Posted inUncategorized

They welcome our hatred

Events forced me to fly across the country. Because the old bereavement fares have gone the way of free (and tasty) meals, in-flight movies, free baggage check and an airport experience not out of Lockup Raw, USAirways got quite the bite out of my wallet. The flight was late and several restrooms on the 757 were not working. Of course the entire process — from getting out of the taxi under the din of recorded commands to reaching the gate area which never has enough seats for waiting passengers — was a joy.

The airlines don't care. We're stuck. Where in 1936, Franklin Roosevelt announced that never before in American history had the forces of money and privilege been arrayed against one candidate, and "I welcome their hatred," now the situation is reversed. More and more, highly concentrated industries and the moneyed elites welcome our hatred, then keep on tightening the screws. Americans sheepishly accept the hatred and queue right up for more.

Other sectors come to mind beyond airlines, health insurance and "financial services" at the top of the list. President Obama seems determined to get insurance industry "buy in" on health care reform, so we know how that song will end. It's appropriate to remember our friends the bankers on the anniversary of the failure of Lehman Brothers. A year later, the TARP money is unaccounted for, the industry is more concentrated and thus dangerous than ever, and real regulatory reform appears DOA. And for these privileges, Americans will get ever more gouged on banking fees and insurance premiums — if they can even keep the latter. Meanwhile, executive salaries and profits keep rising.

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Posted inUncategorized

The Citi gang gets away

The financial implosion that wrecked America was largely cooked up by Citigroup, not only in its kitchens of "innovation" but especially in its wide influence over the industry. Now what was once touted as the largest "financial services" company in the world is being dismantled. Among other things, it will sell its Smith Barney unit, credit-card business and consumer finance units. The Wall Street Journal observes that the final result will look much like the old Citicorp before Sandy Weill got his hands on it in 1998. Only without the integrity, market value and perhaps safety and soundness.

Unfortunately, the American taxpayers own a 7.8 percent stake in this dog (the Treasury alone gave a $45 billion infusion — 45 times the annual Amtrak budget). Maybe — who the hell knows what we're on the hook for, considering the secrecy with which the bailout has been handled. Who knows how many hundreds of billions of dollars have been thrown down the Citi-rathole by TARP and the Federal Reserve. And all for what? Did we also pay for the cheap undercoating and worthless extended warranty?

This institution that was deemed too big to fail has failed to unfreeze credit markets. Citigroup has succeeded in lavishly compensating its top executives and big-time traders, who jet away from the calamity with no consequences. In 2007, as the crisis became undeniable, then CEO Charles Prince, who had performed abysmally for shareholders, nevertheless made some $25 million. Robert Rubin, the Democrat brain trust on economics, was paid $17 million. This year, aided by "rescue" money from the taxpayers, Citi reportedly set aside $3 billion in bonuses.

Obviously the Citi never slept.

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Posted inPolitics: National

Making serious economic reform, part II

In a previous post, I discussed economic reforms that should be made in the sick, corrupt financial markets. But this is only the start of efforts the next president and Congress must make to prevent a startling decline that is already evident in America. Whatever the Dow shows, most Americans are suffering and for the first time in generations, young people wonder, with good cause, if they can live better lives than their parents.

Real change is needed, and the question is whether the American people and their elected representatives have the guts to face the truth and move ahead. The laughable gas-tax holiday and much wishful thinking about alternative energy and hydrogen cars represent the school of destructive denial. This is "sustainability" that seeks to sustain the current unsustainable economic and social arrangements. It can’t be done.

Yet much of the current mess was caused, not by inexorable laws of economics, but by policy changes to benefit the rich and transnational corporations, as well as a sprawl economy at the root of the current recession. We can change it.

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