Less Evil?

Corporate America doesn't care whether or not blacks get equal justice, nor whether or not women have access to abortion services. It is okay with current immigration law, but wouldn't mind if it got more or less welcoming.  It has made peace with Dodd-Frank, well aware that a law is only as good as its enforcement.

People who plan to "make do" with Hillary Clinton for fear of some ideologue from a dysfunctional Republican party winning the presidency are playing right into corporate America's hands.  If Clinton becomes president, the revolving door between the SEC and Wall Street will remain firmly in place.  Some petty criminals may serve five-year sentences instead of ten, but corporate executives guilty of enormous financial crimes will continue to avoid any threat of jail, paying impressive sounding but realistically negligible fines out of the pockets of stockholders.

Military contractors will continue profiteering as our new president continues to prove her figurative "balls" by encouraging military adventurism.  (Secretary of State Hillary Clinton overcame objections from Secretary of Defense Robert Gates to take us on our ill-fated adventure in Libya, and is likely to take us back there again.)

If Hillary wins the Democratic nomination, I, personally, won't have to decide between her and, say, that little turd Rubio.  I live in New York, so I can keep my conscience clear by voting for Jill Stein of the Green Party (again.  My friends are familiar with my politically incorrect reference to Barack Obama as "Clinton in blackface."  Hillary will be "Obama in a pants suit," only more hawkish.)

In today's Times, Elizabeth Warren stopped short of endorsing Bernie Sanders, but discussed some of the political problems we would continue to face under President Hillary.  It's worth a read.

Fast-Track and the TPP

I don't know if the terms of the Trans-Pacific Partnership trade agreement will or will not benefit most Americans, although I suspect that they will be much better for the banks and the multinationals than for you and me.  The reason I'm limited to suspicion is that the terms of the agreement, most of which already have been decided, are secret.  I don't get to see them.  Unless you are a US Senator or one of the corporate leaders and lobbyists who designed the deal, you don't know either.  We commoners are not allowed in on the secret, and when our Senators get to have a peek, they're not allowed to take notes.

What I do understand, just by the nature of such agreements, is that the TPP is likely to have provisions that facilitate violations of our local, state, and federal laws — that is, the ability of business interests to sue governments to overturn laws that the corporations just don't like.  Among those laws might be regulations bearing on health, safety, environmental protection, labor rights, banking, and more.  To me, that sounds like a real danger.

More dangerous than the agreement itself is granting the President six years of fast-track authority to enter into trade deals — that is, the authority to agree to a deal with only 51 votes for approval in the Senate.  If the next president (or, perhaps, the current president) decides to negotiate a treaty that castrates Dodd-Frank, for example, 51 votes would do the trick — not the 60 required to overcome a filibuster.

All the talk about loss of jobs is of little importance — but it's easier for ordinary Americans to understand than the far more virulent threats to regulation of banking, oil exploration and production, food and drug markets, and more.  Fast-track makes the current plutocratic domination of American politics exponentially worse.

The Omnibus Budget Bill

Needless to say, I'm not happy.  I'm not terribly concerned about the enormous increases in permissible contributions to party committees, etc., because the system already is owned by the fat cats.  How much difference can the extra millions make?

The weakening of Dodd-Frank ("the Citigroup amendment"), on the other hand, concerns me a lot.  Inevitably, somewhere down the road, we'll end up bailing out banks gone wild via unsafe, speculative derivatives trading.

.  .  .

As an aside, I'm wondering when the current stock market bubble will burst.  All the profits major corporations are earning are not going into increasing productivity, but into mergers and acquisitions, and buying back their own stock.

When the loud and world resounding "POP" comes, of course, everybody not on Wall Street will regret the weakening of Dodd-Frank.

.  .  .

(The next day)
Okay, the Senate passed the Omnibus last night — passed it on the right, to be exact — and I've had a little more time to think about those contributions to party committees.  What really comes of that, it seems to me, is that the billionaire plutocrats gain a slight advantage over the multimillionaire plutocrats.  On the bright side, that may make them less inclined to give quite so much to the 501(c)3 and 501(c)4 groups.

Still "Too Big to Fail"

The TBTF [Too Big To Fail] institutions that amplified and prolonged the recent financial crisis remain a hindrance to full economic recovery and to the very ideal of American capitalism. It is imperative that we end TBTF. In my view, downsizing the behemoths over time into institutions that can be prudently managed and regulated across borders is the appropriate policy response. Only then can the process of “creative destruction”— which America has perfected and practiced with such effectiveness that it led our country to unprecedented economic achievement— work its wonders in the financial sector, just as it does elsewhere in our economy. Only then will we have a financial system fit and proper for serving as the lubricant for an economy as dynamic as that of the United States.

Now that post-dot.com and post-Enron financial regulations have been rendered largely useless by passage of the so-called JOBS act, we really should see what we can do about salvaging what we can of Dodd-Frank before the Wall Street lobbyists decimate what little good it can do. As you may recall, its original intent was to end the threat of "too big to fail," but somehow the biggest banks remain TBTF and only continue to get larger.

Hence, it is interesting to note that the quotation above is from Richard W. Fischer, president of the Federal Reserve Bank of Dallas — considered among the most conservative of the Fed branches. It comes from his introduction to the Dallas Fed's 2011 annual report, most of which consists of an essay by Harvey Rosenblum entitled Choosing the Road to Prosperity: Why We Must End Too Big To Fail— Now.

Download it here. It's neither too long, nor too technical. It's definitely worth fifteen or twenty minutes of your time.

The Vickers Commission

Regular readers of this blog are familiar with my view on the repeal of Glass-Steagle back in the last days of the Clinton administration, and my view of Bill Clinton for signing it. Irregular readers, I suppose, should be made aware that my feelings about that action are far more uncomfortable than their constipation.

The British, at least, seem to see the problem in allowing retail banks and investment banks to be one in the same. Governments that provide deposit insurance, when banks are on the brink of failure, find themselves facing the necessity to bail out the whole institution — thereby making whole investors, speculators, and just plain gamblers as well as depositors.

What Sir John Vickers and his colleagues have come up with, for the UK, is a plan to "ringfence" the segments of the banking industry that serve ordinary consumers and businesses, while letting the "players" eat their losses. It sounds like a good idea to me, albeit a bit odd. The too-big-to-fail institutions, under the Vickers plan, could be allowed to fail — while their retail subsidiaries would be saved. Go figure.

Well, if that's all that's politically possible, I say, "Go for it." The British, according to all the talking heads I've heard, are likely, indeed, to "go for it." Here in the USofA, of course, anything similar wouldn't be at all likely. The banks still own both our political parties, and they're still working (with nauseatingly predictable success) to eviscerate Dodd-Frank, which wasn't a particularly strong bill in the first place.

What we really need, of course, is a return to Glass-Steagle — which would require the megabanks to split their investment and retail segments into separate companies, and might encourage a bit more healthy fragmentation along the way.

2008 should have taught us that too big to fail is to big to exist.