Occupy – Reason for Real Hope?

I am inspired by the Occupy Wall Street movement and the local gatherings like Occupy Seattle.  I have hope, almost (which is scary, because I remember what happened last time, or rather, what didn’t . . . on so many issues). Pete Seeger, Arlo Guthrie and friends playing Occupy Wall Street at Columbus Circle reminded me of those heady days when so many of us thought “Change” was possible.

Yet, that is part of the hope, both in seeing what the people did via so much grass-roots activism in getting Obama elected, and in the realization of most of us this time not to put our faith in a candidate and on the Democrats being different enough from the Republicans. Turns out too many of them are owned by Wall Street, too (and that is one of the most crucial things that needs to change, which is indeed a formidable goal).

Occupy Seattle March

Why are people occupying and marching? Is it really as vague, incomprehensible and unreasonable as some pundits make it? Personally, I think the “We are the 99%” and “Banks got bailed out, we got sold out” slogans do a pretty good job of explaining why people are so upset.

Lets see, according to The Atlantic, “Half of all workers made less than $26,364, the median wage in 2010,” and “The size of the missing workforce is 10 million. ” In spite of being bailed out at public expense, banks are raising fees and trying to foreclose on people they talked into loans with unfair terms, even “losing” paperwork so they can foreclose, as in the case of Dixie Mitchell and her husband in Seattle which was reported in the PI (and fortunately, Washington CAN is helping them fight).

Alternet‘s article, Which Bank is Worst for America? details how the banks congressional influence led to the collapse.

One of its biggest coups was the overturning of the Glass-Steagall Act, a Depression-era law that created a firewall between investment banking and the commercial banks that hold deposits and make loans.

How much of our tax dollars went to the bailout?

Among our big five, Citigroup was the largest beneficiary of these funds, with $45 billion, but even Goldman Sachs got $10 billion. Wachovia/Wells Fargo and JP Morgan got $25 billion each, while Bank of America got $30 billion. According to ProPublica’s calculations, the big five have all paid back their TARP funds.

Oh, they’ve paid it all back? Wait, there’s more.

But TARP was only one way in which the federal government subsidized the big banks. The Federal Reserve also handed out trillions in unsupervised loans during the so-called crisis period.

And if those numbers weren’t big enough, just this August Bloomberg reported even more secret Fed loans to the big banks: “The $1.2 trillion peak on Dec. 5, 2008 — the combined outstanding balance under the seven programs tallied by Bloomberg — was almost three times the size of the U.S. federal budget deficit that year and more than the total earnings of all federally insured banks in the U.S. for the decade through 2010, according to data compiled by Bloomberg.”

Just a coincidence, I’m sure, that so many in Congress, Democrats as well as Republicans, had large donations from Wall Street.

Just who are the recipients of all this largesse? There are many, but most play key roles on Congressional committees that oversee their businesses. Consider just one example: Senator Chuck Schumer, D-New York, one of the most powerful members of Congress (Schumer is known as “the senator from Wall Street”).

According to the National Journal‘s rankings, Schumer is tied with two others as the 10th “most liberal” member of the upper chamber. But he owes his career to Wall Street.

The article also notes that “(t)wo of Obama’s top bundlers are also connected to Goldman Sachs,” but “Mitt Romney is the clear favorite candidate of Wall Street this year, having taken in $2,339,588 from securities and investment companies.” Don’t despair, or rather, do despair, if you’re not a Wall Street banker, because the Washington Post reports that:

. . .Obama has brought in more money from employees of banks, hedge funds and other financial service companies than all of the GOP candidates combined, according to a Washington Post analysis of contribution data.

As the Washington Post notes in another article:

(I)n the tug of war between Main Street and Wall Street, Obama has made his loyalties clear. Just take a look at the long list of Wall Street contributors to his campaign. Unfortunately, Mr. President, you are the company you keep.

How corrupt is Congress? According to the Spectator:

Uniquely among legislatures in the developed world, our Congressional parties now post prices for key slots on committees. You want it — you buy it, runs the challenge. They even sell on the installment plan: You want to chair an important committee? That’ll be $200,000 down and the same amount later, through fundraising. Unlike most retailers, though, Congressional leaders selling committee positions never offer discounts. Prices only drift up over time.

Bank of America is trying to get more taxpayer funds, to cover their derivatives, which apparently many be ready to blow.

