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  • rjw918 commented on the blog post A Bipartisan Solution To Endorse: Breaking Up the Big Banks

    2012-06-04 14:33:45View | Delete

    >> But let’s call this that tenth time.

    It only looks like a “he finally got it right” because, apparently, the writer here doesn’t know enough about our banking system.

    >>We can make banking boring again, says Hoenig, by focusing commercial banks with access to the discount window and deposit insurance on ordinary activities with long-term customer relationships: consumer lending, deposits, asset management.

    WTH? This is a cockamamie idea…. One really should know the basics of and late 20th century history of commercial banking before jumping on a right wingers “solution.”

    The big commercial banks were insufficiently profitable when they also had commercial/corporate business going into the 90s. The two ideas here just don’t make sense. The ideas that (i) they could be profitable _and_ serve consumers without corporate business, and (ii) that leaving the corp[orate business with the investment banks is a good plan are uninformed.

    The declining profitability of the commercial banks in the 80s and 90s was why Glass-Steagal was repealed – to rescue the commercial banks, with their economically critical credit systems and payment systems.* (Which is why we had to rescue them in 2008 – our economy could not survive with those functions fully operating day to day.)

    From the 70s through the 1990s, the incursion of other, unregulated industries into the profitable lines of the commercial banks made them relatively unprofitable.

    That was known as financial disintermediation and the times were such that implementing safety and soundness regulations on the non-banks who were ‘stealing’ business from the commercial banks was a political impossibility.

    The idea that “commercial banks” could operate without the commercial business (corporate lending and payments) and solely as “consumer banks,” apparently leaving the “investment banks with all corporate business is not only absurd, but is a prescription for a re-occurrence of the 2008/2009 bailout.

    It is also a prescription for even higher consumer banking costs.

    Good lord! You think this is a good idea? Give all the corporate business to the old investment banks?

    You’d end up with consumer “commercial banks” which couldn’t survive and infra-structure critical “investment banks which would still need to be rescued to ensure day to day operation of our commerce should they repweat their mistakes of the past.

    This is a worse idea than the repeal of Glass-Steagall was in the first place.

    = = = =
    I was a banking lawyer back then; I sat on committees of a large bank trying to deal with these very issues.

  • rjw918 commented on the diary post How Many Supreme Court Justices Can Dance on the Head of a Pin? by Janet Rhodes.

    2012-04-23 17:58:52View | Delete

    Excellent column! One tiny nitpick. I don’t know where the execrable acronym “SCOTUS” started. I suspect it started with the Insider’s “POTUS” for the president, and some “cool” reporter or blogger, who didn’t know the centuries(? – at least extremely well established) old tradition of abbreviating “Supreme Court” to “S.CT.” decide to invent “SCOTUS.” To [...]

  • rjw918 commented on the blog post Auto Rescue Now Popular

    2012-02-24 16:46:46View | Delete

    >>I’ll set aside the merits of saving the banking industry, which doesn’t look good for anyone.

    But was essential for everyone.

    The old commercial banking side of the post Glass-Steagall merged banks performed 3 vital functions:

    1: They supplied the day to day credit that all businesses need to operate. 2: they ran the payment systems. And 3: they provided trade finance for all our imports and exports.

    All three functions continue to be performed by the merged commercial and investment. (It was the investment side that created the huge problems.)

    If the credit and payment and trade finance systems had experienced the sort of disruption which would have been caused had even one major player failed (much less several), our economy very likely would have ground to halt. Literally.

    Many folks would have lost access to their credit cards and debit cards to buy stuff. Cash on hand to buy essentials with would quickly disappear.

    Grocery stores and gas stations and lumber yards and department stores wouldn’t be able to pay their suppliers for product – both because many would have lost their credit lines, and because the payments systems would have been, at best, crippled.

    And with trade finance eviscerated by a round of bank failures, imports and exports would have pretty much died.

    YEah, it sucks to see the investment bankers giving us the finger — but the reality of a full banking system crash would have literally been deadly.

