Bankruptcy

By Dave Lindorff

A few months ago, like many struggling Americans, I had my credit
line frozen at my local bank. I hadn’t done anything wrong, and have
always paid my monthly installment payment on time, but I learned from
a bank employee at the institution, which had once been a small
family-owned operation but had earlier this year been acquired by a
regional bank, that most of the bank’s home-equity lines of credit were
being similarly frozen and “reviewed” because the bank had lent a lot
of money to a housing development that was underwater and facing
bankruptcy. I was told I could simply apply for a new credit line, and
pay off the old one, but there was a hitch: I’d be paying almost 3%
more per month in interest than with the old loan.

By Dave Lindorff

It is refreshing to hear the new head of the AFL-CIO, former
mineworker and Mineworkers President Richard Trumka, get mad at
sell-out Democrats and make a threat not to “support” them next year.

As Trumka pointed out in a talk to the Center for American Progress
this week, for years, Democratic politicians, and the Democrats as a
Party, have counted on the labor movement to get out the vote of its
membership on Election Day, only to turn on workers after getting to
Washington, on the issues that really matter, like jobs-killing free
trade agreements, the gutting of bankruptcy law and credit law
protections, and, most recently, the undermining of needed labor law
reform.

Trumka, quoting from a famous Florence Reece mineworkers song popularized by Paul Robeson and Pete Seeger, said that going
forward, Democrats will have to make it clear to labor “Which side are
you on?”

By Dave Lindorff

The accounting profession might seem like the last place that you’d
find serious political hanky-panky going on, and it’s probably not on
very many people’s A-list of fun subjects to read about, but the
Financial Accounting Standards Board, a quasi-governmental body that
has statutory authority to regulate and establish the rules by which
public companies, including banks, do their books, has just caved in to
pressure from those banks and from the large number of members of
Congress who pocket huge piles of campaign swag and perks from those
banks and other public companies, and gravely undermined the integrity
of corporate balance sheets.

By Dave Lindorff

Wait a minute! Did I hear correctly? Did Treasury Secretary and
former New York Federal Reserve Bank screw-up Tim Geithner really tell
a House Financial Services Committee today that he needed “new powers”
to allow the federal government to take control of non-bank financial
corporations whose actions threaten the financial system or the economy
and “break them up”?

The subject under discussion at the hearing was AIG, and Geithner
and Fed Chairman Ben Bernanke, under attack for those AIG “bonus
payments” to executives, were trying to talk tough about the evil
insurance giant.

But aren’t the powers that Geithner is calling for exactly the
powers that he and Bernanke already have in the case of the banking
industry?

Yes they are.

By Dave Lindorff

Six months after the failed Bush administration effort to "rescue"
the US financial system, and after two months of failed efforts by his
own new administration, at an expense to the American public of several
trillion dollars and counting, the Obama administration is announcing
plans to blow another $1 trillion in a massive taxpayer giveaway to
investors who will be subsidized in an effort to get them to buy the
so-called toxic assets on the books of the nation's biggest banks.

The problem with this plan is that its goal--getting these zombie banks to start lending again--is not going to work.

By Dave Lindorff

It may not be obvious today, and certainly it’s not how the corporate media reported it, but future historians are likely to look back at March 13, 2009 as the day that American imperialism began it’s inexorable decline. That’s the day that Chinese Premier Wen Jiabao announced that his country was “worried” about its holdings of over $1 trillion in US treasury securities, and warned that he wanted the US to assure China that it would maintain its good credit and “honor its promises” and “maintain the safety of China’s assets.”

By Dave Lindorff

The futility and stupidity of the Fed’s and the Obama
administration’s policy of pumping ever more money into failing banks
and insurance companies in a vain effort to get them lending again was
demonstrated—if anyone was paying attention—by the collapse in auto
sales this past month, with all the leading companies, Ford, GM and
Toyota, reporting sales down by about 40%.

This fall off in car buying was despite record discounting by the auto industry, and offers of 0% financing.

Clearly, obtaining financing is not the reason people are not buying cars.

People are not buying cars because they are worried about having a job to enable them to pay back the loan.

By Dave Lindorff

Barack Obama’s first address to Congress provided Americans with
yet another example of competent speechmaking, and I suppose, given
that we’ve just endured eight painful years of oratorical farce, being
able to listen to your president without wincing is something.

The problem is that the way forward proposed by the president as
laid out in this address was almost always half-hearted, wrong-headed
or doomed.

Obama declared at the outset of his address that the economic
crisis was the major issue confronting the country, and while one could
argue that this crisis is merely a symptom of much bigger issues, like
the nearly completed deindustrialization of the nation, the death grip
of militarism, and the growing political power of corporations, one
could also concede that there is an urgent need to deal with the
deepening recession.

By Dave Lindorff

Now here’s a word you’re not hearing in America these days: anti-trust.

The country is being dragged down by monstrous businesses, all of
which, we’re told, are just “too big to fail.” As a consequence of
this, the nation’s taxpayers, and their progeny born and yet unborn,
are having trillions of dollars sucked away to prop up these giant
rotting corporate corpses.

Zombie banks, zombie automakers, zombie insurance companies, all bigger than nation states, and all on life-support.

There is a simple answer to this problem. Bust them up.

By Dave Lindorff

` We workers of America, white collar, pink collar, blue collar, and
no collar at all, have just gotten a wonderful example of the power of
having a union. It’s an example that should have every unorganized
employee in America looking for a union organizer.

With the recession deepening, it’s clear that major layoffs are in
store, and that employers are going to be putting the squeeze on
employees, even if they don’t drop them. Individually, workers have
little leverage in such a situation.