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By Sen. Bernie Sanders
Independent U.S. Senator from Vermont

We are supposed to be a country of laws. The laws should apply to Wall Street as well as everybody else. So I was stunned when our country’s top law enforcement official recently suggested it might be difficult to prosecute financial institutions that commit crimes because it may destabilize the financial system of our country and the world.

“I am concerned,” Attorney General Eric Holder told the Senate Judiciary Committee, “that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if we do prosecute — if we do bring a criminal charge — it will have a negative impact on the national economy, perhaps even the world economy.”

The attorney general was talking about some of the same financial institutions that received billions, and in some cases trillions, of dollars in taxpayer bailouts after their greed, recklessness and illegal behavior plunged the country into a terrible recession. Over my opposition, Congress approved a $700 billion taxpayer bailout of financial institutions that were on the brink of collapse which some in Congress considered “too big to fail.”

By Sam Pizzigati
Editor, Too Much online magazine

All across Corporate America, top execs are feathering their own nests at the expense of their workers. The French have a better idea.

The founder of modern management science, Peter Drucker, considered excessive executive pay an assault on good enterprise management practice.

Peter Drucker, the analyst who founded modern management science, died in 2005 at age 95. At his death, business leaders worldwide hailed this Austrian-born American for his enormous contribution to enterprise efficiency.

But Peter Drucker also cared deeply about enterprise morality. In his later years, he watched — and despaired — as downsizing became an accepted corporate gameplan for pumping up executive paychecks. Drucker could find “no justification” for letting CEOs benefit financially from worker layoffs.

“This is morally and socially,” he would write, “unforgivable.”

If Drucker were still writing today, he’d likely be even more unforgiving. CEOs these days aren’t just slashing worker jobs to add on to their own rewards. They’re slashing worker pay as well — and no CEO may be benefiting more from shrinking paychecks than Ford chief executive Alan Mulally.

Mulally has restored Ford to profitability, his many business and political admirers never tire of pointing out, without having to take any taxpayer bailout. But Mulally has indeed enjoyed a hefty bailout — from his workers.

Entry-level workers at Ford used to make $28 an hour. That rate fell by half when the auto industry financial crunch first hit five years ago and now sits a bit above $19. And since the crunch all Ford workers, not just entry-level workers, have given up cost-of-living wage adjustments and health benefits.

Auto industry execs have declared these worker concessions as absolutely necessary. Without lower compensation for auto workers, the argument goes, the auto industry would never become “globally competitive.” This same reasoning apparently doesn’t apply to compensation for Ford CEO Mulally. (more…)

By Richard (RJ) Eskow
Senior Fellow, Campaign for America’s Future

Take a look at these two sentences:

“(I)f losses from the 2007- 2009 crisis were to reach similar levels (as they did in previous recessions) … losses could exceed $13 trillion.” Government Accountability Office

“You would think that any regulation that could affect a major part of the economy and cost industry and/or consumers millions of dollars to comply with would be based on rigorous and consistent economic analysis.” David C. Johns, Heritage Foundation

In the face of trillion-dollar losses, Wall Street’s conservative spokespeople sound like Dr. Evil presenting his demands to world leaders: I will destroy the planet unless you give me … one million dollars.

The Price of Greed

The other day the GAO released a report on the costs of the 2008 financial crisis and the recession which followed – which is still going on for millions of Americans.  The report confirmed and even increased previous estimates of the crisis’ cost, concluding that losses in American output could reach $13 trillion.

The report did something else that was important and admirable, too: It considered the human cost of the recession, noting that “real GDP” – the most commonly used economic measure in situations like these – “is an imperfect proxy of overall social welfare.”

That’s especially true today: While overall statistics show that our country is in a recovery, the top 1 percent in US income captured 121 percent of the gains, while everyone else has actually lost ground since then.  Once that’s considered, even the GAO’s new figures may have understated the costs for the vast majority of Americans.

But, admirably, the GAO report summarizes the painful but now well-known loss of jobs in the present – and, especially for younger people, the earnings potential that they will suffer for the rest of their lives.

