Overthrow the Speculators

Why the Progressive Majority Needs a Common Front vs. Finance Capital, War and the Far Right

By Chris Hedges
Beaver County Blue via Common Dreams   

Dec 20, 2013 - Money, as Karl Marx lamented, plays the largest part in determining the course of history. Once speculators are able to concentrate wealth into their hands they have, throughout history, emasculated government, turned the press into lap dogs and courtiers, corrupted the courts and hollowed out public institutions, including universities, to justify their looting and greed.

Today’s speculators have created grotesque financial mechanisms, from usurious interest rates on loans to legalized accounting fraud, to plunge the masses into crippling forms of debt peonage. They steal staggering sums of public funds, such as the $85 billion of mortgage-backed securities and bonds, many of them toxic, that they unload each month on the Federal Reserve in return for cash. And when the public attempts to finance public-works projects they extract billions of dollars through wildly inflated interest rates.

Speculators at megabanks or investment firms such as Goldman Sachs are not, in a strict sense, capitalists. They do not make money from the means of production. Rather, they ignore or rewrite the law—ostensibly put in place to protect the vulnerable from the powerful—to steal from everyone, including their shareholders. They are parasites. They feed off the carcass of industrial capitalism. They produce nothing. They make nothing. They just manipulate money. Speculation in the 17th century was a crime. Speculators were hanged.

We can wrest back control of our economy, and finally our political system, from corporate speculators only by building local movements that decentralize economic power through the creation of hundreds of publicly owned state, county and city banks.

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Greece: One Graphic, 10,000 Words

Breaking Down the Greek election:

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How About A Bail-Out for Young People?

 

Students in Dire Need of Debt Relief:

Government Vastly Undercounts Defaults

Photo illustration by Ron Coddington

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By Kelly Field

Chronicle of Higher Education

July 11, 2010 - The share of borrowers who default on their student loans is bigger than the federal government's short-term data suggest, with thousands more facing damaged credit histories and millions more tax dollars being lost in the long run.

According to unpublished data obtained by The Chronicle, one in every five government loans that entered repayment in 1995 has gone into default. The default rate is higher for loans made to students from two-year colleges, and higher still, reaching 40 percent, for those who attended for-profit institutions.

The numbers represent thousands of students like Lourdes Samedy, of Boston, who ended up defaulting on about $7,000 in student loans after completing a nine-month-long medical-assistant program at Corinthian Colleges Inc. Everest College, and now cannot get a job.

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The Progressive Answer to 'Deficit Hawks'

 

Tax the Wall Street Casino

by Chuck Collins

Common Dreams, 6/17/10

Angry about the greedy financial speculation that wrecked the economy? Got a deficit headache? Anxious about where the money will come from for long overdue investments in energy independence that will create good jobs in the new economy?   [1]

How do we spell relief? Try F.S.T., which stands for Financial Speculation Tax. 

A financial speculation tax is a modest levy on financial transactions such as the purchase and sale of stocks, bonds, derivatives, and swaps. England and Taiwan have such taxes on securities that encourage productive investment and discourage reckless trading behavior. 

Leaders in the U.S. Congress have introduced a proposal to collect a penny on every four dollars of financial transactions, a fraction of what people pay in broker fees. This FST would exempt retirement funds and the first $100,000 of individual investment transactions. So it would target the fast-buck flippers, the same financial gamblers who crashed the economy through reckless speculation.  

The financial speculation tax would raise an estimated $177 billion a year, which makes it the potentially biggest revenue raiser on the table right now. 

The deficit hawks should be thrilled about a financial speculation tax. Last week, President Obama issued a directive to federal agencies to propose ways to cut their budgets by 5 percent [2]. The Sustainable Defense Task Force identified $960 billion over ten years in wasteful military [3] spending that could be eliminated without compromising national security. Combine that military savings with a financial speculation tax and we have key components to a new budget and spending plan. 

As President Obama heads to Toronto on June 26th for the Summit of the G-20 leaders, he's going to find lots of other presidents asking about the F.S.T. German Chancellor Angela Merkel and French President Nicolas Sarkozy have renewed calls for a financial speculation tax. [4]

President Obama will argue in support of his bank tax proposal, which will raise an estimated $9 billion a year. The G-20 leaders may also debate a proposal from the International Monetary Fund to institute a "financial activities tax" on profits and employee compensation of all financial institutions. We estimate such a tax would raise $28 billion a year in the U.S. 

