The whirlwind of events across the Arab world this year has been so fierce, so unrelenting, and so dramatic in its progression, that it's easy to forget where and with whom it all began. It was little more than 10 months ago that Mohamed Bouazizi, a[...]
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Author Barbara Ehrenreich spent a year working minimum-wage jobs for her book, ‘Nicked and Dimed’ where she uncovered the truth– workers are not getting by in America.
She has a post on Common Dreams today, ‘Throw Them Out With the Trash: Why Homelessness Is Becoming an Occupy Wall Street Issue’.
The current prohibition on homelessness began to take shape in the 1980s, along with the ferocious growth of the financial industry (Wall Street and all its tributaries throughout the nation). That was also the era in which we stopped being a nation that manufactured much beyond weightless, invisible ?financial products,? leaving the old industrial working class to carve out a livelihood at places like Wal-Mart.
As it turned out, the captains of the new ?casino economy? — the stock brokers and investment bankers — were highly sensitive, one might say finicky, individuals, easily offended by having to step over the homeless in the streets or bypass them in commuter train stations. In an economy where a centimillionaire could turn into a billionaire overnight, the poor and unwashed were a major buzzkill. Starting with Mayor Rudy Giuliani in New York, city after city passed ?broken windows? or ?quality of life? ordinances making it dangerous for the homeless to loiter or, in some cases, even look ?indigent,? in public spaces.
In an interview with Pakistan’s Geo TV, Afghan President Hamid Karzai said his country would side with Pakistan in the event of armed hostilities between Pakistan and the United States. “God forbid, If ever there is a war between Pakistan and America, Afghanistan will side with Pakistan,” said Karzai. “If Pakistan is attacked and if the people of Pakistan needs Afghanistan’s help, Afghanistan will be there with you.”
In case anyone forgot, it was the DE-regulation of Wall Street in 1999 that caused the Great Recession and destroyed 10 million American jobs. Since 1935, the Glass-Steagall Act had protected bankers from their own greed and stupidity by keeping commercial banks out of the stock gambling business. Repealing Glass-Steagall handed the keys of the economy to the drunk, stoned teenagers of the finance industry and let them take off.
Regulations protect not just consumers (clean air, clean water, safe food, safe drugs) but also businesses - especially small businesses who need protection from the corporate behemoths who would otherwise crush them.
There's been a fair amount of work done lately to help demonstrate just how wrong Republicans are about regulations holding the economy back - this paper from the Economic Policy Institute's Lawrence Mishel is terrific - but folks should definitely take the time to review this piece from Bruce Bartlett.
As Bartlett, an economist and a veteran of the Reagan and H.W. Bush administrations, explained, Republicans have been told to argue that freeing the private sector of consumer safeguards and worker protections will reduce "uncertainty." Unfortunately for the GOP, from a policy perspective, they're living in fantasy land.Evidence supporting Mr. Cantor's contention that deregulation would increase unemployment is very weak. For some years, the Bureau of Labor Statistics has had a program that tracks mass layoffs. In 2007, the program was expanded, and businesses were asked their reasons for laying off workers. Among the reasons offered was "government regulations/intervention." There is only partial data for 2007, but we have data since then through the second quarter of this year. [...]
As one can see, the number of layoffs nationwide caused by government regulation is minuscule and shows no evidence of getting worse during the Obama administration. Lack of demand for business products and services is vastly more important.
These results are supported by surveys. During June and July, Small Business Majority asked 1,257 small-business owners to name the two biggest problems they face. Only 13 percent listed government regulation as one of them. Almost half said their biggest problem was uncertainty about the future course of the economy - another way of saying a lack of customers and sales.
Surveys from major news outlets, including conservative institutions like the Wall Street Journal, and the National Federation of Independent Business found the same thing: the private sector is concerned about customers and demand, not regulations.
Bruce concluded, "In my opinion, regulatory uncertainty is a canard invented by Republicans that allows them to use current economic problems to pursue an agenda supported by the business community year in and year out. In other words, it is a simple case of political opportunism, not a serious effort to deal with high unemployment."
An Associated Press analysis published this week reached the identical conclusion: the private sector isn't being held back by regulations; companies "aren't hiring because there isn't enough consumer demand." Republican economic policies, of course, intend to weaken demand, on purpose, because they simply don't believe this is the problem behind weak growth.
CHARLESTON, W.Va. - Federal regulators are seeking comments as they target a hazard in underground coal mines blamed for dozens of deaths.
A proposed rule from the U.S. Mine Safety and Health Administration addresses systems meant to warn miners when they get too close to continuous mining machines.
The agency is holding a Thursday public hearing for the proposal in Charleston.
Officials say run-ins with these machines killed 30 miners and injured another 220 between 1984 and last year. Most of those killed were operating these huge machines via remote control.
