I’ve yet to find anyone who shares my feelings, but I was quite uncomfortable with former President Barack Obama’s first public speaking opportunity upon retirement. He was on a panel at the University of Chicago that focused on community activism.

He had been off the public stage for some time and we all knew that he was taking deserved time off for R & R. He had spent part of the time on a yacht in Tahiti as well as palling around with British venturist and billionaire Richard Branson in the Bahamas. He was definitely living “the high life” and the argument that he is entitled to do whatever he wants certainly holds water. But somehow the gap between Chicago community activism and Tahiti seemed too big for me.

As I reflected upon living former Democratic presidents, I could not help but notice the contrast between the lives that Jimmy Carter and Bill Clinton have lived. Yes, both have been very involved in charitable enterprises to help those in need, primarily in Africa, Asia and South America. But Clinton’s work with the Clinton Global Initiative has been very glitzy and with the glitterati. Carter’s work through the Carter Center has been very hands on and with dirty hands. He lives a very unpretentious life back in Atlanta and Plains, GA. He interacts daily with people who live very non-assuming lives and who are well-connected with the struggles that middle and low-income people face in the United States and around the world.

Like so many people, I was taken with Barack Obama when I read Dreams from My Father and The Audacity of Hope. This unassuming man was concerned with reaching his own potential while serving the common good. Upon graduating from law school, he passed up opportunities to work on Wall Street and instead worked to serve the people in Chicago who he had previously come to know as a community organizer. He later became a professor of constitutional law at the University of Chicago.

As a candidate for president, he initially supported the public financing of campaigns. During his 2008 campaign, he learned that his popularity was not only with grassroots people, but also with large financial interests. For him to maximize revenue for his campaign, it behooved him to take a pass on public financing and instead take as much as he legally could from entrenched sources including Wall Street. When he became president, he took care of Wall Street while also working for the economic and social advances of the middle class and those in poverty.

I can’t help but wonder how Barack Obama’s presidency and possibly his post-presidency would be had there been a strong public financing program in place for running for president, with strict penalties for refusing to take the public route. It is certainly likely that Obama would have had less contact with the moguls of Wall Street. It is possible that during his presidency Wall Street would not have escaped with only one culprit of the 2007-08 economic demise having gone to prison.

Sometimes circumstances cause us to lose our grounding. It’s presumptuous of me or anyone else to claim that we know anyone else’s grounding. What I am comfortable saying is that I would feel better if Barack Obama was more in touch with those with whom he worked on the south side of Chicago than those on the Street. He’s young and his post-presidency cannot be defined in 100 days.

I’m hoping that he takes more pages out of Jimmy Carter’s book and fewer out of Bill Clinton’s.

The post Could Obama learn from Jimmy Carter about presidential retirement? appeared first on Occasional Planet.

Has Donald Trump made good on his campaign’s populist message? If you believe that populism means advocating for the interests of ordinary people over the interests of the wealthy, the answer is of course he hasn’t. The fact is that actions taken by Trump during the early days of this presidency have offered up a steady and undeniable repudiation of the much-ballyhooed populist message that swept the Republican into the White House.

Look at what’s happened in just the first one hundred days. The new president has trotted out one executive order after another in his rush to overturn Obama-era, consumer-friendly protections. From overturning Internet privacy rules, to freezing financial regulations requiring financial advisers to act in the best interests of their clients rather than the advisers’ bottom line, to proposing to kill the Consumer Financial Protection Agency that has recovered more than $11.8 billion for twenty-nine million consumers since 2011, Trump has been steadily chipping away at a system that protects privacy and supports fairness, transparency, and the bottom line of consumers, students, and small businesses.

The truth is that Trump has betrayed the trust of ordinary Americans and sucker-punched nearly every American who isn’t a bigwig of Wall Street, a member of the 1%, an executive at a fossil-fuel company, a multi-national corporation, a bank, or the financial industry or a member of the Trump family. Sadly, this massive deregulation scheme is going to affect the bottom line of ordinary Americans for years to come.

That’s the bad news.

Fortunately, there’s under-the-radar good news brewing in state legislatures across the country, where legislators are introducing truly populist measures called fair-repair acts.

Real Populism at Work: Fair-Repair Legislation

Seeking to tip the scales in favor of consumers, small business owners, and farmers, eight states—Illinois, Kansas, Massachusetts, Minnesota, Nebraska, New York, Tennessee, and Wyoming—are currently advancing bipartisan bills guaranteeing the rights of individual owners and independent repair shops to choose where and how to repair electronic equipment—like smart phones and smart appliances, computers, and high-tech farm equipment. These measures seek to break up the monopoly on after-market repairs that limit repairs to the original manufacturers.  Up until now, that proprietary system has resulted in significantly higher repair costs to businesses, farms, and consumers. These state-led initiatives will not only lower costs but protect good, local jobs—jobs that cannot be outsourced—in the small-repair business sector that has, up until now, been effectively locked out of the electronics repair market.

Not surprisingly, fair-repair legislation has drawn support from a diverse cross-section of independent business groups. Among them, associations representing farmers and ranchers, who increasingly are purchasing and using sophisticated high-tech equipment with embedded electronics, have been particularly active.

And if you think that fair-repair legislation is something that only Democrats and progressives would love, think again. Among the more vocal supporters of this commonsense legislation are the American Farm Bureau, the National Farmers Union, the Iowa Farm Bureau, the Michigan Farm Bureau, the Nebraska Farm Bureau, the New York Farm Bureau, and the Texas Farm Bureau.

This year legislators in New York State are hoping to lead the way and become the first in the nation to pass a fair-repair bill, called the Fair Repair Act, S618. New York’s bill, like fair-repair bills in other states, requires that manufacturers provide fair access to servicing information, technical and service manuals, custom replacement parts and tools, security updates, and diagnostics.

