Billions in Political Contributions Bought Financial Deregulation that Led to Current Crisis

An important new report–“Sold Out: How Wall Street and Washington Betrayed America“–shows that the financial sector invested more than $5 billion over the past decade in lobbying and campaigning for deregulation and other policy changes that led to the current financial crisis. The report was prepared by jointly by Essential Information and the Consumer Education Foundation, two nonprofits that have a long history of working to expose corporate crime.

The following excerpt for the report’s executive summary gives a good summary of what the report covers:

“Blame Wall Street for the current financial crisis. Investment banks, hedge funds and commercial banks made reckless bets using borrowed money. They created and trafficked in exotic investment vehicles that even top Wall Street executives — not to mention firm directors — did not understand. They hid risky investments in off-balance sheet vehicles or capitalized on their legal status to cloak investments altogether. They engaged in unconscionable predatory lending that offered huge profits for a time, but led to dire consequences when the loans proved unpayable. And they created, maintained and justified a housing bubble, the bursting of which has thrown the United States and the world into a deep recession, resulted in a foreclosure epidemic ripping apart communities across the country.

But while Wall Street is culpable for the financial crisis and global recession, others do share responsibility.

For the last three decades, financial regulators, Congress and the executive branch have steadily eroded the regulatory system that restrained the financial sector from acting on its own worst tendencies.”

Government Enabled Crisis

While the report’s authors argue that the report has one overriding message–that financial deregulation led directly to financial meltdown–it is clear that the United States government supported the changes due in large part to lobbying and campaign contributions from the financial industry. The changes were made with bipartisan support in response to pressure from the financial sector.

According to the report, the financial sector (finance, insurance, real estate) spent a staggering $5.1 billion over the past decade to influence the political debate. This includes $1.7 billion on candidates in federal elections and $3.4 billion on lobbying federal officials.

By industry, the break down and totals include:

• Accounting firms spent $81 million on campaign contributions and $122 million on lobbying;
• Commercial banks spent more than $155 million on campaign contributions, while investing nearly $383 million in officially registered lobbying;
• Insurance companies donated more than $220 million and spent more than $1.1 billion on lobbying;
• Securities firms invested nearly $513 million in campaign contributions, and an additional $600 million in lobbying.

Moreover, the election spending went to both parties. 55% went to Republicans, while 45% went to Democrats. In the 2008 election, Democrats took in over half of the contributions from this sector, reflecting the changing political winds. This should also be seen as an effort to shape upcoming legislation, in which the financial sector hopes to preserve many of the practices that led to the current crisis.

Similarly, many of the lobbyists employed by the financial sector were formerly Congressional and presidential staffers. At the same time, those who were tasked with implementing regulatory changes were drawn from the financial sector. The report cites Treasury Secretaries Robert Ruben and Henry Paulson as examples.

Twelve Regulatory Changes Led to Economic Crisis

The report cites twelve specific regulatory changes that eroded the regulatory system and paved the way for the current crisis. These are elaborated on in the 231-page report as well as in the executive summary, but they are reprinted briefly below:

1. In 1999, Congress repealed the Glass-Steagall Act, which had prohibited the merger of commercial banking and investment banking.
2. Regulatory rules permitted off-balance sheet accounting — tricks that enabled banks to hide their liabilities.
3. The Clinton administration blocked the Commodity Futures Trading Commission from regulating financial derivatives — which became the basis for massive speculation.
4. Congress in 2000 prohibited regulation of financial derivatives when it passed the Commodity Futures Modernization Act.
5. The Securities and Exchange Commission in 2004 adopted a voluntary regulation scheme for investment banks that enabled them to incur much higher levels of debt.
6. Rules adopted by global regulators at the behest of the financial industry would enable commercial banks to determine their own capital reserve requirements, based on their internal “risk-assessment models.”
7. Federal regulators refused to block widespread predatory lending practices earlier in this decade, failing to either issue appropriate regulations or even enforce existing ones.
8. Federal bank regulators claimed the power to supersede state consumer protection laws that could have diminished predatory lending and other abusive practices.
9. Federal rules prevent victims of abusive loans from suing firms that bought their loans from the banks that issued the original loan.
10. Fannie Mae and Freddie Mac expanded beyond their traditional scope of business and entered the subprime market, ultimately costing taxpayers hundreds of billions of dollars.
11. The abandonment of antitrust and related regulatory principles enabled the creation of too-big-to-fail megabanks, which engaged in much riskier practices than smaller banks. 12. Beset by conflicts of interest, private credit rating companies incorrectly assessed the quality of mortgage-backed securities; a 2006 law handcuffed the SEC from properly regulating the firms.

The report argues that along the way many critics warned that these changes could lead to financial disaster, but those critics were drowned out by the money coming into Washington.

