Tuesday, June 30, 2009

Weekly Audit: Radical Inequality Fueled the Wall Street Meltdown (11:50 am)

Now that Treasury Secretary Timothy Geithner isn’t going to impose pay restrictions on bailed out Wall Street executives, it’s critical to remember that severe economic inequality was a major factor in the financial meltdown. Our tax code funnels money into the hands of our wealthiest citizens, which means that our financial system protects the interests of the affluent—not the the average citizen. The broad divergence between our core democratic values and the existing U.S. economic structure must become part of the public debate over financial reform.

As Les Leopold notes in a roundtable discussion with GritTV’s Laura Flanders, much of the Wall Street meltdown can be traced to a steady redistribution of wealth to the wealthy dating back to the Reagan years. Poor people, after all, do not have money to invest in the Wall Street speculation machine. By 2007, the financial world accounted for over 40% of U.S. corporate profits, an astounding percentage for a business intended to facilitate the operation of other industries. According to Leopold, we need to find constructive ways to shrink the financial sector, like taxing Wall Street transactions to move money into the real economy or imposing meaningful pay caps on financial jobs.

Pay for citizens who live outside the executive class has been steadily falling for decades. As Chuck Collins and Sam Pizzigati note for AlterNet, weekly wages for average Americans are now below 1970s levels after adjusting for inflation, while CEO payouts have exploded. So far, President Barack Obama has been hesitant to fight economic inequality at either end of the spectrum. Remember the promises he made to curb extravagant CEO pay on Wall Street back when the AIG bonuses were generating outrage back in February? Treasury Secretary Timothy Geithner has already made them irrelevant, eliminating a $500,000/year salary cap.

While we’ve heard quite a bit about how Wall Street excess wreaked havoc for homeowners, relatively little attention has been paid to the plight of renters, who often face personal catastrophe when their landlord is foreclosed on. Under a new law passed by Congress, when a bank or new owner takes control over... read more

posted by Zach Carter | start the discussion

Friday, June 26, 2009

Weekly Immigration Wire: Reform Stagnates, Polarization Grows (1:04 pm)

President Obama has often stated that immigration reform cannot be approached in a piecemeal fashion, and that his administration would tackle the issue in 2009. This week, Obama will be meeting with members of Congress to kick off a bi-partisan approach to reform. These meetings don’t guarantee any legislative action will take place this year, but are at least an encouraging sign. In the meantime, the deportation industry shows no sign of slowing, hate crimes are rising and hate groups are being main streamed. As a result, the polarization between reform advocates and foes is getting worse.

New America Media’s Jun Wang writes about the disapointing consensus reached by a panel of immigration activists last Thursday at California State University in Los Angeles. A lack of movement around immigration reform won’t help curb rising rates of hate crimes against Latino/as, and compounds other instances of “othering” and racism. According to one panelist: “Employers in conservative cities” are learning that “they are better off not hiring people who are ‘foreign looking or having foreign sound names.’”

Not content with simply raiding homes, workplaces, or storming the local 7-11, Immigrations Customs and Enforcement (ICE) is escalating its enforcement tactics. Also in New America Media, Hiram Soto reports on the joint operation between the Border Patrol and the Transportation Security Administration (TSA) in deporting three high-school age girls, one as young as 16, who were stopped by ICE on their way to school. Immigration attorney Lilia Velasquez, who is representing the minors, said she “hasn’t seen anything like this in her 25-year career,” because the children are being let back into the U.S. to fight their deportation.

The plight of these girls is proof that the destructive deportation fetish sweeping the Department of Homeland Security is producing increasingly ridiculous results.

Pundits like Michael Savage are also feeding the violent and anti-immigrant, anti-Latino/a energy in the U.S. Samhita Mukhopadhyay at Feministing writes that these broadcasts are are created “for the purpose of inciting violence against immigrants and to fuel racial tension.” Exposing Savage’s “paranoid” and fearful obfuscation of reality, Mukhopadhyay clears up the anti-immigrant propaganda... read more

posted by Nezua | start the discussion

Weekly Pulse: Public Insurance Option is Not Optional (1:01 pm)

During a press conference yesterday, President Obama voiced support for government-administered health insurance for all who need it (aka the “public option”), as a key component of healthcare reform. Though Obama stopped short of threatening to veto a bill that didn’t contain such an option, he said that a public option is needed to enforce market discipline. If the system is going to reform, the health insurance companies can’t just keep selling the same bad coverage with bigger public subsidies for their monopolies. Essentially, Obama isn’t about to force taxpayers to buy overpriced insurance from private companies.

“The public plan, I think, is an important tool to discipline insurance companies,” Obama said during yesterday’s White House news conference. “I think there is going to be some healthy debate about the shape that this takes.” He outlined three options: Get insurance through your employer, buy insurance on your own, or buy insurance from a marketplace where public and private insurance providers compete for business.

