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Seven years after the financial crisis began, many of the conditions that helped cause the near collapse of the U.S. banking system—and that were used to justify the multi-trillion-dollar U.S. government bailout of mammoth financial institutions—endure, warns a new report from the Corporate Reform Coalition (CRC).
Titled Still Too Big to Fail (pdf), Thursday’s report charges that since the meltdown began in 2008, regulators have failed to make sufficient progress on key components of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or to boost transparency in political spending.
According to the CRC, which is made up of more than 75 good governance, organized labor, and environmental groups, action on both these fronts is necessary in order to prevent another financial disaster.
“The top six bank holding companies are considerably larger than before, and are still permitted to borrow excessively relative to the assets they hold,” the report states. “They are dangerously interconnected and remain vulnerable to sudden runs, because they borrow billions of dollars from wholesale lenders who can often demand their cash back each and every day.”
It goes on: “Banks can still use taxpayer-backed insured deposits to engage in high-risk derivative transactions here and overseas. Compensation incentives fail to discourage mismanagement and illegality, given that when legal fees, settlements, and fines mount, it is usually the shareholders, not the corporate executives who pay.”
And, the report warns, “[s]hould one of these giant banking firms fail again, it appears that the damage will not be contained.”
“Avoiding another meltdown depends on the will of federal regulators to use the new powers they were granted in the Dodd-Frank Wall Street Reform and Consumer Protection Act,” said Jennifer Taub, author of the report and professor of law at Vermont Law School. “If they behave as if they are beholden to the banks, we will likely face a more severe crisis in the future.”
Taub, also the author of the financial crisis book Other People’s Houses, highlights—”in plain language”—key regulatory reforms necessary to avert another crisis, including:
- ending bailouts by requiring the largest banks to provide credible “living wills” that show how they can file for bankruptcy or be resolved by the FDIC without triggering a financial crisis;
- further reducing excessive borrowing by the top six banks;
- reducing dependence by banks and other financial firms on overnight and other short-term borrowing;
- prohibiting banks from evading derivatives regulation through use of foreign subsidiaries;
- improving bankers’ accountability through rules around incentive pay and bonuses;
- requiring corporate political spending disclosure “so as to begin to deal with the influence peddling that impacts Congress and regulators”
In a statement, Lisa Gilbert, director of Public Citizen’s Congress Watch division, lauded that final recommendation. Public Citizen, a CRC member, points out that the report’s call for corporate political spending disclosure adds to increasing pressure on the U.S. Securities and Exchange Commission (SEC) to act on a 2011 rulemaking petition—which has garnerd 1.2 million signatures in support—calling on the agency to require publicly held companies to disclose political spending.
“More transparency on the part of Wall Street would better serve both our economy and our democracy,” Gilbert said. “Shareholders deserve to know how companies are spending their money to influence financial policy. Without transparency there can be no accountability.”
Fuck us once, shame on you, fuck us twice… President Obama is scheduled to visit Nike’s Oregon headquarters on Friday to promote the Trans-Pacific Partnership (TPP). Yes, Nike – an Oregon company that grew to billions by outsourcing jobs to overseas sweatshops, an Oregon company that sets up P.O.-box subsidiaries in tax havens to avoid paying U.S. taxes, an Oregon company that uses threats to extort tax breaks from its “home” state.
Nike isn’t the solution to the problem of stagnant wages in America. Nike is the problem.
It’s true that over the past two years Nike has added 2,000 good-paying professional jobs at its Oregon headquarters, fulfilling the requirements of a controversial tax break it wrangled from the state legislature. That’s good for Nike’s new design, research and marketing employees.
But Nike’s U.S. workers make only a tiny percent of Nike’s products.
In fact, Americans made only 1 percent of the products that generated Nike’s $27.8 billion revenue last year. And Nike is moving ever more of its production abroad. Last year, a third of Nike’s remaining 13,922 American production workers were laid off.
Most of Nike’s products are made by 990,000 workers in low-wage countries whose abysmal working conditions have made Nike a symbol of global sweatshop labor.
YO! Phil, thanks for the little money you’ve spent here. Now get the fuck out.
You’re not welcome here.
Fuck the Ducks.
