Thank You Mr. Feckless President

Part of the Dodd-Frank financial reform bill - at best a very tepid attempt to reign in the excesses of the financial industry – was the creation of the Consumer Finance Protection Bureau. The CFPB, a brainchild of Elizabeth Warren, now a senator from Massachusetts, was one of the only good things to come out of the act. Dodd-Frank’s already weak improvements in regulating the financial industry are currently being further watered down by a massive bankster lobbying effort. No matter how low the thieving banksters get, there always seems to be another moral nadir for them to plumb.

Warren was naturally slated to be nominated for the head of the CFPB, but since she’d certainly have faced stiff opposition from the Repugs, Obama was too chickenshit to nominate her. His fecklessness, in this case at least, was a great gift to the people, since Warren was then free to contest a senate seat which she won. Obama went on to nominate Richard Cordray, also a good pick for the post, but since the Repugs hate the idea of financial regulation as a matter of principle, they’re doing everything they can to block his appointment unless or until they can weaken the commission’s mandate into worthlessness.

Had Obama nominated Warren she’d be stuck in limbo, rather than be the strongest voice for banking and finance reform in the Senate. Lately she’s been pushing the idea of pegging student loan interest at the same level as what the big banks are paying. Student loan rates are soon to rise from 3.4% to 6.8% if new legislation isn’t passed. This is part of the cockamamie way politics is made in Washington, with temporary fixes to long-term problems that only require the same shit sausage to be recycled again later. Meanwhile the banks are paying 0.75% so she’s been asking why students should be paying 9 times as much interest as the banksters.

It gets worse: The US government earned a cool $51 billion from the student loan program last year. So the US is making a lot of money off of the backs of struggling students at the same time it is paying the banks to take its money. When you charge less than the rate of inflation, you are essentially giving the money away. One of the ways the banksters have been using that free money is to turn around and buy US treasuries - which are now paying about 2%. This free money is one of the reasons why the banks just posted their best profits ever.

Senator Warren will hold their feet to the fire. They’ll get away with their shenanigans for now because they own the government, but Warren will be relentless in changing the paradigm and I dare say, if she chose to run for president in 2016 she’d give Hillary a run for her money.

So thank you Mr. Feckless President for giving us Senator Elizabeth Warren.

Student loan debt, at $1.1 trillion, now exceeds credit card debt, with the average student owing about $27,000 at graduation. What’s more, student loan debt cannot be written off in bankruptcy, except in very rare circumstances. A lot of that debt has been taken on because government is no longer willing to support higher education to the extent it once was or should be. After all, an educated citizenry is one of the primary goals of society, so it makes no sense to punish people who seek a higher education who don’t happen to have rich parents. Anytime anyone who could benefit from higher education is denied the opportunity, the whole society loses.

In some European countries, students who qualify for public universities not only do not pay tuition but also receive a stipend to allow them to concentrate on their studies. I graduated from City College (now University) of New York, while working 30 hours a week and single parenting. It was very tough, but it would have been impossible if I’d had to pay tuition. At the time, back in the sixties, tuition was free, I only had to pay a small student fee and buy textbooks. Today there are no (that I know of) free public institutions of higher learning in America, and many of them are not just charging tuition but charging a lot.

Charging high tuition at public colleges and gouging of student borrowers is part of the trend in the last 30 years of the 1% not being willing to pay their fair share of the cost of a healthy and educated society. Personal responsibility, they scream, while they pad their own deep pockets with tax breaks and corporate welfare. They bankrupt their banks by making casino bets with the people’s money, knowing Joe Schmo, the US taxpayer, will bail them out, while they rail against the 47% who only want government handouts for inconsequential things like food, health care, shelter, education. Congress wants to cut back on the food stamp program, literally taking food out of the mouths of children, to save a few billion dollars, while refusing to consider a very small stock transaction tax - 0.5% - that would yield $350 billion a year.

One Repug congressman working hard to cut slothful unworthy takers off of food stamps, is himself a very big benefactor of farmer’s welfare programs, the biggest receiver of farm aid in his state. But, of course, that’s somehow different.

In fact, the Repugs only control the House of Representatives by a wide margin because of efficient gerrymandering, since Dumbo candidates for the house received more votes in total than the Repugs. That disconnect doesn’t happen only in the US: in the recent Malaysian election the ruling party won 60% of the seats even though the opposition won the popular vote. Democracy is sloppy, but that’s unfortunately all we have to work with.

