Some 47 million poor Americans – one in four children – see their already meager federal food allowances slashed this week.
The cuts amount to $4 billion a year over the next decade.
That $4 billion figure should ring a bell. It is equivalent to the official annual subvention that the US government sends to Israel – courtesy of the American taxpayer.
This week that $4 billion annual donation to the regime in Tel Aviv was on display with the following items: Israeli tanks, warplanes and troops carried out deadly raids on occupied Palestinian territories, resulting in at least nine deaths and dozens of wounded; dozens of Palestinians continued to be kidnapped (“arrested”) from their homes and streets by Israeli troops; also the dominant Likud party of Benjamin Netanyahu announced that illegal settlements in the West Bank and East Al Quds “will be intensified” with plans to build an additional 5,000 housing units.
The accelerated construction on Palestinian land is in blatant contravention of international law.
In other words, this week, as in every other week, the war crimes that the US-backed Israeli regime has been committing since at least 1967 continued apace. This in the same week that millions of Americans are on notice that they are being put on starvation rations because their government would rather send $4 billion to a genocidal regime than pay for basic human nutrition.
The fact is that the Israeli criminal regime gets away with this genocide only because the US rulers hand over $4 billion every year to a state that comprises some seven million Israeli nationals.
It is astounding that tens of millions of Americans are going hungry because the same amount of money being cut from their social welfare is bankrolling Israel.
Ironically, some 900,000 of those hungry Americans are believed to be former US soldiers, many of whom are mentally and physically broken from fighting in the so-called Wars on Terror in Iraq and Afghanistan.
The Israeli regime, its American lobbyists and its bought-and-paid-for politicians created the false premises for these criminal wars – and many others besides.
But the men and women who served as cannon fodder in these criminal wars are now being abandoned in hunger, while the regime that helped cause their misery is still creaming off American taxpayers.
Hunger, poverty, suffering, death, genocide are all consonant and consistent in this grotesque system deified as capitalism.
Here are a few other figures to round out the abject picture. If just 0.6 per cent were shaved off the annual $700 billion US military budget, that would be enough to cover the cuts in the food stamp program this year.
If the $52-billion-a-year NSA spying program that is operated against our own citizens was cancelled that would pay for the immediate food needs of all Americans and, moreover, help build an economy for genuine social development, with good paying jobs, welfare and infrastructure. But, again, that won’t happen because the US economy is a war economy based on fear and paranoia.
US lawmakers, both Republican and Democrat – they are all the same puppets – want to axe a total of $40 billion from the food program over 10 years. This is the same figure – $40 billion – that these same minions throw at Wall Street and the mega-banks every two weeks under the scam known as “Quantitative Easing.” Taxpayers, many of them on food stamps, are bailing out corporations that crashed the world economy and which are up to their necks in militarism. Yet, this bloated elite turns around and snatches the crumbs out of people’s mouths.
But we return to the Zionist regime. These crimes are subsidized and enabled by money that would otherwise feed hungry Americans. People will die this year in the US simply from poverty and the lack of food. These American deaths will be for the same reason that Palestinians will die from poverty and hunger.
The choice is revealingly simple. Stop funding genocide in the Middle East or start feeding Americans.
The economic crash of 2008 left people in their millions across the globe bewildered and shocked by the catastrophe and devastation inflicted on their lives: the hopelessness of the unemployed young facing a bleak uncertain future, pensioners struggling to survive on pensions that have lost their value, the employed poor accepting a cut in their working hours and wages to avoid losing their jobs, the very poor, the sick and disabled trying to survive the cuts to the welfare safety net. People find it difficult to comprehend how a few powerful bankers could cause so much damage and misery to the lives of countless millions.
In a previous article (Dissident Voice), two years ago, I wrote:
How did it come to this? What sort of a system have we created that gives so much power to these people? How is it that these people, who are entrusted with the money made by working people, end up gobbling up the money for which people have laboured so hard? How were they ever allowed to have such a stranglehold on the lives of millions? Where were the people we elected to look after us when such a distorted, corrupted form of capitalism was being developed? Were they so incompetent, or have they become part of an oligarchy that enriches them as well as the gamblers of the market?
So what has happened since then; have the masters of the universe who caused the crash changed their ways? Are they contrite for the misery they have caused? Have our politicians taken the necessary action to prevent another crash happening, or at least if it happens, ensure that it doesn’t threaten the entire economies of nations?
I meet a lot of these people on Wall Street on a regular basis right now…I am going to put it very bluntly: I regard the moral environment as pathological. And I am talking about the human interactions … I’ve not seen anything like this, not felt it so palpably…. They have no responsibility to pay taxes; they have no responsibility to their clients; they have no responsibility to people, to counterparties in transactions.… We have a corrupt politics to the core, I am afraid to say, and … both parties are up to their neck in this. This has nothing to do with Democrats or Republicans.
