Category Archives: Banks

How America’s National Security Apparatus — in Partnership With Big Corporations — Cracked Down on Dissent

  By Patti Walters | May 23, 2013 - 4:30 am | ALEC, Banks, FBI, Homeland Security, Occupy, Occupy Wall Street, Police
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May 21, 2013                         By Alex Kane

A new report is an eye-opening look into how the U.S. counter-terror apparatus was used to track the Occupy movement.

 

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Counter-terror police officers collaborated with corporate entities to combat protests. Undercover police officers monitored and tracked the Occupy movement. A right-wing corporate-backed group hired a police officer to help protect a conference. These are some of the details revealed in a new report published by the Center for Media and Democracy’s Beau Hodai, along with DBA Press. The revelations are based on government documents the group obtained.

The report, titled “Dissent or Terror: How the Nation’s Counter Terrorism Apparatus, In Partnership With Corporate America, Turned on Occupy Wall Street,” is an eye-opening look into how the U.S. counter-terror apparatus was used to track the Occupy movement in 2011 and 2012 and also help protect the business entities targeted by the movement. The report specifically looks at the activities of “fusion centers,” or law enforcement entities created after 9/11 that transform local police forces into counter-terror units in partnership with federal agencies like the Department of Homeland Security. The fusion centers devoted a lot of time–to the point of “obsession,” the report notes–to monitoring the Occupy movement, particularly for any “threats” to public safety or health and to whether there were “extremists” involved in the movement.

The documents obtained for the report from government agencies reveal “a grim mosaic of ‘counter-terrorism’ agency operations and attitudes toward activists and other socially/politically-engaged citizens over the course of 2011 and 2012,” writes Hodai. He adds that these heavily-funded agencies indisputably view Occupy activists as “terrorist” threats. Additionally, Hodai writes that “this view of activists, and attendant activist monitoring/suppression, has been carried out on behalf of, and in cooperation with, some of the nation’s largest financial and corporate interests.”

Much of the report hones in on the Occupy Phoenix branch of the movement and Arizona counter-terrorism agents monitoring, tracking and cracking down on the protests.

For instance, when JP Morgan Chase CEO Jamie Dimon was planning on coming to Phoenix in October 2011, a “counter-terrorism” detective employed by the Phoenix Police Department’s Homeland Security Bureau exchanged information on potential protests with a JP Morgan Chase security manager. The detective, Jennifer O’Neill, received information on Dimon’s travel plans, and then shared information about Occupy Phoenix. O’Neill said that she and another officer had tracked the online activities of Occupy protesters to find out if they were planning to protest Dimon. No plans for protest were discovered by O’Neill, who also works with the Arizona Counter Terrorism Information Center, otherwise known as the Arizona fusion center.

Read More:   http://www.alternet.org/news-amp-politics/how-americas-national-security-apparatus-partnership-big-corporations-cracked-down?akid=10464.213679.8HCvvT&rd=1&src=newsletter843638&t=3&paging=off

America Is Ruled by Billionaires, and They Are Coming After the Last Shreds of Our Democracy

  By Patti Walters | April 6, 2013 - 9:08 pm | 1%, Banks, Congress, Corporations, Deregulation, Financial Oligarchy, Occupy Wall Street, Plutocracy, Totalitarianism, Vulture Capitalism, Wall Street
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April 4, 2013                                                      By Michael Brenner

America is a plutocracy through and through — what are we going to do about it?

Plutocracy literally means rule by the rich. “Rule” can have various shades of meaning: those who exercise the authority of public office are wealthy; their wealth explains why they hold that office; they exercise that authority in the interests of the rich; they have the primary influence over who holds those offices and the actions they take. These aspects of “plutocracy” are not exclusive. Government of the rich and for the rich need not berun directly by the rich. Also, in some exceptional circumstances rich individuals who hold powerful positions may govern in the interests of the many, e.g. Franklin Roosevelt.

The United States today qualifies as a plutocracy – on a number of grounds.  Let’s look at some striking bits of evidence. Gross income redistribution upwards in the hierarchy has been a feature of American society for the past decades. The familiar statistics tell us that nearly 80% of the national wealth generated since 1973 has gone to the upper 2%, 65% to the upper 1 per cent. Estimates as to the rise in real income for salaried workers over the past 40 years range from 20% to 28 %. In that period, real GDP has risen by 110% – it has more than doubled.

