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Staff posted on May 6, 2010 13:36

Why is the Fed so opposed to an audit and what does it have to hide ?

John Talbot Salon.com

Commercial banks, by law, have to hold a certain percentage of their deposits as cash at the Federal Reserve. From January 1959 until August 2008, the total of these reserves held by the commercial banks at the Fed grew from $11.1 billion to $46.2 billion. At no time during this almost 50-year period did the total bank reserves held at the Fed exceed the minimum required by law by more than $2 billion.

But since August 2008, these bank reserves held at the Fed have exploded to more than $1.2 trillion (as of March 2010), even though only $65.6 billion was required to be deposited by law.

This increase in excess reserves resulted directly from the Fed's policy of dramatically increasing the quantity (and lowering the quality threshold) of assets it bought in the marketplace. During the past 20 months, the Fed has tripled the size of its balance sheet by acquiring more than $1.5 trillion of new assets, more than $1 trillion of which are mortgage-backed securities.

What is going on here? Why would commercial banks hold $1 trillion more than they legally had to in reserves at the Fed, earning only 0.25 percent interest per year, and why would the Fed buy more than $1 trillion of mortgage securities of undisclosed quality in the marketplace?More...


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Staff posted on April 28, 2010 21:27

From Campaign for America’s Future -snip-

DEAN BAKER
Being Rude To The Deficit Hawks

I worked at the Economic Policy Institute (EPI) for 6 ½ years. During this time, the credibility of my work and that of my colleagues was often impugned by describing EPI as "labor backed." This was partially true, we got 20-25 percent of our funding from unions. However, the clear implication of this identification was that our ties to labor called our integrity into question in a way that large amounts of corporate tied money did not affect the integrity of other think tanks. I am reminded of this because I was at the Peter G. Peterson's Foundation deficit fest this morning. I left as Peter Peterson took the stage with Robert Rubin. The hypocrisy around this sight was more than I could bear. Actually, I left because I had work to do, but this sight was still pretty painful.

ISAIAH J. POOLE
Economic Experts Counter Right-Wing Bias Of Deficit Debate

This podcast features highlights from a news conference call by a group of progressive leaders seeking to counter the largely one-sided debate about how to reduce the federal deficit being promoted by Wall Street billionaire Peter G. Peterson and other deficit hawks. Roger Hickey, co-director of the Campaign for America's Future, is joined in the call by Robert Kuttner, The American Prospect, Demos, and author of the new book, "A Presidency in Peril"; Heidi Hartmann, economist and President of the Institute for Women's Policy Research; and Dean Baker, economist and co-director of the Center for Economic and Policy Research.

ROBERT SCHEER
'God, What A Piece of Crap'

thenation.com - It was the Perry Mason moment in the unraveling of what was left of Goldman Sachs's reputation. Only in this case, it involved a grizzled former prosecutor, Senator Carl Levin, rather than a genial defense attorney. The Michigan Democrat, citing the language of the internal e-mails of Goldman traders concerning the deceptive products they were selling, asked: "And when you heard that your own employees in these e-mails are looking at these deals said `God what a shitty deal. God, what a piece of crap,' when you hear your own employees and read about those e-mails, do you feel anything?" Viniar's answer told us all we need to know about the banal but profound immorality of Goldman's business culture: "I think that's very unfortunate to have on e-mail."

ROBERT KUTTNER
Give 'Em Hell, Barry

prospect.org - When President Barack Obama took office, at a time of grave financial crisis and disgraced laissez-faire economics, many of us hoped that he would be the next Franklin D. Roosevelt. That hope, to put it mildly, has not materialized. In fairness to Obama, he took office while the crisis was still deepening. FDR, by contrast, was inaugurated after the depression had festered and Republicans had dithered for more than three years, creating a popular mandate for more drastic change. But if Obama is not destined to be the next Roosevelt, he can choose from one of two very different presidential role models, Harry Truman or Bill Clinton.