It is clear that the “moneymen” have not changed their behaviour; their arrogance is undiminished, with no recognition of their responsibility to society. The politicians, it seems, are unwilling or unable to take action to protect society from the next crash, which will surely happen if the necessary rules, laws, and regulations are not in place. Every attempt at reform is vigorously resisted with the argument that it interferes with the sanctity of the free market.
What is a free market? Is it something that can be objectively defined? Professor Ha-Joon Chang of Cambridge University argues this point thus:
The free market does not exist. Every market has some rules and boundaries that restrict freedom of choice. A market looks free only because we so unconditionally accept its underlying restrictions that we fail to see them…There is no scientifically defined boundary for a free market. If there is nothing sacred about any particular market boundaries that happen to exist, an attempt to change them is as legitimate as the attempt to defend them. Indeed, the history of capitalism has been a constant struggle over the boundaries of the market.
He cites the legislation in 1819 to regulate child labour in Britain as an example. This was a law prohibiting the employment of children under nine in cotton mills, which were considered particularly hazardous to workers’ health. This caused a huge controversy with opponents seeing it as ”destroying the very foundations of the free market.” No one, I hope, in the industrialised rich nations today, is suggesting that we should bring back child labour as part of liberalising our labour laws.
Our government, using hundreds of billions of pounds of our taxes, rescued the banks from collapse. Have they got the guts to do what is required to save us from the next collapse? I am not holding my breath.
Dr Adnan Al-Daini (PhD Birmingham University, UK) is a retired University Engineering lecturer. He is a British citizen born in Iraq. He writes regularly on issues of social justice and the Middle East.
Bank lobbyists have a direct influence on financial legislation drafted in Congress, and are in some cases even writing the measures themselves. Citigroup this month drafted a regulation bill that has already passed through a House committee.
To soften financial regulations, bank lobbyists frequently ‘assist’ lawmakers in writing draft legislation that serves to benefit them at the expense of American taxpayers, according to a New York Times investigation.
Lobbyists working for Citigroup Inc., a multinational financial services corporation, wrote 80 percent of a regulation bill that was approved by the House Financial Services Committee this month. Citigroup wrote 70 lines of 85-line bill, which exempts “broad swathes of trades” from new regulation, the Times reported based on e-mails it obtained.
Two paragraphs of the bill were copied “nearly word for word” from what Citigroup drafted. The only difference between the versions were two words, which lawmakers changed to make plural.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law in 2010, inflicted heavy financial regulatory reform following the most recent recession. The bill was pushed into law by Democrats, but now, both Democrats in the House and Senate are siding with bank lobbyists to roll back parts of the regulation overhaul.
The bill drafted primarily by Citigroup this month was starkly opposed by the Treasury Department, but easily made it through the House Financial Services Committee, the Times reports. MapLight, a nonprofit group that analyzes campaign finance records, found that lawmakers who supported Wall Street’s legislation received twice as much in contributions from financial institutions than those who opposed such measures, which appears to indicate that lawmakers’ support can be bought.
This month, Wall Street groups also held fundraising dinners for lawmakers who co-sponsored the bills they backed and in some cases co-wrote. As a reward for siding with bank lobbyists, these lawmakers were granted a dinner in which attendees paid up to $2,500 for a plate.
When questioned by the Times, bank industry officials said that helping draft legislation was a common practice on Capitol Hill, but argued that they do not undermine Dodd-Frank.
“We will provide input if we see a bill and it is something we have interest in,” said Kenneth E. Bentsen Jr., a Wall Street lobbyist. Bentsen is a former lawmaker himself, and many financial institutions’ lobbyists have worked as Capitol Hill aides and staffers before taking on their current roles.
Jeff Connaughton, a former lobbyist and former congressional staffer, said that Wall Street has so much influence on the Hill that it “skews the thinking of Congress.”
“It’s appalling, it’s disgusting, it’s wasteful and it opens the possibility of conflicts of interest and corruption,” Rep. Jim Himes, a top recipient of Wall Street donations and a former banker at Goldman Sachs, told the Times, admitting his own faults. “It’s unfortunately the world we live in.”
Proving that those who are not punished for their misdeeds are allowed to repeat them, the Wall Street banks that created and sold risky combinations of mortgages and loans during the pre-2008 boom—and crashed the world economy with them—are doing exactly the same thing again. Once again, financial products with obscure, complex-sounding names like “collateralized debt obligations” and “securitized mortgage instruments,” are being sold by Wall Street to people on Main Street.
