News Articles By Mary Bottari
The long-anticipated debate on financial services reform was scheduled to begin on the House floor yesterday. But in a bad sign for reformers, conservative Democrats managed to wring damaging concessions out of House leadership before the debate even began.
There was some good news out of Washington yesterday for a change. The President hosted a high-profile summit on jobs and Congress started work on a Wall Street speculation tax to help pay for a new jobs bill.
Led by Oregon Representative Pete DeFazio and Iowa Senator Tom Harkin, a group of lawmakers introduced a measure sure to drive Wall Street crazy.
Today, the Obama administration announced that it is stepping up efforts to pressure mortgage companies and banks to reduce payments for homeowners facing foreclosure.
As double digit unemployment becomes the major driver of foreclosures and as the vast majority of adjustable rate mortgages have yet to trigger, the White House is finally getting the message that news footage of families being tossed to the curb during the holiday season will not help Democrats going into the 2010 election cycle.
America’s financial sector has blown a hole in the economy so large that it will take many years to repair. The formal unemployment rate is above 10 percent and underemployment is an astonishing 17.5 percent. Yet last week, Bloomberg News calculated that the top three bailed-out Wall Street firms are on track to pay $30 billion in bonuses to their top officers this year and the Wall Street Journal estimated that the bonus pool for the financial sector as a whole is $140 billion.
Taxpayers have done their share. They have put trillions of dollars at risk in an effort to stabilize the financial system and have gotten little in return. Too many banks are not lending to small businesses, they are not helping American families facing foreclosure, but they are raising credit card and other bank fees at a rapid clip.
While many have been starkly critical of bank performance, yesterday criticism came from a new source, the Chairman of the Federal Reserve.
Thursday, November 12th marks the ten year anniversary of the repeal of the depression-era Glass-Steagall Act that protected consumers from casino-style gambling on Wall Street and prevented significant financial crises for almost 60 years. As Congress took up a series of bills this fall to restore confidence in the financial sector, notably lacking were any bills to break up the big banks and restore Glass-Steagall protections.
U.S. Treasury Secretary Timothy Geithner has trouble understanding that the core responsibility of any federal official is to be thrifty with taxpayer dollars. This has been confirmed with new revelations from Bloomberg about Geithner's role in the secret AIG-Goldman bailout.
With the newspapers full of talk about "zombie" banks and parasitic "vampire squid" financial institutions, it was particularly fitting that the "Showdown in Chicago" started with a ghoulish group of zombies rocking out to Michael Jackson's "Thriller." Chicago's own South Shore Drill Team opened the three days of banks protests with a bang and had the crowd of thousands of activists dancing in no time.
The Showdown promises to be the first major American protest against the banks since the financial meltdown in September 2008. Thousands are expected to join three days of educational activities and the large march on Tuesday to the American Bankers Association (ABA) convention at the downtown Sheraton hotel.