Why is Bank of America moving derivatives from Merrill Lynch to an insured subsidiary? Is it because the derivatives could blow up at any time leaving Merrill with gigantic, unsustainable losses? If that’s the case, then it would make perfect sense to shift them into a depository institution that’s covered by the FDIC. That way, the taxpayers would wind up paying for the damage and no one would be the wiser.

Back to the Occupy movement. I’m inspired that people are on the street, especially because they’ve got the rest of us talking. That is something that cannot be taken away, even though some jurisdictions are trying to crack down on protesters and Twitter may or may not be censoring trends (and maybe even tweets, although that may be my own paranoia and lack of sleep at the time; more at a later date).  What is going to be exciting is what changes are we going to be pushing for?  No matter how impossible it seems, getting money out of politics has got to be a major one if any other changes are going to work.


Press Clippings & the Days of Auld Lang Syne

Seldom is a new year such an abrupt change as this one. I’ve been laid off from my old job at Allen’s Press Clipping Bureau due to the economy as of last Thursday, December 30, when I packed up my office knickknacks and headed home.

My Gnome Really Misses the View

Even though I knew it was because of the economy, and even though I knew it was coming since before Thanksgiving, it’s still not easy to pack up from a job you’ve held for 13 years.

Mark Twain's Press Clippings

I know what you’re thinking. Well, what exactly is a press clipping bureau and what kind of job is a “newspaper reader”? Well, once upon a time, in 1888, our main office in San Francisco was founded by William Montgomery Clemens, at the suggestion of his Uncle Samuel. . . No, I’m not making this up, and the reference to Mark Twain is included in a News That’s Fit to Clip column by Rob Morse profiling our SF office in The  San Francisco Chronicle from March 25, 2001:


The article describes how our main office worked, and it’s pretty much the same, even 10 years later, at our Seattle office (although our readers use easels, like artists):

Readers sit at tables that look like something out of Melville’s “Bartleby the Scrivener.” Each day they scan 2,500 newspapers from up and down the West Coast, looking for more than 10,000 names or topics assigned by 3,000 clients, marking each page with clients’ account numbers.

Then the pages go to cutters, who slash out the stories with amazing speed and accuracy. Labels are then pasted to the clips, which are sorted into an ancient bank of cubbyholes, the upper leftmost of which is marked “client number one,” for the governor of California.

The governor can see what voters are reading about him in every paper from El Centro to Yreka.

The technology in all this is completely pre-Silicon Age.

“We still use the Addressograph,” said McCombs. “Maybe when we can’t get parts for the old machines, then we’ll get computers.”

OK. I know what you’re thinking. What is an Addressograph?
Here it is:
Ye Olde Addressograph

You may think we need to discover that 20th century invention, the computer. Actually, the addresses for envelopes that the Addressograph used to do are one of the tasks that have migrated to our computer. Although, we still do use file boxes and catalogs in the reading room, as noted in the article.

There is another reason we haven’t ventured into online clippings, though, in addition to some people preferring the physical clippings and the amount of content not online yet. Copyright laws have not been fully worked out for digital content and how that will apply to the press clipping industry and, in fact, newspapers are cracking down on what they consider stolen content.

Here’s a link to an article on the AP’s plans to go after websites that practice “content ‘scraping’,” reprinting articles without permission as they try to find a way to make money through tracking online visits for advertising opportunities:


Newspapers are also putting up digital “pay walls.” A case in point, while the newspaper from the town I went to high school in Oregon, the St. Helens Chronicle, finally went online this year; my hometown paper in upstate New York, the Apalachin Community Press, which has been available online for at least a decade, now has a PayPal button to subscribe if you want to see their content (and it’s a free paper within the area).

St. Helens Chronicle: http://www.thechronicleonline.com/

Apalachin Community Press: http://www.tiogaweb.com/communitypress/

Actually, $20 a year for the days of Auld Lang Syne might not be so bad, once I find a new job. (Note for another blog entry: do not wait 30-40 years to try to recover photos from old negatives.)

Strawberry Hill, Apalachin - Dec. 1973

The trouble is, even $20 a year for every newspaper site I visit would add up. Hoping they find a way to maybe make package deals for access to papers outside your area in addition to your hometown subscription if they go that route. On the other hand, while I’m not crazy about the commercial aspect of going for advertising either, reporters have to be paid or our papers will disappear or shift to online versions that don’t have the content they once did.

