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The Hoax of Conflict

3:17 pm in Uncategorized by Donald Goldmacher

This entry was written by HEIST co-producer and co-director Frances Causey.

The conflict and profit driven mainstream media continually props up the belief that Democrats and Republicans can’t agree on anything. But when it comes to economic policy, conflict is an engineered myth, a smokescreen perpetuated by the “inside the beltway gang” ostensibly to keep the faithful of both parties happy. I call it smoke and mirror politics.

What is being obscured is the fact that both parties shamelessly support multi-national corporations and financial elites at the exclusion of everything and everyone else. Since the late 1970’s, the GOP and their billionaire backers have spent billions of dollars shaping government in their own “profits at any cost” vision. The Democrats began falling nicely into line beginning with President Jimmy Carter who started the deregulation craze by deregulating the airline and trucking industries. No, this is not your grandfather’s Democratic party anymore.

The Democratic Party, once the champion of working people and defender of Roosevelt’s New Deal that defined liberalism, now finds itself making policy and laws that are destroying what is left of the New Deal and subsequently the middle-class.

Reading between the lines of President Obama’s Top 50 achievements speaks to this reality.
Yes, President Obama and Congress threw working people a few bones like the auto bailout and extension of long term unemployment benefits (to be rescinded somewhat if the sequester happens) but closer scrutiny of the list reveals that a majority of “accomplishments” were for the very few at the very top of the economic scale.

Number One on the list is health care reform. Polls show that 77% of Americans overwhelmingly wanted a government run healthcare option to compete with private insurers. But the public option was dead on arrival after President Obama and Finance Committee Chairman Democrat Sen. Max Baucus played the “Washington shell game” and let Big Pharma and the insurance industry dictate the terms of the legislation, which was a huge windfall to both.

The insurance industry got millions of new customers and high premiums subsidized by the taxpayer and Big Pharma can continue its predatory pricing and monopolistic policies while high drug prices and healthcare costs continue to devastate the budgets of working class families. Big money finds a way.

Number Two on the list is the passage of the stimulus, which was touted and allegedly designed to spur the economy for EVERYONE. But figures show that 93% of recovery dollars went to the 1%. The stimulus did keep the economy from going off the cliff by not completely shutting down our banking system but offered little else in the long term to bring back good jobs with benefits to working people. Relative to our 1979 economy (when Democrats acted like Democrats), the current economy has lost about one third of its ability to generate good jobs or those with good wages, healthcare benefits and retirement.

Lastly, lets look at Number Three on the list: Wall Street Reform. As I write, the White House and Congress are effectively putting the last nails in the coffin of Dodd-Frank, the law originally designed to re-write the rules of how Wall Street did business.

Instead, Congress is once again pandering to groups like the Mortgage Bankers Association that is sitting on bad mortgages to the tune of a 30% loss, which they are loath to write off. The only way to recoup their losses is to create another housing bubble and Congress is only too happy to comply by loosening lending standards again.
Democratic Senator Jeff Merkley is currently crafting a bill that would set up a trust to “purchase or guarantee refinanced (private) mortgages.” Taxpayers will be forced once again to pay for the excesses of investors. After all, this IS how our democracy works these days.

America experienced her greatest prosperity in the 1950’s and 1960’s when we had a political balance of power and laws that ensured fairness. The Democrats representing working people were a counterweight to the power of the capital class, represented by Republicans. Income equality and upward mobility, a core component of the American Dream, was the result. Today, there is overwhelming evidence that your children will not have their fair shot at the American dream. Our Democracy and dreams have been sold to the highest bidder. If indeed there are only two kinds of power in America: organized money and organized people, organized money has had its way. Which do you belong to?

This entry is also available on Daily Kos.

Americans’ Net Worth

5:01 pm in Uncategorized by Donald Goldmacher

This entry was written by Heist Co-Producer and Co-Director Frances Causey.

A recent report that the economy contracted the last quarter is no surprise. Despite the recent numbers, we consistently get rosy reports from the mainstream media that the economy is generally improving. But the reality is that tens of millions of Americans have never been less secure financially because the current economy leaves them out in the cold. The numbers never lie.