Who would oppose measures like these? Measures that would create and retain jobs, foster competition, increase business for independent repair-shop owners, save consumers money, and extend the life of electronic equipment that otherwise would end up in landfill. The answer is large manufacturers and big tech, including companies like Apple, Cisco, Xerox, and John Deere, all of whom are lobbying hard to prevent fair-repair bills from even coming up for a vote.

Lobbyists Prevailed Last Time Around in New York While Massachusetts Got the Job Done

The track record on fair-repair legislation is mixed. In 2016 a bill introduced in New York State, similar to the one working its way out of committee this year, was stopped in its tracks by lobbying efforts spearheaded by the big four: Apple, Cisco, IBM, and Xerox.

On the positive side, in 2012 Massachusetts scored the first major success when the state passed with 87.7% voter support the Massachusetts Right to Repair Initiative—a right-to-repair bill targeting independent car-repair businesses.

This is how Automotive News reported that breakthrough in 2014. That was the year when carmakers struck a deal with Massachusetts to make the state’s law the national standard beginning with the 2018 models.

“ ’A patchwork of fifty differing state bills, each with its own interpretations and compliance parameters, doesn’t make sense,’ ” says Mike Stanton, president of the Association of Global Automakers. ‘This agreement provides uniform clarity our industry needs.’

‘Under the deal, all auto companies would make their diagnostic codes and repair data available in a common format by the 2018 model year, as the Massachusetts law requires. In return, lobbying groups for repair shops and parts retailers would refrain from pursuing state-by-state legislation.’ “

Pay attention, America. Forget about the sideshow antics of the phony populist in the White House. The fair-repair fight is what real populism looks like. This fight deserves our support.

If you want more information, go to IFIXIT.org.

To show your support, go to Illinois.repair.org, Kansas.repair.org, Massachusetts.repair.org, Minnesota.repair.org, Nebraska.repair.org, Newyork.repair.org, Tennessee.repair.org, Wyoming.repair.org.

The post States pick up slack from Trump with populist legislation appeared first on Occasional Planet.

President Barack Obama and presidential candidate Bernie Sanders met on Thursday, June 9, 2016 to discuss “where do we go now” following the primaries and caucuses in California and five other states. Shortly thereafter, he endorsed Hillary Clinton, in a paid video by the Clinton campaign.

In the announcement, the president said that the differences that exist in 2016 between Clinton and Sanders are no different than those that he and Clinton faced eight years ago. This sounds nice; it has a certain symmetry to it, but it may not be accurate. In fact, it is likely an inconvenient truth that it is not so and failing to recognize that will make it more difficult to garner the backing of Sanders and his supporters in the fall campaign against presumptive Republican nominee Donald Trump.

Acknowledging the differences between 2008 and 2016 can be key to bringing the Sanders – Clinton – and Obama wings of the Democratic party together and fashioning not only a successful campaign this fall, but developing a renewed purpose with a progressive perspective for the future.

The differences are spelled out quite well by Tim Dickinson in Rolling Stone:

But, looking back on the 2008 campaign, the substantive differences on policy were vanishingly small. There were big fights over judgment (the Iraq War) and the claim to history (the first African-American versus the first woman nominee). But on policy grounds, Clinton and Obama were all but the same candidate.

Their most salient disagreement was whether the Democratic plan for universal health care ought to include a mandate to buy coverage. Clinton insisted the mandate was essential; Obama opposed as a matter of principle. They debated it ad nauseum. But in the end, this squabble was much ado about nothing. When Obama became president, Clinton’s top health-policy adviser was tapped by the White House to run point reform — and the individual mandate became a bedrock principle of Obamacare. 

This is relevant today, because falling in line behind Obama in 2008 required Clinton to swallow little more than personal pride. It did not require sacrifice of any dearly held principle or policy stance — only surrender of the idea that she would have made a better president.

In 2016, the contested terrain is not symbolic. Consider Sanders’ call to break up the big banks against Clinton’s proposal to better regulate Wall Street.

This is a difference of orientation, not degree. And it is but one of many such differences.

The profound differences between Sanders and Clinton, coupled with Obama nearing the liberation of the post-presidency provide an opportunity for more progressive change. In a nutshell, here is what each of them have to do to make this happen.

1. Sanders, who has good reason (at least in his own mind) to be spiteful about how the race for the nomination turned out, needs to drop his issues about 2016. He ran a good race (at least before the New York primary) and now is the time to make peace. I think that most of his criticisms of Hillary are legitimate, but there is no point in further hammering them home. Let’s learn to live with Hillary; she may surprise us and be a more progressive president than Obama.It is time for Bernie to turn his attention to more structural changes in our democracy, changes that cannot be implemented in 2016, although some might be promoted at the Democratic Convention in Philadelphia. These could include:

a. Promoting dramatic change in the way in which we choose our nominees for president. What about developing a plan so that in 2020, Democrats choose their nominees through four regional primaries beginning in March or April? No more caucuses, no more inflated importance for small states, no more parochial messaging for tiny portions of the country.

b. Promoting concrete ways to reduce the role of money in politics. Sanders is the master of fashioning a national campaign based on small donations. This could be coupled with supply-side democracy to eliminate the financial connection between Wall Street and other vested interests in the business of the people.

c. Working with schools to help students develop into more active and informed citizens in our democracy. This will include drastically reducing (or eliminating) the role of standardized tests and replacing them empathy and concern about the common good.

d. Addressing the issue of the “angry white males” who have gravitated to Donald Trump when a New Deal or Great Society agenda would have been much more beneficial to them.

e. Explaining to the American people who the word “socialism” is not a bad word, and in fact is an option for addressing most of our economic problems.

