The Big Lie Coup d'Etat

By Robert Reich, cross-posted from his website

JP Morgan Chase,  Goldman Sachs, BP, Chevron, WalMart, and billionaires Charles and David Koch are launching a multi-million dollar TV ad buy Tuesday blasting President Obama over the national debt.

Actually, I don’t know who’s behind this ad because there’s no way to know. And that’s a big problem.
The front group for the ad is Crossroads GPS, the sister organization to the super PAC American Crossroads run by Republican political operative Karl Rove.

Because Crossroads GPS is a tax-exempt nonprofit group, it can spend unlimited money on politics — and it doesn’t have to reveal where it gets the dough.

By law, all it has to do is spent most of the money on policy “issues,” which is a fig leaf for partisan politics.
Here’s what counts as an issue ad, as opposed to a partisan one. The narrator in the ad Crossroads GPS is launching solemnly intones: “In 2008, Barack Obama said, ‘We can’t mortgage our children’s future on a mountain of debt.’ Now he’s adding $4 billion in debt every day, borrowing from China for his spending. Every second, growing our debt faster than our economy,” he continues. “Tell Obama, stop the spending.”
This is a baldface lie, by the way.

Obama isn’t adding to the debt every day. The debt is growing because of obligations entered into long ago, many under George W. Bush – including two giant tax cuts that went mostly to the very wealthy that were supposed to be temporary and which are still going, courtesy of Republican blackmail over raising the debt limit.

In realty, government spending as a portion of GDP keeps dropping.

As I said, I don’t know who’s financing this big lie but there’s good reason to think it’s some combination of Wall Street, big corporations, and the billionaire Koch brothers.

According to the reliable inside-Washington source “Politico,” the Koch brothers’ network alone will be spending $400 million over the next six months trying to defeat Obama, which is more than Senator John McCain spent on his entire 2008 campaign.

Big corporations and Wall Street are also secretly funneling big bucks into front groups like the U.S. Chamber of Commerce that will use the money to air anti-Obama ads, while keeping secret the identities of these firms.

Looking at the all the anti-Obama super PACs and political fronts like Crossroads GPS, Politico estimates the anti-Obama forces (including the Romney campaign) will outspend Obama and pro-Obama groups by 2 to 1.

How can it be that big corporations and billionaires will be spending unlimited amounts on big lies like this one, without any accountability because no one will know  where the money is coming from?

Blame a majority of the Supreme Court in its grotesque 2010 Citizens United vs. Federal Election Commission decision — as well as the IRS for lax enforcement that lets political front groups like Crossroads GPS or the U.S. Chamber of Commerce pretend they’re not political.

But you might also blame something deeper, more sinister.

I’m not a conspiracy theorist (you can’t have served in Washington and seriously believe more than two people can hold on to a big story without it leaking), but I fear that at least since 2010 we’ve been witnessing a quiet, slow-motion coup d’etat whose purpose is to repeal every bit of progressive legislation since the New Deal and entrench the privileged positions of the wealthy and powerful — who haven’t been as wealthy or as powerful since the Gilded Age of the late 19th century.

Its technique is to inundate America with a few big lies, told over and over (the debt is Obama’s fault and it’s out of control; corporations and the very rich are the “job creators” that need tax cuts; government is the enemy, and its regulations are strangling the private sector; unions are bad; and so on), and tell them so often they’re taken as fact.

Then having convinced enough Americans that these lies are true, take over the White House, Congress, and remaining states that haven’t yet succumbed to the regressive right (witness Tuesday’s recall election in Wisconsin).

I desperately hope I’m wrong, but all there’s growing evidence I may be right. 


Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley.  He writes a blog at www.robertreich.org.  His most recent book is Beyond Outrage

The Bain Of Our Existence

By Mike Lux, cross-posted from Crooks and Liars

I love this Bain debate. It is exactly the kind of debate about the nature of business and job creation we need to be having in this campaign. The Republicans, along with pro-Wall Street Democrats, are squealing like stuck pigs about the Obama campaign “attacking free enterprise” because they want to change the subject fast. They are saying to themselves: please, let’s talk about anything else. Deficits would be their first choice, but anything would be preferable. Maybe we’ll see them start talking about contraceptives and how people shouldn’t have sex again just to change the subject. Because this debate goes straight to the heart of what kind of economy we should be trying to build in this country.

This is isn’t about being for or against free enterprise. This is about how the economy should work better for everyone in it, not just the top 1 percent. The Republicans -- and Democrats like Cory Booker and Harold Ford, who both have raised millions of dollars in Wall Street money (including money from Bain) for their campaigns -- say that it is great when financial corporations like Bain make money by loading up the companies they buy with debt, taking all the tax write-offs the law allows, and then walking away with tons of money whatever happens to the original company. In fact, the companies Bain bought frequently went bankrupt, and Bain usually profited when those companies did go belly-up because of tax write-offs and sucking the companies’ assets dry. But in this line of reasoning, it’s all good, because capitalism should be unrestrained and some people got very rich.

What Obama and other Democrats are arguing is that our government should be on the side of the businesses that create not just wealth for a few at the top, but jobs and incomes for a lot of people. That is why Obama made the incredibly gutsy move to save the American auto industry, a policy that saved 1.45 million jobs in the short run, and kept desperately needed manufacturing jobs in this country for years to come. It is why Obama has made big investments in the budget for Small Business Administration jobs. It is why investments have been made in clean energy jobs of the future. It is why the U.S. Department of Agriculture has emphasized rural economic development and small business development in areas where jobs and incomes are desperately needed.

Democratic policies are in fact far more pro-business than policies like the Romney-Ryan budget, which independent studies estimate would cost the nation more than 4 million jobs in the next two years. That’s a lot of business customers who no longer have money to spend.

The Republican attack machine (helped by Democrats like Booker and Ford who have been feeding at the Wall Street trough for their entire careers) wants to intimidate the Obama campaign by making the claim that any attack on greedy business practices like the ones Romney perfected at Bain is an attack on all business and the market. It’s the same kind of argument Republicans make when they complain about class warfare politics when Democrats suggest that millionaires ought to pay a little more in taxes. It is an utterly soulless, amoral argument. But this is a fight Democrats can and will win if we make our case, because I think most people understand that there are ethical and unethical business practices. And they get that there is a difference between making money by manipulating the tax code and squeezing all the value out of businesses before throwing them away, and making money by making and selling good products that people want to buy. Biden laid this case out beautifully in a speech in Youngstown:

The Facebook IPO: Unlike

DonkeyHotey

It has been widely reported that the underwriters for Facebook's initial public offering reduced the revenue forecasts for the company before the IPO, but only shared this information with big, institutional investors. 