Changes Offered

While the majority of the report focuses on the failings of the government and Wall Street, it does offer some ideas that could be implemented to change the system. It makes a series of recommendations in the areas of “Restitution,” “Regulation,” “Reform,” Responsibility,” and “Return.”

Among the changes, it says that the government must demand that taxpayer money handed over in the financial industry bailout is paid back fairly. On the bailout, the report also says that it should be reworked to allow for greater oversight and disclosure.

The report says that further regulation of Wall Street is clearly needed as voluntary regulation has not worked. Among the measures, it suggests banning derivatives, barring further mergers of financial industry titans under antitrust laws, and breaking up industry monopolies once the economy has recovered. It further argues that CEOs should be held accountable for their actions. The economy should also shift from being so dominated by the speculation of the money industry to a focus on real and tangible goods.

Finally, the report argues that Americans need to “revolt” and demand an end to “business as usual” on Wall Street and in Washington.

Are You Stimulated? Media and Money

So, the much promoted stimulus plan from the Obama administration has been passed. And despite all the rhetoric around the new administration’s desire for this to be a bipartisan plan, the Senate and the House pretty much voted along party lines.

One thing I noticed during the weeks that led up to the vote on the stimulus plan was the lack of information in the news coverage about what the $787 billion was going to be used for. There was plenty of commentary about the battle between Democrats and Republicans, but little information on where the stimulus money would go and how that would benefit the public.

Now, in the news coverage there was some vague discussion about how the stimulus plan would help the economy, but we shouldn’t confuse that with the general public. One of the neglected truths about the economic system we live with is that even when the “economy” is doing well, lots of people are suffering. In fact, economists will quite often tell us that have 5 or 6% unemployment is a good thing. Economic indicators are driven more by stock prices and consumer spending. The Gross Domestic Product (GDP) is not interested in whether or not people are making a livable income or whether or not we are polluting the planet.

Another myth about the economy that was promoted during the stimulus debate is the idea of job creation. Much of the news coverage promoted the Obama administration’s claim that the stimulus plan will create 4 million new jobs. However, most reporters never really asked what kind of jobs would be created, what they will pay and how that will benefit the public. This is in part due to the fact that we are all just suppose to be happy if a politician says that what he or she will do is create jobs…end of story. The reality is that a great deal of new job creation is in the service sector, which means people earn poverty level wages, often with no benefits. Another way that the job numbers can mislead the public is by saying that the one-day you worked during the whole month through a temp. agency counts as being employed. Is this what they mean by a “market distortion?”

So where will all of the $787 billion included in the stimulus go? There is some money that will go for public education, some for extending unemployment benefits, road and bridge repairs, and health care for the poor. While this money may provide some relief to people who are hurting, it is important to keep in mind that these funds are essentially subsidies for big business. Some uninsured people will get access to some health benefits, but the money goes to the HMOs. This is what lobbyists were doing weeks before the president signed the new stimulus plan, they were making sure that most of the money would come back to the companies they represent. This is particularly the case for the banks and other Wall Street entities that not only lobbied Congress heavily; they put plenty of money into the coffers of candidates before the November election.

So let’s look at this like we were talking to a 4th grader, which is what local TV broadcasters claim is the age level they produce their stories for. Bankers and other financial institutions took lots of money from the public in the form of investments, mortgage loans, or savings. The banks and their friends on Wall Street use the money for their own gains and along the way things bottom out. Lots of working people get screwed and in the process the government gives them billions of dollars to bail them out last fall. Now these same banks and their buddies have come back to ask for more of the taxpayers’ money and while the new administration might be wagging their finger at them, they still give them more money. Not only are they giving them more money, they have continued to provide significant tax breaks to the same people who have been ripping us off for years. Add to that the fact that these same banking executives are giving themselves raises and throwing parties like there is no tomorrow. What an amazing country we live in.

OK, back to The Grand Rapids Press. So, besides not providing the public with good information during the stimulus debate in Congress, what else has the local news done for us? Well, they still provide for us good stock tips and shopping opportunities. You still get to go to any number of shopping expos at the DeVos Place and get your picture taken with a local radio or TV personality after you get introduced to the latest products from home remodeling, to cars and boats. What I want to know is who can buy this stuff? No one I know is thinking “I gotta get me a good deal on 30 foot boat.”

On Sunday, February 15, The Press out did themselves in audacity by running as their featured front page story an article about “financial guru” Dave Ramsey. The article was titled, “Do I save, or do I spend?” The focus of the story (and this is what us little people are supposed to think about during the financial crisis) was what individuals can do to better manage their money. The article even featured a local couple that have taken Dave’s advice and made it work for them. The best part about the story was that Ramsey was speaking at the Van Andel Arena on February 19, so the story was free advertising for this snake oil salesman. Tickets to see the financial guru ranged from $38 to $202. For that kind of money I would think he would take you out to dinner before he f**ked you. I know, I know, Dave Ramsey provides biblically based financial advice and can be heard on WOOD radio, his columns are in The Grand Rapids Press and in a local Christian newspaper, so what is my problem? Not only does Ramsey promote the current economic model, stock investments and all, he makes a shit ton of money giving out this information.

To add insult to injury, The Grand Rapids Press also ran a story that accompanied the piece on Dave Ramsey with the headline, “How to help end the crisis.” The article begins by saying, “It’s your fault.” Basically, the article said that the current economic crisis is because of our spending. “Your free-spending ways helped cause the worst financial crisis since the Great Depression.” The bankers and Wall Street fat cats are not to blame, you are! However, the article did have a silver lining in the form of tips for us consumers. With these tips, we will be able to avoid being in a financial crisis. Before you read these, you might want to sit down. First, “parents of young children can join Costco and make up the fee with just a few months of diaper purchases.” Second, we are told to inflate our tires for better fuel efficiency. Third, we should stop buying bottled water and just buy a water filter. However, my favorite was, “People who do lots of laser printing can purchase a printer that uses only a cent or two of ink per page.”

So, what are we to do? Well there are no easy answers, but I think we might be able to learn something from people around the world. In early February, writer Joshua Holland wrote an interesting piece on AlterNet titled, “The Whole World is Rioting as the Economic Crisis Worsens – Why Aren’t We?” That, I think is an important question. If one looks at what people have been doing in places like Greece, Mexico, France, Iceland, and Russia, you will find that people are taking matters into their own hands and they are not blaming the problem on individual consumers. Check out Naomi Klein’s website, where she has lots of information and video of the global uprising against the economic crash.

I don’t know the answer to why we are not rioting in the US, even though we have every reason to be. So, I will leave us all with that challenge. Let’s answer this question together:

“Why are we not rioting in the US because of the economy?”

If you have any answers let me know and then lets do something about it.

Jeff Smith would love to be on the streets with you and not buying diapers at Costco. jsmith AT mediamouse.org

Video: Naomi Klein in Lansing

Yesterday, we wrote about author Naomi Klein’s lecture in Lansing on Wednesday. We’ve since found a video of the event–thanks to Thomas Rico’s blog–that is well worth watching on a snowy Saturday:

“Shock Doctrine” Author, Naomi Klein Speaks at MSU; Addresses Economic Crisis

Canadian author, activist, and filmmaker Naomi Klein spoke at Michigan State University on Tuesday. Klein is on a tour promoting her book The Shock Doctrine: The Rise of Disaster Capitalism.

Klein began her talk by saying that what inspired her to write The Shock Doctrine was what she discovered in her reporting from Iraq in 2003-2004. The author said that one of the most grotesque myths about the Bush administration is the idea that they had no plan for Iraq. Klein firmly believes they did and the plan was to remake Iraq’s economy.

Iraq War leads to “The Shock Doctrine”

Restructuring Iraq’s economy was the mandate that Paul Bremer received from the Bush administration, with a particular emphasis with how restructuring the economy would be beneficial to foreign banks and investors. Privatization was the mantra, according to Klein, and what better way to bring this change about than by the 2003 US invasion. Her reporting in Iraq led her to look at “the relationship between the various shock doctrine techniques, both legal and economic, which when resisted led to military shock.” The military shock most often meant the repression of popular dissent by a variety of civil society sectors throughout Iraq.

The problem, Klein said, was using a crisis to get around democracy. Klein then went to New Orleans to continue her research and discovered very similar patterns to policy decisions after Katrina.

“Developers had pre-disaster plans to redevelop New Orleans, so the flooding provided the mechanism to allow this to happen. They decided to not rebuild public schools, but gave parents vouchers to go to private education systems.”

Another recent example of disaster capitalism, according to Klein, was what happened after 9/11. It wasn’t just the Patriot Act and the War on Terror that the Bush administration promoted, but the restructuring of the economy.

“The War on Terror was in a sense a business plan. What happened under Bush wasn’t new, but a process that really began with Reagan as a counter-revolution to the New Deal policies. What Bush has done differently, was to privatize the military and border patrol.”

What about the Current Crisis?

Klein argued that the Obama campaign realized that blaming the crisis on these right-wing policies would give him the edge to win the election, even though Obama supported the Paulson-led bailout. Klein feels that Obama’s victory was a referendum against these economic policies and that there are openings in American society. She said that there is a consensus that there needs to be a shift in the economy. Klein believes that the Obama administration is not applying a shock therapy to the current crisis. However, “they are giving over massive amounts of public money, unlimited access to the public ATM. So, who needs privatization when you have this public trough?” Since the banks and other Wall Street sectors keep coming back to the public, US taxpayers are going to be stuck with a huge debt. Klein said that even though much of the mainstream media is putting the bailout price tag at roughly $3.5 trillion, it is more accurately around $10.5 trillion.

