shaping the new financial architecture…

Medicare, right now, has a $38 trillion unfunded liability

Posted in progress by Kitty on February 28, 2010

Rep. Paul Ryan made the opening statement for Republicans at the White House health care summit last week… openly discussing the costs and funding models for reform is critical.

Here is what Rep. Ryan said in the video above…

“Mr. President, you said health care reform is budget reform. You’re right. We agree with that.

Medicare, right now, has a $38 trillion unfunded liability.

That’s $38 trillion in empty promises to my parents’ generation, our generation, our kids’ generation.

Medicaid’s growing at 21 percent each year.

It’s suffocating states’ budgets.

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Eleven principles of financial reform

Posted in progress, TBTF by Kitty on February 17, 2010

Repost from Jesse’s Cafe

~~~ “Personally I doubt that the US is capable of self-reform at this time.

The corruption of the socio-political system runs deep, and is embedded in the national consciousness as a reflexive set of slogans (the big lies) that substitute for practical thought and effective policy formation.

The examples of thinkspeak are numerous. People become parrots for their favorite corporate news/opinion channel, to which they become emotionally addicted, because otherwise, reality is too painful and complex to face. And so they are blinded and cut off from productive and even civil discourse, trapped within deep wells of subjectivity.

The major media in the States are owned by a few corporations. The Congress listens to its large contributors and ignores the public except at election time, when it inundates them with expensive media campaigns, political spin, false promises, and propaganda. And then it is back to business as usual.

“When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.” Frederic Bastiat

What will it take? It took the Japanese about twenty years of economic privation to finally get rid of the LDP political party that had ruled the country since the Second World War. It may take ten years of stagflation and economic hardship for the American people to wake up and put an end to the crony capitalism that has captured its two party political system. A good start would be to continue to defeat incumbents from both parties, and to start electing viable third party candidates.

But that demands a more thoughtful venue than is currently the norm. It really does seem that bad to a relatively objective observer.

Vox
Eleven Lessons From Iceland
Thorvaldur Gylfason
13 February 2010

…What can be done to reduce the likelihood of a repeat performance – in Iceland and elsewhere? Here are eleven main lessons from the Iceland story, lessons that are likely to be relevant in other, less extreme cases as well.

Lesson 1. We need effective legal protection against predatory lending just as we have long had laws against quack doctors. The problem is asymmetric information. Doctors and bankers typically know more about complicated medical procedures and complex financial instruments than their patients and clients. The asymmetry creates a need for legal protection through judicious licensing and other means against financial (as well as medical) malpractice to protect the weak against the strong.

Lesson 2. We should not allow rating agencies to be paid by the banks they have been set up to assess. The present arrangement creates an obvious and fundamental conflict of interest and needs to be revised. Likewise, banks should not be allowed to hire employees of regulatory agencies, thereby signalling that by looking the other way, remaining regulators may also expect to receive lucrative job offers from banks. (I would add a prohibition of movement between regulators and the banks without a significant hiatus of at least four years. – Jesse)

Lesson 3. We need more effective regulation of banks and other financial institutions; presently, this is work in progress in Europe and the US (Volcker 2010). (Too slow, too driven by the banks themselves in the US – Jesse)

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When pollsters address financial reform

Posted in Fraud, Lobbying, Senate Banking Committee by Kitty on February 9, 2010

Reblog from American’s for Financial Reform: Heather Booth: Beware Frank Luntz’s Lies

AFR Director Heather Booth has a new column on the Huffinton Post exposing Frank Luntz’s lies about financial reform.  Here’s an excerpt from her post:

Seen this ad from the “Committee for Truth in Politics”? If the name weren’t comical enough, the visuals are. But that doesn’t mean we shouldn’t take the message seriously. The claim that financial regulatory reform is a $4 trillion bank bailout doesn’t really resemble any truth, as Factcheck.org explains. Yet we know this is just the beginning of what we’ll see and hear as the weeks roll on for the push for real financial regulatory reform. And where did these conservatives get the idea to say black is white and up is down? Frank Luntz.

Frank Luntz, pollster to the right wing and Wall Street agenda, has written a 17-page memo on how to talk about financial reform in order to destroy it. This is the same Luntz whose health insurance reform talking points – on how to best stir up fear and confusion in the American people to derail reform and protect insurance industry profits – showed up across conservative websites and in the mouths of lawmakers. So it shouldn’t be surprising that he’s at it again. After all, his client list is a who’s who of the corporate interests who helped to create the crisis, including Merrill Lynch and Bear Sterns.

When the Frank Luntz Memo wasn’t making me laugh with its absurdity, I was outraged that he uses 1984 George Orwellian advice to call good, bad; to say the solution is the problem. It’s this kind of thinking that inspired belief in the “death panels” that were a fabrication in the health care debate. And it is dangerous because he may have enough money to promote it again and again — so that it may sound real.

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Teapot Dome 2.0?

Posted in Federal Reserve, Senate Banking Committee by Kitty on January 31, 2010

April 15, 1922 Senate Investigates the "Teapot Dome" Scandal

Repost from Jesse’s Cafe

“I have to think this train is probably going to leave the station soon and we need to focus our efforts on explaining the story as best we can. There were too many people involved in the deals — too many counterparties, too many lawyers and advisors, too many people from AIG — to keep a determined Congress from the information.” James P. Bergin, NY Fed, in an email to his Fed colleagues.

‘Though it is hard to divine much understanding from the unredacted filing, it has become clear that Goldman had more involvement than previously believed: In addition to the credit default swaps it bought from AIG, the filing shows that Goldman Sachs also originated many of the underlying assets that AIG and the New York Fed bought back from Société Générale.

The American people have the right to know how their tax dollars were spent and who benefited most from this back-door bailout,” said Kurt Bardella, spokesman for Issa. “Now that it’s public, let’s see if the sky really does fall as the New York Fed said it would to justify its coverup.”

Other lawmakers believed that the New York Fed was trying to hide its ties to Goldman Sachs.’ AIG Reveals the Story – CNN

“Wednesday’s hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials.

We’re talking about the Federal Reserve Bank of New York, whose role as the most influential part of the federal-reserve system — apart from the matter of AIG’s bailout — deserves further congressional scrutiny…

By pursuing this line of inquiry, the hearing revealed some of the inner workings of the New York Fed and the outsized role it plays in banking. This insight is especially valuable given that the New York Fed is a quasi-governmental institution that isn’t subject to citizen intrusions such as freedom of information requests, unlike the Federal Reserve

This impenetrability comes in handy since the bank is the preferred vehicle for many of the Fed’s bailout programs. It’s as though the New York Fed was a black-ops outfit for the nation’s central bank

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Dear politicians: We are fed up Commentary: Fix our problems or get out of the way

Posted in Senate Banking Committee, TBTF by Kitty on January 20, 2010

Yup… this editorial sums up how America feels… President Obama time to swap that black hat for a white one… rein in the banks… start with insisting on Senate hearings on Glass-Steagall… make John McCain your partner on breaking up the big banks

WASHINGTON (MarketWatch) — The people of this country have had it up to here with the way our leaders are running our country.

And while the election of Republican Scott Brown to the U.S. Senate seat held by the Kennedy brothers for nearly 60 years is clearly a repudiation of the Democrats’ leadership, Republicans shouldn’t get so smug about this victory. See full story on Brown’s victory in Massachusetts.

We are fed up with the lot of you.

You promised to change the way Washington works, but you didn’t do it. Your answers to our problems are inadequate, or they make things worse. As usual, you’re taking care of everyone but us. Despite the worst economic crisis in generations, nothing has changed.

This country is in trouble, maybe big trouble. Our economy doesn’t work for us any more. Jobs are hard to find, health care is hit or miss, and the idea of a comfortable retirement seems a cruel joke. We legitimately worry that we’re bequeathing our kids and our grandkids a life that’s going to be much tougher than ours.

We did everything we were asked: We worked hard, we invested in Wall Street, we took off our shoes at the airport, we bought a house, and we borrowed and spent until we couldn’t spend or borrow any more.

You don’t get it. We don’t care about your campaign donations. We don’t care about your political fortunes, or those of your party. We don’t care who posed nude, or who’s the better candidate. We don’t care about 60 votes. We don’t care about the big companies or the special interests who fear the future. We don’t care about Senate traditions, or what those idiots on TV say.

We care about results. Fix our problems, or get out of the way. We know our problems aren’t simple. We know the answers won’t come easy. But we also know that you don’t understand. If you did, you’d hide your faces in shame.

To the Democrats: We elected you to accomplish things for us, not to give you lifetime jobs. We gave you an overwhelming majority in Congress: Use it or lose it.

To the Republicans: It might seem smart in the short run to just oppose everything, knowing that the wheel will turn and that eventually the people will give the power and the mandate to you. But it’d be much better for us if you’d actually stand for something other than protecting your own hides, or getting your own cable show.

To the voters: You deserve better. Start demanding it.

— Rex Nutting, Washington bureau chief