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that had existed until 1999 when Congress, Alan Greenspan, Robert Rubin, Larry Summers and President Bill Clinton repealed major provisions of the Depression-era Glass-Steagall Act.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

Ronald Reagan and his Merrill Lynch Treasury Secretary Donald Regan

Reagan and Bush 41 quadrupled the national debt in only 12 years. Bush 43 doubled it again in only eight. It is now 10 times higher than it was in 1980 when Reagan was elected.

The hero of the conservatives, Ronald Reagan begun an era in which a small minority grew vastly rich, while working families saw only meager gains. He also broke with longstanding rules of fiscal prudence. While the taxes on the super-rich went as high as 90 percent in the past – still leaving them more than enough for a lavish lifestyle – the so-called “trickle down Reaganomics” lowered those taxes by about two-thirds. The rhetoric of course emphasized the tax benefits for the average Americans, who were ostensibly the beneficiaries of those policies.

All of this, while the Regan administration kept preaching about “small government, free markets and democracy”.

Those who actually believed in the above Reagan TV commercial should be seriously surprised that the Federal debt as a percentage of GDP fell steadily from the end of World War II until 1980, rising for the first time in decades under Reagan and Bush 41, falling under Clinton and rising again under Bush 43.

Even though some people like to portray the Reagan legacy as an anti-communist success story, Reagan’s biggest legacy was the change in America’s financial rules.

Let’s start with the tax cuts for the rich, following with turning the federal retirement from a Civil Service Retirement System (CSRS) to the Federal Employees Retirement System (FERS). The former was (and still is for some long-time federal employees), a pension system, based on years of service and FERS consists basically of the Thrift Savings Plan (TSP), a 401k setup, in which untold billions of federal worker’s retirement funds get largely invested in various Wall Street schemes every two weeks. It was in effect an enormous gift for the Wall Street apparatus, while depriving millions of government employees of a viable retirement option.

At the same time, the Reagan administration deprived the Americans of the ability to deduct interest payments for anything not directly related to their primary real estate holdings.

This of course has started the epidemic of rising household debt.

Lets not forget the super-costly S&L crisis, brought about by Reagan’s deregulation.

Lets not blame poor Ronnie for everything. After all, he only started the ball rolling, even though it was in a very big way. As you probably realize by now he was only the front for all of the shady financial “wizards”, who relentlessly continue their lobbying and machinations to the present time.

The next really big breakthrough in their efforts came with the Commodity Futures Modernization Act of 2000 or CFMA (H.R. 5660 and S.3283), which in fact removed regulations of all kinds of financial crookery (called “products” by the industry) and which has returned the U.S. stock markets to the days before the 1907 Wall Street crash – in reality to legalized betting, which happens to be illegal outside of Wall Street. It was Bill Clinton, who towards the end of his second term signed this bill.

Let’s also not forget Enron and a whole bunch of other events, for which nobody has really gotten punished in any meaningful way.

Lets not forget Greenspan, Rubin, Summers and others, who continue to play important roles in our economy.

And don’t for a minute forget the fact that former and present Goldman Sachs executives are sprinkled throughout both the government and our financial system, continuing in their unrelenting mission.

Technorati Tags: bush, clinton, Economy, goldman sachs, greenspan, Reagan, reganomics, Rubin, summers, takeover, US, wall street

Some of the biggest Wall Street banks, such as Goldman Sachs have recently announced record profits – all of this in a really poor overall U.S. economic environment. How and why could this be happening? Well, first of all, the original Wall Street meltdown, in the waning months of the George W. Bush administration has de facto eliminated most of the biggest Wall Street players, with the notable exception of Goldman Sachs, JP Morgan Chase and just a few others.

Most of the competition for these firms has been removed, sometimes by default and in other cases almost by force, such as when then Treasury Secretary Henry Paulson – a man closely allied with Goldman Sachs has threatened to fire Bank of America President Ken Lewis, if the latter backed out of the deal to buy Merrill Lynch. Needless to say, the acquisition of Merrill did go through, eliminating one of Goldman’s main competitors. At the same time,  Paulson has decided to let Goldman Sachs’ biggest rival Lehman Brothers and its second biggest competitor Bear Stearns go under.