The ominous return from the dead of these investments, also called structured financial products, has largely evaded new regulations meant to avert another crisis, prompting concern from financial industry observers. Manus Clancy, managing director at commercial real estate research firm Trepp, worries that “All of this seems like a fairly quick round trip. You are seeing a fair number of sins being forgiven.”
And the sinners who committed those sins are acting like they’ve been forgiven as well. “The players in the business are generally the same as they were before,” noted Tad Philipp, a commercial real estate analyst at Moody’s. “Because it’s the old players, they know how to push the boundaries.”
Wall Street is certainly pushing boundaries on securitized commercial mortgage-backed securities, in which a pool of commercial mortgages are mixed together into bonds, ranked by varying levels of risk. So far in 2013, banks have issued $33.5 billion in such bonds, slightly more than they did in early 2005. Before the 2008 crash, 57% of the outstanding money in such securities was in high-risk interest-only loans, a number that fell hard and fast, to just 11% two years ago. Today, that number has more than tripled to 34%.
Even faster to revive have been collateralized loan obligations, which are pools of loans given to companies with junk ratings. In the first quarter of 2013, banks issued about $26 billion of them—more than in the same period of the last boom year of 2007. Demand has been so strong that banks have started to loosen underwriting standards on the underlying loans and bonds, prompting the Federal Reserve to warn last month that “prudent underwriting practices have deteriorated.”
Those willing to learn from history will recall that securitization—the bundling of many loans into one investment—proved dangerous during the real estate bubble because when the bubble burst, investors learned that the complexity of the instruments had obscured their real risks, leading to unexpected losses by those investors, chaos in the financial system and the Great Recession. They will also recall that those who created these “shoddy deals” and then defrauded their investors escaped wealthy but largely unpunished, and are still working on Wall Street today.
To Learn More:
Wall St. Redux: Arcane Names Hiding Big Risk (by Nathaniel Popper, New York Times)
SEC Tricks Judge to Help Citigroup (by Noel Brinkerhoff and David Wallechinsky, AllGov)
Why No Prison for Banksters Who Caused Financial Crisis…Yet? (by David Wallechinsky and Noel Brinkerhoff, AllGov)
The revolving door between Wall Street and its government regulators has been spinning at warp speed lately. Two recent cases involve high-level officials whose jobs were to regulate Wall Street’s practices and prosecute Wall Street’s crimes. Despite the massive and systemic fraud that led to the financial collapse of 2008, both failed to win a single major enforcement against Wall Street, and now they are being rewarded with lucrative jobs there.
Mary Schapiro, who took over a demoralized Securities and Exchange Commission (SEC) that repeatedly failed to head off financial disasters involving Bear Stearns, Lehman Brothers and Bernard Madoff, did not win a major civil action against any Wall Street executive who was part of the subprime mortgage scam that led to the crash during her four years as SEC chair. One low point came the day federal judge Jed Rakoff refused to approve SEC’s $285 million settlement with Citigroup because, just as with Goldman Sachs, SEC failed to get an admission of wrongdoing. Schapiro did open a new tips database and a whistleblower office.
Lanny Breuer worked the criminal side of the street as head of the Justice Department’s criminal division for the past four years, yet he failed to win a single major criminal conviction against a Wall Street executive. He resigned shortly after a recent “Frontline” documentary implied that he had been ineffectual in bringing justice to the financial industry. His public defense of his own lack of criminal prosecutions was also widely panned.
Now both are returning to the other side: Schapiro has taken a job as a managing director and chair of the governance and markets practice at Promontory Financial Group, which advises financial firms on regulation, while Breuer is going back to Covington & Burling, a major law firm that defends financial clients, as vice chair of the firm. Although salary data are unavailable, both can be expected to earn at least $500,000 annually from their new gigs.
“It used to be called ‘selling out,’ ‘cashing in,’ or ‘influence peddling.’ Now it’s referred to politely as the ‘revolving door,’” Dennis Kelleher, president of Better Markets, a nonprofit that wants stronger regulation of the financial industry, told the National Journal. “But whatever it’s called, nothing is more corrosive to the American people’s trust in government than when former senior public officials turn their so-called public service into multimillion-dollar riches unimaginable to almost all Americans.”
Even more insidious than outright corruption, argue such critics, is the fact that the continually revolving door between Wall Street and its regulators creates a financial industry culture shared by both bankers and their regulators, who come to see themselves as part of the financial system—and hope eventually to be rewarded by the profit-making companies they are supposed to regulate and prosecute.