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From this Saturday's Forbes on Fox, more attacks on labor unions and calls to privatize the United States Postal Service. Host David Asman opened the segment talking about the postal union's decision to hire Ron Bloom, one of the advisers that helped steer the auto industry out of bankruptcy.
That was followed by a call from panel member Dennis Kneale to just shut down the whole Post Office and allow FexEx and UPS to buy it and in his words to ?chop it up.? Fellow panel member Victoria Barret, while disagreeing with Kneale that it's not possible to just ?junk the whole Post Office? and said she still likes sending Christmas cards, but of course thought that the union contracts need to be ripped up.
Here was host David Asman's response to that:
ASMAN: Well Steve, you can send Christmas cards for free on the Internet now! I mean the Internet changes everything, doesn't it?
To which Barret and Forbes responded, ?It's not the same.? Well, no it's not but how about someone reminding Asman that the Internet is not free?
Forbes continued with the fearmongering that if the Post Office is not privatized, tax payers are going to be on the hook for their pension funds and finally one of their panelists actually pointed out the real problem the Post Office is facing right now, which is that Congress has forced them to over fund their pensions to the tune of $75 billion and if some of that money was returned, it would solve their problems immediately.
Which was naturally met with scorn from the other panel members. When Asman also brought up the fact that shutting down the Post Office would likely harm services for those who live in rural areas, Forbes claimed that private industry would take care of the problem on its own and Dennis Kneale chimed back in and said if they're unhappy with not having service after the business is privatized, they can...get this... just move. So if you live in a rural area, according to Kneale you'd better suck it up and move to the city if you want to get mail service. What a guy. So much for those claims of ?compassionate conservatism.?
Our own Kenneth Quinnell has been following this story which you can read about here:
Used to be you had to be an unscrupulous hauler of hazardous chemical waste to be caught dumping poison on public property.
Now all you have to be is a giant unregulated bank with too much bad debt on the books.
And this is why we've been screaming about regulating derivatives! I kind of think that the Occupy movement is going to have something to say about this corporate sleight of hand that came to light earlier this week. Do they really think we're going to look the other way and let them stick us with a $74 trillion bill -- just to let good old "too big to fail" Bank of America off the hook? I don't think so:If you have any doubt that Bank of America is in trouble, this development should settle it. I'm late to this important story broken [...] by Bob Ivry of Bloomberg, but both Bill Black (who I interviewed just now) and I see this as a desperate (or at the very best, remarkably inept) move by Bank of America's management.
The short form via Bloomberg:Bank of America Corp. (BAC), hit by a credit downgrade last month, has moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits, according to people with direct knowledge of the situation...
Bank of America's holding company - the parent of both the retail bank and the Merrill Lynch securities unit - held almost $75 trillion of derivatives at the end of June, according to data compiled by the OCC. About $53 trillion, or 71 percent, were within Bank of America NA, according to the data, which represent the notional values of the trades.
That compares with JPMorgan's deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm's $79 trillion of notional derivatives, the OCC data show.
Now you would expect this move to be driven by adverse selection, that it, that BofA would move its WORST derivatives, that is, the ones that were riskiest or otherwise had high collateral posting requirements, to the sub. Bill Black confirmed that even though the details were sketchy, this is precisely what took place.
And remember, as we have indicated, there are some "derivatives" that should be eliminated, period. We've written repeatedly about credit default swaps, which have virtually no legitimate economic uses (no one was complaining about the illiquidity of corporate bonds prior to the introduction of CDS; this was not a perceived need among investors). They are an inherently defective product, since there is no way to margin adequately for "jump to default" risk and have the product be viable economically. CDS are systematically underpriced insurance, with insurers guaranteed to go bust periodically, as AIG and the monolines demonstrated.
The reason that commentators like Chris Whalen were relatively sanguine about Bank of America likely becoming insolvent as a result of eventual mortgage and other litigation losses is that it would be a holding company bankruptcy. The operating units, most importantly, the banks, would not be affected and could be spun out to a new entity or sold. Shareholders would be wiped out and holding company creditors (most important, bondholders) would take a hit by having their debt haircut and partly converted to equity.
This changes the picture completely. This move reflects either criminal incompetence or abject corruption by the Fed. Even though I've expressed my doubts as to whether Dodd Frank resolutions will work, dumping derivatives into depositaries pretty much guarantees a Dodd Frank resolution will fail. Remember the effect of the 2005 bankruptcy law revisions: derivatives counterparties are first in line, they get to grab assets first and leave everyone else to scramble for crumbs. So this move amounts to a direct transfer from derivatives counterparties of Merrill to the taxpayer, via the FDIC, which would have to make depositors whole after derivatives counterparties grabbed collateral. It's well nigh impossible to have an orderly wind down in this scenario. You have a derivatives counterparty land grab and an abrupt insolvency. Lehman failed over a weekend after JP Morgan grabbed collateral.