From 2007 to 2010, the median net worth of each middle class American family dropped by nearly 40%, wiping out 18 years of accumulated wealth. The housing crash contributed to most of the losses. In that same period, middle-class families went from having on average $126,400 to $77,300. Median income for middle class families is now about where it was in the mid-1990’s. These are stunning losses (not JUST a number) and not without severe consequences, particularly when one considers the psychosocial impact to families. The 1% had big losses too during the crash but they were significantly less impacted because their assets were more diversified. Yet consider this. The earnings of the top 1.0 percent grew a staggering 134% between 1979 and 2007 while those in the bottom 90% grew just 15%.

So where are working Americans suppose to make up for their losses? Apparently not by working. Most of the jobs lost in the economic collapse were replaced by low paying jobs with no benefits. One of the most astonishing numbers consistently left out of the national debate is how 40 million good jobs with benefits were lost well before 2007. These also were replaced with low paying, low-skill service jobs. And yet somehow we continue to think this restructuring of the American economy that began in the late 1970’s when Democrats and Republicans alike began to worship at the altar of free market utopianism is good for us.

Since the late 1970’s average workers have faced historic obstacles in the search for decent employment. Current forecasts suggest there will be protracted unemployment for years to come. To put it bluntly, there is little doubt (and Washington knows this) that the living standards of a majority of working Americans will continue to decline over the next decade.

Even many relatively high tech manufacturing jobs today are paying just $10-12 an hour. In a recent 60 Minutes/CBS News story the reporter filed a piece on the subject of how American manufacturing cannot find enough skilled workers to run their factories. The piece profiled several workers who went back to school to get the necessary training. And guess how the worker is being rewarded for her initiative? She is being paid $12 per hour! Yet the reporter never questioned the employer about the low wages he pays for his “skilled” workers. And American employers wonder why there is a dearth of candidates applying for these positions? These are not living wages when a gallon of milk costs $5. Workers simply can’t afford to take these jobs and support their families.

Yet, without rebuke from the people who elected them, politicians on both sides of the aisle continue to cry about a worker “skills gap”. Just recently, a bi-partisan group of Senators, guided by an addiction to the belief that the market always knows best, just sided 100% with multinational corporations against American high-tech workers by proposing a bill that would overhaul the high-skilled worker visa program. The bill would immediately increase the cap on temporary H-1B from 65,000 to 115,000 a year, giving guest workers an advantage of American workers. How are American workers of any skill level ever able to compete again with the deck so stacked against them?

We hear everywhere that we are in a “recovery” citing the fact that our economy is “growing”. But since the economic collapse, our Gross Domestic Product is consistently averaging around 2.5%. But that number is not high enough to create enough jobs for those job seekers entering the market for the first time much less the millions who need jobs but cannot find them.

Which brings me to another narrative waffling out there. A favorite mantra of the corporate and Wall Street class, and Tea Party is that America is a “welfare state”. Out of work Americans are taking too many handouts and after all “enough is enough.” A closer look at the numbers bearing reality reveals a much different truth. If readers will recall, President Clinton “reformed” welfare in 1996. To receive cash assistance or Temporary Assistance to nearly enough to meet even the most basic of needs. TANF’s role in providing income support to families has declined dramatically since 1996 yet the need has never been greater. For instance in 2011, only 27 families received TANF for every 100 families in poverty.

If the working poor are on Medicaid its because employers like Wal-Mart don’t offer health care. If the working poor participate in SNAP or the food stamp program its because they are not paid enough by employers like Wal-Mart to feed their families. Since 2007, over 12 million families have lost their homes to foreclosure. As of January 2013, another 11 million are underwater on their mortgages and in serious jeopardy of default. Yet, there are currently 1.2 million people in public housing, hardly a huge number given the number of families displaced by the housing crisis. But yet we hear the constant refrain from those who have never wondered where their next meal was coming from complain that our working poor are consistently “on the take”. Corporate or white collar welfare in the form of subsidies, low tax rates for corporations and wealthy individuals, and the auctioning of public resources like oil, timber and the public airwaves for pennies on the dollar costs taxpayers ten times what blue-collar welfare does.

