Tag: Elizabeth Warren

Trans Pacific Partnership: Corporate Mayhem Alive and Well

tpp

Despite President Obama’s spirited pledge to reduce the growing gap between rich and poor, his administration has been covertly involved in negotiating a Trans Pacific Partnership (TPP) trade agreement whose potential fallout would only exacerbate, not lessen, the economic divide, consolidating what is essentially an oligarchy of Wall Street interests.

You may be unfamiliar with the TPP, as it’s not played up in the media, unless you’re a rare aficionado of the marketplace.  Briefly, 14 nations bordering the Pacific, controlling 40% of the world’s GDP and 26% of its trade, have been at work for more than a year, hammering out the final details of a complex agreement that would eliminate tariffs on goods and services.  Composed of 29 chapters, its scope would include not only the area of finance, or banking, but telecommunications (i.e., the Internet), and even food services.  It would have devastating consequences for those of us committed to environmental concerns that include global warming.

Ominously, it includes proposals that would curtail consumer protection across a wide spectrum.  According to Republican Reports, leaked TPP negotiation documents reveal the Obama administration’s attempts to stymie other governments from implementing financial regulations, believing they could mitigate another bank collapse.

These leaked documents (see citizen.org) indicate proposals allowing corporations to sue governments under the auspices of “foreign tribunals,” thus circumventing domestic courts and local laws.  Corporations could even demand financial compensation for “tobacco, prescription, and environment protections” that undermine their profits.

As Senator Elizabeth Warren–I like her more everyday–warns, such provisions allow “a chance for these banks to get something done quietly out of sight that they could not accomplish in a public place without the cameras rolling and the lights on.”

Alarmingly, even without the TPP, over $3 billion has already been paid out to foreign investors under current U.S. trade and investment agreements, with another $14 billion pending, “primarily targeting environmental, energy, and public health policies” (citizen.org).

Representing the U.S. in the negotiations is Obama appointee Stefan Selig, a former Bank of America investment banker nominated to become Under Secretary for International Trade at the Department of Commerce.  Since his nomination, he’s received $9 million in bonuses.  (He had received $5.1 million incentive pay the previous year.)

Slated to join him in the negotiations, pending Congress’ approval, is Michael Froman, presently U.S. Trade Representative.  He received $4 million from CitiGroup as an exit payment in addition to $2 million in connection with his holdings in several investment funds.

This practice of banks lining the pockets of their former cohorts upon joining government is pervasive in the banking industry, pocket money for establishing influence in contexts affecting public financial policy.

Unfortunately, for all the pretty rhetoric coming out of the White House, the oligarchy of the one percent remains entrenched, and even abetted, while the TPP, added to its already formidable arsenal of financial peddling, poses a potent means to intimidating the common citizenry, here and abroad, opposed to its hegemony of privilege.

It certainly doesn’t contribute to economic parity.  According to a study by the Center for Economic Policy and Research, as reported in the Washington Post, the economic gains would largely accrue to the wealthy.

–rj

Happy Days are here again: and the banks roll on

obama

If you’ve been watching the headlines on the economic front, you may have seen the news about record bank profits in the first quarter of the year to the tune of $40.3 billion, an all time high.  In fact, profits surged 15.8% over the same quarter a year ago. This marks the 14th straight quarter of bank gains. In short, the bailed out banks (you and I paid for that), are making money hand-over-fist.  Not so, mainstream America.

Meanwhile, in the past 12 months, scandal- ridden JP Morgan has garnered $24.4 billion in net profit, evidencing once again that banks could evade laws with impunity.  The precedent, after all, had been the release of the 2000 page examiner’s report on Lehman Brothers in 2010,  suggesting fraud had brought about its bankruptcy, yet nothing was done.

You’d never have expected hand-outs from the Obama administration, given their campaign pledges to look out for us po’folk and their left of center politics.  Their hand-outs, not loans, to banks and other fiscal institutions, are shockingly in the trillions, with $85 billion dished out every month from the Federal Reserve.

But then again, we can better understand the forces in play when we look at the cohorts Obama gathered about himself:  Jacob Lew, former Citigroup executive, appointed deputy secretary of state, with a cool $900,000 bonus in his pocket from Citigroup;  Mark Patterson, Goldman Sachs lobbyist, made chief of staff at the Treasury, despite a ban on lobbyists;  Timothy Geithner, who became the architect of the bailouts, appointed as Treasury secretary, even after it was discovered he hadn’t fully paid his taxes;  Larry Summers, who authored many of the pro-bank policies of the nineties, recruited as a mainstay economic advisor; and Rahm Emmanuel, appointed Chief of Staff, after gleaning $16.5 million as a Chicago investment banker in just 30 months in-between government jobs. All of them Democrats.  All of them with dirty hands.  

At the present moment, Larry Summers is being touted as the next Federal Reserve Chairman, replacing the retiring Ben Bernanke.  A long time Goldman Sachs executive and trader, he played a primary role in deregulating Wall Street in the Clinton administration.

So far, and probably never will happen, not a single bank or CEO has been brought to account for their criminal mismanagement of the people’s money, leading to the 2008 meltdown and consequent suffering for millions of Americans. Their suffering continues.

