Earlier in December 2010, Robert Reich, former Labor Secretary under President Clinton and now Chancellor at University of California, Berkeley, Public Policy school, gave a talk to a Peter Drucker business organization in Pasadena, CA about his new book After-Shock: The Next Economy and America’s Future, Robert B. Reich, pages 146, Alfred A. Knopf, Sept 22, 2010, 7th Printing, Nov 2010. http://www.booktv.org/search.aspx?For=Reich Reich did a marvelous job answering many tough questions by this knowledgeable group.
Reich said that of his many books, this was the most difficult to write because he wanted to make it short to get a larger readership. He also did a wonderful job in making the index in Adam Smith’s Wealth of Nations useful and wrote an introduction to this edition. If only Republicans actually read and understood what Adam Smith really wrote in this book, we would not be having all the political debates about what Adam Smith said about capitalism.
I just started reading Reich’s After-Shock yesterday when I finally got a copy. Chapter 1, Eccles’s Insight describes the person who pushed President Franklin D. Roosevelt to stop continuing Hoover’s policies which made the Great Depression worse.
Of the thousands of books, The Great Depression: American, 1929-1941, by Robert S. McElvaine, 1984, 1993, is non-ideological, easy to read, is both a top down and bottom up book about this tragic and transforming era. Most books are top down and rarely discuss the effects the Great Depression had on the American people. The revised edition is essentially the same as the original with some updates. He also concluded that income inequality was the major cause of the Great Depression.
I did mention earlier that the major cause of the Great Depression was due to the great inequality in income where the top one percent had 23 percent of all income. That is the situation now! Because most of the profits are now being made by the Financial Segment which makes up 63% of our GDP, the increase in GDP does not include the job producing economy.
Robert Reich discusses the positive role that Marriner Eccles, who chaired the Federal Reserve during the Great Depression, was a devout Mormon and extraordinary “business tycoon director of railroad, hotel, and insurance companies, head of a bank holding company controlling twenty-six banks, and president of lumber, milk, sugar, and construction companies spanning the Rockies to the Sierra Nevadas.”
When the depression arrived Eccles said all the men he most respected said it will only be short in duration and when workers save their money and the banks stop giving out loans to preserve capital, we will grow out of it similar to what Republicans are pushing for and the European Union is following. The Great Depression only got worse.
Eccles realized it was not working starting really thinking about what really needs to be done instead of just repeating what happens in times of prosperity and income equality such as 1945 to 1970. He said why would any business want to invest money when the economy is so poor?
(It’s easier to borrow money from the Federal Reserve and then buy government bonds at higher interest rates! I cringe every time Obama says that Americans must save more when half of the Americans families earn $50,000 or less. Oregon has determined that a family of four with an income of $48,000, has to eat all their meals at home, never see a movie, and will never be able to save money. I also cringe when Obama says we must emphasize math and science to boost our economy. Why do this? We will just give away the new technology and jobs to China. Be honest, how many have the inclination or ability to do this? Jim)
Federal Reserve Chairman,Eccles, just like Obama and Bernanke, came to the conclusion that only the government can inject money into the economy. He proposed and Roosevelt finally accepted. In 1937 Roosevelt was forced to stop helping the economy and we fell back into a full Depression before World War II. As Santayana roughly said, “If we fail to know and understand history, we are bound the repeat the same mistakes.”
Eccles pointed out something that is largely not mentioned in our corporate controlled press and media is that … “men with great economic power had an undue influence in making the rules of the economic game, in shaping the actions of government that enforced those rules, and in conditioning the attitude taken by peoples as a whole toward those rules.”
Marriner Eccles concluded … “that I and everyone else had an equal right to share in the process by which economic rules are made and changed.” He concluded that the economic game is not being played on a level playing field.
By thinking out of the box using his logic and experience, Eccles proposed to Roosevelt some of the following: Relief for the Unemployed, government spending on public works, government refinancing of mortgages, a federal minimum wage, federally supported old-age pensions, and higher income taxes and inheritance taxes on the wealthy in order to control capital accumulations and avoid excessive speculation. Not until these recommendations were implemented, Eccles warned, could the economy be fully restored.”
Jim Kawakami, Jan 2, 2011, http://jimboguy.blogspot.com
Bank of American Most Shameless Corporate Outlaw, R.J. Eskow, AlterNet, Dec 31, 2010
Bankers. The red carpet's still being rolled out for them in Washington, but if there's a stain on it they'll pout for days. Jason Linkins documents the latest set of cheap white whines from very wealthy white men. (Discrimination lawsuits are a routine part of their legal troubles, too.) This time they're upset because nobody from the six largest banks in America was invited to the president's CEO Roundtable.
They're offended because they didn't meet with the president? From the looks of things they're lucky not to be meeting with the warden. Their collective rap sheet includes fraud, sex discrimination, collusion to bribe public officials... even laundering drug money for Mexican drug cartels. One of them is accused of ripping off some nuns! None of this criminal behavior has stopped them from sulking over a presidential slight. Let's review the record for these corporate malefactors, and then decide:
Which of these six banks was "America's Most Shameless Corporate Outlaw" in 2010? (I mean, really: Nuns?)
1. Bank of America
Here are some recent headlines for the country's largest bank: (BofA was taken over by a smaller bank in Charlotte, North Carolina so its degree of corruption may be related to the well known corruption pervasive in the South. Jim)
- "Arizona Wants Bank of America Held in Contempt"
- "Nevada, Arizona sue Bank of America over failed mortgage aid"
- "Allstate Sues Bank Of America For Selling 'Toxic' MBS"
- "Bank of America Hit With Missouri Class Action Over Loan Modifications"
Here are some of the details:
Associated Press: "Attorneys general in Arizona and Nevada filed civil lawsuits Friday against Bank of America Corp., alleging that the lender is misleading and deceiving homeowners who have tried to modify mortgages in two of the nation's most foreclosure-damaged states."
Courthouse News Service: "Bank of America violated a consent judgment it signed almost 2 years ago to provide loan modifications and help relocate borrowers, the Arizona attorney general claims ... Bank of America has continued to misrepresent 'to Arizona consumers whether they were eligible for modifications of their mortgage loans, when Bank of America would make a decision on their modification requests ... and whether and when Bank of America would foreclose upon their homes.'"
Consumer Affairs: "The bank is also facing at least three suits claiming that it reneged on duties it undertook by accepting $25 billion under the Troubled Asset Relief Program (TARP)."
In total, Bank of America's last annual report lists 29 pending lawsuits against the company. Lawsuits are not proof of guilt, of course. But the bank has already paid a fine for illegally concealing $6 billion in payouts to employees, and another fine for concealing major losses at its Merrill Lynch subsidiary. (Both fines were low - not much more than a slap on the wrist - because Bank of America was on taxpayer-funded life support at the time.) BofA also confessed to committing fraud as part of a settlement this month, which the Justice Department noted was restitution "for its participation in a conspiracy to rig bids in the municipal bond derivatives market." The Bank was also ordered to pay Lehman $590 million for illegally seizing its deposits, in violation of bankruptcy law. … http://www.alternet.org/story/149375/which_of_the_six_big_6_banking_houses_was_the_most_shameless_corporate_outlaw?page=entire