So what is the solution? Profits are not the problem. Blind, relentless pursuit of them at any cost by any business small or large is. American style Democracy has always been grounded in the fact that a majority of America’s citizens worked hard and shared in her prosperity. American worker productivity has never been higher yet American workers are not seeing any return. So we have to make “work” pay again in this country. But how do we do that? If we truly grasp and follow the current numbers, we need a revolutionary change in what’s left of our Democracy.

Through organizing and grassroots efforts, we must rally those left behind in this economy and acting in unison, reconstruct our economy by rebuilding from the bottom up and pressuring those at the top to change policy. This means strengthening the power of workers wherever we can, through workplace laws, policy and unions, which remain the only institutional hedge against the power of Wall Street. Moreover, we must realize that our problems are not just about electing the next politician. Perhaps we even need to redefine the American Dream into one that is more inclusive of all.

This entry is also available at Daily Kos.

The so-called “Fiscal Cliff” is “austerity” in disguise

1:00 pm in Uncategorized by Donald Goldmacher

Note: This post was written by HEIST co-producer and co-director Frances Causey.

The war against people who work for a living in this country continues with the “Grand Bargain” that will slash social spending by trillions on programs that benefit the most vulnerable among us and also “reform” Social Security and Medicare.

We at Heist: Who stole the American Dream? see the cruel irony in this brazen attempt to further erode living standards for the 98%. Today, some 70 percent of Americans pay more in payroll taxes than they do in income taxes! Social Security and Medicare are not “entitlement” programs. Hard working Americans along with their employers pay into this system their entire working lives. But rather than tax corporations and the super rich by allowing the Bush tax cuts to expire, apparently President Obama, Congress and the corporate-financial class on Wall Street would prefer instead to “balance” the budget on the backs of working Americans. Senator Bernie Sanders points out in HEIST the callous indifference inherent in Washington’s march towards austerity.

“Let’s go after little kids, let’s go after the elderly, let’s go after the sick, let’s go after the most vulnerable, but apparently in the Senate we can’t ask Chevron to pay taxes.

How much more can working people give up before they rise up? The tally so far? Across the board, wages have stagnated since the mid-70’s, over 40 million good paying jobs with benefits have been shipped overseas, trade agreements that benefit the corporate and shareholder classes prevail, employers are asking workers to pay more for healthcare, risky 401k’s have replaced guaranteed defined benefit pensions, and now the 1% is going after the one element of FDR’s New Deal that remains, Social Security!

Austerity as described by Webster: difficult economic conditions created by government measures to reduce a budget deficit, especially by reducing public expenditures. So what is in effect here is the Golden Rule: He who has the gold (and the pockets of Congress) makes the rules. As we point out in HEIST, in 1971 there were 175 lobbyists in D.C. but by 2008 there were more than 33,000. Because of this, Congress spends more time hobnobbing with lobbyists who represent the super rich and corporations than they do with most of their constituents, ordinary working people. The big disconnect here is that politicians believe the problems of the one percent are the problems of the country. It’s safe to say that working people have no voice in Washington.

As a result, our priorities are way out of whack as pointed out by Sen. Bernie Sanders in HEIST. -Instead of a society in which we’re struggling together to deal with this environmental crisis, to deal with education, to make sure all of our people have healthcare, we are a society now in which the goal is to be one of those people on top that have tremendous wealth and tremendous power.

By the way, did you notice as we did in HEIST that our “deficit” problems began in 2008 when the world economy tanked thanks to Wall Street’s criminal activity? But to cover their crimes, the cartel’s message machine switched into high gear, effectively convincing working Americans that they were to blame because they bought too many televisions. NO, our deficit “problems” began when Wall Street crashed our economy, people lost jobs and the government lost tax revenue, and brought back the ultimate tool of “magical thinking”?, the Reagan-Bush tax cuts. It’s maddening to hear over and over again from cable pundits, anchors and reporters make assumptions about the “deficit” without understanding its source or doing their own reporting. This is the corporate-political-financial class message machine doing its finest work. The result has been disastrous for working Americans as Jakada Imani of the Ella Baker Center for Human Rights says in HEIST.

