Submitted by Elaine Magliaro, Guest Blogger
Fed Lifts Veil of Secrecy (December 1, 2010)
“Almost two years ago I asked Chairman Bernanke to tell the American people which financial institutions and 
corporations received trillions of dollars as part of the Wall Street bailout. He refused. Today, as a result of an audit-the-Fed provision I put into the financial reform bill, we finally learn the truth – and it is astounding.”
— Sen. Bernie Sanders (I-Vt.), author of Fed disclosure provision
Lifting the Veil of Fed Secrecy
Who Got Secret Fed Bailouts?
The Big Winners
• Goldman Sachs received nearly $600 billion
• Morgan Stanley received nearly $2 trillion
• Citigroup received $1.8 trillion
• Bear Stearns received nearly $1 trillion
• Merrill Lynch received some $1.5 trillion
• Deutsche Bank, a German lender, sold the Fed more than $290 billion worth of mortgage securities
• Credit Suisse, a Swiss bank, sold the Fed more than $287 billion in mortgage bonds
Also receiving secret Fed bailouts
• General Electric
• McDonald’s
• Caterpillar
• Harley Davidson
• Toyota
• Verizon
Release: Sanders Statement on New Federal Reserve Lending Disclosures (March 31, 2011)
WASHINGTON, March 31 – Under court order, the Federal Reserve today identified more banks that took loans during the financial crisis using a once-secret system that Sen. Bernie Sanders (I-Vt.) called “welfare for the rich and powerful.”
A Sanders provision in the Wall Street reform law already had forced the Fed last Dec. 1 to name banks that took trillions of dollars in emergency loans during the crisis.
“The Federal Reserve bailout was welfare for the rich and powerful and you-are-on-your-own rugged individualism for everyone else,” Sanders said. “The information released by the Fed today should never have been kept secret. This money does not belong to the Federal Reserve; it belongs to the American people. I applaud Bloomberg News, Fox News and others for their success in lifting another veil of secrecy at the Fed.”
Sanders said the latest disclosure raises questions about conflicts of interest. While Jamie Dimon, the CEO of JPMorgan Chase, served on the board of directors of the New York Fed, in one month alone, April of 2008, JPMorgan Chase received a combined $313 billion in Fed loans directly benefitting JP Morgan Chase and other financial institutions.
“This is an obvious conflict of interest on its face that must be investigated as part of the independent audit that my amendment requires to be completed this summer. When JPMorgan Chase was telling the world about their great financial success, it seems like they were using the Fed’s discount window as a giant piggy bank.”
Sanders’ provision in the Wall Street reform bill required the central bank to disclose which financial institutions, corporations, and foreign central banks took more than $3 trillion in what were secret loans.
His amendment also directed the Government Accountability Office to conduct the first top-to-bottom audit of the Federal Reserve. The findings of that investigation by the non-partisan research arm of Congress are due to be made public this July.
Usage of Federal Reserve Credit and Liquidity Facilities
MSNBC w/ Cenk: Matt Taibbi – Magic Money Printing Machine at The Fed
Need I say more?????
I’ll just add this: Because April is National Poetry Month, I thought I’d write a song parody to go with this post. I dedicate it to Senator Bernie Sanders of Vermont.
Guess Where Our Money Goes?: A Song Parody by Elaine Magliaro
(To be sung to the tune of That’s Where My Money Goes…to Buy My Baby Clothes)
Guess where our money goes? Not where you might suppose!
It goes to millionaires with big yachts and grand chateaux.
They’re worth their weight in gold. The rest of us keep getting rolled.
Hey, hey! That’s where our money goes!
Bernanke is in the tank for Goldman Sachs and Citibank,
GE and Verizon, too. They got bailout funds—it’s true!
The Fed gave them lots of dough—tried to keep it a secret though.
Hey, hey! That’s where our money goes!
The rich keep getting more and more! It’s something that we should deplore.
Citizens should know about the money that Ben’s passing out.
Bernanke, it just ain’t fair. Main Street oughta get a share.
Hey, hey! That’s where our money goes!
SOURCES & FURTHER READING
Sanders Op-Ed: Sunshine Week
Source: The Caledonian-Record (March 16, 2011)
Articles & Blog Posts by Matt Taibbi
The Great American Bubble Machine
From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression — and they’re about to do it again
(This article appeared in the July 9, 2009 issue of Rolling Stone.)
Wall Street’s Big Win
Finance reform won’t stop the high-risk gambling that wrecked the economy — and Republicans aren’t the only ones to blame
(This article appeared in the August 19, 2010 issue of Rolling Stone.)
Why Isn’t Wall Street in Jail?
Financial crooks brought down the world’s economy — but the feds are doing more to protect them than to prosecute them
(This article appeared in the March 3, 2011 issue of Rolling Stone.)
Looting Main Street
How the nation’s biggest banks are ripping off American cities with the same predatory deals that brought down Greece
(This article appeared in the April 15, 2010 issue of Rolling Stone.)
Jefferson County, Alabama: Screwed By Wall Street, Still Paying
(TAIBBLOG—April 7, 2011)
Why is the Fed Bailing Out Qaddafi?
(TAIBBLOG—April 1, 2011)
Edited to add:
The S.E.C.’s Revolving Door: From Wall Street Lawyers to Wall Street Watchdogs (TAIBBLOG—March 30, 2011)
Considering all the creepy guys who get elected to office and how damned depressing their presence can be on the present and future of our nation, one forgets that politicians such as Sen. Bernie Sanders are also out there. Thank God.
I need more time to study this post and have to go to a birthday party right now.