2. The President can take off the shelf all the progressive ideas that he had to put away because of a recalcitrant Republican Congress and Supreme Court. His memoirs will provide an outstanding opportunity to join with Sanders and millions of others in placing a genuine progressive agenda before the American people. He can write his memoirs with no fear of having to submit them to Congress and having them mired in gridlock. He will be free to speak his mind. He might also say that getting cozy with Wall Street and other big donors was a necessity for him to become president, but that the American people are now willing to conduct politics without big money. Perhaps most importantly, in his retirement, he would be wise to follow the outreach path of Jimmy Carter rather than Bill Clinton so that he is no longer entangled with shady moneyed interests.

Perhaps Obama and Sanders discussed some of those ideas on June 9. In all likelihood they didn’t. But Bernie can push this agenda and perhaps Obama will be a willing follower, knowing that Hillary will be his likely successor.

The post What Obama and Sanders can do to keep “the Bern” alive while helping Clinton appeared first on Occasional Planet.

It’s nothing new to say that sometimes Hillary Clinton is her own worst enemy. I’ve been a Bernie supporter, but I really want to enthusiastically support Hillary because (a) she likely will be the Democratic nominee, and (b) all things being equal (or even close to equal), I certainly would prefer to have a woman candidate, and then president.

It’s interesting how Hillary has been involved in so many “cover-ups” beginning with Whitewater in Arkansas, and then Gennifer Flowers (yes, with a ‘G’), an alleged Bill femme fatale in days past. Her modus operandi seems to be to disclose considerable information, but not enough to put people’s concerns to rest. But interestingly enough, none of the alleged scandals, or wrong-doings that have come to light over the past twenty-five years have turned out to be anything close to what the accusers say they are. I imagine that the F.B.I. investigation of her personal mail server, which she used while serving as Secretary of State, will again determine that while her judgments were less than optimal, overall the situation is much ado about nothing.

The transcripts of her three speeches before Goldman-Sachs and other Wall Street firms may not be as insignificant as she would like us to believe. As of now, we know little about them. Politico has reported that during one of the Goldman speeches, “Clinton offered a message that the collected plutocrats found reassuring, according to accounts offered by several attendees, declaring that the banker-bashing so popular within both political parties was unproductive and indeed foolish.”

This tidbit is far from being either conclusive or damning. But as mystery shrouds the contents of her speeches, they are a breeding ground for rumors, and there is little doubt that Donald Trump will use fact or fiction without distinction to try to bring her down.

Like so many, I am very curious about what she said in those speeches. If it’s left up to Hillary, it’s close to a certainty that I will never find out. But The Hill is now reporting that “GOP operatives on the prowl for secret Clinton transcripts.” This is what we call opposition research. I have always disliked such action because it seems to be the engine that drives negativity in politics. But when there is something in the dark that needs to be sanitized by sunlight, then I will grudgingly accept it.

According to The Hill,

Ian Prior, the communications director for the well-funded Republican group American Crossroads, said information about the Goldman Sachs speeches could prove cataclysmic for the Democratic Party.

Finding and releasing the transcripts “would be a heck of a way to outflank Hillary on her left [in a general election] and stop Bernie’s supporters from voting for her,” he said.

American Crossroads is one of those Karl Rove-founded Super-Pacs that excels in raising money (hundreds of millions in the 2012 presidential cycle), and in losing big (a success rate in the single digits). But that doesn’t mean that it can’t hire sleuths to investigate real or imagined transgressions by opponents. The truth doesn’t matter; what counts is arriving at a conclusion that could be embarrassing in the cross-hairs. Consider it to be the 2010s version on the 1970s “plumbers” established by Richard Nixon.

What I’d like American Crossroads to find would be the truth; i.e. an actual transcript of what Hillary Clinton said in those speeches. In a sense, it would be a relief to Hillary Clinton; she would no longer have to stonewall this issue. It’s also quite possible that she wisely hedged her bets when she spoke on Wall Street and said very little to the moguls that would inflame Democrats. If she said more, she could explain it to many by saying that she had to throw out some red meat to the crowd because she was being paid $225,000 a pop for these speeches. Americans could understand that as they accept Trump’s fixation with being wealthy.

But perhaps most importantly, Hillary Clinton could do what so many would like her to do … say that that was then and this is now. In the past, she felt that she had to kowtow to Wall Street go gain their good graces and their political donations. If she becomes the Democratic nominee, that will no longer be necessary, she can try to emulate Bernie Sanders’ small donations strategy once she eschews the big bucks coming from a concentrated and very powerful segment of the American population.

It’s not just a question of changing her ways in order to win the election. With Trump as the likely Republican nominee, she will be the odds-on favorite to win the presidency. But governing with questions unanswered that should be answered will plague her throughout her presidency. In a former life, Clinton was on the staff of the Senate Watergate Committee; she needs now to review her notes from that period. It’s been extremely difficult for Barack Obama to govern without a scintilla of a scandal or cover-up. If Clinton wins the presidency, it well may be nothing but trouble if she even has the appearance of withholding what the public deserves to know. That’s why in this one rare case, I’m rooting for American Crossroads to do Hillary a favor and to find the transcripts.

The post Rooting for GOP opposition research on Hillary appeared first on Occasional Planet.

Hillary Clinton finds herself on the defensive, doing rope-a-dope, against certain charges from both the media and Bernie Sanders. Where Sanders is concerned, Clinton’s Achilles heel is her relationship with Wall Street. Specifically, Clinton is vulnerable with her contention that she has never been influenced by the money from Wall Street that has been paid to her as speaking fees or cash contributions to her campaign and associated SuperPACs.

Clinton contends that there is no evidence that she has never changed a vote or a policy position because of money from Wall Street. There is some validation to this because so far no one, including those on the right wing, have been able to relate any policy positions that she takes to the millions that she has received from Wall Street.

But a real question is whether her contention passes the giggle test. The fact that there are people giggling may help explain why her support is so poor among young voters. According to the New York Times,

Some 87 percent of likely New Hampshire primary voters ages 18 to 29 said they would vote for Mr. Sanders in the state’s primary on Tuesday, compared with 13 percent for Mrs. Clinton, according to a UMass-Lowell poll conducted Feb. 1 to 3.

