Taxpayers are paying billions of dollars for a swindle pulled off by the world’s biggest banks, using a form of derivative called interest-rate swaps; and the Federal Deposit Insurance Corporation has now joined a chorus of litigants suing over it. According to an SEIU report:
Derivatives . . . have turned into a windfall for banks and a nightmare for taxpayers. . . . While banks are still collecting fixed rates of 3 to 6 percent, they are now regularly paying public entities as little as a tenth of one percent on the outstanding bonds, with rates expected to remain low in the future. Over the life of the deals, banks are now projected to collect billions more than they pay state and local governments – an outcome which amounts to a second bailout for banks, this one paid directly out of state and local budgets.
It is not just that local governments, universities and pension funds made a bad bet on these swaps. The game itself was rigged, as explained below. The FDIC is now suing in civil court for damages and punitive damages, a lead that other injured local governments and agencies would be well-advised to follow. But they need to hurry, because time on the statute of limitations is running out. (more…)
What do you give a Wall Street CEO who has presided over a decade of fraud and criminality, who directly supervised a unit which lost $6 billion through incompetent and illegal trading, and whose reign of crime and mismanagement has cost his institution $20 billion in the last year alone – a figure which undoubtedly would’ve been much larger in a less morally compromised regulatory environment?
If you are the Board of Directors of JPMorgan Chase, you give him a raise.
Let’s not mince words: Jamie Dimon’s bank is, as we said last May, the scandal of our time. The crimes committed during Dimon’s time in senior management include bribery, mortgage fraud, investor fraud, consumer fraud, credit card fraud, forgery, perjury, violation of sanctions against Iran and Syria, violation of laws prohibiting the bilking of active-duty service members … shall we continue?
The Captain and Tennile are getting divorced. But when it comes to the Board and Jamie, love will keep them together. (more…)
The White House is calling January “TPA (Trade Promotion Authority) Month” and has made it their task to pass Fast Track. President Obama needs Fast Track to pass the Trans-Pacific Partnership (TPP). When Congress returned this month, a bill was quickly introduced after delays of more than a year.
The lies begin with title of the bill: “The Bipartisan Congressional Trade Priorities Act of 2014.” Bi-partisan? In the House there was only one sponsor, Republican David Camp (MI). The Republicans demanded the Democrats add a sponsor before it was introduced, but due to public pressure, they could not find one.
The only Democrat on the bill in the Senate is Max Baucus (MT) — the senator who gave us the Bush tax cuts for the wealthy and who is leaving the senate to become Ambassador to China. So, the bill is only bi-partisan until he heads off to his new job.
Baucus likes to informally call the bill “The Job Creating Bipartisan Trade Priorities Act,” but that just adds another lie since trade agreements consistently lose jobs, expand the wealth divide and increase trade deficits.
TPP Loses Momentum
After four years of secret negotiations with more than 600 corporate advisers, the once seemingly invincible largest trade bill in history, covering 40% of the world’s economy , looks very much like it can be defeated.
Why is the TPP looking like it can be stopped? One reason is its secrecy. (more…)
Anyone reviewing the data is likely to conclude that there must be some mistake. It doesn’t seem possible that one out of twenty American families could each have made a million dollars since Obama became President, while the average American family’s net worth has barely recovered. But the evidence comes from numerous reputable sources.
Some conservatives continue to claim that President Obama is unfriendly to business, but the facts show that the richest Americans and the biggest businesses have been the main—perhaps only—beneficiaries of the massive wealth gain over the past five years.
1. $5 Million to Each of the 1 percent, and $1 Million to Each of the Next 4 percent
From the end of 2008 to the middle of 2013 the total U.S. wealth increased from $47 trillion to $72 trillion. And about $16 trillion of that is financial gain (stocks and other financial instruments).
The richest 1 percent own about 38 percent of stocks and half of are non-stock financial assets. So they’ve gained at least $6.1 trillion (38 percent of $16 trillion). That’s over $5 million for each of 1.2 million households.
The next richest 4 percent, based on similar calculations, gained about $5.1 trillion. That’s over a million dollars for each of their 4.8 million households.