As Travis Waldon and Pat Garofalo at ThinkProgress explain, the Facebook IPO fiasco provides us with several examples of how Wall Street games the system:

1. Facebook may have hid information about weak revenue growth: According to one lawsuit launched since the company went public, Facebook “concealed crucial information” regarding weak revenue growth, failing to disclose a revised revenue forecast, much like Wall Street banks failed to provide key information about mortgage securities they were peddling before the financial crisis.

2. Morgan Stanley alerted “preferred” investors to Facebook’s poor growth forecasts: Facebook’s Wall Street underwriters are facing scrutiny from regulators for only alerting certain “preferred” investors about Facebook’s declining revenue stream, leaving many potential shareholders in the dark.

3. Facebook stock dropped, Wall Street got rich: Facebook stock plummeted on its second day of trading and has continued its decline since, but Morgan Stanley and the other underwriters are still turning massive profits by “shorting” its stock. “In fact,” Fortune’s Steven Gandel wrote, “Morgan Stanley and the other banks who were selling Facebook shares to the public were positioned to make more money the lower Facebook’s shares went.” As of Tuesday, the group of Wall Street banks that underwrote the IPO could have topped more than $450 million in profits — on top of more than $170 million in underwriting fees.

4. Facebook will dodge billions in taxes after its IPO: Corporate tax law allows companies that issue stock options to make huge deductions to their tax liabilities, helping Facebook avoid $16 billion in taxes. CEO Mark Zuckerberg could possibly never pay taxes again, using a series of loopholes to avoid them after the initial hit he’ll take after selling shares.

5. Facebook is spending big on politics: Just like the Wall Street banks and other big companies that spend huge amounts of cash lobbying Washington, Facebook jumped into the fray, giving $119,000 in donations to lawmakers through March 31. The money went to leaders of both parties and those lawmakers who “serve on House and Senate committees that handle Internet and online privacy issues.”

Obama Should Be Attacking Casino Capitalism

By Robert Reich, cross-posted from his website
 

I wish President Obama would draw the obvious connection between Bain Capital and JPMorgan Chase.

That way his so-called “attack” on private equity is neither a personal attack on Mitt Romney nor a generalized attack on American business.

It’s an attack on a particular kind of capitalism that Romney and JPMorgan both practice: Using other peoples’ money to make big bets which, if they go wrong, can wreak havoc on the economy.
It’s the substitution of casino capitalism for real capitalism, the dominance of the betting parlor over the real business of America, financial innovation rather than product innovation.

It’s been terrible for the American economy and for our democracy.

It’s also why Obama has to come out swinging about JPMorgan. The JPMorgan Chase debacle would have been prevented if the Volcker Rule were sufficiently strict, prohibiting banks from using commercial deposits to make bets except very specific offsetting bets (hedges) on narrow classes of trades.

But Jamie Dimon and JPMorgan have been lobbying like mad to loosen the Volcker Rule and widen that exception to include the very kind of reckless bets JPMorgan made. And they’re still at it, as evidenced by Dimon’s current claim that the rule that eventually emerges would allow those bets.

As a practical matter, the Volcker Rule is hopeless. It was intended to be Glass-Steagall lite — a more nuanced version of the original Depression-era law that separated commercial from investment banking. But JPMorgan has proven that any nuance — any exception — will be stretched beyond recognition by the big banks.

So much money can be made when these bets turn out well that the big banks will stop at nothing to keep the spigot open.

There’s no alternative but to resurrect Glass-Steagall as a whole. Even then, the biggest banks are still too big to fail or to regulate. We also need to heed the recent advice of the Dallas branch of the Federal Reserve, and break them up.

At the same time, there’s no point to the “carried interest” loophole that allows private-equity managers like Mitt Romney to treat their incomes as capital gains, taxed at only 15 percent, when they’ve risked no money of their own.

If private equity were good for America it wouldn’t need this or the other tax preference it depends on, elevating debt over equity. But the private equity industry has huge political clout, which is why these tax preferences remain.

Get it? Bain Capital and JPMorgan are parts of the same problem. The President should be leading the charge against both.

What The Bain Debate Is Really About

By Terrance Heath, cross-posted from Campaign for America's Future

DonkeyHotey

The 2012 presidential election may go down as one of the strangest political seasons in recent memory, for the simple reason that the influence of the financial sector in politics, policy and the economy has caused Republicans to sound like Democrats and Democrat to sound like Republicans — usually with confounding results.

When Republicans sound like Democrats, like Newt Gingrich attacking Mitt Romney's record at Bain Capital, they tend to start arguments they can't win. When Democrats start sounding like Republicans, like Cory Booker defending Bain Capital, they tend forfeit arguments they could win. That's because, in both cases, the politicians are arguing about the wrong things, in order to avoid the real argument  — the one America needs to have, and Americans need to win; the argument over what kind of economy we will have going forward.

Gingrich's attack on Romney's record confused many conservatives, who equated it with an attack on capitalism itself. Newark Mayor Cory Booker echoed the concerns of confused conservatives when he called the Obama campaigns ads attacking Romney's record at Bain Capital a "nauseating" attack on private equity, labeling them a distraction. "It's either going to be a small campaign about this crap or it's going to be a big campaign, in my opinion, about the issues that the American public cares about," Booker said.

What Booker, Democrats like him, and conservatives now lauding his diatribe ignore or don't realize is that the issues affecting voters don't come much bigger and don't get much more real than the kind of capitalism Bain represents.

Bain Capitalism

As Digby said, if Romney is going to run on his Bain Capital record and tout his private equity background as his main qualification for the presidency, then his track record at Bain is fair game. I summed up that track record in my original post about his brand of "vulture capitalism."

A former managing partner at Bain, in an interview with the Los Angeles Times, made it clear that job creation was never the point at Bain.

Bain managers said their mission was clear. "I never thought of what I do for a living as job creation," said Marc B. Walpow, a former managing partner at Bain who worked closely with Romney for nine years before forming his own firm. "The primary goal of private equity is to create wealth for your investors."

Under Romney's leadership, Bain certainly created wealth for its investors, no matter what happened to the companies it acquired or the the people worked for them. The Wall Street Journal's revealing look at Romney's time at Bain shows that 22% of the companies Bain invested on under Romney's watch either filed for bankruptcy, reorganized, or closed their doors — sometimes with substantial job losses. As Pat Garofalo pointed out, that's nearly one fourth of the companies Bain invested in.

Wall Street, Romney, And Obama

By Mike Lux, cross-posted from Crooks and Liars

The most critical battle in this election year is the battle over Wall Street. Candidates all over the place, from the high profile candidates like Elizabeth Warren to a slew of others all over the country, are battling over who is on Wall Street’s side, who wants to keep bailing them out, and who is pushing them to go to jail. But nowhere is this battle being played out more prominently than in the race for the White House.

