The Wrong People Are Being Blamed: Protect Consumers, Not Wall Street!
posted by: Cynthia Samuels 76 days ago
By Zach Carter, Media Consortium
The economy is still getting worse. Foreclosures are surging above last year’s epic highs and the unemployment rate marches upwards every month. As the misery grinds on, Wall Street lobbyists and their allies in Congress are pushing hard to distract the public from the real causes of the current global economic crisis. Corporate America is trying to pin the blame for our empty pocketbooks on President Barack Obama and the phantom socialist menace, and cable news pundits are taking the bait.
As David Korten explains in a blog post for Yes!, this surge of distractions is a conscious political strategy designed to sabotage reform. “Wall Street’s greatest fear is that the public might demand Congress and the president shut down the casino,” Korten writes. “Any issue that shifts attention away from Wall Street and pins the blame for job loss and mortgage foreclosures on President Obama works in its favor.”
The banking lobby is kicking and screaming over President Obama’s plan to overhaul consumer protection in finance. As a result, the battle over the proposed Consumer Financial Protection Agency (CFPA) has become the most heated economic controversy in the nation’s capital, even though the issue isn’t controversial where ordinary citizens are concerned.
The existing hodgepodge of bank regulators completely failed to stand up for consumers as the housing bubble grew and burst. Our current bank regulators are charged not only with consumer protection, but safety and soundness regulation, which basically means making sure that banks don’t fail. Preventing bank failures often means protecting bank profits, even when those profits come at the expense of communities. Instead of relying on the same inept and conflicted agencies, consumer regulation of credit cards, mortgages, student loans, payday loans should be funneled into a single, new agency with no other priorities: The CFPA.
As Greg Kaufmann details for The Nation, recent economic history isn’t stopping Wall Street’s favorite lawmakers from pushing against the CFPA. Kaufmann highlights some of the most outrageous comments from a hearing on the CFPA last week. Rep. Jeb Hensarling (R-TX) claimed that if the CFPA had existed a few years ago, there would be no ATMs or frequent flyer miles. David John, a researcher from the Heritage Foundation, said that employees of the new agency would spend too much time trying to find their new desks to actually do any regulating. Bank lobbyist Ed Yingling tried to erase the last ten years with his claim that “no real case has been made” for better enforcement of consumer protection in banking.
These are not serious arguments. They are intentional distractions designed to kill an obviously productive policy. Kaufmann’s headline says it all: “Do They Take us for Schmucks?”
But loudmouth Republicans like Hensarling aren’t the only politicians we need to keep tabs on. Plenty of lawmakers on the Financial Services Committee won’t stand up and make crazy speeches about ATMs, but will still go to bat for Wall Street behind the scenes. As I emphasize in a piece for AlterNet, with outsized Democratic majorities in both chambers of commerce, conservative, pro-Wall Street Democrats pose just as great a threat to our economic security as loony Republicans.
If you think that sounds pessimistic, consider Ralph Nader, who Matthew Rothschild profiles in The Progressive. Nader knows corporate America has its hands on nearly every lever in the U.S. political system. Lobbyists don’t just hurl money at lawmakers, they spend tremendous sums on misleading advertisements to sway public opinion. Rothschild quotes from a recent speech Nader gave on his current book tour. He argues that progressives don’t just need concerned citizens on our side. They need concerned citizens with money to counter the flood of corporate cash in the political system.
“There is a poignance in listening to Ralph Nader these days,” Rothschild writes. “Here is a man who, for the last 45 years, has hurled his body at the engine of corporate power. He’s dented it more than anyone else in America. But he knows it’s still chugging, even more strongly than ever.”
Even when lawmakers talk tough about Wall Street, it’s not obvious what’s really going on. Senate Banking Committee Chairman Chris Dodd (D-CT) recently rolled out an extremely ambitious plan to overhaul the bank regulatory system. It has very little common ground with Obama’s plan, and in some respects would be an improvement. Obama’s plan is very strong on consumer protection and not much else. But Dodd’s plan is so ambitious, it seems like a politically impossible waste of time, one that could easily delay reforms into next year. Dodd wants to consolidate all four bank regulators into a single agency to prevent a race to the bottom and strip the Federal Reserve of all of its regulatory responsibilities. They aren’t bad ideas, but they have absolutely no political momentum. Dodd has been holding hearings on the financial crisis since 2007– he could have started pushing for this plan a long time ago. By introducing it so late in the process, major legislative delays seem inevitable. The longer it takes to pass a regulatory bill, the more time the bank lobby has to water it down. Writing for Mother Jones, Nick Baumann suggests this may be exactly what Dodd intends.
“Maybe getting it done by 2010 isn’t the point. Dodd is up for reelection that November. If he manages to win by talking populist while raising money from Wall Street, he’ll have plenty of time afterward to figure out what to do next.”
For now, the economy is still absolutely horrible. Writing for In These Times, David Moberg translates the statistics from the government’s most recent unemployment report and deciphers some recent polling on the economy. Things are bad, and people know it. Many economists believe the recession may have technically already ended. The Gross Domestic Product, a statistical measure of the country’s economic output, may no longer be declining. But the unemployment rate keeps going up. It was 9.8% at the end of September.
Moberg notes that if the rate counted the long-term unemployed who have given up looking and people who want full-time jobs but settled for part-time work, the unemployment rate is a staggering 17%. Over one-third of the 15.1 million would-be workers encompassed by the 9.8% unemployment rate have been out of a job for at least six months. Voters overwhelmingly believe that government policies have helped Wall Street, while just 13% think the government has given a lot of help to the average working person.