In the Washington Monthly, Steve Benen notes the central irony of the standard insurance industry criticism of Obama’s plan:

A public option, critics tell us, would provide a horrible, bureaucratic service for customers, including rationing and long waiting times. But here’s the follow-up: if that’s true, no one would choose the public option and insurance companies would be just fine for the indefinite future.

Except, of course, insurance companies and their policymaking allies know better. Which is why they’re panicking.

As Senate Democrats continued to cast about for an elusive bipartisan compromise on healthcare reform, their colleagues in the House are pushing ahead on their own. House Democrats are holding hearings this week on draft legislation and is written without Republican input. The house bill would require all Americans to have health insurance and put new restrictions on employers as well. The Uptake is covering the hearings live.

By allowing the proliferation of multiple healthcare bills, the Obama administration is deliberately avoiding the mistakes that the Clintons made in 1994, according to Mark Schmitt in the American Prospect. Instead of submitting its own 1300-page bill to Congress, the... read more

posted by Lindsay Beyerstein | start the discussion

Weekly Audit: Obama’s Regulation Overhaul Comes Up Short (12:57 pm)

President Barack Obama rolled out his plan to overhaul financial regulation last week. While much of the Obama plan relies on the same regulators and structures that led to the current meltdown, there is one key exception. The establishment of an independent Consumer Financial Protection Agency would give ordinary citizens a seat at the financial policy table for the first time and prevent the abuses in credit card and mortgage lending that have wreaked havoc on households all over the country.

The new agency is the brainchild of Harvard University Law School Professor Elizabeth Warren. As chair of a key oversight panel for the Treasury Department’s bank bailout program, Warren has uncovered major deficiencies in the government’s handling of the plan, including nearly $80 billion in overpayments to bailed-out banks. American News Project features footage of an interview with Warren, who explains why we need a separate agency to regulate on behalf of consumers.

Several bank regulatory agencies, the Federal Reserve, the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision are already charged with writing and enforcing consumer protection rules for credit cards and mortgages, but have generally abandoned these duties to act as cheerleaders for their banks.The current structure’s problems are two-fold. First, the current regulators are funded by fees levied on the very banks they regulate. When there are several different bank regulators, regulators compete to offer the weakest oversight and attract more banks, and, in turn, more funding. The process quickly becomes a race to the bottom. When the subprime mortgage boom was surging in 2003, the OCC, a federal bank regulator, went to court to ensure that the state of Georgia’s tough predatory lending laws could not be enforced.

Second, the regulatory agencies tend to look at the health of the bank, rather than the quality of the loans it makes. If a commercial bank like Citigroup makes a really outrageous predatory loan, then sells that loan to an unregulated investment bank like Goldman Sachs, Citi’s regulator doesn’t particularly care. A new regulatory agency that answers exclusively to consumers rather than... read more

posted by Zach Carter | start the discussion

Friday, June 19, 2009

‘Tomorrow is Too Late’ for Iranian Election Intervention (11:34 am)

Iranian film director Mohsen Makhmalbaf – a friend and supporter of Iranian presidential candidate Mir-Hossein Moussavi – gave a riveting, inspiring speech Wednesday, imploring the European Parliament and the international community not to recognize the legitimacy of Ahmadinejad’s victory. Video of the speech has now been translated into English:

According to Makhmalbaf, Moussavi was notified of his victory last week by the Committee of Elections and told to prepare a speech. However, while he was writing his speech “inviting the Iranian people to celebrate his victory,” military chiefs entered his office and told him “this green democratic revolution was not going to happen” – essentially staging a political coup.

Later, Iranian media declared that Ahmadinejad was elected and that any gathering of more than four people was completely forbidden. Hundreds of thousands of protesters have gathered in objection to Ahmadinejad’s victory, saying the vote counting was intrinsically flawed. Many have been killed, injured or arrested.

In the speech, Makhmalbaf proclaims: “Iranian people don’t want nuclear weapons. Iranian people want peace and democracy… Are the Iranian people ready for democracy? The answer is YES. Yes, they are ready. They have expressed themselves through their votes, but they have not been heard.”

He continues, saying that to recognize the legitimacy of Ahmedinejad’s presidency would be to invalidate the authority of the Iranian people.

Makhmalbaf asks that the international community control the next vote, rather than a recount of the past one. The international community needs to intervene, he says: “Tomorrow is too late.”

posted by Andrew Gaines | 2 comments

Wednesday, June 17, 2009

Why Does the Chamber of Commerce Oppose Arbitration For Union Workers? (11:13 am)

Yesterday, the union movement ramped up its attacks on the Chamber of Commerce over its “two-faced” approach to the Employee Free Choice Act’s provision requiring arbitration if a business won’t bargain in good faith after a union’s been chosen by workers. As the AFL-CIO Now blog observed:

The latest Big Business tactic is to attack the provision of the Employee Free Choice Act that guarantees workers who form a union a fair first contractóa vital provision, because more than 50 percent of workers who form a union donít have a contract after one year and more than a third still donít have a contract after two years.

