Issues related to high finance and the banking industry were never something I had spent a lot of time focusing on, but last September's financial collapse was a moment not unlike 9/11 and national security: suddenly it became really obvious to all people who care about their country that it was essential to understand and start being involved in the issue.
I approached it from my perspective as a political strategist, and it was extremely clear that while some complicated economic issues were involved, the financial crisis was, at heart, a crisis of politics. Wall Street had gotten way too powerful and politicians were letting them have their way with us. Any private business that is "too big to fail" economically also holds an enormous amount of weight politically, and that political weight is at the heart of the problem.
What's important to remember is that the power of these huge financial institutions takes of many forms. Progressives are keenly aware of all the political contributions the financial industry makes and the well-connected lobbyists they employ. That kind of power is certainly important, especially on Capitol Hill where members have to spend practically every day dialing for dollars to pay for absurdly expensive campaigns. But we need to be careful not to focus on only that kind of power when trying to decide how to win back out democracy from the financial industry.
When you have the kind of size that the institutions behemoths do, your power stretches far beyond campaign contributions.
-- Bond traders have a huge amount to say about whether interest rates are lowered and raised.
-- Stock speculators and investment banks can literally destroy companies overnight by combining to drive their stocks downward.
-- Many in the media make snap judgments over how successful a presidential initiative on the economy is based on whether the stock rises or falls immediately following a new policy announcement.
-- Perhaps most importantly, there's this free market, what's good for Wall Street is good for America mentality that has been bought into by many Democrats and pretty much all Republicans.
And then, of course, there's the whole "too big to fail" dynamic in and of itself. As we have just seen in the last eight months, if one of these giant companies is struggling -- even when it is due to their own bad decisions -- they can run to the government and say "give us all kinds of bailouts and tax breaks and special privileges, or else we will fail and destroy the entire economy"
There is nothing more important to the long term political and economic health of our country than lessening the power and the size of the massive financial conglomerates on Wall Street. They have already destroyed our economy, and will again if we don't solve this problem. They are also the biggest single danger to our democracy.
By changing the two-year term to four years, we cut the need for political fund raising in half. I know there will be those who claim a four-year term too long because they don't like the elected candidate, however, elected officials should be more productive if they spent less time running for office and more time resolving our nation's problems.
By pooling our money into special interest groups in order to gain influence over opposing views, our conflicting interests created an environment of greed and improper conduct in Congress when money came into play as to who can bribe Congress the most. So we need to revamp the candidate selection and election process to make it more effective at governing and reduce the influence of and need for money in order to run for office.
This is not true. Short interest was never more than a few percent on AIG, and was also relatively small on Citi and Bank of America and most other financial stocks as their stock prices plummeted. Investment banks were able to put enormous pressure on financial company's stocks by pushing up prices on credit default swaps, but we know now that the pressure on those swaps and those company's stock prices was very justified. Most people don't seem to understand that speculation is never the "reason" that stock or commodity prices go up or down. Speculation is always the consequence of other factors. This was true with the drop in financial stocks and even more true with the increase in the increase in the price of oil from fall 2007 to summer 2008 and over the last few months.
Just because they now finally overdid the damaging of americans they tore down into ruin for half a century You say it' ssuddenly something we have to react to.
Sorry dude. But the relevant line is "all humans are created equal". - The word to look for could be "american". But not finding it, how about we go for "human".
Our sense of justice is totally screwed up if we only get huffy when millions of americans get ruined as opposed to a billion mere "humans".
http://greattaks.org
"The incorporation of a (National) bank and the powers assumed [by legislation doing so] have not, in my opinion, been delegated to the United States by the Constitution. They are not among the powers specially enumerated." --Thomas Jefferson:
"[The] Bank of the United States... is one of the most deadly hostility existing, against the principles and form of our Constitution... An institution like this, penetrating by its branches every part of the Union, acting by command and in phalanx, may, in a critical moment, upset the government. I deem no government safe which is under the vassalage of any self-constituted authorities, or any other authority than that of the nation, or its regular functionaries. What an obstruction could not this bank of the United States, with all its branch banks, be in time of war! It might dictate to us the peace we should accept, or withdraw its aids. Ought we then to give further growth to an institution so powerful, so hostile?" --Thomas Jefferson, 1803.
