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Archive for the ‘financial meltdown’ Category

The Republic of Wall Street Saga Goes On

Posted by msrb on February 15, 2009

Can Congress “walk and chew gum at the same time?”

by Ralph Nader                                                                               February 14, 2009

This phrase used by President Lyndon Johnson for one of his political opponents comes to mind at a time early in the first 100 days of the Obama Administration when supposedly many long-overdue changes and rollbacks are possible.

It is not just that Congress is completely absorbed with the tax-cut-stimulus package. It is stasis that seems to be enveloping, even within its numerous well-funded and staffed committees in the House and Senate, from even the signaling of serious movement toward rolling back Bush-pushed legislation and starting widely supported forays that take hope to change.

The continuation of this state of stasis is made more likely because the Republican minority is feeling its oats. It put the White House on the defensive during the struggle to enact economic recovery legislation even though previous Republican policies and coddling of Wall Street for eight years build a steep cliff for financial collapse. Add the de-regulatory moves of 1999 and 2000 by the Clinton-Rubin crowd and the financial meltdown accelerates.

There is something else operating. One gets the feel on Capitol Hill among some fairly sharp people of a lack of horizon, a paucity of progressive determination, a sense of being overwhelmed by the corporate forces still bearing down on Congress—easily the most powerful branch of government under our Constitution.

But Congress does not act as if it is the most powerful branch. It routinely abdicates its constitutional responsibilities—the declaration of war authority and the plenary authority to investigate and require access to information in the executive branch.

Even after the Democrats took control of the Congress in January 2007, George W. Bush again and again got his way including a rubber stamp for the huge Iraq and Afghanistan war budgets outside of the normal appropriations processes.

Efforts by Senator Russ Feingold and Cong. John Conyers to move a modest censure resolution of Bush and Cheney for their many constitutional and statutory violations were aggressively rejected by their leaders—Speaker Nancy Pelosi and Senator Harry Reid. In January 2007, Pelosi and Reid two took impeachment off the table allowing the most chronically impeachable presidency in our history to continue undisturbed.

Some staffers in Congress privately assert that the Democrats are not acting like a majority party. It is worse than that. They are not acting—period.

From their majority status in 2007 to 2009 and a Democratic President in the White House, the Congressional Democrats are not moving swiftly to repeal the ban on Uncle Sam negotiating drug prices from volume discounts under the drug benefit law. They are not moving to amend the Patriot Act, regain control of warrantless surveillance, strengthen the corporate criminal laws and enforcement budgets. Congress is not even pushing to require taxing Hedge Fund manager’s income as ordinary income not as capital gains.

I cite these policies because they are policies much favored by many Democratic lawmakers. But in practice lawmakers duck and duck and duck from translating their beliefs into contentious action vis-à-vis the lobbyists and their captive legislators.

Senator Chris Dodd and the vast majority of the American people want to do something about credit card company abuses and gouges. But he is surrounded not just by the Republicans on the Senate Banking Committees but high-ranking Democrats beholden to the financial goliaths who, are demanding and receiving hundreds of billions of dollars in taxpayer bailouts.

There is word from the politicians that consideration of health care insurance—apart from a quickly enacted expansion of some coverage for more poor children—will be put off for a year.  The trade unions’ top priority to enact labor law reforms, supported by Obama during his presidential campaign, are being held back by the Democrats.

There is even doubt whether the District of Columbia will get a voting Representative in the House when push comes to shove in the Senate.

The one-subject-at-a-time attitude is coming from the White House. “Obama doesn’t want it now” is a common phrase used by legislators to excuse themselves from exercising the separate but equal Congressional powers. This pretext applies to taking away some of the hugely expensive and unnecessary weapons systems like the F-22 aircraft decried by many military and retired military analysts. The vast, bloated military budget is sacrosanct on Capitol Hill as it is in the White House.

At a time of widely perceived needs for Congressional action, with large corporations busy applying for corporate welfare and on the defensive, the Democrats are not generating any momentum for standing for and with the people. Even in the midst of food contamination, illnesses and fatalities, they cannot turn around forty years of delay on giving the Food and Drug Administration adequate authority and inspectors to protect our food supply.

It is going to take a very focused civic jolt from you all to your Senators and Representatives. A couple of million jolters from our large country can get the train moving on the tracks. It doesn’t take much time to holler, yell or bellow with the facts.


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Ouch, there goes the 2008 Nobel prize for economics

Posted by msrb on October 14, 2008

submitted by a reader

Paul [“I’m slightly less terrified today than I was on Friday”] Krugman has been “Nobelificated!”

Paul Krugman, aka “why some countries dominate international trade [try the magic ‘Z’ word,]” a professor at Princeton University, said:

“We are now witnessing a crisis that is as severe as the crisis that hit Asia in the 90s. This crisis bears some resemblance to the Great Depression.”