The Shock Doctrine author went on to say that it is interesting that the right is claiming that what the Obama administration is doing with the stimulus is socialism. Klein is amazed at how many people believe that Obama’s policies are socialist, when in fact they are really corporatist in nature. The stimulus is really “public money being transferred to the private sector.” Klein says that when we look at the bailout the numbers are amazing. Citigroup alone has received $45 billion. They are worth $20 billion on paper, according to Klein. “Taxpayers have already given the banks more than the market is able to. The government has voluntarily surrendered the power it could have with the bailout, by not enforcing any accountability.” She went on to say that we all hear about the corporate scandals – AIG’s spa vacation, etc., yet Congress continues to give them money. The banks have been nationalized in a sense, because of the bailout, but in effect, they still operate as private entities.

Klein advocated for the nationalization of US banks, because it would not only mean that the public would have their losses, but also their profits. It would allow the public to have a say in how the money is used and who would get it. Statistically, the bailout is equivalent to being able to pay off every mortgage in the country. “Can you imagine,” Klein said, “if people did not have mortgage payments how much more vibrant the real economy would be?”

What about the Stimulus?

For Klein, the stimulus is just the other side of the coin of the bailout. It is not the green dream that was promised. Money for mass transit was cut in half and funding to states was also cut. Another thing that Klein pointed out is that with the stimulus there will be no breakthrough on health care. The California Nurses Association study shows it makes no sense to provide subsidies to a health care system that doesn’t want to provide health benefits to people who are not insured. A single-payer system would not only provide health care to everyone, it would also create a tremendous amount of jobs.

We can Take our Cue from People Around the World

Klein then shifted the discussion to looking at how the rest of the world has been reacting to the global economic crisis.

In Iceland, one government has come down because of the crisis. Italy has been cutting back funding for schools and the students have rebelled and are using the slogan, “We won’t pay for your crisis!” Students have been on the frontlines of this crisis in most countries around the world, according to Klein. In France, it was announced that when teachers retired, the President would not replace them. How did the French people respond? There was a massive strike, with massive public support. In Greece, it has been farmers blocking the roads. Klein wrote about this global resistance in a recent Nation magazine article, one that includes great video links to public resistance globally.

Klein then mentioned the Republic Doors and Windows factory strike. She said that one of the reasons that they won is because they were not just picking a fight with the factory owner, but also with Bank of America. Their slogan was, “You got bailed out. We got sold out.” What was also amazing about what these workers did was that they were willing to break the law. Klein said, “We need more of Republic Doors and Windows. If there is going to be a progressive movement, we need a radical labor movement in this country.”

Another point that Klein stressed to the audience was the need to remember what it was that got the New Deal policies put in place. The author said that the popular notion was that FDR devised the New Deal policies because of his liberal orientation. However, Klein’s take on that part of US history is that the New Deal policies were advocated by FDR because he knew that if those reformist policies were not adopted there might have been a revolution. The US labor movement was so big and so well organized that it scared the political establishment into adopting the New Deal policies as a way of preventing serious social upheaval. Klein thinks we need to learn from this history and not wait for politicians to make changes. Instead, she emphasized that we have to build movements to demand changes.

Q & A

There were several questions from the audience, many of which were asking for clarification of comments made during the talk.

One of the more important questions asked was, “Why are we not resisting here?” Klein responded by saying:

“In Europe people don’t treat their politicians like rock stars. They don’t treat them with reverence. Because there is this reverence in the US, we wait for the great man to give us good news. What we do not hear about is the tremendous pressure from the grassroots, the kind that lead to the New Deal. Since we have this distorted understanding of history, we are just waiting for Obama to just deliver us from evil.”

Klein was also asked if she thought that Obama would be as bad as Bush, to which she responded:

“Of course I don’t think that he is as bad as Bush, but the question kind of misses the point. The danger is that we are so relieved from eight years of Bush that we will lie to ourselves about what is really happening. The worst of the economic policies, the one that are haunting us now, were passed under Clinton. Clinton pushed much of the deregulatory policies that Bush just drove home. There is a real price to this kind of intellectual dishonesty, because if we don’t own up to this history we will suffer for it. Look at what MoveOn did. They built their data-base as an anti-war group, but never challenged Obama on his military platform, particularly is financial support for the wars in Iraq and Afghanistan and his current push to intensify the war in Afghanistan and probably Pakistan. Those of us on the left need a movement based on principle and truth, not just strategy, if we are going to seriously make any changes.”