To put it somewhat differently, according to the Congressional Budget Office,  the top earning 1 percent of households gained about 8X more than those in the 60 percentile after federal taxes and income transfers over a period between 1979 and 2007; 10X those in lower percentiles.  In short, the overwhelming fraction of all the wealth created over two generations has gone to those at the very top of the income pyramid.  That pattern has been markedly accelerated since the financial crisis hit in 2008. Between 2000 and 2012, the real net worth of 90% of Americans has declined by 25%.  Theoretically, there is the possibility that this change is due to structural economic features operating nationally and internationally. That argument won’t wash, though, for three reasons. First, there is no reason to think that such a process has accelerated over the past five years during which disparities have widened at a faster rate. Second, other countries (many even more enmeshed in the world economy) have seen nothing like the drastic phenomenon occurring in the United States. Third, the readiness of the country’s political class to ignore what has been happening, and the absence of remedial action that could have been taken, in themselves are clear indicators of who shapes thinking and determines public policy. In addition, several significant governmental actions have been taken that directly favor the moneyed interests.

Read More:   http://www.alternet.org/america-ruled-billionaires-and-they-are-coming-after-last-shreds-our-democracy?akid=10296.213679.waBtfB&rd=1&src=newsletter820645&t=11&paging=off

 

The Cooperative Way to a Stronger Economy

  By Patti Walters | March 28, 2013 - 4:44 pm | Banks, Co-ops, Corporations, Credit Unions, Unions, Wall Street
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posted Feb 19, 2013                                                                     by                             Sarah van Gelder
Co-ops—just like people—can get more done together than anyone can do alone. They come in many forms, and are more common than you might imagine.

Our little group of a dozen families was running out of time. After meeting every weekend for three years to plan our hoped-for cohousing community, and after investing much of our savings to acquire a few acres of land, it looked as though our dream would fail. We couldn’t find a bank that would finance a cooperative.

Visit the table of contents for the Spring 2013 issue of YES! Magazine, How Cooperatives are Driving the New Economy.

It was our local credit union that saved us. “You’re owned by your members? What’s so odd about that? We’re owned by our members,” the president of the Kitsap Credit Union mused.

With that financing, we were able to build 30 affordable homes and a common house, and to make space available for gardens, an orchard, a playfield, and a tiny urban forest. In 1992, we moved into Winslow Cohousing, the first member-developed cohousing community in the United States.

Co-ops—just like people—can get more done together than anyone can do alone. The good news is that co-ops come in many forms and are more common than you might imagine. They are owned by workers, residents, consumers, farmers, craftspeople, the community, or any combination. What they have in common is that they circulate the benefits back to their member-owners, and these benefits ripple out to the broader community. As Marjorie Kelly explains, cooperative forms of ownership allow the well-being of people, the planet, and future generations to take priority over profits for shareholders and executives.

This is an exciting moment for cooperatives. A growing disillusionment with big banks and corporations is sparking interest in economic alternatives, and new opportunities are opening up:

• The United Steelworkers and other unions are exploring worker-ownership as a means to assure stable, living-wage jobs that can’t be outsourced to low-wage regions.

• Communities seeking alternatives to profit-driven corporate health insurance are forming health care co-ops.

• Hundreds of thousands of people who “moved their money” from Wall Street banks to local banks and credit unions now have a say in how their money is used.

• Consumers are turning to co-ops like Equal Exchange for ethically produced goods, and Equal Exchange, in turn, supports co-ops made up of farmers and producers in some of the world’s poorest regions.

Read More:   http://www.yesmagazine.org/issues/how-cooperatives-are-driving-the-new-economy/the-cooperative-way

How Congress Could Fix Its Budget Woes, Permanently

  By Patti Walters | March 13, 2013 - 5:24 am | Banks, Currencies, Debt, Federal Reserve, IMF, World Bank
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February 8, 2013                                Ellen Brown

As Congress struggles through one budget crisis after another, it is becoming increasingly evident that austerity doesn’t work. We cannot possibly pay off a $16 trillion debt by tightening our belts, slashing public services, and raising taxes. Historically, when the deficit has been reduced, the money supply has been reduced along with it, throwing the economy into recession. After a thorough analysis of statistics from dozens of countries forced to apply austerity plans by the World Bank and IMF, former World Bank chief economist Joseph Stiglitz called austerity plans a “suicide pact.”