Economics and politics are inextricably linked. To strengthen our economic foundation, we need policymakers who are willing to stand up to corporate America and corporate media and serve the citizens who elect them.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. This is a project of The Media Consortium, a network of leading independent media outlets.
Read more: money, politics, media, financial, wall-street, financial crisis, fiscal crisis
comments
You have got to watch "THE OBAMA DECEPTION" by Alex Jones! Don't be mislead by the title; this film reveals the sinister forces behind Obama — the international bankers who are determined to impose a dictatorial world government. Obama was not voted for or by the people; he is only the tool- the puppet. Watch this film and I assure you that it will seriously make you think of the true agenda for not only the U.S., but the entire world.
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Evelyn B........ Yep. The Federal Reserve is a root cause of the problems this country has. Since they have been in charge of the currency, with the stated goal of controlling inflation, the dollar has lost 93% of it's value. Most of that came over the last 50 years, with a mind numbing reduction of purchasing power of 84%. Fed policies also have been identified as the major cause of the bubble economy and resultant crash,,,,,,,,But it worked for the American people right? Nope, Dead wrong. From 1997-2007, only the top 5% of the American people actually gained in income when adjusted for inflation. And that was BEFORE the crash.....Evelyn, you are exactly correct. The answers are simple. But if simple answers are implemented, then how does the political class justify that onerous 2&1/2 day work week they put in? And that raise they just gave themselves? And how would they fit in (or hide) all the loopholes they work so industriously to get into the legislation? And speaking of Monsanto, how IS that new Food Safety Czar Michael Taylor working out? He did a GREAT job for Monsanto, didn't he? Nice that he's working for us now. Yeah, right! ..... Even Congress would have blushed if they confirmed him. But they didn't have to now did they. I'll tell you, "ya couldn't make this up if ya tried"........
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Jim Steve: Well stated in a nut shell. I would like to only add, there are simple solutions instead of all the complicated "fixes". The biggest Financial Entity running/manipulating the whole government show is the Private Banking Institution known as the Federal Reserve. The Federal Reserve determines the economics of the country, it is telling the government what to do, it controls the interest rates on everything, it puts the government in debt by Loaning the government money, it is self regulating (non-regulating), and self auditing. So simple solution is to sever that connection, and give the job back to the Federal Treasury. Second simple solution is, as Jim said, make lobbyists illegal, stop the revolving door, such as Monsanto employees or those with direct connection, appointed in the government to oversee & regulate Agriculture & work within the FDA. Make all political contributions from Corporations or "Entity" other than an individual US citizen illegal, put a yearly cap on individual contributions to any political individual or group at an amount less than $10,000.00. Stop all Political mass media Advertising. The political ads do not give us answers to any issues, just feel good words without substance, propaganda, misdirection,distractions, or mud slinging against the opposition. Those that can afford mass media are receiving large amounts of Corp. funding so, these candidates owe companies before they are even elected. How to accomplish is the questi
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Agree with Lionel on this. If we were to give a tax credit of $100. On the tax return would read: 1. I wish to contribute $33.00 (maximum) to the XXXX Party for the Senate race in my State; or $33,00 to Other) in which case split between non aligned candidates based on petition signatures). Or I do not wish to contribute and waive the tax credit. Ditto for the Presidential and House contests. Note: Senate cash would be apportioned by State, so California, for example would get much more in the Senate race than North Dakota based on population. The remaining 1% would go to auditing the campaign spending. At the same time, Contributions from all other sources would be banned.
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The U.S. system of "democracy" is basically flawed. As long as politicians need massive contributions from Big Business to support their election campaigns they will always be puppets in the hands of the contributors. As a result it is mainly the most corrupt who will run for office, few honest individuals will have anything to do with such blatant skullduggery.
To amend your Constitution on this issue will need great courage and perseverance, but until that is done you will always suffer such disasters as we have recently experienced. Other nations restricted the powers of the wealthy to interfere in government very many years ago. You can do so too. Go to it!
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Nothing new about blaming the wrong people. Americans are pretty gullible, placing blame is a national sport, and some issues campaigns not only disregard facts, but re-write reality, itself -- and we accept it. For a striking example of the power of propaganda to divorce the public from reality, think back to our anti-welfare campaign. We decided that welfare here was so generous that it sapped people of any desire to work, ignoring the fact that benefits were kept well below the poverty line. We decided that we had a "crisis of welfare dependency", even though some 80% of recipients voluntarily quit welfare in under 5 years before "reform," and long-term recipients were overwhelmingly those with disabilities. But welfare was breaking the budget! Well, no, it only used some 6% of the federal budget.
Facts don't matter much to us -- effective issues campaigns do. All modern propaganda is based on the premise that if something is repeated often enough, and especially by people in positions of authority, the public will accept it as truth, no matter how ludicrous it is.
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Hate to remind all of you, the Government is BIG BUISNESS! The senators and Judges, etc. all are stock holders. Until that conflict of interest is addressed we will always have coruption and green and "ME first".
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When Reagon deregulated the banks and Clinton followed was the beginning of the end. Run away capitalism, all for the wealthy. Why has the middle class gone down hill? thats why. Americans are so fickle, this is not Obama's fault, read the history and watch Michael Moores movie
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same here Shannonnnnn
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A friend of mine has just published a book, "Systems Out of Balance" which shown how big business and the government fool us into believing that they have our best interests at heart, when greed is the real goal. They play us like a harmonica and we need to wake up to the truth. We have to work to get and keep honest, people-centered government.
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Disclaimer: The views expressed above are solely those of the author and may not reflect those of Care2, Inc., its employees or advertisers.
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