The Obama campaign is doing a major push in the coming weeks on Mitt Romney’s sordid history at the helm of Bain Capital. His fellow Republicans called it vulture capitalism, and they were right. Mitt bought companies (many of them doing just fine at the time he bought them), loaded them up with massive amounts of debt that Bain could write off on their taxes, in many cases destroyed and outsourced jobs and cut pay and benefits, and then frequently carved them up and sold off the pieces to maximize short-term profits. A few of these companies ended up surviving this brutal process and becoming more profitable, and we will hear a lot from Mitt about those examples. But way too many times, Mitt and Bain left these companies, and especially their workers, far worse for the wear, leaving behind a lot of shattered lives in the process, while Mitt and his fun-loving pals stuffed money in their pockets and walked away. High School wasn’t the only place Mitt brutalized those weaker than him, and he enjoyed doing it.

Bain Capital was Wall Street at its worst. But the cutthroat, anything-goes-in-the-pursuit-of-one-more-dollar culture at Bain has infected our entire banking system. The Obama campaign is right to attack on Bain and on the culture of Wall Street; it is in my view their single most powerful attack line. However, that attack will be undercut unless they buttress their own credibility on taking on Wall Street. Republicans aren’t going to hesitate coming after Obama hard on his ties to Wall Street (ironically with a lot of Wall Street money) in order to weaken the campaign’s credibility when they attack Bain, and we are seeing signs of that right now.

Robert Reich Explains How We Need A New Era Of Reform Based On Public -- Not Private -- Morality

Romney Has Public Morality And Private Morality Upside Down

by Robert Reich, cross-posted from his website



Mitt Romney’s reaction to J.P. Morgan Chase’s mounting losses from reckless trades is “the market will take care of it.” His spokesman says “no taxpayer money was at risk” so we don’t need more financial regulation. Romney has even promised to repeal Dodd-Frank if he’s elected president.

Yet at the same time, Romney has come out strongly against same-sex marriage. He’s also against abortion. He has no problem with government intruding on the most intimate of decisions a person makes.

He’s got private and public morality upside down. He doesn’t want to regulate where regulation is necessary — at the highest reaches of the economy, where public immorality has cost us dearly, and will cost even more unless boardroom behavior is constrained. Yet he wants to regulate where regulation is least appropriate — at the level of the individual, in bedrooms and other intimate spaces, where private morality should govern.

This is a dangerous confusion. It should be a matter of personal choice whom to marry and when to have children. But it is undoubtedly a matter of public choice whether big banks should be allowed to take the kind of risky bets that plunged the economy into the worst downturn since the Great Depression, and whether people with great wealth and should be able to buy our democracy with huge campaign contributions.

Please see the attached video and pass it on.

 Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley.  He writes a blog at www.robertreich.org.  His most recent book is Beyond Outrage.

JP Morgan: Bank Or Casino?

Robbie Conal

The New York Times reports that JP Morgan, "which emerged from the financial crisis as the nation’s biggest bank, disclosed on Thursday that it had lost more than $2 billion in trading, a surprising stumble that promises to escalate the debate over whether regulations need to rein in trading by banks."  Its CEO, Jamie Dimon, blamed “errors, sloppiness and bad judgment” for the loss, which stemmed from "a hedging strategy that backfired."

Surprising?  Hardly.  As Travis Waldon writes at ThinkProgress, these are the kind of errors that "could have been prevented were it not for extensive lobbying efforts from banks like JPMorgan, which has spent nearly $10 million on lobbying since the beginning of 2011 (including nearly $2 million already this year)."

Robert Reich reminds us that Dimon has incessantly argued against government regulation of Wall Street:

Last year he vehemently and loudly opposed the so-called Volcker rule, itself a watered-down version of the old Glass-Steagall Act that used to separate commercial from investment banking before it was repealed in 1999, saying it would unnecessarily impinge on derivative trading (the lucrative practice of making bets on bets) and hedging (using some bets to offset the risks of other bets).

And since then, Reich continues, "J.P. Morgan’s lobbyists and lawyers have done everything in their power to eviscerate the Volcker rule — creating exceptions, exemptions, and loopholes that effectively allow any big bank to go on doing most of the derivative trading it was doing before the near-meltdown."

As Waldon writes, "Thursday’s events prove that Wall Street hasn’t learned its lesson from the last crisis, and that America’s 'too big to fail' institutions are too irresponsible to avoid failure. The Volcker Rule, watered down as it may be, is aimed at preventing that. Unfortunately, Dimon and his Wall Street colleagues remain committed to making sure it won’t."

Matt Taibbi explains why we should care "if some idiot trader (who apparently has been making $100 million a year at Chase, a company that has been the recipient of at least $390 billion in emergency Fed loans) loses $2 billion for Jamie Dimon."

Because J.P. Morgan Chase is a federally-insured depository institution that has been and will continue to be the recipient of massive amounts of public assistance. If the bank fails, someone will reach into your pocket to pay for the cleanup. So when they gamble like drunken sailors, it’s everyone’s problem.

Taibbi concludes:

 If J.P. Morgan Chase wants to act like a crazed cowboy hedge fund and make wild exacta bets on the derivatives market, they should be welcome to do so. But they shouldn’t get to do it with cheap cash from the Fed’s discount window, and they shouldn’t get to do it with money from the federally-insured bank accounts of teachers, firemen and other such real people. It’s a simple concept: you either get to be a bank, or you get to be a casino. But you can’t be both. If we don’t have rules to enforce that concept, we ought to get some.

Welcome To The 2012 Hunger Games

Sending Debt Peonage, Poverty, and Freaky Weather Into The Arena

By Rebecca Solnit, cross-posted from TomDispatch

When I was growing up, I ate books for breakfast, lunch, and dinner, and since I was constantly running out of reading material, I read everyone else’s -- which for a girl with older brothers meant science fiction. The books were supposed to be about the future, but they always turned out to be very much about this very moment.

Some of them -- Robert Heinlein’s Stranger in a Strange Land -- were comically of their time: that novel’s vision of the good life seemed to owe an awful lot to the Playboy Mansion in its prime, only with telepathy and being nice added in. Frank Herbert’s Dune had similarly sixties social mores, but its vision of an intergalactic world of disciplined desert jihadis and a great game for the substance that made all long-distance transit possible is even more relevant now.  Think: drug cartels meet the oil industry in the deep desert.

