Dark days and “Green Shoots”

“We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both.” --Supreme Court Justice Lous D. Brandeis
For all the discussion of "green shoots" and an economy on the mend, there's plenty of data and commentary to the contrary. What's interesting to me, is that recent developments only highlight the extent to which Main Street economics have become irrelevant to Wall Street. The administration is claiming that the crisis is largely over, and that it's time to breathe a sigh of relief. President Obama yesterday argued that "we can be confident that the storms of the past two years are beginning to break." Treasury Secretary Timothy Geithner discussed last week beginning to wind down some of the programs that were implemented in the heat of the crisis late last year. The value of the Dow Jones Industrial Average has risen from its July low of 8146, and is now trading around 9600. Everything seems well and good in the world of high-finance. But others see it differently. Nobel-prize winning economist Joseph Stiglitz argued this week that nothing has been done to address the underlying banking problems that created the mess in the first place, adding that "the problems are worse than they were in 2007 before the crisis." Simon Johnson, former chief economist of the IMF, echoes that sentiment, and points out that the real issues underlying the crisis have not been addressed at all. He lays out 4 areas of concern:
  1. The big banks need to be made to be dramatically smaller.
  2. Executives need to have a great deal of their personal wealth tied up in their banks to prevent a reckless focus on short-term results.
  3. An end to the revolving door between Wall Street and Washington, DC. "There is no way people should be able to go directly (or even overnight) from a failing bank to designing bailout packages to benefit such banks. In any other industry, in any other country, and at any other time in American history, this would have been seen as an unconscionable conflict of interest. "
  4. The financial elite is aware that they are able to exploit the Federal Reserve and use it as a "bailout machine".

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Elizabeth Warren faces fierce resistance to regulation of non-bank lenders

Elizabeth Warren is one of my heroes. Barack Obama appointed her to be Chair of the Congressional Oversight Panel created, which was established to oversee the banking bailouts. For many years, Warren has fought tough battles on behalf of consumers. [See the related posts to this post; and here's a video of Warren being interviewed by Jon Stewart that will give you an idea of what she is about (and especially consider Part II)]. Warren is now facing an incredibly tough uphill battle. Her main weapon is common sense. She wants to regulate banks and non-bank lenders, to stop them from defrauding consumers with their fine print, their outlandish fees and their arithmetical hocus-pocus. In a fair fight, her position should easily win the day. But it's not a fair fight, because the financial services industry owns much of Congress. Therefore, Warren has spent much time advocating for the need for a strong Consumer Financial Protection Agency (CFPA). Here's what Warren has to say about the need to regulate non-bank lenders:

There is more that we can do to deal with non-bank lenders, but only if Congress creates a strong CFPA. If we stick with the status quo -- which treats loans differently depending on who issues them and places consumer protection in agencies that consider it an afterthought - we know what will happen because we have seen it happen before. Lenders will continue their tricks and traps business model, the mega-banks will exploit regulatory loopholes, and the non-banks will continue to sell deceptive products. In that world, small banks will need to choose between lowering standards or losing market share, and they will still get too much attention from regulators while the non-banks and big banks get too little. Dangerous loans will destabilize both families and the economy, and we'll all remain at risk for the next trillion-dollar bailout. Regulating the non-banks hasn't been tried in any serious way. The CFPA offers a real chance to level the playing field, to add balance to the system, and to change the consumer lending landscape forever.

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Subcontracting war

New reports cast more doubt on the use of private contractors in a war zone. CNN is reporting that the watchdog group Project On Government Oversight (POGO) briefed reporters and sent a letter to Secretary of State Hillary Clinton about widespread hazing incidents allegedly taking place at the U.S. Embassy in Afghanistan.

POGO says two weeks ago it began receiving whistleblower-style e-mails, some with graphic images and videos, that are said to document problems taking place at a non-military camp for the guards near the U.S. diplomatic compound in Kabul. "This is well beyond partying," said Danielle Brian, POGO's executive director, after showing a video of a man with a bare backside, and another man apparently drinking a liquid that had been poured down the man's lower back.
These latest allegations are about ArmorGroup, a British company that was formed in 1981. These types of companies have seen exploding rates of growth since the start of the Iraq war as more and more functions that have been traditionally assigned to the military have been outsourced to private security companies. In 2004 it was reported that there were over 180 private companies providing services in Iraq. This massive deployment has skewed traditional warfighting:
In the first Gulf War 15 years ago, the ratio of private contractors to troops was 1 to 60; in the current war, it's 1 to 3. In fact, the private sector has put more boots on the ground in Iraq than all of the United States' coalition partners combined. One scholar, Peter Singer of the Brookings Institution, suggests that Bush's "coalition of the willing" would be more aptly described as the "coalition of the billing." Those bills are in the billions and rising.

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The torture done by the United States, in detail.

Glenn Greenwald reports on the torture done in our names, and it's sickening. You can read succinct descriptions of the sort this terrible conduct. There's a lot of wailing and whining by conservatives that disclosing our own reprehensible conduct is inappropriate. That's because they can't justify this behavior in the least. How was it that we now know about the torture done by the United States? No thanks to Congress:

[I]t should be emphasized that yet again, it is not the Congress or the establishment media which is uncovering these abuses and forcing disclosure of government misconduct. Rather, it is the ACLU (with which I consult) that, along with other human rights organizations, has had to fill the void left by those failed institutions, using their own funds to pursue litigation to compel disclosure. Without their efforts, we would know vastly less than we know now about the crimes our government committed.

If any other country tortured Americans, most conservatives would be making sure that everyone knew about the torture and many of them would be trying to declare war on that country.

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Israeli lobby: if you’re against illegal settlements, you’re for ethnic cleansing of Jews

The Israeli lobby is at it again, according to a recent article by the U.K. Guardian. If you are against Israel's illegal settlements on the land of Palestinians, you must supposedly be for ethnic cleansing of Jews:

The Israel Project, with an advisory board that includes 20 members of Congress from both parties, issued the confidential document to its supporters at about the time Obama came to power in January. The report, marked as "not for distribution or publication" but since widely disseminated outside of the organisation, says that those who back the removal of the settlements should be told they are supporting ethnic cleansing and antisemitism. The guide offers what it describes as "the best settlement argument".
Not coincidentally, there is a growing movement among British unions for the global boycott, divestment and sanctions campaign against Israel for its treatment of Palestinians and its failure to work toward peace.

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