Matt Taibi writes in his Rolling Stone Magazine article: “The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled dry American empire, reads like a Who’s Who of Goldman Sachs graduates.

There’s got to be something there. Former Goldman CEO Henry Paulson was the Bush-era architect of the bailout, a suspicious plan to funnel trillions of our dollars to a handful of his old friends on Wall Street. Robert Rubin, Bill Clinton’s former Treasury secretary, spent 26 years at Goldman before becoming chairman of Citigroup – which in turn got a $300 billion taxpayer bailout from Paulson. There’s John Thain, the unsavory chief of Merrill Lynch who bought an $87,000 area rug for his office as his company was falling apart. Thain – a former Goldman banker enjoyed a multi-billion-dollar gift from Paulson, who used billions in taxpayer funds to help Bank of America rescue Merrill Lynch. Robert Steel, a Goldman alumnus and then head of Wachovia, got himself and his fellow executives $225 million in golden parachute payments as his bank was taking a deep dive.  Joshua Bolten, Bush’s chief of staff during the bailout, and Mark Patterson, the current Treasury chief of staff, who was a Goldman lobbyist only a year ago, and Ed Liddy, the former Goldman director whom Paulson put in charge of bailed-out AIG, which forked over $13 billion to Goldman after Liddy came on board.

Do you see something, anything wrong with this scenario? You would have to be deaf, blind and illiterate not to see what is happening.

It looks too much like a well-orchestrated power grab, with the few ever-richer Wall Street conglomerates taking over an ever-bigger chunk of our economic resources. That along with plans to increase the oversight powers of the Federal Reserve – another conglomerate of private banks – would pretty much create an almost total dominance of our economic system for the foreseeable future.

And now, please take a look at this great exchange of views on the subject, during a discussion on France 24.

Lo and behold! Even Glen Beck had something interesting to say about Goldman Sachs. Watch this clip.

Technorati Tags: Bailouts, conspiracy, goldman sachs, jp Morgan, paulson, theft, wall street

The answer is rather simple and concise:  Not even close.

We realize that the U.S., along with most of the countries of the world is struggling with the after effects of getting the worldwide finances looted during the past 25, or so years. We are still trying to dig ourselves out from under Alan Greenspan’s legacy at the Federal Reserve and the incredibly dumb and in fact criminal lack of oversight of Wall Street and the banks.

We also realize that the present administration has not started both of the “elective” wars that we are now waging overseas, and that it hasn’t arrested the hundreds of more, or less, or not at all guilty terrorism suspects, still languishing in the Guantanamo prison among other places.

The point is that despite earlier promises, we still have as many soldiers in Iraq, as we did under Bush and that we have increased our deployment in Afghanistan. Also, nobody seems to want any of the Guantanamo prisoners. We don’t believe there should be any discussion in the matter and that the solution to that particular dilemma is rather simple: send the long-suffering and often innocent prisoners to live in and get the titles to the houses and the properties of the neocons and send the latter to Guantanamo, along with many of the bankers and Wall Street thieves.

What? You don’t like that idea? What could possibly be more just under the circumstances? Building a long stretch of gallows on the National Mall?

Getting back to the financial issues. There is no doubt that the first huge bailouts, or whatever the heck they call the multi-billion-dollar giveaways started at the end of the Bush 43 presidency. Most of the money asked for and given to AIG and other financial conglomerates by Hank Paulson – a well-known Walls Street insider – is still unaccounted for. The question is why did the Obama administration hire guys like Larry Summers and Timothy Geithner, who along with Robert Rubin and Alan Greenspan were an integral part of the plan to loot our treasury and allow the bankers and Wall Street to run roughshod over everybody else? These are the very same guys who allowed the so-called Financial Services Modernization Act of 1999 to pass at the end of Clinton’s presidency. Despite earlier moves, the most obvious of which was the actual founding of the Federal Reserve and the subsequent loosening of the regulatory reins by the George W. Bush people, the Financial Services Modernization Act of 1999 was the most serious and glaring act committed against our financial well being.

