tagged w/ Democracy Now!
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by Zach Carter, Media Consortium blogger
Welcome to the final edition of Campaign Cash, which tracked political spending during this year’s midterm elections. Stay tuned for more reporting on money in politics from members of The Media Consortium. To see more stories on campaign funding, follow the Twitter hashtag #campaigncash.
Anonymous millionaires just helped elect dozens of ultraconservative congressional candidates, by pumping millions of dollars into national Tea Party organizations. And guess what’s at the top of the legislative to-do list for those same Tea Party groups? Blocking campaign finance reform legislation.
As Stephanie Mencimer explains for Mother Jones, one of the nation’s largest Tea Party organizations, the Tea Party Patriots, is already coming out guns-a-blazing against any lame duck effort to crack down on secret corporate spending in elections.
And with good cause. The Tea Party’s appeal, after all, is based on its populist, grassroots image. If anybody knew that secret right-wing millionaires were bankrolling the entire operation, the “movement” would lose its luster.
But whether reformers are able to force front-groups to disclose their donors or not, the broader effort to eliminate undue corporate influence from the political process will take years.
Welcome to the plutocracy
The Supreme Court’s decision in Citizens United v. Federal Elections Commission allowed corporations and deep-pocketed elites to spend unlimited amounts electing politicians of their choosing. So long as those expenditures are funneled through a front-group, nobody has to know who is buying an ugly attack ad or why. Instead ads are sponsored by groups with a innocuous-sounding names like “Americans for Prosperity” or “Americans for Job Security.” Nobody knows who ultimately foots the bill.
In organized crime, this process is called “money laundering.” And everyone is getting in on the game, from the Tea Party to Karl Rove to U.S. Chamber of Commerce. As Bill Moyers explains in this Boston University lecture carried by Truthout, it’s ravaging American democracy.
Rove, other conservative groups and the Chamber of Commerce have in fact created a “shadow party” … We have reached what … former Labor Secretary Robert Reich calls “the perfect storm that threatens American democracy: An unprecedented concentration of income and wealth at the top; a record amount of secret money flooding our democracy; and a public becoming increasingly angry and cynical about a government that’s raising its taxes, reducing its services, and unable to get it back to work. We’re losing our democracy to a different system. It’s called plutocracy.”
That, ultimately, is what is at stake with campaign finance reform. Can democracy continue to serve as a check on elite power? Or will America simply dance to the tune played by the super-rich. Citizens United made an undemocratic mess of this year’s election—but the influence of corporate cash is not going to simply melt away. Without serious reforms, the very concept of American elections will become a quaint, naive relic of the past.
Wall Street wins big
And while the plutocracy plainly organized itself against Democrats in this election, democrats have not exactly been strangers to corporate largesse. As Laura Flanders emphasizes for GRITtv, while President Barack Obama occasionally offered rhetorical rebukes against the Wall Street establishment, so far as public policy was concerned, he rarely did anything to ruffle their feathers. Obama continued the Bush bailouts, praised the executives of firms would eventually be investigated for fraud as “savvy,” and aimed pretty low on financial reform. But as Flanders notes, all those favors didn’t end up helping either Obama or his party on Nov. 2:
Having soaked up the government’s largesse, those banksters repaid Obama by pouring millions of anonymous dollars into defeating Democrats.
It worked. The most vocal Wall Street critics in the House and Senate—Rep. Alan Grayson (D-FL) and Sen. Russ Feingold (D-WI) were bombarded with attack ads courtesy of the U.S. Chamber of Commerce. Now they’re gone, along with the Democratic majority in the House.
Last-ditch effort on campaign finance reform
As Jesse Zwick emphasizes for The Washington Independent, Congress can still limit the damage in the coming months before the officials elected last night take office. A modest law that would require corporations to disclose their political expenditures and force front-groups to publicly identify their donors would help limit the damage.
After that, as Moyers emphasizes, it’s a long, hard fight.
But wait! There’s more.
* Andy Kroll at Mother Jones notes that Rick Scott didn’t really need money from outside groups to buy the Governor’s race in Florida. He did it himself.
* Jason Hancock reports for The Iowa Independent that outside groups spent more than $1 million to oust judges that ruled to legalize same-sex marriage in Iowa.
* John Nichols and Richard Kim of The Nation talk to GRITtv’s Laura Flanders and Democracy Now!’s Amy Goodman on the midterm results, and what to expect from corporate expenditures in 2012.
This post features links to the best independent, progressive reporting about the mid-term elections and campaign financing by members of The Media Consortium. It is free to reprint. Visit The Media Consortium for more articles on these issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Audit, The Mulch, The Pulse, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.by Zach Carter, Media Consortium blogger
Welcome to the final edition of Campaign... more
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by Zach Carter, Media Consortium blogger
Flickr/scottjloweTwo Tea Party leaders, Mark Meckler and Jenny Beth Martin, have been jet-setting all over the country ginning up support for conservative politicians. Literally.
They’ve been flying around in a private jet like Wall Street CEOs, except they’re heading to “grassroots” rallies instead of merger talks. Meckler and Martin don’t say how outraged, ordinary citizens can find the money to support such extravagance, and they don’t have to. Thanks to the Supreme Court’s ruling in this year’s Citizens United v. the Federal Election Commission, they can now accept unlimited funding without disclosing the identities of their donors.
No one would even know about the jets themselves, but Meckler and Martin never counted on Mother Jones, or a reporter named Stephanie Mencimer. Using public flight-tracking information, the Tea Party Patriots’ flight schedule, and some serious attention to details in the group’s own videos, Mencimer was able to figure out which jet the not-so-populist duo were using. She then traced the plane to Raymond F. Thomson, founder and CEO of a semiconductor company called Semitool, which he sold last year for a cool $364 million.
It’s both sad and hilarious to see the secret financial arrangements of the super-rich masquerading as grassroots activism. But it also shows the lengths to which reporters must go to actually report on political spending in the wake of Citizens United. There is no documentation to follow, just the contrails of private jets.
Social groups target state races
And while secret political spending has been dominated by big corporations this cycle, the legal maneuvering that liberated corporate coffers was actually performed by fringe right-wing groups targeting social issues. As Jesse Zwick emphasizes for The Washington Independent:
Groups advocating against abortion and gay marriage have waged a low-grade war on laws restricting their ability to spend money freely in elections since the early 1980s, and their victory in the recent Citizens United ruling has hardly caused them to rest on their laurels.
Our democracy is now more beholden to corporate greed than ever, but at least gays won’t be allowed to visit each other in the hospital.
This is just the beginning of corporate rights
But the implications of Citizens United extend far beyond the (critically important) realm of campaign finance itself, as Jeff Clements and John Bonifaz of the organization Free Speech for People emphasize in an interview with Amy Goodman and Juan Gonzales of Democracy Now! As Bonifaz notes:
Citizens United was not just a campaign finance case, it was a corporate rights case. In fact, it was an extreme extension of a corporate rights doctrine that has eroded the First Amendment for thirty years.
At its core, Citizens United grants First Amendment rights to corporations on the grounds that corporations are people, just like ordinary citizens. Sound crazy? It is.
The bill of rights for corporations?
As AlterNet’s Joshua Holland emphasizes in an interview with historian Thom Hartmann, the implications of the view that corporations are people are simply absurd. Now corporations have been granted First Amendment rights, but what happens when they start arguing for Second Amendment rights? And what would it even mean for a corporation to have Second Amendment rights?
A visual map of Campaign Cash
What are the most common themes and issues surrounding the untold amounts of cash flowing into this election cycle? To create that visual, the Media Consortium piped 10 articles by our members through Wordle. While all the articles were generally focused on this topic, they were picked at random and published between October 25-29.
For clarity’s sake, we made “Tea Party” “TeaParty,” “Supreme Court” became “SupremeCourt,” and we also merged the first and last names of key players such as Karl Rove and Jim DeMint. Finally, we removed any extraneous words such as “the,” “and,” and “even.” We did not combine the words corporate/corporation/corporations or Republican/Republicans (but examine the frequency as much as the size). To get the latest reporting on the funds feeding into the mid-term elections, go to www.themediaconsortium.org or follow the search term #campaigncash on Twitter. Wordle research by Amanda Anderson.
But wait, there’s more!
* Sarah van Gelder argues in Yes! Magazine why families can’t afford to stay home on Election Day.
* And no matter who wins on Tuesday, it seems one thing is clear: Democracy will pay the price, says Henry A. Giroux at Truthout.
* Lobbyists are already buttering up the incoming committee chairs, reports Siddhartha Mahanta in Mother Jones. Time to get to know Rep. Dave Camp (R-MI), who could be the incoming chair of the House Ways & Means Committee.
This post features links to the best independent, progressive reporting about the mid-term elections and campaign financing by members of The Media Consortium. It is free to reprint. Visit The Media Consortium for more articles on these issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Audit, The Mulch, The Pulse, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.by Zach Carter, Media Consortium blogger
Flickr/scottjloweTwo Tea Party leaders,... more
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by Lindsay Beyerstein, Media Consortium blogger
Earlier this month, Bank of America (BOA), the country’s largest bank, announced a moratorium on foreclosures in all 50 states.
The bank promised not to sell any foreclosed homes or take any more delinquent borrowers to court until it had reviewed its potentially defective foreclosure process. Other major lenders soon announced that they too were suspending foreclosures in dozens of states. Why are the biggest banks in the country voluntarily calling for a time-out? It’s a hint that we’re facing a huge problem: The banks aren’t sure if they have the legal right to foreclose on millions of homes.
Here’s what’s new in foreclosuregate since the Audit took up the story last week. The Bank of America announced that it would resume some foreclosures on Oct. 25, having deemed its own methods sound. The stock market begged to differ. BOA’s stock fell over 5% on Thursday and other bank stocks also took a beating, as did mortgage bonds. This pattern indicates that investors are very worried about the effect of the foreclosure crisis on the health of the banks.
Rep. Alan Grayson (D-FL) is calling for a foreclosure moratorium under the new Financial Stability Oversight Council (FSOC), as Ellen Brown reports for Truthout. The FSOC has the power to preemptively break up any large financial institution that threatens U.S. economic security. Grayson wants a moratorium on all mortgages securitized between 2005 and 2008 until the FSOC can determine which foreclosures are valid and which are bogus.
The missing link
So, what kind of “defects” in the foreclosure process are we talking about? Fraud, basically.
Zach Carter of the Campaign for America’s Future explains to Chris Hayes of the Nation why Bank of America and other major lenders are in so much trouble: They are just administering loans for other lenders. You make your check out to the Bank of America, but the bank is just babysitting after the loan for the bondholders.