Homeowners Are Financing a Backdoor Bailout

The GAO also estimates the loss in housing value for American families, which it pegs at $9.1 trillion, noting that “national home equity was approximately $3.7 trillion less than total home mortgage debt.”

What they’re describing is nearly four trillion dollars in money that Americans owe to their banks for real estate value that no longer exists.  They base that number on December 2011 figures, and it will have changed by now – both because some real estate markets have picked up, and because millions of homeowners have been foreclosed upon. But the figure is still in the $3 trillion range.

That’s $3 trillion in debt that homeowners took because the banks a) systematically drove up the costs of housing by lowering underwriting standards and creating a boom in mortgage-backed securities, b) knowingly bilked investors by selling them lousy risks (which the so-called “credit rating agencies” labeled “AAA”), and then c) accepted a government bailout when the inevitable collapse followed.

And in yet another enormous favor to the banks, they continue to carry this worthless value on their books. They collect payments on it, or use it to foreclose on families. (more…)

By Jim Hightower
Author, Commentator, America’s Number One Populist

The once haughty tea party has been whittled down to only a nub of its former self, with only eight percent of Americans now identifying themselves with the faction.

And no wonder–the fiery movement that sprang from legitimate anger over the government bailout of the Wall Street banksters who crashed our economy got co-opted by Republican political operatives fronting for those same banksters and such anti-government extremists as the Koch brothers. With that rich-guys’ agenda, the party quickly lost popular support, leaving the nutty nub brandishing “tinfoil hat” issues.

Foremost on today’s tea party agenda is a full bore assault on something that isn’t even there: A United Nations’ plot to destroy American life and establish a UN dictatorship. Yes, the same international debating society that the right wing used to mock as meek and weak is presently being recast as a fearsome totalitarian behemoth stealing our sovereignty. (more…)

By Dean Baker
Co-Director, Center for Economic and Policy Research, Author

The accolades for Timothy Geithner came on so thick and heavy in the last week that it’s necessary for those of us in the reality-based community to bring the discussion back to earth. The basic facts of the matter are very straightforward. Timothy Geithner and the bailout he helped engineer saved the Wall Street banks. He did not save the economy.

We can’t know exactly what would have happened if we did not have the TARP in October of 2008. We do know there was a major effort at the time to exaggerate the dangers to the financial system in order to pressure Congress to pass the TARP.

For example, Federal Reserve Board Chairman Ben Bernacke highlighted the claim that the commercial paper market was shutting down. Since most major companies finance their ongoing operations by issuing commercial paper, this raised the threat of a full-fledged economic collapse because even healthy companies would not be able to get the cash needed to pay their bills.

What Bernanke neglected to mention was that he personally had the ability to sustain the commercial paper market through direct lending from the Fed. He opted to go this route by announcing the creation of a Fed special lending facility to support the commercial paper market the weekend after Congress voted to approve the TARP.

It is quite likely that Bernanke could have taken whatever steps were necessary himself to keep the financial system from collapsing even without the TARP. The amount of money dispersed through the Fed was many times larger than the TARP, much of which was never even lent out. The TARP was primarily about providing political cover and saying that the government stood behind the big banks.

Of course we can never know the right counterfactual had the TARP and related Treasury efforts not been put in place, but even if we assume the worst, the idea that we would have seen a second Great Depression was always absurd on its face. The example of Argentina proves otherwise.

In December of 2001 Argentina did have a full-fledged financial collapse. In other words, all the horrible things that we feared could happen in the United States in 2008 actually did happen in Argentina. Banks shut down. People could not use their ATMs or get access to their bank accounts. (more…)

By Robert Reich
Former U.S. Secretary of Labor, Professor at Berkeley

TARP — the infamous Troubled Assets Relief Program that bailed out Wall Street in 2008 — is over. The Treasury Department announced it will be completing the sale of the remaining shares it owns of the banks and of General Motors.

But in reality it’s not over. The biggest Wall Street banks are now far bigger than they were four years ago when they were considered too big to fail. The five largest have almost 44 percent of all U.S. bank deposits.

That’s up from 37 percent in 2007, just before the crash. A decade ago they had just 28 percent.

The biggest banks keep getting bigger because they can borrow more cheaply than smaller banks. That’s because investors believe the government will bail them out if they get into trouble, rather than force them into a form of bankruptcy (as the new Dodd-Frank law makes possible).

That’s why it’s necessary to limit their size and break up the biggest.

Washington may be getting the message. A few months ago Dan Tarullo, the Fed governor who specializes in bank regulation, proposed capping the size of the banks’ balance sheets.

Some former titans of Wall Street are saying much the same thing. Even Sandy Weill, who created Citigroup (which required $445 billion in TARP loans and asset guarantees) is proposing the biggest banks be broken up. (more…)

By Greg Balast
Investigative journalist and best-selling author

For Mitt Romney, it’s one scary Halloween.  The Presidential candidate has just learned that tomorrow afternoon he will charged with violating the federal Ethics in Government law by improperly concealing his multi-million dollar windfall from the auto industry bail-out.

By Richard Trumka
President, AFL-CIO

Nothing illustrates the choice between the two presidential candidates better than the 2009 rescue of the auto industry. And, despite Republican presidential candidate Mitt Romney’s efforts to distort the contrast with patently dishonest claims and a new TV ad, the auto rescue may turn out to be the deciding factor in the presidential election.

Romney can’t seem to Etch-a-Sketch that now-famous op-ed headline — “Let Detroit Go Bankrupt.”

Let’s break down what that meant: Here was a millionaire whose idea of remaking America’s automakers was liquidation. It was a call for those companies to gut pay and benefits and shed pensions. That’s what Mitt Romney believed in. His goal was to “turn around” the industry by killing good jobs.

Try as he might, Romney can’t shake his past, and nowhere is that more clear than in voters’ reactions in Ohio, where the auto industry accounts for one out of eight jobs. There voters have stuck with President Obama after he stuck his neck out to rescue those ailing giants and the workers, who together form America’s cornerstone industry.

Because of President Obama’s action, the U.S. auto industry was not liquidated. Two million jobs or more were not lost or ruined.

Yes, President Obama took a big political risk — the public had serious bailout fatigue.

Back in 2008 and 2009, pundits and reporters from Fox News to the New York Times called the auto industry rescue a “strategy fraught with risk.”

It wasn’t the only time President Obama took action and risks for working people, and I’ll bet it won’t be the last. And I’ll also bet that Romney’s reaction to crises for working people will be the same in the future, too. When President Obama enforced our trade laws, imposing tariffs on cheap Chinese tires to protect American jobs, Mitt Romney leaped in to criticize him.

Expecting Mitt Romney to get tough on China is like asking his left hand to slap his right.

Ohio knows we need a president who makes job creation his No. 1 priority — and we need those jobs in the United States, not in other countries.

Few politicians today are courageous enough to stand with teachers and construction workers and other regular folks against the wails of Wall Street and the advice of CEOs like Mitt Romney.

Mitt Romney wants us on the low road to jobs — outsourcing all the good ones until even the minimum wage seems high.

Mitt Romney’s running mate, Paul Ryan, called him “a car guy.” That’s hard to understand, but what is clear is that Romney is not a jobs guy. (more…)

When President Obama took the bold step of saving the U.S. auto industry, he didn’t just save auto assembly jobs. He saved American manufacturing, including 350,000 USW jobs that are part of the auto supply chain.

Just caught this on the news the other day. G.M. the car maker is going to  spend a ton of money on a new plant in Mexico. These are the people we bailed out with our tax dollars so they could keep running and not go under. One would think that they would show their appreciation to the people of this country and build it here in the USA, but I guess their greed once again overwhelmed them. Working people can see this, so how is it that our politicians can’t.

The Republicans stand up in congress and ask questions like, “Where are the jobs Mr. Obama?” When pressured they say stuff like, “the government does not create jobs.”

As for the Democrats, don’t they feel the least bit betrayed by these companies that are doing this or do they just not care and choose to turn a blind eye? If all these politicians are so smart that they feel we should give them our vote so that they can lead this country forward on the right path, then why do they continue to show us how ignorant they are?   

Red Reynolds
Silsbee, Texas
Member, USW Local 13-423