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Posts Tagged ‘corruption’

John Oliver asks the right question. “What does congress really do?” The answer is that every senator and ever congress person must spend several hours every day raising money, or what are called campaign contributions. Pay careful attention to Oliver’s presentation of Congresswoman Eleanor Norton Holmes call to a prospective campaign donor. Norton actually says she’s working in congress on behalf of the donor, and this might be against the interests of everybody else.

There’s one more thing quite interesting. Every member of the US congress that belongs to the Republican or Democratic Party must raise sizable amounts of cash to give to the party.

The whole process of congressional representatives having to raise millions of dollars a year, even when they are in safe districts, demonstrates how easily corrupted the US government has become since every politician is at the mercy of those campaign contributors.

Worse yet, many of these campaign contributors put out bait to political office holders, like swanky vacations, thousands of dollars of speaking fees while in office, and high paying jobs once they’re out of office, to US representatives. Overall, the US congress and the White House are pigsty’s of corruption.

 

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Franklin Roosevelt

The next recession is unfolding, and it’s going to be the worst one since the Great Depression. I’ve been watching this historically weak US economic expansion unravel since November 2015. See https://johnhively.wordpress.com/2015/11/06/the-coming-recession-and-us-senator-elizabeth-warrens-seniors-and-veterans-emergency-benefits-act-save-benefits-act/. We will officially go into recession somewhere between late this year and June 2017.

Nothing can stop it. Not declining gasoline and oil prices, not falling interest rates.

The corrupt US government has passed legislation over the decades that have redistributed massive amounts of income and wealth from the 99 to the 1 percent. The 1 percent currently steal over 37 percent of all income produced in the US compared to 8 percent in 1980. See https://johnhively.wordpress.com/2015/12/29/new-study-the-middle-class-is-losing-ground-as-wall-street-senators-ron-wyden-mitch-mcconnell-orrin-hatch-and-others-continue-to-use-the-federal-government-and-the-federal-reserve-to-redistribute/. Now the 99 percent can’t purchase enough goods and services to keep the economy and the financial markets chugging along. The economy is set to collapse upon itself. However, there is even worse news.

Sometime between the November elections of 2016 and whenever the new president is inaugurated Wall Street Senator Ron Wyden will introduce the Trans Pacific Partnership (TPP) into committee. This is the largest income and political power redistribution scam in world history. The TPP is falsely marketed as a trade agreement, but it has virtually nothing to do with trade.

President Obama, ever the servant of Wall Street executives, has already signed this scam without a single word of debate in the halls of one of the most corrupt political bodies in the world–the US congress. So the TPP becomes law, unconstitutionally at that, if it passes through the US House and the US Senate.

quote-no-man-can-be-a-good-citizen-unless-he-has-a-wage-more-than-sufficient-to-cover-the-bare-cost-of-theodore-roosevelt-262926

The TPP will only make matters worse for the 99 percent as this recession swings into full gear. The TPP will redistribute trillions of dollars of income from the 99 to the 1 percent on a yearly basis, as well as steal their state and local voting rights in many cases.

Here’s how bad this coming recession will be without the TPP:

* Effective interest rates will sink into negative levels, like in Europe.
* The nation will flirt with deflation, and possibly fall into it, because trillions of dollars have been redistributed from the 99 to the 1 percent, so demand for goods and services will be weaker than at any time since the Great Depression.
* Instead of 48 million Americans on food stamps, like during the current so-called economic expansion, 60 to 90 million Americans will be on food stamps.
* Unemployment will hit 10 to 18 percent, and will stay above 10 percent for years.
* Mortgage defaults will hit record levels.
* Home prices will decline 20 to 60 percent, and maybe more.
* On average, stocks will lose 20 to 60 percent of their values, and maybe more.
* We’re still feeling the impact of the last recession, and so too will we feel the impacts of this recession for years and years unless….
* Anticipate a possible political revolution as grassroots insurgents take over both major political parties. Think Bernie Sanders and Elizabeth Warren for the Democratic Party, and who knows for the Republican Party?
* Anticipate possible violence as the police and military crack down on protesters.
* Anticipate a US political and economic rejuvenation after many years of hard struggle. People like Wyden, one of the principal architects of this recession, will be a historical footnote.

This Depression will be worldwide.

