As Close Comfort



As Close Comfort


Averted Aftermath:
By late afternoon on November 6th Election Day, it was a done deal…Obama had not only won, he handedly had won the election. Obama’s base was as broad as it was deep. The result surprised almost each and all conservatives…caught ‘em with their drawers down well past the knees. But for the rest of us living outside the right-wing’s make-believe bubble world, the logical choice for mainstream America had prevailed.

All through the general election, while Republicans were insisting media data was wrong in their statistics and polling, they developed their own propagandized news and insider polling. For after all, the media is much too liberally biased right? Broadcasting it through their campaign outlets along with utilizing Fox News pundit media as a firing squad of misinformation, they also hired their own pollsters that would manipulate polls to appease the ones handing out the check payment for services rendered. They actually began believing their own deceit.

Up until past the final tallying, Republicans, including Romney in only accepting the data bias of their bubble facts thought they were still going to win. So much so, that Romney had only written an acceptance speech, then mud-faced, hastily had to put together a concession speech well after the final result was conclusive.

With election results pouring in favoring Obama, right there on Fox News, Karl Rove and Dick Morris were not simply eating crow, they were eating it raw. Denial, denial, denial…even after Fox’s own election news committee had given Ohio to Obama, Rove was insisting no, Romney will get Ohio, for some precincts weren’t counted yet, even though those precincts were heavily Democrat.

After all the voter suppressive legislation the red states had rushed and forced through their perspective state congress, Rove had the gall to state Obama had suppressed the vote, although he never explained as to how the president had exactly done it. Rove even went to preaching out there that Republicans should emulate Democrat Howard Dean’s fifty state ground game. It appears Rove has copped out sublimely referencing…in other words people simply ignore my major failure, just pursue Dean’s success.  

After Election Day, still losing his cookies in up-chucking the crow meat, Morris had to justify why his statements for election results were so far off, but he had no justified excuses, just more crow.

Of course Rush Limbaugh on the morning after the election had to blame Santa Claus; he could not accept the fact Obama was duly elected by the majority of the American people. He was depressingly livid.

Others such as John Sununu, who for some reason had been forked out of the pickle barrel by Romney to be his spokesman, belittled Obama throughout the campaign. He is a nasty old goat, a reminder of that drunk, abusive and intolerant uncle all families are thankful in only seeing but once a year for some holiday.

Sununu had called Obama a wuss, lazy, even told Obama to “learn how to be an American.” But after the election, his bold excuse was much like Limbaugh, when he stated, “President Obama and the Democrats won last months election because they were able to turn out voters who are dependent on the government.” No, it couldn’t have been reasonably minded and hardworking folks voting for Obama; only welfare queens. No ma’am, in his mind’s eye, even with the majority Obama won by…it couldn’t possibly have been a cross section of all Americans.

One day the arrogance of GOP ideology will finally have to come to the conclusion that no one American is obsolete whether liberal, immigrant, minority or poor. None…

I purely enjoyed watching each and every one of these conservative pundits’ gnashing of teeth.

Aftermath Averted:
No matter what the everyday Republican thinks or feels, if he truly cherishes his country’s democracy, he or she should be very thankful for the election results. Although not as impending as predicted, America came close in losing its identity as a true democracy and if Romney had won, the good ol’ USA might very well have converted ungainly into a plutocracy.

The wealthiest 2%, who currently holds 84% of America’s entire wealth in their hands, have also the Republican congress and a small splatter of Democrats as well deep inside their pockets and a conservative leaning obliging supreme court. All they needed was a token CEO holding office of the presidency, in which they came rather close in getting. In Romney, with versed experience in private equity or corporate financial investment or vulture capitalism or whatever you want to call it, they came well within sweating distance in being handed their utopic oligarchy.

I hold no claim in being an economist and certainly am not a financier. However, with some goose down common sense, I will attempt to paint the portrait of what I’ve seen and see in how America, through its blind allegiance to capitalism has allowed our financial institutions and the very wealthy use and manipulate America to be their anchor in making and maintaining their wealth, while all the while, hoisting anchor and setting sail to invest that wealth elsewhere.

At the expense of America’s middleclass on down, this country has capitulated to the wealthiest that do not give back. Yes, the USA has its share of philanthropists, scores of them, but that is not the storyline here.

What we’re going to discuss are the financial institutions that brought down the world economy, but as for themselves remained basically unscathed. The other target of interest will be the corporate CEO that found it fashionable, almost faddish to lay off thousands while at the same time witness mother record of record profits.

No sir, trickle down does not work in today’s capitalism, for the keepers of the bank vault hold onto the wealth. You cannot have a true democracy with the vast amount of the wealth in the hands of the very few; there has to be more of an outward distribution.

America has always been about class mobility, but since the Bush II years that has halted. As the wealthiest 1% has seen income rise 256% since the Reagan years, the middleclass on average has seen their median income drop 8.9% during the Bush II era when adjusted for inflation. Households headed by 45 to 54-year-olds were hit the worse, seeing an income drop of 13.4% during the same time frame. That’s a drop of $10,000.00/yr. normally when incomes actually peak. All this as tabulated by the U.S. Census Bureau.