The conundrum for Clinton is that even if it may be true that she has never been influenced by Wall Street, it’s too big a stretch for young voters to believe. It’s as if the university president at an SEC university said that the scholar-athletes were among the university’s most serious students.

So here’s a suggestion to Hillary Clinton and her campaign. Simply say that while it is her belief that she has never been influenced by Wall Street money, she understands that there is a wide-spread perception that she has been. Furthermore, she is as determined as Bernie Sanders to reign in the excesses of Wall Street and she knows that she will be taken more seriously if she is no longer taking money from either Wall Street or other big corporate interests.

If Clinton would take this step, there would be several clear benefits. First, she would have much “cleaner arguments” in her effort to curb Wall Street abuses. Second, she would be building immunity to Sanders’ charges that she still is too cozy to the Street. Third, it would counter the argument that she’s always “late to the party” when it comes to acknowledging her mistakes.

It took her thirteen years and two presidential campaigns to finally apologize for her 2002 Senate vote endorsing President George W. Bush’s already-failed strategy with Iraq. And who can forget the pain, all through the summer of 2015 and into the fall, until Clinton acknowledged that she had made a mistake in how she handled her e-mails while Secretary of State. And her initial answer to Chuck Todd’s question about whether she will release the transcripts of her paid speeches to Goldman Sachs seems to indicate that we’re in for a long wait before they see the light of day.

For progressives, Clinton is often “right” on the issues, but in far too many cases it takes time for her to get there. It would be great if she could catch up with Sanders on Wall Street. What if she went a step further and was able to get President Obama to say that if he was running now, he too would not accept Wall Street donations. What a coup!

Like many, I currently prefer Bernie Sanders on the issues. However, I respect Clinton’s experience and also think that it is time for the United States to have a female president. I just hope that she can quickly move to reform her campaign to bring more credibility to her progressive ideas.

The post What Hillary Clinton might say to help herself appeared first on Occasional Planet.

From Truth and Satire:

Every single mainstream media has the following narrative for the economic crisis in Greece: the government spent too much money and went broke; the generous banks gave them money, but Greece still can’t pay the bills because it mismanaged the money that was given. It sounds quite reasonable, right?

Except that it is a big fat lie … not only about Greece, but about other European countries such as Spain, Portugal, Italy and Ireland who are all experiencing various degrees of austerity. It was also the same big, fat lie that was used by banks and corporations to exploit many Latin American, Asian and African countries for many decades.

Greece did not fail on its own. It was made to fail.

Consider a recent article in the New York Times by Neil Irwin. The title says it all: “Now Europe Must Decide Whether to Make an Example of Greece.” Those lazy Greeks,” Irwin’s title suggests, “need to be taught a lesson. “

Here’s an excerpt, my emphasis:

The choice for leaders of Germany, France and the rest of Europe will look something like this:

If they tolerate the Greek government’s demands, they will be setting a bad example for every other country that might wish to challenge the strictures of the European Union, telling voters in Portugal and Spain and Italy that if they make enough fuss, and elect extremist parties they too will get a much sweeter deal. It would send the signal that a country can borrow all it likes, walk away from those debts and make the rest of Europe pay the bill, as long as it is intransigent enough. 

Notice Irwin’s use of the word, “tolerate,” as if the Greek government is a bratty, demanding child. He says a challenge to power cannot be allowed—have to nip that in the bud before it spreads to other “lazy” countries. Irwin calls anti-establishment, left political parties, like Greece’s Syriza, extremist. Syriza is “extreme, ” I guess, because it chooses the needs of ordinary people over making banks and hedge funds whole. Finally, he characterizes the Greek people as insufferable deadbeats.

Irwin’s “good vs. bad, white hat/black hat” narrative satisfies the embarrassingly uninformed and gullible American public, and protects the people, banks and institutions that caused the biggest global wealth heist in history.

“Bad Greeks!” Irwin is saying, “They’re getting what they deserve for spending way beyond their means.“ Being an unrepentant bank groupie, I’m sure he believes that. In 2013, Irwin wrote The Alchemists: Three Central Bankers and a World on Fire, a book on how three central bankers dealt with the 2008 financial meltdown. One Amazon reviewer described it as “Pathetic drooling over something that is essentially an anti-democratic institution. The book is littered with fawning details of how some central banker was travelling in a limousine when he received a call about markets being on fire. Or how Draghi was eating smoked goat cheese (or whatever is it that elites eat) when the Greece crisis erupted and then he had to do something on his mahogany table.”

The book earned the endorsement of the Peterson Institute for International Economics, an organization whose sole mission is to cut Social Security, Medicaid and Medicare, and lower taxes on the wealthy. If you didn’t get it from reading Irwin’s article, his book tells you where he stands psychologically and politically. He is typical of the sycophants who populate mainstream media.

My point in critiquing Irwin’s article is to encourage readers, especially those who call themselves “progressive,” to pay attention to the underlying perspective of those who speak or write in mainstream news outlets. What are their values? With whose interests do they identify?

Given the serial mendacity of the NYT, it’s important to look elsewhere to understand world events, and, in this case, what caused the crisis in Greece. Look for writers and journalists who identify with the struggles of the majority population, and who have a clear-eyed view of the rampant corruption in government, banks, and the private sector around the world. Look for writers who, at minimum, are not in awe of the wealthy and the powerful.

For starters, you might try Conn Hallinan’s “Europe’s Debt: Lies & Myths. Hallinan does a great job of countering Irwin’s myths by placing Greece’s plight in historical context. Here’s an excerpt, my emphasis:

Myths are dangerous precisely because they rely more on cultural memory and prejudice than facts, and behind the current crisis between Greece and the European Union (EU) lays a fable that bears little relationship to why Athens and a number of other countries in the 28-member organization find themselves in deep distress.

The tale is a variation of Aesop’s allegory of the industrious ant and the lazy, fun-loving grasshopper, with the “northern countries”—Germany, the Netherlands, Britain, Finland—playing the role of the ant, and Greece, Spain, Portugal, and Ireland the part of the grasshopper.

The ants are sober and virtuous—lead by the frugal Swanbian house frau, German Chancellor Angela Merkel—the grasshoppers are spendthrift, corrupt lay-abouts who have spent themselves into trouble and now must pay the piper.

The problem is that this myth bears almost no relationship to the actual roots of the crisis or what the solutions might be. And it perpetuates a fable that the debt is the fault of individual countries rather than a serious crisis at the very heart of the EU.
<snip>
In Greece’s case corruption was at the heart of the crisis, but not the popular version about armies of public workers and tax dodging oligarchs. There are rich tax dodgers aplenty in Greece, but Germany, Sweden, and many other European countries spend more of their GDP on services than does Athens. Greece spends 44.6 percent of its GDP on its citizens, less than the EU average and below Germany’s 46 percent and Sweden’s 55 percent.

And as for lazy: Greeks work 600 hours more a year than Germans. According to economist Mark Blyth, author of Austerity: The History of a Dangerous Idea, Greek public spending through the 2000s is “really on track and quite average in comparison to everyone else’s,” and the so-called flood of “public sector jobs” consisted of “ 14,000 over two years.” All the talk of the profligate Greek government is “a lot of nonsense” and just “political cover for the fact that what we’ve done is bail out some of the richest people in European society and put the cost on some of the poorest.”

There was a “score” in Greece. However, it had nothing to do with free spending; it was a scheme dreamed up by Greek politicians, bankers, and the American finance corporation, Goldman Sachs.

Greece’s application for EU membership in 1999 was rejected because its budget deficit in relation to its GDP was over 3 percent, the cutoff line for joining. That’s where Goldman Sachs came in. For a fee rumored to be $200 million (some say three times that), the multinational giant essentially cooked the books to make Greece look like it cleared the bar. Then Greece’s political and economic establishment hid the scheme until the 2008 crash shattered the illusion.

It was the busy little ants, not the fiddling grasshoppers that brought on the European debt crisis.

American, German, French, and Dutch banks had to know that they were creating an unstable real estate bubble—a 500 percent jump in housing prices is the very definition of the beast—but kept right on lending because they were making out like bandits.

When the bubble popped and Europe went into recession, Greece was forced to apply for a “bailout” from the Troika [The European Central Bank, the European Commission and the International Monetary Fund]. In exchange for 172 billon Euros, the Greek government instituted an austerity program that saw economic activity decline 25 percent, unemployment rise to 27 Percent (and over 50 percent for young Greeks). The cutbacks slashed pensions, wages, and social services, and drove 44 percent of the population into poverty.

Virtually all of the “bailout”—89 percent—went to the banks that gambled in the 1999 to 2007 real estate casino. What the Greek—as well as Spaniards, Portuguese, and Irish—got was misery.

The post Myths and lies about Greece appeared first on Occasional Planet.

On May 12, Joseph Stiglitz and the Roosevelt Institute published a new report titled “Rewriting the Rules of the American Economy: An Agenda for Growth and Shared Prosperity.” You can download the report and watch a two-hour presentation and panel discussion on it here.

Guest speakers at the report launch were Senator Elizabeth Warren and Mayor of New York city, Bill DeBlasio, along with a slew of really interesting panelists. I started watching the event over breakfast, thinking I would turn it off after I finished off my smoothie, but I kept watching—all two hours of it! Stiglitz offered one of the best explanations of what went wrong with the economy I have heard to date. And he offers a clear path for making it work for the majority of Americans.

Bernie Sanders entering the race for president and Joe Stiglitz launching this report on how to fix the economy are truly hopeful events. I’m talking real hope here, something I have not felt in a long time. There’s been no shortage of ideas on how to fix the economy—break up the big banks, raise the minimum wage, raise the cap on Social Security taxes, raise taxes on companies that offshore jobs. But this slingshot approach is inadequate to what is really a systemic and structural problem. Stiglitz offers a fresh look at the causes of our economic downturn, and puts forward a comprehensive list of solutions, all of which have to be addressed, if the economy is to work for everyone.

Stiglitz’s list of the causes of growing income inequality:

• More market power, less competition
• The growth of the financial sector
• The ‘shareholder revolution,’ the rise of CEO pay, and the squeezing of workers
• Lower taxes for the wealthy
• The end of full-employment monetary policy
• The stifling of worker voice
• The sinking floor of labor standards
• Racial discrimination

Stiglitz’s solutions for rebalancing the economy:

• Make markets competitive
• Fix the financial sector
• Incentivize long-term business growth
• Rebalance the tax and transfer system
• Make full employment the goal
• Empower workers
• Expand access to labor markets and opportunities for advancement
• Expand economic security and opportunity

The report, clearly written and easy to read, goes in-depth on each topic. It refutes the idea that there is a mysterious market force, or “invisible hand” or “natural” business cycle, or changes in the global economy that is causing unemployment and stagnant wages. The economy is in shambles, Stiglitz says, because, for the last thirty years, the rich and powerful have written the rules that govern the economy. Both Republicans and Democrats have participated in this orgy of “rule making for the rich,” which has resulted in the systematic destruction of the middle class, and the increasing impoverishment of the working poor.

Inequality has been a choice, he says, made by the few and foisted on the majority who were sold a bill of goods. It is within our power to reverse those rules. Here’s an excerpt from the report, my emphasis:

Rules are the regulatory and legal frameworks that make up the economy, like those affecting property ownership, corporate formation, labor law, copyright, antitrust, monetary, tax, and expenditure policy, and other economic structures. They also include the institutions that perpetuate discrimination, including structural discrimination—an entire system of rules, regulations, expenditure policies, and normative practices that exclude populations from the economy and economic opportunity. Unequal socio-economic outcomes for women and people of color are rooted in this kind of structural discrimination, in addition to other forms of bias. . . .