ROBERT B. REICH
Swiftboating Finance Reform

robertreich.org - Republicans are blocking a Senate vote on the Dodd bill, seeking to build public support by misleading the public. They're claiming to want a stronger bill when in fact they're doing the Street's bidding by seeking a weaker one. Evidence of their tactics comes in the form of a shady anti-financial reform group called "Stop Too Big To Fail" which today announced a new TV advertising push in three key states. The ad features an out-of-context quote from me to bolster its case to kill financial reform.

CHRISTOPHER BEAM
Goldman Sucks

slate.com - The question at the center of Tuesday's Senate hearing on the role of investment banks in the financial crisis: Are Goldman Sachs bankers criminals or merely a big bunch of jerks? Put another way: Did the employees of Goldman Sachs deliberately mislead investors by failing to disclose that one of the people creating a certain mortgage-backed security was also betting against it, as a new lawsuit by the Securities and Exchange Commission alleges? Or did they simply recommend mortgage-backed securities to investors, then turn around and bet against them - essentially betting against their own investors? The Permanent Subcommittee on Investigations may have failed to prove the former, but it presented a strong case for the latter.

STEPHANIE MENCIMER
Citizens United, Take Two

motherjones.com - This week, congressional Democrats are crafting legislation to undo the Supreme Court's recent decision in Citizens United, which allowed unlimited corporate spending in elections. At the same time, the legal genius behind that case will be asking the court to take a whack at another long-standing pillar of campaign finance transparency: state disclosure laws. Call it Citizens United, take two.


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Nickens: Jeb wields clout without accountability

Katharine Harris Adam Putnam and Jeb Bush If Jeb Bush wants to be governor again, the job will be open soon.

If he wants to be a U.S. senator, he should run against Gov. Charlie Crist in the Republican primary instead of sniping at him in the national media.

Of course, Bush won't enter either race.

Why should he?

Bush is advancing his conservative agenda in the Legislature and influencing the Senate race without coming out of the shadows. He has tremendous clout and no accountability. He makes tons of money, travels the world and answers to no one.

Less than two years ago, Bush declined Times' staff writer Sydney P. Freedberg's request for an interview by claiming he was "trying hard to stay out of the public eye to let my successor do his thing.''

Now he's more like Voldemort in the Harry Potter books. You can feel his presence in the room, his surrogates are doing the dirty work and he still finds ways to leave his own mark. And there's no Harry Potter around to match his intellect or political skills.

In Tallahassee, the Republican-led Legislature has rammed through a sweeping education bill that abolishes tenure for new public school teachers and ties teacher raises to high-stakes testing. It has Bush written all over it, yet he never appeared in the Capitol. His close ally, Sen. John Thrasher of St. Augustine, sponsored the legislation. The executive director at Bush's Foundation for Florida's Future, Patricia Levesque, testified before committees and knows the bill better than most lawmakers. The foundation aired an ad promoting the legislation, and Bush urged his supporters to embrace it as teachers fought back.

"I talked to Jeb this morning,'' Thrasher told reporters the morning after the Senate passed the bill. "He was very pleased with what we did. Very pleased.''

I'll bet.

When Sen. Dan Gelber, D-Miami Beach, joked that this is Bush's best legislative session, he wasn't far off. State lawmakers also voted to expand one of the private tuition vouchers created during the Bush administration — even though it will cost the state millions and is on shaky legal ground. They asked voters to loosen the class size amendment that Bush hates. And they are exploring a dramatic expansion of a managed care Medicaid project started by Bush — even though the experiment has achieved questionable results.

Bush has more influence over the Legislature as the former two-term governor than the guy actually living in the Governor's Mansion.

But you have to feel for Crist. He is running against both Marco Rubio and Bush's shadow in the Republican primary for Senate. Even the Fox television debate between Rubio and Crist became two against one when Fox aired a video clip of Bush criticizing Crist's support of the federal stimulus package.

"I consider it unforgivable in the sense we're now in a battle for our country's future,'' Bush said.

