Goldman (Government) Sachs and Banks Own The US Government?

I used to just love reading what Ralph Nader had to say (not to mention seeing him personally proclaim what he believed) about the ridiculous scenarios in Congress that we were being asked to believe in the USA everyday. He's still the best read on just about anything you actually care about today. Dean Baker takes up where Ralph leaves off.

These lawmakers—Democrats all, who are the majority in Congress and who agree with these questioners—keep saying “It’s not going to happen” or “It’s not practical.”

“It’s just not practical” to provide a federal minimum wage equal to that in 1968, inflation adjusted, which would be $10 an hour.

“It’s not going to happen” to get comprehensive corporate reform at a time when a corporate crime wave, and the Wall Street multi-trillion dollar collapse on Washington, on taxpayers and on the economy is tearing this country apart. A little regulatory tinkering is all citizens are told to expect.

“It’s just not practical” to give workers, consumers and taxpayers simple facilities for banding together in associations with their own voluntary dues to defend these interests in the corporate occupied territory known as Washington, D.C.

. . . Why isn’t a simpler and more efficient carbon tax more “practical” than the complex corruption-prone, corporatized cap and trade deal driven by Goldman Sachs and favored by most Democrats? The avaricious tax cuts for the super-wealthy are still there.

The statutory ban on Uncle Sam negotiating volume discounts on medicines purchased by the federal government are still there. Taking the huge budgets for the Bush wars in Iraq and Afghanistan off their annual fast track, and putting them a meaningful House and Senate Appropriations Committee hearing process has not happened.

Face it, America. You are a corporate-controlled country with the symbols of democracy in the constitution and statutes just that—symbols of what the founding fathers believed or hoped would be reality.

Even when the global corporate giants come to Washington dripping with crime, greed, speculation and cover-ups, and demand gigantic bailouts on the backs of taxpayers and their children, neither the Republicans nor the now majority Democrats are willing to face them down.

The best of America started with our forebears who faced down those who told them “it’s not going to happen,” or “it’s not practical” to abolish slavery, give women the right to vote, elevate the conditions of workers and farmers, provide social security and medicare, make the air and water less polluted and so on. These pioneers, with grit and persistence, told their members of Congress and Presidents—“It is going to happen.”

To paraphrase the words of a great man, the late Reverend William Sloan Coffin, it is as if those legendary stalwarts from our past, knowing how much more there is to achieve a practical, just society, are calling out to us, the people today, and saying “get it done, get it done!”

Dean Baker answers the obvious questions we have after considering Nader's thesis. (Emphasis marks added - Ed.)

Banks Own The US Government There are smart ways to raise money and regulate the market, but Wall Street is working to kill any meaningful financial reform. Last month, when the US Congress failed to pass a bankruptcy reform measure that would have allowed home mortgages to be modified in bankruptcy, Senator Dick Durbin succinctly commented: "The banks own the place." That seems pretty clear.

After all, it was the banks' greed that fed the housing bubble with loony loans that were guaranteed to go bad. Of course the finance guys also made a fortune guaranteeing the loans that were guaranteed to go bad (i.e., AIG), and when everything went bust, the taxpayers got handed the bill. The cost of the bailout will certainly be in the hundreds of billions, if not more than $1 trillion when it is all over. More importantly, we are looking at the most severe economic downturn since the Great Depression.

The cumulative lost output over the years 2008-2012 will almost certainly exceed $5 trillion. That comes to more than $60,000 for an average family of four. This is the price that we are paying for the bankers' greed, coupled with incredible incompetence and/or corruption from our regulators. Under these circumstances, it would be reasonable to think that the bankers would be keeping a low profile for a while. That's not the way it works in Washington. The banks are aggressively pushing their case in Congress and Obama administration. Not only are we not going to see bankruptcy reform, but any financial reform package that gets through Congress will probably contain enough loopholes that it will be almost useless. In this political environment, the poor might get empathy, but Wall Street gets money, and lots of it. Even when the issue is global warming Wall Street has its hand out. The fees on trading carbon permits could run into the hundreds of billions of dollars in coming decades. A simple carbon tax would have been far more efficient, but efficiency is not the most important value when it comes to making Wall Street richer. This is why it was so encouraging to see congressman Peter DeFazio's proposal to tax trades in oil options and futures. DeFazio proposed a tax of 0.02% on trades in oil futures and options as a way to make up a shortfall in the federal government's highway trust fund. This tax could raise billions of dollars each year in revenue and make speculation in the oil market a more dangerous affair. The logic is very simple. For someone using these markets to hedge, the tax will be inconsequential. For example, a farmer that hedges a $400,000 wheat crop will pay $80 when selling a future. Similarly, airlines that hedge by buying oil futures will barely notice the higher cost. In fact, because trading costs have fallen so much in recent decades, a tax at this level would just be raising costs back to their levels of two decades ago, a point at which there was already a very vibrant futures and options market. However, even a modest tax will make life much more difficult for speculators. Many of them expect to make quick short-term gains, often buying and selling the same day.

For these traders, an increase in transactions costs of 0.02% would be a burden. Of course, a modest tax will not drive the speculators out of the market altogether, it is just likely to reduce the volume of speculation. For this reason, even a modest tax can still raise an enormous amount of money in a market where tens of trillions of dollars of derivatives changes hands each year. This tax can best be thought of as a tax on gambling. Gambling is heavily taxed in every state that allows it. DeFazio's bill is effectively a tax on gambling in the oil markets. It will not stop it, but it would discourage it, and in the process raise a huge amount of money that could go to productive purposes. The bill faces an enormous uphill struggle in Congress. As Durbin said, the banks own the place, and they are not going to just step aside and let Congress impose a tax on such a lucrative business. But, it is important that people know about the DeFazio bill. First, DeFazio deserves a place on the honour roll for standing up to Wall Street. Also, it is important for the public to know that there is a relatively low-cost way to make up the shortfall in the highway trust fund. When Congress raises some other tax and/or cuts a useful program, people should know that there was a better alternative.

It just didn't happen because, as we know, the banks own the place.

Suzan ______________________