“After more than five years of negotiations under conditions of extreme secrecy, on March 25, 2015, a leaked copy of the investment chapter for the Trans-Pacific Partnership (TPP) was posted. Public Citizen has verified that the text is authentic. Trade officials from the United States and 11 Pacific Rim nations – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam – are in intensive, closed-door negotiations to finish the TPP in the next few months.”The leaked text provides stark warnings about the dangers of ‘trade’ negotiations occurring without press, public or policymaker oversight. It reveals that TPP negotiators already have agreed to many radical terms that would give foreign investors expansive new substantive and procedural rights and privileges not available to domestic firms under domestic law.”
Obama is as guilty as the rest of them.
Dave Lindorff: With Republicans now in control of both houses of Congress, the current president already on record as supported cuts in Social Security and Medicare, and all signs pointing to the likelihood that the 2016 election could bring us either a neo-liberal or a neo-conservative president, and an increasingly Republican-dominated Congress, it’s time for an aggressive mass movement built around defending and expanding both those critical public funding programs.
The first step is getting out the truth that Social Security is not broke or doomed, but simply needs to be better funded by ending the free pass given to the wealthy. Simply eliminating the cap on income subject to the FICA tax, currently set at the first $118,500 of earned income, would make the system fully able to pay all promised benefits for the next century or more. Extending the tax to cover unearned income — basically capital gains (a tax that only impacts the wealthy) would allow for an expansion of benefits.
There is today $2.8 trillion in the Social Security Trust Fund, a fund that was created by a compromise reform reached by President Ronald Reagan and a Democratic Congress led by House Speaker Tip O’Neill back in 1983. The idea at the time was to have Baby Boomers and their employers pay more into the system ahead of the time they would be retiring, when their numbers would place a burden on current workers (the Boomers’ kids and grandkids), since the system has always since its inception financed current retirees’ benefits through current workers’ FICA payroll tax payments. (The reform also raised the full retirement gradually from 65 to 66 and later to 67 for people born after 1964.)
That advance funding of Boomer retiree benefits is now starting to be tapped but that is what was supposed to happen to it, a point the doom-sayers and political scare-mongers fail to mention. It turns out, though, that the advance funding was not large enough for several reasons. One, very positive, is that people are living longer than projected because of improved nutrition and medical advances. Another is that a series of recessions and market collapses, especially during the “lost decade” of 2000-2010, caused in large part by corrupt investment banks in 2001 and by Wall Street’s mega-banks turned casinos in 2007-9, cut severely into FICA contributions, as well as into workers’ personal savings and net worth.
Right-wing and corporate propaganda to the effect that the Trust Fund is smoke and mirrors or just “IOU” scrips, is absurd…
That means you Greg Walden, trust-funder punk who’s never done a day’s work in your life and don’t even live in Oregon… you don’t represent Oregon.
The differences between the four budget proposals recently put forth by President Barack Obama, both Republican-majority houses of the U.S. Congress, and the Congressional Progressive Caucus are “stark,” according to a new analysis—while some provisions in the GOP blueprints “completely miss the mark in responding to what Americans say they want.”
The National Priorities Project (NPP), a non-profit, non-partisan research organization dedicated to making the federal budget process transparent, released Competing Visions on Friday.
The report compares how each budget proposal responds (or not) to the stated policy priorities of the American people, on key issues including jobs, education, Social Security, Medicare and Medicaid, food assistance, and military spending, as well as proposed strategies for tax reform and deficit reduction.
“Our analysis shows that, in most spending categories, the Congressional Progressive Caucus and the president would do the most to address the priorities voiced by the majority of Americans,” said Jasmine Tucker, research analyst for NPP and author of the report. “In some areas, the House and Senate budget proposals completely miss the mark in responding to what Americans say they want.”
For example, on the issue of taxing the wealthy, according to the NPP analysis:
- 68 percent of Americans think wealthy households don’t pay enough in taxes.
- The Obama budget proposal raises top capital gains tax rate to 28 percent and closes the “trust fund loophole” that allows heirs to avoid taxation, raising $208 billion over 10 years. Places limits on tax deductions for top income earners and implements the Buffett Rule ensuring a minimum tax rate for the wealthy. Places limits on tax deductions for top income earners and ends the “carried interest” loophole that benefits hedge fund managers to raise $17.6 billion over 10 years.
- The House budget calls for comprehensive tax reform that would lower tax rates for individuals and families. Closes some special interest tax loopholes but does not specify which ones. Eliminates the Alternative Minimum Tax that sets a minimum tax for the wealthy.
- The Senate budget contains no proposed changes to the status quo.
- The CPC proposal raises tax rates for richest 2 percent (earning more than $250,000 per year) to Clinton-era levels, and taxes capital gains investment earnings at higher rates, yielding $1.4 trillion in additional revenue over 10 years. Places a cap on the value of itemized deductions that mostly benefit the wealthy (raising $566 billion over 10 years) and limits other tax deductions for top income earners.
Similar discrepancies exist on almost every issue.
As Tucker put it: “The differences between the four budget proposals are stark, and all signs indicate a difficult budget battle ahead as lawmakers try to resolve widely different approaches despite clear public opinion in favor of certain policies.”
While 70 percent of Americans oppose cuts to food stamps, the House and Senate budget plans would both cut the program.
While 67 percent say improving the education system in the U.S. should be a top priority for the president and Congress this year, the House and Senate allocate no new funding for education—and in fact the House proposal “freezes the maximum Pell grant award at the same level for the next 10 years, provides financial aid to fewer families, and makes substantial cuts to domestic discretionary spending, including education.”
Overall, the House Republican budget would cut $5 trillion in government spending over the next decade, mostly out of programs that low- and moderate-income Americans need and depend on—and say they support. At the same time, it adds $400 million in defense spending—not in line with public opinion polls—and promises to lower tax rates for wealthy Americans and corporations.
The Senate version follows the same basic outlines.
At a Senate Budget Committee hearing on Wednesday, U.S. Sen. Bernie Sanders (I-Vt.) alsonoted the divergence between GOP policies and the priorities of the general public.
“[T]he rich get much richer, and the Republicans think they need more help,” he said. “The middle class and working families of this country become poorer, and the Republicans think we need to cut programs they desperately need. Frankly, those may be the priorities of some of my Republican colleagues in this room, but I do not believe that these are the priorities of the American people.”
Otis Byrd, found hanging from a tree in Mississippi today.
Post-racial “America” my rosey red ass.
Kevin Drum, a mid-50s guy with cancer, outlines what the ACA means to him:
If I lose my job, and Republicans repeal Obamacare, I will be left with a very serious and very expensive medical condition and no insurance to pay for it. And I feel quite certain that Republicans will do nothing to help me out.
Obviously lots of other people are in the same position, and have been for a long time. But there’s nothing like being in the crosshairs yourself to bring it all home. If Republicans win in 2016, my life is likely to take a very hard, very personal turn for the worse.
I’ve been there since the last time the Retards ran the show. Have any idea how hard it is to don’t get sick? I harbor no illusions as to my mortality if I did.
House Republicans gear up for another round of massive cuts to Medicare, Medicaid while eliminating Obamacare with their budget proposal.
Republicans say their plan would balance the federal budget and create a surplus by 2024. By contrast, they say, Obama’s proposed budget would generate more than $700 billion in annual deficits by that year. The GOP budget would save over $5 trillion over the next 10 years.
The GOP plan would replace Medicaid expansion through State Flexibility Funds, which would put Medicaid coverage plans in the hands of state governments. It would leave in place some alternatives to traditional Medicaid expansion plans proposed by Republican governors in states like Indiana, where Gov. Mike Pence (R) won federal support for a program that is similar, but not identical, to expansion envisioned under the ACA.
The budget repeals several parts of the Dodd-Frank legislation, including an end to the Federal Deposit Insurance Corporation’s authority to bail out creditors of institutions deemed too big to fail. It would require Congress to appropriate funding for the Bureau of Consumer Financial Protection, which currently generates its revenue from the Federal Reserve.And it would privatize Fannie Mae and Freddie Mac, the semi-public lending institutions.