Last PI

I don’t know about the rest of you, but the Seattle PI just hasn’t been the same since it went digital. On the other hand, good news websites like Crosscut have appeared that are only online.

It's not in there. . .

I think good print journalism will survive. While I’m hoping physical papers and news racks like these don’t go the way of the pay phone; the fact is, people are still reading articles, just in another format, just like people are still making phone calls, on their cell phones. OK, young people are texting, but still, some things can’t be told in 140 characters or less.

I think there’ll also always be a need for a press clipping bureau, even if eventually they’re more online.  Where else could you get articles from not only the Seattle Times to the Spokesman Review, but the West Seattle Herald to the Methow Valley News, The Stranger to the Catholic Northwest Progress, and not only the Anchorage Daily News, but the Mukluk News and the Ester Republic, in a timely, cost efficient manner?

Meanwhile, though, we are in a downturn, in a changing industry still finding its footing, and I need to hit the ground running. . .

OK, maybe not literally. Walking more was my New Year’s physical fitness resolution.

If I believe the San Francisco Chronicle article, maybe I need to enter the 21st Century. . .

. . . where the first volume of Mark Twain’s autobiography was just published last year?

Hey, wait a minute! Are the controls on this time machine working?!!!

Nickelsville in Limbo

So, Mayor Nickels did send the police in Friday to clear out Nickelsville, as promised.  Fortunately, the Church Council of Greater Seattle was able to get Ron Judd from Governor Gregoire’s office to negotiate a temporary reprieve and 42 of the tents were moved to a parking lot on state land until Wednesday, according to accounts in the  Times and PI. Twenty two chose to be arrested to make their point while the police tore down the pink tents and wooden shanty town structures residents and their helpers were already constructing.

Where are the people to go, though?  According to the PI, “on Thursday night, about 140 people slept in Nickelsville”.  The Times claims that the city has offered shelter to all that want it and only 14 Nickelsville residents have taken them up on the offer. Thursday’s PI quotes the Mayor’s spokesperson, Karin Zaugg Black, as saying that “shelters beds were ‘available for everyone or anyone.’  ‘We’ve never had to turn anyone away’ from a shelter after removing him or her from a camp, she said.

But according to the Nickelsville website:

Mayor Nickels continues to argue that there are shelters available. Friday night after Nickelsville was evicted from City land, Operation Nightwatch was still unable to find shelters for all who asked despite the Mayor’s statement that 60-80 new beds would be opened that night.  They referred people to the now reduced in size Nickelsville operating in the nearby State of Washington DOT parking lot.

Also according to the Nickelsville site:

During the One Night Count of January 2008, it was found that 8439 people were homeless in King County. 5808 had shelter through existing programs but 2631 were without, a 15% increase over last year. 34 homeless people have died outside this year alone.

While I don’t like the idea of the return of shantytown “Hoovervilles” or a Nickelsville, where are these people supposed to go?  At the rate we’re going, both towards ever increasing rents as Seattle goes condo, and with the economy tanking (couldn’t we turn some of those condos into low income housing?), I fear I may end out on the street some day in the not to distant future.  A shanty would be more comfortable than sleeping outside or in a tent.  It’s becoming in America like it is in the so called third world, isn’t it?  There’s going to be the rich in their condos and gated communities, with a vanishing middle class, and the rest of us living in shanty slums.

Yet, consider this – the dignity and determination of those building Nickelsville, while the Mayor, sitting in his comfortable home and office, does nothing to help, only threatening to evict everyone, claiming to put them in shelter space that doesn’t exist.  Yet, Mayor Nickels always has time to help his friend Paul Allen build another stadium (ironically, where Hooverville in Seattle used to stand) or unneeded trolley to the neighborhood Paul and his friends are developing.

Have a heart, Mayor Nickels.  Let these people stay, or find them real shelter.


WaMu: Whoo Hoo? Whoops!

It’s been feeling a bit too much like the start of the Great Depression again in Seattle lately, between the unseemly demise WaMu and dignified raising of Nickelsville in response to the city’s homeless sweeps.

IMG_2682 (2)

Washington Mutual (WaMu) was the major bank in Seattle; especially after SeaFirst (Seattle First) merged into Bank of America some years back.  Now, as WaMu employees were told, according to yesterday’s Seattle PI, “Welcome to JPMorgan Chase.”

Washington Mutual Inc. came to an ignominious end Thursday, with federal regulators seizing the company and selling its branches, deposits and loans to New York-based banking giant JPMorgan Chase in the largest bank failure in U.S. history.

