THE BANKSTERS’ RENT BOYS &
GIRLS IN CONGRESS GATHER ROUND TO UNLEASH THE WHOLESALE LOOTING OF THEIR BANKSTER
PAYMASTERS EVEN MORE….
BOTTOMLESS BAILOUTS AROUND THE CORNER WAITING!
After eight years of the
Dodd-Frank bank “reform,” the American financial oligarchy exercises its
dictatorship over society and the government more firmly than ever. This
unaccountable elite will not tolerate even the most minimal limits on its
ability to plunder the economy for its own personal gain.
This was not because of
difficulties in securing indictments or convictions. On the contrary, Attorney
General Eric Holder told a Senate committee in March of 2013 that the Obama
administration chose not to prosecute the big banks or their CEOs because to do
so might “have a negative impact on the national economy.”
Tax cuts boost US bank profits to record highs
By Trévon Austin
30 August 2018
On August 23, the Federal Deposit Insurance Corporation (FDIC) reported that US commercial banks and savings institutions brought in a record $60.1 billion in profits in the second quarter of this year. The sum easily surpassed the $56 billion in bank profits in the first quarter and was up $12.1 billion, or 25.1 percent, from the second quarter of 2017.
In a statement, the American Bankers Association said the “real driver of earnings” last quarter was strong lending, though the group also credited tax “reform,” deregulation and the strength of the economy.
The FDIC, however, acknowledged that the Trump administration’s $1.5 trillion tax cut, which dramatically lowered the corporate rate, was largely responsible for the increase in profits. A secondary factor, it said, was the rise in interest rates. The Federal Reserve has raised interest rates twice this year and is expected to raise them again once or twice before the end of the year.
The vast bulk of the profit increase is occurring at the larger banks rather than the so-called “community banks.” Of the 5,542 insured institutions, some 5,111 are currently counted as community banks. This much larger group saw its net income rise by about $1.1 billion from a year ago, or 21.1 percent, to $6.5 billion in the second quarter. This means that the larger banks, about 1 percent of the total, took in almost 90 percent of the total profit.
The profit surge was also propelled by stock buybacks and the weakening of rules on bank speculation. In June, the Federal Reserve loosened restrictions on high-risk trading conducted by the major banks after intensive pressure by Wall Street and the Trump administration. The change effectively released banks from restrictions on the kind of speculation that led to the 2008 financial crisis.
US corporations are on track to spend a record $1 trillion to buy back their own stock in 2018. This completely parasitic practice diverts capital from useful production and the provision of jobs to pushing up stock prices, which overwhelmingly benefits the richest 5 percent of the population, including corporate CEOs and big investors.
Banks and corporations are channeling the bulk of their savings from the tax cuts into stock buybacks, dividend increases and mergers and acquisitions. Second quarter share repurchases are up 57 percent from the same period a year earlier. In the tech sector, the year-over-year increase is 130 percent.
The parasitic growth on Wall Street is accompanied by the continuing decline in the social position of the working class. Even though the official unemployment rate, at 3.9 percent, is the lowest in nearly two decades, real wages remain stagnant and are beginning to decline due to rising inflation.
The suppression of wages is a conscious strategy that makes the vast inflation of stocks and other financial assets possible. The average compensation of American CEOs has grown by 71.7 percent since 2009, while compensation for the average worker has grown only 2.1 percent over the same period.
The trade unions have played a critical role in facilitating this vast redistribution of wealth from the bottom to the top. For decades they have suppressed strikes and other forms of working class resistance, stepping up their role as industrial police since the Wall Street crash of 2008. As a result, the level of strike activity in recent years has fallen to the lowest level since records began in 1947.
This year has seen a marked growth of strikes due to increased anger and militancy among workers, not because of any shift in the pro-corporate policies of the unions. The wave of teachers’ strikes earlier this year was the result of rank-and-file initiatives carried out largely in defiance of the teachers’ unions. The unions scrambled to gain control of the walkouts in West Virginia, Oklahoma and Arizona in order to isolate them and sell them out.
Labor’s share of national wealth in the US has fallen from 66.4 percent in 2000 to 58.9 percent in 2018, a transfer of wealth worth $1.4 trillion this year alone.