Yet given our national revenue challenges, why wouldn't we consider the biggest potential revenue raiser, a financial speculation tax? According to a new report that I co-authored, Taxing the Wall Street Casino [1] a financial speculation tax will raise 20 times as much as President Obama's proposed bank levy and six times as much as the IMF's proposed Financial Activities Tax. 

A financial speculation tax would have tremendous benefits. It would discourage the short-term investment outlook that lay at the heart of the financial crisis. And it would encourage a healthier marketplace in real goods and services. "We have lost the distinction between real investment in the real economy and short-term speculation," said [5] John Fullerton, a former JP Morgan Managing Director. "A financial transactions tax should, at the margin, shift investment horizons out to longer holding periods by making high turnover trading strategies marginally less profitable."   

Other leaders from business and finance have stepped up to talk about the value of a financial speculation tax. Wealth for the Common Good has initiated a campaign of business leaders and investors [6] who support the tax. John Bogle, the founder of Vanguard Mutual Fund, supports the tax as "a way to slow the rampant speculation that has created such havoc in our financial markets, but also for its revenue-raising potential in this time of staggering government deficits." 

Obviously what stands in the way of implementing such a common sense proposal is the powerful banking and finance lobby, the same interest group that tried to block and is now trying to water down financial reform. But while Wall Street lobby groups have formidable political and economic clout, a growing global "people power" campaign behind financial speculation taxes has a good chance of winning. 

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Article printed from www.CommonDreams.org

URL to article: http://www.commondreams.org/headline/2010/06/17-8

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Jobs, Team Obama and the Banksters

Main Street?

by Bill Fletcher, Jr.

January 21, 2010

(NNPA) - In the midst of the 2008 financial collapse the public was told that Wall Street needed to be saved otherwise we faced total economic disaster. We were also told that so-called Main Street, that is our communities, would also receive badly needed assistance. In fact, the Obama stimulus package was to be aimed at speaking to the needs of Main Street.

The drawbridge between the two ''streets'' seems to be stuck in the up position. While Wall Street has largely been saved from total catastrophe, and many financial institutions have actually grown as a result of the crisis, the plight of regular working people has stagnated or worsened. Yes, it is true that the economy is shedding fewer jobs than a year ago, but the point is that the economy continues to shed jobs rather than add jobs. Thus, once again we face the prospect of what has come to be known as a ''jobless recovery.''

The depths of the current economic crisis go beyond what most of us that have grown up since the Depression are familiar with. Yet what we are experiencing did not just start to happen in the fall of 2008 or the end of 2007 (when the recession officially came about). There has been a slow-moving decline in living standards going on since the mid-1970s and some communities, particularly communities of color, have suffered badly.

When the discussion of the stimulus package was raised this seemed to be the right direction to go. Tax cuts and other Republican magical devices would not work. Yet, true to form, the Obama administration chose to proceed cautiously rather than put the funds into the stimulus that were truly needed. The second problem is that it has taken a long time for the stimulus funds to get where they are needed. The third problem is that too much of the thinking around the stimulus focuses on the immediate victims of this current recession rather than thinking about the long-term victims of our brave new economy.

Ironically, the political Right is attacking the Obama administration for paying too much attention to Wall Street. Certainly if the Republicans were in power they would have done even less for Main Street, but who bothers with the facts? The political Right is playing off of increasing anger among white victims of the economic crisis in order to focus them on looking for scapegoats, whether those scapegoats are Jews, immigrants, gays/lesbians or, yes, Black folks. If the Obama administration does not move quickly to preempt this right-wing demagoguery huge sections of the population will not only be drawn into irrationalism, but people will not bother to pay attention to any efforts by the Administration to address Main Street.

Significant effort must go into jobs and economic development, but it is an effort that must be linked to local initiatives at rebuilding. Not only should funds go to those who have recently lost their jobs, but there must be attention to sites of chronic unemployment, such as the Camden, New Jerseys or Flint, Michigans. That means that it is more than just sending in funds, but funds must also be accompanied by the creation of local economic development boards that work to plan how the funds can be used in order to build a sustainable local economy. Anything less and it will only result in pouring water into a draining bathtub.

Bill Fletcher, Jr. is a Senior Scholar with the Institute for Policy Studies, the immediate past president of TransAfrica Forum and the co-author of ''Solidarity Divided.''

