The 99% Demand that GE Pay Its Fair Share

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I spent the morning in Detroit watching the Joe Louis fist–one of Detroit’s iconic symbols–be swallowed up by a crowd of people demanding that GE–which was holding its shareholders meeting in the Renaissance Center nearby–pay its fair share in taxes (to say nothing of keeping jobs in the US).

Seeing crowds of people, swarm that fist, pointed right towards where Jeff Immelt was speaking, was a pretty awesome way to spend the morning.

Inside the event, some of the 99% were making the same demand.  Then, Jeff “China China China” Immelt apparently rushed through his legal obligation to at least pretend that shareholders own GE (he finished one hour in exactly).

As we walked around Detroit’s Renaissance Center, a few people came to the balcony to look on.

I think the Powers that Be had originally thought it’d be smart to hide us out back. For some reason, they had us leave the hidden back area and move right up front.

The sign reads: To hell with greed. –God

I’ll update later if my video is any good and when Dave Johnson–who managed to stay through the whole whopping 60 minute (exactly) meeting posts his story.

 

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The US Attempts to Retain Control Over the Financialized Playground

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I’m a big fan of Kevin Phillips’ arguments about how increased financialization of their economies lead to the decline of the Spanish, Dutch, and British empires in succession; his latest book warned that Wall Street crash might represent our tipping point. But I’ve been wondering what happens to a globalized world that is that financialized, as we have now. My impression is that it might be different this time around, partly because the world is so interconnected that most of the world has, for better or worse, been integrated into the same financialized system.

As James Galbraith described in his book Inequality and Instability, the the last several decades can be understood as the US first extracting wealth from the rest of the world, and only then turning to the American consumer to do to it what it had already done to developing countries.

First, the massive rise of inequality in the global economy from 1980 to 2000, with a peak in most countries–including the United States–in the millennial year, is a fundamental reflection of the concentration of income and wealth among the richest of the rich, and the corresponding financial fragility affecting everyone else. Crises, and especially debt crises, are thus not new or sudden; in global perspective we see that they have cascaded across the world for a generation, hitting Latin America and African in the early 1980s, the Soviet Union and its satellites in the late 1980s and through the 1990s, and much of Asia in the late 1990s.

Through this period inequality rose in the United States, but the prevalence of external crises also meant that the United States benefited throughout from its position as a refuge for capital. In the 1990s capital flowed in, especially to the benefit of investors in the technology sectors, whose investment euphoria produced a general nationwide prosperity right up to the initial crash of the technology sector–and its NASDAQ stock index–in March and April 2000.

The problem facing the incoming administration of George W. Bush in January 2001 was thus twofold. Externally, there was little scope remaining for extracting capital from the rest of the world. Every region that was open to crisis, with the possible exceptions of China and India, had already had one. Internally, the appeal of the major American leadership sector had worn out.

Galbraith describes how Bush tried first war and then American consumers to sustain growth, which brought about the financial crisis.

The financial crisis (and the world economic crisis it engendered) thus represented not so much the natural outgrowth of rising inequality as a further phase; it was the consequence of a deliberate effort to sustain a model of economic growth based on inequality that had, in the year 2000, already ended. By pressing this model past all legal and ethical limits, the United States succeeded in prolonging an “era of good feeling,” and in ensuring that when the collapse came, it would utterly destroy the financial sector.

In short, you can’t separate the current global system from the US efforts to sustain its financialized empire.

But the big players in the developing world are getting cranky with US efforts to sustain its hegemony over that financialized system.

The view was expressed by Wang Jisi, a high level Chinese insider, in this Brookings report documenting the roots of Chinese-American distrust (see also this NYT article on the report).

Since 2008, several developments have reshaped China’s views of the international structure and global trends, and therefore of its attitude toward the United States. First, many Chinese officials believe that their nation has ascended to be a firstclass power in the world and should be treated as such. China has successfully weathered not only the 1997-98 Asian financial crisis but also the 2008-09 global financial crisis; the latter, in Chinese eyes, was caused by deep deficiencies in the U.S. economy and politics.

Read more →

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Why Does Mitt Cheat His Country But Not His Church?

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As tax day approaches, the presidential campaign has looked like this: 1) Buffet rule. 2) Mitt’s taxes 3) Who gives to charity.