Economic inequality overwhelms a democracy. In the land of supposed opportunity for all, how could this be? Currently, while China and India are building their middleclass, the U.S. is whittling it down. How can bigotry, which is not bias towards any category, allow a caste system to be setup in a democratic nation where 48% of the middleclass has dropped below the poverty level? In the following read this is exactly what we’re going to attempt to explore.

Wealthy Tier Disconnect:
In a winner take all scenario, money changed American politics. The ones with the big money were of course the wealthiest and when they could buy politicians, all that was left was to buy votes. Fortunately for this election cycle that didn’t occur.

From my standpoint it actually all started with mild beginnings at the end of Jimmy Carter’s presidency. Amazingly with liberal agendas under Democrat majorities in the senate and congressional house, congress and President Carter, by embracing the corporate argument that regulations were seriously jeopardizing company growth therefore job creation (a chanting mantra corporate interests still shout out to this day) signed H.R. 4998, thus passing the ‘Financial Institutions Deregulation Bill Statement’ into law.

This bill didn’t sprout the sapling that was to turn into a towering tree, but it was the seed that gave root. The maturing tree was to come from the Reagan administration. What’s being discussed here is corporate lobbyism and its effectiveness in persuading legislators.

During the late sixties, corporations and financial institutions, along with the Chamber of Commerce as their voice outlet, began organizing to counter labor union initiatives and programs unions had fought hard for and won for the American worker. Along with attempting to halt employee rights, they also were against new financial, environmental and health regulations.

With the new business organization, instead of many disgruntled annoying voices, they now had one yell that could drown out opposition. But not only that…instead of little bits of money in numerous pockets they now carried a vault to handle all the pooled money. Now approaching congress, with emboldened lobbyists and organized interests groups backed by vast amounts of monetary incentives, this bill, passed by a Democrat majority gave industry and corporate a new found power. These unlimited money source special interests most certainly would later serve better with a more friendly Republican congress and/or administration.

In the next election, they had President Reagan and a majority Republican congress from 1981-1986. Under Clinton’s two terms they lost the presidency but gained a Republican congress under Newt Gingrich. When it came time for the 2000 election, well, they had both the presidency and congress under George W. Bush’s terms. With Republicans in full control in the Bush era, it was a fantasyland for CEOs and financiers. Anti-trust and regulatory laws were repealed. Oversight became virtually impossible due to defunding of FEC regulators. 

With all that greedy room to roam under a dome of secrecy holding, not theirs, but others’ money to gamble with in predatory derivatives, asset based securities (ABS), credit default swaps (CDS), securitization and shadow banking among other newly devised financial schemes…the inevitable happened. The result was the financial meltdown, an awful price that not they, but the American taxpayer had to pay dearly for not only in monetary means, but also in gainful employment, mortgages, pensions and dignity.

Spoken Token:
By the time the Reagan years rolled on that little seed planted in the passage of H.R. 4998 had sprouted and was generously fertilized in its rapid growth rate. Prior to 1979, the richest 1% income remained around 10% nationally. Once business organization had taken hold of politics, from 1980 onwards it rose every year exponentially to its current level of 25% ownership in total national income according to the economists, Thomas Piketty and Emanuel Saez’ ‘Income Inequality in the United states.’  

Deregulation once Reagan was president, went viral. Organized corporate money had found its niche, went to combat and politically mastered it to extremes. Once they attacked, they braced for a counterattack, none came so they invaded and began driving legislation.

With congress more acceptable, cooperative and not allowing media leaks that might create a negative public mood, organized wealth went to work.

The ‘Garn-St. Germain Depository Institutions Act’ was pushed by special interests, passed by congress and signed by the president in 1982. As Reagan signed it he professed, “This bill is the most important legislation for financial institutions in the last 50 years. It provides a long-term solution for troubled thrift institutions.  All in all, I think we hit the jackpot.”

Hitting the jackpot alright, this bill introduced sweeping deregulation and it promptly led to the S&L scandal. In it, contained primarily for the savings and loan industry, were perverse incentives to gamble with other folks’ investments without investor acknowledgement, no oversight into new business ventures, ended New Deal restrictions on mortgage lending and looted $130 billion dollars from taxpayers.    

One would think that after this debacle, congress would tighten up against corporate interests, but the exact opposite occurred. Oil pricing and allocation controls were deregulated. Insurance price controls were lifted and the industry deregulated. Utilities controls were deregulated as were petroleum windfall profit taxes. The trucking and airline industries were deregulated.

All this deregulation was also accompanied with the ignoring of monopolization and antitrust laws, making wealth even more concentrated into fewer hands.

Almost all the fundamental and sensible banking regulations that arose from the ashes of the devastating financial collapse of the Great Depression were repealed. No matter that these enforced regulations had strengthened U.S. banks and financial markets for decades; they were not liked by capitalists.   

Confident now that congress would not intervene in business, market and industrial tactics but actually accommodate it; corporate and financial lobbyists migrated into other arenas.