The real creditors are the investors who own bonds made up of pieces of many different mortgages, including yours. The bond gives the bondholder a share of the money that you and other borrowers pay each month. If you don’t pay, BOA initiates foreclosure. If you’re late, BOA charges you fees.
However, the bank can’t just hire a foreclosure company to take your home away on a whim. The bank must first show proof that it is entitled to foreclose because you’ve defaulted on your mortgage in the form of a mortgage note. If you hold one of those toxic asset mortgages, there’s a good chance the bank doesn’t have the note.
As Dean Baker explains in Truthout, in many, if not most, cases, “liar loans” (mortgages issued with no proof of income or assets) have become given way to “liar liens” (foreclosures with no proof of default).
According to Carter, all the big banks have been hiring foreclosure mills to rubber-stamp their claims without checking. Unscrupulous foreclosure companies are admitting to “robo-signing,” i.e., foreclosing without even checking whether the bank’s claims were legit.
Foreclosuregate
According to Andy Kroll of Mother Jones, the Bank of America stands to lose up to $70 billion over what’s come to be known as “foreclosuregate.” A mortgage starts out with an originator, typically a bank or a mortgage broker. In the heyday of mortgage-backed securities, investment banks were buying up hundreds of thousands of mortgages, making them into mortgage-backed bonds, and selling them to investors.
Unfortunately, if the bank doesn’t have the note, who does? The mortgage originator may have gone bankrupt, many were fly-by-night operators that folded when the housing bubble burst. Many mortgages were bought and resold more than once before they found their way into a mortgage-backed bond.
So, the question is whether the bank really owned the mortgages it made into mortgage backed-securities and sold to individuals, pension funds, and other institutions. If not, the banks stand could be on the hook for selling assets they didn’t actually own to investors.
Moratorium now
The scandal affects so many mortgages that some lawmakers are calling for a nationwide moratorium on foreclosures until investigators can sort out who owns what once and for all. Rep. Edolphus Towns (D-NY) told Amy Goodman of Democracy Now! that Congress needs to stop banks from putting people out on the street until there is some way to differentiate between fraudulent foreclosures and justified ones:
And so, I just think that people who are saying that this is going to hurt—I think that it’s going to help, because once people gain confidence in the fact that they’re being treated fairly and that there’s no discrepancies in the records, then people will feel very comfortable in terms of trying to move forward. But until that happens, you’re always going to have these comments about the fact that that was not done right, it was done unfairly. And, of course, I think there’s enough here for us to stop and to pause and to say, let’s take a look here before we move forward. So a moratorium is definitely in order.
The Obama administration opposes the moratorium on the grounds that it would hurt the housing market and thereby slow the economy. Towns counters that what would really be bad for the economy is letting banks take people’s homes away without any semblance of due process. If the government doesn’t act to protect the innocent, foreclosuregate could shatter the confidence of potential home buyers. Would you want to invest in a house if you were afraid the bank could just take it away from you?
In AlterNet, Mike Lux argues that fraudulent foreclosures are one more assault on poor and middle class Americans. He argues that the banks are so used to being coddled by Washington that they’re counting on legislators to retroactively change the rules to protect them from the consequences of their own devious behavior.
At this point we don’t know what percentage of foreclosed-upon homes have simply been stolen by banks to pay bondholders, but we do know the problem is vast and systemic. The Obama administration is content to let the banks seize private property first and ask questions later. We need a moratorium to take stock and restore the rule of law.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.by Lindsay Beyerstein, Media Consortium blogger
Earlier this month, Bank of America... more
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Iraq war veteran Ethan McCord was one of three US soldiers who were on the ground during the Apache helicopter assault on twelve civilians in Baghdad in 2007 that was captured in a video released by WikiLeaks. McCord is seen on the video carrying one of the wounded children in his arms to get medical help.Iraq war veteran Ethan McCord was one of three US soldiers who were on the ground... more
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by Zach Carter, Media Consortium blogger
The crazy conservative assault on government spending has become one of the most irrational economic policy debates in recent years.
The Republican Party is trying to maintain the fiction that direct economic relief for millions of working Americans is a fiscally irresponsible splurge, while simultaneously backing hundreds of billions of dollars worth of economically useless tax cuts for the wealthy. The demands are staggering: cut food stamps for the poor, but preserve perks for billionaires.
As Tim Fernholz notes for The American Prospect, serious economists do not believe that President George W. Bush’s tax cuts for the rich are an effective way to stimulate the economy. Rich people don’t spend money, they save it. We need lots of consumer spending to reinvigorate economic growth and put people back to work.
If we want to create jobs, we need to put money in the hands of people who will spend it. At minimum, that means directing aid to the unemployed and providing federal assistance to states, so that local governments don’t lay off hundreds of thousands of teachers and cops. This is not only the decent, humane thing to do when the economy is struggling, it actually helps. Money the government spends to save a teacher’s job goes out into the economy to pay bills and buy products. For states, this also means that basic public infrastructure is preserved—kids learn and the streets stay safe.
Stonewalling aid
But as the editors of The Nation highlight, Republican politicians have made it nearly impossible to get that critical aid out to American families. They’ve demanded strict measures for these benefits, forcing Democrats to cut food stamps—that’s right, food stamps—in order to keep teachers in school and cops on the street.
Millions of families all over the country depend on food stamps. In the middle of the worst recession since the Great Depression, Republican politicians took a stand to take food from the mouths of children—and they did it while supporting a $300 billion a year in handouts for the rich.
There is no immediate budget crisis. The government can borrow money at record low interest rates, meaning that investors don’t believe the federal budget deficit is too big. But if conservatives were really serious about shrinking the deficit, they’d be encouraging economic growth, not backing billionaire giveaways.
Banking on predation
Our perverse economic policy preferences aren’t limited to budget priorities. As Amy Goodman and Juan Gonzalez emphasize in a segment for Democracy Now!, inadequate rules governing bank lending practices were a fundamental cause of the recession, and are actively hampering the economy’s recovery today.
The Community Reinvestment Act of 1977 (CRA) required banks to make good loans to credit-worthy borrowers in the bank’s community. The idea was simple: If a bank wants to benefit from a community’s resources, it has to give something back and help strengthen the local economy.
Conservatives have lashed out at CRA, blaming it for the mortgage crisis, but the truth is that CRA loans had almost nothing to do with the subprime disaster. CRA loans are affordable loans to creditworthy borrowers—the whole point of subprime lending was to charge outrageously high rates to borrowers with poor credit.
In reality, policymakers’ refusal to expand CRA exacerbated the crisis. Only traditional banks are subject to CRA guidelines, and during the past two decades a host of independent mortgage companies have taken over large swaths of the mortgage market. These unregulated firms issued a lot of lousy loans, often working under direct, explicit instructions from bigger banks, who outsourced their lending in order to get around CRA rules and rip off whole neighborhoods.
Lending is critical to moving the economy out of the recession, and CRA provides reliable, proven rules to get banks back in the business of helping our communities and our economy.
Overdrafting the banks
But a host of other banking policies are also making the recession worse. One of the most egregious is the overdraft fee, which, as Annie Lowrey notes for The Washington Independent, scored banks over $38 billion in 2009 alone. To put that in perspective, the entire banking industry earned a combined profit of $12.5 billion last year, which means that the banks are making their money from gotcha fees, not from productive lending.
Banks have spent years charging overdraft fees without telling their customers that they’re subject to such gouging. Lowrey notes that the average fee is $35 on an average charge of $17. But they also have engaged in a backdating scam, rearranging the order of their customers’ purchases in order to charge more overdraft fees. As I explain for AlterNet:
“Say you’ve got $80 in your checking account, and you decide to pay some bills and run some errands. You spend $30 on gas and another $20 on your water bill. Later, you head to the grocery store and spend $81—oops!—on groceries. To reasonable people, it looks like you’re going to get hit with an overdraft fee. That last purchase put you over the line. But instead, the banks reorder your transactions, processing the groceries first. Now you’re below zero, and they can charge additional fees for your gas and water bills. Wells Fargo charged up to $39 per overdraft. This one mistake cost you $117, and nobody even bothered to tell you it was going to happen.”
Fortunately, a federal judge in California just ruled that this backdating scam was grossly illegal, and ordered megabank Wells Fargo to pay back every penny that it swindled from its California customers with the practice since 2004. But Wells Fargo was not alone—every large bank in the United States does the exact same thing, and it’s allowed them to score billions in deceptive profits. A similar ruling in a larger case against all of the big banks could end a transparent outrage, and restore an enormous amount of unfairly seized wealth to citizens all over the country.
We don’t need to be pushing policies that benefit billionaires at the expense of everyone else. The Bush tax cuts are an unnecessary economic waste. Financial policy that puts the interests of a few giant predatory banks above those of the entire citizenry makes no economic sense.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.by Zach Carter, Media Consortium blogger
The crazy conservative assault on... more
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by Zach Carter, Media Consortium blogger
Image Courtesy of Flickr user New America Foundation, via Creative Commons LicenseWith the Wall Street reform bill finally cleared through Congress, activists and intellectuals are pushing hard to make sure that this bill isn’t the last word Congress utters about Big Finance. We need deeper and more robust reforms, but it’s also critical to ensure that the new bill is implemented as effectively as possible. Part of that means appointing officials with a proven record as robust reformers—people like Elizabeth Warren.
Too-big-to-fail lives on
What more do we need to keep Big Finance from ravaging the middle class? As Stacy Mitchell notes for Yes! Magazine, the bill Congress just signed off on doesn’t really address the core problems posed by our out-of-control banking system. Too-big-to-fail is alive and well, and lawmakers must push to break up the megabanks during the next legislative cycle or risk another economic calamity. Mitchell writes:
“Since the collapse, giant banks have only grown bigger and more powerful, and less responsive to the needs of the real economy. While the financial reform bill includes several worthwhile measures, it will not set the industry right or entail a fundamental alteration of its scale and structure.”
There are still some great reforms in the current round of legislation, among them the creation of a strong new Consumer Financial Protection Bureau (CFPB) to write and enforce rules on mortgages, credit cards, overdraft fees and more. The first person to head this new regulatory body will be tremendously important to its future. They will set the tone for the bureau’s operations and establish a culture that will define it for years to come.
Elizabeth Warren: The Obvious Choice
The most obvious pick to head the agency is Elizabeth Warren, who currently chairs the Congressional Oversight Panel for the Troubled Asset Relief Program. Warren has been a rare force of accountability for the Wall Street bailout. She’s also a capable and committed reformer. Her current post has almost no formal statutory power, but Warren has used a series of reports and hearings to publicize previously obscure failures on issues ranging from the AIG bailout to the unmitigated foreclosure crisis.
She also just happened to be the person who came up with the idea for creating a CFPB in the first place.
