Taxation without representation

Some of the less-informed members of the Tea Party movement have argued that our current economic arrangement constitutes taxation without representation. They’re right, but not in the way they think.

Zero Hedge guest poster Chindit13 explains:

Little known to the average taxpayer, the Fed is a public-private entity that not only issues the nation’s currency, but sets interest rate policy and has supervisory authority over the banking system.Its private owners, who are anything but neutral, number the largest banking and finance institutions in the country, the so-called Too Big to Fail banks.

Along with Treasury, the Fed has been instrumental in what SIGTARP Chief Barofsky has estimated has been $23 trillion of bailouts, loans, backstops and guarantees, since the financial crisis struck two years ago.  To put that number in perspective, it represents almost twice the US GDP and 40% of World GDP.  It also represents $75,000 for every man, woman, and child in the US.

Although not all of that money has been created or spent, much has, which means the US taxpayer now carries the responsibility for paying it back.  Oddly, one might even say immorally, the Fed goes out of its way to prevent even the democratically elected representatives of the people from seeing the inner workings of that entity.  The Fed—with help from the Obama White House—has lobbied to block access to information about what the taxpayer has bought, though the taxpayer is still required to pay for it, either directly in taxes or through inflation and a depreciating currency.  If this is not the definition of “Taxation without Representation,” I do not know what is.

Our state’s senators, Richard Burr and Kay Hagan, went along with a minimal audit requirement, and that’s OK for a start. But we need more. Much, much more.

If you liked 2007-08, you’re gonna love the next few years

The Senate has voted almost 2-1 against ending “too big to fail” banks. (North Carolina’s Richard Burr and Kay Hagan both voted for the banksters.)

Which means more too-big-to-fail banks.

Which means more bank bailouts. (Thanks, Dick. Thanks, Kay.)

Which means more sucking up of middle-class and working-class wealth — what there is left of it — by a very few, very wealthy banksters.

Bonus fun: In addition to owning AIG, GM and some banks, you now own Red Roof Inn. But you’re still going to have to pay to sleep there.

Symmetry; or, why the banksters are still with us

Liberal democrats think that because Republicans are going to attack Congressional Democrats no matter what they do, they might as well do the right thing on finance reform.

North Carolina’s senior senator, Republican Richard Burr, apparently thinks that because the Democrats are going to attack him no matter what he does — heck, he is up for re-election — he may as well do the wrong thing.

Sigh.

Odds and ends, Nov. 17

• Our eyes are on Afghanistan, but the prize is energy-rich Uzbekistan. So they boil political opponents alive. Big freakin’ deal.
• The Special Inspector General of the fed bank bailout program says we need to audit the Fed already. Fine minds agree. So let’s audit the Fed already.
• Tim Geithner’s pissing away of taxpayer money earlier this month, to the benefit of — surprise!! — Goldman Sachs and AIG –  would’ve been grounds for dismissal, if not execution, in any country that wasn’t already a banana republic. Unfortunately, we’re all now singing the Chiquita song:

This, Mr. Geithner, is what moral hazard is all about. Thanks to your actions you have doomed the U.S.’s formerly free and efficient equity markets to the biggest capital market bubble in history, which, like any ponzi, has only two outcomes: it either keeps growing in perpetuity as greater fools crawl out of the woodwork to keep it growing, albeit at ever slower marginal rates (note, this did not work out too well for Madoff), or it eventually pops. And the longer it takes to pop, the greater the ultimate loss of value: one day Madoff’s business was worth $50 billion, the next day it was $0. And that is precisely the same fate that American capital markets will have at some point in the upcoming months or years. When future historians look back at what specific action caused the biggest crash in U.S. capital markets history, Mr. Geithner’s cataclysmally botched negotiation of the AIG counterparty bailout will undoubtedly be at the very top of the list. In the meantime, just like in the Madoff case where the trustee is trying hard to trace where any stolen money may have been transferred to, to see the fund flows in our ongoing “ponzi in progress”, look no further than the bank accounts of Goldman bankers as they receive their biggest ever bonus this year …

 

