Tag: TBTF

I have Joslyn Stevens's permission to repost this interview.

This week I conducted an interview with a progressive populist I follow on twitter, Priceman, whose annoying habit of using facts and common sense with a dose of in-your-face realness to prove his points tends to piss off democrats over at the “progressive” DailyKos. I feel it’s necessary to showcase often ignored voices representative of the people who speak truth to power and will continue to do so on a weekly basis.

The democratic blog DailyKos claims to be a reform blog open to all views but as we both know opposing views aren’t welcome. Are they doing their readers a disservice by promoting and defending a corporate Democratic Party that doesn’t represent working-class Americans and hasn’t for a long time?

A. Hi, Joslyn. It’s nice to talk to you. I have a lot to say on this topic. Not only are they doing their readers a disservice, they are making a laughing stock of the so called progressive blogosphere as a whole. Wanting “more and better Democrats” does not mean a whole lot when those who administer and run that site, coddle so called Democrats that are openly hostile to the programs that shaped the party’s platform in the first place, from the New Deal and Great Society. That site’s administrators play favorites there and try to hide it; President Obama and his enablers are who take precedence over everything else on Daily Kos.

I base this on the very poor job their site moderators do at that site, and the lack of self awareness that comes from denying it, which happens every time anyone looks into it. There are a number of good diarists that write there, but they do not receive equal treatment; posters whose sole mission is to protect their hero in the White House, are allowed to break the site rules and troll any posts not favorable to the Obama administration. And if anyone retaliates against them, only then does the site’s administration get involved in order to put them in their place while pretending to just enforce site rules, which are arbitrary, selective, and not clearly defined at all except in secret.

Sure, they might ban an obvious sockpuppet whose sole mission is to attack Glenn Greenwald, but that is low hanging fruit and does not hide the obvious bias at that Democratic gatekeeper site. The business model there relies on pretending that every problem in our society must be the fault of the Republicans, instead of both parties colluding together for the continuing grand austerity bargain happening now with the first step: the sequester. The White House wrote the sequester and put out there, but to mention that is blasphemous at Daily Kos like most other critiques of the President when it comes down to it. This is specifically true during election season; posters are banned for harshly criticizing the President.

I witnessed this first hand, and even I was warned in 2012 for doing so; I merely uprated a factual comment that in some ways there is little difference between Mitt Romney and President Obama. The 2012 Obama campaign went after Bain for outsourcing jobs, closing plants, and devastating US communities. Yet, now that the election is over, President Obama has appointed Jeff Zients, a former executive of Gov. Mitt Romney’s Bain & Company investment firm, as head of the National Economic Council.

To add insult to injury, on civil liberties issues, the owner of the Daily Kos, Markos Moulitsas, was asked how he feels about what Snowden revealed with regard to the 4th amendment being trashed by this administration continuing and expanding the Bush administration’s NSA war on terror abuses, and he said he honestly didn’t care. He said that worrying about spying was a very white privileged thing to do. However, anyone who has done even a modicum amount of research, knows that New York — pretty much the whole country, but especially New York — has changed after 9/11; it is now outfitted with a massive surveillance arsenal to more efficiently conduct racist policies like stop and frisk which does affect black people suffering from real white privilege in the real world.

This is similar to the drug war President Obama is continuing, which is also racist, since most incarcerations for drug possession are disproportionately black even though white people use the same amount or much more in many cases. Some on Daily Kos will try to deny this by saying the drug war is mostly a state issue and that you should just go yell at your local mayor and city council, and leave Obama alone. That would be fine if the Obama administration did not deploy for-profit prison lobbyists in their Justice Department like U.S Marshall, Stacia Hylton. The Prison Industrial complex lobbies all states to have access to the prisoners arrested for drug possession in whatever state they set up. This is coddled and supported at the federal level.

Not to mention all the broken promises from Eric Holder and the President about not raiding medical marijuana dispensaries. None of this is mentioned on Daily Kos when it comes to issues about race, and it’s perpetuating real racism which involves institutions like this and always has. So, this is not something Markos — and those that like him who scoff at what Glenn Greenwald and Edward Snowden have revealed — can ignore while claiming to care about real white privilege, real racism, and what’s going on in the real world on the federal level and at the state level aided and abetted by the drug warriors in the Obama administration at the federal level.

No, once Markos wrote a book about “Crashing the Gate” with regard to the political blogosphere he was instrumental in creating, along with Howard Dean’s campaign, in filling the void that the bought oligopoly — the mainstream media that failed and is still failing the public — left. However, now that a Democrat is in the white house, sites like Daily Kos are gatekeepers. They are not interested in crashing any gates. This is how they run the site and ultimately this is their business model.

I wrote there for a time, but I would now warn others that Daily Kos is not the site where intellectual debate is allowed on anything substantial. Only about how bad the other bought political party is. That is, instead of Democrats, with few exceptions, and Republicans working together to subvert representative Democracy. Oh, how mighty the once promising site has fallen and will continue to fall now that we know what the site’s true purpose is; shilling for the status quo as long as it has a (D). This, we all now know and can see.

There’s no reason to read anything on that site. It’s no different than what’s on MSNBC.

Effective regulation, and on that note, it is a positive thing that the Summers of our discontent can finally be laid to rest. After all the damage Larry Summers has caused in being one of the architects of this crisis, from boxing in Brooksley Born and ignoring her warnings with regard to derivatives which brought down Long Term Capital Management during the Clinton administration, to his sexism among everything else. He has now thankfully taken himself out consideration for the job.

It’s a good thing he did. Rather than fighting for something or someone that helps people suffering from this economic crisis, President Obama strongly recommended and fought for Larry Summers to be Chairman of the Federal Reserve, a guy who lost a billion dollars as President of Harvard betting on interest rates. Yeah, let that sink in for awhile.

