This is a must-read/see for every American. The Banksters continue their plundering in full daylight. How come William Black isn’t on every talk show in the country? Oh, yeah, that’s right. If Obama meant half the things he says, Black would be Secretary of the Treasury, not foxes from Goldman Sachs lording over the henhouse of the public treasury like people like Timothy Geithner.

The Dow Jones Industrial Average has topped 10,000 for the first time in a year, as JPMorgan Chase reported massive profits in the third quarter. Meanwhile, the Wall Street Journal is reporting that major US banks and securities firms are on pace to pay their employees about $140 billion this year˜a record high. But on Main Street, foreclosures are also at record levels, and the official unemployment rate is expected to top ten percent. We speak to former bank regulator William Black, author of The Best Way to Rob a Bank Is to Own One.

One of the many examples of Bill Black getting to the point…

Well, I mean, Summers, for example—you talked about Geithner’s aides and how much money they had made, and, of course, it’s absurdly large, and they’re making it typically for not doing much of anything. But they’re taking their cue from Summers, who got $5 million, roughly, for working one day a week in areas he had no expertise. So, you know, once you leave the federal service, then these interests that you were very helpful to find a way to make you spectacularly rich, and they know that that’s what’s coming in their future. That’s part of the problem.

But the bigger part of the problem, in many ways, is that they have such an ideology about the market and its ability to deal with all problems that has no basis in reality, has been exposed in this crisis as completely fictional, and yet they can’t give it up. I mean, think of yourself as one of these professors who’s been trained in the Milton Friedmanish views, and you’re in your fifties, and you’ve been saying—you know, everything you’ve said in your career is wrong. Everything you’ve learned in your career is wrong. All of your areas of expertise are wrong. Are you going to admit that? “Hi, I’ve been misleading you, and I’m sorry I caused this disaster. And by the way, I have no meaningful skills or experience.”

Read The Transcript/Watch The Video from this insightful interview

And for those of you who missed it the first time around, here is another excellent interview with Black by Bill Moyers.

Reverend Billy asks the question, and makes his case for propping up community banks and helping to support localism in the economy and culture.

It’s hard to imagine Timothy Geithner taking advice from an iconoclast dressed in a white suit, clerical collar and Elvis-inspired hair, but the Reverend Billy may be on to something.

In place of a system where big banks and corporations enter neighborhoods only to profit from them, Reverend Billy wants to empower small banks and credit unions that hold a stake in the communities they serve by offering incentives and making it harder for big finance to undercut local business.

It’s hard to argue against the system he envisions.

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“The Wall Street experience is parallel and equal to the destruction of neighborhoods through chain stores,” Reverend Billy says.

Basic economics are on the Reverend’s side. For every dollar spent at a chain store, studies show only 50 cents stays in that community. By contrast, 90 cents of every dollar spent at a local business remains in the local economy.

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Reverend Billy knows he faces long odds both in his mayoral run and his effort to change a system built around spending and credit speculation, but there are signs of hope. His audience was growing before the financial crisis, and things have only gained momentum since. Later this month, he’ll speak at the Yale Divinity School.

“People qualify their report of pain by saying ‘we’re spending more time with our family and that’s changing our lives,’” Reverend Billy says. “‘Whatever we do next I’m not going back completely to the way I was doing things before,’ they say.”

The leaders we’ve chosen to undertake financial reform are threatening to take us back to where we were by propping up banks and companies that nearly brought down the economy and cost taxpayers trillions.

Read the complete New York Times article Here

Nobody prefers paying taxes…with the possible exception of IRS employees who realize that their tax returns along with those of others keep them employed.

Hardly anyone enjoys coughing up hard-earned money to “the government.”

Everyone likes to rail about taxes especially today, “Tax Day,” April 15.

But taxes are the necessary price for a civil society.

Fire and police protection. Food inspectors. Air traffic controllers. Libraries. Unemployment insurance. Water and sewer systems. Border protection. Medical care for senior citizens. Courts. Public parks and open spaces. Educational, nutritional, and medical programs for pre-school age children. Boards of elections. Enforcement of clean air and water laws.

These and hundreds of other social, economic and political functions are the glue that bond people and their/our institutions together to forge community. Humans are social beings. We need social networks — both informal and formal.

Governments are one type of formal network that at their best reflect the will of their inhabitants through their constitutions, rules, laws, policies and programs. Taxes provide the funds that allow governments to create and maintain these functions.

Are all taxes fair? No. Are tax dollars wasted? Absolutely. Can other formal networks besides governments sometimes perform the same social function without tax dollars. Sure.

This doesn’t mean we don’t need taxes.

At their best, governments are us. We need public structures and institutions that create, maintain, protect, and defend the commons and collective goals. We also need governments to control and define the other major organized structure and institution in our societies that threaten self-governance — the major one being business corporations.

