FTT not enough; abolish credit default swaps

At Huffpo, Robert Kuttner makes the case for completely abolishing credit default swaps.  Many reformers are focusing on enacting a financial transaction tax, but Kuttner argues that this worthy reform falls far short of what is ultimately needed for meaningful financial reform.  Therefore, in addition to reenacting the Glass-Steagall Act, Kuttner seeks to abolish credit default swaps:

The financial transaction tax has become a useful symbol of the need to rein in the banks. Its enactment would mark an important turning point -- it would show that the power of the banks can be broken. And if the US government keeps opposing it, the EU should enact it unilaterally -- every global bank does business in Europe.

But such a tax would be only a small first step. Banks would still invent exotic instruments and trade them; they'd just have to pay a small tax.

It's time to simply abolish credit default swaps and similar exotic, impenetrable, essentially unregulated securities. They add nothing to economic efficiency, they line bankers' pockets, and they add massively to global financial risks. Swaps were only invented in the 1990s. The world got along beautifully -- much better in fact -- without them.

Kuttner is co-editor of The American Prospect and a senior fellow at Demos.

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Kahlil Gibran’s “On Children”

How often do you cross paths with a parent who is attempting to make his or her children in the parent's image and likeness? I see it on a regular basis. The prototypical case is the parent who didn't make it to the Broadway stage who tries to turn his/her child into a Broadway performer. You often see parents who demand athletic excellence from their kids, often (it seems) in an effort to compensate for the parent's failed strivings to make it big in sports. This style of parenting reaches every high-earning or high-prestige profession.  Or maybe it's not to make up for the parents own failings as much as it is an attempt to create a trophy child so that, at cocktail parties, the parent can nonchalantly drop a few hints about his or her child's (sometimes admittedly spectacular) accomplishments. This afternoon, a friend sent me a perfect antidote for this mindset. It's a poem by Kahlil Gibran, titled "On Children." Upon reading it, I was reminded of the following quote by Friedrich Nietzsche:  “What does your conscience say? — 'You should become the person you are'.”

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Bill Moyers explains the concerns of Occupy Wall Street

Bill Moyers recently gave the keynote speech at Public Citizen's 40th anniversary Gala. In addition to the video of that speech, I have transcribed various excerpts from his excellent speech. During his speech, he made it quite clear that he fully understands the concerns of the occupy Wall Street protesters. Except for the bracketed material each of the following is a quote by Bill Moyers at the Public Citizen 40th Anniversary Gala: While it's important to cover the news, it's more important to uncover the news. One of my mentors at the University of Texas told our class that "news" is what people want to keep hidden; everything else is publicity. And when a student asked the journalist and historian Richard Reeves for his definition of real news, he answered, "The news you and I need to keep our freedoms." - [We now have what historian Lawrence Goodwin has described as] "a mass resignation of people who believe the dogma of democracy at a superficial level, but who no longer believe it privately." - We have a decline of individual self-respect on the part of millions of people. - We hold elections knowing that they are unlikely to produce the policies favored by a majority of Americans. - The property qualifications for federal office that the framers of the Constitution expressly feared as an unseemly veneration of wealth are now openly enforced, and the common denominator a public office, including for our judges, is a common deference to cash. - Barack Obama criticizes bankers as fat cats and then invites them to dine at a pricey New York restaurant where the tasting menu runs to $195 per person. And that's the norm. They get away with it. - Let's name it for what it is: Democratic deviancy, defined downward. - Politics today is little more than money laundering in the trafficking of power and policy. - Why are the occupiers there? They are occupying Wall Street because Wall Street has occupied America - Citizens United: Rarely have so few imposed such damage on so many. - [At the 12 minute mark of the video, Moyers discusses corporate personhood and the laws damaging public welfare resulting therefrom] - The Roberts Court has picked up the mantle: Money first, the public second, if at all. - [At the 14 minute mark: the damage done by Citizens United]

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Glenn Greenwald discusses justice for some

Glenn Greenwald recently appeared on Dylan Ratigan's television show to discuss his new book, With Liberty and Justice for Some: How the Law Is Used to Destroy Equality and Protect the Powerful. Greenwald argued that many of our leaders don't even pretend anymore that we should aspire to fairness.   Here's the thought process underlying these claims we so often hear from those who oppose the Occupy movement: "Inequality will be deserved and legitimate because were all playing on an equal playing field."  According to Greenwald, the reason for so much citizen anger (tea party and occupy protesters) is a growing perception that this inequality

is not the byproduct of fair and reasonable and well-deserved accomplishments but the byproduct of cheating, of a tilted playing field, that the winners exempt themselves from the rules to which the rest of us are bound. Typically, it is the law that constrains the most powerful from abusing their power. When law ceases to apply to them, as it has, the only solution that citizens have is to go outside of the system of law and begin to demand that change. That is why so many citizens are taking to the streets and protesting and realizing that working within the system is no longer a viable course of action.

How can this energy be harnessed, for instance through the Occupy movement?

The status quo--the failure to accommodate or to adhere to rules for anyone outside of this 99% is itself extremely volatile and itself extremely dangerous and destructive in that a course of action where citizens do go out on the streets in the United States has become a more attractive and really the only alternative for effectuating the kind of change that people thought that the 2008 campaign would bring.

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