Largest bank failure in U.S. history?  Washington Mutual, where I used to have my money?  According to yesterday’s PI, “depositors had lost confidence” and “$16.7 billion in deposits had been pulled from the company just since Sept. 15.” “Whoo hoo!” as their ads go, or “Whoops!”? 


Whoops, especially for investors who seem to have lost everything, while deposits are safe in the now Chase Bank branches (especially if they’re under the $100,000 insured by FDIC).  As for shareholders, according to today’s Seattle Times:

Against all odds, WaMu shares continued to trade Friday. That’s because, while JPMorgan bought the company’s banking subsidiary, it left behind the parent holding company — a shell containing little more than a passel of nonbanking subsidiaries. The shares fell to 16 cents as 102 million changed hands Friday.

Apparently, shareholders aren’t likely to see anything anyways, as they have to stand in line behind other creditors.  To add more injury to insult, many WaMu employees who may be loosing their jobs soon had stock options or a lot of WaMu stock in their 401k plans.

Meanwhile, what about the CEOs?  According to the Times:

Alan Fishman, chief executive for 18 days before the federal government took control, is eligible for $11.6 million in cash severance and can keep his $7.5 million signing bonus, according to an analysis by James F. Reda & Associates, a compensation-consulting firm in New York.

Fishman, a former CEO of New York-based Independence Community Bank, took over WaMu on Sept. 8 after the ouster of longtime CEO Kerry Killinger. Fishman remains CEO of WaMu’s holding company, spokeswoman Darcy Donahoe-Wilmot said.

Killinger, who presided over WaMu for 18 years, was entitled to $16.5 million in cash severance, $14.9 million in deferred compensation and $7.5 million in estimated pension benefits, according to Reda. Killinger also left WaMu with company stock then worth about $5.1 million.

All told, Killinger received take-home pay totaling $98 million from 1994, the earliest year for which data is available, through 2007, according to Equilar, an executive-compensation research firm in Redwood Shores, Calif. He pocketed a total $22 million in 2006 and 2007 alone.

Nice.  The ones who messed up get richly rewarded, while the hard working employees. . .?  Well, there’s always Nickelsville. Or is there?

PS: On an amusing note, my spell checker wanted to replace Killinger with Dillinger.  A bank robber.  Hmm, maybe Killinger is just a different kind of bank robber!

Golden Parachutes

The Bill Moyers Journal on PBS did a whole episode on the economic crisis last night. Bill Moyers paints this picture near the end of his show (reprinted on Thuthout (Moguls Steal Home While Companies Strike Out):

From our offices in Manhattan, we look out on the tall, gleaming skyscrapers that are cathedrals of wealth and power – the Olympus ruled by the gods of finance, the temples of the mighty, the holy of holies, whose priests guard the sacred texts of salvation – the ones containing the secrets of subprime lending and derivatives as mysterious and elusive as the Grail itself.

    This last couple of weeks, ordinary mortals below could almost hear the ripcords of golden parachutes being pulled as the divinities on high prepared for soft, safe landings – all this while tossing their workers like sacrificial lambs into the purgatory of unemployment.

While I know I shouldn’t be surprised, it is astounding how the very CEOs and board chairs who brought their financial corporations to disaster are so richly rewarded.

During the last five years of his tenure as CEO of now-bankrupt Lehman Brothers, Richard Fuld’s total take was $354 million. John Thain, the current chairman of Merrill Lynch, taken over this week by Bank of America, has been on the job for just nine months. He pocketed a $15 million signing bonus. His predecessor, Stan O’Neal, retired with a package valued at $161 million, after the company reported an $8 billion loss in a single quarter. And remember Bear Stearns’s Chairman James Cayne? After the company collapsed earlier this year and was up for sale at bargain basement prices, he sold his stake for more than $60 million.

    Daniel Mudd and Richard Syron, the former heads of Fannie Mae and Freddie Mac – aka the gods who failed – are fighting to keep severance packages of close to $24 million combined – on top of the millions in salary each earned last year while slaughtering the golden calf. As it is written in the Gospel According to Me, when the going gets tough, the tough get going.

Guess we won’t find this bunch on street corners selling apples in the coming Depression.