But it's even worse than that. During the savings & loan crisis, the FDIC did not have enough indeposit insurance receipts to pay for the Resolution Trust Corporation wind-down vehicle. It had to get more funding from Congress. This move paves the way for another TARP-style shakedown of taxpayers, this time to save depositors. No Congressman would dare vote against that. This move is Machiavellian, and just plain evil.
(also published to DKOS)I don't like occupying myself with politics very much. It's a part of life but a relatively minor part for me. If I had my druthers I would and pursue my real love which is art in all its forms. I am attuned and immersed in beauty[...]
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On Thursday, April 29, 2009, the Senate defeated, 45-51, Brad Miller's Cramdown legislation, which had already passed the House (234-191), dooming the country to the financial and economic catastrophe we're suffering through now. Not a single Republican voted for it-- and 11 conservative Democrats crossed the aisle to vote with the GOP, including three who are up for reelection next year: Ben Nelson (NE), Jon Tester (MT), and Tom Carper (DE). Just thought I'd mention it. I'll also mention that almost all two dozen Democrats in the House who voted with the GOP on this were subsequently defeated for reelection, although Jim Matheson (Blue Dog-UT), Ron Kind (WI), Larry Kissell (NC), and Dan Boren (Blue Dog-OK) managed to survive... so far.
Saturday AlterNet made the best attempt to date to get out the real story of OccupyTheBoardroom, reprinting 9 Angry, Heart-Breaking Messages to Wall Street's Elites From the 99%. Joshua Holland's compendium begins with a photograph of half a dozen well-heeled securities traders sipping champagne on a balcony high over Zuccotti Park as they look down on the Occupation below, "capturing," he writes, "the haughty detachment with which Big Finance has received this rapidly spreading expression of popular outrage."
Charlotte, North Carolina is the second largest banking center in the United States after NYC, home to Bank of America and East Coast headquarters for Wells Fargo. It was also the home of Wachovia before they went belly up in 2008. One of the most poignant letters AlterNet published, "My Father's Hands," was written by a woman in North Carolina named Liza.
Like you I?m from the Tar Heel state so I thought I?d tell you my story. A couple of years ago my father died waiting for a liver transplant. It was an ugly, horrible death and left me parentless while still in my 20s. My brother and I inherited the small ranch-style house my father worked his whole life to pay off. (Our mother died during our childhoods.) I wanted to take care of my father?s money so I invested it. Six months later I had lost over half of it when the crash happened. I lost half of my father?s life savings because of the corrupt practices of Wall Street. My father worked his whole life. He was the 11th child of a sharecropping family and was sent to the cotton fields before he was ten. He completed high school but there was no money for college so he went to work at blue-collar jobs which he used to support us his whole life.
When I think of the money I lost, I think of my father?s hands. I think of his broken, scarred hands that built a home and future for me. It wasn?t just money that Wall Street stole. Futures, trust, hard work and respect-- those are the things Wall Street corruption has stolen from the American People, not just money. I don?t think everyone on Wall Street is corrupt, but the system is, and I want to do my part to correct it, even if it?s just writing a letter like this. I owe my father that. Mr. Bowles, I hope you do your part too. Because of your position, you are a powerful person in our society. So I ask you, how will you use your power? What will your legacy be?
When Senator Barack Obama was running for president he told voters that he would support legislation to allow homeowners to get relief in bankruptcy court. The legislation would have repealed a bankruptcy provision that prohibits modifications of mortgages on a primary residence. ?I will change our bankruptcy laws to make it easier for families to stay in their homes,? he told voters at a campaign rally in September 2008, describing the bankruptcy exemption for mortgages as ?the kind of out-of-touch Washington loophole that makes no sense.?
Today cram-downs make even more sense than they did in 2009. The various bank proprietary loan modification programs and the government-sponsored loan modification programs are widely acknowledged to be failures for not helping enough homeowners and also for having high re-default rates. But one of the biggest unmitigated disasters about these programs is that homeowners who have succeeded in obtaining loan modifications actually have become mired in more debt. That is because instead of reducing homeowners overall debt, these loan modification programs have focused on lowering monthly payments on a homeowner?s primary mortgage by reducing interest rates and extending the term of the loan. In 2010, nearly 95 percent of active, permanent loan modifications resulted in homeowners? actually owing more debt on their homes than before the modification according to a Congressional Oversight Panel report.
The reason that we don?t have cram-downs is that the banks lobbied heavily against the 2009 bill. They said it would further destabilize home prices and that they would have to raise interest rates to account for the risk of underwater homeowners? having their mortgages modified in a bankruptcy. They also argued that bankruptcy reform would create a ?moral hazard? by rewarding irresponsible borrowers who took out mortgages that they couldn?t afford.