As US banks report record profits
Regulators, Congress move to
end all restraints on Wall Street speculation
By Barry Grey
23 May 2018
On Tuesday, the US
House of Representatives passed a bill to exempt the vast majority of financial
firms from the Dodd-Frank bank regulations passed after the 2008 Wall Street
crash. This coincided with press reports that the Federal Reserve Board and
other bank regulators will announce as soon as next week proposals to gut the
provision of Dodd-Frank most hated by Wall Street—the so-called “Volcker Rule.”
The accelerating
offensive against even the most minimal restrictions on financial speculation
takes place in the context of surging bank profits and CEO pay. On Tuesday, the
Federal Deposit Insurance Corporation, one of the agencies that is preparing to
eviscerate the Volcker Rule, reported that US banks recorded record profits of
$56 billion in the first quarter of 2018, a 28 percent increase over the same
period last year.
As the tenth
anniversary of the September 2008 Wall Street crash approaches, the token
restrictions on the banks that were passed during the Obama administration are
being dismantled. These minimal measures, including increased capital reserve
requirements, annual “stress tests” and limited restrictions on risky
derivative trading, were mainly enacted to provide political cover for the
administration’s multi-trillion-dollar bailout of the financial institutions
responsible for the wholesale destruction of jobs, millions of home
foreclosures and the wiping out of retirement savings.
After eight years of
the Dodd-Frank bank “reform,” the American financial oligarchy exercises its
dictatorship over society and the government more firmly than ever. This
unaccountable elite will not tolerate even the most minimal limits on its
ability to plunder the economy for its own personal gain.
The Volcker Rule,
named after the former chairman of the Federal Reserve Board Paul Volcker, was
included in the 2010 Dodd-Frank act but not drafted and approved by the regulatory
agencies until 2013. It took effect only in 2015.
The rule ostensibly
bars commercial banks, which benefit from federally guaranteed retail deposits
and other government backstops, from speculating with bank funds, including
customers’ deposits, on their own account—a practice known as proprietary
trading. However, the rule incorporates huge loopholes allowing banks to
speculate with their own funds under cover of hedging their investments and
providing liquidity to the financial markets.
At the time of its adoption, the Wall Street Journal cynically but accurately
wrote: “Rest assured banks will find loopholes. And rest assured some of the
Volcker rule-writers will find private job opportunities to help with that
loophole search once they decide to lay down the burdens of government
service.”
No banks have been
cited for violating the rule since it took effect.
Nevertheless, top
Wall Street CEOs such as JPMorgan’s Jamie Dimon and Goldman Sachs’ Lloyd
Blankfein have campaigned ferociously against the measure, denouncing it as an
arbitrary restriction on the financial markets and an impediment to economic
growth. Wall Street lobbyists have spent many millions of dollars bribing
politicians of both parties to weaken the rule to the point of complete irrelevance.
In a speech to
international bankers in March, Randal Quarles, the Fed’s new vice chairman for
supervision, said, “We want banks to be able to engage in market making and
provide liquidity to financial markets with less fasting and prayer about their
compliance with the Volcker Rule.”
The plan is to make
the rule a dead letter through administrative changes in the language of the
regulation rather than by means of legislation. At the behest of the major
banks, federal regulators are preparing to widen even further the existing
loopholes, allowing the banks to carry out short-term trades with their own
funds and amass more speculative assets in the name of “market-making.” They
will also end requirements that the banks provide documentation to prove that
their activities comply with the rule, relying instead on assurances from the
bankers.
The banking bill
passed by the House on Tuesday increases the Dodd-Frank asset threshold for
financial firms to be considered “systemically important financial institutions,”
and thus subject to tighter regulatory oversight, from $50 billion to $250
billion. This is being presented by Democratic as well as Republican backers as
a matter of fairness to small and midsize banks. In fact, the exemption covers
such giant companies as American Express, SunTrust Banks and Fifth Third Bank.
These companies will
no longer be subject to yearly Federal Reserve “stress tests” or higher capital
reserve requirements. The bill also exempts banks with less than $10 billion in
assets from the Volcker Rule and exempts banks that have granted fewer than 500
mortgages from reporting requirements.
Thirty-five House
Democrats joined all but one of the House Republicans to pass the measure,
which now goes to President Trump, who has pledged to sign it. The Senate
version was passed in March with broad Democratic support, including 11
Democratic co-sponsors. A total of 17 Senate Democrats voted for the bill.