Since our country's founding, Democracy has been struggling to free itself of the Banksters.
Listen to Kucinich, he has already beaten the banks.
If you are paying any attention at all to the looting of America's middle class, you should by now understand there are at least six must reforms that need to be undertaken.
1. The 5 investment banks and AIG need to be put into receivorship and broken up. By keeping them too big to fail, we are growing them into to big to save, which means catastrophic collapse when it comes.
2. Every person who was involved and everyone above them needs to be fired. A message to the financial sector. We may have to bail them out, but no more corporate welfare.
3. The rating agencies need some stiff punishment. They sold us out for money.
4. Credit Default Swaps need to be treated like the insurance product they are. That means reserves.
5. Owner occupied home mortgages need to be taken out of the hands of Wall Street gamblers. This is the single biggest asset most Americans will ever own. It should not be a gambling chit for greedy market speculators. Fannie Mae and Freddie Mac can take them over.
6. Owner occupied home mortgages need to be lowered to 3%. That will save the middle class and free up enough capital to jump start America's economy.
The illegal activities that have been legalized need to be removed:
1. ENRON Loophole that allows "ILLEGAL OFF-THE-BOOKS" accounting
2. Reinstate "Mark-TO-Market" so they have to tell the truth on their Accounting Balance Sheets
3. Breakdown the ability of TRADERS to do MASS Pile on of Leveraged SHORTING to ruin Companies prior to giving them a chance to recover
Their "heads I win and tails you lose" approach to business is unacceptable to the millions of American taxpayers and investors who been robbed of their financial security and dreams. Our financial institutions need to be smartly regulated and our government needs to enforce these regulations....including revising regulation regarding foreclosures and credit cards.
And perhaps the best approach for compensating executives in these “too-big-to-fail†financial firms and for getting the toxic assets off their balance sheets, as well as, enhancing the credit markets, is to have all managers and above in these financial institutions be compensated using these toxic assets. This provides numerous other benefits, such as:
- Reconnecting risks with rewards – This minimizes the moral hazard issue and need for corporate socialism;
- Enhancing corporate governance, especially enhancing employees’ vigilance to risk management; and,
- Price discovery – There will be an interesting dynamic between institutional price points and employee price points
kamact, a capitalist who believes in regulation, but not trickle-down
Political Contributions = Banking+Lobbyists use Ill-Gotten Funds to Buy Congress+President
____________
Wall Street and its Media Allies have ingrained in Americans these “Mythical Beliefs†since Reagan VOODOO Economics took control of us 30 years ago:
_____
“Too big to fail†= Economically holds enormous weight politically and is acceptable
“Bond traders POWER + FED" = Should Control our interest rates
“Speculators/WS Banks/Hedge Funds†= Illegally Destroy companies overnight driving down stocks
“Media Measures Success†= by Stocks rising or falling
“Free market MYTH†= American mentality bought into by Many Democrats+All Republicans
We must end this "MYTHICAL MENTAL MEDIA LOCK" on AMERICANS:
1. “FAIR MARKETS†create Progress and “FREE MARKETS†Create Havoc making the RICH RICHER.
2. “The FED DEBT SYSTEM†President Wilson called his worst mistake MUST END to save America!
3. “Audit and Regulate Manipulators†and take away their Leveraging and In-Mass SHORTING!
3. “RIGHT SIZED TO SUCCEED†must replace “Too Big to Failâ€
4. "MEDIA must do their JOB as Fourth Branch of Government" =truthfully report White-Collar CR1MES!
Until we END our INSANE, SUICIDAL, quest for EMPIRE, we are only straightening the deck chairs on the USS Titanic - as long as we continue to pursue this ill-fated journey, only one thing is assured - THE END OF AMERICA AS WE HAVE KNOWN IT!
In America, in the minds of Wall Street, Washington & the Pentagon, "EMPIRE" is THE THING that has become TOO BIG to FAIL - BUT IT MUST or else we will ALL be heading for far too few lifeboats!!!!
The same goes for other large companies. Exxon used to compete with Mobil. What was wrong with that?
I don't get it.