Congress already has in its hands the power to solve the nation’s budget challenges – today and permanently. But it has been artificially constrained from using that power by misguided economic dogma, dogma generated by the interests it serves.  We have bought into the idea that there is not enough money to feed and house our population, rebuild our roads and bridges, or fund our most important programs — that there is no alternative but to slash budgets and deficits if we are to survive. We have a mountain of critical work to do, improving our schools, rebuilding our infrastructure, pursuing our research goals, and so forth. And with millions of unemployed and underemployed, the people are there to do it. What we don’t have, we are told, is just the money to bring workers and resources together.

But we do have it.  Or we could.

Money today is simply a legal agreement between parties. Nothing backs it but “the full faith and credit of the United States.” The United States could issue its credit directly to fund its own budget, just as our forebears did in the American colonies and as Abraham Lincoln did in the Civil War.

Any serious discussion of this alternative has long been taboo among economists and politicians. But in a landmark speech on February 6, 2013, Adair Turner, chairman of Britain’s Financial Services Authority, broke the taboo with a historic speech recommending that approach. According to a February 7th article in Reuters, Turner is one of the most influential financial policy makers in the world.  His recommendation was supported by a 75-page paper explaining why handing out newly-created money to citizens and governments could solve economic woes globally and would not lead to hyperinflation.

Our Money Exists Only at the Will and Pleasure of Banks

Government-issued money would work because it addresses the problem at its source. Today, we have no permanent money supply. People and governments are drowning in debt because our money comes into existence only as a debt to banks at interest. As Robert Hemphill of the Atlanta Federal Reserve observed in the 1930s:

Read More:  http://www.webofdebt.com/articles/budgetfix.php

 

Are Big Banks a Bunch of Organized Criminal Conspiracies?

  By Patti Walters | March 3, 2013 - 9:18 pm | Banks, Crime, Libor, Money Laundering
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February 27, 2013                                     By Les Leopold

The record of deceit and deception that has surfaced in just the past two months points to yes.

Are too-big-to-fail banks organized criminal conspiracies? And if so, shouldn’t we seize their assets, just like we do to drug cartels?

Let’s examine their sorry record of deceit and deception that has surfaced in just the past two months:

Loan Sharking

You want to get really, really pissed off? Then read “Major Banks Aid in Payday Loans Banned by States” by Jessica Silver-Greenberg in the New York Times(2/23/13). In sickening detail, she describes how the largest banks in the United States are facilitating modern loansharking by working with Internet payday loan companies to escape anti-loansharking state laws. These payday firms extract enormous interest rates that often run over 500 percent a year. (Fifteen states prohibit payday loans entirely, and all states have usury limits ranging from 8 to 24 percent. See the list.)

The big banks, however, don’t make the loans. They hide behind the scenes to facilitate the transactions through automatic withdrawals from the victim’s bank account to the loansharking payday companies. Without those services from the big banks, these Internet loansharks could not operate.

Enabling the payday loansharks to evade the law is bad enough. But even more deplorable is why the big banks are involved in the first place.

For the banks, it can be a lucrative partnership. At first blush, processing automatic withdrawals hardly seems like a source of profit. But many customers are already on shaky financial footing. The withdrawals often set off a cascade of fees from problems like overdrafts. Roughly 27 percentof payday loan borrowers say that the loans caused them to overdraw their accounts, according to a report released this month by the Pew Charitable Trusts. That fee income is coveted, given that financial regulations limiting fees on debit and credit cards have cost banks billions of dollars.

Take a deep breath and consider what this means. Banks like JPMorgan Chase provide the banking services that allow Internet payday loansharks to exist in the first place, with the sole purpose of breaking the state laws against usury. Then Chase vultures the victims, who are often low-wage earners struggling to make ends meet, by extracting late fees from the victims’ accounts. So impoverished single moms, for example, who needed to borrow money to make the rent, get worked over twice: First they get a loan at an interest that would make Tony Soprano blush. Then they get nailed with overdraft fees by their loansharking bank.

Read More:  http://www.alternet.org/corporate-accountability-and-workplace/are-big-banks-bunch-organized-criminal-conspiracies?akid=10123.213679.BBbFNZ&rd=1&src=newsletter802457&t=3

 

Why The Rolling Jubilee Matters

  By Patti Walters | February 27, 2013 - 10:28 pm | Banks, Capitalism, Debt, Inequity, Rolling Jubilee
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29 January 2013                                By Kevin Zeese

Rolling Jubilee has abolished more than $11 million in debts.