Special interests began attacking labor unions to the point where unions have been eviscerated. Today, unions are a mere 23% of their objective abilities than they were just prior to the Reagan era. In their heyday, unions sought, fought and won the forty hour work week, sick leave, vacation time, safer working conditions, a livable wage and worker dignity. Today, unions are outspent by corporate lobbyists 65-1.

Union shops, attacked relentlessly by the conservative right were equated to socialism merely because unions protect worker rights. Conservatives also felt unionized labor was a bane to capitalism. In fact, American capitalism benefits greatly from a union wage earner. A livable wage equates into purchasing power which leads to company potential market share increasing production. Amassed consumerism was 72% of the GDP during W. Bush’s reign; about the only entity adding to economic growth during the ending of Bush’s second term.

The ‘right to work’ is a very catchy phrase, but in reality, is a misnomer. Introduced through corporate business interests represented by the Chamber of Commerce who lobbied extensively to pass it in states legislation is now law in twenty-four states. Right to work laws have nothing to do with encouraging employers to hire employees. Its main function is to weaken labor unions.

Right to work legislation, does not perform for better wages, benefits such as pensions and safer workplaces, state economic development or even business growth, for states with right to work laws are unable to raise labor standards for fear of capital flight.

The wealthy corporate lobbied for and received lower tax rates at the expense of the rest of America. The ‘Tax Reform Act’ of 1986 reduced tax rate margins for the wealthy while increasing taxes on lower incomes; in particular for those making below $50,000.00. It also deleted most tax deductions for lower classes, while reducing capital gains and high dollar investment tax rates that only the wealthy participate in.

Tax loopholes were cemented for the affluent. Nixon era pricing controls were eliminated, while federal interest rate ceilings on six year deposit accounts were phased out. Financial lobbyists lobbied for and received preempted state usury laws that limited rates banking and financial lenders could charge on residential mortgage loans.    

As more and more corporations banded together to further their interests, they formed policy institutes known as conservative think tanks such as the ‘Heritage Foundation’ that were originally organized to influence economics, and political policy to benefit business and employers. Listing themselves as non-profit they were rewarded tax exempt status. Now as there are liberal think tanks and environmental advocacy groups, the conservative think tanks have expanded into social policy, environmental issues, the military and technologies.

Some think tanks were ridiculous in supporting business and industry such as promoting the welfare of the tobacco industry, ‘The Advancement of Sound Science Coalition’ didn’t have much to do with science at all, as its intended purpose was strictly to dispute scientific findings of cigarette smoke linked to cancer. Sounds a little like the conservative think tanks of today, like ‘Heartland Institute’ that wait in the aisles to argue against the decades long concluded analyses of climatologist science studies just to add doubt and confusion to public thought and opinion.     
    
For Reagan’s own ‘Reaganomics’ his two terms were mired either in high inflation rates peaking at 10.8% or interest rates peaking at 20%. He was egregious towards the poor with attempts to destabilize social programs. Reagan is the only president not to raise the minimum wage and at the end of his second term told the ‘New York Times’ that homelessness is not the fault of society or government; the homeless “make it their own choice for staying out there.”

Reagan’s contractionary monetary policy, a policy that seeks to reduce monetary supplies, added revenue to business coffers but reduced business spending resulting in (including the recent 2008 Great Recession) the highest U.S. recessionary unemployment rate ever at 10.8%.

Reagan cut funding to eight out of fifteen public agencies during his first term while cutting funds to ten out of fifteen agencies in his second. In Reagan’s two terms he slashed 100s of billions of dollars from public and social programs such as the EPA, labor, food stamps, education and health, but due to increased spending of 28.1% solely on defense expenditures equating to 22.7% of GDP, he tripled the U.S. nominal national debt from $900 billion to $2.8 trillion.           

Breaking Point March:
By the end of Reagan’s reign, even though deregulation had become rampant for the financial and industrial institutions, it was simply the beginning mark for further business and financial changes to benefit the corporate and wealthy.

During George H. W. Bush’s one term, securitization came into play adding even more influence to wealthy avarice and political manipulation. H. W. Bush was one of the few old style Republicans left and as you may recall, during the 1980 Republican primaries, he called ‘Reaganomics’ “voodoo economics.” Nonetheless, under his tenure, two, albeit but quiet and secretive, banking revolutions were legislated into law.

Bankers involved in mortgage related risks were expected to set aside enough reserves to cover any risk that failed. In the beginning of H. W. Bush’s term, all that changed. Financial lenders were now contending that the reserves tied up money they otherwise could be investing with to make even more money. They sought for and had the reserves precluded and were allowed to shift from originating and holding on to mortgages to packaging them and hold the mortgaged asset packages in a securitized form. This is what led to disconnect between sound asset quality applications and the trending risky asset liquidity applications. They became known as swapping.

Furthering this new financial tool, Wendy Gramm as chairperson for the ‘U.S. Commodity Futures Trading Commission’ (CFTC) exempted these lending swaps from all regulation in 1989 and 1993. As swaps ensued, a financial instrument evolved known as a derivative where value is derived from an outside source’s underlying worth.

Mrs. Gramm is the wife of former Senator Phil Gramm (R-Tx) who he himself later would orchestrate legislation into one of the biggest financier gifts to be discussed a bit later in reference to the Gramm/Leach/BlileyFinancial Services Modernization Act (FSMA) which was the final death knell leading into the Great Recession.

This husband-wife team is perhaps the best blessing free marketeering has ever had. After her financial gifts were bestowed to the financial sector, Mrs. Gramm resigned from her post at CFTC to become a chairwoman on Enron’s board to lead of all departments…the audit committee. We all know the Enron saga, where unfettered deregulation and lack of proper auditing led to massive industry malpractices, mounting fraud and eventual implosion.

As time marched on the ever increasing and constant flow of money from industry lobbyist to politician’s campaign purses, financial and corporate interests were receiving special attention. During Clinton’s term, Gingrich became Speaker of the House and with it brought his mentality of to destroy and conquer. Former Federal Chairman, Alan Greenspan, who we all want to love and adore, began dismantling about the only regulatory law left in legislation…the ‘Glass Steagall Act’ (GSA).
         
Meanwhile, the polygamous marriage of the commercial bank Citibank with Smith Barney (an investment holding bank) and Travelers Solomon (an insurance giant) occurred. This union was illegal, for although it was being disassembled, the GSA deemed it so in regulation. Through a loophole, the newly formed union known as Citicorp was given a five year reprieve to become legal or it in turn would have to be absolved. To the rescue, in comes Republican Senator Gramm.   

Instead of leveraging some form of ethics to make it legal, Gramm decides that eliminating the GSA altogether would be the best route to legitimize the monopoly business union. To get House of Representative approval, Senator Gramm recruited Rep. Jim Leach (R-Iowa) and Rep. Thomas J. Bliley (R-Virginia) where all three wrote and introduced their pending bill into legislation.

In the House of Representatives, Rep. John Dingell (D-Michigan) argued against the bill claiming it would result in a government bailout. Dingell, in his arguments, was the first to coin the phrase “too big to fail” insisting conglomerate financial entities would fail, but would be too big of a hit to the American economy to allow the failure to unfold in bankruptcy. How right Mr. Dingell’s protests were to be.

Dingell’s argument did not prevail and the FSMA passed both houses with bipartisan majorities and was signed into law by President Clinton in 1999. GSA, on the legislative books since 1933, the last holdout to monopolized deregulation was repealed.

Clinton wanted to bolster the ‘Community Reinvestment Act’ (CRA). This bill, enacted in 1977 was to encourage federally insured banking systems to give some form of monetary aid to whole communities which included the poorer neighborhoods. Through Fannie Mae, Clinton wanted the ability of the poor to have access to home ownership; a dream of every American. Under strict CRA regulatory guidelines, but only under these “safe” and “soundness” guidelines, Clinton setup a pilot program with 24 federally insured banks in 15 low income minority markets. Under the auspices of the guidelines the program was showing success. Then, W. Bush becomes president.

A Stooge in Power:
Since it only involved a limited low income market, the Bush administration, asked the financial sector if they wanted to put the program on the chopping block; their reply was a resounding no and here’s why...with a few tweaks, it could turn into a money making financial venture.

Under the Bush administration, numerous bank mergers were never slowed, much less questioned in regulatory oversight. A loophole tweak was set up for non-federally insured entities. The loopholes were guised under a merger with a federally insured entity, to set up another new element known as an adjustable rate loan (ARM) that would balloon beyond the creditor’s means. The original loaner would bundle these loans off into options for investors and no matter how many credit defaults occurred the original loaner was always paid his fee up front. The CRA regulations were essentially rendered toothless the next eight years to assess each federally insured institution’s records in meeting the qualifications of sound loaning judgment.

It became common under the Bush years that special interest lobbyists not only pushed for new legislation…they wrote them. The politician or Bush administration acted only as the sponsor of the bill. New insurance laws were written by insurance officers. New pharmacy bills were written and detailed by drug company CEOs. Bankers inhibited prudent regulation at the expense of investors and loan borrowers for banker compensation incentives. Energy companies legislated energy bills. Heavy industry deregulated environmental law.   

Business and financial policies became the norm under the favoring Bush administration to the point of being oligarchical. Folks with lesser incomes were not represented and it showed. For the first time in record keeping, almost half of America’s middleclass slipped below the poverty line. Working wages not only stagnated but declined. Fewer jobs were created since the eve of the Great Depression. For those that had access to job benefits, they now had to pay more for them.

CEO pay scales versus their worker’s pay skyrocketed. According to an ‘Economic Policy’ study, CEOs took home 26.5 times more than their workers were paid in 1978. In 2005 in the middle of the Bush era, CEO pay had raised 525 times that of his worker’s pay scale. CEO pay spiked a whopping 725% between 1978-2011.

Even so, the mentalities of CEOs were dead-brain to the monetary fluxes their workers were experiencing. An example is of former IBM CEO, Samuel J. Palmisano. Between 2004-2006, he laid off 16,066 employees and eliminated the remaining employees’ pensions. Immediately in 2006 he quietly went about setting up his own retirement of $14 million per year for the rest of his life.         

Throughout Bush’s economic tenure, he was to reward top earners with deep tax cuts instead of providing average American families with some form of cost relief and realistic social mobility scales. At the ending of his second term, not quite before the financial crisis reared its ugly breadth, while living costs rose $4,800.00 for the average American, median household income dropped $2,200.00. The Bush tax cuts for the wealthy were basically written into law as subprime mortgages.

Bush personally attempted to make the forty hour work week illegal by annulling overtime pay. Even when he failed to pass this, he had his labor department send memos to CEOs on how they could break the law in going around in having to pay overtime. All this equated into total wealth migrating into the hands of the wealthy few.

With all this reckless abandon going on in the financial and corporate fields, the Bush administration’s SEC had the audacity in 2004 to rule that it was fair play to allow investment banks that were merging into other financial fields to determine their own net capital. The insanity to this is that, although SEC regulators had full rights to investigate what were the holding companies of investment banks, they chose not to. This is also the same reason high risk hedge funds and pyramid schemes went unabated as exampled in Bernard Madoff’s devious financial trading.

With no demands of regulatory scrutiny of the books justifying risks to be in compliance with net capital requirements, investment companies were allowed under their own due diligence to makeover hybrid capital tools, subordinate debt and defer tax returns. In the end, significantly reducing the reserve ratios against outstanding capital assets, the investment firms increased their leverage by as much as a 30:1 ratio in returns favoring their pocketbooks but at the expense of their investors and the taxpayer.

With all this going on, the consumer with reduced incomes in an inflationary economy had put too much on credit. They could no longer support the economy; the weight of its burden had become too great for abused backs.

Finally, the financial crisis hit. All the repackaging of ballooning loans, credit default swaps, predatory derivatives and shadow banking had come to a screeching halt. The ones left holding the bundled securities were in deep six, for now their assets were worthless. When playing musical chairs with high finance someone is going to be left standing. But there were too many standing choking to death the insurers like AIG. They just could not afford to payout so many claims at one time.

As reasoned by assistant secretary treasurer, Michelle Davis, Lehman Brothers had failed because the government was powerless to intervene. Nonetheless, Bush’s administration did find a way to intervene. In addition to the $700 billion TARP bailout, $30 billion of taxpayer money went to Goldman Sachs to coax them into buying out the good assets of Bear Stearns. The company’s toxic assets would be absorbed by the government. AIG did not have the funds to meet its obligations even in covering Lehman Bros bankruptcy, so another $180 billion of taxpayer money was used to cover AIGs outstanding claims.

Entitlement Without Obligation:
The financial crisis essentially left the financiers, the ones with dirty hands, unscathed. Except for the Lehman Brothers bankruptcy, the insolvent Bear Stearns was picked up by JP Morgan & Chase Co. and Bank of America Corp. absorbed Merrill Lynch in a cheap sale. Goldman Sachs and Morgan Stanley hastily accepted applications to convert into bank holding companies in order to feed off the taxpayer bailout funds and the Fed’s liquidity handouts.

The ones solely responsible for the rapacity and unethical conduct in selfishness that created the financial meltdown were barely affected. While jobs, homes, life savings and community services were being lost by mainstream America, financial firms were still attempting to re-bundle loan derivatives to sell off to anyone still unsuspecting. Financial CEOs were still attempting to pass out big bonuses.

They were even expecting bonuses derived later from the $700 billion in the ‘Troubled Asset Relief Program’ (TARP) that the Bush administration first secured then almost literally simply threw the money into high finances’ laps and let the financial institutions figure out what to do with it themselves. The newly inducted Obama administration carried TARP through, but fortunately put guideline controls and regulatory stipulations in place to track the money ensuring it’s spent in what it was intended for and to ferret out any waste.

Many of America’s financial whizzes connected to the crisis truly live in their own perceived elite world. They feel they are too privileged. They are takers viewing America as only an avenue of personal gain without giving anything back. The two following examples are indicative of their mindset.
 
Remember former Senator Phil Gramm, the engineer in repealing the ‘Glass Steagall Act?’ He later became the finance and economics spokesman for McCain’s 2008 presidential campaign. As the American economy was crumbling and Americans were experiencing real economic hardships, Gramm instructed America that the economic slowdown is merely a “mental recession.” In the Washington Times interview, he also scolded Americans in calling us a “nation of whiners.” Essentially I guess he was stating that our complaints of high gas prices, spiraling inflation, deflated wages and loss of pensions is only a figmentation of our imagination.

Even after the financial crisis, Gramm still doesn’t get it. Currently working as a lobbyist for the Swiss banking giant, UBS he had this to say with no apology, “There is this idea afloat that if you had more regulation you would have fewer mistakes. I dont see any evidence in our history or anybody elses to substantiate that. The markets have worked better than you might have thought.”