As problematic as governments may be in representing its citizens, they are bastions of self-governance compared to business corporations. Business corporations are in not democratic. Employees have no Bill of Rights protections. Business corporations are not loyal to any people or place. Business corporations, in fact, seek to supplant the role of government not just economically but politically. That’s what drives privatization of public assets and institutions.

Several dozen “Tax Day Tea Parties” are taking place today across Ohio — as part of a nationwide revolt against taxes. They’re billed as nonpartisan. Many I’ve read about are focused on opposing President Obama’s stimulus programs. Whether deliberate or not, the tenor of these brewing tax revolt actions, however, seems to be much more — to reduce the power, authority, and wherewithal of government to:

1. Define and control corporate actions
2. Ensure that governments can’t assume new authorities that may be better in the public rather than the corporate domain — i.e. controlling the issuance of national currency, and/or
3. Decrease the ability of government to meet basic public functions, thereby, opening the door to selling or leasing them to for-profit business corporations.

There’s no question we need a tax revolt. The proposed fiscal year federal budget calls for over $700 billion for military spending (to maintain a military empire with bases and troops in more than 100 nations, including current wars and occupations in several) and $750 billion more to bailout banks that lost trillions in risky and bizarre financial gambles. An increasing amount of our tax dollars are in the form of corporate welfare. None of this increases housing security, health care security, environmental security, job security (expect for bankers and military contractors), or education security. It’s not taxes that are revolting but how and where they’re spent.

Reducing taxes for any of the three reasons above simply taxes democracy by decreasing the ability of governments to set and enforce laws, rules, priorities and programs that reflect the wishes and interests of the vast majority of the public — and against those running national and transnational business corporations.

In a time when the “free market” and Wall Street has demonstrated beyond doubt its lack of service to the public interest and lack of public accountability, government provides the best institutional path to authentic public accountability and responsibility.

Tax Day Tea Parties only brews blanket hostility at the government and represents an effort to divert popular anger away from where it most needs to be — against the growing power and rights of business corporations and toward creating a government ruled by people.

- Posted by Greg Coleridge, The American Friends Service Committee and the Program On Corporations, Law & Democracy

“How do they get away with it?” Well, no one has asked that question more often than Bill Black, whom Bill Moyers talks with in this stunningly candid and revelatory interview. A must-see for all Americans. Should be required viewing in every civics class.

The financial industry brought the economy to its knees, but how did they get away with it? With the nation wondering how to hold the bankers accountable, Bill Moyers sits down with William K. Black, the former senior regulator who cracked down on banks during the savings and loan crisis of the 1980s. Black offers his analysis of what went wrong and his critique of the bailout plan.

Now Black is focused on an even greater scandal, and he spares no one, not even the President he worked hard to elect, Barack Obama. But his main targets are the Wall Street barons, heirs of an earlier generation whose scandalous rip-offs of wealth back in the 1930s earned them comparison to Al Capone and the mob, and the nickname “banksters.”

Seems that the real capital of America is Wall Street, not Washington (or would that make it ‘das kapital’ of America?). Obama’s administration is starting out on a pretty bad foot as it looks to prop up and protect the very criminals and corrupted institutions that are responsible for this catastrophic mess, rather than hold them to full accountability for their actions, and make the systemic changes necessary to prevent them from happening again.

Watch The Video/Read The Transcript

More on ‘bankster’ Geithner and the fraudulent scheme he’s peddling on the American taxpayer with this piece from Jeffrey Sachs “The Geithner-Summers Plan Is Even Worse Than We Thought”

Thank you President Obama! All hail the era of “hope” and “change”!

Bill Moyers and Michael Winship provide this additional commentary on the whole farcical debacle that is American financial policy as directed by the same thieves that have led us to this sorry state. Read “Changing the Rules of the Blame Game”

Nobel Prize-winning economist Joseph Stiglitz tells CNBC’s Trish Regan that having one-third of the U.S. economy based in the financial sector should not have been bragged about, but flagged as a sign of a sick economy.

WATCH THE VIDEO

Tim Rutten of the Los Angeles Times provides this fascinating and insightful overview of the history of privatized retirement accounts, and the devastating impact that their implosion is having, and will continue to have, on the fundamental foundations of the American economy.

As a consequence, there’s been little discussion of the way in which this economic implosion has exposed the utter failure of the now-ubiquitous 401(k) retirement accounts. In fact, the entire 401(k) system looks increasingly like the sort of bait-and-switch con relished by the Bernie Madoff’s of the world.

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…More and more employers began to look for ways to get out of funding the pension and health plans that, up to then, had been regarded as part of the responsible capitalist social contract. Two innovations in political ideology — one on the left and one on the right — provided superb cover for the companies’ greed.

