John Moyers at AMERICAblog makes a great point, namely nuclear power is an industry defined by privatized profits and socialized risks. This is exactly like the financial sector around the world, where banksters made hundreds of billions of dollars in profits and bonuses doing things that blew up the global economy and begat a massive bailout by the American public (and other countries’ citizenries). Just saying.
Category: Economy
Sam Seder on Wiscosin & Attacks on Workers
Awesome.
Bill Maher on the Rich’s Class Warfare
“America’s rich aren’t giving you money, they’re taking your money.”
Via Gawker.
What Class Warfare Looks Like
Mike Konczal has a rough transcript, starting about 45 seconds in:
Representative Barca: Excuse me, Mr. Chairman I have a question about the open meeting rule being violated…Most importantly, before we even get started, obviously I’m going to want to have a summary of this bill from our director Lane, so I understand what’s in here.
Chairman: It’s the same bill you debated for 60 hours.
Barca: So there’s nothing different?
Chairman: No. We just removed items from it.
Barca: Removed what?
Chairman: Removed items. There’s nothing new.
Barca: So can we get a description of what was removed?
Chairman: Nothing new.
Barca: Well, you said things were removed Mr. Chairman. I want to know what’s removed. It seems to me that the body should have and our community should know what we are voting on. So what was removed? I need to know that. So I do want a description from Director Lane….But before we even get into that I want this is a violation of the open meeting law. It is required, I have here a memo from the current Attorney General, not a past one the current one. August 2010. No Wisconsin Court decision will allow meetings unless you have good cause to provide less than 24 hours notice of a meeting. The provision, like all other provisions of the open meetings law must be construed in favor of providing the public with the fullest and most complete information about government affairs…
Chairman: Representative Barca.
Barca: that’s compatible with government business…
Chairman: Representative Barca. Clerk, call roll.
Barca: NO EXCUSE ME It says if there’s any doubt as to whether or not good cause exists the governmental body should provide 24 hours notice. This is clearly a violation of the open meetings law. You have been shutting people down…
Members: Aye.
Last night was as clear an example as any I’ve ever seen of how Republicans are waging class war on the American middle class. As Rep. Barca points out, what the happened in Wisconsin during last night’s conference committee meeting clearly violated the state’s open meetings law, which require 24 hour notice prior to a governmental meeting. David Dayen has been astutely documenting the ways in which how the WI Senate Republicans split off the repeal of collective bargaining to make it “non-fiscal” (despite arguing for a month that it was a fiscal provision) failed to actually remove fiscal items from the language they voted on:
But that does not address the potential fiscal impact in what remained. On page 12 of the LFB memo you see a item that would “reduce funding… in the Joint Committee on Finance’s general program revenue supplemental appropriation.” On page 17, you see the changes to public employee health and pension benefits. On page 33, there’s an inclusion of a particular piece of wetlands in a tax incremental financing district, which appears to be tax relief. It would be hard to imagine that these pieces don’t have a fiscal impact. In fact, the Wisconsin State Journal, one of the more staid publications in the state, basically came this close to accusing the Republicans of outright lying
One of the Wisconsin 14 Democratic State Senators who’ve bravely stayed away for the last number of weeks and created the delay that allowed protests to gather steam did in fact go so far as to call Governor Walker a liar last night on MSNBC (sorry I don’t have the quote). State Senate Minority Leader Mark Miller had this to say after the Republicans dishonest and dishonorable actions yesterday:
“In thirty minutes, 18 State Senators undid fifty years of civil rights in Wisconsin.
“Their disrespect for the people of Wisconsin and their rights is an outrage that will never be forgotten.
“Tonight, 18 Senate Republicans conspired to take government away from the people.
“Tomorrow we will join the people of Wisconsin in taking back their government.”
The solidarity between Wisconsin Democrats, unionized workers of both the public and private sector, students and the general public has been truly inspiring. It will continue in the face of this latest assault and I can’t imagine anything but a further slide in approval for Gov. Scott Walker and the Republicans in Madison who rammed this bill through over unprecedented public opposition.
Iowa AG Miller’s Term Sheet with Banks
The 27-page term sheet between the group of 50 state Attorneys General, led by Iowa AG Tom Miller, and the banks is online and it isn’t pretty. There are a few categories I see this term sheet doing:
1. Getting things to work the way they are already intended to work under current law. This is the bulk of the term sheet;
2. Getting the servicers actions back in line with MBS investor interests and homeowner interests;
3. Improving systems for homeowners in sensible ways advocated by consumer groups.
But mostly #1. Fraud Digest writes, “For the most part, the settlement would require servicers to do exactly what they are already required to do.”