The least wealthy 90 percent in our country only own 11 percent of all stocks excluding pensions, which are fastly disappearing. The frantic recent surge in the stock market has largely bypassed these families.
WinCo, a small, employee-owned grocery store chain based in Boise, Idaho, is able to beat Walmart’s prices on goods while providing its employees with good benefits. The company, which will soon have close to 100 stores with the latest openings in Texas, has almost 15,000 employees. Those who work at the store long enough qualify for a pension plan into which the company puts an amount equal to 20 percent of their yearly pay. More than 400 “front-line” workers — clerks, cashiers, and others who are not at the executive level — have retirement accounts that are worth at least $1 million, according to a company spokesman.
It also provides full health benefits for those who work at least 24 hours a week, beyond the requirements in the Affordable Care Act. While the company is private and hasn’t made wage information available, Glassdoor reports that cashiers and clerks make more than $11 an hour. Thanks to these benefits and wages, the company has low turnover. An industry analyst estimated that the average hourly worker stays with the company for more than eight years. (more…)
AP: 4 in 5 Americans live in danger of falling into poverty, joblessness
By The Associated Press
Four out of 5 U.S. adults struggle with joblessness, near-poverty or reliance on welfare for at least parts of their lives, a sign of deteriorating economic security and an elusive American dream.
Survey data exclusive to The Associated Press points to an increasingly globalized U.S. economy, the widening gap between rich and poor, and the loss of good-paying manufacturing jobs as reasons for the trend.
The findings come as President Barack Obama tries to renew his administration’s emphasis on the economy, saying in recent speeches that his highest priority is to “rebuild ladders of opportunity” and reverse income inequality.
As nonwhites approach a numerical majority in the U.S., one question is how public programs to lift the disadvantaged should be best focused — on the affirmative action that historically has tried to eliminate the racial barriers seen as the major impediment to economic equality, or simply on improving socioeconomic status for all, regardless of race. (more…)
In October 2012, nine U.S. state legislators went on an industry paid trip to explore the Alberta tar sands. Publicly described as an “ALEC Academy,” documents obtained by CMD show the legislators were accompanied on a chartered flight by a gaggle of oil-industry lobbyists, were served lunch by Shell Oil, dinner by the Canadian Association of Petroleum Producers, and that the expenses of the trip were paid for by TransCanada and other corporations and groups with a direct financial interest in the Alberta tar sands and the proposed Keystone XL (KXL) pipeline.
Among the nine legislators on the tour was the new ALEC national chairman, Representative John Piscopo from Connecticut, and Senator Jim Smith from Nebraska who has sponsored legislation in his state to speed up the building of the Nebraska segment of KXL. Email records obtained by CMD show that after the trip, legislators were asked by ALEC to send “thank you notes” to the lobbyists for their generosity in Alberta.
Far better than a mere “thank you,” Rep. John Adams from Ohio returned from the trip (more…)
A recent article by Les Leopold informed us that our nation is near the bottom of the developed world in median wealth, probably the best gauge for the economic strength of the middle class. The source of the information, the Global Wealth Databook, provides additional evidence of our decline from our once-lofty position as an egalitarian country with opportunities for nearly everyone.
The data is summarized below. (more…)
Ignoring the memory of the over 1,100 factory workers that passed away at the Rana Plaza Factory collapse in Savar, Bangladesh last month, at least 14 major North American retailers have declined to sign the Accord on Fire and Building Safety, an agreement that would have entailed a five year commitment from all participating retailers to conduct independent safety inspections of factories and pay up to $500,000 per year towards safety improvements.
The retailers worried that the agreement would give labor groups and others the ability to sue them in U.S. courts, but anybody that has paid attention to the last 30 years of global unfettered corporate greed knows the truth: these corporations care more about their bottom line than they do about the lives and safety of third-world workers, and their actions reflect it. They are so obsessed with reducing production costs that they could not care less about a few cheap lawsuits from cash-starved labor groups. (more…)
Former bank regulator William Black and Rolling Stone’s Matt Taibbi join us to dissect the career of Jack Lew, President Obama’s pick to replace Treasury Secretary Timothy Geither. Currently Obama’s chief of staff, Lew was an executive at Citigroup from 2006 to 2008 at the time of the financial crisis. He backed financial deregulations efforts while he headed the Office of Management and Budget under President Bill Clinton. During that time, Clinton enacted two key laws to deregulate Wall Street: the Financial Services Modernization Act of 1999 and the Commodity Futures Modernization Act of 2000. Black, a white-collar criminologist and former senior financial regulator, is the author of “The Best Way to Rob a Bank is to Own One.” A contributing editor for Rolling Stone magazine, Taibbi is the author of “Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History.”