Another aspect of the
attack on Dodd-Frank is the strangulation of the Consumer Financial Protection
Bureau (CFPB). This agency, lacking any serious enforcement powers and fully
subordinate to the Federal Reserve, was set up under Obama-era legislation to
give the impression of government support for consumers victimized by illegal
or fraudulent banking practices. Despite its toothless character, it was
immediately targeted by Wall Street for destruction.
Under Trump, this
process is now well underway. The White House pressured the Obama holdover
Richard Cordray to resign as director of the CFPB and installed Mick Mulvaney,
Trump’s budget director, as acting head of the bureau to oversee its
dismantling. Mulvaney has halted investigations, imposed a hiring freeze,
stopped the agency from collecting certain data from banks and proposed cutting
off public access to a database of consumer complaints.
Despite
for-the-record verbal protests by Democratic politicians over the gutting of
bank regulations, the removal of restrictions on financial institutions is a
bipartisan policy. Trump’s scorched earth approach is an intensification of the
basic line of the Obama administration rather than a departure from it.
In 2011, the Senate
Permanent Subcommittee on Investigations produced a 650-page report on the
financial crisis documenting in detail the fraudulent and illegal activities of
the major Wall Street banks, aided by corrupt and compliant federal regulatory
agencies and credit rating firms that had a vested interest in promoting the
banks’ subprime mortgage fraud and other swindles. At the time, the chairman of
the subcommittee, Michigan Senator Carl Levin, gave a press conference at which
he said the investigation had found “a financial snake pit rife with greed,
conflicts of interest and wrongdoing.”
Nevertheless, Obama
pursued a deliberate policy of shielding the big banks and their top executives
from criminal prosecution. Financial speculation and fraud continued unabated,
subsidized by the government’s policy of supplying the banks with virtually
free credit by means of near-zero interest rates and the Fed’s money-printing
“quantitative easing” program.
Despite a wave of
scandals, including the manipulation of the key Libor interest rate, JPMorgan’s
$6.2 billion “London Whale” derivative loss, money-laundering cases involving
some of the world’s biggest banks, and the forging of documents to facilitate
home foreclosures, not a single leading banker was criminally charged, let
alone jailed during the Obama years.
This was not because
of difficulties in securing indictments or convictions. On the contrary,
Attorney General Eric Holder told a Senate committee in March of 2013 that the
Obama administration chose not to prosecute the big banks or their CEOs because
to do so might “have a negative impact on the national economy.”
Meanwhile, government
policies favored the further consolidation of financial institutions, including
JPMorgan’s subsidized takeover of Bear Stearns and Washington Mutual, Bank of
America’s acquisition of Merrill Lynch, and Wells Fargo’s absorption of
Wachovia. As a result, the stranglehold of a handful of megabanks over economic
and social life in America is tighter than ever.
WeHo rejects Wells Fargo in 3-2 vote
https://beverlypress.com/2018/08/weho-rejects-wells-fargo-in-3-2-vote/
Responding
to the controversy surrounding Wells Fargo, including its account-opening
scandal and funding of the Dakota Access Pipeline, the West Hollywood City
Council issued a request for proposal in February to perhaps find another bank
to handle the city’s finances.
With
selection criteria approved by the council that emphasized social
responsibility, Wells Fargo applied and emerged as the frontrunner in a field
that included U.S. Bank, Union Bank and Bank of the West.
But in a
3-2 vote at its Aug. 20 meeting, the City Council decided against city staff’s
recommendation to continue with Wells Fargo.
City
Manager Paul Arevalo said the city can contract with one of the other banks
that applied, or start the process over with a new request for proposal. It
would take nine to 12 months for the city to transition to a new bank, he
added. The city’s current contract with Wells Fargo expires in March.
Opening
accounts on behalf of customers without their knowledge, financial ties to
President Trump and its financing of the Dakota Access Pipeline were among the
reasons the City Council undertook the process. More recently, Wells Fargo has
been accused by the city of Sacramento of illegal lending in minority and
low-income communities, and it was fined $1 billion for car insurance and
mortgage abuses.
“It seems
like every week there’s something else that comes out in the news,” said
Councilwoman Lauren Meister, who voted no.
Mayor Pro
Tempore John D’Amico and Councilwoman Lindsey Horvath also voted no.
