Category Archives: Banking

Betrayal Of Public Trust.

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Now that Michigan’s GOP governor has forced the City of Detroit into bankruptcy, it’s expected that retired city workers will have to settle for a fraction of the pensions they were awarded under contract.

As a result of the expected bankruptcy settlement, many of the retirees may be forced to file bankruptcy themselves and find jobs to make up for their lost pensions. The governor and his supporters responded to that news by saying that’s what bankruptcy does. It forces all creditors to settle for the same percentage of their claims.

This is a complete reversal of the GOP position regarding the failure of the too-big-to-fail banks. Back then, many GOP leaders argued that the very executives whose decisions led to the banks’ failure should not be denied the multi-million dollar bonuses that were written into their six and seven-figure contracts.

But many of those same GOP leaders now argue that city workers who had been paid salaries as little as $19,000/year should agree to voiding their contracts as part of the bankruptcy. These contracts were the result of negotiations with city managers during which they agreed to give up short-term salary gains in lieu of a secure retirement.

Indeed, long-term retirement benefits have always been the incentive for taking government jobs over equivalent jobs in the private sector. Taking away or reducing the pension payments after the fact is not only a violation of the workers’ contract. It’s a complete betrayal of public trust. The natural outcome of such a violation will be to make government workers at every level demand higher salaries knowing that they will no longer be able to trust governments to live up to their obligations.

We have long known that we can’t count on corporations and private companies to live up to their promises. But we should be able to count on our governments to live up to theirs.

Stop & Frisk Old White Men.

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Since dimwits like Bill O’Reilly think the NYC Stop & Frisk program is so great, I propose it be redirected for a year or so. Instead of targeting minorities, let the police target white guys around Wall Street. After all, they have been responsible for far greater crimes than minorities, having stolen trillions of dollars over the past 30 years.

The bad guys are easy to spot. Instead of hoodies, they wear expensive suits and lounge in the back of black limos.

I, for one, would love to see them forced to spread their legs and arms, patted down and asked what they’re doing in the neighborhood and where they’re going. Then, if they object, they could be slammed to the ground, cuffed and taken to jail to be booked for obstructing an officer in his, or her, duties. Let them be held overnight and assigned a public defender (no overpaid Wall Street attorneys allowed).

Just for good measure, the police should also patrol the neighborhood of Fox News. After all, it has been the center of crimes against reality and facts. And don’t forget to include balding, angry white guys in the profile. Then they would be certain to catch O’Reilly in the dragnet.

Seriously, why not?

It would do the nation a lot of good, and it would almost certainly put an end to other senseless, racist measures. And as long as we’re on the subject let’s force cavity searches or similarly invasive procedures on all white male legislators. That might give them pause before voting for more mandatory invasive procedures on pregnant women.

Finally, let’s limit voting centers and voting hours in wealthy white neighborhoods forcing voters to stand in line for six, seven, eight hours or more. Then when they eventually get to the head of the line, they could have their IDs questioned and given a provisional ballot that may or may not be counted.

What Happened To Creativity?

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After the conclusion of the past TV season and viewing the latest sample of so-called blockbuster (emphasis on bust) movies, I must conclude that creativity in the US is either dead or on life support.

As a former advertising creative director, for the first time since the early 1960’s, I ignore most of the commercials. It seems that most US commercials are bland compared to their international counterparts. It’s not for lack of budget. Large US advertisers are literally throwing money at production and getting little in return. That’s because the ideas are mostly formulaic and stunted by research.

Much of the TV programming is worse than the advertising. Except for HBO, “Reality” TV has replaced comedy and drama. We have Survivor, Big Brother, Storage Wars, Swamp People, Here Comes Honey Boo Boo, The Apprentice, The Amazing Race…ad nauseum. Unfortunately, there appears to be no end in sight for the dumbing down of American TV (hard to imagine it could get worse that the vast wasteland of the 60’s and 70’s). Because reality TV is cheap to produce, some industry insiders are predicting the end of scripted television.

Our movies are no better. Hollywood has abandoned stories in favor of bombastic production. Most of the movies are devoted to disasters of one kind of another. Those that aren’t, are remakes of old classics. The reason?  Lynda Obst, in her book Sleepless in Hollywood, argues that the movie industry is driven by foreign demand. She says that foreign movie sales now account for 80 percent of all movie income; that movies with complex stories relying on dialogue simply don’t draw movie audiences in Europe and Asia. As a result, American movie-goers are forced to suffer through movies that are long on action and short on story. Of course, that fits into the video game psyche of American youth.

To my mind, these industries are only indicators of a distressing lack of creativity throughout the US. More and more, we’re falling behind other nations when it comes to creativity and invention. Now that the hedonistic yuppies of the 80’s are running our corporations, we’re good at making money. But not much else.

Hedge fun managers are creative in finding new ways to rip off unsuspecting investors. Mortgage lenders are creative in finding ways to foreclose on homes. Multinational corporations are creative in avoiding taxes, increasing productivity while cutting costs, and socializing their financial losses.

I believe the US won’t reclaim its leadership role until we, once again, value products, design and people over profits; creativity over productivity; customer service over sales; and craftsmanship over cost-cutting.

Until then, we can watch our nation’s demise on our screens in 3D and HD.

The Dismal State Of Our Union.

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Upon listening to the last day of Neal Conan’s Talk of the Nation on NPR, I was surprised by Ted Koppel’s response when asked about the future. Turns out, Koppel shares many of the same concerns as I do. For what it’s worth, here is a compilation of my own views of the current state of our union and its future.

Civil Rights – How depressing that people are still struggling for civil rights nearly 150 years after the end of slavery! The Supreme Court ruling on the Voting Rights Act was a huge setback, unleashing red states to suppress minority votes.

Abortion – Although abortion was made legal in 1973, women are still fighting to wrest control of their own bodies from the old men who control our political system. Amazingly, women are now forced to fight for access to contraception!

Environment – Most Americans say they’re concerned about our environment. They just don’t act like it. Most refuse to sacrifice anything on behalf of our planet’s future.

Hunger – In the richest nation on Earth, 50 million people are unsure of where they’ll get their next meal. That includes 17 million American children!

Energy – Nearly 40 years after President Carter had solar panels installed on the White House, we’re still addicted to fossil fuels. We spill more oil than most other countries use.

Healthcare  – The dirty secret is that we have no healthcare system. We spend more than twice as much as other advanced nations, yet achieve worse outcomes. And we spend more on pharmaceuticals than the rest of the world combined.

Wall Street – Greed has turned large banks into high stakes casinos. Their gambling habit not only cost individuals and pension plans trillions…many families lost their homes. Yet any attempt to regulate these banks has been undermined by millions in lobbying efforts.

Income Disparity – The US ranks among the world’s worst nations for income inequality. 400 Americans control more wealth than half of our population, and the gap is growing. Yet Republicans believe that 47 percent are sponging off the rest!

Jobs – Simply put, we don’t have enough of them. And far too few of them pay enough to support a family. Corporate leaders and politicians, on the other hand, each make enough to support dozens of families.

Privatization – We’ve privatized prisons, prison healthcare, schools, our military, even our intelligence efforts. Although all of these efforts have proven to cost more than publicly run institutions, Republicans are pushing for even more privatization.

Pensions – We lost tens of thousands of employee pensions over the past 40 years, replaced by IRAs and 401Ks which were originally intended to supplement defined benefit pension plans. The money once used for employee benefits now lines the pockets of CEOs, executives and investors.

Politics – Our politics have continued to move to the right, even though our population hasn’t. When Republicans are in control, they unabashedly cram through partisan legislation. When Democrats are in control, they tentatively nibble around the margins instead of doing what they were elected to do. Both parties rely on large corporations to finance their political campaigns.

Tea Party – This is a relatively small group that has had a large impact. Based on lies and meanness, it seems its goal is to take us back to the 16th Century.

Surveillance – Following 9/11, we traded privacy for increased security. The NSA tracks records of our phone calls, search engine terms and emails. Banks and credit card companies track our purchases. And surveillance cameras are everywhere.

Guns – While the NRA works to increase the availability of guns, even for criminals and the mentally ill, manufacturers make guns ever more lethal.

Education – Thanks to conservatives, public education is underfunded and teachers are woefully underpaid. Enough said.

Science – Many now claim that evolution is merely a theory. But so is gravity! Of course, these people also deny man’s affect on climate change. (See education.)

Religious Intolerance – Islam is not the only religion with extremists. The intolerance of all religions seems to be growing.

Anger and Pettiness – Within 20 years of the end of the Fairness Doctrine, 91 percent of talk radio was conservative…mean, angry, venomous Rush Limbaugh-style conservative… and it’s getting worse. (See Tea Party)

War – There’s no denying it. The US absolutely LOVES war. We glorify soldiers and their war machines with military-style ceremonies and flyovers at nearly every large event. And we spend hundreds of billions on “defense” to build bigger, badder war toys.

Iraq – Iraq cost us trillions of dollars and thousands of lives. The result of our sacrifices is that we have turned Iraq into a vassal state of radical Iran.

Afghanistan – Despite setting a deadline for withdrawal, there is no clear outcome for this war. We may leave the country no better off than it was when we arrived.

Syria – Yet another opportunity to dive into a war with no real reason or plan. But it is a war and some of our politicians don’t want to be left out.