Imagine what this recession will be like with the TPP.

Now, if we can just stop Wyden and the TPP in congress, that will make our task of a restored America for everyone much easier in the long run. And it will be in the long run that we win.

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BernieSanders-TPP3

Jared Bernstein, a former chief economist to Vice President Biden, said last week;

“The time has come to create a new category of person in this town: Someone who supports expanded trade and is all for globalization with a voice for working people here and abroad, but who has completely soured on so-called free-trade agreements (FTAs), as they too often squelch that voice.

The need for this new type of person comes from two sources. First, after years of studying, critiquing, trying to improve and even helping to promote FTAs (when I worked for the Obama administration, I helped with the South Korean FTA), I’ve come to view the process as impossibly broken and essentially corrupted. It’s opaque, the end product is incomprehensible to most people, the input (and thus much of the output) is imbalanced, the politics are a hot mess, some of what’s called “free trade” is actually protectionist, and while many elites remain committed to evermore FTAs, there’s little trust among the people.

Second, if you suggest any of the above, you’re quickly labeled as a knuckle-dragging protectionist, not fit for elite company.”

hillary-for-whatever-tpp-flip-flop

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income inequality

A new study by the Economic Policy Institute (EPI) shows that income inequality grew again last year, continuing a thirty-five year trend of rising income and wealth inequality that has been the defining feature of the American economy.

According to the study, “The way rising inequality has directly affected most Americans is through sluggish hourly wage growth in recent decades, despite an expanding and increasingly productive economy. For example, had all workers’ wages risen in line with productivity, as they did in the three decades following World War II, an American earning around $50,000 today would instead be making close to $75,000. A hugely disproportionate share of economic gains from rising productivity is going to the top 1 percent and to corporate profits, instead of to ordinary workers—who are more productive and educated than ever.”

As I show in The Rigged Game: Corporate America and a People Betrayed, our rising inequality is mostly the result of big corporations and the wealthy rewriting the rules of the economy via federal legislation to stack the deck in their favor. They’ve bought everybody from Hillary Clinton and Barack Obama to George W. Bush and Dick Cheney, from Wall Street Senator Ron Wyden to Wall Street Senator’s Mitch McConnell and Orrin Hatch. The rich, in other words, are the monopolists who own the political markets on the federal and most state levels.

This government corruption has prevented the benefits of productivity growth from “trickling down” to reach most households.

A few years ago, President Obama called wage and income inequality the “greatest issue of our time.” Then some Wall Street hacks must have called him to their throne room and gave him a tongue lashing. So the president has never mentioned the “greatest issue or our time” ever again. And he’s done nothing about it either.

That’s why wage inequality continued to increase during 2015.

Among EPI’s findings:

* Wage growth occurred fastest in states with higher minimum wages.

* Overall, 2015 saw overall real wage gains driven only by a dip in inflation.

* Wage growth was faster for male workers and white workers, particularly at the top of the wage distribution, which continued to exacerbate racial, ethnic, and gender wage gaps.

* If the Federal Reserve makes decisions based on the data, it is clear that the United States is not in a period of inflation-spurring wage growth. (Editors note: So the Fed should not raise rates in June, although they likely will, but for other than inflation is on the horizon reasons)

* To see strong broad-based wage growth outside of the tightest of labor markets, policymakers could strengthen labor standards, such as by raising the minimum wage, expanding eligibility for overtime pay, and protecting and strengthening workers’ right to bargain collectively for higher wages and benefits.

Income inequality is destroying the US economy. It’s turning us into a third world nation, with a corrupt federal government, and corrupt corporate news media as bad as in any third world nation.

The less money the 99 percent has, the less demand there is for goods and services. This is why the last two economic expansions are the worst in recorded history for US job growth, as well as other economic indices. The more money the rich steal via government corruption, the more the stock markets roar. Currently, 1 percent of the population steal 37 percent of all income produced in the USA, up from 8 percent in 1980.

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If President Obama was a serious Democratic Party president, and he wanted to wipe out Republican Party majorities in the US house and senate, it would be a simple thing to do.

