Monthly Archives: April 2013

Wall Street; the New Capitol of America

“It’s time we stop subsidizing risky Wall Street practices. We’ve seen how too big to fail is also too big to manage, too big to regulate, and too big to jail.” Sen. Sherrod Brown (D-OH) does not hesitate to make his feelings known when it comes to the monster banks on Wall Street. He is one of the loudest and most ardent supporters of Sen. Bernie Sanders (I-VT) new legislative proposal to break up these banks that gambled away our economic prosperity and sent ripples into the entire global economy.

Typically, I pay attention to Bernie Sanders for pure entertainment purposes only. He runs as an independent simply because there is not socialist party in America, so it is not often we see eye to eye on anything (in fact, this might be the first time), but I am all in with him on this one. Wall Street now runs America—unelected, private, for profit firms are calling the shots these days, and they do not answer to or care about anyone. Their checkbooks are their idol.

Unfortunately, Sen. Sanders’ proposal most likely headed to the same destination as gun control. There simply is not enough public support to make an honest man out of Congress, so Congress will keep their various financial mistresses until you and I demand the banks be held accountable.

Wait, this soap box rant sounds pretty anti-capitalist to me? Admittedly, it does, but I have not changed philosophies, a regulated capitalism is still the best economic system; I am just not sure we have that anymore. Breaking up the banks might be just what we need to reclaim it.

Wait, getting IN the way of free markets is how you reclaim capitalism? Ironic, I know, but my answer is emphatically YES! The problem is the markets are not really free anymore; we (rather, the government) sold our capitalist soul the day we bailed out Wall Street, then refused to even slap their wrists for what they did. Capitalism requires that you allow businesses to grow and fail based on their own merits, but we did not allow banks to fail, they have become too big for that. If they are too big to participate in our regulated capitalist economy that made us the greatest place to live in the world than they must be broken up to save that same regulated capitalism. Too big to fail is unacceptable; particularly when you and I will be punished for the misdeeds of these banks, which will then be bailed out by our tax dollars. Does that sound like capitalism to you?

So…the bailout was years ago; why are you suddenly so vocal about breaking up the banks? Simple. Because not only has this administration flat out refused to hold the banks accountable for what they have done, but now the administration is on record, through the voice of Attorney General Eric Holder, stating that the banks have become too big to prosecute for their crimes.

In a political system where money has become the determining factor in most elections, the center of the financial world becomes the political Mecca. Between political parties and special interests the Capitol Rotunda is beginning to resemble a puppets stage. If you have always found it a bit fishy that not a single Wall Street executive has had so much as an accusation thrown at them by law enforcement, your answer lies inside the beltway. Political parties are a separate bone to pick altogether, but last I checked there were five, yes, 5 Wall Street lobbyists for every member of Congress.

Wall Street spends about $1billion every election cycle to try to ensure the next Congress will be as banker friendly as possible. Why? So the government will turn a blind eye to their white collar crime. J.P. Morgan himself stated that if Americans knew how the banking system worked they would rise up in revolution. If any Congressman or Congresswoman becomes a threat to Wall Street, Wall Street will spend like crazy to get a new representative in that office. This is why monster banks have recently been funneling the larger part of their campaign contributions toward Republicans. With Occupy Wall Street and too big to fail becoming dinner table conversation topics, Democrats seem to be more of a threat.

Republicans fight the breakup of big banks, claiming that they are defending capitalism; they just fail to explain what part of capitalism there is to defend? If they hate wasteful spending and excess taxes as much as they say they do during election season, is there any better way to attack both then to ensure there will never again be a tax payer funded multi trillion dollar bailout of private financial firms with the sole purpose of making money? Republicans are not alone. President Obama has also been seduced by Wall Street harlotry every bit as much.th

Though he promised he would fight for the middle class he has done no such thing. The youth and minority populations still face staggering unemployment rates, the average income has dropped, and healthcare premiums are growing faster than ever. On the other hand, Wall Street and big banks have hardly seen a more prosperous time. The banks that we bailed out are now bigger–by translation that should probably read riskier–than ever, their profits are at an all-time high, and bonuses been large enough to purchase small sovereign nations. So pleased is Wall Street with the performance of President Obama that at one point 1/3 of his campaign contributions came from the monster banks. How is any of that working for the middle class? President Obama has adulterated his principals, and played in favor of the big banks.

He has also let the banks get away with economic murder. As the head of the executive branch, and thereby the justice department, it is up to him to demand punishments for Wall Street. Instead, he has de facto pardoned them, sending the signal to these spoiled children that their actions are not just acceptable, but encouraged. I mean that literally–President Obama is telling banks to begin engaging in the same high risk lending that led to the meltdown.

How is it that high government officials can serve prison time over the Watergate scandal, but not a single high Wall Street executive has served time–much less, been charged with a crime– for what they have done? But we have seen exactly the opposite; instead, a government official who should be prosecuting the banks for their crimes leave to be hired to defend them from their crimes. This is not a free market; Wall Street is running an autocratic market. It is time to reclaim our own economy. We need to break up the biggest banks.