This blog has not been updated lately because I’ve been privileged to help build Strike Debt, a social movement against an economic system which forces millions of people to go into debt for basic needs like food, housing, health care, and education. In particular, I’m involved in organizing the Rolling Jubilee, a campaign to purchase defaulted debts for pennies on the dollar and abolish them.

Rolling Jubilee blew up in the media, taking us all by surprise. Unfortunately, there was not a lot of time to consider what it all meant. Three months in, I’d like to reflect on what we did and why.

Rolling Jubilee required the tireless effort of many unpaid organizers who spent months researching the debt industry, building relationships with debt buyers and attorneys, developing websites, and planning a star-studded telethon in NYC. Throughout the process, we did not know whether the campaign would be a success. Would people want to help abolish the debts of total strangers? We set the modest goal of raising $50,000 to erase approximately $1 million of debt and hoped for the best.

From the moment the Jubilee launched, our expectations have been wildly exceeded. Contributions flowed in. We smashed our initial goal in the first 36 hours. At this writing, we’ve raised over $550,000 to abolish more than $10 million of debt. The campaign also attracted media attention and was featured in many publications, including the New York Times, Forbes, and Mother Jones. Since early November, the internet has been abuzz with conversation about debt and its discontents. In addition to raising money to abolish debt, the Rolling Jubilee has succeeded by an equally important metric: starting a public conversation about the predatory debt industry and raising critical questions about how debt functions as a centerpiece of capitalist exploitation.

The campaign continues. In December, we announced our first purchase of medical debt, which will be followed in a few weeks by another, much larger purchase. Now that the Jubilee is up and running, I’d like to explain why the campaign is important and respond to some of Strike Debt’s critics on the Left. As I don’t speak for Strike Debt, these views are my own.

First, the basics: when a debtor defaults, the lender can sell the debt for pennies on the dollar to buyers and brokers on a secondary market. In some cases the lender is required by law to sell off defaulted debt. That means that if you owe $100 and don’t pay it back, the lender can sell your debt for between $5 and $20 (and sometimes even less) to the secondary market. Selling the debt allows the original lender to get a tax write off, a kind of mini-bailout. Then, collectors try to get you, the debtor, to pay the full amount. Many different kinds of debt – from credit cards to payday loans – are sold this way. Lenders and debt collectors essentially traffic in human misery.

In some ways, those of us involved in Strike Debt were unprepared for the avalanche of emotion that followed the launch of the Jubilee. We heard from uninsured people whose lives had been ruined by one grim medical diagnosis. We received desperate letters from former students whose loan payments had ballooned to amounts unpayable in a lifetime. We heard from families trying against all odds to save their homes in foreclosure. Some wrote to ask for help that we cannot provide, as all debts are sold in anonymous bundles. For the most part, though, debtors wanted only to release their shame and tell their stories.

It is clear that, in addition to offering concrete help to a few, RJ has opened the door to a broad conversation about debt as a system of domination.\

Read More:  http://october2011.org/blogs/kevin-zeese/why-rolling-jubilee-matters

Criminalizing Dissent and Punishing Occupy Protesters: Introduction to Henry Giroux’s “Youth in Revolt”

  By sherry | February 1, 2013 - 2:38 am | Activism, Austerity, Banks, Books, Corporations, Economics, Education, Ethnic Studies, Human Rights, Inequity, Media, Neo-Liberal, Occupy, Privatization, Regulation, Violence, War on Terror
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By Henry A Giroux, Truthout | Book Excerpt

Military-style command and control systems are now be­ing established to support “zero tolerance” policing and urban surveillance practices designed to exclude failed consumers or undesirable persons from the new enclaves of urban consumption and leisure.

—Stephen Graham

Young people are demonstrating all over the world against a variety of issues ranging from economic injustice and massive inequality to drastic cuts in education and public services.1 In the fall of 2011, on the tenth anniversary of September 11, as the United States revisited the tragic loss and celebrated the courage displayed on that torturous day, another kind of commemoration took place. The Occupy movement shone out like flame in the darkness—a beacon of the irrepressible spirit of democracy and a humane desire for justice. Unfortunately, the peacefully organized protests across America have often been met with derogatory commentaries in the mainstream media and, increasingly, state-sanctioned violence. The war against society has become a war against youthful protesters and in­creasingly bears a striking resemblance to the violence waged against Occupy movement protesters and the violence associ­ated with the contemporary war zone.2 Missing from both the dominant media and state and national politics is an attempt to critically engage the issues the protesters are raising, not to mention any attempt to dialogue with them over their strate­gies, tactics, and political concerns. That many young people have become “a new class of stateless individuals … cast into a threatening and faceless mass whose identities collapse into the language of debt, survival, and disposability” appears to have escaped the attention of the mainstream media.3 Matters of justice, human dignity, and social responsibility have given way to a double gesture that seeks to undercut democratic public spheres through the criminalization of dissent while also resorting to crude and violent forms of punishment as the only mediating tools to use with young people who are at­tempting to open a new conversation about politics, inequality, and social justice.

