Tag Archive: Dylan Ratigan

Dec 14 2011

Extractionism: Grand Larceny By The Banks

Extractionism: taking money from others without creating anything of value; anything that produces economic growth or improves our lives.

MSNBC talk show host, Dylan Ratigan has a new book, Greedy Bastards, coming out in January and has been promoting the premise of the book, how the banks have shaken down taxpayers, in a series of on-line pod casts. He recently interviewed Yves Smith, author of ECONned and proprietress of naked capitalism, gave Dylan an education of how the banks have been extracting capital for themselves and why investors are afraid to take them to court for fear the government will retaliate.

Under an extractionist system, we find lose value at a faster rate over time, while we need to be creating it.  Instead of giving people incentives to make good deals where both sides can benefit, extractionist systems rewards those who take and take some more, and give nothing in return.  Sadly, extractionism has crept its way into every aspect of our economy – it’s everywhere, from trade to taxes to banking.

Let’s take a look at banking as an example.  As Yves Smith explains, financial firms do provide valuable services to our economy, like establishing stable and reliable methods of payment for goods and services, and selling bonds and stocks to help raise new money to fund big projects. There are more than that, of course, but those are two basic examples of valuable services that our banking and financial sector provides.

Now, let’s look at how they can also be extractive – almost always going back  the lack of transparency in the financial markets.

Yves identifies two main extractive techniques of our financial industry.  The first is charging too much for goods or services. “Even fairly sophisticated customers can’t know what the prices are of many of the products, so it’s difficult for them to do side-to-side comparisons,” says Yves.

The second method is producing products that are so complicated – like in the swaps market – that clients can’t see hidden risk in them.  “This has unfortunately become extremely common now that we have a lot more use of derivatives. Many of the formulas that are used they are disclosed by they are extremely complicated, and then on top of that, the risk models that are commonly used for evaluating the risk actually understate the risk,” says Yves.

(emphasis mine)

In the interview Yves makes suggestions how this can be fixed:

  • 1. A small tax on all financial transactions.
  • 2. Give financial institutions a bigger financial responsibility when they knowingly recommending bad products or dubious strategies.
  • 3. We need increased political pressure for an effective and robust Securities and Exchange Commission.
  • 4. More inspection of what the banks are doing in their over-the-counter businesses.
  • The full interview transcript is here.

    Yes, we do need a Constitutional amendment to get money out of politics so this can be stopped.

    h/t Yves Smith @ naked capitalism

    Dec 11 2011

    Getting Money Out Of Politics

    I’ll believe corporations are people when Texas executes one ~ unknown author #OWSNYC

    Besides shifting the conversation in the media from budget cuts, deficits and austerity to jobs, jobs, jobs, the Occupy Wall Street movement has also brought more attention to how Wall St., banks and, especially mega-corporations control the two parties and influence politics. Follow the money. Since the Supreme Court ruling that corporations are people and money talks, some politicians, organizations and a few in the media have been examining ways to get money out of politics and put government back in the hands of the governed. One of those means is a constitutional amendment as proposed by Independent Vermont Senator Bernie Sanders:

    Sanders’s amendment, S.J.Res. 33 (pdf), would state that corporations do not have the same constitutional rights as persons, that corporations are subject to regulation, that corporations may not make campaign contributions and that Congress has the power to regulate campaign finance.

    While the Citizens United case affected corporations, unions and other entities, the Sanders amendment focuses only on “for-profit corporations, limited liability companies or other private entities established for business purposes or to promote business interests.”

    Sanders said he has never proposed an amendment to the Constitution before, but said he sees no other alternative to reversing the Citizens United decision.[..]

    The Sanders amendment is co-sponsored by Sen. Mark Begich (D-Alaska), and a similar amendment has been proposed in the House by Rep. Ted Deutch (D-Fla.).