Back when TARP funding was about to be passed out, the financial CEOs were summoned to a meeting at the Treasury Department. John Thain, CEO of Merrill Lynch at the time, threw out his first question. With deep concern, he asked that if he accepted any of the TARP funding, would it cut any of his compensation or bonuses.
 
Now keep in mind, this was at a time America was at the brink of financial catastrophic end times teetering on a much broken see-saw and his first concern wasn’t about the deteriorating condition of the nation nor the taking of taxpayer dollars in attempts to amend the situation he and his fellow financiers had put the country and globe in. No, his first concern was if there were to be any deductions to his personal income if he accepted government funding for his troubled company.

In the initial White House roundtable meeting for relief money, presidential candidates Obama and McCain were invited to observe and hopefully add positive input into the negotiating phase among acting congressmen. Of course this was also an opportunity for both candidates to show to the media, thus the voting public that they were hands on in solving the crisis.

Obama had done his homework and was in constant contact with economic advisors and financial officials. He came prepared to the meetings, while McCain, who had originally called for a meeting, had a few cue cards to go by.

Obama steps right in giving serious discussion expressing why he feels the bailout should succeed, then asks for McCain to speak saying since he arranged this meeting he should have the floor. McCain fumbles with the scribbling on his cue cards barely giving anything pertinent to the discussion then simply melts away as described by witnesses.

After McCain’s fumbling, Bush makes a crack whispering to Nancy Pelosi, “You guys are going to miss me.” A moment later after some partisan shouting by Republicans, Bush raises his hands and announces, “Well I’ve clearly lost control of this meeting,” then scoots from his chair and walks out. In Bush’s leaving at such a critical moment relinquishing the fate of the country into other people’s hands on what to decide; he basically showed all this was well over his head. Bush lacked leadership. It was now going to be up to others.

For those who would like to watch a video portion of the financial crisis which ends with the White House talks, this link will take you to PBS’ Frontline: Money Power & Wall Street Part 2.

Reversing the Reversal:
Once Obama was elected suffice it to say, he had more than a pot full of three day old pork rind gravy. The country was in financial digress hemorrhaging 750,000 jobs per month, consumer debt versus disposable income had risen from 80% in 1990 to 180%, the deficit was at $1.4 trillion and the average income of the top 1% was ascending at an annual median of $14,784,000,000.00 while for the rest of the 99% was descending at a median average of $52, 029.00. On top of that under Bush, the housing market’s price index in 2008 had it largest ever quarterly fall at -1.7 % leading to the largest ever annual fall at -3.1%.

Even facing very belligerent and partisan Republican politicians, Obama managed to halt all these drifts and put them on a downward trend where needed and an upward trend where necessary.

Globally, world diplomats were amazed at Obama’s resolved demeanor, his optimism, in his paying attention and listening. After the financial crisis and the economic huge downturn that ensued, world leaders had to come together to decide how best to approach the matter. Although the crisis epicenter was the American financial market, its tentacles reached well beyond U.S. shores.

With American financiers as instructors, global finance had become dependent on overnight and short term borrowing relinquishing reliance on its own individual depositors. Bundling mortgage loans had become one of the main foundational pillars and when mortgage losses began to really mount, markets had become too dependent on short term finance that had dried up.

Taught well by the American instructors, bank auditors the world over were hiding mortgage arrears while falsifying profit margins. For the financiers, the reported false figures to the deceived public provided highest returns of capital for investors and executives to the detriment of Main Street.

Even after the financial crisis was in full swing, as mentioned above, and even after they had received government bailout money, financial management was still privatizing gains. With no other options for the ‘too big to fail’ syndrome, governments had to nationalize the losses once they realized how deep the toxic assets were allowed to go by the market’s financial gambling.  

Packaging off then selling blocks of mortgage loans certainly wasn’t a new idea as this had been occurring since the 1980s, but it was the intensity and level of the transactions that began to occur in the 2000s that it became so risk laden. With no oversight there was no attempt to manage the high risks. The markets actually began betting on the risks to fail. Literally, trillions of dollars of unqualified mortgages were bundled, securitized and given an AAA rating.

Back in the states, due to new relaxed regulatory laws and repeal of the ‘Glass Steagall Act’ credit hedge funds and pension mutual funds were now able to invest in high risk mortgage bundling. Shadow banks, which were nothing more than paper conduits for finance assets, began to appear. With no access to central bank liquidities, they had built up huge liabilities with public sector funds, but with no public sector credit guarantees against high risk failures.

In foreign finance and GS meetings, Obama understood the deficit of transparency. He would suggest in order to understanding the magnitude of the crisis, the market would have to come clean by declaring their losses. Only an infusion of capital would loosen their tongues, but at least restoration would commence.

Obama was aware of terms in costs of excessive remuneration at the expense of capital on hand. If financial CEOs had paid themselves just 10% less it would have freed up tens of billions of dollars for the company’s capital holdings.

Obama listened to and spoke of ethical and moral issues lacking in the financial institutions. Discussing internationally and domestically, the right balances of banking capital, dividends they pay and certainly most important…contributions the market should make to the public for the economic and social costs due to their avarice high risk taking.

