would also agree with Wall Street needing regulation (and elections being publicly financed). However, you need *good* regulations. Taxing financial transactions on products ordinary investors use is just a pure populist move that will end up hurting Main Street. That’s an example of bad legislation that just gives voters the illusion that something is happening, when in reality they are the ones paying for it.
Here are some suggestions for targeted regulations that more directly address the real issues:
1. Better oversight of complex products (such as mortgage-backed securities and credit default swaps).
2. Requiring higher capital requirements for banks, thereby reducing their leverage and making them less likely to go under in the event of crisis.
3. Changing the bonus structures on Wall Street (ex: If a banker comes up with a new profitable business line, then his/her bonus for this is deferred for several years, subject to cancellation if the product blows up in the interim.).
4. Windfall taxes on bank profits (if the issue is recovering money from Wall Street).
5. Setting limits on bank size so they can't become "too big to fail". To make this more precise, the issue is not that banks are too big to fail in the same sense that an automobile manufacturer might be (for example). GM going bankrupt is a bad thing but civilization wouldn’t have come to a halt if they had been allowed to go under. The problem with the banks is that they have so many interconnections via poorly understood derivatives transactions that the entire financial system could grind to a halt if an important node in this network were to fail. That’s why the banks were bailed out. Similarly, if we look back in history, this is the reason why Long Term Capital Management was bailed out in 1998. The hedge fund Amaranth was not bailed in 2006 since it was not interlinked with the system to the same extent (even though the losses were larger). This means that much more regulatory oversight of the interconnections between financial institutions is necessary in order to properly assess the risk to the system. Think of it like an air traffic controller for the financial markets.
@ Rjs: Props for reading that phone book sized monstrosity. You’ve inspired me to look through it too to see if some of the above suggestions are covered.
rjs wrote:
"If you’re a banker, the bill is tastier. While banks opposed the legislation, they should cheer for its passage by the full Congress in the New Year: There are huge giveaways insuring the government will again rescue banks and Wall Street if the need arises."
I am beginning to think that the banks are opposing legislation to make the regular folks think it is bad for them, that way the banks don't get the bad press of getting what they want and the people still get abused by their services...
Just a thought! I don't know how true it is but considering what has been passing as news these days, I could believe it.
This sounds like an excellent Idea to me, though when I entered my zip code the closest bank that came up was 15 miles away.
Welcome, SJ. Which of your many blogs do you call home? Indeed! Shelby is a snake!
Hill, bipartisanship with Repuglicans is always an even trade. They get 100% of the benefits; we get 100% of the liabilities.
Jim, you may love cousin Fat, but he's not too popular here. That guy can fill a litter box in a mighty whoosh!
Oso, I hope you are mistaken about Obama's motive. Time will tell.
Welcome Thomas. Those are good ideas and I have suggested most of them here. Doesn't the exemption in the bill protect ordinary investors from the tax? If not, the exemption needs to be adjusted.
Kevin, as I've said before, the banks are happy that this legislation is no tougher than it is (House version), but the still oppose it. The Senate version remains to be seen.
Mark, what's funny is that I live in downtown Portland and it offered zero choices for me, when I tried it.
“Welcome Thomas. Those are good ideas and I have suggested most of them here.”
Thanks TomKat and Happy New Year! Thanks also for your comment on my blog. It’s good that you thought of these ideas too. These are the kinds of things that would actually make a difference because they address root causes. This is where the discussion should begin rather than on populist measures that won’t accomplish what they intend.
“Doesn't the exemption in the bill protect ordinary investors from the tax? If not, the exemption needs to be adjusted.”
The bill gives the *illusion* of protection. The problem is that this is the sort of thing where it is impossible to shield the ordinary investor and some of the reasons aren’t entirely obvious to those not familiar with markets.
The following exemptions exist:
1. Mutual fund transactions by the individual investor
2. First $100K of purchases in a given year
3. Retirement funds
Here are some problems with this:
1. Mutual Funds
Mutual fund transactions by the individual investor are exempt. However, the transactions that the mutual fund company does on your behalf while managing your money are NOT exempt. This means that these costs will be passed down to ordinary investors through lower returns. The typical mutual fund does a lot of transactions in a year. If you were to take a look at the annual report for the funds you hold, I would bet that the turnover is over 100%. This would reduce your returns substantially over the course of your investing lifetime.
2. Pension Funds
Pension funds are not exempt. This means that they are in the same boat with the mutual fund companies.
3. $100K Exemption
This exemption is a total for the year, not by individual transaction (and is on purchases only). Any even somewhat active trader will blow through that exemption very quickly. There are many independent retail traders who rely on the markets for income (I include myself in this category). A tax of this magnitude could easily put many of them out of business. These aren't Wall Street employees. They are just ordinary middle-class people managing their own capital.
4. Retirement Funds
The problem here is a little more subtle. The transactions to the individual investor are exempt inside a retirement account. However, there is a hidden cost. The market makers who provide liquidity will pass the cost of the tax down to the individual through a widened bid-ask spread. This is the sort of the thing that will go unnoticed by the typical investor because they may not be all that aware of how their trades are executed. However, it is a real cost and it will be borne by the individual, not by Wall Street. In addition, the costs of this tax are high enough to put many liquidity providers out of business, which reduces competition among market makers and also contributes to a wider bid-ask spread. This means that even transactions inside a retirement fund will still be affected.
Thanks Thomas. Your first two and fiurth points make sense to me. On number three, people trading at that volume outside the confines of a self managed IRA would, in my opinion, fall into more speculative investment.
Perhaps a better solution would be to return the incom taxes of the top 5% to pre Reagan levels.
“Thanks Thomas. Your first two and fiurth points make sense to me. On number three, people trading at that volume outside the confines of a self managed IRA would, in my opinion, fall into more speculative investment.”
I dislike the speculative vs. non-speculative dichotomy. I prefer to look at investment decisions as either possessing an edge or no edge. But in keeping with the common usage of the term “speculative”, all investments are speculative, in my opinion. Even doing nothing by holding cash is speculative since it is an implicit bet in the value of the US dollar (and thus a bet on the fiscal and monetary policy of the country). Over the last decade, this has been a bad bet as the dollar has lost 34% of its value against the euro (for example) and over 70% of its value against gold.
Additionally, investors have many financial needs over their lifetimes that are not related to retirement so it does make sense to have a non-retirement account to cover those needs. There are many strategies the ordinary investor might use in the short-term (such as selling calls against a stock portfolio to generate income, for example) that aren’t speculative (again using the common usage of the term).
At any rate, it doesn’t require as much volume as you might think to make the exemption meaningless. Due to margin rules, the minimum account size required to make shorter-term activity viable is $25K. Leverage on that would boost the buying power to $50K-$100K (depending on holding period) so it doesn’t take much.
”Perhaps a better solution would be to return the incom taxes of the top 5% to pre Reagan levels.”
A tax on the income end is a much fairer way to go. A properly-scaled income tax would fall on those more able to afford it rather than a transaction tax which will end up falling on the middle class. To be really effective though, I think it would have to be combined with real reforms on Wall Street (such as those we discussed above) rather than illusionary populist measures. However, seeing as how Goldman Sachs and JP Morgan were the #2 and #4 contributors to Obama’s campaign respectively, I wonder if this can actually happen.
Thomas, you make some excellent points. Sadly, the banksters have bought their way into both parties. Obama's appointment of Geithner and Summers and his support for Bernanke's reconfirmation are my biggest criticism of him. However, the GOP is even more bought and paid for than the Dems.
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