But while Warren is the top candidate for the post, she’s facing stiff opposition from the Treasury, as Annie Lowrey details for The Washington Independent. The source of the tension? Warren’s public criticisms of Treasury from her current position. In short, the Treasury is upset that she’s doing her job well.
Kevin Drum of Mother Jones also weighs in, calling Warren “the obvious choice” for the new CFBP role. A Warren appointment, Drum notes, would send a clear signal to voters that the Obama administration is serious about reining in financial excess. It would also demonstrate that President Barack Obama is actually paying attention to the concerns of the people who elected him in 2008.
A Strong CFPB Will Strengthen Economic Recovery
From a policy perspective, Warren’s long list of accomplishments on banking reform will be critical to the new CFPB, because financial abuses of consumers have not abated since the mortgage meltdown, despite widespread public condemnation.
As I emphasize for AlterNet, banks scored a total of over $38 billion in overdraft fees in 2009, while the industry’s combined profit for the year was just $12.5 billion. The problem is not only that banks are engaging in rampant predation, but that predation is their dominant line of business. Instead of making responsible loans to support the economy, finance is gouging the middle class with tricks and traps.
But current regulators have been extremely reluctant to do anything about this behavior. The CFPB needs a strong leader who can immediately put an end to these kinds of activities and coherently set the tone for the bureau’s future conduct. There is simply no candidate better qualified for the post than Elizabeth Warren—selecting anyone else would be a clear sign that Obama is not serious about reining in Wall Street.
Fighting fraud
Consumer protection is not the only arena that will need strong oversight in the coming years. We’ll also need aggressive prosecutions of financial fraud. On Thursday, Goldman Sachs agreed to pay $550 million to settle a fraud suit brought against the company by the SEC. The arrangement is something of a mixed bag—Goldman did not admit to any wrongdoing, but it did acknowledge that it mislead its investors, which is a very big liability for a Wall Street titan to take on. The admission will also make it much easier for Goldman to be successfully sued by clients who got a raw deal from the megabank.
But as Amy Goodman and Juan Gonzalez of Democracy Now! note in an interview with Rolling Stone reporter Matt Taibbi, the settlement is also largely a disappointment. If the SEC had pursued and received a verdict against Goldman, it may very well have extinguished the company altogether. But even more frightening, Taibbi notes, is that Wall Street is interpreting the deal to mean that the government will not pursue further prosecutions against financial fraud.
The financial crisis that reached a fever-pitch in 2008 was fueled by inadequate rules, but it was also largely a story of banks aggressively breaking the rules that did exist. At the most basic level, banks issued millions of fraudulent mortgages, then packaged those fraudulent mortgages into securities and sold them off to investors without telling them that the securities were fraudulent.
They also resorted to all kinds of wild tricks to artificially inflate the values of their assets and deceive the public about the scope of their potential losses. Fraud, in other words, was at the very heart of what went wrong during the housing bubble, and if the SEC and the Justice Department refuse to take action against other fraudsters, they will encourage future abuses.
As Mitchell of Yes! emphasizes, citizens can express their outrage by moving their money from banking behemoths to safe, community-oriented local banks. Breaking up the big banks will require federal action, but we can pressure policymakers into doing the right thing by changing our own economic habits. The sooner we do so, the better.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.by Zach Carter, Media Consortium blogger
Image Courtesy of Flickr user New America... more
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by Erin Rosa, Media Consortium blogger
On Tuesday, the Department of Justice filed suit against the state of Arizona in an effort to overturn a stringent anti-immigration law passed in April. The move is a breath of fresh air for immigrant rights supporters. Democracy Now! and the Washington Independent have the story.
The suit will take on Arizona’s Senate Bill 1070, a law that requires local law enforcement to check an individual’s immigration status if there is “reasonable suspicion” that said individual is undocumented. The law has sparked national outrage and serious concerns that Latinos will be racially profiled by the police. Another provision of SB 1070 requires immigrants to carry papers denoting citizenship at all times while in the state.
Is SB 1070 unconstitutional?
At ColorLines, Daisy Hernandez reports that “the lawsuit, which was filed in a U.S. District Court in Phoenix, argues that it’s against the Constitution for a state to make its own immigration policy” because of “the legal doctrine of ‘preemption,’ which says that federal law trumps state statues.”
The key argument being that “the federal government already works with states to enforce federal immigration law,” so there’s no need for a law like SB 1070 to intervene, according to Hernandez.
A civil rights fiasco
Since April, the Arizona law has served as a rallying point for immigrant rights supporters, who refer to the bill as the “Juan Crow” law. The nickname references the Jim Crow laws that existed prior to the civil rights struggles of the 1960s.
Jessica Pieklo at Care2 notes that the DOJ suit “also contains a civil rights component and argues that the law would lead to law enforcement harassing U.S. citizens and lawful immigrants in efforts to hunt down undocumented workers.”
Citizens react
At New America Media, Valeria Fernández gauges immigrants’ and Arizona residents’ reactions to the suit.
“I really feel that the Justice Department will be on the winning side of history,” said Mary Rose Wilcox, a supervisor for District 5 in Maricopa County, AZ. “I think when justice needs to be served, you should never look at political costs.”
An undocumented immigrant named Griselda told Fernández that she “jumped for joy when she heard the news,” and “Thank God there’s another one in the fight.”
The immigration reform battle moves forward
Last week, President Barack Obama called for Congress to put politics aside and focus on immigration reform as quickly as possible. The speech and suit are fueling demand for comprehensive reform and it’s clear that the issue won’t be going away.
Yet despite the need for reform, there are roadblocks. As Paul Waldman writes for the American Prospect, “It’s true that there is little incentive for politicians to produce comprehensive reform. It’s guaranteed to displease much of the public, while there is a powerful incentive to play on people’s fears and resentments.”
However, there is hope in the organizing that’s being done by immigrant youth. Undocumented immigrant and student organizer Tania Unzueta said in an interview with In These Times that immigrants from across the country are risking deportation and incarceration to come “out of the shadows and into the spotlight.”
As Unzueta explains in the interview, “When you stop being afraid, there’s a whole world of possibilities in terms of how much risk you’re willing to take to fight for what you believe is just.”
This post features links to the best independent, progressive reporting about immigration by members of The Media Consortium. It is free to reprint. Visit the Diaspora for a complete list of articles on immigration issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, and health care issues, check out The Audit, The Mulch, and The Pulse . This is a project of The Media Consortium, a network of leading independent media outlets.by Erin Rosa, Media Consortium blogger
On Tuesday, the Department of Justice filed... more
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by Erin Rosa, Media Consortium blogger
Hope for a comprehensive immigration reform bill this year has fallen by the wayside, but the Obama administration is rallying for one last hurrah before mid-term elections in November. Late last week, the White House unofficially announced plans to sue the state of Arizona over the now notorious Senate Bill 1070, a state law passed this year to crackdown on undocumented immigrants.
SB 1070 allows Arizona police to check the immigration status of a person if there is a “reasonable suspicion” that they are undocumented, and forces immigrants to carry government papers proving their identify at all times.
Meanwhile, an estimated 15,000 progressives and 1,300 organizations are meeting in Detroit this week to discuss alternative solutions to our broken immigration system at the second U. S. Social Forum (USSF).
US v. Arizona?
As Jessica Pieklo reports at Care2, “After Secretary of State Hillary Clinton’s nonchalant statement on Ecuadorian television last week that the Department of Justice planned to file suit challenging Arizona immigration law SB 1070, senior administration officials confirmed that such a suit would be forthcoming.”
“Expect a suit to come soon though as the controversial measure is set to take effect in July,” Pieklo writes. “That said, it is only one of many suits already challenging the measure in federal court. Some of those cases have asked a federal judge to issue an injunction which would halt implementation of the measure while the legal issues get sorted out.”
At the Women’s Media Center, Gloria Steinem and Pramila Jayapal argue that “In the wake of Arizona’s SB 1070—the harsh anti-immigrant law that not only condones but promotes racial profiling that endangers entire groups of the innocent—all sides seem to agree that the Federal government has abdicated its responsibility to institute a fair and just immigration system….”
Eyes on Detroit
In the wake of discriminatory laws like the one in Arizona, many immigration reform activists have come to the USSF, taking place June 22-26, to make their voices heard.
“This is great because it just shows community unity,” Rocio Valerio, an activist with the Worker’s Center immigrant rights group, told GritTV. “Right now the strategy for immigrant voices is being driven by policy groups, and with the social forum we’re saying that decisions can’t be made without us.”
At New America Media, Anthony Advincula interviews Rev. Phil Reller, a coordinator for Phoenix-based Southwest Conference United Church of Christ who is attending the forum. “This is a perfect opportunity to educate people on what’s truly happening in our local communities, not just about the struggles of immigrants in Arizona, but also the momentum of hope among community leaders to repeal SB 1070,” Reller says.
ICE gets a face lift
While activists are trying to find answers in Detroit, the Immigration and Customs Enforcement (ICE) agency in Washington D.C. is attempting to turn itself into a more attractive bureaucratic juggernaut. As AlterNet explains, “This week, [ICE] announced changes to its management structure, conceived as part of a strategy to ‘re-brand’ the agency to the public.”
The agency has even gone so far as to recruit help from Hollywood, although it’s uncertain where the assistance will be coming from or if ICE agents will be portrayed as the “good guys” in movies. But not even a public relations face lift can cover ICE’s sordid record of terrorizing and deporting undocumented immigrants at a record pace.
The National Radio Project has already reported on numerous abuses in ICE-run immigration prisons. The media outlet notes that the government’s “immigrant detention is the fastest-growing form of incarceration in the U.S., with more than 30-thousand detainees behind bars on any given day.”
Filming América
While immigration problems and discrimination against Latinos continues, Oliver Stone is releasing a new film titled “South of The Border” that traces the history of popular struggles in South America and how they affect the Western Hemisphere.
According to Free Speech TV, the movie, which is set to premiere at the USSF, features interviews from “several South American heads of state, including Evo Morales of Bolivia, Luiz Inácio Lula da Silva of Brazil and Hugo Chavez, president of Venezuela.” Stone was also interviewed about the movie on Democracy Now!
This post features links to the best independent, progressive reporting about immigration by members of The Media Consortium. It is free to reprint. Visit the Diaspora for a complete list of articles on immigration issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, and health care issues, check out The Audit, The Mulch, and The Pulse . This is a project of The Media Consortium, a network of leading independent media outlets.by Erin Rosa, Media Consortium blogger
Hope for a comprehensive immigration reform... more
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By Sarah Laskow, Media Consortium Blogger
“There’s a dead dolphin on this beach,” Mother Jones‘ Mac McClelland, wrote yesterday in Louisiana. It’s one snapshot of the harm visited on the Gulf Coast by the BP oil spill. Back in Washington, the Senate climate bill, which would put the country on a path to cleaner energy consumption, is on its last legs.