Now you would think from the President’s major address on the economy this month that happy days are here again for you and me, what with his boast of 7.2 million new jobs created in the business sector in the last four years.  But politicians do prevaricate, and it’s up to you and me to hold their feet to the fire.  Fact is, long term unemployment is at its highest level since the Great Depression, and of the newly minted jobs, most are low wage (often in the service sector), temporary, or part-time.

Curiously, nowhere did the President mention the plight of Detroit facing bankruptcy and the possible erosion of pension and health benefits for the city’s workers, including police and fire personnel.

To give him his due, he did allude to the growing income disparity between the rich and the majority of Americans:

Even though our businesses are creating new jobs and have broken record profits, nearly all the income gains of the past ten years have continued to flow to the top 1 percent. The average CEO has gotten a raise of nearly 40 percent since 2009, but the average American earns less than he or she did in 1999. And companies continue to hold back on hiring those who have been out of work for some time.

But how did this happen?  He didn’t mention government’s largesse to the wealthy through bank bail outs, corporate tax breaks, and reduced wages for autoworkers.  In the first two years of the President’s tenure, or after the downturn of 2008, the richest one percent enjoyed an 11% increase in income, unlike the rest of Americans whose incomes declined.

Again, nobody’s been minding the store.  In 2011, the Senate Permanent Subcommittee  noted Wall Street’s culpability just prior to the 2008 market collapse as “a financial snakepit rife with greed, conflicts of interest and wrongdoing.”

While it may appear that things are humming along nicely, the banks booming, the real estate market up, stocks at their peak, the reality is that more than 3 million of us can’t find work.  Those who do, work for less, often part-time.  Many, particularly those 50 and over, may never work again.  Black youth unemployment is currently at 42 %.

Several million Americans have been foreclosed upon by the banks, losing their biggest investment stake and, sometimes, a whole lot more.  Many others owe the banks for houses purchased at inflated prices, now worth considerably less.

But the banks roll on, too big to take on, as Attorney General Eric Holder recently let slip. What’s more, their lobbyist legions do their work well, busy button-holing members of Congress.  It’s a game of money, always has been, money spelling influence.  It’s America, you know.

This just  in:  The President remains committed to slashing Medicare by $400 billion and Social Security by $130 billion in his projected 2014 budget.  (In 2008, candidate Obama had pledged, reiterated by Biden in 2012, that he wouldn’t cut Social Security.)  Apparently, the bankers are a privileged class; the people, expendable to the exigencies  of  power and influence.

-rj

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Right-on, Elizabeth!

Elizabeth Warren, Democratic aspirant to the Senate seat held by Republican Scott Brown in Massachusetts, recently came out with what’s now become a widely publicized comment, subsequently picked-up by YouTube and Move On websites:

There is nobody in this country who got rich on his own. Nobody. You built a factory out there? Good for you. But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.

Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.

Her comment rests on the assumption that the rich aren’t paying their fare share in taxes. In a previous post I’ve shown that the top 1 percent do pay 38 percent of the federal tax; however, this isn’t the bottom line. It’s what they don’t pay in taxes, given limitations on payroll taxes on social security, or sharply reduced tax brackets, once 70% before the Reagan era, now 35% max, etc. And then there are the investment loopholes and off shore tuck-a-ways a la places like the Cayman Islands and Swiss banks.

Concurrently, many of the middle class at substantially lower income levels pay at a high 28% clip. That includes my wife and me.  The unpleasant truth is that the rich have exponentially  increased their economic disparity with the middle and working classes to the point where the future threatens something resembling the two class set-up common to many South American countries of some rich and many poor.

We now learn that 20 million of our fellow Americans live in poverty. Forty-three percent of our unemployed, those age 50 and above, have been out of work more than a year. Unemployment among minorities, the fastest growing segment of our population, approximates the squalor of the Great Depression. The average indebtedness of a college graduate, a good many unable to find meaningful work, stands at $25,000, all of this at a time when corporate profits have soared 12% over the last decade, despite the 2008 down turn.

Sounds like Jacques Rousseau, but in the fine print of Warren’s spirited quote lies the idea of the social contract, that those with means have a responsibility for those who lack. The perquisites of the wealthy rest on the labor of the working poor and middle classes, as Warren points out.

Here in Lexington, KY, local government, facing severe budget limitations, is impinging on health care benefits for its employees, who are being asked to pay a larger share; for families, that’s some $600 monthly. Get real! As prolific social commentator Barbara Ehrenreich astutely observes in her 2001 classic, Nickel and Dimed, “Something is wrong, very wrong, when a single person in good health, a person who in addition possesses a working car, can barely support herself by the sweat of her brow. You don’t need a degree in economics to see that wages are too low and rents too high.”

Ehrenreich writes of employees in the minimal paying service industries, or of the working-poor, but her observations are no less valid for the vast majority of middle class families, too.

It was essayist John Ralston Saul who famously observed, “Everyone has an equal right to inequality.” Let the rich, the banks, the corporations try on the other fellow’s shoes, and I can promise you bellowing howls and light-year speed in concocting remedy.

Right-on, Elizabeth!

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