For the Democrats, “choice” became a mantra, and the 401(k) suddenly became a mechanism through which working people could “choose” how to fund and manage their own retirement. On the Republican side, the notion of “an ownership society” came into vogue. There, the theory was that giving working people an ownership interest in the equities market would promote greater personal responsibility and make people better citizens.

Nobody bothered to ask employees whether they wanted to swap their pensions for choice or ownership, nor did anybody stop to notice that very few people are suited by background, ability or temperament to actively manage investments.

If there is such a thing as lethal social poison, it is avarice cloaked in political piety.

Companies seized the opportunity to abandon their defined-benefit pension plans. Today, more than 60% of all U.S. workers rely on 401(k)s as their primary retirement fund. They’re not eager to “choose” their own retirement program, nor are they enthusiastic “owners” of American business. They’re draftees. Essentially, millions of us have been conscripted into the equities markets, where we have helped fuel stock prices and provided a bonanza for the financial services companies that manage and sell investment funds.

The problem is that, since the markets’ peak in October 2007, our 401(k)s have lost a collective $1 trillion in value. That’s fully a third of the value of all 401(k)s. The picture is actually worse than that because another $1 trillion has been stripped from people who lost or changed jobs and rolled their 401(k)s into individual retirement accounts.

Read The Full Article

Or should this be the ’shocked doctrine’ of disbelief? Here is an excellent overview by UMass economics professor David M. Kotz on the background of Greenspan and the ideology which enabled this mess we are now experiencing. Amazing that even *I* (with no professional economics education at all) could see this coming a mile away, yet this man, this scion of institutional legitimacy, this atlas (of the shrugging type?) of political influence and supposed wellspring of economic wisdom is now scratching his head totally befuddled as to how our economy is in freefall.

Greenspan should be indicted, if not for direct criminal activity, for criminal negligence and inexcusably grotesque ignorance. But that is what ideology will do to you, particularly if it is of the virulent Ayn Rand-ite strain that he worshipped his entire life.

Former Chairman of the Federal Reserve Alan Greenspan found himself “in a state of shocked disbelief” at the failure of individual self-interest to protect our banking system. What really ought to provoke shocked disbelief is that a person who held such views was placed in charge of regulating the American financial system, a position he held from 1987 to 2006.

Greenspan’s long stewardship of the financial system reflected the revived intellectual dominance, since around 1980, of a free-market economic theory once thought to have been permanently laid to rest by the Great Depression of the 1930s. This theory holds that if individual actors, whether ordinary people or officials of large corporations, are free to pursue their own self-interest through market exchanges with other free individuals, the result will be optimal for society as a whole. Government has little role to play in the economy, beyond enforcing the law of contracts and protecting the rights of property owners. In such a world, everyone is supposed to succeed based on her or his own effort, skill, intelligence and other worthy attributes, or fail due to a lack of them. It is an appealing vision in which individual liberty meshes perfectly with the social good. No one has to depend on the good will of anyone else, but instead need only rely on oneself.

This theory, pushed to the fringes of respectable thought for several decades following the Great Depression, re-emerged and was vigorously, if not entirely consistently, applied to the US and global economies starting nearly three decades ago. This is a world in which the process of production and exchange takes the form of a global system of interconnected corporate institutions. Since 1980, this system has become increasingly interdependent, as virtually every corner of the globe was drawn into the new complex of economic networks.

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As the American financial system was gradually deregulated during 1980-99, promoted by the resurgent free market ideology, one more experiment based on this theory was put into play. Alan Greenspan did his part by encouraging the experiment to proceed unhindered for his entire tenure at the Fed. Those who ran our banks, investment banks and other financial institutions participated with enthusiasm. They quickly found a much better way to make money than the old humdrum activity of taking deposits, making loans and holding those loans to maturity.

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Everyone in this chain felt their super-high rates of return were safe, given the supposedly endless rise of home prices and the AAA ratings given to these securities by rating agencies hired by the security issuers. Free market theories of finance insisted that the markets price every security properly, so no one need worry about the spread of these derivative securities throughout the world financial system. Chairman Greenspan’s vision played out on a world stage.

No one who knew any history should have been shocked when this vast experiment collapsed.

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Hopefully, the lesson will finally be learned. What former British Prime Minister Margaret Thatcher claimed at the start of the free market period - that there is no society, there are just individuals - is belied by what we are now witnessing. We are not disconnected individuals whose fate rests solely in our own hands. We are all dependent on one another. We must rebuild our economy on the principle that we are all in this together. If we are to solve the many real economic problems we face, we have to do so by cooperative effort, not by the pursuit of narrow self-interest.

Read The Original Post

Good analysis on the whole cause, nature and recommended course of action regarding the present American economic meltdown, posted on The Oil Drum, a site dedicated to discussion about energy and our future.