According to the New York Times, the Bush administration wants Congress to “grant it far-reaching emergency powers to buy hundreds of billions of dollars of distressed mortgages despite unknowns on how the plan would work.”  Bush’s treasury secretary says “that the upfront cost of the rescue proposal could easily be $500 billion,” while “outside experts predicted it could reach $1 trillion.” Locally, WaMu is holding their breath that this will bail them out.  Why do I not feel very reassured about all this?

Moyers interviewed first Grethchen Morgenson and Floyd Norris, business and financial columnists from the New York Times.  None of what’s going on with Wall Street makes a lot of sense, especially, as much as I can make out, common sense.

Morgenson describes part of the situation (from the transcript):

There was a lack of accountability where a banker didn’t care whether the loan was repaid. And the Wall Street firm that sold the securitization trust didn’t care if it ever got paid back, because they were happy with their commission. The broker making the loan didn’t care, because he got, all the way up the ladder to the CEOs of these companies, who are allowed to walk away from a financial cataclysm with huge payments.

Then there was the speculation by companies like Lehman:

FLOYD NORRIS: I believe Lehman believed it. Lehman, consistently during this, has believed that the bottom was upon us.

So they were buying as this started down last year, taking advantage of what they believed to be a temporary ridiculous decline. And they never quite realized that they were wrong. The prices on many of these assets now probably are ridiculously low. But buying them on heavy leverage is risking if you’re a little wrong, you can die. And that’s what happened to Lehman.

Gambling on borrowed money is probably never a good idea.  Ironically, though, Lehman’s biggest problem, given the way the current situation is set up, is that they weren’t big enough.

GRETCHEN MORGENSON: Well, the problem is that now, everything in our financial markets is super-interconnected. And so, one failure has the potential to push over other dominos.

BILL MOYERS: But why AIG and not Lehman?

GRETCHEN MORGENSON: Because AIG was so enormous, it’s almost a paradox. It’s almost perverse. Lehman was not big enough in the derivatives market.

That has counterparties, where if you fail, then they might then push over another domino. Lehman was not large enough in those areas. AIG was enormous. AIG had those derivatives from European banks, which may have failed. And so, you see, it’s a worldwide problem.

FLOYD NORRIS: To let AIG go under now would have created an awful lot of problems for an awful lot of other institutions. And the government doesn’t have any way to know exactly who and how much. And they were scared. And they probably were right to be scared.

Moyers then interviewed Kevin Phillips, author of Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism.  Phillips is pretty harsh on the roles of Alan Greenspan and both the Republicans and Democrats in their bi-partisan creation of the conditions that led to this mess.

Again, from the transcript:

BILL MOYERS: You’re very hard in here on Alan Greenspan’s tenure at the Fed.

KEVIN PHILLIPS: Well, I know Alan from the Republican campaign back in 1968. He was always a very scholarly, data-driven guy. But I think, for some reason or other, his chairmanship will be remembered as turn on the spigots.

BILL MOYERS: Turn on the spigots?

KEVIN PHILLIPS: Turn on the spigots. He started in 1987 with a crash that was a wicked one in one day in 1987. And he turned on the spigots. And they had the huge growth of the tech bubble in the 1990s. And then right after the tech and the stock market bubble blew up in 2000, you had 9/11. So there was a need for more stimulus. And they ginned up the stimulus again hugely.

And the upshot is that during Greenspan’s tenure from 1987 to 2006, what they call total credit market debt in the United States quadrupled, quadrupled from about $11 trillion up to $44, $45, $46 trillion. And finance got the great bulk of it. And Greenspan would do nothing to disturb finance.

He wouldn’t puncture a bubble. He wouldn’t crack down on the exotic mortgages. He really wouldn’t do much of anything except give obscure speeches in which, you know, he mumbled the different directions so nobody would know what he meant. But basically he gave finance what they wanted.

Then on the bi-partisan mess, especially Robert Rubin from the Clinton administration (and currently one of Obama’s economic advisors; and with McCain’s campaign being run by Phil Gramm, who also pushed through all this, it’s still a bi-partisan mess):

BILL MOYERS: And you write also that during this period the Clinton Administration aided and abetted this kind of speculation. Bill Clinton’s economic advisor, Bob Rubin, who later became Secretary of Treasury — wanting to fuel this, right?

KEVIN PHILLIPS: It’s been a bipartisan phenomenon. You can go back to the 1980s and say Reagan and George Bush, Sr., got a bubble started. Clinton got in and got an even bigger bubble going. And then George W. Bush with the biggest bubble of all. But it’s not that the Clintonites didn’t play. They did. Bob Rubin as Secretary of the Treasury — I mean, if he was a Hindu and he was being reincarnated, he’d come back as a pail because this guy bailed out everything you can imagine. They had the Mexican loan bailout. They had the long-term capital management bailout, the Russian Southeast Asian currency bailouts.

Then this:

Rubin was also central — Democrats more than Republicans in a lot of ways with the Clinton Administration — in getting rid of Glass Stiegel, was the old restriction that the banks couldn’t tie up with brokerage firms and insurance companies. Well, basically after they made their reform led by Clinton and by Bob Rubin, you had like four-color linguini here in a bowl. It’s all mixed up together.

BILL MOYERS: So you have it — for this disaster has bipartisan parentage.


Do we have hope?  I will say, from his statement on the economic crisis and bailouts (from a Truthout article), that Obama seems to not only get the crisis, but expresses his outrage at what’s going on.  He’s calling for help for Main Street, not just Wall Street (and, indeed, he has been speaking about these issues all along).  He’s calling for responsibility on Wall Street (and calling out the golden parachutes).  Obama is also calling for “tough new oversight and regulations of our financial institutions.”

Then he really nails how we got into this situation:

One last point. We did not arrive at this crisis by some accident of history. What led us to this point was years and years of a philosophy in Washington and on Wall Street that viewed even common-sense regulation and oversight as unwise and unnecessary; that shredded consumer protections and loosened the rules of the road. CEOs and executives got reckless. Lobbyists got what they wanted. Politicians in both parties looked the other way until it was too late. And it is the American people who have paid the price. The events of this week have rendered a final verdict on that failed philosophy, and it will end if I am President of the United States. We must build upon the ideas I have laid out over the last several years about how to modernize our financial regulation in this country, and establish commonsense rules of the road for our financial system to help restore confidence in our financial system.

Which is all really great, but. . . Obama’s financial advisors are still Robert Rubin and Lawrence Summers, who helped bring us this mess during the Clinton administration (with the bi-partisan help of people like Phil Gramm).

Kevin Phillips doesn’t hold out much hope for real change from Obama (though he has considerably less hope for any change from McCain):

KEVIN PHILLIPS: He doesn’t seem to have anything very specific to say. That’s part of the problem. A second problem is, for me at least, you know, just as I can’t believe that John McCain ever wanted to get his economic advice from Phil Gramm. I mean, Phil Gramm, a former Texas Senator, appalling. He and his wife were known as Mr. and Mrs. Enron because they were so flagrant, that’s McCain.

But then you’ve got Obama with Bob Rubin and he doesn’t have any problem with the hedge fund types. I mean, one of the Chicago people was a major financer of his. He gets a guy to pick his vice-president. Turns out to be somebody who was part of the Fannie and Freddie mess.

So I don’t exactly see Obama as this fellow riding in on a horse who represents all kinds of reformism. It’s an important thing probably to have to change from the Republicans but I don’t see that he is free of the ties to finance and Democratic Party financial types.

Phillips does mention Obama in the past telling him he read one of Phillips’ books, and said he would be impressed if Obama came in January and leveled with the American people (but doesn’t hold out much hope for Congress really wanting to deal with it other than a New Deal quick fix). 

Here’s a thought for Obama.  Why not have Kevin Phillips as one of your campaign economic advisors and/or Treasury secretary?  Or Gretchen Morgenson or Floyd Norris? 

Or is there really hope for that kind of change, when the reality is the Wall Street money helps fund both parties?

Don’t get me wrong.  I still think Barack Obama is our best hope, and will be the best President I’ve had a chance to vote for in my lifetime.  It’s just that the realities of who really funds the campaigns and has any politician in their back pocket, no matter how many of us send in $25 donations when we can afford it, makes real change really doubtful. 


It’s the Economy (and it’s really scary. . .)

This election really coming down to the economy again, as it was for Clinton the first time.  It’s hard to lie about the economy to the American public, because people know what’s in their own wallet. I know I’ve been hurting for some time, as have many others.  Then there’s the failure of so many major financial institutions at rates not seen since the Great Depression.

Meanwhile, McCain is looking very out of touch, and  said the economy was fundamentally sound on Monday, even as Lehman Brothers went into bankruptcy and Merrill Lynch was sold.