You’d think that after a seemingly unstoppable oil spill in the Gulf of Mexico (official estimates are up to 50,000 barrels a day, as of yesterday) and the hottest spring on record (hello, climate change!), U.S. citizens and elected representatives would recognize that our country’s thirst for resources has consequences.
It’s not just that oil is spilling into the Gulf, even after BP hit on a fix. Besides the blow-out that has dominated headlines, another, more routine spill showed up near the Louisiana coast. The Deepwater Horizon spill is now the larger of two spills in the Gulf Coast, according to Care2. A week ago in Pennsylvania, a natural gas well owned by EOG Resources (formerly Enron) shot a geyser of chemical-laced water 75 feet into the air; and on Monday, in West Virginia, another natural gas well, this one owned by Chief Oil and Natural Gas, also exploded, as AlterNet reports.
Yet BP is still supplying the Pentagon with oil and gas, as Jeremy Scahill writes at The Nation. Senators are still supporting natural gas exploration and off-shore oil drilling. The White House has also abandoned any intention of pushing for strong legislation that would push for better, cleaner energy.
Lifestyle vs. lives
Americans aren’t willing to give up their lifestyle, so wild animals are giving up their lives. One casualty of the BP spill in the Gulf might be bluefin tuna. Their population is 20% of what it was 40 years ago, Inter Press Service reports. Although the effects of the oil spill won’t be entirely clear for a few years, scientists are worried.
“Biologically, bluefin are already unlucky,” IPS writes. “The fish – which can be as long as and faster than a sports car – only spawn once a year and only in certain locations.”
Schools of the tuna, IPS reports, are headed now towards the Gulf of Mexico.
“The spill has been going on during their peak spawning period in the only place the western population spawns, so in timing and location it’s probably the worst place you could have it and during the worst time,” Lee Crocket, director of federal fisheries policy at Pew Environment, told IPS.
All the creatures of the sea
It’s not just tuna that are at risk, either. Mother Jones’ Julia Whitty has been documenting the fate of birds, fish, and other sea creatures that come into contact with the oil in the Gulf. She visited Elmer’s Island, LA, and snapped a shot of one of the dead jelly fish that had washed up on the shore:
“There were dead Portuguese man o’war jellies—one of the few species that weather the travails of the dead zone that afflicts these waters each summer. The dead zone is an area around the outflow of the Mississippi River made hypoxic by too many nutrients flowing downstream, mostly from farms and ranches. If you’re a jellyfish, a dead zone is survivable. Apparently an oiled zone is not.”
BP’s shroud of secrecy
BP has been remarkably cagey with the public about what’s going on in the Gulf. In addition to keeping reporters away from soiled area, the company hasn’t shown much interest in understanding exactly how much oil it’s spilling into the ocean. Initial estimates of 1,000 barrels per day have blossomed into estimates, on the low end, of 25,000 barrels. On Democracy Now!, scientist Ira Leifer said that the company is being more forthcoming with information now than it was originally. But he’d like a fuller picture:
“What there really should be at these kind of sites is some acoustic methods, whether it’s sonar or passive listening devices, or other approaches that continuously are monitoring and waiting for something to happen and then would provide a nonstop, steady data stream, so we could actually learn from what happens….These things, they’re not steady states. They belch. They have large eruptions.”
What that means, Leifer said, is that it’s not necessarily accurate to talk about a definitive rate at which the oil is pouring out. In his words, “the flow today is not necessarily the flow tomorrow.” What’s more, the attempts to stop the spill can make it worse. One concern is that the rock surrounding the pipe could “give out,” Leifer says. In that scenario, the oil would not just come from the pipe but from many sites in the surrounding sea bed.
“This reservoir is massive, and it could easily flow that kind of oil for the next twenty or thirty years, if it was left to go unattended,” Leifer said. “So the amount of oil that could end up in the environment if measures are not successful is at what I would call unimaginable.”
Spin, BP, spin
Given that sort of doomsday scenario, it’s not surprising that BP has plans to promise as little as possible to the spill’s victims. As Justin Elliott reports at TPMMuckraker, the company’s plan for oil spills instructs its spokespeople not to promise anything.
BP’s June 2009 Gulf of Mexico Regional Oil Spill Response Plan reads: “No statement shall be made containing … Promises that property, ecology, or anything else will be restored to normal,” Elliott writes.
Solutions
How to move beyond these horror stories? This week, Sen. Lindsey Graham (R-SC) completely disowned the climate legislation he was working on before, and both Mother Jones’ Kevin Drum and The Washington Monthly’s Steve Benen bemoaned the climate bill’s fate.
Yesterday, the Senate narrowly defeated an amendment offered by Sen. Lisa Murkowski (R-AK) that would have stripped the Environmental Protection Agency of its power to regulate carbon. Although the amendment failed, support from Democrats like Arkansas’ Blanche Lincoln signals that the support isn’t there for even unambitious climate legislation. And at this juncture, it seems like the U.S. has done more harm than good in the international arena.
Coping with Copenhagen
International leaders are at Bonn this week, trying to pick up the pieces from last November’s climate change negotiations in Copenhagen.
“Copenhagen was a pretty horrible conference,” conceded Yvo de Boer, the executive secretary of the United Nations Framework Convention on Climate Change (UNFCCC), as IPS reports. “This year it’s about restoring trust.”
For the U.S., passing climate legislation would help.
This post features links to the best independent, progressive reporting about the environment by members of The Media Consortium. It is free to reprint. Visit the Mulch for a complete list of articles on environmental issues, or follow us on Twitter. And for the best progressive reporting on critical economy, health care and immigration issues, check out The Audit, The Pulse, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.By Sarah Laskow, Media Consortium Blogger
“There’s a dead dolphin on... more
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by Erin Rosa, Media Consortium blogger
A Border Patrol agent shot and killed a 14-year-old Mexican boy on June 7. At RaceWire, Julianne Hing reports that “Sergio Adrian Hernandez Huereca [was] on the Mexican side of the El Paso-Juarez border [and] was shot and killed by a Border Patrol officer, who was on the U.S. side.” The incident has been condemned by the Mexican government and sparked investigations by the Customs and Border Protection agency and the Federal Bureau of Investigation.
The exact details are still being investigated. The Border Patrol claims that the teen was throwing rocks at agents, but eye-witnesses on the Mexican side of the border say otherwise.
An eye-witness account
Democracy Now! quotes an eye-witness who says that Hernandez Huereca was clearly on Mexican soil, playing with other youths when an agent shot at the entire group and killed the 14-year-old Juarez resident as he was taking cover.
“Once the youngsters were on Mexican soil, an official—I don’t know if he was an immigration agent or a police officer—arrived on a bike, wearing a white shirt, a helmet and shorts,” the witness says. “He shot at the youngsters, at the whole group. Some ran in one direction, and others in another. This one teenage victim hid behind the wall. He looked out, and that’s when the teenager was shot.”
Twice in two weeks
The shooting was the second deadly Border Patrol-related incident in two weeks. On May 26, Anastacio Hernández-Rojas, 32, was allegedly beaten and hit with a stun gun by agents in California after he became combative. His death has been ruled a homicide by the San Diego County medical examiner’s office and an investigation is ongoing.
Going back to Racewire, Maria Jimenez, an organizer with the Houston-based immigrant rights group America Para Todos, says that such incidents have a tendency to be swept under the rug. According to Jimenez, in the 1990s, agents committed at least 33 unwarranted shootings in a single year.
“Some of them we don’t even know about, they just don’t reach the public,” Jimenez says. “They know about it, but we don’t.”
Border Patrol corruption
Border Patrol agents also face accusations of charging a steep price to allow undocumented people to cross into the United States.
At New American Media, Anthony Advincula writes about the perilous journey many immigrants take to cross the border. He interviews Guatemalan immigrant Danilo Gonzalez, who paid $7,500 to a human smuggling ring that could call in favors from the Border Patrol.
“When we reached the Mexican border, we were asked to get off and transferred to a different bus. All of us were together,” Gonzalez recalls. “The traffickers had good connections to U.S. authorities; they paid some Border Patrol officers. After many hours of traveling, we were finally transported to Arizona.”
Crime down along the border
The Obama administrations’ decision to send 1,200 National Guard troops to the border is exacerbating the situation. But the troops aren’t there because of immigration, according to White House officials. They’re supposed to keep a lid on drugs and other violent trafficking crimes along the Rio Bravo.
That argument doesn’t hold water, as violence in U.S. border cities—especially those with high immigrant populations—is actually down. At Care2, Jessica Pieklo reports that “Violent crime in Arizona, and other states that have a significant immigrant populations, has been consistently on the decline, especially recently.”
Pieklo explains that after a spike in 2006 and 2007, the number of violent crimes reported in Phoenix, Arizona, including murder, dropped 13 percent in 2009.
The decrease isn’t because of Arizona’s tough anti-immigration laws. Pieklo notes that “El Paso, Texas remains one of the safest cities in the country with only 12 murders last year, despite the fact that right across the border a drug war rages in Juarez, Mexico.”
ICE and BP
Moving along to what is likely to be the worst environmental disaster in United States history, the notorious BP oil spill has now become a cause for immigrant rights supporters who are appalled by reports that the federal government is using the crisis to detain immigrant clean-up workers.
GritTV spoke with Mallika Dutt, executive director of Breakthrough, about the crackdown. Dutt noted that “it is easier to crack down on immigrants (sending ICE to check up on workers cleaning up BP’s mess) than oil companies, and that activists around these issues need to work together as civil disobedience rises around the country.”
This post features links to the best independent, progressive reporting about immigration by members of The Media Consortium. It is free to reprint. Visit the Diaspora for a complete list of articles on immigration issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, and health care issues, check out The Audit, The Mulch, and The Pulse . This is a project of The Media Consortium, a network of leading independent media outlets.by Erin Rosa, Media Consortium blogger
A Border Patrol agent shot and killed a... more
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by Sarah Laskow, Media Consortium blogger
Image courtesy of Flickr user -Snugg-, via Creative Commons licenseSen. John Kerry (D-MA) and Sen. Joe Lieberman (I-CT), though down one man, finally released their stab at climate legislation this week. One of the most crucial sections in the bill covers off-shore oil drilling, an issue that was supposed to help solve the tricky math of reaching 60 votes. But since the Deepwater Horizon rig sank in the Gulf of Mexico, drilling has become a wedge issue.
Just a few weeks ago, off-shore drilling could have been a point of compromise around which Senators could rally votes to pass the climate bill; now the bill had to strike a new balance to mollify both potential allies who oppose drilling, like Sen. Robert Menendez (D-NJ), and those who support drilling, like Sen. Mary Landrieu (D-LA). The draft that Sen. Kerry and Sen. Lieberman released this week allows for expanded drilling but gives states veto power over new projects.