Republican Party leaders, such as Wall Street Senator’s Mitch McConnell and Orrin Hatch, are desperate to get the Trans-Pacific Partnership (TPP) passed through congress. The TPP is a massive scam to redistribute income and political power from the 99 to the 1 percent. It involves 11 nations around the Pacific Rim. The TPP will export hundreds of thousands, and perhaps millions upon millions (which is more likely), of US jobs to China and Vietnam (Click https://johnhively.wordpress.com/2016/02/12/the-trans-pacific-partnership-the-op-ed-the-liberal-and-conservative-corporate-media-doesnt-want-you-to-see/. The difference between the old US higher wages and the new lower wages over there will go straight into the pockets of the rich via higher corporate earnings, share prices and dividends. The stock markets will then shoot up, like what occurred under the same income redistribution scam called NAFTA.

Obama should have Democratic Wall Street Senator Ron Wyden introduce the TPP out of committee and into the senate for debate. Wyden is a long time supporter of redistributing income, wealth and political power from the 99 to the 1 percent. That’s why I call him Wall Street Ronnie. Republicans will try to block the TPP in committee for a simple reason.

This is an election year and there are more Republican seats up for grabs in the senate than there are Democrats. Voting yes for the TPP before the elections in November will be a deathblow to any candidate who votes yes, except for Wyden, who has a carefully and fraudulently cultivated reputation for caring about the aged, the poor, and the middle class, while carefully voting to redistribute their income to the 1 percent time and time again.

Obama, however, wants the TPP badly, and so most likely will wait with his Republican Wall Street allies until after the November elections to bring the TPP out of committee.

On the other hand, the economic winds already began shifting toward recession late last summer. Those winds will become more readily apparent by November to the great mass of US citizens. The president, Wyden and the Republican leadership will try to ram the TPP through congress then, but this international income and political power redistribution scam will come under intense opposition the like of which has not been seen for decades.

The result should be the death of the TPP, but only if pressure is continued until the bitter end, because most Republicans and Democrats in the US house and senate work for the 1 percent, and against the interests of the 99 percent. Anything to keep those corporate share prices rising, and those campaign contributions, lobbying jobs, vacations and other perks coming.

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Wall Street investment bank CEOs, and their presidential apprentice, Hillary Rodham Clinton, want us not to focus on issues that are important to the vast majority of US citizens. This happens to be the many issues Bernie Sanders is focusing on, such as income inequality, government corruption, increasing social security, bad trade deals, free college education, profitable wars we were lied into, the crimes of Wall Street executives, and a lot more. These things all have one thing in common; they’re a sleazy way that Wall Street investment banks have managed to redistribute trillions of dollars from the 99 to the 1 percent. Hillary seems to be on Wall Street’s side of these issues, which makes Hillary a one issue candidate.

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Here are the 10 major components to Sanders’ Wall Street reforms.

1. End Too-Big-to-Fail

The underlying logic of this federal policy is that the biggest banks cannot fail and shut down, even if they make terrible investments or wreak great harm to the economy, because the U.S. economy and millions of ordinary people would become financially destitute. Sanders said this “scheme … is nothing more than a free insurance policy for Wall Street.” Compared to before the crash of 2008, the biggest banks in the country are larger than ever, he said, adding, “if a bank is too big to fail, it is too big to exist.”

The truth is that the big banks are not too big to fail. When Lehman Brothers died, not one member of the 99.9 percent was impacted in the slightest. However, the super rich have a massive financial stake in the banks, and they would lose their shirts if the banks were allowed to fail. Using the “too big to fail” slogan means that the banks don’t need to be responsible for their bad decisions, and bad bets, and bad investments, and why should they? Especially when the banksters know the government or the Federal Reserve will bail them out instantly.

“In 2008, the taxpayers of this country bailed out Wall Street because we were told they were ‘too big to fail,’” Sanders said. “Yet, today, three out of the four largest financial institutions [JP Morgan Chase, Bank of America and Wells Fargo] are nearly 80 percent bigger than before we bailed them out. Incredibly, the six largest banks in this country issue more than two-thirds of all credit cards and more than 35 percent of all mortgages. They control more than 95 percent of all financial derivatives and hold more than 40 percent of all bank deposits. Their assets are equivalent to nearly 60 percent of our GDP. Enough is enough!”

Sanders concluded, “A handful of huge financial institutions simply have too much economic and political power over this country. If Teddy Roosevelt, the Republican trust-buster, were alive today, he would say, break ‘em up. And he would be right.”