Corporations are crying about the possibility they might have to take part in arbitration with employees if they don’t reach a first contract after three months of talks - even though they’re enthusiastic about arbitration in a wide variety of circumstances where they have the advantage.

In a new ad running in key newspapers, American Rights at Work again challenges corporate hypocrisy on arbitration. When itís a big corporate entity against an individual, as in credit card disputes or personal injury claims, corporate spokesgroups like the Chamber of Commerce say arbitration is a way to settle any sort of dispute ìfairly, quickly and inexpensively.î But when itís time to bargain over better wages and benefits for their workers, these same groups are viciously opposed to even the possibility of requesting arbitration.

To union activists, what’s especially galling is how fervently businesses embrace arbitration when it allows them to avoid being held accountable for negligence towards employees or the defrauding of consumers.

As Stewart Acuff, the special assistant to the President of the AFL-CIO, observes, “It’s pretty simple: arbitration is fine for them when it keeps them out court and limits damages to business. They use it to settle credit card disputes, mortgage payment disputes, and whenever it limits businesses liability and negligence. But when they look at arbitration for workers, then all of it sudden they hate it when it’s simply used as an incentive to force good-faith bargaining, a last resort to allow... read more

posted by Art Levine | start the discussion

Weekly Pulse: The Push for a Public Plan (10:55 am)

Healthcare reform is back in the news, as Legislators and interest groups spar over the promised public component of Obama’s healthcare plan. In very simple terms, this is a fight between groups with a vested interest in expensive healthcare and everyone else. This week, the American Medical Association warned Obama that a public plan could restrict patient choice. But for millions of Americans, getting a choice between healthcare and no healthcare wold represent a 100% increase in their healthcare options. Obama’s public plan would also give people the choice of keeping their private health insurance. So, the public plan is an additional option, not a diminution of options.

The AMA is a powerful interest group, but it doesn’t speak for all physicians. Several prominent groups representing doctors and medical students, including the American Association of Family Physicians, co-signed a declaration supporting Obama’s push for a public plan this week.

Expect the health insurance lobby to fight the public option tooth and nail, says economist Dean Baker in AlterNet. It’s smart business from their perspective. Platitudes about the free market aside, no real capitalist welcomes competition. As Baker points out, a public plan represents competition to health insurance companies. For every dollar Medicare pays to providers, it spends two cents on administration. Whereas private insurers spend about fifteen cents on the dollar in administrative costs. Baker estimates that if a public plan were available, insurance profits would drop by 20-30%, all things being equal.

Former president Bill Clinton invited about 20 progressive bloggers to his Harlem office on Monday for a seminar-style discussion about the work of the Clinton Foundation. Several staff from Media Consortium member organizations were in attendance, including yours truly. Healthcare was a major topic of conversation. Emily Douglas of RH Reality Check, who also attended the meeting, writes:

The former President observed that the country, emerging from a “post-9/11 emotional straitjacket” has become “more communitarian” — and that President Obama has fewer budget issues, and less Republican opposition, to content with when attempting reform. But, most importantly, “everything is worse now” — health care spending has doubled, more... read more

posted by Lindsay Beyerstein | start the discussion

Tuesday, June 16, 2009

Weekly Audit: Reining in the Subprime Scoundrels (11:02 am)

President Barack Obama is scheduled to unveil his agenda for revamping financial regulation later this week. As the economy struggles though a recession created by the banking industry, it’s crucial that Obama and his advisers craft a set of rules ensuring that the financial sector strengthens our economy instead of destroying it.

Various government regulatory agencies are sparring over how the final regulatory structure will be divided. But, as Robert Kuttner notes for The American Prospect, the most important aspects of the plan will not be who regulates what, but how stringently they are required to regulate. The Federal Reserve has had the power to devise consumer protection regulations for years, but has generally decided against writing strong rules to defend borrowers. There is perhaps no area of public policy more critical to the nation’s economic stability than consumer protections in banking, especially as the subprime mortgage crisis continues to devastate U.S. households.

Without stronger regulations, the government’s rescue programs for the financial sector will be a complete waste, and bailouts will only reward the destructive behavior that created the current recession. And the bailout plans are getting more absurd every week. Writing for Mother Jones, Nomi Prins details the latest bank bailout farce: The false euphoria emanating from the Treasury Department after it decided to allow 10 banks to return the bailout money it received from the public. Or, at least, some of the bailout money.

As Prins explains, the Troubled Asset Relief Program (TARP) accounts for just a tiny fraction of the bank rescue efforts currently orchestrated by the Treasury, the Federal Reserve and the FDIC. When banks accepted TARP money, they agreed to implement a few modest restrictions on executive pay, though none of the other bailouts came with any strings attached. The FDIC, for instance, agreed to guarantee the corporate debt that banks issue to fund their operations without requiring banks to adopt any changes in the way they do business. This government backing has allowed banks to raise several billion dollars in funding at extremely inexpensive rates, at a time when most banks were struggling to... read more