How would Bush have dealt with the economic crisis in Florida without the federal stimulus money?

How would Bush explain laying off thousands of teachers or denying medical care to Floridians on Medicaid if there were no federal money?

Shouldn't Bush take some responsibility for the state's situation since he cut billions in taxes that could have helped Florida better weather the recession? Shouldn't he take some responsibility for the overdevelopment that contributed to the housing crash?

Bush cannot be bothered with such questions any more. Instead, he's free to take potshots like he did in a New York Times story on Crist's initiative to buy property from U.S. Sugar Corp. for restoration of the Everglades.

"To replace projects that were under way for a possibility of a project decades from now is not a good trade,'' Bush said. "On a net basis, this appears to me there has been a replacement of science-based environmental policy for photo-op environmental policy.''

Many environmentalists still support Crist's proposal and note that some of the restoration projects Bush embraced are based on untested methods. But Bush only plays offense these days and doesn't have to play any defense.

The fact is, Bush has never liked Crist. He treated him shabbily during the 1998 campaign, when Bush was gliding to the Governor's Mansion and Crist was waging a quixotic U.S. Senate campaign against incumbent Democrat Bob Graham. After Crist received more than 2.4 million votes even in defeat, Bush did not give him a high-profile state agency to run. He made him an obscure deputy in an out-of-the-way office. Crist then was elected education commissioner, attorney general and governor by charting his own course — not by riding any Bush coattails.

The governor is not the policy wonk his predecessor is. But Crist's political instincts and general decency have served him well. You won't hear Crist complain about how Bush left behind messes in property insurance, the Department of Corrections and the Department of Children and Families. Sometimes, the governor is too polite.

Rubio's record of public service is awfully thin, and his lavish spending of political contributions hardly shouts conservatism and fiscal responsibility. But Bush considers Rubio a more fitting heir than Crist and his proxy in the Senate race. The winner of the Republican primary will probably face Democrat Kendrick Meek — who pushed through the class size amendment Bush opposed and once staged a sit-in on affirmative action in Bush's office.

It must be nice to get your way and settle old scores without having to defend your own record.


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Matt Taibbi By Matt Taibbi

How the nation's biggest banks are ripping off American cities with the same predatory deals that brought down Greece

If you want to know what life in the Third World is like, just ask Lisa Pack, an administrative assistant who works in the roads and transportation department in Jefferson County, Alabama. Pack got rudely introduced to life in post-crisis America last August, when word came down that she and 1,000 of her fellow public employees would have to take a little unpaid vacation for a while. The county, it turned out, was more than $5 billion in debt — meaning that courthouses, jails and sheriff's precincts had to be closed so that Wall Street banks could be paid. More...


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Jaded with Greed, driven by his addictions. John McCain can feel no shame.


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Staff posted on March 16, 2010 10:47

j0283260 Hey Pay Stub!  My Medical went up 32% this year, 35% last year; 6% the year before, 8% before that, and 30% before that.  Whoa! What gives?

Sir, you are correct.  But as a numbers guy I can tell you it’s worse than you think.  Your employer is paying over 70% of your heath costs and passing the expense on to you.  The total likely rivals your house payment. No offense, but that’s why your net pay is not growing.

Pay Stub, you’ve never lied to me...

Sir, even Einstein didn’t argue with math.

Pay Stub, I don’t understand.  My insurance company gets to pick my doctors and deny me coverage more than ever.  I need some arthroscopic surgery and they won’t even pay a dime for an anesthesiologist…

Sir, I’m sure that will be painful, but I’m just a numbers guy.  Pardon my interruptions.

Pay Stub, you’re right.  I should be saying all this to my Congressman and Senator.  Insurance provider profits are way up.  I owe them a profit, but not fabulous wealth.  We pay a lot more per capita for health care that other modern democracies.  Our administrative costs are sky high. Our system is broken and I’m at the bottom of the chain.  We need reform and I want them to vote for it.

Sir, good luck.  And thanks for looking at my numbers.

Jim Rockett

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