Former Federal Reserve Chairman Paul Volcker wants to prohibit commercial banks from some high-risk trades, saying that this should be an essential component of broader financial regulations and would cut back on institutions deemed “too big to fail.”

That’s seems eminently reasonable to us and we are glad to see Paul Volcker brought to the front of the regulatory battle.

President Obama has embraced Volcker’s idea to prohibit large financial companies that have both commercial and investment functions, such as Goldman Sachs, from engaging in speculative trading.

Large banks have already said that they oppose the idea. Do you blame them? These guys had the best deal around, since mobsters built Las Vegas and they don’t want to give any of that up.

Volcker said commercial banks, whose deposits are insured by the Federal Deposit Insurance Corporation,  should not be allowed to engage in speculation that does not benefit their commercial customers.

The ban would distinguish between commercial and investment banks – a separation that had existed until 1999 when Congress, Alan Greenspan, Robert Rubin, Larry Summers and President Bill Clinton repealed major provisions of the Depression-era Glass-Steagall Act.

This wasn’t exactly the beginning of the wild ride on Wall Street, but most likely the beginning of the mortgage derivative schemes, the irresponsible lending practices and so forth – all leading to our present economic quagmire.

It appears that Paul Volcker has the right idea – to roll back some of the deregulatory schemes, which have turned the financial mills into legalized gambling houses.

One thing we wonder about, though… Why wasn’t he allowed to speak publicly before Scott Brown won the Massachusetts senatorial race?

Technorati Tags: banks, gambling, las vegas, regulations, Volcker, wall street

The  Republican gubernatorial victories in New Jersey and Virginia, along with Scott Brown taking over Ted Kennedy’s seat in the U.S. Senate have sprouted all kinds of suppositions, ” I told yous” and even a bit of a reshuttle at the White House.

There is no doubt that the Democrats have screwed up on many fronts. Having a filibuster-proof majority in the Senate should have given them the opportunity to take care of many, long-overdue issues, but considering the fact that too many of them – Christopher Dodd comes to mind among others – were really taking care of somebody else’s business, things simply didn’t get done and the American electorate, including a whole slew of liberal Democrats felt downright betrayed.

There is the definite possibility that the Obama voters were really under the impression that the movement created around the candidate actually represented the man. Surprisingly, the man was and is different from what the voters imagined him to be. Just look at the bailouts of the messed up financial mills, which were ostensibly “too big to fail”. Now the biggies are paying multi-million-dollar bonuses, possible only because of the taxpayer-funded bailout.

Let’s not forget that in 2009 the U.S. has reportedly printed more money than in the entire 20th century…successfully bailing out the Wall Street shysters, called by some bonus-happy executives  “their best people”. Wouldn’t these “best people” be more appropriately employed producing our license plates for the next 20 years in some federal penitentiary?

In any case, practically exit Tim Geithner and finally re-enter Paul Volcker, who seems to have saner ideas. We also welcome the return of David Plouffe,  Obama’s campaign manager. As expected Obama’s chief political strategist, David Axelrod says that there is no major White House shakeup in the works. Why not, we wonder?

In closing, enjoy another excellent cartoon by Washington Post’s Tom Toles. If one picture is worth 1,000 words, these two combined must be worth quite a bit more

Technorati Tags: democrats, Health Care reform, obama, politics, republicans

Many of you must have heard by now that the Senate finance committee passed its version of health care reform legislation. The bill would expand coverage without increasing the deficit, according to the Congressional Budget Office, in part by taxing the most expensive health insurance plans, the so-called “Cadillac plans.”

The problem is that many of those plans, despite requiring fairly high premiums from both employees and of employers are really not that great at all. The Senate finance committee’s thinking is not along the lines of quality coverage, but rather along the actual cost of the plan.

There is a big difference between the $40,000-a-year plan offered to Goldman Sachs CEOs, with no co-payments, no deductibles, few limits on how much you can spend, and no need for prior authorization, before you get treated and other, run-of-the-mill “Cadillac plans” offered to average government, or corporate employees.

Many not so fancy plans, which also qualify as “Cadillacs” under the finance committee’s definition are so defined because the term refers to total cost – and not a particular set of benefits – and many factors, like for example the state you live in, the size of your company, and the makeup of that company’s work force, which can affect costs.

Premiums tend to be significantly higher in some states. The employer/employee contribution also varies by state. In addition, the smaller the business, the fewer employees who participate, the less leverage the organization has to negotiate lower premiums. And if the workers have an average age of, say, 55, their premiums are going to be a lot higher than if the average is 24.