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Obama: Just Say 'No' to 'Banksta' Jerks

Obama and

the Big Dogs

By William Greider
The Nation

April 22, 2009 - The big dogs of banking and finance are playing a rough game of bump-and-run with our president, trying to knock him off balance and demonstrate their dominance. The best names in Wall Street--Goldman Sachs, JPMorgan Chase--pumped out happy talk about quarterly earnings, then announced that they intend to give back the government's money (more than $50 billion, if counted honestly). The crisis, they announce, is over for them. They want to be free of official meddling in their private affairs. The arrogance is breathtaking, even for Wall Street bankers.

Forget the financial numbers. What we are witnessing is a high-stakes melodrama of glandular politics. This rival power center, though gravely weakened, is contesting for control with the president. Think of dogs circling one another to establish who will be leader of the pack. For three decades, the Wall Street guys in good suits have ruled the economy, demanding deference from the political system and from corporate managements, too. Those who failed to follow them were punished, either through stock prices or election financing. Despite their catastrophic failure, the surviving bankers and financiers are trying to hold on to their thrones.


For the last couple of weeks, they have poked the kid in the chest and mocked his economic advisers with condescending gestures. Jamie Dimon of the Morgan bank handed Treasury Secretary Geithner a fake check for $25 billion. They threw complicating wrenches into the government's financial rescue plan. Their essential message, crudely colloquial, was intended for Barack Obama : "You don't have the balls to take charge of us."

The question is: Are they right? Obama seems cowed by their bluster. He certainly looks reluctant to take them on in a public way or refute their version of reality. This president wants to govern through public-spirited cooperation. The financial titans play hardball in return. I say "seems" because we do not yet know about Obama and how he will resolve this mess. The administration has been stalling action on the troubled banks, as if it believes in its own wishful forecasts about an early recovery for the economy. The bankers trumped him by announcing, hey, things are already better for us. So back off.

The bankers think they have the president cornered. His rescue plan cannot possibly succeed without much more money--hundreds of billions more--that Congress will be extremely reluctant to provide (Obama hasn't yet had the nerve to ask for it). The bankers' offer to return their welfare checks is a cute gesture, but a bluff. They know Obama's government is committed to save them, whatever it costs. As usual, the big dogs want to have it both ways--take the public's money but promise nothing in return.

Roughly speaking, that has been Obama's posture, too. He acts as though the old order must be restored with public money, but without forceful government direction. He can call their bluff if he has the courage--shut down a couple of big banks, take control of the system--and the public would cheer. During the campaign, Obama demonstrated he is a great teacher--his political vision changed the country. But we do not yet know if he is a confident political leader willing to use his power against formidable adversaries in order to get his way. Every potential rival is now taking his measure. Weakness would doom him.

The financial crisis poses the first great moral dilemma of the Obama presidency. Sometime in the next few months, he will be compelled to choose between his technocratic inclinations--rescuing certain financial institutions deemed "too big to fail"--and the obvious moral wrongness of his policy of rewarding the very players who caused our national disaster. The broad public does not doubt that this is morally wrong. I saw a Zogby opinion poll the other day that said only 6 percent of the public supports the financial bailouts. Obama is on the wrong side of that bipartisan consensus.

The moral dilemma in the financial crisis is oddly parallel to Obama's reluctant approach on the torture issue. The president bravely made public the sickening documents from the Bush administration that reveal how CIA and Justice Department officials rationalized their illegalities and authorized crimes against humanity. Yet the president said it would be wrong to prosecute (or even investigate) any of the CIA agents or military officers who committed these crimes. Likewise, we are told it would be wrong to punish the financial malefactors or look too closely into how they engineered the gross fraud and false valuations that destroyed trillions of dollars in American wealth. Let's not dwell on the past, the president says, let's look forward.

But everything Obama does now--or fails to do--becomes an inescapable precedent for the future, defining the true meaning of law and moral principle. The president's rationale on government-led torture sounds dangerously close to the line of defense invoked by Nazi war criminals at Nuremberg. We were only following orders. CIA barbarians are invited to hide behind that excuse.

So in a sense are the bankers from Wall Street. They were merely doing what the financial markets wanted and what the government allowed. Rescuing these players now, while declining to force fundamental structural changes on the banking system, would essentially ratify the bankers' arrogant beliefs. They are too important to fail. The government will never let it happen. Despite their destructive behavior, they will be allowed to remain in power and free to do it all again.

I do not doubt the president's good intentions, but if he is not vigilant, the "Obama precedent" could prove to be an ugly legacy. His name might someday be linked to wilful evasion of misdeeds and the degradation of law and moral principle. When great crimes are committed in the future by government or by powerful private interests, people in authority might decide to let them go by, citing the national interest and recalling how Barack Obama dealt with similar events.