Multiple
cities, including Los Angeles, joined the movement to divest from Wells Fargo
that started two years ago. Seattle, like West Hollywood, wanted to look for
other banks that better reflected the city’s values. But the city of Seattle
re-upped with Wells Fargo a few months ago after it couldn’t find any other
viable options.
With
similar concerns, Councilman John Heilman voted in favor of West Hollywood
continuing with Wells Fargo. The selection process may have revealed that Wells
Fargo is the best bank to handle the city’s financial needs, he said, and it’s
unclear if a prolonged search will attract better options.
All four
banks that applied invested in the Dakota Access Pipeline, and all lost points
in the city’s social responsibility criteria for reasons including investment
in fossil fuel and ties to private prisons.
Representatives
from Wells Fargo said they’ve been working to rebuild trust in the community.
Other Wells Fargo proponents in West Hollywood noted that the bank has a long
history supporting LGBT causes. Richard Ayoub, executive director of Project
Angel Food, which provides meals to people with HIV and other illnesses, said
Wells Fargo is the “most generous corporate partner in our history.” Alan
Acosta, director of strategic initiatives at the Los Angeles LGBT Center, said
“there’s not another financial institution in the world” that has supported the
LGBT community the way Wells Fargo has.
“The
center believes that corporations have a responsibility to lead in the arena of
civil rights, including LGBTQ civil rights, and in helping to improve community
health,” he said, speaking on behalf of the center’s CEO, Lorri L. Jean. “Few
corporations do so. Wells Fargo has been a pioneer in this regard, and this
commitment has earned our continued support and loyalty, even if they might
occasionally falter.”
Mayor John
Duran, who has defended Wells Fargo and its support of the LGBT community
throughout the process, echoed the sentiment.
“Wells
Fargo has been the only bank, for so long, that has stepped up to the level
that I wish all banks would,” he said. “And not just on LGBT.”
But other
council members said their decision should have no bearing on whether the bank
continues to support LGBT causes.
“It
shouldn’t,” D’Amico said. “If it does, then our cynicism is well placed.”
D’Amico
and Duran, members of the council’s Finance and Budget Subcommittee, will
consider the city’s next steps to secure banking services.
"Particularly since the 2008 economic crisis, the ruling class
and its two parties have slashed social spending while
cutting taxes for corporations and the rich."
"Between 2005 and 2015, the
total payroll
cost for the top 10 percent of UC wages grew
from 22 to 31
percent, while that of the bottom
50 percent dropped from 24 to 22 percent."
More than 50,000 UC workers on
strike
For a political movement of the entire working class against
inequality and capitalism!
By David Moore
9 May 2018
David Moore is
the Socialist Equality Party’s candidate for senate in the California June 5 mid-term
elections. You can find out more and get involved in the campaign at socialequality.com/2018.
Tens of
thousands of service workers at the University of California (UC) are
concluding their three-day strike against deteriorating pay and conditions
today.
The
widespread support for the strike of services workers, including from nurses
and technical workers who have engaged in sympathy strikes, is part of a
growing wave of opposition from workers throughout the United States and
internationally. However, the unions involved have worked to limit and contain
the struggle and ensure its defeat.
In April,
the UC system unilaterally imposed a contract on service workers that increased
the retirement age by five years, included a paltry two percent wage increase,
and allowed the university to outsource more jobs as well as raise health care
premiums.
The UC
system is the state’s third largest employer, and the conditions there are
immediately familiar to workers across the country. Just in the past two months
there have been strikes of public school teachers and support staff in West
Virginia, Oklahoma and Arizona.
In each of
these strikes, the role of the unions—the American Federation of Teachers and
the National Education Association—was to smother opposition and shut it
down. The strikes were not initiated by the unions, but by
rank-and-file teachers. The unions intervened to end the strikes and prevent
them from developing into a nationwide movement against the Democratic and
Republican parties and the capitalist system.
The teachers
unions were operating under the principle articulated by a lawyer for the
American Federation of State, County and Municipal Employees (AFSCME) in the
pending case of Janus vs. AFSCME on
union agency fees: “Union security is the tradeoff for no strikes.” The AFSMCE
lawyer was telling the high court justices: You need us, because without us
there will be “an untold specter of labor unrest throughout the country.”