In the United States, the state monopoly on the use of violence has intensified since the 1980s and in the process has been di­rected disproportionately against young people, poor minorities, immigrants, women, and the elderly. Guided by the notion that unregulated, market-driven values and relations should shape every domain of human life, a business model of governance has eviscerated any viable notion of social responsibility and conscience, thereby furthering the dismissal of social problems and expanding cutbacks in basic social services.4 The examples are endless, but one in particular stands out. In March 2012, Texas governor Rick Perry7joined eight other states in passing legislation to ban funding for clinics, including Planned Parent­hood facilities, affiliated with abortion services for women.5 As a result, the federal government has stopped funding the Texas Women’s Health Program. Unfortunately, this attempt by Perry to punish all women because of his antiabortion stance means that more than 130,000 women in Texas will not have access to vital services ranging from mammograms to health care for their children. There is more at work here than a resurgent war on women and their children or “an insane bout of mass misogyny.”8 There is also a deep-seated religious and political authoritarianism that has become one of the fundamental pil­lars of what I call a neoliberal culture of cruelty. As the welfare state is hollowed out. a culture of compassion is replaced by a culture of violence, cruelty, waste, and disposability.7Banks, hedge funds, and finance capital as the contemporary registers of class power have a new visibility, and their spokespersons are unabashedly blunt in supporting a corporate culture in which “ruthlessness is prized and money is the ultimate measure.”8 Collective insurance policies and social protections have given way to the forces of economic deregulation, the transformation of the welfare state into punitive workfare programs, the privatiza­tion of public goods, and an appeal to individual culpability as a substitute for civic responsibility. At the same time, violence—or what Anne-Marie Cusac calls “American punishment”—travels from our prisons and schools to various aspects of our daily lives, “becoming omnipresent … [from] the shows we watch on television, [to] the way many of us treat children [to] some influential religious practices.”9

Read More: http://truth-out.org/opinion/item/14224-criminalizing-dissent-and-punishing-the-occupy-movement-protesters-introduction-to-henry-girouxs-youth-in-revolt

Thoughts from Occupy

  By sherry | January 21, 2013 - 3:37 am | Bank Failure, Banks, Capitalism, Citizens United, Civil Rights, Corporations, Economy, Education, Health Care, Jobs, Occupy, Occupy Tucson, Occupy Wall Street, Solar Power, Wind Power
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By Billy Lolos

Forced to watch from Tucson while the Occupy Wall Street Movement took hold in New York , I eagerly added my voice and presence when the Tucson Occupation began. For, like the drug-addict or alcoholic who reaches bottom when the pain of drinking or drugging is greater than the pain they are trying to medicate, my cloak of silent compliance had left me naked.

First and foremost, let me say that this is our country and we are in grave danger of losing it forever. Big money, corporate money, or whatever you want to call it (I call it “capitalism gone wild”) has created a monster that is devouring our democracy and its excrement is polluting just about every facet of our society.

Here are some issues, and by no means all the issues, challenging us:

1) Citizens United – this is the one place where capitalism gone wild has the greatest detrimental effect on our democracy. Elected officials are not beholding to the people who elected them; rather, the politicians are beholding to those whose money got them elected. “We, the people” have lost our voice and the government of the people, by the people, and for the people, has become a fading memory. We need publicly financed elections.

2) Health Care For All – nowhere in the word “insurance” do I see or hear health care. Wall Street administers our health care and they only provide it to those who can afford it. We spent 2.6 trillion dollars on health care in 2010. That’s $8,402 for every man, woman, and child in America . Yet 10% of our people have no coverage and 45,000 people die annually due to no access to health care. At least $500 billion of the $2.6 trillion spent annually goes to insurance profits and administration costs. Why are we the only industrialized country without some kind of public health care? Greed. Plain and simple.