Sen. Lindsey Graham (R-SC), who worked on the bill, said that he had not seen the changes his two colleagues had made since he dropped out of the drafting process—but he looked forward to reviewing their work. Although Sen. Kerry says he thinks the bill can pass, without support from Sen. Graham or another Republican, chances are slim.
Next steps
Now that the two Senators have released the bill, the only work that remains is to pass it.
“I think climate change legislation is dead,” writes Kevin Drum at Mother Jones. His explanation:
“There’s not enough time for a bill to go through the committee process, get passed by the Senate, sent to conference, amended, and then passed by the full Congress before the midterms, and after the midterms Democrats will probably be reduced to 53 or 54 members in the Senate.”
Not everyone agrees that the bill’s chance are so dire, though.
“I think the chances are roughly as good as they’ve ever been in the Senate: low but non-trivial,” says Grist’s David Roberts.
Kerry’s argument
But should green-minded politicos root for the bill’s passage at all? Sen. Kerry and Sen. Lieberman worked closely with energy companies while drafting the bill, and the resulting legislation balances the need to reduce carbon emissions with the interests of prime polluters. The bill includes incentives for old energy industries like coal and natural gas, for instance, and exempts farmers from carbon caps.
On Wednesday, Sen. Kerry made his case to left-leaning environmentalists. “A comprehensive climate bill written purely for you and me — true believers — can’t pass the Senate no matter how hard or passionate I fight on it,” he wrote for Grist. The bill they have, he wrote, can pass, and that victory outweighs the compromises in the legislation.
Responses from the left
On Democracy Now!, Phil Radford, the executive director of GreenPeace USA, said that most environmental groups have given the bill little more than a “tepid endorsement.” Radford squared off on the show with Joseph Romm of the Center for American Progress, who supports the bill.
“This will be the first bill ever passed by the Senate, if it were to pass, that would put us on a path to get off of fossil fuels,” Romm said.
The two men were also divided over issues like the impact the climate bill could have on international negotiations.
They agreed, though, there is room for improvement; the only question is whether the politics of climate change will allow for the passage of a stronger bill any times soon. As Kevin Drum wrote, “If you think this year’s bills are watered down, just wait until you see what a Congress with a hair-thin Democratic majority produces.”
Coal and natural gas
Tripping up environmentalists now, though, are the hand-outs to dirty energy industries. The coal and natural gas industry could both benefit from the provisions of the Senate bill, for instance.
On GritTV, Jeff Biggers, a writer and educator who covers the coal industry, explained his frustration:
“The climate bill is a nice first step and a very well meaning effort for someone like Sen. Kerry who’s been working on this issue for 20 years. But at the same time, because of the massive big coal lobby that has poured millions of dollars into lobbying congress on this climate legislation…there are all sorts of little panders and loopholes and exemptions.”
“What we see in this bill is that Sen. Kerry and Lieberman want to ensure coal’s future,” he said.
The booming natural gas industry also had a hand in shaping the bill and benefited from it. Environmental groups like the Sierra Club favor natural gas as an energy source over coal, and as Kari Lydersen reports in Working In These Times, the industry is driving job growth at a time when the economy needs a boost.
But as Alex Halperin reported last month for The American Prospect, in the places where drilling is occurring, like Ithaca, NY, activists are arguing that the environmental risks could outweigh those economic benefits.
Drill or be drilled
That devil’s bargain—risking natural resources for jobs in the energy industry—went the wrong way for the Gulf Coast, and states like Louisiana, Alabama, and Florida are paying the price even before the oil hits shore.
As I report in AlterNet, the Gulf’s economy could lose billions of dollars and is suffering already from the misconception that its beaches are tarred with oil. With this catastrophe still fresh in voters’ minds, the Senate climate bill proposes pushing new drilling initiatives 75 miles offshore and giving affected states veto power over these projects.
Depending on how long the memory of the Deepwater Horizon spill lasts, politicians could have a good reason to veto drilling. Public News Service reports that 55% of Floridians now oppose off-shore drilling, “almost a complete reversal from one year ago.”
Blame game
Certainly no one is stepping up to take responsibility for the explosion off the coast of Louisiana, as the Washington Independent reports. At a hearing this week, officials from British Petroleum, which was operating the well, Transocean, which owns it, and Halliburton, which was doing contract work that may have caused the problem, all denied wrongdoing and pressed the blame on each other.
It’s starting to look Halliburton played a key part. “The focus is increasingly shifting to the role of Halliburton, which poured the cement for the rig, as well as for another operation that spilled oil off the coast of Australia last August,” writes Kate Sheppard at Mother Jones. The company apparently did not place a cement plug that would have kept gas in the well before emptying it of the mud that was holding in the flammable gas.
Anyone living in a state that could have new drilling off their coast should keep this catastrophe in mind if their politicians are given the option of vetoing new projects.
This post features links to the best independent, progressive reporting about the environment by members of The Media Consortium. It is free to reprint. Visit the Mulch for a complete list of articles on environmental issues, or follow us on Twitter. And for the best progressive reporting on critical economy, health care and immigration issues, check out The Audit, The Pulse, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.by Sarah Laskow, Media Consortium blogger
Image courtesy of Flickr user -Snugg-,... more
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Watch excerpts of BP being grilled by Senators and learn from marine biologist Rick Steiner about the full extent of damage done by the spill. Then watch Harvard law professor Lawrence Lessig and Salon.com writer Glenn Greenwald debate about Elana Kagan's Supreme Court nomination.Watch excerpts of BP being grilled by Senators and learn from marine biologist Rick... more
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by Zach Carter, Media Consortium blogger
Last week, the U.S. Senate rejected a plan that would have broken up the nation’s six largest banks firms into firms that could fail without wreaking havoc on the economy. Even though the defeat reinforces Wall Street’s political dominance, there is still room for a handful of other useful reforms, like banning banks from gambling with taxpayer money and protecting consumers from banker abuses. After looting our houses, banks are now pushing for the ability to bet on movie box-office receipts, and will keep trying to financialize anything they can unless Congress acts.
Wall Street calls the shots
Writing for The Nation, John Nichols details last week’s Capitol Hill damage. Today’s financial oligarchy, in which a handful of bigwig bankers and their lobbyists are able to write regulations and evade rules they don’t like, will still be in place after the Wall Street reform bill is passed. The lesson is clear, as Nichols notes:
Whatever the final form of federal financial services reform legislation, one thing is now certain: The biggest of the big banks will still be calling the shots.
Still worth fighting for
As I emphasize for AlterNet, Congress has made a terrible mistake here, but there is still room for reform. It took President Franklin Delano Roosevelt seven years to enact his New Deal banking laws. It took even longer to reshape public opinion of monopolies when President Theodore Roosevelt took on Corporate America in the early 1900s.
What’s still worth fighting for? We have to curb the derivatives market—the multi-trillion-dollar casino that destroyed AIG. We have to impose a strong version of the Volcker Rule, which would ban banks from engaging in speculative trading for their own accounts. We have to change the way the Federal Reserve does business and force the government’s most secretive bailout engine to operate in the open. And we have to establish a strong, independent Consumer Financial Protection Agency to ensure that the horrific subprime mortgage abuses are not repeated.
As Nomi Prins details for The American Prospect, the current reform bill will not effectively deal with the dangers posed by hedge funds and private equity firms—companies that partnered with banks to blow up the economy through investments in subprime mortgages. That means that whatever happens with the current bill, Congress must again take action next year to rein in other financial sector excesses.
The derivatives casino at the movies
As Nick Baumann demonstrates for Mother Jones, banks are doing everything they can to gobble up other productive elements of the economy. The economy crashed in 2008 in large part because banks had used the derivatives market to place trillions of dollars in speculative bets on the housing market. This wasn’t lending, it was pure gambling: Instead of using poker chips, bankers placed their bets with derivatives. But, as Baumann emphasizes, banks are now looking to expand the sort of thing they can make derivatives gambles with. The latest proposal is to allow banks to bet on the box office success of movies. That’s right, banks would be gambling on movies.
Hollywood may be shallow, but it isn’t stupid. It doesn’t want to see the banking industry repeat its destructive looting of the housing industry on the movie business, and is pushing hard to ban banks from betting on movies. But we can’t count on every industry having a powerful lobby group to counter every assault from the banking system.
Taking stock in schools
Consider the unsettling report by Juan Gonzales of Democracy Now!. Gonzales details how big banks gamed the charter school system to score huge profits while simultaneously saddling taxpayers with massive debts that make teaching kids supremely difficult. By exploiting multiple federal tax credits, banks that invest in charter schools have been able to double their money in seven years—no small feat in the investing world—while schools have seen their rents skyrocket. One school in Albany, N.Y. saw its rent jump from $170,000 to $500,000 in a single year.
About that unemployment rate…
It’s not like public schools are flush with cash right now. The $330,000 increase in rent could pay the salaries of more than a few teachers. As the recession sparked by big bank excess grinds on, even the good news is pretty hard to swallow. As David Moberg emphasizes for Working In These Times, the economy added 290,000 jobs in April, but the unemployment rate actually climbed from 9.7 percent to 9.9 percent in March. That’s because the unemployment rate only counts workers who are actively seeking a job—if you want a job but haven’t found one for so long that you give up, you’re not technically “unemployed.” All of those “new” workers are driving the official figures up.
In other words, it’s still rough out there. And likely to stay rough as state governments try to deal with the lost tax revenue from plunging home values and mass layoffs. Nearly half of all unemployed people in the U.S. have been out of a job for six months or more. And while we’d be much worse off without Obama’s economic stimulus package, that percentage is likely to grow this year, Moberg notes.
This is what unrestrained banking behemoths do. They book big profits and bonuses for themselves, regardless of the consequences for the rest of the economy. Congress absolutely must impose serious financial reform this year. After the November election, breaking up the banks must once again be on the agenda when Congress considers the future fate of hedge funds, private equity firms, Fannie Mae and Freddie Mac. If we don’t rein in Wall Street, banks will continue to wreak havoc on our homes, our jobs and even our schools. Congress must act.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.by Zach Carter, Media Consortium blogger
Last week, the U.S. Senate rejected a plan... more
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by Sarah Laskow, Media Consortium blogger
Environmental advocates from around the world gathered in Cochabamba, Bolivia, this week and resolved that, a year from now, they would hold a world’s people referendum on climate change to marshal support for the rights of the planet.
“Although it is hoped that some states will cooperate, the participation of governments will not be essential to the referendum, as civil society organizations are to plan it according to their own lights and the traditions and customs of each local area,” reports Franz Chavez for Inter Press Service.