At FedUpUSA, Stephanie has a very detailed analysis:
Let’s be blunt: There’s no “there” there.
The entire document is a rehash of what servicers had a legal mandate to do right up front. Accurately apply payments. Respond to inquiries. Operate in good faith. Use a NPV test for HAMP (was in the HAMP program originally.) Document the assignment chain before foreclosing.
There’s exactly one substantive change, in that HAMP did not prohibit “dual-track” (that is, foreclosure while attempting modification.)
Yves Smith rips apart the landscape that bred this term sheet:
Team Obama has put on a full court press since March 2009 to present the banks as fundamentally sound, and to the extent they needed more dough, the stress tests and resulting capital raising took care of any remaining problems. Timothy Geithner was even doing victory laps last month in Europe. To reverse course now and expose the fact that writedowns on second mortgages held by the four biggest banks and plus the true cost of legal liabilities from the mortgage crisis (putbacks, servicer fraud, chain of title issues) would blow a big hole in the banks’ balance sheets and fatally undermine whatever credibility the officialdom still has.
But the fallacy of their thinking is that addressing and cleaning up this rot would lead to a financial crisis, therefore anything other than cosmetics and making life inconvenient for the banks around the margin is to be avoided at all costs. But these losses exist already. The fallacy lies in the authorities’ delusion that they are avoiding creating losses, when we are in fact talking about who should bear costs that already exist.
Smith goes on:
Even if these measures were tough-minded and vigorously enforced (two irrelevant “ifs”), they are still deficient. We don’t even know the extent of servicer abuses, since we are conveniently moving very quickly to avoid any serious probe, but there is considerable evidence that suggests that a lot of foreclosures were servicer driven. So merely fixing practices going forward, is necessary but far from sufficient. What are the remedies for people who suffered in the past? Of course, it’s horrifically difficult for individuals to prove their case, which is why having state AGs act on their behalf is the best remedy we have. And if that is going to be waived, the trade needs to be that the pubic gets something punitive, not just prescriptive.
…
In other words, this is simply another example of how the too big to fail banks are chipping away at the rule of law. The banks have over time have fought successfully to reduce the influence of state laws and regulations on their business while increasingly bending the Federal regulatory apparatus to their will. But the state AGs are still enough of a force to be reckoned with that the Federal bank regulators are now applying considerable to pressure them into abandoning initiatives that could help homeowners in their states. Hopefully at least a few of these AGs will wake up and have the self-preservation instincts to realize that this settlement is not in their or their constituents’ best interests.
David Dayen has a take that ends up being very close to where I am (it stems from his writing on an Iraq veteran whose home was illegally foreclosed and whose possessions were stolen by the servicer):
The main point is this: you can make all the guidelines you want, and basically, the 27-page term sheet has most of them. You can demand a single point of contact for borrowers, an end to the dual track process of the servicer pursuing modifications and foreclosures simultaneously, specific mandates for modifications and all the rest. You can even set stricter guidelines for dealing with military families. All of those are in the term sheet, and many of those kinds of guidelines are in the VA Home Loan that Sgt. Kevin Matthews received. It didn’t matter. Neither did all the promises servicers have made to reform their systems going back to 2003. Servicers pretty much don’t follow the law. That’s why they were under investigation. A document that tells them to comply with the law, in language the banks are already using, doesn’t seem like it’ll make much of a difference.
Two more things. Without rigorous enforcement, the guidelines are approximately meaningless. State AGs and the Consumer Financial Protection Bureau would serve as the enforcement monitors under the terms of the agreement. And CFPB adds a new wrinkle to this. However, if servicers have been abusing their customers for this long, and the term sheet mostly reinforces the same laws that they broke all this time (with a couple additional strictures), who’s to say that they won’t simply treat the Kevin Matthewses of the world the same way again?
The final issue is this. The term sheet sets the basic standards for conduct in the servicing industry that servicers should have followed all along. But this is supposed to be a sanction, for violations of law. So now the penalty for failing to follow the law is having to sign an agreement saying you’ll really follow the law this time? We don’t know what monetary penalties or quotas for principal mods will come along with this yet. But we do know this. Kevin Matthews had all his possessions stolen from him, and nobody under this agreement will go to jail for that theft.
The term sheet is not a full deal. We don’t know if there will be any financial penalty to along with it. We don’t know if banks will have a specific money budgeted for principal reduction. But the implication prior to last night was that whatever terms were agreed to would come in exchange for the 50 state AGs not pursuing criminal investigations. And I don’t see any of this, even good parts that will hopefully make life a lot easier for currently distressed home owners, as an appropriate trade for not looking backwards at illegal actions by servicers.