To Learn More:
Mary Schapiro and Lanny Breuer Give Us the Ultimate Dog-Bites-Man Story (by Michael Hirsh, National Journal)
Justice Dept. Defends Not Prosecuting Corporate Leaders for White-Collar Crime (by Noel Brinkerhoff and David Wallechinsky, AllGov)
SEC Chair Schapiro Retains a Lawyer (by Noel Brinkerhoff and David Wallechinsky, AllGov)
Revolving Door at SEC is in a Whirl as Hundreds Hired by Industry they Regulated (by Noel Brinkerhoff and Danny Biederman, AllGov)
- Where Bank Regulators Go to Get Rich – Bloomberg (bloomberg.com)
- Schapiro’s move to consultant prompts ‘revolving door’ critique (blogs.marketwatch.com)
- Washington’s Revolving Door Keeps Spinning (billmoyers.com)
Charged with regulating Wall Street, the Securities and Exchange Commission (SEC) has become a launching pad for former agency employees—by the hundreds—to become part of the industry they once oversaw.
The study also found numerous other concerns with the “revolving door” between the SEC and financial firms. These included agency workers trying to help corporations influence agency regulations, defending companies suspected of breaking the law, and helping them avoid tougher enforcement actions.
Perhaps the most high-profile concern in this arena is President Obama’s nomination of Mary Jo White to become the new SEC chief. During her most recent job at the firm of Debevoise & Plimpton, White’s clients included JPMorgan Chase, General Electric, Verizon Communications, former Bank of America chief executive Kenneth Lewis, and Rajat Gupta, the former Goldman Sachs board member convicted of insider trading.
“The revolving door is moving faster than ever,” Senator Charles Grassley (R-Iowa) said after reading POGO’s findings. “The SEC has to fix this problem once and for all. That involves more disclosure, more meaningful restrictions, and top-to-bottom application of the rules without waivers that make any restrictions meaningless.”
The year is 2008. In the US the housing bubble has burst, leaving major financial institutions with a large mess on their hands. It will always be remembered as a time of failing banks, the ‘credit crunch’, plummeting stock markets and declining trade worldwide. The causes of the financial meltdown are a complex interplay of forces, but at the core of the issue is Wall Street’s greed and risk-taking, as well as a failure on the part of regulators and the financial market to prevent the situation from exploding. The end result on the world economy has been nothing short of disastrous. Since 2008 we have seen too many reports of famine, joblessness and uprisings (after all, these things tend to be related).
So what steps were taken to “rein in the excesses of Wall Street?” Well, governments and central banks handed out bailouts to poorly performing financial institutions of a magnitude never seen before.
We have come to normalise the reckless disregard for human life so characteristic of the banking sector. We could have walked down many different paths to deal with the financial crisis – so what else could we have done?
In Venezuela the government takes a very different approach to the banking sector. For example, there is a law in place that means that at least 10% of a bank’s lending should support development projects. President Chavez has recently threatened to nationalise the banks that are not delivering on this. The Venezuelan government wants to see more loans going to support small farmers rather than just going to big businesses. “Either you finance agricultural production or we will take measures. There is no alternative,” Chavez has said. And the irrefutable warning, “If you can’t do it, give me the banks.”
Chavez has made similar threats to the commerce sector, having angered the business community by imposing regulations that will guarantee a fixed maximum price on basic consumer goods. This is to avoid the price of goods being driven up by speculation, the catastrophic effects of which were seen in the Horn of Africa last year. Speculation on the world food market helped to fuel the widespread famine that endangered millions of people.
Venezuelan businesses have predictably complained about the new price fixing measures, calling them “unviable” for business as usual. But rather than balking at the first hurdle, Chavez has said he will seek investment from outside the country if the companies are not able to deliver within the new constraints. It seems that in Venezuela they are unwilling to let big business hold the country to ransom.
Lets take a case study in the UK for comparison – the Royal Bank of Scotland (RBS). Consider this worrying timeline:
2009: the UK government provides an unprecedented bailout to banks, and now officially owns 84% of RBS
2010: bonuses totaling almost £1 billion were paid to top executives of RBS, despite reporting losses of over £1 billion in the same financial year
2011: the massive drop in the price of RBS stocks meant that UK taxpayers lost £26 billion on the value of their investment
2012: there was much controversy over the £1 million bonus offered to the RBS Chief Executive.
Luckily for the UK taxpayer, the RBS Chief Exec turned down the £1 million bonus following intense pressure. But the government could have demanded this of him in the first place. Why didn’t they? The tired old argument of “we don’t want top people or businesses to leave the country” just doesn’t fly in the face of 2.7 million unemployed people in the UK and cuts to much needed welfare payments and disability allowances.
If Venezuela can teach us anything, let it be that:
It is possible to take a stand against ugly business practices
It is possible to expect our banking and commercial sectors to make a positive contribution to the world
There is no better time than right now
- Venezuela’s Economy Grows by 5.5 Percent in 2012 (alethonews.wordpress.com)