• Relatedly, I’m a lot less bothered about Obama bowing to an Asian leader than I am about his bowing to Goldman Sachs.
• Question of the day, from Michael Lind: Shouldn’t the government pledge allegiance to the people, rather than the other way around?
• Nice punking of an anti-immigration crowd. Not-so-nice behavior of the cops on hand, who were shoving around nonviolent counterprotesters rather than the anti-immigration folks who started the fisticuffs.
• Time to revoke David Broder’s membership in the Wise Old Mainstream Media Pundits’ Club: When you say it’s more important to do something, anything, now than to do the right thing, you’re reckless. When you say that about a decision over whether to start, or expand, a war of choice, you’re just batsh*t insane definitely not supporting the troops.
• Faith may well complement competent psychiatric care, but it is no substitute, a fact that appears to have escaped the Department of Veterans Affairs. And this is just one facet, albeit a particularly annoying one, of the VA’s utter failure to cope competently with the mental-health problems of veterans of the fighting in Iraq and Afghanistan. My senior senator, Richard Burr, ranking Republican on the Senate Veterans Affairs Committee and a guy with a DSCC bulls-eye on his back this election year, could do himself a lot of political good, in addition to doing a lot of real-world good for a lot of deserving people, if he just rode this issue like a beast across the plains of Mongolia.
• And speaking of Richard Burr, call the WAAAAmbulance. Apparently, Senate Republicans are concerned that TV commercials about them supporting government contractors who let their employees get gang-raped may engender bad feelings against … um, well, the 30 Senate Republicans who supported government contractors who let their employees get gang-raped. (Here’s the one on Burr:)

More odds and ends

• The Galleon insider-trading case, in which billionaire Raj Rajaratnam was charged and the securities-rating firm Moody’s was implicated? Has been assigned to Judge Jed Rakoff. Yeah, this Jed Rakoff. (I hope the judge is taking extremely good care of his health, if you know what I mean, because he is making life intolerable for some very, very wealthy and powerful people.)
• Former Fed Chairman Paul Volcker, who got us both into and out of the ’81-’82 recession, thinks we need to kind of restore the Glass-Steagall Act, which kept commercial banks from doing investments (and being dragged under when those investments went south) before its 1999 repeal. But he’s having trouble selling that idea to all the Goldman Sachs alumni on Team Obama.
• If this hearing in fact happens tomorrow — I read or heard somewhere it could get delayed — it could get real ugly real fast for Fed Chairman Ben Bernanke and former Treasury Secretary Hank Paulson. Hell, it might even get ugly for current Treasury Secretary Tim Geithner. I’d be OK with any and/or all suffering some consequences, because you don’t have to be a Harvard MBA to know Bank of America shareholders got screwed.
• Speaking of Hank Paulson, turns out that while he was still secretary, he met in Moscow with the board of Goldman Sachs. But nothing improper happened. Really. Move along; nothing to see here. These are not the droids banksters you’re looking for.
• Dana Perino, concern troll. Memo: advice on how to conduct yourself from a PR standpoint from someone who used to take money to call people traitors and supporters of terrorists is probably not worth what you’re paying for it.
• Shorter Congressman Jeb Hanserling (R-Texas): I’m here to protect banks; screw the consumers.
• Another Republican, this time John McCain, thinks another earmark, this one $325,000 for earthquake study in Memphis, is a waste of money, and once again is wrong. Three words: New Madrid Fault.
• Shorter Timothy Noah: Whatever happened to, you know, reporting?; or, The public option was always popular, you morons — you just pretended otherwise or weren’t paying attention.
• More Noah, because this is just so good and so true: “Political reporters are momentum junkies, forever plotting out momentary trends to infinity. If they were meteorologists, they’d interpret 90-degree temperatures in July to predict 160-degree temperatures in December.”
• John Cole righteously dopeslaps neocon pinhead Pete Wehner.
• Sure, Sarah Palin’s $29 book can become a bestseller — when you sell it for $9 or give it away with a magazine subscription.
• The Bush and Obama administrations actually threatened not to share intelligence with the U.K. if it released evidence of our torture of a guy named Binyam Mohammed. (Yeah, let’s stop sharing info with our oldest and most trusted ally. Genius.) Fortunately, Britain’s highest court is calling their bluff.
• The maker of Tasers, which has long claimed that Tasers aren’t lethal, now concedes that they might be, potentially, well, a little bit, um, lethal. I’m guessing someone finally talked to their lawyer and figured that just maybe they might want to do a little butt-covering.
• Socialism … and its potential benefits.
• OTOH, let’s foster competition and innovation, not hinder it.