    (I worked as major bank attorney from the 70s to 90s dealing with, among other things, all three of those systems. And yeah, I know better than most how screwed up banks are – I am not an apologist for them – but from my experience I have a pretty good idea of how ugly things would have gotten very quickly.)

  • A birth control measure added to a transportation bill???

    I thought the GOP pledged they wouldn’t do stuff like this – were they lying then or just (repeatedly) breaking that promise?

    “Advance Legislative Issues One at a Time
    “We will end the practice of packaging unpopular bills with “must-pass” legislation to circumvent the will of the American people. Instead, we will advance major legislation one issue at a time.”

    Pledge to America, 2010, http://www.gop.gov/indepth/pledge/reform#body

  • rjw918 commented on the blog post Texas Teenager Mistakenly Deported to Colombia

    2012-01-04 17:00:41View | Delete

    >>Would you be satisfied if no one got deported?

    I believe Congress has only those powers specifically named in the Constitution.

    The Constitution does not give Congress the power to create immigration laws, there there can be no such thing as an illegal immigrant.

    (Actually, I’m not really a “tenther,” but a lot of the virulent anti-immigrant people are and thus are walking talking contradictions.)

    I am not a nativist, either, and I think our immigration laws are based on fear and racism.

  • rjw918 commented on the diary post We the 99% Demand a Totally Different Budget by David Swanson.

    2011-10-19 16:24:22View | Delete

    >>we should be allowed to present the full list of grievances.

    In the Declaration of Independence, the founders specified 27 different categories of tyrannies by King George – why should we be limited to just a few today?


  • rjw918 commented on the diary post Closing Your CitiBank Account Can Get You Arrested by spocko.

    2011-10-16 07:59:29View | Delete

    >>Only one person asked to close an account and was accommodated. I used to work as legal counsel for one of the large NY banks – although not in consumer banking. I was sometimes involved in drafting and/or reviewing statements to be made. I can assure all that the statement Citibank made was carefully reviewed [...]

  • rjw918 commented on the diary post Another Lesson on National Income Accounting for Robert Samuelson by Dean Baker.

    2011-09-13 05:33:05View | Delete

    >>The problem is that the country has a large trade deficit. My understanding is that Adam Smith taught us that for a nation to build wealth, it needs to manufacture domestically the goods it needs, not import them. (Smith was in Scotland, which faced the same restrictions on domestic manufacturing as did the American colonies.) [...]

  • rjw918 commented on the diary post CEOs to Obama: Get Out Of The Way? by TobyWollin.

    2011-09-09 06:43:28View | Delete

    The GOP is loudly chanting “job killing regulations.

    We can also call them “life and economy saving checks and balances.”

    What is the true cost of job where the worker faces higher health and safety risks?

    What is an economy where the banks need taxpayer bailouts because of a gutted safety and soundness regulatory scheme?

  • rjw918 commented on the blog post GOP Debate Audience Apparently Really Loves Killing People

    2011-09-08 09:47:32View | Delete

    Conservatives generally are far more attracted to authoritarianism tghan are liberals.

    The death penalty is the ultimate display of and exercise of authoritarian power; the conservatives’ perceived morality of authoritarian power seems to far outweigh their other claimed sources of moral suasion, such as Scripture.

  • rjw918 commented on the diary post Either We Make Stuff — Or We Go Out Of Business by TobyWollin.

    2011-08-28 17:25:38View | Delete

    Adam Smith, the “father of capitalism” taught us that for a country to develop wealth, it has to do domestic manufacturing, not import the goods it needs.

    Sadly, the GOP has decided their allegiance is to corporation who will ship production and jobs overseas despite how it diminishes our nation’s wealth.


  • In 1776 Adam Smith, the “Father of Capitalism” taught us that domestic manufacturing is necessary for a nation to build wealth.

    US corporations shipping all that production and jobs overseas? Great for their profits, terrible for our country.

    What true patriot can support the “global corporations” in this day and age?

