His show is really hard-hitting, I’m surprised he’s still on the air!
Category: #OccupyWallStreet
A win for Warren — and us
Senator Elizabeth Warren (D-Mass.) got her way on Tuesday when the Federal Reserve rejected the living will plans for most Wall Street banks.
Barclays, Citigroup, Goldman Sachs, and JPMorgan Chase all had their plans rejected.*
The concept of living wills was born of the financial crisis, when regulators and politicians realized that they had no orderly way of unwinding systemically important banks that had failed. They didn’t want to see another Lehman bankruptcy that would take three years to resolve.
The wills then became a part of Dodd-Frank, so banks were legally required to write their own strategies for the “rapid and orderly resolution in the event of material financial distress or failure of the company.”
The Fed on Tuesday made it clear that it did not feel the wills that banks submitted last month (now in their second iteration) were capable of doing that — something Warren had been shouting about.
When Federal Reserve Chair Janet Yellen testified before the Senate last month, Warren completely grilled her on JP Morgan’s living will, which she said was not enough to cover the bank’s $2.5 trillion in assets.
“I almost couldn’t believe this when I read it,” Warren told Yellen.
Yellen said the Fed was continuing to review the wills and that it was a complicated process.
Warren wasn’t satisfied:
I think the language in the [Dodd-Frank] statute is pretty clear. That you are required, that the Fed is required to call it every year on whether these institutions have a credible plan. And I remind you, there are very effective tools that you can use if those plans are not credible. Including, forcing these financial institutions to simplify their structure, or forcing them to liquidate some of their assets. In other words, break them up.
The Fed said the wills the banks presented were “unrealistic” and that firms lacked significant structural changes necessary to carry them out.
Via Terry Eaton.
Imagine that
That Rahm would steal money from the schools to give to his pals. Who’d a thunk it?
Months after Chicago Mayor Rahm Emanuel said budget constraints forced him to push for pension cuts and mass school closures, an analysis of government documents reveals the city has $1.71 billion in special accounts often used to finance corporate subsidies. While the Emanuel administration has rejected open records requests for details of the subsidies, evidence suggests at least some of them have flowed to companies connected to Emanuel’s campaign donors.
The analysis conducted by the TIF Illumination Project evaluated the city’s 151 tax increment financing, or TIF, districts, which divert a share of property taxes out of accounts obligated to schools and into special accounts under the mayor’s control.
The report shows $412 million was diverted last year alone into the TIF accounts and out of traditional property tax funding streams, many of which are dedicated to the city’s schools. In 21 of those districts, the report says 90 percent or more of all property taxes were diverted into the TIF accounts.
Citing Chicago subsidies offered to S&C Electric Co., LaSalle Street Capital, United Airlines and the Chicago Mercantile Exchange, an earlier study from the taxpayer watchdog group Good Jobs First found in the last 25 years, $5.5 billion of taxpayer money has gone into TIF accounts, and “much of the city’s TIF revenue was spent on subsidizing corporations, nonprofits and developers.” The amount of money diverted into TIFs has exploded in the last decade, and transparency advocates say under Emanuel, TIF projects have been shrouded in more secrecy than ever.
Another crash?
I can’t imagine it’s not going to happen. I think anyone who thinks their finances are stable now is living in a fool’s paradise. We never fixed any of the problems with the banks, it will all collapse again.
And once people realize what happened, it’s not going to be pretty. Invest in pitchfork futures!
Walgreens is staying put
Look what we helped make happen:
Yesterday afternoon the Wall Street Journal’s MarketWatch reported the news: “Walgreen Stock Tumbles on Report It Won’t Invert.” Citing unnamed sources (and Sky News), the bulletin reported that Walgreens has decided not to “invert” the company’s nationality to become a Swiss company, and thus lower its U.S. tax bill as it completes its takeover of the pharmacy chain Alliance Boots.
This news represents a victory for a powerful alliance of citizen action groups, united under the banner of Americans for Tax Fairness, who have been sending a strong message to Walgreens that, if the company did not renounce plans to abandon the U.S., Americans would abandon Walgreens stores. And it represents a victory for President Obama, who had recently called on companies like Walgreens to reject using the inversion loophole to change nationality while continuing to operate in the U.S. He declared in July that “I don’t care if it’s legal, it’s wrong.” And it is a victory for members of Congress, like senators Sander Levin, Richard Durbin and Elizabeth Warren, who are still pursuing legislation that would make it illegal for large corporations to use the inversion option.
Over the last few weeks, the Campaign for America’s Future has joined other coalition groups of Americans for Tax Fairness to criticize the stampede of U.S. corporations using inversion to escape taxes – and we have focused pressure on Walgreens as that company publicly considered taking the inversion route, which would have saved them $4 billion over five years by becoming – on paper – a Swiss company, according to a report by ATF and Change to Win.