We now live in a world that is wilder than a lot of science fiction from my youth. My phone is 58 times faster than IBM’s fastest mainframe computer in 1964 (calculates my older brother Steve) and more powerful than the computers on the Apollo spaceship we landed on the moon in 1969 (adds my nephew Jason). Though we never got the promised jetpacks and the Martians were a bust, we do live in a time when genetic engineers use jellyfish genes to make mammals glow in the dark and nerds in southern Nevada kill people in Pakistan and Afghanistan with unmanned drones.  Anyone who time-traveled from the sixties would be astonished by our age, for its wonders and its horrors and its profound social changes. But science fiction is about the present more than the future, and we do have a new science fiction trilogy that’s perfect for this very moment.

Sacrificing the Young in the Arenas of Capital 

The Hunger Games, Suzanne Collins’s bestselling young-adult novel and top-grossing blockbuster movie, is all about this very moment in so many ways. For those of you hiding out deep in the woods, it’s set in a dystopian future North America, a continent divided into downtrodden, fearful districts ruled by a decadent, luxurious oligarchy in the Capitol. Supposedly to punish the districts for an uprising 74 years ago, but really to provide Roman-style blood and circuses to intimidate and distract, the Capitol requires each district to provide two adolescent Tributes, drawn by lottery each year, to compete in the gladiatorial Hunger Games broadcast across the nation.

That these 24 youths battle each other to the death with one lone victor allowed to survive makes it like -- and yet not exactly like -- high school, that concentration camp for angst and competition into which we force our young. After all, even such real-life situations can be fatal: witness the gay Iowa teen who took his life only a few weeks ago after being outed and taunted by his peers, not to speak of the epidemic of other suicides by queer teens that Dan Savage’s “It Gets Better” website, film, and books aspire to reduce.

But really, in this moment, the cruelty of teens to teens is far from the most atrocious thing in the land. The Hunger Games reminds us of that.  Its Capitol is, of course, the land of the 1%, a sort of amalgamation of Fashion Week, Versailles, and the KGB/CIA. Collins’s timely trilogy makes it clear that the 1%, having created a system of deeply embedded cruelty, should go, something highlighted by the surly defiance of heroine Katniss Everdeen -- Annie Oakley, Tank Girl, and Robin Hood all rolled into one -- who refuses to be disposed of.

Now, in our world, gladiatorial entertainment and the disposability of the young are mostly separate things (except in football, boxing, hockey, and other contact sports that regularly result in brain damage, and sometimes even in death). But while the Capitol is portrayed as brutal for annually sacrificing 23 teenagers from the Districts, what about our own Capitol in the District of Columbia? It has a war or two on, if you hadn’t noticed.

In Iraq, 4,486 mostly young Americans died.  If you want to count Iraqis (which you should indeed want to do), the deaths of babies, children, grandmothers, young men, and others total more than 106,000 by the most conservative count, hundreds of thousands by others. Even the lowest numbers represent enough kill to fill nearly 5,000 years of Hunger Games.

Then, of course, there are thousands more Americans who were so grievously wounded they might have died in previous conflicts, but are now surviving with severe brain damage, multiple missing limbs, or other profound mutilations. And don’t forget the trauma and mental illness that mostly goes unacknowledged and untreated or the far more devastating Iraqi version of the same. And never mind Afghanistan, with its own grim numbers and horrific consequences.

Our wartime carnage has been on a grand scale, but it hasn’t been on television in any meaningful way; it’s generally been semi-hidden by most of the American media and the government, which censored images of returning coffins, corpses, civilian casualties, and anything else uncomfortable (though in our science-fiction era when every phone is potentially a video camera, the leakage has still been colossal). Most of us did a good job of being distracted by other things -- including reality TV, of course.  The US Ambassador and military commander in Afghanistan were furious not that our soldiers struck jokey poses with severed limbs, but that the Los Angeles Times dared to publish them last month. And those whistleblowers who took the effort to reveal the little men behind the throne are facing severe punishment.  Witness one Hunger-Games-style hero, Bradley Manning, the slight young soldier turned alleged leaker, long held in inhumane conditions and now facing a potential life sentence.

Occupy May Day

Eric Drooker

 By Sarah Van Gelder, cross-posted from Yes Magazine

If the mainstream media was confused about Occupy Wall Street in its early days in Zuccotti Park, they’re bound to be completely befuddled this May Day.

May Day already has a lot piled on it. In pre-Christian Europe, May Day was a time to dance, light bonfires, sing, and carry on in celebration of the changing seasons. May Day also marks the anniversary of the 1886 Haymarket massacre, which occurred during a Chicago strike for the eight-hour work day. Also called International Workers’ Day, it’s a holiday in more than 80 countries.

And most recently, the U.S. immigrants right movement has used May 1st for massive street demonstrations and strikes aimed at reforming laws and policies that result in imprisonment, deportation, and discrimination against undocumented people.

This May Day, the Occupy movement is getting involved, calling it “The day without the 99 percent.” What will May Day look like with so many traditions riding on it?

May Day Collaborations—from Bike Caravan to Free University

The way plans are shaping up, in at least some locations around the United States, it could be big, festive, and importantly, include elements of all the May Day traditions. And it could be profoundly different than the big days of action we’ve seen in the past. In the weeks leading up to May Day, various movements have been collaborating. And people will not only be protesting, they’ll be liberating spaces for education, the arts, general assemblies, and teach-ins.

There will be marches, of course. Some permitted, planned, and predictable. Others will be spontaneous, possibly disruptive. In spite of all the police planning (and collaboration with Wall Street private security forces) law enforcement will be kept guessing.

There will be fairs, free food, teach-ins, music, bicycling, marches, and fiestas.

In New York, occupiers are leading up to May Day by organizing 99 pickets in support of workers around the city, from jazz musicians to taxi drivers to laundry workers. The LGBTQTSGNC (Lesbian, Gay, Bisexual, Queer, Trans, Two-Spirit and Gender Non-Conforming) contingent will be out in force. They’ll be a “Guitarmy” marching from New York’s Bryant Park to Madison Square Park, with 1,000 guitars.

At Madison Square Park, there will be a Free University, organized by students fed up with tuition hikes and a student debt burden that’s now reached $1 trillion. Educators will bring classes to the park, there will be skill sharing and workshops.

At Bryant Park, they’ll be a “free” market—where everything is actually free— as well as public art and “opportunities for action.”

In Los Angeles, bike and car caravans will travel to the city center from the four cardinal directions. Along the way, there may be union strike action, and there will be “flash occupations,” free food, and direct action along the way, targeting the foreclosure crisis. Tuition hikes, income inequality, immigrant rights, police violence, the criminalizing of the homeless—the Los Angeles caravans each will focus on some combination of these topics.

In the San Francisco Bay area, nurses and social workers have declared a strike. Bridge and transportation workers and occupiers will attempt to shut down the Golden Gate Bridge. There will be “flying pickets” to shut down banks and business associations.

In Seattle, the group Hip Hop Occupiers to Decolonize is inviting artists, families, and the general public to a day of music, dance, live art, and speakers. There will also be marches of immigrants, occupiers, and workers.