Looking to the Left on the Economic Crisis

Over the past few weeks, we’ve provided a fair amount of coverage of the economic stimulus bill, particularly looking at possible benefits to West Michigan and unneccessary tax breaks contained within the bill.

Unfortunately, our coverage has tended to be fairly uncritical of the rest of the bill, not asking big questions about what it means for the economy, what the nature of the economy is, and what other possibilities are to the current economic model. Sadly, this reflects the poverty of leftist thought in the United States–there has been relatively little substantive critique. The crisis–unprecendented in many ways–offers an opportunity to reimagine how the economy functions.

To encourage people to think beyond the simply passing the stimulus and then moving on, we’re posting two interviews with Robert Kuttner about Obama, the economic crisis, and the solutions that have been offered thus far. Kuttner’s ideas certainly aren’t perfect, but he offers some worthwhile comments.

Part 1 – Conservative Solutions to a Radical Crisis

Part 2 – What Obama Should Do

It’s Not Just the Economy Silly, It’s Capitalism

It’s mid-December and I just sat down to watch a few minutes of the Lions game and right away there is a commercial break. I wanted to watch the game to be part of history. The first commercial was for Verizon with that creepy guy who can only say one thing and his horde of support staff. The rest of the commercials were all holiday themed with happy music in the background and assurances that all the products were bargains that would “make our holidays special.”

The best commercial by far was the new Cadillac ads promoting their red-tag sale. Using pseudo-democratic language, the commercial tells viewers that they can pick their own price tag at Cadillac.com. I was feeling in the mood to be seen in a new Cadillac so I went online and filled in the fields which gave me “my” price tag for a 2008 Cadillac Escalade for just $72,000. But wait, the company was offering $10,000 cash back, so I could be styling in a new ride at a mere $62,000.

Apart from the fact that spending $62,000 on a car would be utter absurdity, the idea that these companies would continue to try to convince me and everyone else that their holiday joy will be intimately connected to what I buy is disgusting. Add to that the fact that the economy is in the shitter and such commercial appeals are nothing more than corporate arrogance.

However, despite the fact that poverty rates in the US are growing and unemployment/underemployment is skyrocketing, the market keeps telling us to buy crap that we do not need. Everywhere you look commercialism is rampant. According to the Media Education Foundation, the average American will encounter about 3,000 commercial ads per day. On top of the obnoxious ads on TV, we see them on billboards, in movies and video games, online, and on the radio.

Open The Grand Rapids Press on any given day of the week and you will be slapped in the face with the amount of ad space. In the Sunday, December 14 issue of the Press, the Home & Garden section provided readers with details on how to decorate your house for the holidays, which of course required you to purchase electrical lighting. In the Travel section the lead story is how your family can have an affordable vacation on the Caribbean Island of St. Lucia. This is not only arrogance on the part of the Press to suggest that working people can vacation with the entire family in the Caribbean it is an affirmation that the Press is not only a product of capitalism, but an ardent defender and promoter of the “free market” system.

The Grand Rapids Press, like most mainstream media, has a business section in their daily paper. However, mainstream news sources do not have a workers section of the paper nor do most news agencies have a labor beat reporter. Doesn’t this seem odd to you? I mean, aren’t most of us working people? Why have a section for business owners when they are clearly in the minority? The answer should be clear. We live in a business run society. This is why stock information is scrolled across the bottom of the screen and not information of working people’s wages.

In the past few months with the news coverage focused on the Wall St. disaster, the banking scams and the proposed auto industry bailout when have you hear or read a news story that even questions the system of capitalism? You just won’t find those perspectives in mainstream media. In early October, I attended a forum organized by the Siedman School of Business of GVSU at the downtown campus. The forum was on “Understanding the Economic Crisis,” yet there was only one perspective represented on the panel. All six of the panelists were either financial consultants or bankers. The only thing they could agree on were “the market is ok, we just need to stabilize the economy” and “don’t do anything without consulting your financial advisor first.”

Ok, so a show of hands…how many of you have a financial advisor? And while we are on it, what the hell is a financial consultant anyway? Do they advise you on what not to buy or inform you that the average salary of CEO in the US is 344 times more than the average worker? Hell no, they tell you what stocks you should invest in or they will be out on their 3 piece suit-wearing asses.

In early November, the Project for Excellence in Journalism produced a study on how much news coverage was devoted to the recent economic crisis. The study showed that while all forms of news media were repeatedly reporting on the economic crisis they relied exclusively on financial experts, business leaders or elected officials. The only time that working people were cited in stories is when reporters wanted to know how they would survive if laid off or how much shopping they were hoping to do for the holidays. Apparently, working people do not have an opinion on the current economic crisis. However, most absent from the coverage were the voices of those who say that this recent wave of the economic crisis is a natural outcome of capitalism.