    On December 3, the Los Angeles City Council voted unanimously to support such a constitutional amendment:

    The resolution was backed by Move to Amend, a national coalition working to abolish corporate personhood and overturn U.S. Supreme Court’s controversial Citizens United ruling. The decision gave corporations and unions the ability to spend unlimited amounts of money to influence elections, so long as their actions are not coordinated with a candidate’s campaign.

    “Move to Amend’s proposed amendment would provide the basis for overturning the recent Supreme Court decision in Citizens United v. Federal Election Commission,” stated Mary Beth Fielder, Co-Coordinator of LA Move to Amend. “The Supreme Court has no legitimate right to grant people’s rights to corporations. We must clearly establish that it is we, The People, who are meant to rule.”

    Move to Amend hopes to get ballot initiatives put on the ballots in cities and states for the 2012 election to help voters show their representatives that they are serious about reigning corporate influences in elections:

    “These are how American amendments move forward from the grassroots when Americans say enough is enough.  We’re very proud to come together and send a message but more than that, this becomes the official position of the City of Los Angeles, we will officially lobby for this.  I also chair a group which oversees all the Democratic mayors and council members in the country and we’re going to share this with all our 3,000 members and we hope to see this start here in the west and sweep the nation until one day we do have a constitutional amendment which will return the power to the people.”

    There is some bipartisan agreement between Democrats and true conservative Republicans. Former Louisiana governor, congressman and candidate for the GOP presidential nomination, Buddy Roemer, agrees with Sen. Sanders on getting money out of politics when he appeared with Dylan Ratigan on MSNBC. You won’t hear Roemer in any of the debates that are being run by Fox, CNN but he has been getting exposure on the talk show rounds. Roemer believes, like Sanders, that “Washington is being bought and sold like a sack of potatoes”

    Like the LA City Council, Occupy Wall Street, Sen. Sanders and Gov. Roemer, we agree that this is the best solution. It will be fought by the corporations and those they control and like any fight it starts with first steps. Lets hope it grows. The survival of democracy in America depends on it.

    Contrary to the will of special interests, Buddy wants to see Washington reform that includes full disclosure of campaign contributions, 48 hour electronic reporting of campaign contributions, the elimination of the Super PACs that keep the GOP’s top contenders at the top, limiting PAC donations to same amount of money that individuals can contribute, prohibiting lobbyists from participating in fundraisers, and imposing criminal penalties on those that violate the rules of campaign finance.

    These changes seem to be what most Republican voters are looking for, but without a Super PAC to fund him, Roemer is unable to throw the millions of dollars the big spenders like Romney, Perry and even Ron Paul shell out on publicity. And Americans cannot expect those taking money from special interest groups to protect citizens from those very same special interest groups. [..]

    Buddy also wants to end corporate welfare. Corporations are big spenders when it comes to campaign contributions. While big oil companies no longer need government money to survive, since they earn billions in profits selling overpriced gasoline and oil to consumers, they are willing to shell out large amounts of campaign money to ensure the politicians that will push their agendas are elected.

    Aug 14 2011

    Rant of the Week: Dylan Ratigan

    MSNBC talk show host Dylan Ratigan lets go with both guns blazing on US political ties to banking. The Republican strategists sticks to her talking points, totally ignoring reality.

    Apr 10 2011

    Rant of the Week: Cenk Uygur and Dylan Ratigan

    Cenk Uygur and Dylan Ratigan discuss what it is to regulate banks in the Rant of the Week.

    “Pretty please, can we regulate you with someone you like?”

    The fight for Elizabeth Warren to head the Consumer Financial Protection Bureau is a “fight worth waging”. Jennifer Granholm, former governor of Michigan

    Feb 13 2011

    Rant of the Week: Cenk Uygur and Dylan Ratigan

    Social Insecurity: Republican and Retirement Money

    Nov 07 2010

    Rant of the Week: Greenwald, Ratigan & Uygur

    The Left Behind by President Obama: Progressive Base Loses Faith

    Partial transcript below h/t TheCallUp @ FDL