The budget also curtails some programs implemented through the 2009 stimulus bill, which spent about $800 billion trying to drag the United States out of an economic recession. The bill proposes limiting Energy Department programs that have invested in emerging technologies by requiring the department leave application and commercialization of those technologies to the private sector. It also rescinds money that hasn’t yet been spent on green energy programs.
Republicans said their bill would simplify the tax code through comprehensive reform, repealing the Alternative Minimum Tax and lowering rates for both individuals and corporations. It would create a reserve fund to spur a new surface transportation bill that would keep the Highway Trust Fund solvent.
A Raise For America
Offering a sustainable alternative to regressive federal budget proposals put forth this week by the Republican majorities on Capitol Hill, the Congressional Progressive Caucus on Wednesday released The People’s Budget: A Raise for America, which aims to “level the playing field” for low- and middle-income Americans.
Surrounded by constituents the proposal is designed to help, leaders of the CPC unveiled the budget blueprint at a Washington, D.C. press conference at noon EST:
“The People’s Budget fixes an economy that, for too long, has failed to provide the opportunities American families need to get ahead,” the document reads. “Despite their skills and work ethic, most American workers workers and families are so financially strapped from increasing income inequality that their paychecks barely cover basic necessities. They earn less and less as corporations and the wealthy continue amassing record profits. It has become clear to American workers that the system is rigged.”
The CPC budget (pdf), in turn, attempts to un-rig that system by:
- creating new jobs
- increasing the minimum wage
- reversing harmful cuts to safety net programs (and then bolstering those same supports)
- implementing new tax brackets for those who earn more than $1 million annually
- providing debt-free college to every student
- enacting a price on carbon pollution and investing in renewable energy
- allowing states to transition to single-payer health care systems
- funding public financing of campaigns to curb special interest influence in politics.
Among other things, the proposal would allocate $820 billion for infrastructure and transportation improvements and enact short-term economic stimulus measures that would create 4.7 million jobs in 2015.
“And the CPC insists that the rich and corporations pay their fair share of taxes,” writes Robert Borosage, of the Campaign for America’s Future, in an op-ed published Wednesday. “It would create new tax brackets for those making a million or more. The People’s Budgetraises the estate tax for the super-wealthy. It taxes the income of investors at the same rates as the income of workers. It terminates deferral, which allows multinationals to avoid taxes on money they report as earned abroad.”
Overall, the provisions included in the CPC budget contrast sharply with the austerity policies embraced by the right-wing.
“The People’s Budget reverses the past few years of extraordinarily sharp cuts to federal spending, which have held us back from a full recovery,” said Thomas Hungerford, an economist who analyzed the proposal for the Economic Policy Institute. “It is a forward-looking, evidence-based document that would set us on track to a full, durable recovery from the Great Recession.”
In comparison with GOP budget plans, the CPC’s ambitious proposal is “about as close to common sense as Congress gets,” declared
“With few exceptions, Republicans are committed to slashing the basic functions of government and programs that support education, food stamps, energy and R&D to avoid asking corporations or the wealthy to contribute even one more dime in taxes,” she wrote.
However, she continued: “What the CPC budget shows is what Washington too often suppresses: There is an alternative. We can afford to build a society that reflects the values and priorities of most Americans. We only have to choose to do so.”
This is how you get something done in spite of Republican obstruction:
What he’s seeking out of the December U.N. climate talks in Paris would create the broadest, farthest-reaching deal in history, reworking environmental regulations for governments and corporations around the world and creating a framework for global green policy for decades.
Republicans in Congress, sensing what he’s up to, are already saying no. And Obama’s already preparing to sign on without them.
Which is why, even though reaching a climate change pact has become a top priority for the West Wing and part of nearly every conversation Obama has recently had with a foreign leader, Obama and his aides aren’t advertising it.
All the same, a global climate accord is what last November’s greenhouse gas agreement with China was leading up to. That’s what a big focus of his talks with Indian Prime Minister Narendra Modi was in New Delhi in January. And that’s why aides have been traveling to Lima, Bonn and Geneva, setting the terms for a deal that’s far bigger than the one Obama unenthusiastically committed to in 2009 in Copenhagen.
Since the Paris agreement would be voluntary and not a formal treaty, it’s seen as much more likely to get support around the world. And it can happen without the Senate taking any kind of vote on it.