What’s most frustrating is that it seems that the things that need to happen are not happening not because of a lack of need, but because these AGs and federal regulators don’t have believe they have the political will to fight the banks or that the banks need to be protected from suffering the consequences of their action. Given that and everything else we’ve seen from regulators and AGs, I find it hard to believe that the provisions in this term sheet will be adequately enforced, that whatever commitment to principal modification that is made alongside this will be large enough to be meaningful, and that servicers will be sufficiently dissuaded from continuing illegal behaviors that squeeze people out of their homes. If there was a realistic chance of enforcement and if there ends up being a requirement for a large volume and dollar amount of principle modification and if the settlement effectively stopped servicers from behaving the way they have structured themselves to behave, this could be a good thing, as long as it also included a pathway for some of these fraudsters to go to jail.
I look forward to seeing the rest of this deal, as well as seeing if the rest of the state Attorneys General are actually on board with it. Until then, I will file this in the ever-growing section of things that might have been tolerable had they also looked backwards and held people accountable.
Bonds vs. Social Security
In the course of debunking a particularly bad article by Fareed Zakaria on what he perceives to be high costs of Social Security and Medicare, Dean Baker makes a point which I think is very useful in turning back attacks on Social Security. Baker writes:
Zakaria is upset that seniors are allowed to receive the benefits that they have paid for. By the same logic, he should be upset that billionaires like Peter Peterson can get millions or even tens of millions of dollars in interest each year on the government bonds they own. After all, this money would be far better spent educating our children than being put in the pockets of these incredibly wealthy people. The Zakaria methodology would have us go after these interest payments on the debt, if it were applied consistently.
Of course the idea of ceasing to pay interest on government bonds would be received as absurd in most any quarter. But it is effectively what those who take issue with the federal government paying back the Social Security trust fund are arguing. The government reneging on its debts is a dangerous idea no matter who the debt is owed to. While it’d be great to stop giving taxpayer money to pay interest on the bonds owned by Pete Peterson and the Koch brothers, that’s not a choice available to the federal government and neither is ceasing to pay what is owed to Social Security.
Little Enthusiasm
Politico’s Morning Money tip sheet:
INDUSTRY MIND-MELD – Morning Money spoke with a number of bank executives about the concept of a $20 billion “global settlement” of state and federal mortgage servicer abuse probes. The executives view the idea as a naked shakedown by regulators, especially at the CFPB. There is little enthusiasm for signing on to it. They also view it as a direct contradiction of the administration’s attempt to take a “pro-business” stance. “How can they be business- friendly and sign-off on something like this?” one executive said, noting that he did not believe the OCC was in favor of the deal. [Emphasis added]
Law enforcement based on consensus between cop and perp hasn’t caught on broadly, but seems to be how it works when Wall Street is the perp. For example, I don’t think Bradley Manning has much enthusiasm for being left naked in his cell at Quantico. But his level of enthusiasm probably isn’t something that is determinative of how he is treated.
MJ on Wisconsin
Andy Kroll of Mother Jones has a must-read account of the ongoing fight between workers and GOP Governor Scott Walker in Wisconsin. It’s a step-by-step walk through of Walker’s actions, labor’s responses, and how people moved into the streets to protest Walker’s attacks on unions. If you haven’t been paying attention, this is a good piece to get caught up. And if you have been paying attention, Kroll provides insight into how Wisconsin unions made decisions to act with conviction to protect public workers. Perhaps the most important part of the fight in Wisconsin is how it has brought different unions together in solidarity. Walker’s union-busting bill exempts the police and fire fighters – two unions that were politically supportive of him. He hoped to divide public workers and keep some of the best messengers for labor on the sidelines. But the fire fighters and police wouldn’t have it – they stood with other public sector workers and have been strong opponents to Walker’s bill. Beyond labor solidarity, Kroll identifies the radicalization of students as key allies in the fight as something which has helped sustain opposition to union busting. Given that labor unions haven’t had the best public perception broadly, seeing the positive support from youths in Wisconsin is encouraging for the long-term prospects of resistance to union busting. Demographics are important and it’s going to be hard for Republicans to succeed in destroying unions if young voters are not on their side. Hopefully what we are seeing in Wisconsin (and Ohio) is not a flash in the pan and labor solidarity with public support stays strong.
Explaining Republican Attacks on the Middle Class
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Clay Bennett |
Keith Olbermann, writing at his new blog, does a great job answering the question of why Republicans are waging war on the middle and working class of America.