War on Drugs – This “war” may have ruined more lives than the drugs themselves. It disproportionately affects minorities, filling our prisons to overflowing. Indeed, we have a larger prison population than any other nation.

Militarization of Police – As our soldiers return from war, they’re increasingly hired by police departments. As a result, police become ever more militarized…with assault weapons and assault vehicles…and further removed from ordinary citizens.

Journalism – In the 1980’s, TV networks began measuring the success of their news organizations by ratings which instantly sensationalized the news and created the “sound bite.”  Worse, most news groups have lost their independence as they were gobbled up by conglomerates.

With all this, it’s difficult to be optimistic about the future, but the pendulum may soon swing the other way. I hope so.

Organized Bank Crimes.

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After an ill-advised investment in grain futures in the late 80’s, I became more convinced than ever before that small investors are at the mercy of large investors. Not just in commodities, but in other markets as well. If your timing happens to coincide with that of the large corporations and the wealthy, you profit. If not, they take your money.

In other words, all markets are inherently rigged. Because large corporations and the wealthy gamble such large amounts of money, they control the price of commodities and securities.

We’ve seen this play out in a variety of ways since 1999. That was the year President Clinton caved to the big money lobby (reported to have spent $300 million over 25 years) and a Republican-controlled Congress by signing a bill that repealed the Glass-Steagall Act. According to the likes of former Fed Chairman Alan Greenspan, former Senator Phil Gramm and former Treasury Secretary Robert Rubin, repealing the law would “free” Wall Street from onerous regulation so the banks could “innovate” and grow.

A year later, Clinton signed another such onerous bill, The Commodity Futures Modernization Act of 2000. Ironically, that was also the year of the dot.com crash.

Our financial markets have taken us on a frightening roller coaster ride ever since.

In my opinion, these bills turned financial markets into international high stakes casinos with a variety of complex games that allow the house and the big players to constantly adjust the rules in order to skim more money from suckers like us.

We’ve seen the big players run up the price of commodities, such as gold and oil, at the expense of ordinary citizens. We’ve seen them pump up the real estate market with subprime mortgages designed to fail. When the inevitable happened, the institutions holding those mortgages were bailed out by taxpayers. They then stepped in and snapped up foreclosed homes at a fraction of their actual value. These events also resulted in the loss of trillions by pension plans and the holders of 401ks.

So, thanks to the gambling of financial institutions, millions of ordinary citizens lost their homes and their financial futures at the same time.

The Dodd-Frank Wall Street Reform and Consumer Protection Act was designed to protect us from such risky and unethical behavior by financial institutions. Signed into law in 2010, Teapublicans have not allowed the act to be fully implemented. Even worse, they are working on behalf of their Wall Street benefactors to dismantle the bill. Even some freshmen Democrats seem to have fallen under the spell of Wall Street and the promise of campaign contributions. They recently voted for a bill written almost entirely by the banksters’ lobbyists that would water down Dodd-Frank.

For their part, financial institutions seem totally unphased by any regulations. In the past year, we learned that financial institutions manipulated LIBOR (London Interbank Offered Rate) the benchmark interest rate that determines the international cost of borrowing. After stealing billions, a handful of the big banks involved in the scandal have paid fines that amount to a stern slap on the wrist. Of course, such penalties only encourage financial traders to continue their games.

Now we’re learning of yet another rigged game – the currency market (aka the Foreign Exchange market). According to a Bloomberg report, “traders at banks around the world have regularly worked together for ‘at least a decade’ to move a key benchmark currency rate in ways that profit them and hurt their clients.”

It seems the old adage that “it takes money to make money” has never been more appropriate.

How The Wealthy Avoid Taxes.

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Last fall’s presidential election shed light on the issue of offshore tax havens. Thanks to the fact that, as a presidential candidate, Mitt Romney was forced to reveal his income tax returns, many people now better understand how the world’s wealthiest people avoid taxes by stashing their often ill-gotten fortunes offshore.  According to the Tax Justice Network, up to $32 trillion in assets are stashed in a country where the owner of those assets has no legal or tax residence.

The primary reasons for sending assets offshore? Tax avoidance and money laundering.

Most of the countries housing the assets are chosen for their secrecy, their low tax rates and willingness to help the wealthy get around the laws of their own countries. Of course, Switzerland is the most famous of these tax shelters and, not surprisingly, the largest in terms of offshore assets. Others, in descending order, are Hong Kong/Singapore, Ireland/Channel Islands, Caribbean/Panama, the United Kingdom, the United States (yes, some time in the 1980’s, we changed our tax laws to create tax havens for non-US citizens), Monaco/Dubai/Luxembourg and assorted other playgrounds for the rich.