I never tire of posting this graph of the “W economy”, because it summarizes in a nutshell what happened: growth happened, but was not shared widely. Thanks to wage stagnation, made possible by the threats of outsourcing and offshorization, and by consistent policies over the last 30 years to deregulate and liberalise markets, starting with labor markets), the fruits of growth have to a large extent been captured by a very few - but this has been hidden because consumption was propped up by readily available debt and the apparently growing virtual wealth of homeowners.

The problem is that, while a lot of that growth was illusory (and is now unraveling), the wealth re-allocation that took place thanks to it was very real, and, in particular, the mechanisms ensuring that an ever grower share of the pie get into a few privileged hands are still in place, and will bite even more harshly as the pie shrinks.

Read The Complete Post

Class war anyone?

Whenever you bring up statistics like this, the oblivious opulent tend to screech out about how one is engaging in ‘class warfare.’

Seems to me that its a war that has long been underway, and its pretty obvious who is winning it.

Here from author David Cay Johnston, reporting for The New York Times…

The increase in incomes of the top 1 percent of Americans from 2003 to 2005 exceeded the total income of the poorest 20 percent of Americans, data in a new report by the Congressional Budget Office shows.

The poorest fifth of households had total income of $383.4 billion in 2005, while just the increase in income for the top 1 percent came to $524.8 billion, a figure 37 percent higher.

The total income of the top 1.1 million households was $1.8 trillion, or 18.1 percent of the total income of all Americans, up from 14.3 percent of all income in 2003. The total 2005 income of the three million individual Americans at the top was roughly equal to that of the bottom 166 million Americans, analysis of the report showed.

The report is the latest to document the growing concentration of income at the top, a trend that President Bush said last January had been under way for more than 25 years.

Earlier reports, based on tax returns, showed that in 2005 the top 10 percent, top 1 percent and fractions of the top 1 percent enjoyed their greatest share of income since 1928 and 1929.

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Jared Bernstein, an economist at the Economic Policy Institute in Washington who characterizes the Bush administration’s policies as YOYO economics, based on You (Are) On Your Own, said the differences in income growth explained why so many Americans have told pollsters that they are feeling squeezed.

“A lot of people justifiably feel they are working harder and smarter, they are baking a bigger and better pie, and yet their slice is not growing much at all,” Mr. Bernstein said. “It is meaningless to middle- and low-income families to say we have a great economy because their economy looks so much different than folks at the top of the scale because this is an economy that is working, but not working for everyone.”

The rich with the greatest share of income since 1929? We know what went down the last time THAT happened.

Read The Complete Article

George Lakoff and Bruce Budner of The Rockridge Institute elaborate here on some of the hidden truths and necessary social positives of a progressive taxation system…

Progressive taxation - taxing the wealthy at higher rates than the poor - is a moral issue. Like many moral issues, it sparks heated debate. The debate is borne of conflicting worldviews, values and understandings of values.

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America’s government has at least two fundamental functions: protection and empowerment. Protection includes the police, firefighters, emergency services, public health, the military and so on. Empowerment includes the infrastructure needed for business and everyday life: roads, communications systems, water supplies, public education, the banking system for loans and economic stability, the SEC for the stock market, the courts for enforcing contracts, air traffic control, support for basic science, our national parks and public buildings, and more. We are usually aware of protection. But the empowerment infrastructure, provided by taxes, is usually taken for granted, hidden or ignored. Yet it is absolutely crucial, a fundamental truth about America and why America provides opportunity.

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As Warren Buffet famously observed, he likely couldn’t have achieved his financial success had he been born in Bangladesh instead of the United States, because Bangladesh had no banking system and no stock market.

Ordinary people just drive on the highways; corporations send fleets of trucks. Ordinary people may get a bank loan for their mortgage; corporations borrow money to buy whole companies. Ordinary people rarely use the courts; most of the courts are used for corporate law and contract disputes. Corporations and their investors - those who have accumulated enough money beyond basic needs so they can invest - make much more use, compound use, of the empowering infrastructure provided by everybody’s tax money.

The wealthy have made greater use of the common good - they have been empowered by it in creating their wealth - and thus they have a greater moral obligation to sustain it. They are merely paying their debt to society in arrears and investing in future empowerment.

This is the fundamental truth that motivates progressive taxation.

It is a truth that undercuts conservative arguments about taxation. Taxes provide and maintain the protecting and empowering infrastructure that makes our income possible.

Our tax forms hide this truth. They do not indicate the extent to which taxes have created and sustained the common wealth so you could earn what you have. They make it look like the empowering infrastructure was just put there by magic and that the government is taking money out of your pocket. The most likely truth is that, through the common wealth, America put more money in your pocket than it took out - by far.

Read The Complete Article