Banking Crisis: No lesson learned

Economist Anat Admati discusses the banking crisis with Bill Moyers, pointing out that real reform has not yet occurred.

BILL MOYERS: But as you surely know, the bankers tell us, not only do we have a safer system, but it's getting even better as reforms are put into place. You look skeptical. ANAT ADMATI: Well, they are truly trying to confuse people with their narratives. They just-- either speaking a language that nobody can understand, or they say things, sometimes, that are completely wrong. And sometimes they're just misleading. But if you step back and look at the system, it's very fragile. It's one of those systems that's like a big house of cards. You touch it, stuff can happen fast. And it's far from any system that we would think of as reasonably stable, able to support the economy, all of that. BILL MOYERS: You made that point in your TEDx talk. That the average US corporation relies on 70 percent equity and earnings. A company like Google, however, maintains 94 percent equity and borrows little. Banks, on the other hand, live on borrowed money and maintain very little equity— five percent. So when banks are over leveraged, and interconnected, and loans go bad, everything can topple, and there is poor old Uncle Sam trying to keep whole system from collapsing. And are they still taking these risks? ANAT ADMATI: Oh, enormous. And by any measure of exposures to derivatives and the amount of debt versus their own money that they have, by most of these measures, it's incredibly distorted and dangerous. BILL MOYERS: I learned from you that two years before the financial crisis, the average size of the top 28 banks was $1.35 trillion five years ago. The average size last year, $1.7 trillion. And you say these too big to fail banks are particularly reckless and dangerous. ANAT ADMATI: Look at them. They've basically become above the law. The people in them are able to do things that most other corporations would worry more about them doing because they can benefit from upsides all through the chain. And their creditors don't worry enough, as much as other creditors would worry. And the downside eventually is everybody. So, by just taking the risk, they're able to pass on some of their costs to other people. That's kind of how it works for them.

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Chris Hedges on Useless Liberals

Chris Hedges has no use for modern liberals:

I save my anger for our bankrupt liberal intelligentsia of which, sadly, I guess I am a member. Liberals are the defeated, self-absorbed Mouse Man in Dostoevsky’s “Notes From Underground.” They embrace cynicism, a cloak for their cowardice and impotence. They, like Dostoevsky’s depraved character, have come to believe that the “conscious inertia” of the underground surpasses all other forms of existence. They too use inaction and empty moral posturing, not to affect change but to engage in an orgy of self-adulation and self-pity. They too refuse to act or engage with anyone not cowering in the underground. This choice does not satisfy the Mouse Man, as it does not satisfy our liberal class, but neither has the strength to change. The gravest danger we face as a nation is not from the far right, although it may well inherit power, but from a bankrupt liberal class that has lost the will to fight and the moral courage to stand up for what it espouses.

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Premier episode of Lee Camp’s Redacted Tonight

Lee Camp's premier episode of Redacted Tonight begins with a head-on assault upon Monsanto. It's hard hitting and deals with extremely serious issues. Here's the description of the show: "In this episode, Lee Camp bites into Monsanto, which makes him ill, and John F. O'Donnell gets molested by the tentacles of the billionaire Kochtopus. Obama ends the War in Afghanistan with something other than peace, Chilean magician Papas Fritas makes $500 million in student debt disappear. Sam Sacks examines NSA reform - and by "reform," we mean ''business as usual." A second Deutsche Bank video against boasting bankers is mysteriously leaked, and speaking of leaks - radiation is leaking in New Mexico. Tennessee brings back a shocking punishment, and more!"

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Tax breaks are as big as the deficit

According to the National Priorities Organization:

In 2013, the cost of tax breaks was equal to the entire U.S. discretionary budget [1]. However, the discretionary budget is subject to an annual appropriations process, where Congress debates the proposed spending. Tax breaks, on the other hand, remain on the books until lawmakers modify them. As a result, over a trillion dollars a year in lost revenue – more than 1.6 times the 2013 budget deficit – goes largely unnoticed.

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