Meanwhile there are individuals like Elizabeth Warren who rise up to make great changes in spite of the built-in disadvantages of the political systems they are forced to work with.

It's the Paradigm

Bankia, one of Spain’s largest banks, is needing a €23 billion bailout, to compensate for their over-zealous investments in the country’s late real estate boom gone bust. Throw in a few other teetering banks and the price tag rises to €50. The only way to thrive or even survive in a scenario of irrationally exuberant lending is to borrow more to keep the growth paradigm going. In other words, as long as the value of property is expanding, it’s not necessary to be rational in your investments. But then, as always happens with bubbles, they burst - it is a part of their nature, after all.

There are two ways that happens, though they’re often intertwined. One is inflated prices. At a certain point, prices have to reflect reality. The other is larger economic movements. The general economic malaise that pervades the country depresses optimism and growth. Either way, the loan is defaulted and somebody is going to have to pay.

Spain wants the European Central Bank to bailout the banks directly. That makes sense, since it’s the system, the paradigm, which encourages, almost demands imprudent lending. Used to be you had to put 20% down to buy a house. A buyer who’s accumulated that much cash will generally be a low level risk. However that would also constrict the market and slow down construction so we can’t have any of that. Instead the establishment wisdom is to push the economy to the limit, go for broke, the more growth the better.

The country is also at fault since it could’ve established rules and policies designed more for stability and prudence than growth at any cost. That would not be an easy task in today’s financial environment. There are only so many Hugo Chavez’s in the world who could ignore the dictates of the establishment view.

The borrower, of course, must take a substantial portion of the blame for the broken contract, but ultimately is has to rest with the bank to assume responsibility and take the loss. Banking is about risk; banksters know the level of risk they are undertaking. If you aren’t smart about lending your money, who else is supposed to compensate for your inadequacy?

Actually it’s the taxpayer who coughs up since some type of deposit insurance is essential to a functioning banking system. (But not in Cambodia, here you’re on your own.) There should be no question or hesitation when a bank gets into trouble; it should be shut down and small depositors paid off. There’s no good reason to keep a stupidly or irresponsibly run bank alive. Also as long as the taxpayer is on the hook to insure depositors the government has responsibility to properly regulate to prevent speculation that has the potential to get the bank into trouble. However, since the banksters own the government, at least in the US, we know there can be no changes on that front.

In Europe it may be different, since they have a more socialist, egalitarian political outlook and the people are hopping mad. Still, there’s a very powerful push on the part of the financial establishment for European countries to ‘take their medicine’, that is, to strip any benefits that might aid the 99% so that they’d have the money to feed the banksters.

Still, can you imagine, Spain coughs up €50 to protect the banks at the same time they’re slashing safety net funds in an economy with 25% unemployment? In fact, latest news is that the Spanish government has accepted a $125 billion loan to bailout its banks… anything to protect the banksters.

The European establishment may be forced to change the paradigm but Americans will never get it together if the recent recall result in Wisconsin is any indicator. Governor Scott Walker, who was elected in a Tea Party surge in 2010, started off giving $180 million in tax breaks to business and then discovered there wasn’t enough money to pay public employees. His ultimate goal, unstated in the campaign, was to break the public unions, which he proceeded to do by virtue of Repug control of both houses of state government.

This didn’t sit well with the unions or the progressive community so they fought back with a signature gathering campaign to recall the governor. The got the necessary signatures, all right, but lost badly in the election with Walker sustained in office by a 53% to 46% vote. There are two immediate reasons why the Repug won. The most important was the flood of money from right-wing billionaire assholes. According to the US Supreme Court - which today garners the support of only 44% of the people - money has the right of free speech. The other reason was that Obama gave the campaign neither financial or moral support. The feckless wonder did not stand by the people. The Dem running against Walker had $4 million and was outspent 8 to 1. Obama made $3.5 million in one fundraising event but couldn’t see his way to helping a fellow Dem.

The fundamental reason for the Dem’s defeat is that Americans, at least a lot of them, are political morons. It’s called the Fox News effect: A recent study showed people who watched Fox were less informed than people who watched no news at all. It’s people who rail against socialism at the same time they love their Medicare, that socialist program that would save the country $400 billion a year if it applied to everyone. It isn’t just the average low IQ wingnut dolt that doesn’t know their ass from a hole in the ground. You’ve got Romney and the Repugs insisting on programs of slashing public services to pay for tax cuts for the wealthy as a path to economic recovery when that’s been an abject failure since Reagan.