In an attempt to shift focus away from Mitt’s efforts to make sure other rich people like him don’t have to pay taxes, John Sununu suggested that Obama and Biden don’t give enough to charity.

When Joe Biden went to New Hampshire on Thursday to attack Mitt Romney’s tax proposals, the Romney campaign greeted Biden by attacking President Barack Obama’s charitable giving rate. On a campaign conference call with reporters, former New Hampshire Gov. John Sununu, a Romney backer, said the following:

In their own private lives, it would be nice to see some contributions to charity that are significant out of President Obama and Joe Biden. I think it is an interesting contrast to make with the presidential candidate the Republicans have now put together a nomination for, that is Mitt Romney, former Governor Romney, who gave almost 15% of his income last year to charity.

In response, the White House has released the Obamas’ taxes, showing they donated 22% of their income, a higher percentage than they paid in taxes.

I expect we’ll dwell on this for a while, but the entire tax versus charity debate ignores one thing: 10% of Mitt’s money, by Mormon Church rule, goes to the Church. The only debate (and it is a big debate in some quarters) is whether that 10% is pre- or post-tax. So when Sununu boasts that 15% of Mitt’s income goes to charity, what he really means is Mitt gives 5% after paying the amount required to pay by his Church.

All that got me thinking. Why is it that Mitt cheats his country but not his Church? Read more →

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David Gregory & NBC Give John McCain Blowjob; Screw Americans

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Saturday evening, the New York Times put up an important editorial, The Banks Win Again, on its website regarding the financial crisis, an editorial piece that would be key in their Sunday Morning Edition Opinion Section:

Last week was a big one for the banks. On Monday, the foreclosure settlement between the big banks and federal and state officials was filed in federal court, and it is now awaiting a judge’s all-but-certain approval. On Tuesday, the Federal Reserve announced the much-anticipated results of the latest round of bank stress tests.

How did the banks do on both? Pretty well, thank you — and better than homeowners and American taxpayers.

That is not only unfair, given banks’ huge culpability in the mortgage bubble and financial meltdown. It also means that homeowners and the economy still need more relief, and that the banks, without more meaningful punishment, will not be deterred from the next round of misbehavior.

The nation is on the cusp on having the government, both federal and states, sign off on arguably the biggest financial fraud on the American public in history, and doing so in a way that massively rewards the offending financial institutions and refuses serious investigation, much less prosecution, of any participants perpetrating the conduct. This pattern of craven conduct cratered not just the US economy, but most of the world economy.

In the face of all this, David Gregory and MTP had on the Sunday morning show one of the most senior Senators in the United States Senate, John McCain, who serves as a key member of both the Governmental Affairs and Health, Education, Labor and Pensions Committees, both of which Read more →

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BAE F-35 Hack Confirmed

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I’ve long complained that the government’s obsession with WikiLeaks is badly misplaced. After all, DOD and some of its contractors simply can’t keep their networks secure from Chinese hackers. So if our chief rival can take what it wants, why worry so much that actual American citizens have access to what China can take with abandon?

Case in point. The Australian has confirmed what was initially reported three years ago: China hacked BAE to steal performance information on the F-35.

CHINESE spies hacked into computers belonging to BAE Systems, Britain’s biggest defence company, to steal details about the design, performance and electronic systems of the West’s latest fighter jet, senior security figures have disclosed.

The Chinese exploited vulnerabilities in BAE’s computer defences to steal vast amounts of data on the $300 billion F-35 Joint Strike Fighter, a multinational project to create a plane that will give the West air supremacy for years to come, according to the sources.

[snip]

One of those present said: “The BAE man said that for 18 months, Chinese cyber attacks had taken place against BAE and had managed to get hold of plans of one of its latest fighters.”

This plane will have taken more than $385 billion to develop and will take $1 trillion to sustain. It is the most expensive weapons system in history. And yet for 18 months, the Chinese were just living on (at least) BAE’s networks taking what they wanted. How much of the considerable cost and rework on this program comes from the data on it China has stolen along the way?

In fact, I’m wondering whether China isn’t borrowing from our own playbook: during the Cold War, we made Russia go bankrupt by engaging in an arms race it couldn’t afford. China doesn’t need to do that. By hacking our data, they can just make us go bankrupt by setting up an arms race between our contractors and its hackers. With the result that we build a trillion dollar plane that it can already exploit.

And yet the government’s priority seems to be shutting up leakers who reveal its crimes, not networks that reveal our biggest military secrets.

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Senate Judiciary Committee: Closing the Barn Door after the Barn’s Been Foreclosed

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Sometime this week, the long-awaited terms for the foreclosure settlement will be released, giving banks immunity for much of the fraud and forgery they committed in the course of taking homeowners’ houses.

Which makes the timing of this hearing the Senate Judiciary Committee just announced beyond absurd.

“Examining Lending Discrimination Practices and Foreclosure Abuses”

Senate Judiciary Committee
Full Committee

DATE: March 7, 2012

A better time for such a hearing might have been December 2010, just as the full extent of the robosigning was being exposed. In fact, that’s the second-to-last hearing John Conyers hadbefore Dems lost their House majority. Since that time, he has been imploring the Administration and the Attorneys General to do something substantive about foreclosure problems, even asking MI’s AG not to sign onto the settlement.

But next week!?!?! Just as the settlement will be enacted, making many of these issues (though reportedly not civil rights issues) moot?!?! Really?!?!

I mean, if the Judiciary Committee is going to hold a hearing in the immediate future, it’d be far better to hold a hearing considering what impact it will have on justice in this country to assign a $2,000 price tag to fabricating forged documents or engaging in other fraudulent activities before a court. Will judges ever be able to trust corporations in their courtrooms again? Will private citizens have access to this $2,000 Get Out of Jail Free card, or only Too Big to Fail institutions?

Alternately, act like the bankster-owned body the Senate is, and simply call a hearing to discuss whether having pension funds pay to buy immunity for the banks hurts corporations.

And then there’s the witness list: right now, just Civil Rights Division head Thomas Perez will testify. I’m all in favor of Thomas Perez in most any role–his work at Civil Rights has easily been the best part of DOJ under Obama. But aren’t there other people who might better address foreclosure abuses, even if the hearing just focuses on lending discrimination?

I mean, I’m all in favor of someone finally conducting oversight over the fraud going on in this country. But this hearing couldn’t be more badly timed.

 

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After Arguing People Shouldn’t Attack Media Indiscriminately, Jamie Dimon Attacks Media Indiscriminately

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When last we saw Jamie Dimon being a dick, he was appealing to what he presumably imagined was reporters’ shared sense of indiscriminate victimization.

Is it surprising that people lash out after such a severe recession in which we’ve seen these polars of wealth creation and destruction?

I can give you all the reasons why. But whenever anyone says to me, “All media,” I turn it off. “All politicians.” I turn it off. I don’t think it’s the right way to have discourse. Abe Lincoln didn’t do it. George Washington didn’t do it. It shouldn’t be done.

You don’t justify it because you’ve had a tough time. As a matter of fact, in a tough time, the best people stand tallest. They’re the ones who discriminate between the right and wrong. They’re the ones who stick to the true blue. … Not the ones who out of convenience scapegoat and finger-point.

It was wrong, Dimon argued, for people to indiscriminately pick on the media out of convenience.

In our latest edition of Jamie the Psychopath, he attacks newspapers, indiscriminately, as a convenient way to suggest banks don’t pay inordinate salaries.

“Obviously our business, in investment banking in particular, all of our businesses, we have high capital and high human capital,” Dimon said today at a presentation in New York, where the bank is based. “Newspapers — I went and got this one day just for fun — 42 percent payout ratio, which I just think is just damned outrageous.”

[snip]

“Worse than that, you don’t even make any money!” Dimon said, directing his comments to those in the media covering the company’s investor day and drawing laughter from his audience. “We pay 35 percent. We make a lot of money.” JPMorgan posted $19 billion in profit last year.

Especially nice, however, is Dimon’s suggestion that the justification for such a payout–for banks and for newspapers–is and should only be profit. If only the media just provided an even shittier product–and put the difference to profits–then all would be right with this world.

Presumably because then no one would chronicle what a dick he is.