Former UK prime minister, Gordon Brown, the chancellor of Germany, Angela Merkel and Dominique Strauss-Kahn, then managing director of the ‘International Monetary Fund’ (IMF) were all influenced by Obama’s sense of grasping detail. All diplomats felt he was informed and engaged.

Back home in the good ol’ USA, only here, has Obama been scorned by his conservative fellow Americans. Calling him a socialist, GOP politicians won’t even shake his hand, due to the resultant fear in retribution by their party.

The fact is the Great Recession took away two years of economic growth; a $2 trillion gap. Slowly Obama is mending that, but he had to turn the federal reserves into a ‘lender of last resort’ to a ‘lender of only resort.’     
  
Retail Politician:
After right-wing rhetoric and constant conservative usage of the Hostess’ current business dilemma, one would think the bakery company’s going under was all due to labor union’s unreal demands when in actuality it was due to a private equity firm takeover, taking of and pocketing of workers’ pensions. The union was not on strike for unrealistic wage and benefit demands, they were on strike to get back the pensions they had worked hard for and invested in throughout the years in putting out all those Twinkies and cupcakes. It wasn’t the union that broke the back of the ailing company; it was the times with more nutritional thinking moms coming into play in not wanting to buy junk food.

This private equity firm takeover of Hostess was the same business Romney had built his career and millions on. Romney’s professional business experience was not as a job creator, no his economic oracle was in making high dollar profits for his investors and his own pocket. Once Romney singled out a company that was in some sort of arrears but in a stable market, he saw opportunity. He went to investors not out of the goodness of his heart to create jobs, but to make millions through the aid of their investments at the expense of jobs.

Romney was a vulture capitalist. He would sacrifice companies, employment, benefits and the communities’ economy to make profits, then leave the battle zone to allow the ashes to fall wherever it may. Bain Capital, his company, not only shut down companies, it setup offshore company accounts, sent companies overseas and left employees without jobs and lost pensions.

What was a bit perplexing to me was what vulture capitalism as displayed by the Romney/Bain esquire actually is. As a form of capitalism in putting people on the streets, Romney then complained about these very people being dependent on government.

Romney intentionally eschewed decency for his fellow American to appease his party’s extreme right. Ideology of conservative extremism is this…the infant child unfortunate enough to have poor parents and afflicted with leukemia, the right-wing is so covetous in being true to unfettered capitalism they would allow that infant to perish rather than give a few pennies in tax dollars to save it. I myself just cannot buy into that form of belief. When ideologue is simply the capacity for outrage, there is no room for me there in Republican morality. 

While Obama is the statesman, Romney was the salesman. Obama’s supporters knew where he stood on an array of issues, while Romney supporters did not know where he stood. Obama voters truly believed in his majority of agendas. The right did not; they simply pulled the lever in the voting booth for Romney because he was the one running against Obama.

The right did not really believe in the ‘etch-a-sketch’ man nor his policies, for he never revealed them. What was his economic Five Point Plan…no one knew. What were his tax statements…no one knows.

Lying is one of the Ten Commandments. Lying can be abusive, but Romney’s own campaign said it was OK to lie in campaign ads. Being heavily criticized for their calculated strategy of deceit, in October of last year, campaign surrogate, Representative Phil Gingrey (R-Ga.) admitted Romney was lying to win over more moderate support. Even the original dubbing of Romney as ‘etch-a-sketch’ was from his campaign adviser Eric Fehrnstorm.  

Romney is the ephemeral liar to do whatever it takes to make a buck or get elected. He keeps his skeletons in his tightly closed closet, where normally as a person running to be the nation’s leader, would be more out in the open. His blind trusts, offshore accounts and tax rates are beyond his control so says he.

As proof from his 47% video, there is a wealthiest top tier disconnect. The ones blessed to be rich should remain richer. For those that are poor, well it’s their own fault. Romney employed rhetoric for the moderate while embracing policies of the right. He was more ‘etch-a-sketch’ than the toy was. Can you imagine lying in campaign speeches and in ads about Chrysler moving Jeep production to China, while at the very same moment Romney’s own former company Bain was doing exactly that with Sensata Technologies...moving it to China. Simply amazing…

Romney’s ethics can best be summed up by Shearson Lehman Brothers CEO, where with a cigar dangling from his mouth while attending a $50,000.00 per plate luncheon in New York, Peter Cohen announced, “This country is about business.”

Yes ma’am, if Romney had won the election high finance indeed would have their CEO sitting in the presidential chair. They would have enjoyed unrestricted access to authority amounting to an amassed pogrom of Main Street. As it turned out, an unraveling is occurring and thank the gods for that.

Yes sir, it’s all in Romney’s tagline…he’s never been in it for you

Dennis the Menace Maturity:
The proof of monopolizing wealth didn’t just happen; it was made to happen as it transpired through Wall Street, politicians and the power brokers in Washington D.C. Just prior to this Great Recession, for every $8.00 made, $1.00 dollar went to 1% of the wealthiest population while the remaining $7.00 was to be cut up by the rest of the 99%.