People believe that socialized medicine would be the end of democracy. Political systems and economic systems are independent of each other and are not fused to each other. I have a Bachelor of Science in Psychology, and as an undergraduate, I studied several different psychological theories (e.g., cognitive, behavioral, object relations theory, etc.). Now if I were to go on to a post-graduate degree, I would specialize in one of these disciplines. Clinical psychologists,however, do not adhere to only one theory when treating their patients; they use what is called “best practice,” using the field or theory that best helps the patient. Best practice is used in medicine, in engineering, as well as in therapy.The insurance companies use best practice to keep their costs down, thus increasing their profits. I propose best practice economics. Use the economic theory that provides the best and most cost-effective results.

3) Jobs – I don’t remember ever hearing a politician run on a free-trade agreement platform. Yet we have these agreements shoved down our throats. Free trade agreements cost American jobs by allowing big business to exploit cheap foreign labor and then import the products, circumventing tariffs. Tariffs designed to protect American labor. Big business makes more while the average American earns less. The bail-out of Wall Street (the banks) and the big three automakers worked. The New York stock exchange is over 13,000 and GM set profit records in 2011.

Now we need to bail out Main Street . Make $700 billion available for low- or no-interest loans to put a windmill in every yard and solar panels on every roof. the only stipulations would be, American made products and American labor. This would not only jump-start the economy by creating several million jobs, it would cut into our dependence on big oil. This would also retool our buildings for 21st century renewable energy sources. I don’t want to hear that the technology is not yet available. If that were so, why are there wind farms and solar farms where they sell us the energy they create? Every satellite in space is equipped with solar panels; why are they not on every American roof? Greed.! If they can’t sell it to us, we can’t get it.

In 1903, the Wright brothers’ first flight traveled 120 feet. Sixty-six years later, man was walking on the moon. The $700 billion bail-out would trigger a firestorm of research and development in the wind and solar technology fields as companies compete for the lions’ share of the bailout money.

4) Educational Opportunities – If the pursuit of happiness is an inalienable right, then affordable education should be available to all. Presently there is $1 trillion in student debt for tuition alone. End education for profit. Increase access to all types of education. That would be jobs training, academic education, and technical education.

Now, how to pay for all of this? Adopt a new tax code, free of loopholes and subsidies, and one that values labor over capital gains.

Since Ronald Reagan “released the bulls” in the 1980’s by de-regulating Wall Street, income disparity is off the charts. And, because Wall Street, big business, capitalism gone wild, or whatever you call it, controls our elected officials, our tax code is bottom-heavy instead of top-heavy. We are the richest country on the planet, yet capitalism gone wild treats us as though we are an impoverished third world nation.

Remember, the above mentioned issues are not, nor are they meant to be, a complete list of grievances. They are just a good start. I have not even mentioned: the foreclosure fiasco, for-profit wars, the erosion of our civil rights, global warming, the GOP’s war on women or the attack on collective bargaining (organized labor) These and other issues will have to wait for another article.

Wake up, America ! Use your voice while you still have it. For, if not now, when? And if not us, who?

Full Show: How Big Banks are Rewriting the Rules of our Economy

  By Patti Walters | December 26, 2012 - 6:23 pm | Banks, Capitalism, Dodd-Frank, Glass-Steagall
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January 27, 2012               Bill Moyers

Watch By Segment

  • Byron Dorgan on Making Banks Play by the Rules

    Bill Moyers talks with former Senator Byron Dorgan about making sure big banks play by rules that protect consumers from financial calamity.

    Air Date: March 16. 2012

    Byron_feature

    Byron Dorgan on Making Banks Play by the Rules

  • John Reed on Big Banks’ Power and Influence

    Bill Moyers talks with former Citigroup Chairman John Reed about his role in bringing down the Glass-Steagall Act.

    Air Date: March 16, 2012

    REED_Feature

    John Reed on Big Banks’ Power and Influence

Full Show: How Big Banks are Rewriting the Rules of our Economy

January 27, 2012

Big banks are rewriting the rules of our economy to the exclusive benefit of their own bottom line. But how did our political and financial class shift the benefits of the economy to the very top, while saddling uswith greater debt and tearing new holes in the safety net? Bill Moyers talks with former Citigroup Chairman John Reed and former Senator Byron Dorgan to explore a momentous instance: how the late-90’s merger of Citicorp and Travelers Group – and a friendly Presidential pen — brought down the Glass-Steagall Act, a crucial firewall between banks and investment firms which had protected consumers from financial calamity since the aftermath of the Great Depression. In effect, says Moyers, they “put the watchdog to sleep.”