Once again Americans face a disheartening lack of choice this November, though the country will slide downhill a little slower with Obama at the helm. In the end result, the people get the politics they deserve… unfortunately.

  

Uncle Tom + Manchurian Candidate = Obama

I can’t help thinking Obama is a melding of Harriet Beecher Stowe’s, Uncle Tom with the seminal movie, The Manchurian Candidate. Uncle Tom is the good ‘Negro’ who always cautions patience, compromise and deference towards society’s masters. Speak softly, don’t make waves, never challenge the powers that be. Obama always starts his negotiating from a compromise position and then gives away the store to the opposition. That’s because he’s really the Manchurian Candidate, a plant; the perfect foil sent by the enemy to further their own goals. He’s ideal for the task: he’s a totally likable fellow who’s got the rhetoric of progressivism down even when his policies are exactly opposite. He’s got all the right credentials and background and being of half African descent, nobody would ever guess he’s been programmed to work for the other side.

After three years on the job, governing from the center right, how could it be otherwise. The only thing that distinguishes his impact from that of a theoretical ‘Moderate Republican’ is his federal court picks, on every other score, it’s clear he’s doing the work of society’s controllers. He’s even been offering up cuts in ‘entitlements’ as ways to cut the deficit before the Repugs even demanded it. He’s given up the one best campaign issue for Dumbocrats, the one factor that has always distinguished the party from the opposition. Is he doing it because he believes he’s truly representing the will of the American people?


Not if you believe polling has any legitimacy since more than 80% of Americans say no cuts to Social Security and nearly 80% say no cuts to Medicare. Neither are really ‘entitlements’ since both are totally self-funded programs: to receive benefits requires having put money in. Medicaid, which is an entitlement because low-income people are entitled to benefits based solely on their citizenship, is supported by nearly 70%.


He consistently chooses the worst possible people for his economic team, like Jeffery Imelt, CEO of General Electric, to lead his Commission on Jobs and Competitiveness. GE has created a lot of jobs recently but they’re all outside the US. GE made $14 billion in profits last year but not only didn’t pay taxes on it but received a $3 billion refund. There are half a dozen progressive economists I could name offhand who would actually represent the American people rather than the elite, and do a far better job on jobs and competitiveness than Imelt. That’s Obama’s Uncle Tom coming out; he wants to be one of the guys, to be liked and respected by the bigtimers.


When his base, the people who worked and campaigned for him, try to push a progressive agenda he slams and slanders them as unrealistic, pie-in-the-sky, radical, professional leftists. According to Mr. O, the more than 60% of Americans and 90% of self-identified Democrats who want single-payer health care, the same single-payer he advocated as a candidate, are asking for the impossible. It is much better in his mind to make the despised insurance industry central to his health plan, thus his Manchurian Candidate side. He doesn’t want to upset or incur the wrathful opposition of the big guys so he’s happy to settle for a half-assed plan.


Problem is, you don’t inspire your constituency with half-assism. He’s made it very clear that he thinks insulting his base improves his electoral chances with independents; after all, if you’re a progressive, who’re you going to vote for, Rick Perry? That may be true, except you don’t work for or campaign for someone who shits on you while kowtowing to right wing nuttery. You don’t show any enthusiasm for a leader who stops at nothing to protect and coddle thieving banksters while watching obliviously as millions of Americans are kicked out of their homes by those same heartless fat cats. Okay, he’s not totally oblivious to the plight of average Americans; he does mention them in passing now and then while he’s haplessly, fecklessly betraying them. Anyway, if 80% of Americans are opposed to cuts in Social Security and Medicare, who are the independents he’s trying to appeal to?


His latest jobs plan is another in a long line of policy farces. Sixty percent of the plan goes to tax breaks which will have very minimal effect on jobs. If you give the average American a tax break today, they will most likely pay down debt or buy something made in China; how does that create jobs? And since he has no fight in him, he’ll get the tax breaks because the Repugs like that part and give up the actual job creation part because they don’t.


He’s doing the job his enemy controllers sent him to do, and most American readers of this post will hold their noses and vote for him; but not me, as long as the results are essentially the same then it’s better to have a village-idiot Repug in the job than an enemy plant who talks the talk of empathy and caring while stabbing you in the back.