Folks who are in charge of this economy ran red light after red light after red light, and caused car wreck after car wreck after car wreck, and no one’s held them accountable. There hasn’t even been a conversation about accountability.

So the political coup begun in the mid 1970’s by nihilistic corporations and the super rich as described in HEIST, that swept up both American political parties continues to this day. In all honesty, on matters regarding the economy it’s almost impossible to separate the Democrats from the Republicans. We sincerely hope President Obama proves us wrong. To make matters worse, the corporate owned media has helped create within the working class a sort of “learned helplessness”, that we are powerless to counter the powers that be. This country has a history of social movements, the feminist and civil rights movements, among others. We must support social movements like Occupy Wall Street, which is raising the level of consciousness about the grave inequality present in this country. Which is exactly why the corporate-political class swooped in to shut it down so quickly.

For more information about Heist: Who Stole the American Dream? please go to

JeffreeB will be available for comment immediately following publication.
This entry is also available on Daily Kos.

Libor, Sandy Weill, and Endless Corruption

9:33 pm in Uncategorized by Donald Goldmacher

Gangsters + Bankers = Banksters. Britain's Libor price fixing scandal and its global impact
Note: This post was written by donnyg1941 and JeffreeB
By now you’ve probably heard of Libor, the London Interbank Offered Rate, and the scandal surrounding it. And unless you have an advanced degree in finance, the complexity of the scandal (and Libor itself) probably makes your head spin. In simple terms, as Rolling Stone contributing editor Matt Taibbi explained it in a recent interview with Democracy Now!, “Libor is basically the rate at which banks borrow from each other. It’s a benchmark that… a lot of international investment products are pegged to. When Libor is low, that means that the banks feel confident in each other; and when Libor is high, that means there is generally instability.”So what does some esoteric, inter-bank lending rate in London have to do with you? Quite a bit, actually. As Taibbi points out, Libor, “sets the borrowing costs of everything from mortgages to student loans to credit card accounts… Basically, every city and town in America, to say nothing of the rest of the world, has investments that are pegged to Libor. Most of them are holding investment accounts that actually will decrease in value as Libor goes down.” And as municipalities lose money because big banks stack the deck, the same big banks make billions.Somehow Wall Street has convinced municipalities countrywide that they will save money by engaging in interest rate swaps based on Libor. But in practice, these swaps have been devastating to communities. Pam Martens writes in her article, “How Wall Street Gutted Our Schools and Cities,” “In many cases, continuing to this day, the municipality ended up receiving a fraction of one percent, while contractually bound to pay Wall Street firms as much as 3 to 6 percent in a fixed rate for twenty years or longer. If the local or state governments or school boards wanted out of the deal, a multi-million dollar penalty fee could be charged based on the rate structure and notional (face amount) of the swap.” While you may need a degree in finance to understand how Libor works, you don’t need that degree to know that when you’re receiving a fraction of a percent and have to pay 3 to 6 percent, you’re losing money. And of course, where does that money you’re losing go? Right into the pockets of the deck stackers themselves.

Martens points out that between 2006 and 2008, banks, “collected as much as $28 billion in termination fees from state and local governments who were desperate to exit the abusive interest rate swaps. That amount does not include the ongoing outsized interest payments that were and are being paid. Experts believe that billions of abusive swaps may be as yet unacknowledged by embarrassed municipalities.”

Not only have the big banks rigged Libor to appear stronger than they really were, a key factor in the economic situation in which we found ourselves in 2008, but they also did it simply to steal billions from your city, your state, and your schools. When the house gets to stack the deck, the house always wins.

Enter Sandy Weill, former CEO of Citibank, who now professes religion. In a move seeming to come right out of left field, Weill stated on CNBC(the paragons of economic objectivity) that he believes too big to fail banks should be broken up. Oddly enough, Weill was largely responsible for creating the current structure of big banking.

