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Planetary Rescue Operations [Filtered & blocked by Google!]

Posts Tagged ‘main street’

Wall Street: The Biggest Threat to the U.S. Economy

Posted by msrb on February 1, 2009

The Moderators and contributors of this blog have identified Wall Street as the No. 1 threat to the U.S. economy and therefore its  national security. Our colleagues at EDRO have argued that the “ten-trillion-dollar bailout-stimulus-Wall-Street-Monopoly-money plan” won’t work unless Wall Street is eliminated and the Federal Reserve system is abolished and replaced with a nationalized central banking system.

In the following essay, Ralph Nader, citing from Why Wall Street Can’t Be Fixed and How to Replace It: Agenda For a New Economy by David C. Korten, asks:

“First, do Wall Street Institutions do anything so vital for the national interest that they justify trillions of dollars to save them from the consequences of their own excess?

“Second is it possible that the whole Wall Street edifice is built on an illusion of phantom wealth that carries deadly economic, social, and environmental consequences for the larger society?

“Third, are there other ways to provide needed financial services with greater results and at lesser cost?”

Wither Wall Street

by Ralph Nader [Received Sat 1/31/2009]

Soon after the passage in 1999 of the Clinton-Rubin-Summers-P. Graham deregulation of the financial industry, I boarded a US Air flight to Boston and discovered none other than then-Secretary of the Treasury Lawrence Summers a few seats away. He was speaking loudly and constantly on his cell phone. When the plane took off he invited me to sit by him and talk.

After reviewing the contents of this Citibank-friendly new law called the Financial Modernization Act—I asked him: “Do you think the big banks have too much power?”

He paused for a few seconds and replied: “Not Yet.” Intrigued by his two word answer, I noted the rejection of modest pro-consumer provisions, adding that now that the banks had had their round, wasn’t it time for the consumers to have their own round soon?

He allowed that such an expectation was not unreasonable and that he was willing to meet with some seasoned consumer advocates and go over such an agenda. We sent him an agenda, and met with Mr. Summers and his staff. Unfortunately, neither his boss, Bill Clinton, nor the Congress were in any mood to revisit this heavily lobbied federal deregulation law and reconsider the blocked consumer rights.

The rest is unfolding, tragic history. The law abolished the Glass-Steagall Act which separated commercial banking from investment banking. This opened the floodgates for unwise mergers, acquisitions and other unregulated risky financial instruments. Laced with limitless greed, casino capitalism ran wild, tanking economies here and abroad.

One champion of this market fundamentalism was Alan Greenspan, then chairman of the Federal Reserve. Last October before a House Committee, Greenspan admitted he was mistaken and expressed astonishment at how corporations could not even safeguard their own self-interest from going over steep speculative cliffs.

Greenspan and Summers were deemed “brilliant” by the press and most of Congress. Summers’ predecessor at Treasury—Robert Rubin—was also a charter member of the Oracles—those larger-than-life men who just knew that the unfettered market and giant financial conglomerates would be the one-stop shopping mart consumers were assumed to be craving.

Now the world knows that these men belong to the “oops oligarchy” that bails itself out while it lets the companies collapse into the handcuffed arms of Uncle Sam and bridled taxpayers who have to pay for unconditional megabailouts. Instead of the Wall Street crooks being convicted and imprisoned, they have fled the jurisdiction with their self-determined compensation. Corporate crime pays, while pensions and mutual fund savings evaporate.
Now comes the next stage of the Washington rescue effort in a variety of stimulus packages which every vendor group imaginable wants a piece of these days. When trillions are offered, many come running.

As the public focus is on how much, when and where all this money should be spent, there are very serious consequences to be foreseen and forestalled. First, consider how much more concentrated corporate power is occurring. Forced or willing mergers, acquisitions and panic takeovers of big banks by bigger banks along with bankruptcies of companies further reduce what is left of quality competition for consumer benefit.

Remember the anti-trust laws. Obama needs to be their champion. The fallout from the Wall Street binge is likely to lead to a country run by an even smaller handful of monopolistic global goliaths.

In the stampede for stimulus legislation, there is a foreboding feeling on Capitol Hill that there is no proposal on the table to pay for it other than by the children and grandchildren. Just the opposite is raining down on them. Everybody including the private equity gamblers, Las Vegas casinos and Hollywood studios along with the banks and auto companies are looking for tax breaks.

So with the economy deteriorating and taxes being cut, where is the enormous money coming from? From borrowing and from printing money. So look out for big time inflation and decline in the dollar’s value vis-à-vis other currencies.

In all the hundreds of pages of stimulus bills, there is nothing that would facilitate the banding together of consumers and investors into strong advocacy groups. We have long proposed Financial Consumer Associations, privately and voluntarily funded through inserts in the monthly statements of financial firms.

If this bailout—stimulus—Wall Street funny money waste, fraud and abuse sounds confusing, that is because it is. A brand new paperback “Why Wall Street Can’t Be Fixed and How to Replace It: Agenda For a New Economy” by long-time corporate critic, David C. Korten will explain some of the wheeling and dealing.

You don’t have to agree with all or many of Korten’s nostrums. Just read Part II—The Case For Eliminating Wall Street. He considers three central questions:

First, do Wall Street Institutions do anything so vital for the national interest that they justify trillions of dollars to save them from the consequences of their own excess?