Capitalism, by its very nature, is predatory. The goal is to make more, to put profits before people and to have an ever-expanding market. A good example is Nestle, which bottles spring water from Michigan. Nestle does not have a plan to sell 50 million bottles of water and be content with that. They want to constantly expand their market, even if it means environmental destruction. Nike wants to charge you $120 for the new LeBron sneakers, even if it means using sweatshop labor in Vietnam. You can buy a Toyota Prius and feel better about fuel efficiency, but the reality is that these cars are made by workers who are forced to work in difficult, and at times, repressive circumstances.

In addition to the brutal and repressive treatment of workers in a capitalist system, the state is a necessary tool for it to continue. Don’t you find it interesting that corporation, bankers, and other financial institutions are begging the state to bail them out with public funds? Even when these institutions are not in crisis, many of them survive off government welfare, usually referred to as subsidies. In fact, according to the Project on Corporations, Law & Democracy if corporate welfare ended over half of the Fortune 500 companies could not survive.

Considering that things are not likely to get better anytime soon, what is it that we can do to confront capitalism and maybe even create economic systems that are not based on exploitation? Some are putting their hope in the new administration, despite the fact that his economic advisors and appointments, like Lawrence Summers, Robert Rubin and Tim Geithner. These guys are the same ones who pushed for deregulation of the market during the Clinton years, policies that helped to create the economic mess we have now.

The other option would be to begin to reject capitalism and create economic systems that are based on justice and equality. This kind of action requires that we work on this together and not as individuals. I in no way want to suggest that I have any answers here, but maybe there are efforts we can look to for ideas.

We could begin by being inspired by what the workers did in Chicago recently, when they decided to occupy the Republic Windows and Doors factory as a response to the company’s decision to shut down the factory. Legally, workers do not have the right to engage in these kinds of actions, thanks to the 1947 Taft-Hartley Act, but that didn’t stop them from doing what is right. We can all take a lesson from these workers.

Other campaigns and movements we can learn from are the World Social Forum, an international gathering in response to the G-8 nations and the World Trade Organization. There is also the Project for Corporations, Law and Democracy, a group, which educates people on the origins of corporations and provides resources on challenging corporate charters. Next, we could learn from the investigative work of groups like the National Labor Committee, CorpWatch.org and Corporate Crime Reporter. Once we have a better analysis of capitalism, we can participate in actions by looking to Infoshop.org, which has a wealth of information on anti-capitalist and anti-globalization movements. Another great resource is Root Force, which provides information and analysis for taking direct action against capitalism. Locally, there is the Really, Really Free Market, which provides an opportunity for anyone to share goods and resources and not participate in the capitalism model and The Bloom Collective, which has numerous anti-capitalist zines, books, and DVDs you can check out.

“One day we must ask the question, Why are there forty million poor people in America? And when you begin to ask that question, you are raising questions about the economic system, about a broader distribution of wealth. When you ask that question, you begin to question the capitalistic economy. And I’m simply saying that more and more, we’ve got to begin to ask questions about the whole society.”

– Martin Luther King Jr.

Banks won’t say how they have Spent Bailout Money

Remember all of the criticism about the financial industry bailout several months ago? And the criticism about the lack of transparency?

A new article from the Associated Press titled “Where’d the bailout money go? Shhhh, it’s a secret” says that many banks are either not tracking how they are spending the money or are simply refusing to disclose it. The AP surveyed 21 banks that have received $1 billion in government money and asked for simple questions: “How much has been spent? What was it spent on? How much is being held in savings, and what’s the plan for the rest?”

None of the banks provided specific answers that accounted for how they have used the money. However, there were some choice responses:

“We’ve lent some of it. We’ve not lent some of it. We’ve not given any accounting of, ‘Here’s how we’re doing it,'” said Thomas Kelly, a spokesman for JPMorgan Chase, which received $25 billion in emergency bailout money. “We have not disclosed that to the public. We’re declining to.”

“We’re choosing not to disclose that,” said Kevin Heine, spokesman for Bank of New York Mellon, which received about $3 billion.

“We’re not sharing any other details. We’re just not at this time,” said Wendy Walker, a spokeswoman for Dallas-based Comerica Inc., which received $2.25 billion from the government.

The largest recipients of money–Bank of America and CitiGroup–simply responded with PR statements saying that the money is being used to “strengthen balance sheets and continue making loans to ease the credit crisis.”

TheRealNews.com has a great video that explains the flaws over the oversight system:

Income Jumps by 5.8% for Wealthiest 1% of the US Population

The Center on Budget and Policy Priorities is reporting that the income of the top 1% of households in the United States has grown by $60,000 or 5.8%. For the bottom 90% of the population, income rose only by $430 dollars. Since 2002, the average income of for the top 1% of households has increased by 42% compared to just 4.7% for the bottom 90%. The income share of the wealthiest households is now at the highest point since 1928.