Even for the banks that didn’t receive it, TARP kept all banks fat and happy flush with cash. It was the sole instrument that kept the whole market from falling into the bottomless abyss. Regrettably though, it did not entice them to begin loaning again or conduct principle write downs for the hurting public.

As a whole subsidiary of a functioning capitalist economy, America has always rewarded and revered the rich. The contention goes, ‘for those who create societal wealth should be the most highly compensated.’

But currently it appears the ones running Wall Street are essentially the ones mooching from the American way. It is not the poor as the chants from the right attempt to profess. The Wall Street rich horde wealth and not only do they flinch in perhaps giving a little back; they try to ensure redistribution of wealth is not parceled onto the societal economy. Their exchanging of money hands adds nothing to the GDP. For that matter they’re really not even a service, as the goal is to make themselves richer by gambling with clients’ investments.

Is there a moral side to Wall Street? Where is the overall societal value; can it now peek through? America’s stake in competitive markets is not in one’s success over others, but in seeing through each one’s success.

The rich guy coming to town to shut down the business then abruptly leave richer with local money, has no place in American markets, government or our neighborhoods. Yes, Americans truly believe in competition, but more so, we believe in fairness on a level playing ground.   

Capitalism for sure is a grand bargain for all. It is the driving force of a healthy economy as long as ethical principles are involved. Without ethics, pure capitalism can be a result of a complacent democracy as exemplified in American capitalism during the W. Bush years. In and of itself though, pure capitalism is not a democracy; it is authoritarian with the main driving principle setup as greed and edacity to extend even higher profits at the expense of others’ employ, investments, health and environment.

For anyone to challenge pure capitalism...industry and corporate had trained the majority of rank and file Republicans to respond by chastising the provocateur as a socialist or even a communist.

That’s nonsense, for any successful democracy has enlisted social programs to benefit its citizenry. Of course this is ridiculous. By no means does this equate a democracy as pure communism. Even today, there are those that consider labor unions as socialist entities merely because that has been the subliminal to conscious message they’ve constantly been exposed to by their particular party affiliation that in turn has promoted the capitalist’s propagated dispatch.

In retaining their hold on the country’s wealth, the richest have even affected mainstream Republicans into thinking that attempts to a more balanced wealth distribution is socialistic. With the top 2% holding 84% of the nation’s entire wealth, you cannot have a healthy democracy where for social mobility a more outward distribution of wealth is required.

Individual freedoms become fairly mundane when political freedoms are biased toward economic inequality. When wealth is concentrated in a few mere hands, there is an ever more gaining control over properties, livelihoods, mobility and of course money that to the point individual destiny blows out of the hands of all the rest. This puts stress on a middleclass dropping numbers below the poverty line subjecting the society to a more styled caste system described best by W. Bush’s phrase of the “haves and have nots…”

Inequality matters not just in race, religion and gender but in all spheres and no doubt social ranking, pay scale and wealth are included. Economic inequality overwhelms a democracy. Big money indeed has changed American politics and as it infiltrated ever more deeply, American politicians currently pert near campaign for it about half as much as they legislate. Peddled and influenced money are breaking down our system of law governing for, of and by the people. American democracy is not all about winner take all attitudes as big money is churning it out to be; it’s about compromise and diplomacy to reach out to all.

Republican politicians overall do not work for the middleclass on down. If money continues its bereft influence benefiting only the few elitists, a struggle of some form will lead to a transformational occupation regulating the flow of money. We don’t want to go there. High finance and the will of politics to accommodate it got us to this stage, but it is the change in politics that can get us back into a more fair game.


Due to Tea Bags and Money Bags’ constant uproar of disdain, I dare say most Americans feel that public programs and foreign humanitarian aid are the two items dragging the nation further into debt. How wrong this is.

Under domestic discretionary spending, social programs such as SNAP are only 1.7% of total GDP while defense eats up a whopping 58%. Foreign aid is less than 1% of the budget at 0.2% of GDP. Conservative politician’s rhetoric simply doesn’t add up in reality. As former speaker of the house, Tom Delay (R-Tx) infamously once blurted as paraphrased, it’s difficult to explain to constituents why the American government should help Ghana along with the expense of grandma. Why do Republicans hate foreign aid so much? There is a piece of each and every one of Americans dispersed throughout the globe. Foreign aid is in our national interests and heritage.  

As wealth is concentrated and corporations would rather sit on $1.8 trillion as reserve rather than hire, invest or do research with it, the only resource to accommodate the lower classes is government. There is no other entity. But here again, due to the countless messaging in the same tune of “less government is good for enterprise” by corporate figures, the lower ranking Republican has bitten into this deep enough to not only affect themselves, but all of us at our detriment too.

Who stated this:

“Should any political party attempt to abolish social security, unemployment insurance and eliminate labor laws and farm programs you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things.”

If you’re not familiar, former Republican President Dwight D. Eisenhower did in a letter addressed to his brother Edgar dated November 8, 1954. He was right on!


HAPPY NEW YEAR Y’ALL
BJA
01/10/2013