An investigative series on offshore money by the International Consortium of Investigative Journalists exposed the extent of “the global offshore money maze.” And it’s not just shady business tycoons who take advantage of offshore tax havens. Those who stash their money in other countries include royal families, bankers, celebrities, lawyers, politicians, doctors, publishers, mercenaries, hackers, drug lords and more.

The practice may not be illegal. But it is unethical and highly destructive to the countries where the money was obtained. Meanwhile, people like you and me make up for the taxes the wealthy avoid.

A Role Model For The US Senate.

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If US senators are wondering what they can do to endear themselves to their constituents, they should look to their new colleague, Sen. Elizabeth Warren from Massachusetts. In her short tenure, Warren has already shown a willingness to tell truth to power. She has also shown she has the guts to stand up for those who are not represented by lobbyists and special interests.

In other words, unlike most other senators, she is actually doing the job she was elected to do. What a concept!

To see what a senator should look like and sound like, check out this link from Upworthy.com. This wasn’t a one-time event. She wasn’t grandstanding. She wasn’t seeking approval or looking for votes. She wasn’t engaging in blind partisanship. She was simply representing the American people…all Americans.

More recently, Warren has written a bill that would give college students the right to borrow money at the same rate the too-big-to-fail banks enjoy. Imagine that…government money being loaned to ordinary people in order that they might improve themselves and our country. Students would not only be required to pay the money back, as they become successful, they would increase government revenue by contributing more in income taxes.

It’s the ultimate win-win.

Let’s hope other politicians eventually follow Warren’s lead by focusing on the needs of their constituents. If they don’t, we need to elect different politicians.

A Message To Tea Party “Patriots.”

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There’s simply no nice way of saying it. You are a bunch of self-serving, gun-toting, conspiracy promoting, anti-intellectual, anti-education, anti-evidence, anti-American nitwits.

You call yourselves Tea Party Patriots, but you’re neither patriotic nor even a party. You are the lunatic fringe. You wrap yourselves in the flag and spout quotes from a select few of our Founding Fathers all the while undermining the very principles they stood for. You say you’re strict Constitutionalists, but it’s apparent that the only part of the Constitution you’ve read is the Second Amendment (and you can only quote half of that). The other principles you attribute to the Founders are actually from the Articles of Confederation, the document our Constitution replaced.

You didn’t have the guts to stand on your own, so you decided to backdoor the Republican Party. Your angry rhetoric and Koch brothers’ millions managed to drive most moderate Republicans from office. As a result, you and your wealthy supporters have destroyed the party of Lincoln.

Now you’re trying to destroy our nation.

Your economic theories not only defy economics, they defy logic. They’re hurtful to children, the elderly, the poor, even veterans. You claim to be worried about the national debt, yet you sat idly by while the previous administration ran up enormous deficits through two ill-conceived wars and the collapse of our economy. Then you blamed President Obama for our economic ills. You watched as President Bush expanded the size of government by creating the government’s second-largest agency, the Department of Homeland Security, then screamed about the growth of government when the new administration took office.

You ignored the bailout of “too big to fail” banks, which saved the jobs of Wall Street millionaires and the assets of billionaires. But you howled in disgust when President Obama loaned money to US automakers, saving tens of thousands of jobs for middle class workers. You whined that you are “Taxed Enough Already” and blamed President Obama for raising taxes, even though tax rates were at a 60-year low.

You claim that you’re not racists, yet every single one of your rallies includes blatantly racist depictions of our democratically-elected president. You call him a Muslim, a socialist, a communist, a fascist and worse. You compare him to Hitler. You have even called him the leader of al Qaeda.

When you’ve failed to win elections, you’ve tried to change the rules. You have tried to suppress the votes of minorities and your political opponents. You have tried to deny women the right of equal pay for equal work. You have tried to deny women the right to control their own bodies. You have held our economy hostage in order to get your way. You have undermined democracy through use of the filibuster and gerrymandering. As a result, our nation now suffers from tyranny by the minority.

Thanks to your tactics, Congress has been turned into a venomous body devoid of compromise. Thanks to your representatives, the approval rating of our duly-elected Congress is lower than that of cockroaches. Thanks to your policies, the very wealthy have become wealthier while the rest of our citizens have suffered. Thanks to you, our nation is on the verge of becoming a plutocracy.

All of that is bad enough. But your real “triumph” is that you have made millions of Americans fearful of their government and of each other. Thanks to you, according to a new poll, 44 percent of Teapublicans now believe that an armed revolution against our government may be necessary…our own democratically-elected government!

Your entire movement is based on lies and meanness.

That said, it’s difficult to determine who is most at fault…you…or those who tolerate you, especially the media that give you undeserved credibility. One thing is certain…your movement would be more accurately called the Tea Not-Really-A-Party Traitors.