Why Animals Matter: The Case for Animal Protection

Click on the image to purchase this book through Amazon.com. Purchases help support MediaMouse.org.

Why Animals Matter: The Case for Animal Protection exposes how capitalism has degraded yet another ages old human institution: our relationship to animals. This contemporary pursuit of profit–as animals are used for food, hunting, pets, research and entertainment–inflicts extreme cruelty upon animals, places many of their human counterparts in danger and destroys the environment.

The authors’ strongest point is made in their expose of the meat industry. The reader gets much more than a moral lecture on why to be a vegetarian. The book documents how factory farm methods not only slaughter animals but also force them to live lives of daily torture as they are confined in dark, small, crowded pens, in their own urine and feces. To combat the resulting ill health, they are pumped with antibiotics and growth hormones that make them more susceptible to painful and debilitating deformations.

Birds’ beaks are cropped; even eating causes them pain. Cow’s tails are cropped; they cannot even swish away biting flies. The authors write, “They (animals) often have no fresh air, do not feel the earth under their feet, and do not enjoy sunlight. Hundreds of millions of them are virtually immobilized. They can hardly perform any of their most important natural behaviors or experience even the most basic pleasures.”

When it’s time for slaughter, meat animals experience horrific fear and excruciating pain. For example, they are shipped long distances with little care given to food, water or rest and hung on hooks or scalded in boiling water often while conscious. Spent hens are crammed into dumpsters while still alive.

Human costs

Meanwhile, the underpaid workers in these operations are often immigrants who dare not speak up. The authors write, “…they slip and fall in the blood, feces, and other fluids that cover the floors; they are kicked and cut by animals struggling for their lives; they are cut by knives that disembowel and disassemble animals; they endure painful and chronic repetitive motion injuries. The industry’s ever-increasing line-speeds increase the risk of being cut, bruised, burned, stabbed, blinded, dismembered, disfigured and worse.”

In addition, slaughterhouse workers breathe air contaminated with airborne feces, E coli, campylobacter and listeria. Workers on factory farms endure similar subhuman working conditions and routinely develop sinusitis, chronic bronchitis and organic dust toxic syndrome. The book notes, “Factory farm workers are also exposed to infectious diseases such as anthrax, psittacosis, brucellosis, leptospirosis, swine influenza A, and avian influenza A, as well as several other diseases and conditions…”

Workers are not the only human health victims of the meat industry. Widespread use of antibiotics has created several antibiotic resistant bacteria, such as MRSA, which are in the beginning stages of causing pandemics among the general public in the US and around the world.

Environmental consequences

According to Williams and DeMello, “… animal agribusiness and its use of ever-increasing numbers of animals is among the most serious causes of environmental degradation.” U.S. factory farms produce more than 500 million tons of manure a year, waste that is hundreds of times stronger than untreated domestic sewage. Overgrazing is the leading cause of desertification, and subsequent loss of native plant species, in the U.S.

Factory farms growing animals account for more than 50% of all water use. In addition, manure spills contaminate our water supplies. “Each year, pollution from animal agriculture creates a ‘dead zone’ in the Gulf of Mexico, killing much of the marine life in an area the size of Massachusetts,” the authors report.

Data supporting humane change

In subsequent chapters, Why Animals Matter presents well documented, full treatments of other ways our capitalistic society subjugates and abuses animals. The authors show that hunting has very little to do with conservation; the fur industry subjects farm raised and trapped fur animals to ongoing pain and cruelty; animal laboratory research is more about big bucks than science; and zoos, rodeos, circuses and the TV/motion picture industry all victimize animals, though to differing extents. Nor is the pet industry exempt. Its powerful lobbyists make sure legislation favors profit over fair treatment of the very animals Americans hold most dear.

Each section of the book concludes with action steps readers can take to work against the vast market forces that see all animals as units to be sold for profit. For example, the chapter on the meat industry–while encouraging readers to adopt a meat-free diet–also offers the options of reducing meat and dairy consumption or limiting purchase to products from free range animals that have been raised and slaughtered humanely.

Excerpts about animal friends rescued from the factory farm, puppy mill, greyhound track and laboratory also inspire readers to make the world a better place for animals–and hence, a better world for humans, too.

Erin E. Williams and Margo DeMello, Why Animals Matter: The Case for Animal Protection, (Prometheus Books, 2007). A new book by Erin E. Williams and Margo DeMello explores the treatment of animals and how the pursuit of profit has led to horrendous treatment of animals in the United States.

Why Animals Matter: The Case for Animal Protection

Why Animals Matter: The Case for Animal Protection exposes how capitalism has degraded yet another ages old human institution: our relationship to animals. This contemporary pursuit of profit–as animals are used for food, hunting, pets, research and entertainment–inflicts extreme cruelty upon animals, places many of their human counterparts in danger and destroys the environment.