Finally, a bit of a health-care roundup:

• The House Judiciary Committee voted 20-9 today to strip the health-insurance industry of its federal antitrust exemption. This is such a good idea that three Republicans even went along with it. I dearly hope my own representative, Howard Coble, was one of them. (thomas.loc.gov hasn’t been updated yet so I don’t know.)
• You can too get a hip replacement under the Canadian health-care system even if you’re of retirement age. Ignore the urban legends/propaganda.
• Sen. Richard Burr’s health-care reform plan: fail. Not epic fail, not actual sabotage of what the bill purports to support, but also not enough recognition of certain economic and financial realities.
• Expand Medicare to include — well, anyone who wants in? That’s a public option even some Blue Dogs can believe in.
• And even if we choose a real public option, the Congressional Budget Office says it won’t cost as much as opponents have been claiming.
• Apparently, U.S. Sen. Arlen Specter had no idea that some people were unable to start their own businesses, or stuck in jobs they hate or aren’t suited for, because they can’t afford the health insurance costs they’d have to pay if they made those moves. I mean, c’mon, how imaginative do you have to be before that possibility occurs to you?
• Last but not least, Al Franken humbles a Hudson Institute hack on health-care finance:

Senator Al Franken: I think we disagree on whether or not the healthcare reform we’re talking about now in Congress should pass. And you said that, kind of the way we’re going will increase bankruptcies. I want to ask you, how many bankruptcies because of medical crises were there last year in Switzerland?

Diana Furchtgott-Roth: I don’t have that number in front of me but I could find out and get back to you.

Franken: I can tell you how many it was. It’s zero. Do you know how many medical bankruptcies there were last year in France?

Furchtgott-Roth: I don’t have that number but I can get back to you if you like.

Franken: The number is zero.
…

Linin’ ‘em up

A couple of weeks ago I said that auditing the Federal Reserve was a great idea even if it was Ron Paul who introduced the bill that would make it happen. I am delighted to note that that bill, HR 1207, has, as of today, 282 co-sponsors, more than enough to pass if the bill makes it to the floor. I’m less delighted that only one of Greensboro’s three reps, Howard Coble, is among the co-sponsors, although I don’t know whether that means Brad Miller and Mel Watt oppose the bill or just figured that with a majority assured they would turn their attention to other things.

The companion Senate bill, S 604 from Bernie Sanders, I-Vermont, has 23 co-sponsors, ranging in political ideology from Tom Harkin, D-Iowa, to Sam Brownback, R-Kansas. (That’s quite a range, actually.) Among them is North Carolina’s Richard Burr but not our other senator, Kay Hagan. I do not know why that is.

But here’s what I suspect.

I suspect that the Fed has been doing things with our tax dollars, largely for the benefit of a few very large financial institutions, that will infuriate people once word becomes public. I further suspect that the wave of outrage that will follow will be something any incumbent and quite a few challengers would want to surf, rather than be swamped by. That wave is coming, and the time to get your board lined up and get up on your feet is drawing to a close.

There’s additional good news on this front: The Bloomberg news organization sued the Federal Reserve Bank of New York last year under the Freedom of Information Act for records on how tax money was spent. On Monday, a federal judge granted Bloomberg’s motion for summary judgment, meaning that both the facts and the law are so clearly on Bloomberg’s side that there’s no need for a trial. The bank has five business days to provide certain records and until Sept. 14 to let the court know how it intends to provide others. Should bank allies manage to kill or stall the Paul or Sanders bills, people could just file more FOIA lawsuits. So one way or another, this stuff’s coming out.

Congresscritters and would-be congresscritters of all stripes, take note.

UPDATE: Arguably another excellent reason to support auditing the Fed: Tim Geithner thinks it would be a bad idea.

A blog. He haz one.

North Carolina’s senior senator, Richard Burr, has joined blogworld. I hope he finds blogging both useful and educational. I just wish it had comments, as much of a nightmare as they’d be for a U.S. senator to manage.

(h/t: Ed)