Friday, April 15, 2005

Mai Tai Friday Revelations 

(Warning: this is a long post, but I think it's important. If you are short on time, move along and come back when you have a tall drink in hand.)

recipe_lhmI'm late to the dance (as usual), but that doesn't mean this is out of date. Get over to The Nation archives (circa April, 2002) and read William Grieder:
"Labor and consumer lobbyists felt a chill in early March when Senate majority leader Tom Daschle announced his intention to get "a strong bankruptcy bill out of conference and on the President's desk within four weeks, so the bill can be signed before we go home for the Easter recess." Bankruptcy "reform" is of a different order from Enron fraud or loophole bookkeeping by Arthur Andersen, but it emanates from the same political sources and is, likewise, hideously one-sided in its impact on ordinary citizens. The legislation was written by major banks and the credit-card industry, wishing to tighten the screws on debt-soaked families. No one doubts this measure will make life even more miserable for the people maxed out on their credit cards and on the brink of Chapter 7. Daschle's statement meant the Democratic leader thinks it is now safe to enact the bankers' bill. Last year, a record 1,492,000 Americans filed for bankruptcy protection, but now the recession is over, isn't it? ...
In Congressional circles, a bill like this one is known as a "money vote," because it's an opportunity for good fundraising from monied interests (or, if you vote wrong, you face the risk of those interests financing your next opponent). For six years, the financial industry has lobbied intensively for this measure and both parties have milked it like a veritable cash cow. Contributions from finance companies and credit-card firms more than doubled during the last election cycle, passing $9 million. Commercial banks are the dominant credit-card issuers--led by Citibank, with $99.5 billion in credit-card debt--and this remains their most profitable line of business.
When George W. Bush took office, a bankruptcy bill was the first major legislation passed by the new Congress. Bill Clinton had vetoed a milder version, but in the new circumstances many former opponents scrambled aboard. Only sixteen Democratic senators voted against the bill, led by Paul Wellstone (the measure would have become law long ago, if not for Wellstone's guerrilla resistance). The "yea" votes included a couple of new faces much celebrated as "people" politicians and presidential possibles--Hillary Clinton and John Edwards. Two other potential candidates--Russ Feingold and John Kerry--voted against it.

Senator Daschle's solicitude for Citibank goes deeper than the money, though he gets money, too. Daschle treats the Wall Street behemoth like a hometown industry. Two decades ago, Citibank lobbyists persuaded South Dakota politicians to be the first state to repeal its anti-usury law--an obstacle to charging sky-high interest rates...
In legislative matters like bankruptcy, Daschle plays faithful facilitator for Citibank's interests, while graciously assuring liberal-labor groups he will help them get a floor vote on their amendments (which routinely lose). It is Senator Joe Biden of Delaware, however, who plays tough-cop enforcer for the industry (a role also shared by Senator Robert Torricelli). Delaware is home to six major credit-card operations, led by MBNA America, Chase and Bank of America. Altogether, they process indebtedness of $230 billion. Biden is their guy.

The industry's main argument for relief is that its reckless customers pile up impossible debts, then escape by gaming the bankruptcy system. No doubt this occurs, but the bank lobbyists grossly distort the stressed-out predicament of millions of ordinary working families, some of whom borrow on credit cards to pay the rent. Did the banks themselves have anything to do with fomenting the explosion of credit-card debt? Evidently not, according to Congress, because numerous amendments to impose some restraint and accountability on the lenders were rejected. In a classic twist, Democratic senators instead tossed a couple of bones to the discontented constituencies--one amendment that prevents Texas millionaires from shielding their Enron-size mansions under state homestead laws and another that bars abortion-clinic terrorists from escaping fines and lawsuits in bankruptcy court. Both are meritorious, of course, but neither speaks to the general pain this legislation will inflict on rank-and-file constituents."
This article is particularly damning for Joe Lieberman. You simply must go read it...
All right. Go get a stiff drink. I'll wait.

But now, I want to draw your attention to the article today in the NYTimes:
"Citigroup, the world's largest financial services company, said today that its earnings rose 3 percent in the first quarter, bolstered by higher growth in its consumer banking businesses...
"I feel very good about the numbers we are reporting today," said Charles O. Prince, Citigroup's chief executive said today in a conference call with industry analysts and investors."
So what do you think could have made forging ahead with gouging the hoi-polloi via yesterday's Bankruptcy Bill so attractive, if all these profits are pouring in (mind you, this is info from 3 years ago)?
"Citigroup must contend (with) several regulatory setbacks. In the wake of a scandal in its Japanese offices, regulators there revoked its private banking license. It was prominently named in a Senate committee report for its lax practices in countering money laundering and for its ties to Gen. Augusto Pinochet, the former Chilean dictator. And last month, the Federal Reserve said the company would not be able make any large acquisitions until it tightened its controls and addressed regulatory problems worldwide."
So, when faced with these annoyances, where do you make up the loss? Well, those damned fool saps right here in the US of A, of course! No one gives a shit about them, not even Tom Daschle! Just make a few loud noises about your concern for blastocysts, and they'll let you get away with anything!

We have been so, so sold down the river, friends and lovers. Please hold them accountable, before it's too late.

corrente SBL - New Location
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The Washington Chestnut
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