Seattle occupiers will be serving free breakfasts to get the day off to a good start, something that can get you fined in Philadelphia, where the mayor has made it illegal to feed the hungry in city parks.
In Portland, occupiers plan to occupy a vacant home and hold a block party.

In Kalamazoo, Mich., they’ll be camped out on the sidewalk in front of the Bank of America, and there’s a good chance they’ll be doing civil disobedience to stop the auction of public land for hydraulic fracking.

The list goes on and on, from small towns in Wyoming to the place where it all started, lower Manhattan.

This broad range of topics and tactics may bewilder mainstream pundits, but it reflects a transformation in activism as profound as anything that’s happened in social change over the past decades. People are moving out of their isolated interest groups and causes. They’re coming together in a shared analysis, demonstrating their agreement about sources of some of our biggest problems—the overwhelming power of Wall Street and big corporations and our society’s continuing struggle with exclusion of people based on their race, gender, sexual orientation, immigration status, etc. And they’re developing shared ambitious goals and bold strategies that add up to real power and real possibility.

As often happens in the planning of a big event, some of the most important work began well before the actual day, with undocumented workers, union organizers, occupiers, and students coming together to plan events. They’re mixing it up across races, ages, backgrounds, and interests.

It’s a day without the 99 percent, say organizers. No work. No school. No housework. No shopping. No banking.

Even more than what people won’t be doing on May 1, though, the day is about showing up and protesting, but also building the world we want.

A Progressive Budget Or The Ryan Plan: American Dream Or American Nightmare

 Who Pays The Bill For Wall Street's Mess?

By Robert Borosage, cross-posted from Campaign For America's Future

DonkeyHotey

Yesterday, House Republicans rolled out their budget plan in the Washington version of a Hollywood movie opening. There was a star turn for Budget Chair Paul Ryan at a conservative think tank. Gaseous rhetoric -- "liberties endangered, time to choose" -- fouled the air. There were dueling videos, and furious salvos of partisan messaging. And a backup document -- the "Path to Prosperity" -- festooned with tables for wonks to wallow in.

Today, with fewer trumpets and less fanfare, the Congressional Progressive Caucus releases its budget plan -- A Budget for All.

Each of the two documents is designed to define a message. Their contrasts help clarify the real choices the country faces. Federal deficits exploded after Wall Street's excesses blew up the economy. The questions now are who gets the bill and when does the payment start? Ryan's Republican budget and the CPC's offer starkly different answers that would take the country in starkly different directions.

The Bathtub Fantasy

"My goal is to cut government... to get it down to the size where we can drown it in the bathtub." Grover Norquist.

Ryan's Republican budget, like a speedo bathing suit on a corpulent geezer, is revealing, but not flattering. Even by Washington standards, this is a remarkably dishonest document. It claims to be serious, but offers targets that are simply preposterous. It calls for leveling with the American people, but cravenly ducks laying out who will pay for top end tax cuts. It calls itself a "blueprint for American renewal" while systematically trampling the American dream.

Republicans have lined up like lemmings to sign Grover Norquist's infamous pledge never to raise taxes on anyone at any time. But turns out they even treat the quips of the conservative gadfly as gospel. As the Center for Budget and Policy Priorities pointed out, the Ryan budget, by its own numbers, assiduously pursues Grover's bathtub fantasy.

The Congressional Budget Office reports that under the Ryan budget, by 2050 most of the federal government would simply cease to exist. Ryan's budget would shrink all federal expenditures outside of interest payments, Social Security, Medicare, Medicaid and children's health to 3.75 percent of gross domestic product (GDP).

To translate that arcane measure, CBO notes that "spending for defense alone has not been lower than 3 percent of GDP in any year [since World War II]. " Ryan and Republicans call for increasing defense spending -- so the rest of the government would have to be cut to bathtub size. Ryan argues that the "challenges this nation faces are among the largest in its history," but the budget target he offers is, well, goofy.

Voters Get It, Elites Not So Much

By Mike Lux, cross-posted from Crooks and Liars

Throughout American history, some of our greatest political thinkers have understood that at the end of the day, democracy works better when average Americans rather than elites run things, because regular people instinctively get the truth of what is going on in the real world — on Main Street — more than out-of-touch elites. Thomas Jefferson, Benjamin Franklin, and Thomas Paine got this; as did Abe Lincoln, who believed in a government of, by, and for the people. So did the reformers and organizers of the 20th Century like Saul Alinsky and Walter Reuther. They all knew that the people might get things wrong some of the time, but that ultimately it was better to trust and empower regular folks because the elites generally messed up a lot more of the time than democracy did.

When I read the great memos and reams of data that Stan Greenberg and James Carville at Democracy Corps put out, and read focus group and polling reports from other pollsters I respect, I am reminded of that truth once again. It is striking how much better regular folks understand, than most of the elites in this country, what is really going on with this economy. They aren’t following the moment-to-moment blips in the job or GDP numbers so much as they know deep in their guts that the American middle class is in real danger, that it is on a long downhill decline, and that there needs to be big fundamental changes. This has big implications for the 2012 election.

The swing voters swing because they go back and forth on whom to blame more — Wall Street and big business or the government — and what then to do about it. They think both sides of that equation are bad: that Wall Street screwed up the economy, and that government can’t succeed because it is bought off by Wall Street and other wealthy special interests. They think both political parties are bad. And they for the most part aren’t feeling like the economy is getting much better, or that, as President Obama put it in his State of the Union address, “America is back!” They are pessimists (at least in the short term), populists, alienated from the establishment. That is why I continue to fear a more upbeat message on how the economy really is getting better from the Obama team will cause him to lose. Stan and James reminded me recently of the last ad we ran in the 1992 Clinton campaign, the single most effective ad we ran that fall. I wish I could find the video for you, but I haven’t been able to. It was a 15-second ad that had a clip of George Bush talking about how the economy really was getting better and jobs were starting to pick up again (both of which were technically true), and then the screen just cut to lettering and a voice saying “How ya doing?” People responded strongly to it, feeling in their gut that the economy the last four years had not been getting better, and that Bush was out of touch for saying so. It turned a race that had been tightening into an easy six-point win.

My concern isn’t just, as I have written about before, that the Obama team doesn’t brag too much about economic improvements that most voters aren’t feeling yet. My bigger worry is that Obama, other Democrats, and the broad progressive movement will just miss the moment we are in: middle-class voters have a deep understanding that something is profoundly wrong with the direction our economy has been heading for the last 30 years. They understand, far better than most elites, the underlying trends that are grinding middle-class families into the dirt, and are making it harder and harder for poor people and young people to climb the ladder into the middle class. They are cynical about politicians bragging about job growth because they know that most new jobs don’t pay what the ones that were lost used to, or are temp jobs that will be gone all too fast. They know that wage growth is flat, housing prices are down, and the costs of necessities — gas, groceries, health care — keep going up. They worry about being able to retire with enough money to live on, about taking care of their elderly parents and grandparents, and about sending their kids to college with tuition rates skyrocketing.

This kind of frame of mind for voters makes things challenging for an incumbent President trying to win re-election, but it also presents an opportunity. The Osawatomie, Kansas speech, where Obama cast himself as the fighter for the middle class in tough times, is a part of the answer, and I am glad he has taken on that mantle. But I think he needs to be more explicit and more expansive in creating the narrative, telling the story, of how we got here. The 30-year frame is helpful in part because that is clearly where voters are — that our problems started quite a while back and we have been in decline too long — and in part because it doesn’t make it seem like Obama is just trying to blame Bush, which feels too partisan and blame-gamy. (I also like the fact that it is true. It was Reagan’s policies 30 years ago which decimated our manufacturing base, started us on our current path of massive trade deficits year after year, began the massive deregulation of the financial sector, and embraced supply side economics that first led to massive tax cuts for the wealthy, big budget deficits, and a concentration of both income at the top and industry concentration in one sector of the economy after another.)

Occupy At Six Months

Eric Drooker

As the Occupy movement comes out of its winter hibernation, it is worth looking at its impressive record of achievement over its first six months.

As Travis Waldon puts it, "Occupy groups have shifted the national debate on taxes and inequality, helped homeowners stay in their homes, forced major policy issues to the forefront of debate at the state and federal level, and gotten the attention of the institutions they’ve challenged most forcefully."

Here is list compiled by ThinkProgress of Occupy's accomplishments:

Income Inequality: The 99 Percent movement refocused America’s political debate, forcing news outlets and eventually politicians to focus on rising income inequality. While debt and deficits were the primary focus of the media before the movement started, their attention after the movement began shifted to jobs, Wall Street, and unemployment. By the end of October, even Republicans were talking about income inequality, and a week later, Time Magazine devoted its cover to the topic, asking, “Can you still move up in America?”

Occupy Our Homes: The movement has drawn attention to many of the predatory, discriminatory, and fraudulent practices perpetrated by banks during the foreclosure crisis, and across the country, Occupy groups, religious leaders, and community organizations have helped homeowners prevent wrongful foreclosures on their homes. Activists in Detroit are working to save their fifth home, and similar actions have taken place in cities like Minneapolis, Los Angeles, Cleveland, and Atlanta. The movement has drawn so much attention that local political leaders and even members of Congress have stepped in to help homeowners facing foreclosure.

Move Your Money: On Bank Transfer Day, activists helped more than 40,000 Americans move their money from large banks to credit unions, and more than 650,000 switched to credit unions last October. Religious groups have taken up the cause as well, moving $55 million before Thanksgiving. This year, a San Francisco interfaith group moved $10 million from Wells Fargo and other groups marked Lent by moving more money from Wall Street. As a result, analysts say the nation’s 10 biggest banks could lose $185 billion in customer deposits this year “due to customer defections.”

Fighting For Positive Policies: Occupy groups have pushed for positive policy outcomes at both the state and federal levels. Occupy The SEC submitted a 325-page comment letter on the Volcker Rule, a regulation to rein in big banks. Pressure from protesters forced New York Gov. Andrew Cuomo (D) to reverse his opposition to a millionaire’s tax, and activists fought Indiana Republicans’ union-busting “right-to-work” law, and have pushed big banks to stop financing destructive environmental practices like mountaintop removal mining in coal states.

Waldon notes that while "many of the camps across the country have been disbanded, the 99 Percent Movement isn’t going away," with organizers continuing to fight on the state level, "pushing back against banks on fraudulent foreclosures and other issues, and [turning] their attention to the 2012 presidential elections."  Meanwhile, leaders in New York "are developing high-tech ways to organize protests and keep the movement going" and "Occupy is starting to assert a political influence, pushing multiple candidates and even running for office themselves — in both Maine and Pennsylvania, former Occupy activists are running for public office."

Romney, Santorum And Goldman Sachs: Their Values Are The Same

By Mike Lux, cross-posted from Crooks and Liars

Robbie Conal

Everyone is buzzing — and the Goldman Sachs PR team is desperately spinning — about the powerhouse op-ed in the New York Times this morning by the (as of this morning, apparently) former Goldman Sachs exec Greg Smith who resigned in protest because of their “toxic and destructive” environment. It is a painful reminder of how out-of-control Goldman has become, but this isn’t just about one company or one set of immoral executives; it’s about the Wall Street system and its allies in the political and media world.

Stories like Smith’s, along with a Mack Truck-load of books and articles written since the financial panic of 2008 about Wall Street greed and corruption, are a reminder of the breakdown of basic morality in the entire culture and structure of Wall Street, and of the destruction and potential destruction this lack of ethics causes the rest of our economy. According to virtually all the reporting, writing, and research we have seen in the last four years, this kind of short-term greed and willful corruption — and in many cases outright law breaking — has been baked into the Wall Street system, so that the honest players like Smith are systematically discouraged, punished economically, and driven from the companies. Only the people obsessed with short-term greed remain. The events of 2008 demonstrated in way too dramatic a fashion the incredible harm that does to the entire economy.

You have to be amused by the massive irony of all this, as these pillars of our society and their close allies in government and the media go on and on about what is moral and what is not. Brian Moynihan, CEO of Bank of America, with its $75 trillion in toxic assets and its terrible track record of heartless foreclosures, talks of the moral hazard of writing down mortgage debt for homeowners. One of Wall Street’s biggest defenders in the media is Rush Limbaugh, who calls young women sluts and prostitutes when they disagree with him. Goldman Sachs’ closest political ally, Mitt Romney, wants to shut down Planned Parenthood because they are apparently so immoral.

The irony is deep because the conservatives who are such fans of Wall Street and so worshipful of free markets say that they are the ones who are for traditional morality. The problem is that the kind of greed they defend gets its morality from a very untraditional place: Ayn Rand, who argued that selfishness was not only a virtue, but really the only one that mattered, and that generosity was immoral because it helped society’s leeches. When a company like Goldman encourages its executives to, as Smith put it, “callously talk about ripping their clients off,” they are simply following Rand’s twisted version of a morality based on greed and selfishness.

When Republicans like Romney, Santorum, Limbaugh, or GOP budget author Paul Ryan (who openly sings Rand’s praises and speaks of her as his biggest influence) speak of morality and values, they seem to never talk of things like companies not cheating people, or fairness, or kindness, or generosity. I suspect that is because they agree with Rand that those are false values that don’t actually matter. But maybe the not cheating/fairness set of values is somewhere on their list but not high enough to mention or think about as much as, say, stopping people having sex.