The authors’ strongest point is made in their expose of the meat industry. The reader gets much more than a moral lecture on why to be a vegetarian. The book documents how factory farm methods not only slaughter animals but also force them to live lives of daily torture as they are confined in dark, small, crowded pens, in their own urine and feces. To combat the resulting ill health, they are pumped with antibiotics and growth hormones that make them more susceptible to painful and debilitating deformations.

Birds’ beaks are cropped; even eating causes them pain. Cow’s tails are cropped; they cannot even swish away biting flies. The authors write, “They (animals) often have no fresh air, do not feel the earth under their feet, and do not enjoy sunlight. Hundreds of millions of them are virtually immobilized. They can hardly perform any of their most important natural behaviors or experience even the most basic pleasures.”

When it’s time for slaughter, meat animals experience horrific fear and excruciating pain. For example, they are shipped long distances with little care given to food, water or rest and hung on hooks or scalded in boiling water often while conscious. Spent hens are crammed into dumpsters while still alive.

Human costs

Meanwhile, the underpaid workers in these operations are often immigrants who dare not speak up. The authors write, “…they slip and fall in the blood, feces, and other fluids that cover the floors; they are kicked and cut by animals struggling for their lives; they are cut by knives that disembowel and disassemble animals; they endure painful and chronic repetitive motion injuries. The industry’s ever-increasing line-speeds increase the risk of being cut, bruised, burned, stabbed, blinded, dismembered, disfigured and worse.”

In addition, slaughterhouse workers breathe air contaminated with airborne feces, E coli, campylobacter and listeria. Workers on factory farms endure similar subhuman working conditions and routinely develop sinusitis, chronic bronchitis and organic dust toxic syndrome. The book notes, “Factory farm workers are also exposed to infectious diseases such as anthrax, psittacosis, brucellosis, leptospirosis, swine influenza A, and avian influenza A, as well as several other diseases and conditions…”

Workers are not the only human health victims of the meat industry. Widespread use of antibiotics has created several antibiotic resistant bacteria, such as MRSA, which are in the beginning stages of causing pandemics among the general public in the US and around the world.

Environmental consequences

According to Williams and DeMello, “… animal agribusiness and its use of ever-increasing numbers of animals is among the most serious causes of environmental degradation.” U.S. factory farms produce more than 500 million tons of manure a year, waste that is hundreds of times stronger than untreated domestic sewage. Overgrazing is the leading cause of desertification, and subsequent loss of native plant species, in the U.S.

Factory farms growing animals account for more than 50% of all water use. In addition, manure spills contaminate our water supplies. “Each year, pollution from animal agriculture creates a ‘dead zone’ in the Gulf of Mexico, killing much of the marine life in an area the size of Massachusetts,” the authors report.

Data supporting humane change

In subsequent chapters, Why Animals Matter presents well documented, full treatments of other ways our capitalistic society subjugates and abuses animals. The authors show that hunting has very little to do with conservation; the fur industry subjects farm raised and trapped fur animals to ongoing pain and cruelty; animal laboratory research is more about big bucks than science; and zoos, rodeos, circuses and the TV/motion picture industry all victimize animals, though to differing extents. Nor is the pet industry exempt. Its powerful lobbyists make sure legislation favors profit over fair treatment of the very animals Americans hold most dear.

Each section of the book concludes with action steps readers can take to work against the vast market forces that see all animals as units to be sold for profit. For example, the chapter on the meat industry–while encouraging readers to adopt a meat-free diet–also offers the options of reducing meat and dairy consumption or limiting purchase to products from free range animals that have been raised and slaughtered humanely.

Excerpts about animal friends rescued from the factory farm, puppy mill, greyhound track and laboratory also inspire readers to make the world a better place for animals–and hence, a better world for humans, too.

Erin E. Williams and Margo DeMello, Why Animals Matter: The Case for Animal Protection, (Prometheus Books, 2007).

Study Finds that Media Elevates Business Perspectives over that of Workers

A new study by the Center for American Progress titled “Journalists Give Workers the Business: How the Mainstream Media Ignores Ordinary People in Economic News Coverage,” finds that the nation’s leading television news programs and newspapers consistently emphasize business perspectives over worker perspectives when reporting on economic issues. The study found that:

• Overall, representatives of business were quoted or cited nearly two-and-a-half times as frequently as were workers or their union representatives.
• In coverage of both the minimum wage and trade, the views of businesses were sourced more than one-and-a-half times as frequently as those of workers.
• In coverage about employment, businesses were quoted or cited over six times as frequently as were workers.
• On only one issue that we examined, credit card debt, was coverage more balanced, presenting the perspectives of ordinary citizens in the same pro- portion as those of business.