  • rjw918 commented on the blog post Effective Democrats Make Working Peoples’ Lives Better

    2011-08-04 10:53:40View | Delete

    >>Meanwhile, the health care bill is still broadly unpopular. Why? Because people know they’re going to be forced to buy an increasingly expensive product from a pernicious cartel that they already hate.

    Plus, for those who can’t afford, the US government will pay that money to the private health insurance cartel.

    Corporate welfare at it’s finest

    The advocate of free enterprise love competition except when they can’t compete with an alternative

  • All this attention to the country’s credit rating is something of a mis-direct.

    The actual cost of credit is what counts, and that depends on investors’ confidence — not just on the credit rating, which is only one part of those perceptions and confidence.

    There was a t-bill auction yesterday, and the interest rates went up:

    WASHINGTON – Interest rates on short-term Treasury bills rose in yesterday’s auction, with rates on three-month bills rising to their highest level since February.

    The Treasury Department auctioned $27 billion in three-month bills at a discount rate of 0.115 percent, up from 0.080 percent last week. Another $24 billion in six-month bills was auctioned at a discount rate of 0.150 percent, up from 0.100 percent.


    It is too early to tell if that was from the bad GDP reports, or from the debt crisis and the continuing concern that the GOP will do something else to take the economy hostage, or the market realization that the debt-ceiling deal will cost a lot of jobs and thus weaken the economy further.

    At any rate, don’t look only at the credit rating for determining the costs of the GOP economic hostage taking.

    BTW, a rise in the short term t-bill rates will not only cost us as tax payers, but those rates form the basis for the rates banks charge both consumers and corporations.

    So the increase in the t-bill rates will affect each of us as

    1) taxpayers
    2) credit interest payers (credit card, mortgage, etc), and
    3) consumers paying the increased costs passed on by corporations

    Think of this as the Great Republican Tax Increase of 2011 – except the extra taxes go to the Chinese and the banks.

  • rjw918 commented on the blog post Whip the Super Congress: Head Count #2

    2011-08-01 09:45:54View | Delete

    FWIW, I was just told (1:30 PM, Monday) by the tally desk at my GOP senator’s office that the calls are running against the deal, and by my Dem senator’s office that were all running against it.

  • It seems to me that the GOP has taken most Dem party proposals hostage, and the Dem leadership is suffering from Stockholm Syndrome – identifying with their hostage takers….

  • rjw918 commented on the diary post George Will Spreads Some Lies About the Economic Crisis by Dean Baker.

    2011-07-03 13:47:37View | Delete

    I did regulatory compliance work for large banks from the 70s to 90s, including CRA compliance and reporting. The claim that CRA forced banks to make bad loans is completely false. CRA required and requires banks to _consider_ making loans in “red-lined” areas they had previously refused to even consider. CRA also encouraged banks to [...]

  • NAFTA-style agreements to create jobs? Those agreements create them overseas – Clinton and the Dems (including me) bought a pig in poke with NAFTA and boy, were we wrong.

    Adam Smith, the “father of capitalism” taught us that to build its wealth, a nation has produce the goods it needs domestically and avoid importing such goods.

    When we support politicians and corporations which export our production capacities and jobs, we are undermining our nation’s strength and wealth.


  • rjw918 commented on the blog post Standing up for the little people

    2011-07-01 14:09:44View | Delete

    >>Ask yourself this… If the richest 400 people in America retired tomorrow how would your life change? It wouldn’t. Neither would mine or anyone elses.

    Because their replacements would continue redistributing the wealth created in our nation to themselves.

    >> You are not being ripped off.

    What “natural law” dictates that the bulk of the wealth created by the combination of labor, ideas and capital has to be distributed to the richest?

    We are, indeed, being ripped off

  • rjw918 commented on the blog post Standing up for the little people

    2011-07-01 14:06:40View | Delete

    >>You’d think after the yacht tax debacle, the left would have figured out how destructive, demonizing a domestic industry can be.

    And you’d think patriotic Republicans and capitalists would realize that shipping our manufacturing and jobs overseas is really bad for the country – Adam Smith taught us that more than 200 years ago.

    If you support corporations which send jobs overseas, you are actively undermining our nation.

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