He got it right last time. Senator Byron Dorgan, Democrat of North Dakota, was one of eight senators who stood up to oppose the repeal of the Glass-Steagall act in 1999. That repeal, which was signed into law by President Clinton exactly 10 years ago today, broke down the barriers between commercial banking and investment banking, and led to the growth of behemoth financial firms that were able to take enormous risks with impunity, because they were "too big to fail." "I think we will in 10 years' time look back and say we should not have done this," Dorgan said back then. The video of his speech has become something of a cult favorite for wonks — ten years, a $700 billion bailout and a major financial crisis later.
Tag Archives | Bail Outrage
It's a new week, a new year, and some, erroneously believe a new decade. What's not new is the stranglehold the banks have on our economy, quietly stashing billions for more bonuses, while still restricting the flow of credit. Bad loans have been supplanted by no loans. Writers on the left continue to go after one bankster — the one we love to hate: Goldman Sachs, which has become the poster child for profiteering and even serving bad coffee in their cafeterias. Most ignore the rest of the avaricious industry which is still volatile with big pockets of insolvency and dependence of government bailout funds. While the media has recently focused on the terror threat posed in Detroit, the terrifying reality in Detroit is generally ignored. The Associated Press reports...
“When plunder becomes a way of life for a group of men, they create for themselves in the course of time, a legal system that authorizes it, and a moral code that glorifies it.”
– Political economist Frederic Bastiat, The Law (1850)
“I used to think of Wall Street as a financial center.
I now think of it as a crime scene.”
– Filmmaker Danny Schechter, Plunder (2009)
I am an old-fashioned “follow-the-money” journalist. As I’m writing this, most economists have learned to downplay fear and panic and up-play the “resilience” of the market. It’s a belief that all we need is confidence and then, all will be right with the world. Sadly, journalism has gone along with this charade by first denying the crisis and then avoiding investigating its architects and beneficiaries.
Three years ago, by choosing to be an “investigative” journalist, I made the film In Debt We Trust, with the idea in mind that I was examining “America before the Bubble bursts” (the subtitle of that film).… Read the rest
Posted on Before It’s News:
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The price tag for the Wall Street bailout is often put at $700 billion—the size of the Troubled Assets Relief Program. But TARP is just the best known program in an array of more than 30 overseen by Treasury Department and Federal Reserve that have paid out or put aside money to bail out financial firms and inject money into the markets. To get a sense of the size of the real $14 trillion bailout, see the chart here. Below, a guide to the pieces of the puzzle:
Money Market Mutual Fund: In September 2008, the Treasury announced that it would insure the holdings of publicly offered money market mutual funds. According to the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), these guarantees could have potentially cost the federal government more than $3 trillion [PDF].
Douglas A. McIntyre writes in MSN Money:
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There has been plenty of evidence that firms like Goldman Sachs have had such huge profits that their bonus payouts may be at all-time highs.
The federal government has systematically begun to control bank pay packages. The Treasury “pay czar” is effectively controlling compensation at companies which still owe TARP money. The Fed is pressuring other large financial firms to tie pay to risk.
None of those efforts seems to be working well, because bankers are ignoring the signals from Washington.
A new compensation survey described in the Wall Street Journal predicts that Wall Street incentive pay will rise 40% this year. For those in the fixed-income part of the industry, the increase could be closer to 60%.
Data about pay packages will be available, in some cases, as banks release their proxies. It is safe to say that the study and other data from Wall Street show that being a financier was very rewarding this year.
KAREN MATTHEWS writes on the AP via Google News:
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Some of New York’s biggest companies, including Wall Street giants Goldman Sachs and Citigroup, received doses of swine flu vaccine for at-risk employees, drawing criticism that the hard-to-find vaccine is going first to the privileged.
Hospitals, universities and the Federal Reserve Bank also got doses of the vaccine for employees who need it the most, such as pregnant women or chronically ill workers, according to the city’s health department.
In order to receive the vaccine, companies had to have their own medical staff. Distributing large doses of the vaccine to such businesses is “a great avenue for vaccinating people at risk,” said Jessica Scaperotti, spokeswoman for the city Department of Health and Mental Hygiene.
But critics said Wall Street firms should not have access to the vaccine before less wealthy Americans. “Vaccines should go to people who need them most, not people who happen to work on Wall Street,” Democratic Sen.
Dylan Ratigan writes on the Huffington Post:
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Lately I have been using the phrase “Corporate Communism” on my television show. I think it is an especially fitting term when discussing the current landscape in both our banking and health care systems.
As Americans, I believe we reject communism because it historically has allowed a tiny group of people to consolidate complete control over national resources (including people), in the process stifling competition, freedom and choice. It leaves its citizens stagnating under the perpetual broken systems with no natural motivation to innovate, improve services or reduce costs.
Lack of choice, lazy, unresponsive customer service, a culture of exploitation and a small powerbase formed by cronyism and nepotism are the hallmarks of a communist system that steals from its citizenry and a major reason why America spent half a century fighting a Cold War with the U.S.S.R.
And yet today we find ourselves as a country in two distinctly different categories: those who are forced to compete tooth and nail each day to provide value to society in return for income for ourselves and our families and those who would instead use our lawmaking apparatus to help themselves to our tax money and/or to protect themselves from true competition.
In an attempt to squeeze more revenue out of consumers who don’t rack up much debt, Citigroup, Bank of America, and other credit card companies are adding new fees. According to USA Today credit card users are being hit with new “inactivity fees” and fees for not putting enough debt on your credit cards. Consumers thinking about canceling their cards face taking a hit to their credit scores for closing an account.
Other consumers may have no choice – Citibank has been closing some credit card accounts without reason or warning, damaging their customers credit ratings.
I cut-up my credit cards last night.
The Huffington Post reports:
Derivatives is one of the dirty words of the financial crisis. Though these often-risky bets were blamed by many for helping fuel the credit crunch and the downfall of Lehman Brothers and AIG, it seems that Wall Street has yet to learn its lesson. U.S. commercial banks earned $5.2 billion trading derivatives in the second quarter of 2009, a 225 percent increase from the same period last year, according to the Treasury Department.