2. The above is why we need to Break Up the Biggest Banks

If elected, Sanders said he would direct the Treasury Department to compile a list of the institutions “whose failure would pose a catastrophic risk to the U.S. economy without a taxpayer bailout.” Using the power of executive authority, he would break up these institutions. “Within one year, my administration will break these institutions up so that they no longer pose a grave threat to the economy as authorized under Section 121 of the Dodd-Frank Act.”

3. Pass a 21st-Century Glass-Steagall Act

This Depression-era law, which was repealed by Congress under President Bill Clinton, prevented commercial banks from investing in risky and arcane financial instruments, such as bundled home loans during the housing market bubble that predated the 2008 financial market collapse. Now investment and commercial banks are merged, and the government couldn’t bail out homeowners, such as FDR did. Had they done so, homeowners would have renegotiated lower home prices that reflected reality. But the Obama regime couldn’t do that because an 8 percent decline in home prices effectively rendered the tens of trillions of dollars in home mortgaged backed bonds valueless. Instead, the government bailed out the banks, and the Federal Reserve bailed out the banks. But they really weren’t bailing out the banks; they were bailing out rich investors.

See The 26 Trillion Dollar Bailout–JohnHively.wordpress.com

Also see the video below.

“Secretary Clinton says that Glass-Steagall would not have prevented the financial crisis because shadow banks like AIG and Lehman Brothers, not big commercial banks, were the real culprits,” Sanders said. “Secretary Clinton is wrong. Shadow banks did gamble recklessly, but where did that money come from? It came from the federally insured bank deposits of big commercial banks—something that would have been banned under the Glass-Steagall Act.”

Moreover, Sanders said his work as a senator revealed that the Federal Reserve and the Treasury Department “provided more than $16 trillion in short-term, low-interest loans to every major financial institution in the country” to stop the global economy from imploding after the 2008 crash. “Secretary Clinton says we just need to impose a few more fees and regulations on the financial industry. I disagree.”

4. End Too-Big-to-Jail

Sanders said that the government needs to run Wall Street, not the other way around, which he said is the reality today. He said that “equal justice under the law” means that banking and finance executives whose reckless gambles damaged people’s lives must face real criminal penalties including prison.

“The average American sees kids being arrested and sometimes even jailed for possessing marijuana or other minor crimes,” Sanders said. “But when it comes to Wall Street executives, some of the wealthiest and most powerful people in this country, whose illegal behavior caused pain and suffering for millions—somehow, nothing happens to them. No police record. No jail time. No justice.”

He noted that “not one major Wall Street executive has been prosecuted for causing the near collapse of our entire economy” and that “will change under my administration.”

What Sanders doesn’t mention is that large banks also have been caught engaging in drug money laundering for the Mexican banks. The US government has fined the banks, but never indicted any bank officers, not even when the banks have been caught committing this crime time and again.

5. Criminalize Wall Street’s Business Model

One of Sanders’ most incisive comments concerned Wall Street’s ways of doing business, which he said are based on intentionally ripping off average Americans and engaging in all kinds of unethical and illegal behaviors. He said the government must do more to penalize companies that routinely rip off the public and richly reward the executives overseeing that process.

“The reality is that fraud is the business model on Wall Street,” Sanders said. “It is not the exception to the rule. It is the rule. And in a weak regulatory climate the likelihood is that Wall Street gets away with a lot more illegal behavior than we know of. How many times have we heard the myth that what Wall Street did may have been wrong but it wasn’t illegal? Let me help shatter that myth today.”

Sanders read from a dozen business page headlines to underscore that the banks most Americans use have been fined $204 billion since 2009 for malfeasance. “And that takes place in a weak regulatory climate,” he said. “And, when I say that the business model of Wall Street is fraud, that is not just Bernie Sanders talking. That is what financial executives told the University of Notre Dame in a study on the ethics of the financial services industry last year.”

Sanders said he would appoint regulators who are not afraid to tackle this caldron of corruption. “I will nominate and appoint people with a track record of standing up to power, rather than those who have made millions defending Wall Street CEOs. Goldman Sachs and other Wall Street banks will not be represented in my administration,” like they will be in a Clinton, Trump, or any other Republican administration.