So, what does he do Tuesday, but try to spin it (as noted in a NY Times editorial):

He said that by calling the economy fundamentally sound, what he really meant was that American workers are the best in the world. In the best Karl Rovian fashion, he implied that if you dispute his statement about the economy’s firm foundation, you are, in effect, insulting American workers. “I believe in American workers, and someone who disagrees with that — it’s fine,” he told NBC’s Matt Lauer.

Mmm, right, when we say you’re clueless about the economy, we’re attacking the American workers, Senator McCain?  Wait a second, I am an American worker, that’s why I’ve known for a long time the economy was unsound, long before Wall Street.  You can’t put lipstick on that bull, Senator.

As the Times went on to say:

In clarifying his comments, Mr. McCain lavished praise on workers, but ignored their problems. That is the real insult.

For decades, typical Americans have not been rewarded for their increasing productivity with comparably higher pay or better benefits. The disconnect between work and reward has been especially acute during the Bush years, as workers’ incomes fell while corporate profits, which flow to investors and company executives, ballooned. For workers, that is a fundamental flaw in today’s economy. It is grounded in policies like a chronically inadequate minimum wage and an increasingly unprogressive tax system, for which Mr. McCain offers no alternatives.

Barack really gets it, and his economic plan, was one of the issues in his plan that really impressed me back when I bookmarked his website when it was his exploratory committee’s.

As Robert Scheer notes in Truthdig about McCain:

He voted for abolishing all of the significant rules put in place at the time of the Great Depression designed to prevent a repeat. The two main bills accomplishing that, bills which McCain enthusiastically supported, were the Commodity Futures Modernization Act and the Gramm-Leach-Bliley Act. The Gramm is former Sen. Phil Gramm, who was chair of the Senate Banking Committee when he acted as chief sponsor of both pieces of legislation. The same Gramm that McCain picked to co-chair his presidential campaign.

On the other hand:

Barack Obama has been way ahead of McCain in grasping the severity of the problem and back in March offered a scorching criticism of the deregulation mania, in particular the Gramm-Leach-Bliley law, which allowed the stockbrokers, insurance companies and banks to merge for the first time since the 1930s, ushering in this era of irresponsibility. But that was in the primaries, and now he has turned for advice to Robert Rubin and Lawrence Summers, who both served as treasury secretaries in the Clinton administration and talked the president into signing that wretched legislation.

 I’d be lying if I said the last part doesn’t concern me.  Even Obama seems to have trouble keeping the special interests out of the process.  He is recommending some (hopefully serious) regulation, however; and all McCain is offering is to form a national commission to ignore, err, study the problem.

All these mergers, buyouts and bailouts are putting the financial institutions and the U.S. taxpayers who are bailing them out, on real shaky ground.  As the New York Times noted:

During the Depression, Congress separated commercial banks, which take deposits and make loans, from investment banks, which underwrite and trade securities. The investment banks were allowed to do business with less oversight, while commercial banks operated with tighter supervision.

But after Congress repealed those Depression-era laws in 1999, commercial banks began muscling in on Wall Street’s turf. As the new competition whittled down profit margins, investment banks used more of their capital to trade securities and also began developing financial derivatives to fuel profits.

As Amy Goodman points out, this all came about because “President Clinton and his treasury secretary, Robert Rubin (now an Obama economic adviser), presided over the repeal in 1999 of the Glass-Steagall Act, passed after the 1929 start of the Great Depression to curb speculation that caused that calamity. The repeal was pushed through by former Republican Sen. Phil Gramm, one of McCain’s former top advisers.”

Those laws were passed for good reason during the Great Depression, now we’re back to where all that can happen again, aren’t we?  Yes, we have the FDIC now, which insures accounts up to $100,000.  Still, what happens when we have to actually have to use it at rates of bank failures approaching (or passing) Depression Era levels?  Along with all these other bailouts, and are already huge debt?  Can American declare bankruptcy?  Will we be auctioned off to the highest bidder?  China?  Saudia Arabia? 

OK, maybe my speculation is too far here, but, seriously, what happens?  We definitely need someone in there to turn this around.

Locally, WaMu (Washington Mutual) is looking for a buyer, and some people are getting jittery and taking their money out of the bank.  Actually, I took mine out and put it in a credit union several years ago over their $40 overdraft fees.  WaMu’s stock price closed at $2.01 Wednesday.  It turns out that was a 94% drop from where it had been one year earlier, of $35.96 a share.

Pretty scary. . .