Elaine … love your song parody
Elaine,
Great story! I wasn’t aware of the corporations getting secret loans. That is a travesty.
Jamie Dimon needs to go to trial and then onward to a very long prison term. Stat. If the GAO audit due in July turns up the kind of fraud, conflict of interest and malfeasance I think they’ll likely turn up and the DOJ doesn’t pull a “let’s look forward, not backward” fascist evasion of their legal responsibilities (now known the Obama/Bush Maneuver)? I fully expect to see Dimon and others like GoldmanSacks (misspelling intentional) criminal CEO Lloyd Blankenfeld in either prison orange or fleeing the country to avoid prosecution.
Wormy venal bastards.
Buddha,
What’s been happening to the “upper crust” crooks of this country is that they and/or their banks/firms get fined. Few ever go to jail.
In addition, I’d like to see Bernanke fully investigated and charged as well for his role in aiding and abetting this massive scale fraud committed against the government and the American tax payers.
Elaine,
And that needs to change.
Quickly.
Because if it doesn’t?
That Marie Antoinette moment for American history will just come on that much faster.
Buddha,
“That Marie Antoinette moment for American history will just come on that much faster.”
Have portable guillotine…will travel???
Something like that, Elaine. I plan on selling guillotine holsters in addition to fire proof hand baskets. Hip holster models only though. I’m having difficulty making the shoulder holsters work out.
Buddha,
Taibbi has an article about the Fed loans coming out in the next issue of Rolling Stone.
Thanks for the heads up. I will certainly keep an eye out for that article, Elaine.
I second that motion. The Fed loan audit was one of the best things passed through Congress in years!
When speaking of criminal indictments let us not forget Henry Paulson.
Every single American citizen, man, woman, and child, was financially raped by these guys and all with the help of the Bush Administration. They literally stole our future out from under us simply to cover their own ineptitude … and then, like the animals they are, they sniffed the air and, smelling no danger, continued the rape.
The crazy teabaggers are going to look like kittens when the rest of the American citizenry discover the totality of the crimes committed against them.
That isn’t wishful thinking; that’s fact … and they know it. I’m certain many of them have their travel plans in place.
Foreign Banks Tapped Fed’s Secret Lifeline Most at Crisis Peak
By Bradley Keoun and Craig Torres – Apr 1, 2011
Bloomberg
http://www.bloomberg.com/news/2011-04-01/foreign-banks-tapped-fed-s-lifeline-most-as-bernanke-kept-borrowers-secret.html
Excerpts:
U.S. Federal Reserve Chairman Ben S. Bernanke’s two-year fight to shield crisis-squeezed banks from the stigma of revealing their public loans protected a lender to local governments in Belgium, a Japanese fishing-cooperative financier and a company part-owned by the Central Bank of Libya.
Dexia SA (DEXB), based in Brussels and Paris, borrowed as much as $33.5 billion through its New York branch from the Fed’s “discount window” lending program, according to Fed documents released yesterday in response to a Freedom of Information Act request. Dublin-based Depfa Bank Plc, taken over in 2007 by a German real-estate lender later seized by the German government, drew $24.5 billion.
The biggest borrowers from the 97-year-old discount window as the program reached its crisis-era peak were foreign banks, accounting for at least 70 percent of the $110.7 billion borrowed during the week in October 2008 when use of the program surged to a record. The disclosures may stoke a reexamination of the risks posed to U.S. taxpayers by the central bank’s role in global financial markets.
“The caricature of the Fed is that it was shoveling money to big New York banks and a bunch of foreigners, and that is not conducive to its long-run reputation,” said Vincent Reinhart, the Fed’s director of monetary affairs from 2001 to 2007.
**********
“The American people are going to be outraged when they understand what has been going on,” U.S. Representative Ron Paul, a Texas Republican who is chairman of the House subcommittee that oversees the Fed, said in a Bloomberg Television interview.
“What in the world are we doing thinking we can pass out tens of billions of dollars to banks that are overseas?” said Paul, who has advocated abolishing the Fed. “We have problems here at home with people not being able to pay their mortgages, and they’re losing their homes.”
Rep. Paul wants to return to the gold standard. That is his solution. I blame Greenspan more than Bernanke. He created the mess.
From Senator Bernie Sanders (March 31, 2011)
Release: Why Did the Fed Bail Out the Bank of Libya?
How do Gadhafi’s Bankers Avoid U.S. Sanctions?
http://sanders.senate.gov/newsroom/news/?id=ece720e4-d5d6-4eff-937c-dcada784c3f9
Excerpt:
WASHINGTON, March 31 – Sen. Bernie Sanders (I-Vt.) today questioned why the Federal Reserve provided more than $26 billion in credit to an Arab intermediary for the Central Bank of Libya.
The total includes at least $3.2 billion in loans that the Fed was forced to make public today in addition to earlier revelations under a Sanders provision in the Wall Street reform law.
Sanders also asked why the Libyan-owned bank and two of its branches in New York, N.Y., were exempted from sanctions that the United States this month slapped on other Libyan businesses to pressure Col. Moammar Gadhafi’s government.
“It is incomprehensible to me that while creditworthy small businesses in Vermont and throughout the country could not receive affordable loans, the Federal Reserve was providing tens of billions of dollars in credit to a bank that is substantially owned by the Central Bank of Libya,” Sanders said.
Swartmore mom,
Regarding Alan Greenspan: He definitely helped to create the mess!
You should read the chapter about Greenspan in Matt Taibbi’s book “Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America.” You’ll love the title of the chapter on Greenspan–”The Biggest Asshole in the Universe.”