6. Tax the Casino Culture

Sanders said one of the keys of reforming Wall Street was ending its culture of financial speculation. He said he would do that by imposing a transaction tax aimed at high-speed, high-volume traders who are not investing “in the job-creating economy.” Those funds would then be used for cutting the cost of higher education. This was something first proposed in The Rigged Game: Corporate America and a People Betrayed.

“We will use the revenue from this tax to make public colleges and universities tuition-free. During the financial crisis, the middle class of this country bailed out Wall Street. Now, it’s Wall Street’s turn to help the middle class.”

7. Reform the Financial Rating Agencies

Sander’s notes that the ratings agencies committed fraud when it came to rating mortgage backed bonds. If the investment banks didn’t like the ratings of the liar loans they were purchasing from, say, Country Wide, then they simply went to a different ratings agency. For the ratings agencies, it’s either fraud or bust. This must end.

8. Cap Credit Card Interest and ATM Fees

Sanders doesn’t mention that just as there are tens of trillions of dollars of mortgage backed bonds issued by Wall Street Investment firms, such as JP Morgan and Goldman Sachs, the credit card debt backed bond market is a billion dollar industry. Capping interest rates charged by banks and credit card companies, and curtailing some of their fees, will bring the full might of an enraged banking/investing industry down around Sanders neck because what he proposes will undercut the value of credit card backed bonds, which is a trillion dollar plus industry. Sanders proposals might even send the value of the bonds to zero, which would be a good thing for the 99 percent, but a bad thing for the idle rich and their unearned income stolen from the 99 percent.

Sanders says banks and credit card companies must stop “from ripping off the American people by charging sky-high interest rates and outrageous fees. It is unacceptable that Americans are paying a $4 or $5 fee each time they go to the ATM. It is unacceptable that millions of Americans are paying credit card interest rates of 20 or 30 percent.”

Sanders wants interest rates “capped at no more than 15 percent for borrowed money. He also said ATM fees should be capped at $2. “People should not have to pay a 10 percent fee for withdrawing $40 of their own money out of an ATM. Big banks need to stop acting like loan sharks and start acting like responsible lenders.”

9. Let the USPS Offer Banking

The post office’s money order service could be greatly expanded “to give Americans affordable banking options,” Sanders said. “The reality is that, unbelievably, millions of low-income Americans live in communities where there are no normal banking services.”

“Today, if you live in a low-income community and you need to cash a check or get a loan to pay for a car repair or a medical emergency, where do you go?” he asked. “You go to a payday lender who could charge an interest rate of more than 300 percent and trap you into a vicious cycle of debt. That is unacceptable.”

10. Reform the Federal Reserve

Sanders said this arcame institution that regulates the flow of the U.S. currency and interest rates charges to banks must be reformed so that its primary purpose is serving the public, not private bankers. “When Wall Street was on the verge of collapse, the Federal Reserve acted with a fierce sense of urgency to save the financial system,” he said. “We need the Fed to act with the same boldness to combat unemployment and low wages.” What Sanders doesn’t mention is that the Federal Reserve is a private bank, and not a government agency. It’s primary goal is to ensure that the big banks are solvent and their profits and stock prices are rising, even at the expense of the American people.

“It is unacceptable that the Federal Reserve has been hijacked by the very bankers it is in charge of regulating,” Sanders said. “I think the American people would be shocked to learn that Jamie Dimon, the CEO of JPMorgan Chase, served on the board of the New York Fed at the same time that his bank received a $391 billion bailout from the Federal Reserve. That is a clear conflict of interest that I would ban as president. When I am elected, the foxes will no longer be guarding the henhouse at the Fed.”

As striking as Sanders’ reforms sound, he said they were unlikely to be sufficient to ensure that American capitalist excesses do not harm the country again.

“No president, not Bernie Sanders or anyone else, can effectively address the economic crises facing the working families of this country alone,” he said. “The truth is that Wall Street, corporate America, the corporate media and wealthy campaign donors are just too powerful.”

But Sanders said that new rules of the financial game could be written and that government could force Wall Street to follow them.

“Yes, we can make our economy work for all Americans,” he said. “And so my message to you today is straightforward: If elected president, I will rein in Wall Street so they can’t crash our economy again. Will they like me? No. Will they begin to play by the rules if I’m president? You better believe it.”

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