Second, is it possible that the whole Wall Street edifice is built on an illusion of phantom wealth that carries deadly economic, social, and environmental consequences for the larger society?

Third, are there other ways to provide needed financial services with greater results and at lesser cost?  END.

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Posted in bailouts, phantom wealth, stimulus plan, tax breaks, U.S. National Security | Tagged: , , , , | 9 Comments »

Taxpayers Taken to the Cleaners BIG TIME!

Posted by msrb on October 4, 2008

submitted by a reader

Some More of Other People’s Money [OPM]

As expected, the House sells out to Wall Street

The house signed bailout plan, and so did Mr Bush, probably in record time—just in case someone changed their mind!

In scenes reminiscent of selling the Iraqi invasion to find the illusive WMD, the House readily approved the bailout plan to search and destroy the “Weapons of Monetary Discomfort.”  It took less than 90 minutes for Pelosi to sign and enroll the bill, and for Bush to sign it into law!

Hail to Thee

House Speaker Nancy Pelosi (center) holds aloft the $700 billion financial bailout bill after signing it. Reuters/Jonathan Ernst. Image may be subject to copyright.

Hailing Democratic and Republican leaders alike, President [sic] Bush said: “We have shown the world that the United States of America will stabilize our financial markets and maintain a leading role in the global economy.” As to why the market found itself in a mess in the first place, he had nothing to say.

Speaking on behalf of probably a lot of Reps., Sue Myrick (R-N.C.), who like many voted for the bill after initially opposing it said: “I may lose my race over this, but that’s OK. Because I believe in my heart I’m doing the right thing.”

Rep. Zach Wamp (R-Tenn.), referring to “blue dog” fiscal conservatives said: “On Monday I cast a blue dog vote. Today I am casting a red, white and blue vote for this country.” Reiterating his approval for the bailout package, Wamp urged colleagues to “hold your vote over the heart and vote yes.” He then quoted Warren Buffet why the bailout was necessary for the nation: “We don’t have any choice [because] small businesses can’t meet their payrolls. Pension funds are upside down.” However, he didn’t say what the lawmakers should do in the next “meltdown.”

Selling Out Americans to Save America

Rep. Jim Marshall (D-Ga.), scared out of hits wits for selling out his voters,  has already begun a TV ad campaign in his district proclaiming, “I don’t like this rescue plan any more than you do.” He didn’t say why he disliked the plan, of course, was it some minor tremor, or a major fault line?

Traders pause to watch the House vote on television on the floor of the New York Stock Exchange today in New York City. The U.S. House of Representatives approved a $700-billion bailout of the U.S. financial system. Spencer Platt/Getty Images. Image may be subject to copyright.

The general excuse for voting is pretty much the same across the board. The elected Reps are telling the electorate that they, the electorate, have no idea what’s good for them. And although they, the Reps themselves, don’t like the plan either, they have to agree to it. “I’m not going to stand by and let this crisis undermine our economy and damage the financial future of everyone in America.” Marshall declared.

Hold on a moment, Jim Marshall, if we the electorate don’t like the idea because we believe it’s bad for the economy, and you as our Rep agree that it’s a bad idea, too, then why must you act against our wish and vote for it?

Democratic Suicide on Behalf of America

Rep. Howard Coble (R-N.C.), one of the “hero’s” of the day, who also supported the bill after first opposing it, said “the sky may fall tomorrow, but it will fall upon my head. It won’t fall upon anyone else.”

This is truly the politics of self sacrifice, when the Reps become “democracy suiciders,” by destroying both their political future and the voice of their electorate to, in the words of Jim Marshall, save the “financial future of everyone in America [sic.]”

“Do I still have concerns about how this will affect the free market system? Yes, but  we have to act and we have to act now [because] if we don’t solve these problems [then] America will fail.” Said Rep. Gresham Barrett (R-S.C.).

Stealing money from Mr. and Mrs. Jones on Main Street and  giving it to Mr and Mrs Smith on Wall Street

Pelosi, hammering the final nail, said, “While the focus has been on Dow Jones and Wall Street, we are addressing the real pain felt by Mr. and Mrs. Jones on Main Street.” [And the only possible way to help Mr. and Mrs. Jones on Main Street, of course, is by stealing their wallet and purse and  giving it to Mr and Mrs Smith on Wall Street.]

California Gov. Arnold Schwarzenegger, in a letter read by Rep. Lofgren (D-San Jose), warned: “The credit market has already frozen up to the point that it chills even the state of California’s ability to meets its short-term cash flow needs.”  [And we need lots of money for the 2009 wildfires, I must tell you in advance!]

The Miracles of Capitalism

Rep. Devin Nunes (R-Visalia), a critic of the bailout extravaganza, warned against Paulson having the power to buy toxic mortgages. “If the secretary wants to run a hedge fund, he should go back to Wall Street,” he said.

Rep. Dennis Kucinich (D-Ohio), referring to the case of Addie Polk, 90, who shot herself Wednesday as deputies tried to evict her, said: “This bill does nothing for the Addie Polks of the world [because it] fails to address the fact that millions of homeowners are facing foreclosure.”

“[The bill] will take care of Wall Street,” Kucinich said, “but democracy is going down here.”

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Posted in Democracy Suicider, Democratic Suicider, Dennis Kucinich, Federal Reserve, Kucinich, OPM, Other People's Money, WMD | Tagged: , , , , | 3 Comments »