The conference’s democratic, citizen-oriented format starkly contrasted with March’s United Nations-led summit in Copenhagen. The conference at Cochabamba emphasized inclusion and a diversity of voices, providing an antidote to processes like the U.N. climate negotiations, where smaller countries were excluded from key discussions.
No official United States delegation attended the conference, but this week, the country held its own celebration of the environment: the 40th annual Earth Day. On Thursday, arguments over climate change were put on pause, as environmental leaders recognized both accomplishments and the unfinished business of cleaning up the air, land, and water.
“Environmentalism isn’t such a mysterious thing anymore. People are looking more at environmental values as being things that are tangible and relate to how we live our lives,” Pete Carrels of the South Dakota Sierra Club told Public News Service.
The mystery, now, lies in finding a way to shore up defenses against old environmental hazards—dirty water, dirty air, diminishing resources—and to agree on a path towards a low-carbon future that avoids the worst calamities of climate change.
At Cochabamba
“Bolivian music, indigenous ceremonies and the Bolivian army’s honor guard were on hand to greet the first indigenous president of the Plurinational State of Bolivia, Evo Morales,” Democracy Now! reported from Tiquipaya, the town just outside Cochabamba where the actual conference is being held.
In a stadium crowded with fifteen thousand people, President Morales opened the event Tuesday morning with exhortations to choose life for the planet. Franz Chavez of Inter Press Service reports:
“The stadium, ablaze with the multi-coloured traditional garments of different Andean and Amazonian native communities and the flags of people from different countries around the world that contrasted with the cold formality of presidential summits, served as the stage for Morales, of Aymara descent, to call for an “inter-continental movement” in defence of Mother Earth.”
You can get a sense of the atmosphere in this GRITtv report or the below video from Yes! Magazine.
Too many cooks?
One of the main goals of the summit was to draft a “universal declaration of rights of Mother Earth,” envisioned as a complement to the United Nations declaration on human rights. There were also 17 working groups that dealt with issues like climate migrants, the Kyoto protocol, and technology transfer. Any conference participant could participate in up to five working groups.
The open format was, at times, chaotic. Cormac Cullinan, an environmental lawyer from South Africa who provide the baseline text for the declaration of rights, told Democracy Now! that on one day of the conference four hundred people were contributing revisions to the text. Another day, that number jumped to one thousand.
“The challenge is to make sure we integrated all the different comments and point of view,” he said. “We’re essentially expressing an entirely new world view from an indigenous perspective in legal language.”
Many voices, but what are the solutions?
Elizabeth Cooper affirms this emphasis on a diversity of voices in a report for Yes! Magazine. “This issue of valuing the knowledge and abilities of indigenous peoples and those from the South was an undercurrent to the rest of the afternoon as it is to the Summit as a whole,” she writes.
But this scale of participation also meant that conversations could veer from essential topics. Also at Yes! Magazine, Jim Shultz asks, “If forcing rich countries to pay a climate debt is a dead end, what is the plan to move “climate debt” from a catchy idea to a real proposal with a chance of delivering some results?”
“At a workshop today on that topic, there was an abundance of declarations about why climate debt is important, but few ideas of how to make it real,” he reports.
The need
There’s a need, though, for people to participate in these discussions, even if the conversations don’t take a smooth and tidy course. At The Nation, Naomi Klein writes that “Bolivia’s climate summit has had moments of joy, levity and absurdity. Yet underneath it all, you can feel the emotion that provoked this gathering: rage against helplessness.”
At a conference like Copenhagen, the worries and priorities of smaller countries were ultimately excluded from the debate. In Bolivia, Klein explains, glaciers—the water source for two major cities—are melting. Yet that problem did not earn the country a place in the Copenhagen discussions that could determine its fate. Cochabamba’s goals were, in part, to reestablish a more democratic system for decision-making about climate reform.
As Regina Cornwell documents at the Women’s Media Center, left to its own devices, international bodies like the United Nations easily exclude interested groups from the conversation.
“In early March, just as the entire area of Manhattan around the UN was crawling with women wearing their blue Conference for the Status of Women tags, UN Secretary General Ban Ki-moon announced a “High-level Advisory Group on Climate Change Financing” composed exclusively of men,” she writes.
Earth Day 2010
The conferees at Cochabamba traveled to Bolivia because they saw a gap in leadership after UN climate talks at Copenhagen crumbled. The ideas developed this week could prompt the world’s leaders towards brave action on climate change. Strong leadership can make the difference between real change and status quo.
At The Nation, John Nichols reflects on the leadership of Sen. Gaylord Nelson, who helped create Earth Day. Nelson, was “a bold progressive who recognized the need to make the health and welfare of human beings, in the United States and abroad, a priority over the profits of multinational corporations,” he writes. Nelson’s vision for Earth Day was to produce an outpouring of empathy for the environment “so large that it would shake the political establishment out of its lethargy.”
It worked. The first Earth Day is credited with driving action on the environmental institutions that still protect Americans today: the Clean Air Act, the Clean Water Act, the Environmental Protection Agency.
Today’s leaders
Today, other leaders are fighting the same fight as Nelson did. At Cochabamba, these climate leaders, profiled by Colorlines, are marshaling their communities to push back against global warming, as are these conference-goers. They lack official titles but are leading nonetheless. Young people, like those honored by the Brower Youth Award, are coming up with amazing ideas to ensure a healthy future for the planet, reports LinkTV. At The Progressive, Winona LaDuke explains how native communities are working to produce a new energy economy.
And all over the world, individuals are working to minimize their impact and the impact of their societies on the environment. AlterNet suggests “five ways you can help save life on earth,” and Care2 has two other suggestions: eat less meat and reduce use of water bottles.by Sarah Laskow, Media Consortium blogger
Environmental advocates from around the... more
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by Zach Carter, Media Consortium blogger
Last week, the Securities and Exchange Commission filed fraud charges against Goldman Sachs and underscored what most Americans have believed for some time: Wall Street has rigged the economy in its own favor, and will stop at nothing—not even outright theft—to boost its profits. What’s worse, Goldman’s scam could have been completely prevented by better regulations and law enforcement.
Goldman’s heist
Let’s be clear. “Financial fraud” means “theft.” Goldman Sachs sold investors securities that were stocked with subprime mortgages and had been cherry-picked by a hedge fund manager named John Paulson. Paulson believed these mortgages were about to go bust, so he helped Goldman Sachs concoct the securities so that he could bet against them himself.
Goldman Sachs, like Paulson, also bet against the securities. But when Goldman sold the securities to investors, it didn’t tell them that Paulson had devised the securities, or that he was betting on their failure. By withholding crucial information from investors, Goldman directly profited from the scam at the expense of its own clients. If ordinary citizens did what the SEC’s alleges Goldman did, we’d call it stealing.
As Nick Baumann emphasizes for Mother Jones, the SEC’s suit against Goldman is just the tip of the iceberg. During the savings and loan crisis of the late 1980s, literally thousands of bankers were jailed for financial fraud. Today’s crisis was much larger in scope, yet the Goldman allegations are among the first serious charges of legal wrongdoing to emerge (other complaints have been filed against Regions Bank and former Countrywide CEO Angelo Mozilo). If the SEC or the FBI are doing their jobs, we should see many more of these cases.
Bust ‘em up.
How do banks get away with these kinds of shenanigans and still secure epic taxpayer bailouts? It’s all about their political clout, as Robert Reich notes for The American Prospect. So long as banks are so enormous that they can ruin the economy with their collapse, the institutions will always carry tremendous political clout.
Even in the case of Goldman Sachs, which is too-big-to-fail by any reasonable standard, the SEC’s fraud case is being filed three years after the company’s alleged offense. That’s well after the company rode to safety on the Troubled Asset Relief Program, the AIG bailout and billions more in other indirect assistance—and only after multiple journalists made Goldman’s offensive transactions general public knowledge.
If we don’t break up the big banks, politically connected Wall Street titans will make sure they get bailed out when the next crisis hits, regardless of whatever laws we have on the books.
Fix the derivatives casino
If Congress doesn’t soon pass a bill to break up behemoth banks, it will be neglecting the gravest problem in our financial system today. But several other reforms are needed if Wall Street is ever going to serve a useful economic function again.
As Nomi Prins emphasizes for AlterNet, much of the Wall Street profit machine has been divorced from the economy that the rest of us live in. These days, banks make most of their money from securities trades and derivatives deals. Their actual lending business is taking a beating. That means big banks have very little incentive to promote economic well-being for every day citizens. We need to create these incentives by banning economically essential banks from engaging in securities trades, and make sure all derivatives transactions are conducted on open, transparent exchanges, just like ordinary stocks and bonds.
Better derivatives regulations could help protect against fraud. If Goldman Sachs’ sketchy subprime deal had been subject to market scrutiny on an exchange, it’s very unlikely that any investor would have bought into it. Goldman Sachs almost got away with it because the deal was secretive and beyond the scope of most regulatory oversight.
Protect whistleblowers
The Goldman case also raises significant questions about the government’s enforcement of existing financial fraud laws. Bradley Birkenfeld, a banker for Swiss financial giant UBS, helped the Department of Justice bring the largest tax fraud case in history against his company, which was helping rich Americans hide money from the IRS in offshore bank accounts.
For his cooperation, Birkenfeld was rewarded with a four-year prison sentence, even though nobody else at UBS—nobody—has been sentenced to prison over the scam. As Juan Gonzalez and Amy Goodman emphasize for Democracy Now!, Birkenfeld’s imprisonment could have something to with who exactly is hiding money with UBS.
Gonzalez discusses an interview with Birkenfeld, in which the former banker notes that the bank had a special office to handle the accounts of “politically exposed persons”— American politicians. Moreover, the top brass at UBS includes key advisors to top politicians in both parties. This is exactly the kind of influence smuggling that breaking up the banks would help fix. UBS is a multi-trillion-dollar institution with no less than 27 U.S. subsidiaries.
But protecting Birkenfeld would accomplish still more—by jailing him, the Justice Department is actively discouraging others from coming forward, and making it more difficult for regulators to enforce the law.
Greenspan’s failure
It’s abundantly clear that almost every major regulatory agency charged with curtailing financial excess failed to prevent the Crash of 2008. But that failure doesn’t mean that effective regulation is impossible—it only shows that the regulators in power failed. The top bank regulator in the U.S., John Dugan, was a former bank lobbyist.
As Christopher Hayes demonstrates for The Nation, former Federal Reserve Chairman Alan Greenspan has never had any interest in regulation whatsoever. After the crash, Greenspan insisted that nobody could have seen it coming. But as Hayes notes, many people did—Greenspan simply didn’t listen to them. These days, Greenspan is revising his story, claiming that he did in fact see the crisis coming, but that nobody could have prevented it. That is simply not credible.