There’s no clearer example of the collusion between government and corporate finance than the Citicorp-Travelers merger, which — thanks to the removal of Glass-Steagall — enabled the formation of the financial behemoth known as Citigroup. But even behemoths are vulnerable; when the meltdown hit, the bank cut more than 50,000 jobs, and the taxpayers shelled out more than $45 billion to save it.

Senator Dorgan tells Moyers, “If you were to rank big mistakes in the history of this country, that was one of the bigger ones because it has set back this country in a very significant way.”

Now, John Reed regrets his role in the affair, and says lifting the Glass-Steagall protections was a mistake. Given the 2008 meltdown, he’s surprised Wall Street still has so much power over Washington lawmakers.

“I’m quite surprised the political establishment would listen to groups that have been so discredited,” Reed tells Moyers. “It wasn’t that there was one or two or institutions that, you know, got carried away and did stupid things. It was, we all did…. And then the whole system came down.”

How Wall Street and Washington got together and stacked the deck against the rest of us. Watch it here

Watch Video:http://billmoyers.com/episode/full-show-how-big-banks-are-rewriting-the-rules-of-our-economy/

Why Occupy Wall Street’s Rolling Jubilee Puts Borrowers at Risk

  By Patti Walters | December 6, 2012 - 6:40 pm | Activism, Banks, Debt, Home Foreclosures, Occupy Wall Street
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December 5, 2012                     By: Yves Smith

 

Photo Credit: Shutterstock.com

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Last month, I  criticized the well meaning but naive strategy of the Occupy Wall Street group Strike Debt for dealing with consumer debt, which is to buy severely discounted debt from debt collectors and forgive it. My main complaint was that there were more productive approaches, such as wider publicity and distribution of the  Debt Resistors’ Operations Manual , providing more counseling and legal support to borrowers, and using debt purchases to develop cases against the debt sellers. By contrast, the Rolling Jubilee increases the profitability of bad system by providing more revenues to the incumbents, while the debt purchases are unlikely to do more than help a few random people. It might make for feel-good PR, but it won’t make a dent in the problem.

Perversely the post got pushback on the last (and by implication, the least important) issue raised, namely, that of possible tax problems with the scheme. I wanted to revisit this issue and demonstrate why the responses of allies and members of Strike Debt have failed to put the issue to rest, and more important, why this matters.

The short version is that Strike Debt maintains that there is no risk here, when as we will demonstrate, the outcome is not knowable at this juncture (yes, that is unsatisfying, but welcome to the world of tax). It’s possible that things will work out just fine for the Rolling Jubilee. But if not, the ramifications to Strike Debt and the borrowers whose debt was cancelled would be significant. Thus, to dismiss this very real possibility is irresponsible.

Tax issues are nerdy. You need to be prepared to read this entire post, carefully. Go get some coffee or a cola. I’m planning to box readers about the ears if they raise issues that were addressed in the post.

To review: normally, the cancellation of indebtedness is treated as income unless the party is in bankruptcy or can establish that they are insolvent. Strike Debt claims  they do not need to issue 1099-Cs , the usually-required notification to the IRS that debt has been forgiven. They further claim that  they have “double checked” with the IRS on this matter. In addition, Strike Debt is conducting its activities through a 501 (c)(4), which is a form of tax exempt organization (a “Civic League and Social Welfare Organization”). As we will also discuss, its debt forgiveness plan also appears to run afoul of the IRS’s published requirements for a 501 (c)(4).

Why the Tax Risk is Real, and Strike Debt’s Due Diligence is Inadequate

While the Rolling Jubilee site currently does not discuss the tax implications for borrowers whose debt has been forgiven, the Strike Debt scheme rests fundamentally on the idea that their cancellation of debt can be construed as a gift. (note that  the site previously stated , “a project like this …will almost certainly have no effect on anyone’s taxes.”). Otherwise, borrowers will have to report the cancelled debt as income, which in many cases would require them to pay more in taxes. And this issue is binary: a transfer is either a gift or it is income.

Read More: http://www.alternet.org/economy/why-occupy-wall-streets-rolling-jubilee-puts-borrowers-risk?akid=9762.213679.YAbRJh&rd=1&src=newsletter755977&t=11&paging=off