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Wall Street Shills Hype How Much Preet Bharara Could Make If He Stopped Shielding Wall Street

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The Time Cover–facetiously suggesting that SDNY US Attorney Preet Bharara was busting anyone of note–was bad enough.

But this piece from noted Wall Street booster, Charlie Gasparino, reads more like a reminder to his readers of the protection they might lose if Bharara decided to check out and cash in.

Preet Bharara, the US Attorney for the Southern District, is telling friends that if he should leave his job today, he could earn as much as $6 million in the private sector, according to people with direct knowledge of these conversations. Bharara’s private statements come as speculation grows in Washington that the politically savvy prosecutor might also replace his boss, US Attorney General Eric Holder, if President Obama wins re-election.

[snip]

That said, private law firms seek out prosecutors of Bharara’s level primarily because of the high-profile clients they can attract.

An especially nice touch is the vote of approval from Harvey Pitt, whose enabling of financial corruption set new standards even from the Wall Street-coddling SEC.

“I have no doubt he would be a star in the private sector,” said former SEC chairman Harvey Pitt, who also worked as a high-profile private-sector attorney. “Bharara deserves enormous credit for the insider-trading effort, the cases his office has brought, and what his office is accomplishing. I just think it would be better if other people said that.”

When Harvey Pitt hails what your office is accomplishing, it usually means Wall Street crooks are getting a legal pass.

As they are.

And now we know the price Bharara expects when he cashes out: $6 million.

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Jamie Dimon: A $50,000 ATM Is a Big Risk

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Jamie Dimon’s got his whine on again (or should I say “still”), wishing we all could just move on from the catastrophe Dimon and his buddy banksters caused.

Dimon’s strategy here is rather amusing. He twice suggests that the media and the banks are both unfairly denigrated, as a “class.”

You’ve criticized others for an ongoing vilification of Wall Street and bankers?

I would say it differently. This indiscriminate scapegoating and finger-pointing. I don’t think it’s a good thing if you do it to banks or media. The point is there is some decent media and not decent; some good businesspeople and some not so good. My belief is this indiscriminate blame of both classes denigrates our society, destroys confidence — it certainly can’t boost it — and damages us.

Is it surprising that people lash out after such a severe recession in which we’ve seen these polars of wealth creation and destruction?

I can give you all the reasons why. But whenever anyone says to me, “All media,” I turn it off. “All politicians.” I turn it off. I don’t think it’s the right way to have discourse. Abe Lincoln didn’t do it. George Washington didn’t do it. It shouldn’t be done.

You don’t justify it because you’ve had a tough time. As a matter of fact, in a tough time, the best people stand tallest. They’re the ones who discriminate between the right and wrong. They’re the ones who stick to the true blue. … Not the ones who out of convenience scapegoat and finger-point.

And, having appealed to the journalist’s sense of common angst and suggested those seeking precisely to distinguish between right and wrong are “fingerpointing,” Dimon gets a piece that focuses on the number of people Chase has hired locally rather than his patently false claim that none of Chase’s foreclosures were improper and “we don’t know of any where the actual information in the affidavit about the foreclosure itself is wrong.”

Where Dimon’s latest whine says something new, however, is where he tries to suggest that the people who deposit their money with Chase–effectively loan Chase their money–are just freeloading.

Let’s talk about fees. We’ve seen some fees like the debit charge go away at the same time others are surfacing. Has it gone too far?

More than 80 percent don’t pay the monthly fee (on checking). Here’s the issue: It costs $300 to give you a checking account. What’s the cost of that? Branches, ATMs, online bill pay, Smart systems, checking account, a debit card. Any business has a cost. If you want a customer, you care, but you have to make a fair profit to survive.

But even after the debit fee went away, banks were still profitable.

Very often people will see us as having a profit, and I’m saying it’s really suboptimal results. Because we’re big and have a lot of capital, it sounds like a lot. But these are huge services and huge risks these banks take. We want to be fairly paid for services we provide. Just like a newspaper or anybody else.

Is the issue one of degree? For instance, that $5 ATM fee you were testing?

If you’re a client, we don’t charge you for ATMs. We charge nonclients. I think we charge $2 now. It costs us $50,000 a year to have an ATM. It’s not a gift. It’s for our clients. [my underline]

Right. The $50,000 ATM is a big risk. Dumping loads of money into derivatives? That’s apparently not where Chase’s big risk lies. Rather, it’s in replacing human tellers with machines that require relatively little maintenance, no health benefits, and no days off to give customers a reason–convenience–to loan Chase their money.

Or maybe now that Chase has made billions in the casino, they expect their $50,000 ATMs to be just as profitable. So Dimon will call a simple computer, an ATM, a huge risk, and demand exorbitant fees. Because banks shouldn’t have to pay the cost of doing business anymore, I guess. Asking them to do so is treating them unfairly as a class.

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Rick Snyder: “Look at Me!!! And, Oh, BTW, Mitt Was Born in MI”

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I was pretty gleeful when Romney’s folks hinted yesterday that Rick Snyder was going to endorse today. While Snyder’s approval levels are improving from abysmal levels, he’s still unpopular. Plus, he’s a rich man from liberal Ann Arbor; Snyder’s own biography will emphasize precisely the things conservatives distrust in the rich Governor from liberal MA. Most of all, it raises the likelihood we’ll have a replay of 2000, when McCain won the primary here largely because people saw it as a way to damage Governor John Engler, who had aggressively campaigned for George W. Bush.

Boy, the party must have pushed Snyder hard to endorse here, because there’s little upside to it for him.

I’m even more amused now that I’ve read what Snyder said in his endorsement.

The whole endorsement is just over 600 words long. Of that, the first 62 words blather about Snyder, not Mitt. After a transition finally bringing him around to Mitt, Snyder spends the first 130 words of his description of Mitt to explain that Mitt was born here.

Let’s start with one important fact. Our country has never elected a president born and raised in Michigan. Mitt Romney was born in Detroit. His father served with distinction as governor. Before that, he was president of American Motors. Mitt grew up with the prospects of the auto industry and of Michigan discussed around the dinner table.

He has deep ties to our state. Mitt understands the challenges confronting Michigan as few Americans do.

Snyder spends a paragraph transitioning back to MI again (effectively saying, “Mitt’s a businessman like me”–which brings me back to my earlier point about how Snyder will emphasize the reasons the GOP base is suspicious of Mitt). Here’s where it gets interesting: Snyder, as he often does, claims credit for things he had little to do with (notably, MI’s turnaround), and then says Obama–who should get some credit for it–is screwing up nationally.

Michigan has laid out an impressive game plan for success. Across both peninsulas, Michiganians are working together with relentless positive action to move our state forward. We’ve made the tough decisions and bold reforms that are rejuvenating our state, such as restoring Michigan’s fiscal integrity.

By eliminating a nagging $1.5 billion budget deficit last year, we’re now in the position of recommending strategic, long-term investments in priority areas such as education, economic development and infrastructure. Simply put, we’re getting it right and we’re getting it done.

In contrast to Michigan’s blueprint, Washington is still at the drawing board. Deficit spending continues to run rampant. For the first time since World War II, the nation’s total debt burden exceeds the size of our entire economy. With Washington running trillion-dollar annual deficits, our nation’s recovery has been the slowest since the 1930s.

Washington is not on a sustainable course. Mitt Romney will change the direction.

Another quarter of Snyder’s “endorsement” claims credit for himself and promises to put the plans that had been working before he cut them–education and business development–back into place.

Only then, almost two-thirds of the way into his “endorsement,” does Snyder get around to telling Michiganders (actually, he calls us “Michiganians,” which is a bit of a departure for him) why they should vote for Romney–aside from the fact that he was born here and therefore MI might claim credit for him if he were to win. Vote for Romney, Snyder gets around to exhorting after he spends large chunks of his op-ed begging readers first to support him, because Romney will cut taxes and address the deficit and not force all states to adopt RomneyC– I mean, ObamaCare.

I hope all Michiganians will join me in supporting the candidacy of this favorite son of our great state.

It doesn’t exactly read like a full-throated endorsement, even while Snyder’s pitching that Romney will do for the US what Snyder claims credit for doing for MI. More like a squeal of “don’t hurt me!!!!” while reminding us what we already know, that Mitt was born here.

Vote for Mitt Romney, Rick Snyder says, because his accident of birth is one of the best things I can think to say about him.

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