High court rules that the Federal Reserve must disclose records from bailouts
Examiner/PNN
March 22, 2011
http://www.patriotnewsnetwork.org/2011/03/high-court-rules-that-federal-reserve.html
The high court today ruled that the Federal Reserve will be required to disclose their records of bank bailouts that took place during the 2008 credit crisis. In a determination by the Supreme Court on March 21st, the high court chose to let stand a lower court ruling which rejected the banks case that disclosure of bank intervention and lending in 2008 would lead to dire consequences for the economy, and for the banks themselves.
The original lawsuit that was filed by Bloomberg News under the Freedom of Information Act was high contested by both the banks, and the Federal Reserve. In the lawsuit, Bloomberg News sought information on load amounts, dates, and entities who borrowed money from the Fed during the banking and credit crisis. Fox News Network had also joined in on the lawsuit, seeking the same, or similar information on the bailouts.
In December of last year, the Federal Reserve acknowledged that the Supreme Court would probably rule in favor of the lower court, and issued a list of some of the recipients who received money during the time of the bailouts. Beyond domestic banks, the list included foreign banks, and even corporations such as McDonalds, and the California State Teachers Retirement Association.
Both American citizens, and Congressional Representatives have been highly critical of the Federal Reserve’s failures in disclosing the list of bailout recipients in a timely manner. Congressman Ron Paul repeatedly asked the Federal Reserve and Ben Bernanke during Congressional hearings to disclose where the taxpayers money went, and who received it, only to be stonewalled at every turn. Former Congressman Alan Grayson was also a strong advocate of the Fed revealing who and where the money was distributed to while he was still in office before the 2010 elections.
While the high court’s determination that the lower court’s ruling was correct, and that the Federal Reserve should have been required to disclose all documents on which banks and companies received money during the bank bailout and credit crisis, the fact that the information was finally revealed two years after the fact made the disclosure almost irrelevant as Americans and legislators have sinced moved on to deal with other monetary crisis’ such as the current state and federal budget issues.
From Bloomberg
On the subject of the Federal Reserve secretly loaning billions to a bank owned by Libya–as well as to other foreign banks:
Great post, Elaine, and excellent parody! How about writing a parody of another old song…
Once… I had a secret loan, …
Steve,
Here is one just for you.
Once I had a secret loan, (Chorus)
I thought I’d toss you a bone,
Since you are alone.
I’ll be your bone,
when your all alone.
You all blew up,
when we have your balls up,
with our bailout,
You see the one with the most green.
wins the men.
Once I had a secret loan (Chorus)
And you complain,
and show us disdain,
Oh how can that be,
it just between you and me,
Our spread sheets are pearly white,
not a dribble in site.
we wipe them clean, we use mean
Once I had a secret loan (Chorus)
Good one, Schmuckster! Thanks! Although, being an old guy, I had a much older song in mind, one popularized by Doris Day.
Schmuckster Adams,
We welcome posters who are poetically inclined!
*****
Steve,
I remember that “much older” song. Calamity Jane was one of my favorite movies when I was a kid.
Here’s something for neat comparison….
The five largest-cap U.S. companies and their market values as of June 2010
Exxon Mobil: $279 billion
Apple: $228 billion
Microsoft: $221 billion
Procter & Gamble: $175 billion
Johnson & Johnson: $160 billion
SW – Helicopter Ben just swooped in with buckets of cash to save his little friends from the hard questions.
Mr. Andrea Mitchell was the real mastermind of the catastrophe. Apparently Ayn must have transmitted her mental illness to him when he was slipping his little Taggert into her Gaults Gulch back in the 50′s. The fool actually seems to believe all that bullshit about how ‘producers’ think and act. For 20 years he performed a great social experiment on a once great nation and it will be generations before it recovers, if ever.
frank, Saw Greenspan on CNBC last month, and he was still saying the same thing.
Monday, April 4, 2011 by TruthDig.com
This Is What Resistance Looks Like
by Chris Hedges
http://www.commondreams.org/view/2011/04/04
From the article:
The 10 major banks, which control 60 percent of the economy, determine how our legislative bills are written, how our courts rule, how we frame our public debates on the airwaves, who is elected to office and how we are governed. The phrase consent of the governed has been turned by our two major political parties into a cruel joke. There is no way to vote against the interests of Goldman Sachs. And the faster these banks and huge corporations are broken up and regulated the sooner we will become free. (end excerpt)
anon nurse,
Thanks for that link!
Have you heard about ALEC–American Legislative Exchange Council? That organization has been writing legislation for state politicians for years.
Here’s one article on the subject:
7 striking revelations from NPR’s investigation into how companies influence lawmakers
By Liz Goodwin
Yahoo, 10/29/2010
http://news.yahoo.com/s/yblog_upshot/20101029/pl_yblog_upshot/how-corporations-write-laws-behind-closed-doors
The private prison industry helped write Arizona’s anti-illegal-immigration bill in a closed-door session in a hotel conference room, and then donated to 30 of the bill’s co-sponsors after the bill passed, NPR revealed in a blockbuster story yesterday.
Now, NPR has a second story out explaining how the nonprofit American Legislative Exchange Council (ALEC) brings together corporations and legislators who collaborate to design “model bills” out of the sight of taxpayers and voters. These conferences are not considered lobbying (see below), so much of what goes on remains opaque to outsiders.
Legislators pay $50 a year to join ALEC, and are then treated to conferences with the group’s corporate members, who collectively shell out $6 million per year for the privilege. In addition to the private prison company the Corrections Corporation of America, tobacco company Reynolds American Inc., Exxon Mobil Corp. and pharmaceutical company Pfizer Inc. are among the group’s members.
Here’s our round-up of the seven most striking revelations from the story, which you should read in full here:
1. Just over the past year, more than 200 of the organization’s “model” bills — drafted by corporations with the lawmakers — became law around the country.
2. Because member organizations don’t actively advocate for policies, ALEC’s conferences — where these bills are created — are not considered lobbying. That means companies don’t have to disclose which lawmakers they’re talking to or how much they’re spending at these conferences.
3. It also means that ALEC gets to keep its nonprofit status. Corporations can write off the donations they give ALEC as charitable gifts, and ALEC does not have to disclose its membership, donors, or how it spends its money.
4. Lawmakers are told to bring their families and are treated to golf tournaments and parties at these conferences. Corporations sponsor open bars and baseball games, which lawmakers do not have to disclose as gifts.
5. There are an unnamed amount of “scholarships” that ALEC gives out so that politicians do not even have to pay their own travel expenses to get to the conferences. Arizona state Senator Russell Pearce, the sponsor of anti-illegal-immigration law SB1070, traveled to the conference on such a scholarship.
6. Five of the politicians pushing for laws nearly identical to Arizona’s in other states were in the same hotel conference room with the Corrections Corporation of America in which SB1070 was crafted.
7. ALEC’s director of policy, Michael Bowman, says lawmakers come to the conference to learn about legislation, not to be pressured or influenced. “They’re just trying to learn a policy and understand it,” he said. Lobbying is defined in most states as convincing politicians to make or pass laws. Bowman says at ALEC, politicians are just trying to “find” good laws, and thus it is not lobbying.
**********
Here’s the link to the NPR story:
Shaping State Laws With Little Scrutiny
by Laura Sullivan
NPR, 10/29/2010
http://www.npr.org/templates/story/story.php?storyId=130891396
anon nurse, Chris hedges spoke at the Unitarian church in Dallas. I thought about going but didn’t.
[youtube http://www.youtube.com/watch?v=5t3CWk6dSdE&w=640&h=390
almost as good as the original…..;)
Columbia Business School Spring 2006 Follies spoof on The Police’s “Every Breath You Take” featuring imitation Dean Glenn Hubbard and Fed Chairman Ben Bernanke
Every Breath Bernanke Takes
Bank Bailouts Explained
Alan Grayson: “Which Foreigners Got the Fed’s $500,000,000,000?” Bernanke: “I Don’t Know.”
Elaine M., No, I haven’t heard of ALEC — will take a look at the links you’ve provided. Thanks. Some very good work here, and on the blog, in general…
Swarthmore mom and Elaine M., I’d like to see Hedges in person… Have read his book, “American Fascists, The Christian Right and The War on America”, which I highly recommend.
In the final chapter, he states:
“I do not believe that America will inevitably become a fascist state or that the Christian Right is the Nazi Party. But I do believe that the radical Christian Right is a sworn and potent enemy of the open society. It’s ideology bears within it the tenets of a Christian fascism. In the event of a crisis, in the event of another catastrophic terrorist attack, an economic meltdown or huge environmental disaster, the movement stands poised to manipulate fear and chaos ruthlessly and reshape America in ways that have not been seen since the nation’s founding. All Americans — not only those of faith — who care about our open society must learn to speak about this movement with a new vocabulary, to give up passivity, to challenge aggressively this movement’s deluded appropriation of Christianity and to do everything possible to defend tolerance. The attacks by this movement on the rights and beliefs of Muslims, Jews, immigrants, gays and lesbians, women, scholars, scientists, those they dismiss as “nominal Christians,” and those they brand with the curse of “secular humanism” are an attack on all of us, on our values, our freedoms and ultimately our democracy. Tolerance is a virtue, but tolerance coupled with passivity is a vice.”
anon nurse,
Taking advantage of crises to move an agenda forward. That’s reminiscent of Naomi Klein’s “The Shock Doctrine.”
Yes, you’re right… Coincidentally, I happened to see the following on her blog yesterday:
Joining 350.Org: The Next Phase
By Naomi Klein – April 7th, 2011
Today I joined the newly formed Board of Directors of 350.org, coinciding with a range of exciting new changes at the organization. I have been a supporter of 350.org since I first heard about the wacky plan to turn a wonky scientific target into a global people’s movement, and I’m thrilled and honored to be officially joining the team.
…and it continues:
As 350.org has known all along, the real task is to build the kind of mass movement that politicians cannot afford to ignore. That means showing how making the deep emission cuts that science demands is not some dour punishment that will destroy our economy (as the Koch-funded right is perpetually claiming) but rather our best chance of fixing an economic system that is failing us on every level. Shifting to renewable energy and re-localizing our economies could create millions of good new jobs, while leaving us with cleaner cities and a healthier food system. And as 350.org’s Global Work Party showed, a big part of averting climate chaos involves rebuilding and strengthening our frayed communities – and that is a joyful process.
end excerpt
That was to you, Elaine M., but hopefully others will find it interesting, as well.
Anon nurse,
Great link to Naomi Klein’s announcement.
Here’s a link to Matt Taibbi’s most recent Rolling Stone article about the Fed and the bailout:
The Real Housewives of Wall Street
Why is the Federal Reserve forking over $220 million in bailout money to the wives of two Morgan Stanley bigwigs?
http://www.rollingstone.com/politics/news/the-real-housewives-of-wall-street-look-whos-cashing-in-on-the-bailout-20110411?print=true
Excerpt:
America has two national budgets, one official, one unofficial. The official budget is public record and hotly debated: Money comes in as taxes and goes out as jet fighters, DEA agents, wheat subsidies and Medicare, plus pensions and bennies for that great untamed socialist menace called a unionized public-sector workforce that Republicans are always complaining about. According to popular legend, we’re broke and in so much debt that 40 years from now our granddaughters will still be hooking on weekends to pay the medical bills of this year’s retirees from the IRS, the SEC and the Department of Energy.
Most Americans know about that budget. What they don’t know is that there is another budget of roughly equal heft, traditionally maintained in complete secrecy. After the financial crash of 2008, it grew to monstrous dimensions, as the government attempted to unfreeze the credit markets by handing out trillions to banks and hedge funds. And thanks to a whole galaxy of obscure, acronym-laden bailout programs, it eventually rivaled the “official” budget in size — a huge roaring river of cash flowing out of the Federal Reserve to destinations neither chosen by the president nor reviewed by Congress, but instead handed out by fiat by unelected Fed officials using a seemingly nonsensical and apparently unknowable methodology.
Now, following an act of Congress that has forced the Fed to open its books from the bailout era, this unofficial budget is for the first time becoming at least partially a matter of public record. Staffers in the Senate and the House, whose queries about Fed spending have been rebuffed for nearly a century, are now poring over 21,000 transactions and discovering a host of outrages and lunacies in the “other” budget. It is as though someone sat down and made a list of every individual on earth who actually did not need emergency financial assistance from the United States government, and then handed them the keys to the public treasure. The Fed sent billions in bailout aid to banks in places like Mexico, Bahrain and Bavaria, billions more to a spate of Japanese car companies, more than $2 trillion in loans each to Citigroup and Morgan Stanley, and billions more to a string of lesser millionaires and billionaires with Cayman Islands addresses. “Our jaws are literally dropping as we’re reading this,” says Warren Gunnels, an aide to Sen. Bernie Sanders of Vermont. “Every one of these transactions is outrageous.”
Release: Sanders Calls Budget Deal Robin Hood in Reverse
http://sanders.senate.gov/newsroom/news/?id=3990a1d9-fdd7-4ba5-8c08-53f8368289b7
WASHINGTON, April 12 – Sen. Bernie Sanders (I-Vt.) said today he will vote against a bill that cuts more than $38 billion from programs that help working families without calling for shared sacrifice by the wealthiest Americans.
Bush-era tax breaks for the very rich were extended and expanded last December – driving up the deficit. “Today, in order to reduce deficits that Republicans helped create, they now are slashing programs of enormous importance to working families, the elderly, the sick and children,” Sanders said. “At a time when the gap between the very rich and everybody else is growing wider, this budget is Robin Hood in reverse. It takes from struggling working families and gives to multi-millionaires. This is obscene.”
While it is too soon to determine the exact impact the cuts will have on Vermont, Sanders, a member of the Senate Budget Committee, said “there can be no doubt that these cuts will be devastating to working families in Vermont and throughout the country.”
At a time of soaring fuel prices, the Low-Income Home Energy Assistance Program (LIHEAP) would be cut by $390 million.
At a time when college education has become unaffordable for many, Pell grants would be reduced by an estimated $35 billion over 10 years, including a nearly $500 million cut this year.
At a time when 50 million Americans have no health insurance, community health centers would be cut by $600 million and the Children’s Health Insurance Program would be cut by $3.5 billion.
At a time when poverty is increasing, the Women Infant and Children (WIC) nutrition program for low-income pregnant women would be cut by $504 million.
At a time when we have to put Americans to work rebuilding our crumbling infrastructure, federal funding for high-speed rail would be eliminated, representing a cut of $2.9 billion. Public transportation would be cut by nearly $1 billion, a 20 percent reduction.
At a time when police departments are struggling with inadequate budgets, local law enforcement funding would be cut by $296 million.
At a time when homelessness is increasing, public housing would be cut by $605 million.
“This budget moves America in exactly the wrong direction,” Sanders said. “While there is no question that we must reduce soaring deficits, it must be done in a way that is fair, which protects the most vulnerable people in our country, and which requires shared sacrifice. I will not support a budget that will cut programs for struggling working families, the elderly, children and the poor while expanding tax breaks for billionaires, maintaining corporate tax loopholes and increasing military spending. That is just plain wrong.”
In the coming weeks, Sanders said he will work with colleagues in the Senate and House on a deficit-reduction package that is fair to all, and does not balance the budget only on the backs of working families.
Surprise, surprise: rich get richer
OP-ED | DERRICK Z. JACKSON
April 12, 2011The Boston Globe
http://articles.boston.com/2011-04-12/bostonglobe/29410552_1_bush-era-tax-cuts-corporations-income
THIS IS the biggest stickup in American history. First we were told that in order to save the nation, we had to bail out irresponsible banks and decrepit car companies, and to extend the Bush-era tax cuts. Last week, we were told that the federal government would be shut down without $38.5 billion in cuts that will slash labor, education, transportation, and health programs, as well as State Department diplomacy. Those cuts are only the beginning as House Budget Committee Chairman Paul Ryan, the Wisconsin Republican, wants $6 trillion in cuts over the next decade, plus $4 trillion in tax breaks for corporations and the wealthy.
The only people being saved are the wealthy.
While unemployment remains at close to 9 percent, the average salaries for CEOs at 200 of America’s largest companies rose 20 percent, to $11.7 million, according to the New York Times. Last month, the Wall Street Journal reported that CEO bonuses at 50 major corporations rose 30.5 percent last year, the biggest gain in three years, to an average bonus of $2.5 million.
The rich have recovered so fast that their share of America’s income is on track to break the all-time record. According to Emmanuel Saez of the University of California, the top 10 percent of Americans hoarded 46.3 percent of the nation’s income in 1932. That fell to around 31 percent in the 1950s and held steady into the early 1970s, due to a combination of World War II fiscal shocks, more progressive income and corporate tax policies, unions, and social programs. The top 1 percent had 19.6 percent of the nation’s income in 1928 and that fell to 7.7 percent by 1973.
Then income for the wealthy roared back full circle. The share for the top 10 percent was back up to 45.6 percent in 2008. For the top 1 percent, it was back up to 18.3 percent in 2007. All signs point to these shares breaking the records of the 1920s and ’30s. In an email, Saez said, “I expect top income shares to be going up sharply in the near future … With a split Republican/Democrat, Congress/administration, it does not look like the government will take drastic policy steps to change this trend in the medium run (such as more progressive taxation, or stringent regulations). So I don’t see this trend changing.’’
Oh my God.
Goldman Sachs Chief Blankfein Could Face Criminal Prosecution For Role In Financial Crisis
By Shahien Nasiripour
Huffington Post, 4/14/2011
http://www.huffingtonpost.com/2011/04/14/goldman-financial-crisis-prosecution_n_848994.html
Excerpt:
WASHINGTON — Goldman Sachs executives deceived clients in order to profit off the brewing financial crisis and then misled Congress when asked to explain their actions, concluded a top lawmaker who led a two-year investigation into Wall Street’s role in the meltdown.
Carl Levin, chair of the Senate Permanent Subcommittee on Investigations, will recommend that Goldman executives who testified before his panel, including chairman and chief executive Lloyd Blankfein, be referred to the Justice Department for possible criminal prosecution, the Michigan Democrat announced Wednesday. Members of the subcommittee will now deliberate Levin’s proposal.
A Goldman spokesman said its executives were truthful in their testimony, adding that the firm disagreed with many of the panel’s conclusions.
Two and a half years after a historic crisis that has yielded not a single criminal conviction of anyone who played a leading role in causing it, the prosecution of such a high-profile Wall Street executive may satisfy the public’s desire to see culprits brought to justice. Last year, the Securities and Exchange Commission settled a lawsuit it had brought against Goldman.
But the firm was just one target of a sweeping, 639-page report by the Senate panel into the causes of the crisis. Hardly a fluke occurrence, the meltdown was the product of a deeply corrupt financial system, one fueled by profit-hungry banks that deceived their clients, and overseen by lax regulators who were complicit in the firms’ chronic abuse of the most fundamental rules of the game, the report concludes.
The investigation found a “financial snake pit rife with greed, conflicts of interest, and wrongdoing,” Levin said.
More than any other government report produced in the wake of the crisis, this account names names, blaming specific people and institutions: Goldman Sachs, Washington Mutual, Moody’s Investors Service, Standard & Poor’s, the Office of Thrift Supervision and others. It targets four types of institutions, all of which it says played key roles in causing the crisis: mortgage lenders that offered prospective homeowners booby-trapped loans; regulators that were paid by the institutions they were regulating and cooperated in widespread deception; rating agencies that gave seals of approval to products they knew to be especially risky, all in the pursuit of market share; and Wall Street banks that duped investors into buying securities that only the insiders knew were destined to go bad.
Big banks are government-backed: Fed’s Hoenig
By Joe Rauch
CHARLOTTE, North Carolina | Tue Apr 12, 2011
Excerpt:
(Reuters) – Big banks like Bank of America Corp (BAC.N) and Citigroup Inc (C.N) should be reclassified as government-sponsored entities and have their activities restricted, a senior Fed official said on Tuesday.
The 2008 bank bailouts at the height of the financial crisis and other implicit guarantees effectively make the largest U.S. banks government-guaranteed enterprises, like mortgage finance companies Fannie Mae and Freddie Mac, said Kansas City Fed President Thomas Hoenig.
“That’s what they are,” Hoenig said at the National Association of Attorneys General 2011 conference.
He said these lenders should be restricted to commercial banking activities, advocating a policy that existed for decades barring banks from engaging in investment banking activities.
Key Senator Calls For Criminal Investigation Into Goldman Sachs’ ‘Shitty Deals’
Think Progress, 4/14/2011
http://thinkprogress.org/2011/04/14/goldman-criminal-investigation/
Excerpt:
Yesterday, a Senate subcommittee investigating Wall Street’s role in the recent financial collapse released a massive, 639-page report documenting the role mortgage lenders, investment bankers, and insufficient regulatory checks on Wall Street played in creating America’s worst economic disaster since the Great Depression. But this congressional investigation could lead to much more public scrutiny into one of Wall Street’s biggest players. In a statement announcing the report’s findings, subcommittee chair Sen. Carl Levin (D-MI) suggested that Goldman Sachs could face criminal charges:
Sen. Carl Levin (D-Mich.) said on Wednesday that he plans to refer Goldman officials, and potentially officials from other organizations, to the Justice Department for possible prosecution and to the Securities and Exchange Commission for possible civil proceedings.
“In my judgment, Goldman clearly misled their clients and they misled the Congress,” said Levin, the chairman of the Senate Permanent Subcommittee on Investigations. [...]
Levin said prosecutors should look at not only Goldman’s statements to the public about its investment products, but also the statements officials made to Congress. Goldman officials, including chief executive Lloyd Blankfein, gave testimony that was “inaccurate,” Levin said. It is a crime under federal law to make a false statement to Congress or to obstruct congressional proceedings.
OCC Gently Admonishes Big Banks on Foreclosure Practices
By DANIEL INDIVIGLIO
The Atlantic
APR 13, 2011
http://www.theatlantic.com/business/archive/2011/04/occ-gently-admonishes-big-banks-on-foreclosure-practices/237275/
Elaine,
I saw that story about Levin’s committee this morning and dared to hold a spark of hope. There are few people in this country who deserve to go to prison as much as Llloyd Blankfein, CEO of Goldman and his partner in crime, the former Treasury Secretary (and former Goldman CEO), Henry Paulson. They are bank robbers armed with a fountain pens.
If Levin can bring them to justice? Hell, even if only gets Blankfein? I’ll add Levin to the list of pols who understand what their job is and do their best to do it. It’s a very short list with plenty of room for expansion.
Elaine,
I have yet to see anyone put as much into gratis service that you do and for that we are blessed…. You must have been one hell of a teacher and friend… Your children were lucky…your biological ones as well….
“Carl Levin, chair of the Senate Permanent Subcommittee on Investigations, will recommend that Goldman executives who testified before his panel, including chairman and chief executive Lloyd Blankfein, be referred to the Justice Department for possible criminal prosecution”
My feet are doing a happy dance right now …
Buddha,
A spark of hope is about all I can muster at this point.
BTW, have you read Matt Taibbi’s most recent Rolling Stone article? It’s MUST reading!
The Real Housewives of Wall Street:
Why is the Federal Reserve forking over $220 million in bailout money to the wives of two Morgan Stanley bigwigs?
http://www.rollingstone.com/politics/news/the-real-housewives-of-wall-street-look-whos-cashing-in-on-the-bailout-20110411?print=true
**********
In Financial Crisis, No Prosecutions of Top Figures
By GRETCHEN MORGENSON and LOUISE STORY
Published: April 14, 2011
http://www.nytimes.com/2011/04/14/business/14prosecute.html?_r=1
Excerpt:
It is a question asked repeatedly across America: why, in the aftermath of a financial mess that generated hundreds of billions in losses, have no high-profile participants in the disaster been prosecuted?
Answering such a question — the equivalent of determining why a dog did not bark — is anything but simple. But a private meeting in mid-October 2008 between Timothy F. Geithner, then-president of the Federal Reserve Bank of New York, and Andrew M. Cuomo, New York’s attorney general at the time, illustrates the complexities of pursuing legal cases in a time of panic.
At the Fed, which oversees the nation’s largest banks, Mr. Geithner worked with the Treasury Department on a large bailout fund for the banks and led efforts to shore up the American International Group, the giant insurer. His focus: stabilizing world financial markets.
Mr. Cuomo, as a Wall Street enforcer, had been questioning banks and rating agencies aggressively for more than a year about their roles in the growing debacle, and also looking into bonuses at A.I.G.
Friendly since their days in the Clinton administration, the two met in Mr. Cuomo’s office in Lower Manhattan, steps from Wall Street and the New York Fed. According to three people briefed at the time about the meeting, Mr. Geithner expressed concern about the fragility of the financial system.
His worry, according to these people, sprang from a desire to calm markets, a goal that could be complicated by a hard-charging attorney general.
Asked whether the unusual meeting had altered his approach, a spokesman for Mr. Cuomo, now New York’s governor, said Wednesday evening that “Mr. Geithner never suggested that there be any lack of diligence or any slowdown.” Mr. Geithner, now the Treasury secretary, said through a spokesman that he had been focused on A.I.G. “to protect taxpayers.”
Whether prosecutors and regulators have been aggressive enough in pursuing wrongdoing is likely to long be a subject of debate. All say they have done the best they could under difficult circumstances.
But several years after the financial crisis, which was caused in large part by reckless lending and excessive risk taking by major financial institutions, no senior executives have been charged or imprisoned, and a collective government effort has not emerged. This stands in stark contrast to the failure of many savings and loan institutions in the late 1980s. In the wake of that debacle, special government task forces referred 1,100 cases to prosecutors, resulting in more than 800 bank officials going to jail. Among the best-known: Charles H. Keating Jr., of Lincoln Savings and Loan in Arizona, and David Paul, of Centrust Bank in Florida.
Former prosecutors, lawyers, bankers and mortgage employees say that investigators and regulators ignored past lessons about how to crack financial fraud.
Elaine,
Yes I did. I will have to say I found it “Must Read Reading”.
Elliot Spitzer was on to AIG very early.
AY,
I appreciare your generous comments. I admit that I can get passionate about certain issues–and outspoken. Sometimes being outspoken when I was a teacher got me into trouble with administrators. Still, I always felt better when I spoke up in defense of teachers and spoke out for what I believed was best for our students educationally.
I worry about what is going on in this country. I am concerned about what the future may hold in store for my daughter and her husband and any grandchildren that I may have if I am so fortunate. I think that is part of what drives me.
Buddha,
I think Taibbi is going to be on the Dylan Ratigan Show tomorrow.
Taibbi was on the Don Imus Show this morning. Here’s the link to the video of his interview with Imus that Taibbi posted on his Rolling Stone blog today:
http://www.rollingstone.com/politics/blogs/taibblog/talking-real-housewives-of-wall-street-on-imus-20110414
Elaine, I agree about the children and grandchildren. That is one of the reasons I argue against wasting a vote and letting the Tea Party Express take over.
Swarthmore mom,
I think that you and I think along the same lines.
Elaine, It is that catholic education. lol
Yes, to leaving the world a better place…
Elaine and Swarthmore,
Add me to that list that wants to protect their children and grandchildren! These banksters need jail time.
Rafflaw,
re: “These banksters need jail time.”
Yes, they do.
From Senator Carl Levin:
Senate Investigations Subcommittee Releases Levin-Coburn Report On the Financial Crisis
April 13, 2011
http://levin.senate.gov/newsroom/release.cfm?id=332491
Financial System Riskier, Next Bailout Will Be Costlier, S&P Says
By Shahien Nasiripour
Huffington Post, 4/19/2011
http://www.huffingtonpost.com/2011/04/19/financial-system-riskier-_n_851122.html
Excerpt:
The financial system poses an even greater risk to taxpayers than before the crisis, according to analysts at Standard & Poor’s. The next rescue could be about a trillion dollars costlier, the credit rating agency warned.
S&P put policymakers on notice, saying there’s “at least a one-in-three” chance that the U.S. government may lose its coveted AAA credit rating. Various risks could lead the agency to downgrade the Treasury’s credit worthiness, including policymakers’ penchant for rescuing bankers and traders from their failures.
“The potential for further extraordinary official assistance to large players in the U.S. financial sector poses a negative risk to the government’s credit rating,” S&P said in its Monday report.
But, the agency’s analysts warned, “we believe the risks from the U.S. financial sector are higher than we considered them to be before 2008.”
Because of the increased risk, S&P forecasts the potential initial cost to taxpayers of the next crisis cleanup to approach 34 percent of the nation’s annual economic output, or gross domestic product. In 2007, the agency’s analysts estimated it could cost 26 percent of GDP.
Wall Street Banks Earned Billions In Profits Off $7.7 Trillion In Secret Fed Loans Made During The Financial Crisis
By Travis Waldron on Nov 28, 2011
http://thinkprogress.org/economy/2011/11/28/376430/wall-street-banks-fed-loans-secret/
Excerpt:
In the lead-up to the financial crisis that crippled the American economy and plunged the country into a recession, the Federal Reserve made trillions in undisclosed loans to struggling banks and financial institutions, according to official documents obtained by Bloomberg News. Six of the country’s largest banks then turned those loans into more than $13 billion in previously undisclosed profits.
The total cost of the Fed loans amounted to $7.77 trillion, and unlike the funds made available by the Troubled Asset Relief Program (TARP), the loans came with virtually no strings attached for the banks:
The amount of money the central bank parceled out was surprising even to Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he “wasn’t aware of the magnitude.” It dwarfed the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP. Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.
“TARP at least had some strings attached,” says Brad Miller, a North Carolina Democrat on the House Financial Services Committee, referring to the program’s executive-pay ceiling. “With the Fed programs, there was nothing.”
In one month, Morgan Stanley — one of the most vulnerable financial companies at the time — took $107 billion in secret loans, enough to pay off a tenth of the nation’s delinquent mortgages. The loans, like those made to other institutions, were never reported to Morgan Stanley’s shareholders or the taxpayers who subsidized them.
Other banks drew similar loans without disclosing them. Bank of America, for instance, held $86 billion in public debt on the day then-CEO Ken Lewis declared his company “one of the strongest and most stable major banks in the world.” Bank of America’s Fed borrowing peaked at $91.4 billion in February 2009; at the same time, it benefited from $45 billion in TARP loans.
Secret Fed Loans Helped Banks Net $13B
By Bob Ivry, Bradley Keoun and Phil Kuntz
November 27, 2011
http://mobile.bloomberg.com/news/2011-11-28/secret-fed-loans-undisclosed-to-congress-gave-banks-13-billion-in-income.html
Excerpt:
The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.
The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.
Saved by the bailout, bankers lobbied against government regulations, a job made easier by the Fed, which never disclosed the details of the rescue to lawmakers even as Congress doled out more money and debated new rules aimed at preventing the next collapse.
A fresh narrative of the financial crisis of 2007 to 2009 emerges from 29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions. While Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.
‘Change Their Votes’
“When you see the dollars the banks got, it’s hard to make the case these were successful institutions,” says Sherrod Brown, a Democratic Senator from Ohio who in 2010 introduced an unsuccessful bill to limit bank size. “This is an issue that can unite the Tea Party and Occupy Wall Street. There are lawmakers in both parties who would change their votes now.”
The size of the bailout came to light after Bloomberg LP, the parent of Bloomberg News, won a court case against the Fed and a group of the biggest U.S. banks called Clearing House Association LLC to force lending details into the open.
The Fed, headed by Chairman Ben S. Bernanke, argued that revealing borrower details would create a stigma — investors and counterparties would shun firms that used the central bank as lender of last resort — and that needy institutions would be reluctant to borrow in the next crisis. Clearing House Association fought Bloomberg’s lawsuit up to the U.S. Supreme Court, which declined to hear the banks’ appeal in March 2011.
Various matters: endless war, military detention, the Fed
By Glenn Greenwald
http://www.salon.com/2011/11/28/various_matters_endless_war_military_detention_the_fed/singleton/
Excerpt:
(3) A Bloomberg report today revealed that the Federal Reserve loaned $1.2 trillion of previously unknown funds to banks at below-market rates, enabling those banks to earn profits in excess of $10 billion (all of which dwarfed TARP). This was part of the impetus for the joint effort by Alan Grayson and Ron Paul in 2010 to compel an audit of the Fed. In particular, watch this 5-minute video of Alan Grayson from early 2009 grilling the Vice Chair of the Federal Reserve, Donald Kohn, as Grayson demanded to know how much the Fed loaned and to which institutions, while Kohn refused to provide that information (absurdly claiming that such transparency would prevent banks from wanting to borrow in the future: in light of the disclosures today, does anyone believe banks will no longer borrow from the Fed?).
*****
$1.2 Trillion Slush Fund: Congressman Alan Grayson Grills Fed Vice Chair Donald Kohn