The main
union involved in the UC strike is AFSCME, and it—along with the University
Professional and Technical Employees and California Nurses Association—is
putting this statement into practice. The three-day strike is intended to let
off steam, while doing nothing to resolve the conditions facing service and
other workers in the UC system.
AFSCME has a
long history of calling short-term strikes and making empty strike threats to
demoralize members and force through sellout contracts. In 2014, it cancelled
planned strikes of two different sections of workers and imposed contracts that
included increases in pension contributions from workers. In this strike,
AFSCME is seeking to block widespread opposition to the bipartisan attack on
public education and workers compensation by focusing almost entirely on racial
and gender pay discrepancies that they claim can be fixed at the university
level.
The unions
want to prevent any discussion of the political background to the conditions
facing UC workers. Particularly since the 2008 economic crisis, the
ruling class and its two parties have slashed social spending while cutting
taxes for corporations and the rich.
BLOG: CA
IS A STATE THAT HANDS OUT $30 BILLION FOR SOCIAL SERVICES AND WELFARE FOR
ILLEGALS BUT CUTS EVERYTHING HAVING TO DO WITH LEGALS!
Within
California, the UC system’s budget has been cut by Democratic Governor Jerry
Brown and the former Republican Governor Schwarzenegger.
In 2017
the state of California provided nearly two-thirds less in per pupil funding
than it did in 1990, from $19,100 down to $7,160, after inflation. State
funding now only accounts for roughly 10 percent of the UC budget. More than
three times that amount comes from UC-run medical centers.
Those cuts
have increasingly shaped every aspect of work and study in the UC system.
Custodians, groundskeepers and office staff workers are overworked, and their
departments are understaffed. University lecturers find
themselves on food stamps with no prospect of advancement. Students have seen
their tuition and debts soar.
As part of
the UC’s transformation from being funded by the state to making profits from
medical and research businesses, well-heeled administrators were brought
in. Between 2005 and 2015, the total payroll cost for the top 10
percent of UC wages grew from 22 to 31 percent, while that of the bottom 50
percent dropped from 24 to 22 percent.
UC workers
in the medical centers are doubly squeezed by the attacks on health care that
were carried out under the Affordable Care Act (ACA), or Obamacare. Hailed by
the unions and Democrats as a great reform, the ACA has provided record profits
to insurance companies while forcing low-income workers to ration their care in
overpriced plans with prohibitively high deductibles and co-pays.
Within the
medical centers and hospitals, health care workers have been subjected to
particularly sharp understaffing and speedup.
These
attacks on the working class have been combined with tax breaks, bailouts and
giveaways to the ultra-rich. Nationwide, the three richest billionaires have as
much wealth as the poorest half of Americans combined. This immense social gulf
grew precipitously under the Obama administration and continues to accelerate
with the Trump tax cuts.
BLOG: THE
ENTIRE REASON FOR OPEN BORDERS IS TO KEEP WAGES DEPRESSED. THERE IS NO
BILLIONAIRE THAT DOES NOT PUSH FOR WIDER OPEN BORDERS, AMNESTY and NO E-VERIFY!
Both parties
of big business have worked closely to funnel money from the working class to
the rich. While being run by Democrats from top to bottom, California has
grown to be the fourth most unequal state in the US, with the largest number of
billionaires and the largest homeless population. When the
cost of living is taken into account, California has the highest poverty rate
in the country, at just over 20 percent.
The unions
promote the lie that Democrats are allies of workers. Yet the Democrats voted
for a record $700 billion military budget, found room in the budget for Trump’s
border wall and bailed out the banks in 2008, but claim there is no money for
education, health care and retirement.
The
three-day strike will resolve nothing. I call on UC workers to form
rank-and-file committees, independent of the unions, to unite their fight for
wages and benefits with the struggles of the entire working class against
inequality and war. The conditions facing striking workers are the same as
those facing teachers, auto workers, Amazon workers, telecommunication workers,
and all sections of the working class—in the United States and internationally.
The building
of rank-and-file factory and workplace committees must be connected to a
political counteroffensive against the two big-business parties and the entire
capitalist system. The resources exist to ensure everyone the right to a
high-paying job, quality health care and a secure retirement. The problem is
capitalism, a social and economic system based on the exploitation of the
working class to secure the profits of the ruling class.
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