About William Greider

National affairs correspondent William Greider has been a political journalist for more than thirty-five years. A former Rolling Stone and Washington Post editor, he is the author of the national bestsellers One World, Ready or Not, Secrets of the Temple, Who Will Tell The People, The Soul of Capitalism (Simon & Schuster) and--due out in February from Rodale--Come Home, America.

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Message to Obama: Buyout, Not Bailout

Photos: It can be done: Neil Young's 100mpg 'LincVolt' and Honda's Hydrogen Car

Rx for 'Ailing'
Auto Industry:
Take it Over

By Carl Bloice
Left Margin via Portside.org

It is hemorrhaging fast and no end to the bloodletting seems to be insight. No question something has to be done about the auto industry. But what? As usual, the preferred answer depends your vantage point. As usual, when courses of action are proposed on matters like this the people be adversely affected are passed off as mere numbers. Bankruptcy on the part of any of the Big Three automakers would cost the U.S. economy $175 billion the first year after it went into effect and tens of thousands of workers would be laid off. The cost of a General Motors takeover of Chrysler could be as much as $10 billion and mean dismissing over 30,000 workers. Behind these sterile statistics are real live individuals and families.

It may be that Chrysler and GM are 'too big to fall.' (Although letting them go down is what some pundits are -- with clinical calmness -- advising) But what about the workers?

Over the past four decades or so, the deindustrialization of vast areas of the country has left once relatively prosperous communities in dire straits and vast numbers of young people on the street with little hope for a future of gainful employment. It has hit very hard at cities that are home to stable working class African American populations, often referred to as a 'black middle class.'

The potential devastation of bankruptcies in any part of the auto industry is being understated. There are a couple of million retired autoworkers whose pensions and health care coverage are at stake. Many of them have yet to reach the age for receiving Social Security and yet would be severely disadvantaged in today's labor market. Then there are the millions employed in auxiliary services dependent on auto making.

It's hard to think about the additional pain that will befall cities like Detroit in the face of the current crisis in the auto industry and the prescriptions being offered up to address it. The area, once the world center of auto manufacturing, is now being told that whatever happens over the coming months it's going to have to absorb a another heavy blow.

So, what is to the done about the ailing auto industry? Here's one answer: nationalize it.

Don't get your alimentary system in an uproar; it's been done before. We could simply takeover the industry with understanding that thousands of engineers and technicians would be mobilized to design and make functional and efficient 'green' cars. And, tens of thousands of autoworkers could be put to work building them. Of course, this would not employ all of those about to be laid off. They could be retrained to work in other new green industries building wind turbines, solar panels, mass transit lines and recycling factories. It would provide jobs for hundreds of thousands and provide new hope for young people entering the workforce in Michigan, Kentucky and elsewhere.

This will require a lot of central planning and that's the last thing the people now running the economy want to hear. Horrors. But let's face it; radical innovation and planning is the only thing that could get us out of the current mess and lay the base for a healthy economic future. An endless series of bailouts and stimulus packages is unlikely to do the trick. There is a lot of talk from the experts these days about what a 'recovery' would look like. Estimates of when one is likely to take place range from the end of 2010 to never.

Economists are now talking about a 'jobless recovery.' That is, Wall Street will get back up to speed and corporate profits begin to rise again while high joblessness continues and the legions of the poor grow even larger.

A government organized effort to consolidate, refurbish, and refinance the auto industry will surely be denounced as 'socialist' but, actually it wouldn't be anything a traditional socialist would recognize as such. It could be a public-private collaborative project. Yet, its central prerequisite would be a political decision -- reached democratically -- to pursue a policy of guaranteed employment to those who want to work and an economic strategy premised on full employment, innovation rooted largely in green technology and a commitment to preserve our communities' health and that of planet.

The employment statistics for September are in -- the official ones that are always understated . The country's unemployment rate is 6.5 percent. That's up from 4.8 percent a year ago. It is expected to climb above 8 percent. For teenagers it's 20.6 percent; that's up from 4.3 percent in September 2007. Latino unemployment stands at 8.8 percent; it was 5.6 percent this time last year. African American joblessness has risen steadily this year to 11.1 percent from 8.5 percent a year ago. Claims for unemployment insurance broke a new record last week. Most economists say it's only going to get worse as we move toward the holidays.

The incoming Obama Administration is being offered all kinds of advice these days on what to prioritize. Way up there on the list has got to be a program to save jobs and create new ones. Save GM? Yes, but not because of the corporate heads and financiers whose greed and errant business judgment got us into this fix but for the workers and their communities.

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