CALIFORNIA — Tucked deep back in the tightly guarded machine shop of California’s oldest prison, well away from the muscle flexing inmates in “the yard,” a select group of convicted felons has their eyes on space. They fabricate metal housing for miniature satellites designed to explore the heavens. That’s right. San Quentin inmates serving time for horrible crimes are given easy access to some of the sharpest metal humans can make.
They are, most likely, the only prisoners on Earth helping to develop products for space exploration. Ariel Wainzinger, a man with ten months left on his sentence, said: “You come to prison and you think it’s gonna be all gloom and doom and you find yourself with a lot of different opportunities and you take advantage of it.”
Working under the strict guidance of NASA, Ariel and a handful of other skilled inmate machinists are making something most people have never heard of: P-PODs, Poly Picosatellite Orbital Deployers, essentially, aluminum boxes designed to hold tiny satellites known as CubeSats, which ride “piggyback” into space as secondary payloads. The devices are part of a new generation of low-cost, miniature launch vehicles developed for research used by more than 150 universities worldwide. (more…)
After failed Twinkies-maker Hostess filed for bankruptcy in November, acting chief executive Gregory Rayburn imposed an 8 percent across-the-board pay cut on the company’s workers. Despite those cuts, Rayburn, who took the company over after its second bankruptcy filing in March, will not be subject to the pay cut because he is not technically a company employee, the Huffington Post’s Bonnie Kavoussi reports:
Though he imposed an 8 percent pay cut for all Hostess workers, Gregory Rayburn’s monthly $125,000 pay — or $1.5 million a year — will remain unchanged, a company spokesman told The Huffington Post on Monday. Rayburn is not on the Hostess payroll and therefore isn’t subject to the imposed pay cut, the spokesman explained.
Earlier this year, Hostess’ former CEO received a pay increase from $750,000 to nearly $2.5 million even as the company was struggling. The pay package was later reduced to $1.5 million, and Rayburn reduced the salaries of four other senior executives who received bonuses to just $1 until the company emerges from bankruptcy, according to a company spokesperson. Four other executives who received raises, the spokesperson said, had their salaries reduced to pre-raise levels.
Still, the company asked a judge to approve $1.75 million in bonuses for 19 executives after it filed for bankruptcy in November. The judge approved the bonuses this week, making Hostess the latest company to dole out big pay packages to executives even as their firms were failing.
A wave of historic protests struck the retail giant Wal-Mart on Black Friday — the busiest shopping day of the year. Workers and their supporters demonstrated at more than 1,000 stores. The Wal-Mart protests were organized in part by OUR Walmart, an organization backed by the United Food & Commercial Workers International Union. Nine people, including three Wal-Mart workers, were arrested at a protest in Los Angeles after they blocked traffic. We broadcast the voices of protesters in Secaucus, New Jersey, and speak to Josh Eidelson, a contributing writer for The Nation magazine.
Nonpartisan Tax Report Withdrawn After G.O.P. Protest
WASHINGTON — The Congressional Research Service has withdrawn an economic report that found no correlation between top tax rates and economic growth, a central tenet of conservative economic theory, after Senate Republicans raised concerns about the paper’s findings and wording.
The decision, made in late September against the advice of the agency’s economic team leadership, drew almost no notice at the time. Senator Charles E. Schumer, Democrat of New York, cited the study a week and a half after it was withdrawn in a speech on tax policy at the National Press Club.
But it could actually draw new attention to the report, which questions the premise that lowering the top marginal tax rate stimulates economic growth and job creation. “This has hues of a banana republic,” Mr. Schumer said. “They didn’t like a report, and instead of rebutting it, they had them take it down.” (more…)