Who is Sandy Weill you might ask? Well, he’s been around the block a few times in the Financial industry, starting in 1955. “Weill began serving as president of American Express Co. in 1983 and as chairman and CEO of American Express’s insurance subsidiary, Fireman’s Fund Insurance Company, in 1984. Weill was succeeded by his protégé, Peter A. Cohen, who became the youngest head of a Wall Street firm. While at American Express, Weill began grooming his newest protégé, Jamie Dimon, the future CEO of JPMorgan Chase.”(credit Wikipedia). Are you seeing a pattern here yet? For more background on Mr. Weill, see the Wikipedia page.

As CEO of Travelers Insurance Group, Weill oversaw the 1998 Travelers Group and Citibank merger, a merger that, as Bonnie Kavoussi at the Huffington Post points out, was, “at the time, the largest merger in history.” Weill remained CEO of Citi until 2003 and remained chairman until 2006. He did this in defiance of banking law extant at the time, and guess who gave him a free pass? Right, Alan Greenspan, that apostle of Ayn Rand, and originally appointed to the Fed by that great president, Ronald Reagan.

Not only did Weill create yet another big bank monster out of Citi, he was also the  lobbyist-in-chief for repealing the Glass-Steagall Act. Weill was so instrumental in the 1999 dismantling of Glass-Steagall that, as Kavoussi reports, “Weill’s office once had a wooden plaque with his portrait that read ‘The Shatterer Of Glass-Steagall.’” And with the end of Glass-Steagall, any commercial bank could do what Sandy had illegally done the year before, and could now engage in the very same behaviors as the Wall Street investment banks, just as they did in the 1920s.

Repealing Glass-Steagall was a grand slam for commercial banks; the law, instated after the crash of 1929, separated investment banking from commercial banking. With Glass-Steagall out of the way, Weill could now take our bank accounts right to the bookie. And in 2008, the bookie came to collect.

So now it seems Weill has gone rogue, or found some new way to make money. He said in the Wednesday morning interview with CNBC, “What we should probably do is go and split up investment banking from banking, have banks be deposit takers, have banks make commercial loans and real estate loans, and have banks do something that’s not going to risk the taxpayer dollars, that’s not going to be too big to fail.” Odd words to come from the terminator of the very things he now professes to embrace.

But is Weill really batting for the 99 percent now? We’ll see.

When Weill went on to discuss his reasons for believing that banks should be taken in the exact opposite direction from that which he took Citigroup, he said, “I think that the earlier model was right for that time… I don’t think it’s right anymore… I think that this system is really immobilizing the banking system.”

Right for the time? Repealing Glass-Steagall was a major factor in getting us into the mess in which we now find ourselves. It’s like Weill is saying that it was a great idea until it wasn’t a great idea, and now it’s not a great idea. But this seems to be about as close to an apology or an admission of failure as we can expect to get from Banksters. Or as Marketwatch’s David Weidner writes today,”Former executives such as Weill, or his former lieutenant, Sally Krawcheck, or Dick Fuld of Lehman Brothers, or Maurice “Hank” Greenberg never get it. They try to reconcile their resumes with history for the sake of sounding honest and remorseful. But they also remind their audience that there were forces outside of their control too.”

Though we cannot say with certainty that he has become a proponent of re-regulation, his failure to acknowledge his role in all of this mess leaves one with a very skeptical view of Sandy the wily. But before we end, let us remind ourselves that not one of these guys has gone to jail or been forced by our government to give up their personal ill-gotten gains. So the corruption is pandemic, infecting our financial systems world-wide and the governments that are supposed to regulate and punish them when they behave badly. As David Cay Johnston, Pulitzer Prize winning investigative journalist says in Heist, “The purpose of rules is not to regulate saints, it is to regulate sinners.”

Sandy it is time to repent for thou art indeed a major league sinner. As for the rest of the Banksters, it is way past time to lock them up, and nationalize these bankrupt banks, for the good of the nation.