The misleading message on cram-downs that stuck in the minds of many voters came from CNBC host Rick Santelli. It was Santelli?s 2009 rant about cram-downs that launched the Tea Party. ?This is America!? Santelli told cheering traders on the floor of the Chicago Mercantile Exchange, ?How many of you people want to pay for your neighbor?s mortgage that has an extra bathroom and can?t pay their bills??
In contrast to candidate Obama, President Obama was conspicuously silent on cram-downs. According to ProPublica, Treasury Department staffers actually cautioned lawmakers against the bankruptcy reform legislation. Unfortunately for underwater homeowners, although the cramdown legislation passed Congress in March 2009, it was defeated the following month in the Senate by a vote of 45 to 51. Georgetown Law School professor Adam Levitin, who has written extensively on cram-down legislation, says that Obama?s lack of support doomed the bill. ?Had Obama put his weight into it, it would have passed,? says Levitin, ?It would have been a fight, but he was too chicken to have the fight.?
?The principal objective of the Obama administration and the Bush administration before that was to let the banks avoid taking immediate losses,? says Democratic Representative Brad Miller of North Carolina, who sponsored the cram-down bill, ?The bankruptcy law change was incompatible with that, it would have required the banks to recognize a lot of losses immediately and might very well have revealed some of them to be very nearly insolvent or actually insolvent.?
...Aside from propping up the country?s largest banks, there?s very little reason not to pass bankruptcy reform. In contrast to the Obama administration?s Home Affordable Modification Program, under which the taxpayer is partially footing the bill, court ordered mortgage cram-downs would cost the federal government nothing. Indeed, cram-down legislation requires no government bailouts or financial incentives for lenders or for borrowers. The 2009 CBO cost estimate of the proposed cram-down legislation shows that the federal government actually would have made money on the bill through the increase in bankruptcy filing fees.
...The argument that cram-downs would have rewarded irresponsible borrowers is also misleading. Chapter 13 Bankruptcy is not a get-out-of-debt-free option. It requires borrowers to live on a court-monitored budget for three to five years. Further, in many parts of the country, there are Americans who owe more than twice as much on their mortgages as their homes are worth. Many of these people are victims of predatory lending and appraisal fraud. The most authoritative official report that we have on the events that led to the 2007 meltdown, the Financial Crisis Inquiry Commission?s final report cites widespread instances of predatory lending during the housing bubble. For example, the commission?s report discusses how the quality assurance department of New Century, once the nation?s second-largest subprime lender, found evidence of predatory lending, legal and state violations and credit issues in 25 percent of the mortgages that they audited. Yet instead of reforming the company?s business practices, New Century executives dissolved their quality assurance department and terminated its personnel.
In addition to potentially helping millions of Americans get back on track, bankruptcy reform actually would have benefited the entities that own most of the outstanding secured mortgage debt in this country-- Fannie Mae, Freddie Mac, pension funds and private investors. ?Investors recognize that a 20 or 30 percent principal write down creates re-performance,? says Joshua Rosner, managing director at Graham Fisher & Co, a company that advises investors, ?and it beats absolutely a 70 percent plus loss in a default.?
Even one of the major unstated reasons for not passing the bankruptcy reform bill, protecting the nation?s largest banks, no longer holds water. Failure to pass the cram-down legislation has not in fact saved the banks from their travails. Bank of America, the nation?s largest bank, is going wobbly due in large part to its continuing problems with mortgage meltdown. If the cram-down legislation had passed and BoA had failed as a result, then so be it. Millions of Americans facing foreclosure would have had a much better shot at saving their homes, and that would have been a much bigger boon to the overall economy than bailing out the banks.
The allegations in civil lawsuits by private mortgage investors and insurance companies, if true, appears pretty clearly to be of criminal conduct. I've struggled with the issue of politics and criminal prosecutions. I think calls for "perp walks" can sound like an appeal to mob rule, but not prosecuting powerful people in the face of clear evidence of criminal conduct is a real problem for democracy. I think some may have discouraged prosecutions because they feared for our fragile banking system, but I fear for our fragile democracy if people believe that the powerful are immune. I think the lack of criminal prosecutions or even aggressive civil lawsuits has offended the sense of justice of many Americans, including me.
Just when you thought Perry couldn't flounder any more, he goes birther. How did he possibly raise so much cash with this level of silliness? PARADE via ThinkProgress:
Governor, do you believe that President Barack Obama was born in the United States?
I have no reason to think otherwise.
That?s not a definitive, ?Yes, I believe he??
Well, I don?t have a definitive answer, because he?s never seen my birth certificate.
But you?ve seen his.
I don?t know. Have I?
You don?t believe what?s been released?
I don?t know. I had dinner with Donald Trump the other night.
That came up.
And he said?
He doesn?t think it?s real.
And you said?
I don?t have any idea. It doesn?t matter. He?s the President of the United States. He?s elected. It?s a distractive issue.