As it stands, there should be considerably more emphasis on improving the coverage of existing health insurance plans, rather than just emphasizing the total cost. There is no doubt that the cost of health care in the United States has gone through the roof a long time ago and that issue needs to be urgently addressed, rather than only worrying whether the reform is going to increase our already skyrocketing deficit. Just think about the trillions of dollars doled out to banks and other financial conglomerates. That seemed to be quite painless to those who are now worrying about increasing our deficit. Couldn’t we have used that money to improve our health insurance system and our crumbling infrastructure, rather than bailing out the fat cats, who have actually caused the financial disaster?

If we are to truly reform the U.S. health care insurance system, along with the health care itself, the main points of the so-called reform should be: how to reduce the exorbitant costs of both the care and the insurance, to improve the quality of often substandard care (unless you are willing and able to pay for the very best care available) and to broaden, rather than reduce the coverage that the health plans offer.

Providing health care insurance to the uninsured is a noble quest, to be sure, but to further penalize others, who are ‘covered”, but who do pay their premiums, their ever-rising co-pays and who’s “Cadillac” plans do not offer coverage for such common procedures such as dental care in general, specifically root canals, crowns and necessary oral surgery is the wrong way to go about it.

We have strongly supported the reform of U.S. health care system as a whole for some time now, but taxing the people, already penalized by the inadequacies of some of our health insurance plans, including some of the “Cadillac” ones, seems more like an idea of still another bean counter, rather than a true reformer.

Let’s get this done now and lets get it done right!

Technorati Tags: banks, cadillac, financial institutions, Health care, health insurance, plans, reform, taxing

As the tragedy in Haiti continues, Americans are generously donating millions of dollars to aid organizations by many different means.

But when they do so by the way of their credit cards, in most cases the credit card companies keep 3 percent of the donation as a “transaction fee,” even though that is considerably more than it costs them to process the donation.

There is a petition in the works to the CEOs of the major credit card companies demanding that they waive their processing fees for all charitable donations.

American Express is trying to get ahead of this story, announcing that they will temporarily waive the fees they charge on some Haiti-related charitable contributions for the next six weeks. That’s commendable, but not near enough.

The goal is to have all American credit card companies announce that they will waive ALL fees on charitable contributions, starting today, and in the future.

The credit card companies of course are not the only hyenas out there, trying to profit on the Haiti disaster and on the people’s good will.  As with almost any emergency situation, requiring charitable donations, all kinds of scams have cropped up all over the place.

Be careful how and to whom you send your contribution.

Technorati Tags: companies, credit card, Disaster, getting, Haiti, off, petition, rich, scams

Mountaintop mining consists basically of blowing off entire mountain peaks, or entire mountains, in order to easily and relatively cheaply extract coal. It occurs mainly in West Virginia and Kentucky, although mountaintop removal is also carried out in far-Southwest Virginia and in Tennessee. Peaks are sheared off with heavy machinery and explosives, exposing the coal seams inside. Excess rock is used to fill steep Appalachian valleys, some with streams at the bottom.

When rainwater falls on the filled-in valley, it trickles through the rubble and picks up pollutants off rocks that came from deep underground. The water emerges mixed with pollutants such as metals and chemicals called sulfates, which can be toxic to the insects and fish in small Appalachian streams. It is also toxic and damaging to other animals, humans and entire ecosystems.

Although the companies are required by existing laws to “rehabilitate” the damaged areas, the wanton destruction of the mountains is more than obvious to anyone who sees it.

The latest development in the mountaintop removal battle is a study published by a group, headed by a University of Maryland researcher, who said it performed the most comprehensive study to date of the controversial practice, also known as “mountaintop removal.”

They also did something that scientists usually don’t: step beyond data-gathering to take a political stand.

“The science is so overwhelming that the only conclusion that one can reach is that mountaintop mining needs to be stopped,” said Margaret Palmer, a professor at the University of Maryland Center for Environmental Sciences and the study’s lead author.

The group’s paper, published in the journal Science, was released in the same week that the U.S. Environmental Protection Agency – which has been scrutinizing these mines – angered environmentalists by supporting a new mine permit. The EPA said the Hobet 45 mine, in West Virginia, had made changes that would eliminate nearly 50 percent of the environmental impacts and protect 460 union mining jobs.

Palmer said the group’s work did not echo the idea implicit in this EPA decision: that there could be a “good” mountaintop mine, whose environmental consequences were acceptable.

So, the fight goes on, but this time it seems that the advantage has shifted a notch to the good guys.

Technorati Tags: coal, destruction, Environment, EPA, Mountaintop Removal, pollution, study