Hayes draws a useful parallel Hurricane Katrina, a problem sparked by a natural event that became a catastrophe when regulators failed to take the necessary precautions. The lesson from both Katrina and the financial crash is not that government always screws up—we have plenty of examples of government preventing floods and economic calamity. The lesson we should learn is that people who don’t believe in government will never do a good job governing. As Hayes notes:
If Greenspan couldn’t figure things out, that doesn’t mean others can’t. In fact, developing systems for doing just that is called—quite simply—progress, and Alan Greenspan continues to be one of its enemies.
That is exactly the task that now presents itself before Congress: Developing a system to prevent and constrain economic destruction wielded by Wall Street. The U.S. had a system that did exactly this for more than fifty years. For the last thrity years, it has been systematically dismantled. How well Congress lives up to that challenge will define much of our economic future for decades to come.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.by Zach Carter, Media Consortium blogger
Last week, the Securities and Exchange... more
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By Sarah Laskow, Media Consortium blogger
Image courtesy of Flickr user swperman under Creative Commons LicenseOn Monday, climate activists, nonprofit leaders, and governmental officials will gather in Cochabamba, Bolivia, to look for new ideas to address climate change. The World People’s Conference on Climate Change and the Rights of Mother Earth, organized by leading social organizations like 350.0rg, “will advocate the right to “live well,” as opposed to the economic principle of uninterrupted growth,” as Inter Press Service explains. In the absence of real leadership from the world’s governments, the conferees at Cochabamba are looking for solutions “committed to the rights of people and environment.”
The United States certainly isn’t stepping up. Sen. John Kerry (D-MA), along with Sen. Joe Lieberman (I-CT) and Sen. Lindsay Graham (R-SC), were supposed to release their climate legislation next week, just in time for Earth Day. But yesterday the word came down that the release was being pushed back by another week, to April 26.
No matter when it finally arrives, like other recent environmental initiatives, this round of climate legislation falls short. Even if Congress manages to pass a bill—and there’s no guarantee—it will likely leave plenty of room for the coal, oil, and gas industries to continue pouring carbon into the atmosphere. And a wimpy effort from Congress will hinder international work to limit carbon emissions: As a prime polluter, the United States needs to put forward a real plan for change.
Kerry, Graham, and Lieberman
Although the text of the bill is not public yet, it is likely that this attempt at Senate climate legislation will limit carbon emissions only among utilities and gradually phase in other sectors of the economy. On Democracy Now!, environmentalist Bill McKibben called the bill “an incredible accumulation of gifts to all the energy industries, in the hopes that they won’t provide too much opposition to what’s a very weak greenhouse gas pact.”
Climate reform began with a leaner idea, a cap-and-trade system that limited carbon emissions while encouraging innovation. The Nation’s editors document the transformation of climate reform from the Obama administration’s original cap-and-trade proposal to the behemoth tangle it has become. Both the House and the Senate fattened their versions of climate legislation with treats for the energy industry. The Senate’s new idea to gradually expand emissions reduction through a bundle of energy bills only opens up more opportunities for influence.
“Some of these pieces of legislation may pass; others may fail; all are ripe for gaming by corporate lobbies,” the editors write. “Kerry-Lieberman-Graham would also skew subsidies in the wrong direction, throwing billions at “clean coal” technologies, nuclear power plants and offshore drilling, a questionable gambit favored by the Obama administration to garner support from Republicans and representatives from oil-, gas- and coal-producing states.”
Even with these goodies, the climate bill may not pass. The Washington Independent rounds up the D.C. players to watch as the next fight unfolds, including the Chamber of Commerce’s William Kovacs and the Environmental Protection Agency’s Lisa Jackson.
Green leftovers
In theory, the climate bill should not be America’s only ride to a greener future. But the other vehicles for green change choked during start-up. The EPA was going to regulate carbon emissions, but Congress has reared against that effort. The climate bill could snatch away that power from the executive branch.
If companies won’t limit their carbon emissions, individuals still have the option for action. But as Heather Rogers explains in The Nation, carbon offsets, one of the most popular mechanisms for minimizing carbon use “are a dubious enterprise.”
“To begin with, they don’t cut greenhouse gases immediately but only over the life of a project, and that can take years–some tree-planting efforts need a century to do the work. And a project is effective only if it’s successfully followed through; trees can die or get cut down, unforeseen ecological destruction might be triggered or the projects may simply go unbuilt.”
The pull of carbon offsets should diminish as energy use in buildings, cars, food, and flights gains in efficiency and uses less carbon. But if the green jobs sector is any indication, that revolution has been slow in coming. ColorLines reports that “there are no firm numbers on how many newly trained green workers are still jobless. But stories abound of programs that turn out workers with new, promising skills—in solar panel installation and weatherization, in places like Seattle and Chicago—and who nonetheless can’t find jobs.”
Cochabamba’s unique approach
These failures and setbacks don’t just affect Americans; they keep our leaders from negotiating with their international peers. The United Nations led a conference last winter in Copenhagen that promised to hash out carbon limits, yet produced no binding agreement. This coming winter, the UN will try again in Mexico, but if the United States shows up with the scant plan put forward by Kerry, Graham, and Lieberman, those negotiations have little promise.
In Cochabamba, leaders from inside and outside the government will attend a summit to discuss the future of climate change action. In The Progressive, Teo Ballve writes that,
“One of the bolder ideas is the creation of a global climate justice tribunal that could serve as an enforcement mechanism. And conference participants are already working on a “Universal Declaration of Mother Earth Rights” meant to parallel the U.N.’s landmark Universal Declaration of Human Rights of 1948.”
With U.S. government action paling, it might take outside ideas like these to revitalize the push towards a green future. By the end of next week, we’ll see if the Cochabamba group made any more progress than the bigwigs at Copenhagen.
This post features links to the best independent, progressive reporting about the environment by members of The Media Consortium. It is free to reprint. Visit the Mulch for a complete list of articles on environmental issues, or follow us on Twitter. And for the best progressive reporting on critical economy, health care and immigration issues, check out The Audit, The Pulse, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.By Sarah Laskow, Media Consortium blogger
Image courtesy of Flickr user swperman... more
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by Zach Carter, Media Consortium blogger
Congress returns from its April recess this week with financial reform at the top of its to-do list. With millions of Americans still bearing the brunt of the worst recession in 80 years, Congress needs to start protecting our economy from Wall Street excess, and repair the shredded social safety net that has allowed the Great Recession to exact a devastating human cost.
Big banks are an economic parasite
In an excellent multi-part interview with Paul Jay of The Real News, former bank regulator William Black explains how the financial industry has transformed itself into an economic parasite. Black explains that banks are supposed to serve as a sort of economic catalyst—financing productive businesses and fueling economic growth. This was largely how banks operated for several decades after the Great Depression, because regulations had ensured that banks had incentives to do useful things, and barred them from taking crazy risks.
The deregulatory movement of the past thirty years destroyed those incentives, allowing banks to book big profits by essentially devouring other parts of the economy. Instead of fueling productive growth, banks were actively assaulting the broader economy for profit. None of that subprime lending served any economic purpose. Neither do the absurd credit card fees banks charge, or the deceptive overdraft fees they continue to implement.
As Matt Taibbi explains in an interview with Amy Goodman and Juan Gonzales of Democracy Now!, banks didn’t just cannibalize consumers. They also went directly after local governments, bribing public officials to ink debt deals that worked wonderfully for the banks, and terribly for communities. In Jefferson County, Ala., J.P. Morgan Chase helped turn a $250 million sewer project into a $5 billion burden for taxpayers. The deal generated nothing of value for either citizens or the economy, but J.P. Morgan Chase was still able to line the pockets of its shareholders and executives. This kind of behavior was illegal, but the transactions involved were complex financial derivatives, which are not currently subject to regulation. To this day, nobody at J.P. Morgan Chase has been prosecuted for bribery or corruption.
Congress set to avoid tough regulations
There is a clear need for Congress to enact some firm restrictions against risky and predatory bank activities. But at the behest of Treasury Secretary Timothy Geithner, Congress is doing its best to avoid inserting any hard terms in legislative language, instead leaving the specifics to federal regulators to work out. As Tim Fernholz emphasizes for The American Prospect, this is an exercise in futility. Regulators already have the power to impose more stringent rules on nearly every arena of Wall Street business that matters (derivatives are a very noteworthy exception). If they wanted to fix things, they could do it without Congressional help. The trouble is, the financial sector has polluted most of the regulatory agencies, so that many regulators now act more like lobbyists for the banks they regulate, rather than law enforcers. Indeed, as I note for AlterNet, the top bank regulator in the U.S. spent over a decade lobbying for the nation’s largest banks before taking up his current job. If Congress doesn’t establish firm rules, regulators under future administrations would be free to simply undo any measures that the current agencies actually implement.
Megabanks equal mega risks
As Stacy Mitchell illustrates for Yes! Magazine, most of the problems in the financial sector are connected to the size of our banking behemoths. Big banks have enormous power—if they fail, the economy goes off a cliff. As a result, any responsible government wouldn’t allow any of our megabanks to actually fail. But knowing that the government will protect them from any true catastrophes, big banks take bigger risks—if the risk pays off, they get rich, if it backfires, taxpayers will suck it up. That puts the interests of big banks at odds with the public interest, and creates an economy where bankers don’t try to finance useful projects with a safe and steady return, but instead back crazy bets that just might pay off.
You can’t fix that problem with regulations or idle threats of taking down a big bank when it gets itself in trouble—the markets won’t believe it, and the banks will still take risks. The only solution, Mitchell notes, is to break up the banks into smaller institutions that can fail without wreaking havoc on the economy.
Economic inequality weakening the economy
All of this ties into rampant economic inequality in the United States. Since the 1970s, conservatives have waged a constant battle on the social safety net, shredding protections for ordinary people, while empowering corporate executives to take advantage of them. In an illuminating blog post for Mother Jones, Kevin Drum highlights the fact that average income has only rose from about $20 an hour in 1972 to $23 an hour today. This isn’t because workers were slacking off—productivity has increased at roughly five times that rate. In other words, nearly all of the economic gains since the Nixon era have accrued to the wealthy.
When people don’t have access to strong and improving income, they finance things with credit. But if wages never actually improve, that debt becomes a significant burden. When an entire society finds itself overly indebted, people stop buying things, and the economy tanks. The predation in the American financial sector makes this problem even worse.
But political theatrics are even trumping efforts to provide relief to those hit hardest by the recession. Sens. Jim Bunning (R-KY) and Tom Coburn (R-NE) have blocked the extension of unemployment benefits twice in the past month. As Kai Wright emphasizes for ColorLines, that recklessness puts up to 400,000 Americans at risk of losing their unemployment checks. That’s a human tragedy—hundreds of thousands of people will have no way to pay the bills. It’s also bad for business, since those people won’t have any money to buy things that businesses produce. It is, in short, short-sighted economic insanity.
The economy is supposed to work for everybody, not just the rich, not just bankers. For that to happen, politicians have to establish meaningful regulations to make sure finance works for the greater good– and safety nets to make sure that anyone who falls through the cracks doesn’t see her life prospects permanently diminished.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.by Zach Carter, Media Consortium blogger
Congress returns from its April recess... more
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By Sarah Laskow, Media Consortium Blogger
President Barack Obama announced this week that his administration would open areas from Delaware to Florida and in Alaska to offshore drilling for gas and oil. The Environmental Protection Agency (EPA) and the Department of Transportation also released new guidelines for auto emissions to cut carbon emissions, and the EPA said new benchmarks for issuing mountaintop mining permits would prevent damage to waterways in Appalachia. The environmental community welcomed these last two announcements but both were overshadowed by the off-shore drilling decision, which green groups largely condemned.
Off-putting off-shore drilling decision
Although as a candidate President Obama began by opposing off-shore drilling, by the end of the campaign he said he would support an expansion of drilling areas. Mother Jones’ Kate Sheppard explains the series of decisions that made this week’s announcement possible:
“In October 2008, amidst calls of “drill, baby, drill” from conservatives, Congress failed to renew the long-standing moratorium on offshore drilling. Months earlier, George W. Bush had lifted an 18-year-old executive ban on offshore drilling, which had originally been imposed by his father in 1990. Obama, of course, could have issued his own order, but didn’t.”
The administration had been considering the decision to go ahead with drilling for about a year but kept deliberations quiet. Key senators, however, knew the decision was coming, and it’s pushing Democrats like Sens. Mary Landrieu (D-LA) and Mark Warner (D-VA) to warm towards energy legislation, TPMDC reports.
Cars’ carbon emission
The EPA’s announcement on auto emissions, on the other hand, comes as no surprise. It marks the first big step the Obama administration has taken to limit carbon emissions through regulation. Auto regulations are a relatively easy sell. A chunk of Congress wants to keep the EPA from taking these sorts of actions, but in this case, the auto industry supports the federal regulations. At the Washington Independent, Aaron Wiener notes that “the guidelines drew immediate praise from the Alliance of Automobile Manufacturers, which has long advocated national emissions and efficiency regulations rather than patchwork state-by-state rules.”
Mountaintop removal mining
The coal industry will be less happy about the EPA’s announcement on mountaintop removal mining. The agency admitted that the practice causes significant damage to streams and said its new guidelines would lead to significantly less harm.
The new policies, Jeff Biggers writes at AlterNet, will “effectively bring an end to the process of valley fills (and the dumping of toxic coal mining waste into the valleys and waterways).” It could be, he says, “the beginning of the end of mountaintop removal.”
One sign that mountaintop removal’s doomsday is nigh? Sen. Robert Byrd (D-WV), one of coal’s staunchest and most powerful advocates on the Hill, praised the EPA’s decision, reports Mike Lillis at the Washington Independent.
Green groups groan
Green groups are lauding the EPA’s two announcements. (The Sierra Club called the mining announcement “the most significant administrative action ever taken to address mountaintop removal coal mining,” for instance.) But the push for off-shore drilling has environmental advocates squirming.
“As the president extends olive branches to his critics, he’s alienating allies in the environmental community, who say his policies are reminding them more and more of those of his predecessor, George W. Bush,” says Mother Jones’ Sheppard. “Some enviros are even likening Obama to Alaska’s oil-loving ex-governor, Sarah Palin.”
On Democracy Now!, Brendan Cummings of the Center for Biological Diversity, called the decision “horribly disappointing” and said, “Obama is essentially embracing wholeheartedly the policy of: we can drill our way to energy independence.”
The Obama administration’s energy and environmental policy is creeping ever further towards the center. Ken Salazar, Secretary for the Interior, said this week that “Cap-and-trade is not in the lexicon anymore,” TPMDC reports. It’s no wonder that progressive members of Congress are starting to feel uncomfortable with the direction their climate bill is taking, as Sheppard reports. The president may be using up his reserves of political support from his allies as he stretches to meet conservatives and centrist Democrats on some shaky middle ground.
This post features links to the best independent, progressive reporting about the environment by members of The Media Consortium. It is free to reprint. Visit the Mulch for a complete list of articles on environmental issues, or follow us on Twitter. And for the best progressive reporting on critical economy, health care and immigration issues, check out The Audit, The Pulse, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.By Sarah Laskow, Media Consortium Blogger
President Barack Obama announced this... more
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Interview topics about:
How the United States Television News Media's content has been controlled and restrained by large corporate businesses by restricting funding, threats by advertisers and how it's affected the coverage of much important news stories...
There has been a dumbing down of the US News Media, allowing an environment that allows crimes to be committed in safety and seclusion. An environment where the real issues are hidden... and the in depth of coverage that is needed.... is controlled tightly by the hands of corporate giants...
The people and citizens of the United States have lost a crucial needed component that must be preformed in a free society. Without a Vibrant and Independent Media.... we loose both the Truth and our Freedom.
Here are a series of Pre & Post show interviews shot at the Michael Moore / Moveon.org event on the evening of March 27,2010 in Sausalito California of
"Capitalism; A Love Story"
Booking and Assignments: =====================================
G.A.P. International News Services
Gérard Angé: Reporter
Tele: (415) 306-2525
Gerard_Ange@win-tv.net
www.win-tv.net
www.LIVE-WEB.biz
http://www.youtube.com/user/gerardange
http://my.media-match.com/gerard.ange
http://www.linkedin.com/in/gerardangeInterview topics about:
How the United States Television News Media's content... more
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By Zach Carter, Media Consortium blogger
While the poor judgment of top-level officials at Treasury and the Office of Management and Budget frequently makes the news, there is another, unrecognized economic crew doing terrific work: Officials at the Department of Labor are restoring workers’ rights after nearly a decade of neglect.
To top it all off, President Barack Obama appears ready to make another set of strong, though less high-profile, economic appointments that will help rein in Wall Street excess.
DoL All-Stars
As Esther Kaplan documents in a masterful piece for The Nation, the Department of Labor (DoL) has been transformed from an agency that enabled corporate excess to one that holds companies accountable. In less than a year, Labor Secretary Hilda Solis and her team of deputies significantly leveled the playing field between ordinary workers and high-flying executives.
For decades, when conservatives have attempted to confront social problems, they’ve relied on the mantra of enforcement. If we had more cops, we’d fix everything. But as Kaplan documents, under President George W. Bush and his Labor Secretary Elaine Chao, the DoL simply stopped enforcing worker protection laws. From wage theft to mine safety, the Department essentially allowed corrupt employers to do anything they wanted.
That neglect has already ended. Armed with a budget of just $1.5 billion—that’s roughly 0.2% of the Troubled Asset Relief Program—Solis and company have cultivated a list of economic accomplishments that seemed impossible when they took office. As Kaplan details:
“Facing badly depleted enforcement ranks, Solis hired 710 additional enforcement staff, including 130 at OSHA and 250 for the crucial wage-and-hour division, upping inspectors by more than a third. Another hundred will come on next year to staff a crackdown on the misclassification of millions of employees as “independent contractors”–a dodge to avoid paying taxes and benefits–a move that has set off enormous buzz on business blogs. Her team took a plunger to the stagnant regulatory pipeline, moving forward new rules on coal mine dust, silica, and cranes and derricks. She restored prevailing wages for agricultural guest workers and is poised to restore reporting rules on ergonomic injuries.”
Fixing the Fed
Obama also appears ready to make another slate of strong economic appointments at the Federal Reserve, an agency stuffed with free-marketers who helped engineer both an economic catastrophe and resulting bailouts. Obama’s rumored picks—economists Janet Yellen and Peter Diamond and bank regulator Sarah Bloom Raskin—are aggressive about making the economy work for everyday citizens, as I emphasize for AlterNet.
If Congress passes financial reforms similar to what Senate Banking Committee Chairman Chris Dodd (D-CT) has proposed, the Fed’s regulatory responsibilities will actually expand, despite its failures over the past decade. The Fed has never effectively regulated anything and it’s not very concerned with unemployment as an economic problem.
That makes Obama’s pending slate of officials who prioritize bank regulation and broader employment very important. Raskin, in particular, stands out with her strong record as a state banking regulator. If Obama ultimately nominates her, she’ll be the first pure regulator ever appointed to the Fed. The potential picks don’t make up for Obama’s reappointment of bailouteer Ben Bernanke as Federal Reserve Chairman, but they do show that the President is capable of sound judgment.
Strengthening the Dodd bill
But the strength of Obama’s potential Fed nominees doesn’t justify the weakness of Dodd’s financial regulation bill. As Amy Goodman and Juan Gonzalez of Democracy Now! reveal in interviews with economist Robert Johnson and ColorLines Editorial Director Kai Wright , the bill leaves plenty to be desired. Dodd is currently making the rounds and declaring that his bill will end the abuses giant banks deployed against the broader economy, but the truth is, the bill has largely been gutted by bank lobbyists. Here’s Johnson:
“We’re engaged in a Kabuki theater right now, hoping the material is too complex for the American people to understand, declaring victory, and yet basically encoding into law current practices of the banks. Every one of your listeners should ask the question, given this legislation, if the President, House and Senate pass it, will we be in a place where AIG couldn’t have happened, Lehman Brothers couldn’t have happened, Bear Stearns couldn’t have happened, and, more importantly, nine, ten percent unemployment caused by the banking crisis couldn’t have happened? I argue this bill does very little.”
The importance of trust-busting
So Dodd’s bill needs to be substantially strengthened as it moves through the Senate. But there’s plenty of other economic work to be done outside of Wall Street. As Barry C. Lynn and Phillip Longman explain for The Washington Monthly, the steady expansion of corporate monopolies has resulted in a fundamentally unstable economy.
The U.S. simply does not create jobs at the rate it once did, and companies aren’t held accountable to market forces like competition. Many of our monopolies are hidden, as Lynn and Longman note. Macy’s and Bloomingdale’s seem like competitors, but they’re owned by the same holding company. The same dynamic holds true in auto manufacturing, banking, pet food, health care and IT. Consumers think they’re choosing between competing goods and services, when in fact they’re shopping in different divisions of the same corporate Goliath.
All hope is not lost. As Laura Flanders emphasizes for GRITtv, the passage of health care reform proves that the Obama administration and Congress can make substantive progressive changes when they put their minds to it. The question is whether Obama is willing to limit his economic accomplishments to lower-level issues, or go big and take on the deep-pocketed corporate campaign contributors.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.By Zach Carter, Media Consortium blogger
While the poor judgment of top-level... more
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