The other rich irony here is that the man these guys claim to worship as their savior, Jesus of Nazareth, cared a whole lot more about the fairness and kindness stuff. He despised greed and wealthy people taking advantage of the poor, and preached over and over about generosity, kindness, helping others less fortunate, and that whole set of values. The sex thing, not so much. Jesus never condemned homosexuality even though it was common in ancient Greek and Roman culture, and never mentioned abortion even though it was a very common practice in that era. He mentioned adultery a few times, mostly in a long list of other sins to avoid, and told the authorities about to stone a woman to death for committing adultery that he who was without sin should cast the first stone. He openly socialized with prostitutes. This was not a man obsessed with sexual sins.

These modern day followers of his sure seem to be, though. Wall Street is brazenly ripping off its clients and tanking our entire economy, and the Romney/Santorum/Limbaugh team has no time to castigate them, but they sure seem to have all the time in the world to talk about the sinfulness of gays and abortion and birth control.

Maybe we should try to reorient their thinking about morality. My organization, American Family Voices, has put up a petition calling on Mitt Romney to call on Lloyd Blankfein to step down as CEO of Goldman Sachs. I think Romney should be the one to lead the charge on this because Goldman is his single largest source of money, and if I were Romney, I would want to do everything I could to make clear that my values were not identical to Blankfein’s values.

It is amazing we live in a culture that allows the wealthiest and most powerful companies in the country to cheat their clients and the public at large with impunity, and that their closest political allies aren’t held to account as well. Help us shine a spotlight on this by signing our petition.

The Difference Between Private And Public Morality

By Robert Reich, cross-posted from his website

DonkeyHotey

Republicans have morality upside down. Santorum, Gingrich, and even Romney are barnstorming across the land condemning gay marriage, abortion, out-of-wedlock births, access to contraception, and the wall separating church and state.

But America’s problem isn’t a breakdown in private morality. It’s a breakdown in public morality. What Americans do in their bedrooms is their own business. What corporate executives and Wall Street financiers do in boardrooms and executive suites affects all of us.

There is moral rot in America but it’s not found in the private behavior of ordinary people. It’s located in the public behavior of people who control our economy and are turning our democracy into a financial slush pump. It’s found in Wall Street fraud, exorbitant pay of top executives, financial conflicts of interest, insider trading, and the outright bribery of public officials through unlimited campaign “donations.”

Political scientist James Q. Wilson, who died last week, noted that a broken window left unattended signals that no one cares if windows are broken. It becomes an ongoing invitation to throw more stones at more windows, ultimately undermining moral standards of the entire community.

The windows Wall Street broke in the years leading up to the crash of 2008 remain broken. Despite financial fraud on a scale not seen in this country for more than eighty years, not a single executive of a major Wall Street bank has been charged with a crime.

Since 2009, the Securities and Exchange Commission has filed 25 cases against mortgage originators and securities firms. A few are still being litigated but most have been settled. They’ve generated almost $2 billion in penalties and other forms of monetary relief, according to the Commission. But almost none of this money has come out of the pockets of CEOs or other company officials; it has come out of the companies — or, more accurately, their shareholders. Federal prosecutors are now signaling they won’t even bring charges in the brazen case of MF Global, which lost billions of dollars that were supposed to be kept safe.

Nor have any of the lawyers, accountants, auditors, or top executives of credit-rating agencies who aided and abetted Wall Street financiers been charged with doing anything wrong.

And the new Dodd-Frank law that was supposed to prevent this from happening again is now so riddled with loopholes, courtesy of Wall Street lobbyists, that it’s almost a sham. The Street prevented the Glass-Steagall Act from being resurrected, and successfully fought against limits on the size of the largest banks.

Windows started breaking years ago. Enron’s court-appointed trustee reported that bankers from Citigroup and JP Morgan Chase didn’t merely look the other way; they dreamed up and sold Enron financial schemes specifically designed to allow Enron to commit fraud. Arthur Andersen, Enron’s auditor, was convicted of obstructing justice by shredding Enron documents, yet most of the Andersen partners who aided and abetted Enron were never punished.

Americans are entitled to their own religious views about gay marriage, contraception, out-of-wedlock births, abortion, and God. We can be truly free only if we’re confident we can go about our private lives without being monitored or intruded upon by government, and can practice whatever faith (or lack of faith) we wish regardless of the religious beliefs of others. A society where one set of religious views is imposed on a large number of citizens who disagree with them is not a democracy.

It’s a theocracy.

But abuses of public trust such as we’ve witnessed for years on the Street and in the executive suites of our largest corporations are not matters of private morality. They’re violations of public morality. They undermine the integrity of our economy and democracy. They’ve led millions of Americans to conclude the game is rigged.

Quote Of The Day

"I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.  . . . To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money. . . . It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as 'muppets.'”

Greg Smith, Why I Am Leaving Goldman Sachs, New York Times Op-Ed 

Occupy Heads Into The Spring

Mad, Passionate Love -- And Violence.  Or Why The Media Loves The Violence Of Protestors And Not Of Banks.

By Rebecca Solnit, cross-posted from Tom Dispatch

Robbie Conal

When you fall in love, it’s all about what you have in common, and you can hardly imagine that there are differences, let alone that you will quarrel over them, or weep about them, or be torn apart by them -- or if all goes well, struggle, learn, and bond more strongly because of, rather than despite, them. The Occupy movement had its glorious honeymoon when old and young, liberal and radical, comfortable and desperate, homeless and tenured all found that what they had in common was so compelling the differences hardly seemed to matter.

Until they did.

Revolutions are always like this: at first all men are brothers and anything is possible, and then, if you’re lucky, the romance of that heady moment ripens into a relationship, instead of a breakup, an abusive marriage, or a murder-suicide. Occupy had its golden age, when those who never before imagined living side-by-side with homeless people found themselves in adjoining tents in public squares.

All sorts of other equalizing forces were present, not least the police brutality that battered the privileged the way that inner-city kids are used to being battered all the time. Part of what we had in common was what we were against: the current economy and the principle of insatiable greed that made it run, as well as the emotional and economic privatization that accompanied it.

This is a system that damages people, and its devastation was on display as never before in the early months of Occupy and related phenomena like the “We are the 99%” website. When it was people facing foreclosure, or who’d lost their jobs, or were thrashing around under avalanches of college or medical debt, they weren’t hard to accept as us, and not them.

And then came the people who’d been damaged far more, the psychologically fragile, the marginal, and the homeless -- some of them endlessly needy and with a huge capacity for disruption. People who had come to fight the power found themselves staying on to figure out available mental-health resources, while others who had wanted to experience a democratic society on a grand scale found themselves trying to solve sanitation problems.

And then there was the violence.

Occupy Has Raised Class Consciousness: Now What?

By Rose Aguilar, cross-posted from Truthout

Eric Drooker

The year 2011 will go down in history as the year in which citizens used their collective power to make economic justice part of the national conversation and force the media to focus on real issues rather than the manufactured deficit crisis. Last February, Wisconsinites began demonstrating and, eventually, occupying their state Capitol to stop attacks on public workers, collective bargaining and unions.

Since Occupy Wall Street kicked off on September 17, Occupy demonstrators across the country have raised awareness about the widening wealth gap, inequality, rising student debt, criminal activity on Wall Street, poverty and home foreclosures.

Politico's Dylan Byers did a quick search of the news via Lexis Nexis and found a significant rise in the use of the term "income inequality," from less than 91 instances in the week before Occupy Wall Street started to almost 500 instances in November 2011.

"The Occupy movement is an extraordinary breakthrough," says David Korten, co-founder and board chair of YES! Magazine, and author of "Agenda for a New Economy." 

"On the progressive side, we tend to focus on individual issues. The Occupy movement has given us an overall framing umbrella with a focus on inequality. It may be one of the most effective branding exercises in history."

"They tapped into something that millions and million of Americans obviously felt," adds Gar Alperovitz, professor of political economy at the University of Maryland and author of "America Beyond Capitalism: Reclaiming Our Wealth, Our Liberty, and Our Democracy."

"The response tells you far more about where most Americans are than we had known before. Those ideas touch something in the understanding of millions of people that something is profoundly wrong in America."

The Bank Deal: Ante Before The Cards Are Played

By Robert Borosage, cross-posted from Campaign for America's Future

The bank settlement of $25 billion over three years from five major banks for robo-signing forgeries is being hailed in Washington and scoured by leading bank critics.

It is hard not to be suspicious of any settlement that the banks would agree to. I’m reminded of Groucho Marx who said upon being invited to join a country club: “I wouldn’t want to belong to any club that would have me.”

But the deal should be seen for what it is – a relatively small ante by the banks handed out before the real cards are seen.

What’s clear is that the banks trampled the law in their wilding while blowing up the housing bubble. They abused homeowners, committed routine forgery and perjury before the courts, and defrauded investors. When the bubble burst and the housing market collapsed, homeowners were left about $700 billion underwater (owing that much more on their mortgages than their houses are worth).

The banks are looking for a deal that will relieve them of untold criminal and civil liabilities. Untold is the right word because, outrageously, there has been no real investigation into the scope of their crimes. The state attorneys general simply don’t have the resources. The federal government does, but once the administration decided to continue Bush’s policies of bailing out the banks without reorganizing them, it has been committed to keeping insolvent banks afloat, not holding them accountable.

So the administration and some state attorneys general started pushing a deal that would relieve the banks of immunity. Some courageous attorneys general – Eric Schneiderman of New York, Beau Biden of Delaware, Catherine Cortez-Masto of Nevada, Martha Coakley of Massachusetts, Kamala Harris of California and others – held out. Schneiderman led the effort to limit the scope of immunity offered the banks, expand the settlement, and force the administration to launch a real investigation at the federal level.

So this deal results. It gets a relatively small sum from the banks in exchange for circumscribed immunity on their flagrantly illegal robo-signing – or forgery – of mortgage documents. The money will provide homeowners with the possibility of real legal assistance and small amounts of relief. No private rights of action have been waived. The suit brought by Schneiderman against Mortgage Electronic Registration Systems, or MERS – the bank creation that simply trampled hundreds of years of property laws – continues, and other state AGs should follow suit. Schneiderman now co-chairs a federal task force charged with doing a real investigation that could result in a serious settlement. That's not part of the settlement, but it is the most important part of the deal.

The deal has been cut before the investigation so it is suspect on its face, but limited in its scope. Whether it will be enforced adequately remains to be seen. How homeowners benefit will differ from state to state.

But the real question remains whether the federal investigation will finally turn over all the cards so we know just how bad a hand the banks are holding. Only then is there a possibility for real accountability – and real relief for homeowners.

So this settlement must be the beginning, not the end. We have to sustain pressure on the administration for an aggressive investigation. State criminal and civil suits, individual and investor relief have to continue. We are a far remove from achieving the justice and accountability that is due.

Stress Testing Tim Geithner

By Mary Bottari, cross-posted from Campaign for America's Future

DonkeyHotey

Thanks to Occupy Wall Street, in the State of the Union this week President Obama struck some of his most populist themes yet. He wants to tax millionaires, bring back manufacturing and prosecute the big banks. He touted his Wall Street reforms saying the big banks are “no longer allowed to make risky bets with customers deposits” and “the rest of us aren’t bailing you out ever again.”
But are we safe from the next big bank bailout?

Many experts are dubious and Wednesday the consumer advocacy group Public Citizen decided to test the theory in the most direct way possible. They used the administrative law process to formally petition the nation’s top bank regulators to move swiftly to break up Bank of America (BofA) asserting in their petition: “The bank poses a grave threat to U.S. financial stability by any reasonable definition of that phrase.”

A Ticking Time Bomb

BofA is not just big, its behemoth. With assets of $2.1 trillion, equal to more than 14 percent of U.S. GDP, it is bigger than many small countries. Yet, its stock is trading at $7.

What does Wall Street know that we don’t?

The petition provides a compelling list of disturbing data points. In 2008-2009, BofA publicly took $45 billion in TARP bailout funds and secretly took another $1 trillion in emergency Federal Reserve loans. Yet, several analysts predict that BofA is woefully short of capital reserves and facing potentially billions in legal liability for its role in the crisis.

Although the bank declared net profits in recent quarters, these profit comes from accounting tricks, one-time asset sales and stock swaps. BofA’s share price to tangible book value is extremely low. The market suspects the bank is worth roughly half of what management claims and the price of credit default swaps (a type of insurance) on BofA recently rose to record highs.

“The bank is a ticking time bomb,” says David Arkush of Public Citizen. “If Bank of America in its current form were to fail, it would devastate the financial system. We’re asking the regulators to make sure that never happens. The only way to be sure is to reform the institution into something safer before any crisis materializes.”

Public Citizen asked the new Financial Stability Oversight Council (FSOC), which is chaired by Treasury Secretary Tim Geithner and made up of the nation's top bank regulators, to use the tools provided in the Dodd-Frank Wall Street reform law to act before a crisis occurs and to break BofA into smaller separate institutions. The law allows the FSOC to limit big bank mergers and acquisitions, restrict products and services or order it to divest assets or off-balance-sheet items after a vote to designate the institution a “grave threat” to financial stability.