Our challenge, then, is to rewrite the rules to work for everyone. To do so, we must re-learn what we thought we knew about how modern economies work. We must also devise new policies to eliminate the distortions that pervade our financial sector, our corporate rules, our macroeconomic, monetary, tax, expenditure, and competition policies, our labor relations, and our political structures. It is important to engage all of these challenges simultaneously, since our economy is a system and these elements interact. This will not be easy; we must push to achieve these fundamental changes at a time when the American people have lost faith in their government’s ability to act in service of the common good.

The problems we face today are in large part the result of economic decisions we made—or failed to make—beginning in the late 1970s.

The changes occurring in our economy, politics, and society have been dramatic, and there is a corresponding sense of urgency in this report. We cannot afford to go forward with minor tweaks and hope that they do the trick. We know the answer: they will not, and the suffering that will occur in the meantime is unconscionable. And, as we explain, this is not just about the present, but the future. The policies of today are “baking in” the America of 2050: unless we change course, we will be a country with slower growth, ever more inequality, and ever less equality of opportunity. Inequality has been a choice, and it is within our power to reverse it.

The good news is that Stiglitz’s report is not just an intellectual exercise. Along with the Roosevelt Institute, he will be releasing a series of specific proposals to help rewrite the rules of the economy in favor of ordinary Americans. As the presidential campaign heats up, I have no doubt that Bernie will be onboard, but will Hillary or Jeb Bush? Joe Stiglitz is one of many official advisors to the Clinton campaign, but I’m not holding my breath that she will embrace the kind of changes he envisions.

We are entering an interesting time in history, when the majority of voters are aware that, despite cheery statements from the Obama administration to the contrary, there has been no economic recovery for ordinary Americans. Also, the majority of voters know that banks and corporations will be spending obscene amounts of money to elect Hilary Clinton, or the GOP candidate, who will continue to write rules that favor the elite.

The time is ripe for genuine progressive ideas to take hold because, for once, they have a chance to resonate with people across the political spectrum. Bernie Sanders and Joe Stiglitz, together, offer real solutions to an economy, and a country, gone off the rails.

The post Joe Stiglitz wants to rewrite the rules of the American economy appeared first on Occasional Planet.

Senators Bernie Sanders and Elizabeth Warren are putting a new focus on the Glass-Steagall Act, which was, unfortunately, repealed in 1999 and led directly to the financial crises we have faced ever since. Here’s a bit of history of this legislative debacle from an older post on Occasional Planet published several years ago :

On November 4, 1999, Senator Byron Dorgan (D-ND) took to the floor of the senate to make an impassioned speech against the repeal of the Glass-Steagall Act, (alternately known as Gramm Leach Biley, or the “Financial Modernization Act”) Repeal of Glass-Steagall would  allow banks to merge with insurance companies and investments houses. He said “I want to sound a warning call today about this legislation, I think this legislation is just fundamentally terrible.”

According to Sam Stein, writing in 2009 in the Huffington Post, only eight senators voted against the repeal. Senior staff in the Clinton administration and many now in the Obama administration praised the repeal as the “most important breakthrough in the world of finance and politics in decades”

According to Stein, Dorgan warned that banks would become “too big to fail” and claimed that Congress would “look back in a decade and say we should not have done this.” The repeal of Glass Steagall, of course, was one of several bad policies that helped lead to the current economic crisis we are in now.

Dorgan wasn’t entirely alone. Sens. Barbara Boxer, Barbara Mikulski, Richard Shelby, Tom Harkin, Richard Bryan, Russ Feingold and Bernie Sanders also cast nay votes. The late Sen. Paul Wellstone opposed the bill, and warned at the time that Congress was “about to repeal the economic stabilizer without putting any comparable safeguard in its place.”

Democratic Senators had sufficient knowledge about the dangers of the repeal of Glass Steagall, but chose to ignore it.  Plenty of experts warned that it would be impossible to “discipline” banks once the legislation was passed, and that they would get too big and complex to regulate. Editorials against repeal appeared in the New York Times and other mainstream venues, suggesting that if the new megabanks were to falter, they could take down the entire global economy, which is exactly what happened. Stein quotes Ralph Nader who said at the time, “We will look back at this and wonder how the country was so asleep. It’s just a nightmare.”

According to Stein:

“The Senate voted to pass Gramm-Leach-Bliley by a vote of 90-8 and reversed what was, for more than six decades, a framework that had governed the functions and reach of the nation’s largest banks. No longer limited by laws and regulations commercial and investment banks could now merge. Many had already begun the process, including, among others, J.P. Morgan and Citicorp. The new law allowed it to be permanent. The updated ground rules were low on oversight and heavy on risky ventures. Historically in the business of mortgages and credit cards, banks now would sell insurance and stock.

Nevertheless, the bill did not lack champions, many of whom declared that the original legislation — forged during the Great Depression — was both antiquated and cumbersome for the banking industry. Congress had tried 11 times to repeal Glass-Steagall. The twelfth was the charm.

“Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century,” said then-Treasury Secretary Lawrence Summers. “This historic legislation will better enable American companies to compete in the new economy.”

“I welcome this day as a day of success and triumph,” said Sen. Christopher Dodd, (D-Conn.).

“The concerns that we will have a meltdown like 1929 are dramatically overblown,” said Sen. Bob Kerrey, (D-Neb.).

“If we don’t pass this bill, we could find London or Frankfurt or years down the road Shanghai becoming the financial capital of the world,” said Sen. Chuck Schumer, D-N.Y. “There are many reasons for this bill, but first and foremost is to ensure that U.S. financial firms remain competitive.”

Unfortunately, the statement by Chuck Schumer sounds very much like it was prepared by a lobbyist. This vote underscores the way in which our elected officials are so heavily swayed by corporate and banking money that our voices and needs become irrelevant. It is why we need publicly funded elections. Democratic senators, the so-called representatives of the people, fell over themselves to please their Wall Street donors knowing full well there were dangers for the country at large, for ordinary Americans, in repealing Glass-Steagall.

It is important to hold Democratic senators (along with current members of the Obama administration) accountable for the significant role they have played in the current economic crisis that has caused so much suffering for ordinary Americans. In case you were wondering, the current Democratic Senators who voted yes to repeal the Glass-Steagall act are the following:

Daniel Akaka – Max Baucus – Evan Bayh – Jeff Bingaman – Kent Conrad – Chris Dodd – Dick Durbin – Dianne Feinstein – Daniel Inouye – Tim Johnson – John Kerry – Herb Kohl – Mary Landrieu – Frank Lautenberg – Patrick Leahy – Carl Levin – Joseph Lieberman – Blanche Lincoln – Patty Murray – Jack Reed – Harry Reid – Jay Rockefeller – Chuck Schumer – Ron Wyden

Former House members who voted for repeal who are current Senators.

Mark Udall [as of 2010] – Debbie Stabenow – Bob Menendez – Tom Udall -Sherrod Brown

No longer in the Senate, or passed away, but who voted for repeal:

Joe Biden -Ted Kennedy -Robert Byrd

These Democratic senators would like to forget or make excuses for their enthusiastic vote on the repeal of Glass Steagall, but it is important to hold them accountable for helping their bank donors realize obscene profits while their constituents lost jobs, savings and homes. And it is important to demand that they serve the interests of the American people.

The post Glass-Steagall: Warren and Sanders bring it back into focus appeared first on Occasional Planet.

What’s a derivative?

The word “derivative” may ring a bell because Wall Street speculation in “innovative financial instruments” such as derivatives, helped tank the economy 2008.

Mayra Rodriques Valladares provides a good definition in her recent article in the New York Times. “Derivatives Markets Growing Again, With Few New Protections:”

 A derivative, put simply, is a contract between two parties whose value is determined by changes in the value of an underlying asset. Those assets could be bonds, equities, commodities or currencies. The majority of contracts are traded over the counter, where details about pricing, risk measurement and collateral, if any, are not available to the public.

Michael Snyder writing at Washingtonblog weighs in on the continued dangers of banks gambling in derivatives in his article “The Size of the Derivatives Bubble Hanging Over the Global Economy Hits a Record High.”

A derivative does not have any intrinsic value. It is essentially a side bet. Most commonly, derivative contracts have to do with the movement of interest rates. But there are many, many other kinds of derivatives as well. People are betting on just about anything and everything that you can imagine, and Wall Street has been transformed into the largest casino in the history of the planet.

So how much money are we talking about?

On May 8 2014, The Bank for International Settlements (the international organization of central banks) reported:

OTC derivatives markets continued to expand in the second half of 2013. The notional amount of outstanding contracts totalled $710 trillion at end-2013, up from $693 trillion at end-June 2013 and $633 trillion at end-2012.

Does $710 trillion sound like a lot of money to you? It should because, by comparison, the U.S. GDP is projected to be around 17 trillion for 2014.

A big chunk of that $710 trillion—$236 trillion—is held by the top 25 banks in the U.S. Of the top 25 U.S. banks, the top five banks hold the lion’s share. The following figures are from Michael Snyder’s post at Washingtonblog:

JPMorgan Chase has about 2 trillion in assets and more than $70 trillion of exposure to derivatives.

Citibank has a little more than $1.3 trillion in assets and more than $62 trillion of exposure to derivatives.

Bank of America has $1.4 trillion in assets and more than $38 trillion of exposure to derivatives.

Goldman Sachs has only $105 billion in total assets, but has more than $48 trillion of exposure to derivatives. That would be 460 times greater than their total assets.

On the international scene, banking giant Deutsche Bank has $2.2 trillion in assets and more than $75 billion of exposure to derivatives

The bottom line, as it were, is this: Derivatives represent another gigantic bubble waiting to, once again, tank the global economy.

Why are banks so overexposed to derivatives?

Louise Story answers this question in her piece in the New York Times of December of 2010:

Perhaps no business in finance is as profitable today as derivatives. Not making loans. Not offering credit cards. Not advising on mergers and acquisitions. Not managing money for the wealthy.

Well that explains a lot. But how do they work? Story offers a good analogy for why derivatives are so profitable:

The profits on most derivatives are masked. In most cases, buyers are told only what they have to pay for the derivative contract, say $25 million. That amount is more than the seller gets, but how much more — $5,000, $25,000 or $50,000 more — is unknown. That’s because the seller also is told only the amount he will receive. The difference between the two is the bank’s fee and profit. So, the bigger the difference, the better for the bank — and the worse for the customers.

It would be like a real estate agent selling a house, but the buyer knowing only what he paid and the seller knowing only what he received. The agent would pocket the difference as his fee, rather than disclose it. Moreover, only the real estate agent — and neither buyer nor seller — would have easy access to the prices paid recently for other homes on the same block.

Did Dodd-Frank do anything to reign in or regulate derivatives?

Dodd Frank set up clearinghouses for derivative trading to introduce more transparency, but like banks that are too-big-to-fail, the clearinghouses were deemed too-big-to-fail by the Obama administration. So Obama insisted they be back-stopped by taxpayer money. Michael Snyder quotes The Wall Street Journal from 2012:

Little noticed is that on Tuesday Team Obama took its first formal steps toward putting taxpayers behind Wall Street derivatives trading — not behind banks that might make mistakes in derivatives markets, but behind the trading itself. Yes, the same crew that rails against the dangers of derivatives is quietly positioning these financial instruments directly above the taxpayer safety net.