It’s really not OK. This is why making excuses for everything the President does, as too many Democrats do without thinking of the damage, is dangerous, immoral, and unprincipled. Now it looks like the front runner to replace Ben Bernanke as Chairman of the Federal Reserve is going to be Vice Chairwoman of the Board of Governors of the Federal Reserve System and once President and Chief Executive Officer of the Federal Reserve Bank of San Francisco, Janet Yellin. Unlike Larry Summers, she at least saw the crisis coming as early as 2005.

Within one week Republicans are going to grab the national spotlight on two huge issues that should be the realm of the party who stands up for the little guy.  That party used to be the Democratic party.  How can they let this happen?

On Friday, at the CPAC convention, Federal Reserve Bank of Dallas President Richard Fisher is going to call for breaking up the big banks in the wake of a failed Dodd-Frank bill.

This is mind blowing. First a Republican, Rand Paul, filibusters to get answers about the targeted killing program and now at CPAC, a speech calling for breaking up the TBTF banks.  Where are the Democrats??  The last thing we heard from the party was that the executives can’t be held criminally liable, via Eric Holder and Lanny Breuer.

End “Too Big to Fail” Once and for All

In advance of his speech on Friday to the Conservative Political Action Conference, Federal Reserve Bank of Dallas President Richard Fisher writes with Harvey Rosenblum about the failure of the Dodd-Frank financial reform law to adequately address financial institutions that are “too big to fail.”

[…]

“Third, we recommend that the largest financial holding companies be restructured so that every one of their corporate entities is subject to a speedy bankruptcy process, and in the case of banking entities themselves, that they be of a size that is ‘too small to save.'”

[Emphasis added]

Harris Interactive’s annual “Reputation Quotient” survey for 2013 finds that the five biggest “too big to fail” (TBTF) U.S. banks have some of the lowest reputations in the country according to their survey of the general public.  All five of them are ranked in the lowest eight slots among the sixty most visible companies measured.

The maximum “reputation quotient” is 100.  Any quotient lower than 64 is considered to be “poor” and anything below 50 is considered “critical”.  All of the big five TBTF banks scored lower than 64 and Goldman Sachs is below 50, so its reputation is in “critical” condition.

Bank of America and JP Morgan have seen some improvement in their score this year, but their reputation still falls into the “poor” range.  

Harris Interactive also ranks industry reputations.  The banking and financial services industries rank above only two other industries:  government and tobacco.  Banking and financial services have improved over last year, however, by seven and eight percentage points, respectively.  Technology, travel and retail are the top three.

This poll has been published for fourteen consecutive years.  This year, more than fourteen thousand interviews were conducted for data collection.

Bank Size (1 is the largest)

Harris Reputation Index

Sources:

FFIEC – Top 50 holding companies (HCs) as of 12/31/201

relbanks.com – The Largest US Banks

The Harris Poll 2013 RQ® Summary Report – A Survey of the U.S. General Public Using the Reputation Quotient® (This file is a PDF)

Yes, unlike what was sold to us about Dodd Frank, there are in effect already backdoor bailouts before our very eyes if we care to look. This one involves the most important regulator of our entire financial system, the New York Fed, intervening to let Bank of America off the hook for its residential mortgage backed securities fraud.  

Besides the $700 billion from TARP and $17.7 trillion from the Federal Reserve the “Too Big To Fail” financial entities are still getting bailouts with tax payer dollars via tax breaks on losses. 90% of the insurance giant, American International Group Inc.’s (AIG), fourth quarter profits from 2011 were “because of an inappropriate tax break the government-owned insurance company continues to receive, according to four former members of the watchdog panel that oversaw the financial crisis bailouts“:

The break allows AIG to count its past net operating losses against future taxes. That amounts to a “stealth bailout” of a company that received about $125 billion in taxpayer money, said the former appointees to the Congressional Oversight Panel for the $700 billion Troubled Asset Relief Program.

“It’s been more than three years since AIG lost its reckless bet on mortgage-backed securities, yet today AIG continues to get special tax breaks that last quarter accounted for 90% of its profits,” the panel’s former chairwoman, Elizabeth Warren, told reporters Monday on a conference call. “We think it’s time for Congress to end the special tax break.”

Warren, who is running as a Democrat for the U.S. Senate in Massachusetts, was joined by former panel members Damon Silvers, Mark McWatters and Kenneth Troske in saying the tax break gives the illusion of significant profitability at the company.

The profits benefit AIG’s private stockholders and allow the company to pay higher executive compensation, the TARP panel members said.

“By doing it this way….billions of dollars leak out to the benefits of private parties, who really should not be benefiting from public policy in this way,” Silvers said.

The special tax exemption that AIG and other struggling companies received allows it to deduct its past losses against future tax bills thus showing a net profit. It allowed for AIG to hand out generous executive compensation and benefit private shareholders.

Just last week, Matt Stoller at naked capitalism reported that almost half the banks that had paid back TARP did so with funds from other government programs:

The Government Accountability Office continues its subtle war on the talking point used by Treasury that “TARP made money”. Here’s the GAO, with a report out today.

   As of January 31, 2012, 341 institutions had exited CPP, almost half by repaying CPP with funds from other federal programs. Institutions continue to exit CPP, but the number of institutions missing scheduled dividend or interest payments has increased.

Much of the government-supplied TARP funding (to small banks) was replaced by the Small Business Lending Fund passed in 2010, which Republicans called “TARP 2.0″.  The larger banks, however, where much of the bank-based credit creation in the economy takes place, didn’t use this program.  Instead, they got an implicit subsidy of between $6B (pdf) and $300B a year from the widespread belief that the government will not let their bondholders lose money…

You can take a stand with Ms. Warren and sign her petition: