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Posts Tagged ‘glass-steagal’

BernieSanders-WallStreet

A new Marquette Law School poll released yesterday shows that Bernie Sanders is leading Hillary Clinton in Wisconsin by 49-45, raising the possibility that Sanders will win there. However, as Sanders continues to develop his message and grassroots support, it is likely he will defeat Hillary by a larger margin. Many months ago, Hillary was beating Bernie by 50 points in Wisconsin.

In addition, a new LA Times poll shows Sanders beating Clinton 45 to 37 percent. Sanders came from way back. And just like in Wisconsin, Bernie’s lead is likely to grow.

In my lifetime, we’ve seen the 1 percent go from getting 8 percent of the total income produced in the United States to 37 percent. I’ve seen tens of millions of jobs exported overseas, and the difference between the old higher US pay and the new lower overseas pay goes straight into the pockets of the 1 percent via higher corporate earnings, rising dividends, and surging share prices. I’ve seen a government and both its major political parties become intensely corrupted by that money. Bernie says enough is enough. I agree, and so do a lot of other people. The more his message gets out, the more people flock to him.

As for Hillary. It becomes difficult to like Clinton as more people get to know about her ties to Wall Street, her support for exporting jobs overseas, her support for deregulating Wall Street way back when, and her strong backing for legislation making it more difficult for people to go bankrupt, which helps the big banks who support her. And that’s just a few of the things people don’t like about her.

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Praise for Bernie is what Cornell West had in a recent interview with Politico magazine. In it, he excoriated Hillary for her ties to Wall Street.

According to a CNN report, Hillary and Bill gave 729 speeches from February 2001 until May 2015. The two got an average payday of $210,795 for each address. Bill and Hillary also reported at least $7.7 million for at least 39 speeches to big banks, including Goldman Sachs and UBS, with Hillary Clinton, the Democratic 2016 front-runner, collecting at least $1.8 million for at least eight speeches to big banks.

Among Professor’s West observations:

“With Obama’s departure from the White House, we shall see clearly where black America stands in relation to (Martin Luther) King’s legacy. Will voters put a smile on Martin’s face? It’s clear how we can do it. King smiles at Sanders’ deep integrity and genuine conviction, while he weeps at the Clinton machine’s crass opportunism and the inequality and injustice it breeds.

“…when it comes to advancing Dr. King’s legacy, a vote for Clinton not only falls far short of the mark; it prevents us from giving new life to King’s legacy. Instead, it is Sanders who has championed that legacy in word and in deed for 50 years. This election is not a mere campaign; it is a crusade to resurrect democracy—King-style—in our time. In 2016, Sanders is the one leading that crusade.”

King was leading the poor people’s campaign at the time of his death. Sander’s has been leading the charge for middle class, poor class, and racial equality for fifty years, while the Clinton’s have been collecting millions of dollars of speaking fees from Goldman Sachs.

West goes on:

“The Clintons’ neoliberal economic policies—principally, the repeal of the Glass-Steagall banking legislation, apparently under the influence of Wall Street’s money—have also hurt King’s cause. The Clinton Machine—celebrated by the centrist wing of the Democratic Party, white and black—did produce economic growth. But it came at the expense of poor people (more hopeless and prison-bound) and working people (also decimated by the Clinton-sponsored North American Free Trade Agreement).

“It’s no accident that Goldman Sachs paid Hillary Clinton $675,000 for a mere three speeches in 2013, or that the firm has given hundreds of thousands of dollars to her campaigns or that, in total, it has paid her and her husband more than $150 million in speaking fees since 2001. This is the same Goldman Sachs that engaged in predatory lending of sub-prime mortgages that collapsed in 2008, disproportionately hurting black Americans.”

In other words, Wall Street owns Hillary and Bill as much or more than it owns the Republican party stalwarts, such as Marco Rubio, Jeb Bush, Mitch McConnell and Orrin Hatch.

For the rest of the story: http://www.politico.com/magazine/story/2016/02/bernie-sanders-african-americans-cornel-west-hillary-clinton-213627#ixzz40Ygf3Q5Z

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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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It’s not too late to save the US economy. Middle Class Senator Elizabeth Warren of Massachusetts is determined to fight the fight to save the USA and the 99 percent from the depredations of such people as Wall Street Senator Ron Wyden, a useful idiot of the 1 percent in their war against the middle class.

Warren is co-sponsoring legislation in the senate to reinstate the Glass-Steagal Act, depression era legislation that forced banks to separate commercial from investment banking. During the Great Depression, the government enacted legislation to insure bank deposits of citizens. The rationale for Glass-Steagal was that the government shouldn’t insure the gambling of Wall Street, and so Glass-Steagal was enacted. Wall Street’s useful idiot of a president, Bill Clinton, signed legislation repealing Glass-Steagal in 1999. The result has been an economic disaster that’s at least partially responsible for Wall Street’s destruction of the US economy from 2007 to now and into the future.

The archtype of political corruption, Ron Wyden, will soon be chair of the senate finance committee, and he’ll fight tooth and nail to protect his Wall Street masters.

Check out the videos and links below for more on this story.

Elizabeth Warren–Reinstate Glass Steagal

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