So, professor Einstein Krugman, it must be divine intervention that helped markets to recover miraculously in just a few days, mustn’t it! Someone must have been praying real hard to Mammon! Or else, the world governments must have agreed to the blackmail fee!

[What took you so long?]
Princeton economics and international affairs professor Paul Krugman listens during his introduction as the 2008 Nobel prize winner in economics at a new conference on the campus of Princeton University in Princeton, New Jersey, October 13, 2008. REUTERS/Tim Shaffer. Image may be subject to copyright.

He said news of the prize took him by surprise. [Well, isn’t that a coincidence? My colleagues and I are surprised every year when they start dishing out the Nobel prizes.  “I took the call stark naked as I was about to step into the shower,” he told a news conference. [We are only interested to know what your hands were doing at the time!]

Praising the European leaders for saving the world from financial catastrophe [sic,] Krugman said: “I’m slightly less terrified today than I was on Friday.” [Conclusion:  His terror of a financial meltdown eased over a mere weekend!]

The Royal Swedish Academy of Sciences which awards the $1.4 million prize to the sciences’ “elite” [and since when economy was a science?] said it “recognized Krugman’s formulation of a new theory that addresses what drives worldwide urbanization.” Reuters reported.

“He has thereby integrated the previously disparate research fields of international trade and economic geography,” the committee said. “Krugman’s approach is based on the premise that many goods and services can be produced more cheaply in a long series, a concept generally known as economies of scale.”

“Krugman’s theory clarifies why trade is dominated by countries that not only have similar conditions but also trade in similar products.” Reuters said.

And what does all that mean in layman’s language? “The prize is ours and we would only award it to selected individual who not only fight tooth and nail to protect the collapsing system, of which we are a part, they also manage to formulate their justification in economic mumbo jumbo.

In a world whose dominant system of finances is a proven abject failure, it’s interesting to find people who reward the economic morticians to beautify the putrid corpse of capitalism!

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Posted in divine intervention, Financial markets blackmail, financial meltdown, Great Depression, worldwide urbanization | Tagged: , , , , | 2 Comments »

Who Needs Corporations?

Posted by msrb on September 24, 2008

Wall Street Bailout: A Terminal Moral Hazard!

The proposed bailout of Wall Street is nothing short of rewarding a gang of thieves for robbing the bank.

Edward S. Herman, a professor emeritus of finance at the Wharton School, the University of Pennsylvania, said today:

“Essentially, the Bush administration plan is Wall Street bailing itself out with taxpayers’ money, after Wall Street had failed to carry out its financial functions with efficiency and integrity, and with the bailout organized by one of its own (Paulson) who had resisted all reforms that might have prevented the crisis. This amounts to a hard-to-beat conflict-of-interest program.

The victims of the financial crisis get nothing in this bailout, the taxpayers get no stake or payback in exchange for their $700 billion payout, and the difficulty in evaluating the purchased assets by a broken regulatory system makes it likely that the folks who are responsible for and have profited from this crisis may be able to squeeze a further windfall out of the buyout process.”

Herman has authored books including “Triumph of the Market” and “Corporate Control, Corporate Power.”

Herman’s esays can be downloaded here: Coldtype and The Threat of Globalization

The Absurd Premise of Corporate Personhood

Lewis Pitts, a public interest lawyer in North Carolina and a member of the Program on Corporations, Law & Democracy, said today:

“It is striking that nearly $800 billion can be magically produced to bail out financial institutions when for years we’ve heard there isn’t enough money for universal health care, fully funded, quality public schools, to fully fund current promises of services to children such as foster care, special education or mental health treatment. The problem is far deeper than needing more regulation of corporations and the economy. The recent past tells us the bailouts will simply prop things up to allow a return to deregulated, profits-before-people policies that cause human misery for most people and huge wealth for a few.  Look who the regulators will be: types like Ben Bernanke and Henry Paulson, who are true-believers in free market fundamentalism except when government bailout is needed to prop up key financial institutions. What this crisis moment should open up for debate is the need for real democratic decision-making and planning of the economy so the interests of the majority are served. This historic moment begs us to question the basic premise of capitalism that as John Maynard Keynes once said ‘is the extraordinary belief that the nastiest of men for the nastiest of motives will somehow work for the benefit of all.’

“One absurd premise of today’s capitalism is the notion of corporate personhood, the present legal concept that a corporation is a ‘person’ with constitutional rights that can be wielded against real human beings and defeat their democratically enacted laws designed to protect life and nature from corporate harm. Corporate regulation and government intervention in the market and economy are crucial. However, having Foxes, like Bernanke and Paulson, guarding the Henhouse will never provide the systemic, democratic changes needed. Now is the time we must re-think the notion of democracy, civil and economic, and whether we even have an approximation of government of the People, by the People, and for the People. These are the real homeland security issues.”

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