If you were standing at an ATM machine that spit out a thousand dollar bill every time you pushed any button – and you knew there was no real chance you’d ever be punished for keeping each one of them – how long would you stand there?
Presumably you’d stand there until you passed out. Or until you ran out of room in your pockets because they were stuffed full of thousands. Or until you could call your very best friends to bring over bags and empty pillowcases and wheelbarrows. Or until you realized that there was a finite number of thousand dollar bills in the universe and you’d better make arrangements to get the treasury to print more. Or until you calculated the tax implications of the product of the bottomless ATM and you realized you’d better use some of your thousands to bribe politicians to change those tax laws. Or until you had successfully done all that – and every other connivance you could think of to make sure the ATM kept spewing thousands – at which point you might let your friends take your place in line. Or, if not, screw ‘em – you got yours.
This is, of course, the answer to the most macro of the questions I get asked every day: why are the Republicans trying to do things like what they’re trying to do in Wisconsin? Why do they want to impoverish the middle class, bust unions, cut staples like Social Security, Medicare, and Medicaid, postpone the retirement age, stop government expenditures on everybody except the rich, increase government expenditures on everybody who’s already rich, smother real small business, redefine “small business” by counting not the number of employees but the number of owners, and a thousand other scams worthy of an economic version of the Spanish Inquisition?
Because they’re standing at an ATM machine that’s spewing out thousand dollar bills. They know some day it will stop, or they will be stopped from grabbing them. They know that there is a tipping point coming in this country when – to borrow cartoonist Clay Bennett’s priceless imagery – the mice will realize they are mice and the Republicans are cats. They saw the polling that showed that it took barely six weeks for Scott Walker to lose the state GOP its Republican Union members. They know what the changing demographics of the nation suggest about the extinction of Conservatism.
To put it a different way, Republicans and financial elites are enjoying vacuuming up wealth from the poor and middle classes of America. Working people are the ATM and the cash that comes out is the transfer of wealth that is the product of the class warfare waged by the rich on everyone else in America. These people aren’t going to stop until the ATM finds a way to stop cash from being withdrawn.
The Moral Question
Via New Deal 2.0, Tom Scocca has an incredible post dissecting David Brooks’ anti-entitlement, anti-poor people writings. Or, as the person who manages the New Deal 2.0 Twitter account put it, “Tom Scocca argues that deficit hawks are really just irritated by the existence of poor people.”
The debt—the runaway debt—has nothing to do with morality. Casting the debt as an object of moral concern is the work of minds that have come detached from human experience. The debt is an epiphenomenon. It is the side effect created by the specific moral decisions about what the country wishes to see funded, and how it is willing to fund those things.
Talking about the deficit is a way of cutting morality out of the discussion. Waste! Mismanagement! Incompetence! Unaccountable earmarks! These things are noise. The actual questions are: is money to be spent on people who do not have money? And where is that money going to come from?
There are people who do not have money. Some of them do not have money because they are children. Some of them do not have money because they are old or sick or otherwise unsuited for the labor market. Some of them do not have money because the labor market has stopped paying for the work that they know how to do in the places where they live. Robots and other machines can approximate the things these people used to do.
This may be hard for Brooks and other elites to understand, but Scocca is exactly right. There are real moral questions at play here, but the deficit hawks aren’t being honest about what they are.
What happens when there is no money to give to the people who have no money? That is the moral question. It’s fine to say that the old people should have saved more, they should have worked an extra job, they should have done without cable TV, they should have invested more wisely. Saying that doesn’t change the fact that there will be old people who do not have money. These old people will believe that they need food and shelter and medical care.
Will they get it? At the arch-plutocrats’ end of things, the Koch brothers’ end, the end occupied by the most devout worshippers of Ayn Rand, the answer is: no. That’s the goal. It’s long since time for the sloppy, implicit, badly supported social contract to go away. Rich people have been trimming their contribution to the general revenue for decades now. They are not interested in paying the premium that keeps old people and ailing people or just backward people out of the streets. If the day comes that they have to travel to and from their various compounds in armored helicopters, they can afford the helicopters. It’s not their problem.
With all the talk about America being the greatest country on earth from Republicans, it’d be great if some of them recognized what has allowed them to do so well. The Masters of the Universe don’t exist in a vacuum – their successes are built on the efforts of working American. Being glib about the need to make Tough Choices and Hard Decisions when it comes to social spending ignores the real consequences of being so Serious. People will lose their homes. They will get sick. They will be hungry. They will die. These are real moral consequences. Conversely, the color of ink on paper is not a moral question.
Hold Fast 