Jumping ahead to May of 2014, Mayra Vakkadares explains other reasons why the purposefully weak Dodd Frank bill will not remove the risk associated with derivatives:

As regulations like the Dodd-Frank law and the European Markets Infrastructure Regulation start to take effect, some aspects of the derivatives markets, like pricing and volumes, will slowly become more transparent. What will remain opaque, however, is how banks sell derivatives to clients, in what jurisdictions derivatives are recorded, the strength of risk management, and the extent to which governments and taxpayers can be affected if derivatives are again at the center of a crisis.

As I read these articles on the continued growth of derivatives, and the risky behavior of TBTF banks, I feel betrayed by the Wall Street owned Obama administration, and the Democrats and Republicans in Congress who continue to serve bank interests at the expense of their constituents. This can’t, by any stretch, be pinned on “Republican obstructionism.” The biggest blame falls on Corporate Democrats who pretend to be the party of the people on the campaign trail, but morph into corporate shills on the floor of the House and Senate.

After the financial nightmare of 2008, in which Americans lost trillions in personal wealth, our bank owned elected officials have done nothing substantial to protect us from another financial meltdown. Too-Big-to-Fail banks have grown larger and speculative activities continue in overdrive. Since we have not really recovered from the last crisis, I’m afraid for what the future holds.

Meanwhile a tiny fraction of the population, with the full backing of the U.S. government, continues to enrich themselves at the expense of the rest of us. When people say we should put bankers in jail for their role in tanking the economy, I say forget that—we need to get the money back.

The post Global derivatives markets 20 percent larger than before the crash appeared first on Occasional Planet.

Like many progressives, I’ve been very frustrated by both the gridlock that Republicans have been causing in Congress and the ongoing mischaracterization of it by much of the mainstream press. No sooner had President Obama been sworn into office than Senate Minority Leader Mitch McConnell of Kentucky said that his main goal the upcoming Congressional session was to keep President Obama from being reelected. Fortunately he failed at that, but he and soon-to-be House Speaker John Boehner have successfully kept Congress from doing much of anything. If you’re a progressive, that’s not the direction (or non-direction) in which you’d like to go.

Now it seems that at least some Republicans do want to see movement. They call it going forward; others may see it more as going in reverse. According to the New York Times, Representative Dave Camp of Michigan, the chairman of the Ways and Means Committee, is proposing major changes in the federal tax code. His plan calls for “a cut in the top corporate income rate to 25 percent from 35 percent, and a reduction of the seven individual tax brackets to two — at 10 percent and 25 percent — according to aides familiar with the proposal.”

Why should we worry about something that sounds like needed breaks for the American people? First, taxes may actually go up when deductions such as home mortgage interest payments end. Second, rates this low may only be capable of funding the federal government if there are major cuts in both entitlement programs and other important discretionary spending. Years ago, a major reform bill from a Republican would have been cause for serious study; remember that Theodore Roosevelt was a Republican before he was a progressive. But now, it’s highly implausible that a bill, in this case one that runs 1,000 pages long, is likely to benefit either the middle class or those living in poverty.

“The Hill” reports more about the bill:

The House’s top tax writer rolled out a broad tax reform plan on Wednesday (Feb. 26) that would pare back tax breaks once thought untouchable and affect practically every part of American life.

The nearly 1,000-page plan unveiled by Ways and Means Chairman Dave Camp (R-Mich.) would pull back on the cherished deduction for home mortgage interest and embraces some ideas touted by Democrats, like scrapping the “carried interest” tax break used by hedge fund managers.

Camp said a discussion on making the tax code fairer and a more positive force for the economy was long overdue in Washington, given that the last successful tax reform effort was in 1986.

But the discussion draft, which included a summary that along ran almost 200 pages, quickly found detractors both on and off Capitol Hill, as trade groups and lobbyists found out who were the losers in the chairman’s outline.

Even before it was released, the top Republicans in both chambers had distanced themselves from the effort, with Speaker John Boehner (R-Ohio) scoffing at the possibility of a vote this year and Senate GOP Leader Mitch McConnell (Ky.) saying it would be better to do tax reform next year.

In fact, one of the few areas of bipartisan agreement is that tax reform has little chance for success this year, and some have suggested that the best-case scenario for Camp’s draft is to be a template for future efforts. But Camp was defiant, arguing Wednesday that the average person was ready for a tax code no longer littered with “special interest handouts.”

“You’re going to hear a lot about one provision or another,” Camp told reporters at a news conference introducing his long-awaited draft. “The truth is people want a simpler, fairer and flatter tax code.”

The Michigan Republican said he meets that goal by getting rid of 228 sections of the tax code, or roughly a quarter of its current 70,000 pages.

With changes to tax breaks for mortgage interest, charitable contributions, and state and local taxes, Camp also says that around 95 percent of households would be able to use the standard deduction and avoid itemizing – down from around seven in 10 right now. The deduction for state and local taxes – which Camp outright eliminates – is especially prized in Democratic states like New York and California.

But the release from Camp also acknowledges that he fell short on the House GOP goal of reducing the top individual rate to 25 percent. Roughly 99 percent of taxpayers, Camp says, will pay 25 percent or less, while the rest will face a top bracket of 35 percent.

Camp did succeed in lowering the corporate rate to 25 percent, by chopping off 2 percent a year over five years. In the process, Camp makes the prized credit for research and development permanent, while also stretching out depreciation schedules and getting rid of an accelerated cost recovery system.

Still, Camp also acknowledged that he was at times hamstrung by the fiscal cliff deal hashed at the end of the last Congress, which raised the top individual tax rate to close to 40 percent.

It appears that this bill will go nowhere fast, but in the long run, it could be a blueprint for what the GOP would like to enact if it had the legislative majorities to do so as well as the presidency. At first glance, the bill has a certain attractiveness, as any bill purporting to lower taxes would. But when I see plans like this, I hope for the kind of gridlock that has made today’s brand of Republicans famous.

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