Many groups used different language to encourage supporters to sign the same message. We led our online campaign with a blunt warning: Tell Walgreens: If you leave the U.S., we will leave your stores.
From the notorious hippies at Standard & Poor’s
The topic of income inequality and its effects has been the subject of countless analysis stretching back generations and crossing geopolitical boundaries. Despite the tendency to speak about this issue in moral terms, the central questions are economic ones: Would the U.S. economy be better off with a narrower income gap? And, if an unequal distribution of income hinders growth, which solutions could do more harm than good, and which could make the economic pie bigger for all?
Given the decades–indeed, centuries–of debate on this subject, it comes as no surprise that the answers are complex. A degree of inequality is to be expected in any market economy. It can keep the economy functioning effectively, incentivizing investment and expansion–but too much inequality can undermine growth.
Higher levels of income inequality increase political pressures, discouraging trade, investment, and hiring. Keynes first showed that income inequality can lead affluent households (Americans included) to increase savings and decrease consumption (1), while those with less means increase consumer borrowing to sustain consumption…until those options run out. When these imbalances can no longer be sustained, we see a boom/bust cycle such as the one that culminated in the Great Recession (2).
Continue reading “From the notorious hippies at Standard & Poor’s”
Is the leftist Tea Party finally here?
We can only hope. Go read:
Teachout and Wu are trying to place the citizen at the center of policy. They do that through their proposals for public financing, for antitrust, for social insurance, infrastructure and labor. It’s a callback, not just to 20th century Democratic presidents like Franklin Roosevelt, but to the politics of Thomas Jefferson, James Madison and other 19th Century anti-monopoly Democrats. Cuomo and de Blasio, though they disagree on how much the middle class should have, place the CEO and the Wall Street banker at the center of policy. For them, it is apparently just fine for Citigroup — rather than the public — to make all key decisions on how to allocate credit in society.
This is not the last election in which populists, with a fully fleshed-out program, begin to take on the people who have dominated Democratic politics for decades. Many people, including the institutional progressive establishment, wish Teachout and Wu would just go away. But elections like this can create power and influence even if the underdog loses, just by creating credible rhetoric and showing there is a hunger for a different kind of policy framework. And if, by some remarkable turn of events, Teachout and Wu manage to come close or even win, that would send shockwaves throughout the entire political establishment. The races and voter pool are obviously quite different, but Eric Cantor, the House Republican leader who lost to populist insurgent Dave Brat despite an apparent 35 point lead in the polls just weeks before the election, showed just how vulnerable an incumbent in this environment can actually be.
That said, the entire establishment is against Teachout and Wu. Though these two are credible figures, they have virtually no institutional support. Liberal figures within the Democratic Party have been getting crushed in primary elections for the last six years. Despite ample reasons for unions, activist groups and liberals to come out for liberalism, it has been the Andrew Cuomos of the world that have been getting liberal votes. Cuomo is even maneuvering to crush the Working Families Party itself, by putting forward a similar party that will draw liberal votes from the WFP and put them under the 50,000 vote threshold required for a New York political party to stay in existence. Cuomo is attempting to ignore Teachout and Wu into submission, and teach liberals to not even think of challenging him again. The odds are he’ll succeed, as Democratic leaders have been succeeding in suppressing liberals for decades. If he does so, the prospects of a Democratic party revolt will remain slim.
Still, populism is always a powerful force, even if it is latent and suppressed by fear. It is why a group of dedicated, principled activists can threaten entrenched interests. Arguments about antitrust, corporate power, unions, infrastructure, democracy and immigrant-run small business are in the DNA of the Democratic Party, even if they have been suppressed for more than two decades. And for that reason, this race is very much worth watching, and could be one of the most important elections of the decade. A Democratic Tea Party may be on our doorstep.
Thomas Friedman wants you to be happy with your scraps
Rape and pillage
As you may know, Detroit’s unelected city manager is overseeing water turnoffs in the city. Please read the story and familiarize yourself with the tactics and rationale, because you may rest assured it will eventually be used in your state or town.
By the way, they used a military acoustic device to disperse this rally. Apparently we no longer have the right to peaceably assemble and petition our government for the redress of grievances. Shut up and take it!
Poor doors!
Because God forbid the worthies might brush shoulders with the poors!
The push to ban “poor doors”—entrances that spare market-rate tenants from being forced to share an entrance with their less fortunate neighbors—wasn’t quick enough to stop the glass-bound luxury condo at 40 Riverside Boulevard. The Post reports that developer Extell has the green light from the HPD to construct a separate door for the building’s 55 affordable units.
Those 55 apartments, which are located in a separate “building segment” that faces the street, will rent for 60% of the area median income ($51K for a family of four), while 219 nicer, river-facing condos will likely be obscenely expensive.
Extell’s largesse is being rewarded with a “floor area bonus” under the Bloomberg-era voluntary inclusionary zoning program, and they plan to sell that land to other developers at a profit [PDF].