Now that with the addition of Al Franken the Democrats have finally achieved the coveted filibuster-proof majority in the Senate, can we really expect some long-awaited and long-overdue reforms to get enacted? Don’t hold your breath. The thousands of lobbyists, representing all kinds of special interests are swarming all over Capitol Hill, often dwarfing our elected representatives and their staffs, not only by sheer numbers, but also with money, favors and special deals. After all, we are not only talking about reforming health care, or enacting a truly meaningful climate legislation, but also about the main event, which is really a fight about preserving and if possible increasing corporate profits. And that of course is the real name of the game, as it always has been.

It doesn’t really matter that the majority of Americans want a public health plan in addition to the private ones and that most are truly concerned about the state of the environment. Most politicians do not really represent the rank and file citizens, or the country at large, but rather corporate interests. The situation is no different in the case of many government agencies, which despite popular perception are less concerned with protecting our interests, health and safety, but largely act in the corporate interest.

Going back to the Federal Reserve, which has failed abominably, particularly in the last 25 years to perform its main and most important mission, namely, to protect the public against the banking system. Just as in the case of the other agencies, unfortunately one cannot expect the Fed to fulfill its officially stated mission, if it is in reality a front for the banking industry. In fact, according to many experts, the Federal Reserve was the principal cause of the financial disaster that we have experienced and giving it even more oversight power seems by far more dangerous and foolhardy than playing Russian roulette. Doing so is simply another example of rewarding failure, just as the government has rewarded the banks with the bailouts for their failure.

It is therefore regrettable that President Obama has gone along with the advice of his flock of financial advisers and although we hope that by some as yet unknown miracle things will work out somehow, many feel that the president, along with the rest of the country may actually have cause to regret taking that road.

The economic recovery will not happen any time soon, despite the predictions of forecasters in the government and other places. What the financial “gurus” are touting is a recovery, but the bailouts will not really create that at all and the economy is not going to magically spring back to life as they keep telling us. They are simply propping up the industry, which has actually caused the disaster.

The drop in employment, productivity, wages and consumption might slow down a bit, but it is going to be a long time, before the economy actually recovers. And it is probably the hope of the industry insiders that by that time the public might actually be fooled into believing that the trillions of dollars doled out to the financial industry had the desired effect, when in fact it is simply another chapter in the unprecedented looting of our national financial resources.

In other words, it appears that the Democrats are just as proficient at looting the U.S. treasury as the Republicans, but that is frankly no surprise at all.

Technorati Tags: Bailouts, banks, democrats, Economy, federal reserve, greenspan, looting, majority, republicans, summers, wall street

I always found the dropping of the ball on New York’s Times Square to mark the New Year as kind of a silly “tradition”. Why a ball? Why drop it, instead of raising it? Why New York? Why Times Square? Why do a million people crowd there and freeze for hours?

Also, why does ABC television still persist in having poor Dick Clark take part in this silly exercise, calling it Dick Clark’s New Year’s Rockin’ Eve With Ryan Seacrest? I did watch just for a few minutes and must say that there wasn’t really anything worth watching in that show. Seacrest was blabbing away along with Lionel Ritchie, passing the baton to Clark every few minutes. Some “reporter’ kept interviewing carefully screened spectators in the mindless, Hollywood/Entertainment Tonight style of “reporting”.

By the way, the chilled crowds were controlled to make sure order was preserved and dressed in product endorsements to make sure the economy survived.

Although the New Year arrived in regular, one-hour intervals throughout the world, the Times Square extravaganza organizers, along with ABC tried to make it seem like it was only happening in Times Square and as if the Big, Rotten Apple was the center of the World.

We believe that it would be appropriate only if the central entertainment of the New York celebration was an event in which carefully chosen, from among the guiltiest of Wall Street “smart guys” were tied to whipping posts, given at least fifty lashes each and then gotten tarred and feathered. It would be a much more entertaining, just and popular event that the silly dropping of the ball.

Technorati Tags: ball, celebrating, lets, new year, new york, stop, times square, wall street