Dismantling to the point of nonexistence is not what needs to be done. Banks are needed, and often serve a useful purpose. What needs to be done is to divide these banks into several independent branches small enough to be accountable for their own actions. A tax payer funded bailout is the only reason many of these banks still operate today, this is more than enough justification to introduce a tax payer protective breakup. These monster banks grew because we supported them in their malpractice; this means in every sense of the word that we are their creditors. Now it is time to settle the books.

Thankfully the founding fathers had the foresight to create three branches of government. If the President will not execute his office we can only hope Congress will execute theirs. Sen. Sanders’ bill may not have everything right, but it is better than nothing. We cannot have banks betting on house money; we must keep our capitalist society breathing. Too big to fail is not acceptable. These monster banks must be cut down to size.

–Matt Young

8 April 2013

Advertisements

Does Obama Care?

It is a legitimate question. Now that Obamacare is three years old we can take some time to reflect on how it has unfolded. Obamacare was initially a derogatory term used by Republicans to insult the program, but during the Presidential campaign the president accepted the term as his own. He was proud of it and pleased with it, saying “I have no problem with people saying Obama cares. I do care”. But does he?

Someone who cares would clearly want what is most beneficial for those they were elected to serve. Someone who cares would make public welfare a higher priority than personal merit. The failures of Obamacare are in plain sight. So many promises have been broken, and so little benefit has come from the law, that it is time to really ask: does Obama care?Obamacare-tax

President Obama promised he would fight for the middle class; he promised he would not raise taxes on the middle class; he promised he would take care of the middle class. Obamacare does the opposite of these. In fighting for Obamacare President Obama raised taxes on the middle class by $1 trillion. Many of these taxes directly pass on the cost to patients, increasing the cost of healthcare.

President Obama promised that if you like your healthcare plan you will be able to keep it.

“If you like your doctor, you will be able to keep your doctor, period. If you like your health care plan, you’ll be able to keep your health care plan, period. No one will take it away, no matter what. My view is that health care reform should be guided by a simple principle: Fix what’s broken and build on what works. And that’s what we intend to do.”
 

                Sound familiar? Instead, the Department of Health and Human Services tells us that may not be the case; in fact, estimates are as high as seven million for people who will have to find new healthcare plans. The cost of providing insurance to an employee is much higher than the fine levied for not providing it. Many employers are also laying workers off, or reducing them to part time hours in order to avoid the penalty at all. This will push many more people on to the expanding Medicaid system, which, in some states is so crowded already that it is difficult to find quality or timely healthcare.

Employers who can afford to offer the care for their employees may be in shock before too long. We are already learning that there will be a 32% increase in the cost of claims for employers. This is going to have a significant impact on business revenue. Consider this: the cut off for employer mandates under Obamacare is 50 employees. There are now two and a half times as many businesses with 49 employees than there are with 50. If this were not enough the government tried to remedy these problems and only made matters worse.

The Obamacare law states that “affordable” healthcare coverage from an employer must not exceed 9.5% of the annual household income of the worker; however, it has been decided that 9.5% will apply only to the employee, and not to their spouse or dependents. This means Obamacare still classifies a family spending 30% or more on healthcare as affordable, as long as the primary policy holder does not spend more than 9.5%. The Obamacare system places the burden of the costs on the shoulders of the employers and families: costs that keep increasing.

We were promised that Obamacare would not add a penny to the national debt. Earlier this year the Government Accountability Office released their estimate that Obamacare would add $6.2 trillion to the long term deficit.th

The pinnacle of promises may have crested on the fib that health care premiums would decrease $2,500 per year if Obamacare passed. In the two year period from 2010 to 2012 the average healthcare premium increased $3,000 per year; a difference of $5,500 in extra costs to you and me from the promise made by President Obama. The worst part is that experts expect costs to continue to rise.

The only solution offered by Obamacare to any of these broken promises is the expansion of Medicaid. Millions of Americans will take the risk of waiting too long for insufficient care. Many states’ Medicaid systems function very well, but if you cannot afford healthcare, or your employer is cutting you to part time hours hopefully your state is one of these. To the Americans not so fortunate Obamacare offers the following sympathy: “good luck”.

Remember when President Obama promised this would insure 50 million Americans currently without insurance? All these broken promises result in only 20 million more insured Americans–many of whom qualified for insurance before Obamacare but chose not to have it.

So again, I ask the question: does Obama really care? Maybe he does, just not about you and me. To keep this law in place with so many broken promises and so much lack of fulfillment shows that he cares more about his crowning legislative achievement than he does about those who elected him. If this is not the case I call on him to prove he does care, admit he was wrong, and repeal this law. Doing so would be the mark of a great President.

 

–Matt Young

2 April, 2013

%d bloggers like this: