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From National Public Radio’s Morning Edition … George Packer’s article in The New Yorker follows the U.S. attorney for the southern district of New York during an insider trading case. In “A Dirty Business,” Packer explores why it’s been difficult to build prosecutions directly tied to the financial crisis. Packer talks to Steve Inskeep about what he’s learned during his investigation.

Sam Pizzigati

By Sam Pizzigati
Editor, on line weekly Too Much

America‘s top bankers and CEOs don’t have any more talent than millions of other Americans. They do have, two timely new data dumps remind us, plenty of generous friends in pivotal places.

We Americans, former Reagan White House budget director David Stockman told a reporter last week, “no longer have a democracy.” Instead, Stockman charged, we have “crony capitalism,” a system that’s rigging the economy to benefit the powerful few — at everyone else’s expense.

Last week brought still more evidence on how revoltingly raw this rigging has become. Wall Street and Corporate America, new data detail, have some incredibly thoughtful cronies who sit in some incredibly important places.

Some of these cronies run the Federal Reserve. Others serve on corporate boards of directors. Together, they’ve made the Great Recession a Great Sensation — for America’s corporate and banking elite. (more…)

Robert Kuttner

By Robert Kuttner
Co-Founder and Co-Editor of The American Prospect

Economists are painting a pretty bleak picture of the economic outlook between now and the November 2012 election. Will this hurt President Obama’s re-election chances? Or will voters blame the Party of No?

That, of course, partly depends on what kind of campaign Obama runs and partly on the Republicans. But first, let’s take stock (actually, maybe let’s sell stock).

The Federal Reserve has been buying up lots of bonds to keep interest rates very low. The Fed disguises what it’s doing with the antiseptic and mystifying term, “quantitative easing,” or QE for short. This is the second time the central bank has tried this trick, hence the coy nickname, QE 2. The problem is that very low interest rates only take you so far in a depressed economy.

For the most part the Fed’s policy has been good for large banks and good for the stock market. Ordinary borrowers, businesses and homebuyers have trouble getting credit. (more…)

Robert Reich

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

This week’s biggest economic show occurs Wednesday when Fed chair Ben Bernanke steps in front of the cameras for the Fed’s first-ever news conference. The question on everyone’s mind: Will the Fed signal it’s now more worried about inflation than recession?

Much of Wall Street thinks inflation is now the biggest threat to the U.S. economy. As has been the case in the past, the Street is dead wrong. The biggest threat is falling into another recession.

The most significant economic news from the first quarter of 2011 is the decline in real wages. That’s unusual in a recovery, to say the least. But it’s easily explained this time around. In order to keep the jobs they have, millions of Americans are accepting shrinking paychecks. If they’ve been fired, the only way they can land a new job is to accept even smaller ones.

The wage squeeze is putting most households in a double bind. Before the recession, they’d been able to pay the bills because they had two paychecks. Now, they’re likely to have one-and-a half, or just one, and it’s shrinking. (more…)

Dean Baker

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

The battle in Wisconsin over the rights of public-sector workers holds the potential to reawaken workers across the country to demand their fair share of the economic pie. This could be an important turning point. However, if workers are to make real progress they must move to alter the rules of the game. These rules have been deliberately rigged against them over the last three decades.

The most obvious of these rules are those governing the rights to unionize, such as those that Gov. Walker directly attacked in Wisconsin. However, this is just part of the story. Unionization has become almost impossible in the private sector, since companies routinely fire workers engaged in an organizing drive.

It is illegal to fire workers for trying to organize, but the penalties are trivial, even if a fired worker presses a case before the National Labor Relations Board long enough to win. Companies will gladly pay a few dollars to the organizers they fire in order to avoid having a union.

It would be a very different world if there were real penalties for violating labor law. A woman in Minnesota got fined more than $200,000 for allowing people to download copyrighted music from her computer. Suppose companies paid the same penalty for illegally firing workers trying to organize a union as this woman had to pay for violating copyright laws. That might encourage some respect for the law. (more…)

Zach Carter

By Zach Carter
Economics Editor, AlterNet; Fellow, Campaign for America’s Future

Several key House Democrats are circulating a letter urging support for new regulations that would crack down on what critics say are rampant foreclosure abuses in the nation’s banking system.

The letter, authored by Rep. Brad Miller (D-N.C.) encourages federal banking regulators to rein in practices at bank divisions called “mortgage servicers.” Servicers are responsible for collecting and processing payments, charging late fees, negotiating with troubled borrowers and implementing the foreclosure process. Servicers have been criticized for committing widespread fraud in recent months, charging improper fees and incorrectly evicting borrowers.

The three House Democrats have already signed the letter, including House Financial Services Committee Chairman Barney Frank (D-Mass.), House Judiciary Committee Chairman John Conyers (D-Mich.), Rep. Maxine Waters (D-Calif.), Rep. Keith Ellison (D-Minn.) and Rep. Laura Richardson (D-Calif.).

The letter from lawmakers comes one day after more than fifty economists, consumer advocates and banking experts urged regulators to take action on mortgage servicers. Federal Regulators are currently divided over whether or not to use new powers to regulate mortgage securities granted by this year’s Wall Street reform bill to crack down on servicing abuses. The FDIC wants to take the opportunity to rein in servicers, but the Federal Reserve and the Office of the Comptroller of the Currency are resisting the new rules, although spokespeople for both agency say they support stronger standards for mortgage servicing. (more…)

Sen. Bernie Sanders

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

At a Senate Budget Committee hearing in 2009, I asked Fed Chairman Ben Bernanke to tell the American people the names of the financial institutions that received an unprecedented backdoor bailout from the Federal Reserve, how much they received, and the exact terms of this assistance. He refused. A year and a half later, as a result of an amendment that I was able to include in the Wall Street reform bill, we have begun to lift the veil of secrecy at the Fed and the American people now have this information.

It is unfortunate that it took this long and it is a shame that the biggest banks in America and Mr. Bernanke fought to keep this secret from the American public every step of the way. But, the details on this bailout are now on the Federal Reserve’s website and this is a major victory for the American taxpayer and for transparency in government.

Importantly, my amendment also required the Government Accountability Office to conduct a top-to-bottom audit of all of the emergency lending the Fed provided during the financial crisis to be completed on July 21, 2011, which will take a hard look at all of the potential conflicts of interest that took place with respect to this bailout. So, in many respects, details that the Fed was forced to divulge on Wednesday about the $3.3 trillion in emergency loans that until now were totally kept from public scrutiny, marked the beginning, not the end, of lifting the veil of secrecy at the Fed.

After years of stonewalling by the Fed, the American people are finally learning the incredible and jaw-dropping details of the Fed’s multi-trillion-dollar bailout of Wall Street and corporate America. As a result of this disclosure, other members of Congress and I will be taking a very extensive look at all aspects of how the Federal Reserve functions and how we can make our financial institutions more responsive to the needs of ordinary Americans and small businesses. (more…)

Les Leopold

By Les Leopold
Author, “The Looting of America”

“Thus the real reason for Thanksgiving, deleted from the official story, is: Socialism does not work; the one and only source of abundance is free markets, and we thank God we live in a country where we can have them.” ~ “The Great Thanksgiving Host,” The Ludwig Von Mises Institute - a Tea Party favorite re-write of American History.

Just think, only two years ago Wall Street’s billionaires were on their knees begging for help. Their reckless financial games had crashed the economy. Every firm on Wall Street teetered on the edge of collapse. Without trillions of dollars of government bailouts and asset guarantees, they were finished — kaput. (Please see The Looting of America for the blow by blow on how the “abundance” of financial markets failed.)

But then… a reprieve! The billionaires were bailed out. Congress passed the mildest financial reforms possible. The biggest banks — the survivors — came out of the recession even bigger than before. Wall Street got richer again, and bonuses are now back to near-record levels. Sure, they have to pay back TARP money. Big deal. The profits and bonuses that money leveraged is theirs to keep as if nothing had happened. Is this a great country or what?

But while things are booming on Wall Street, the rest of our economy is in serious trouble. It won’t take much to push us into another downward deflationary spiral, sending unemployment even higher. (Already, year-to-year core inflation has hit its lowest level since this statistic was first recorded back in 1957.) We need 22 million new jobs to get back to full-employment and it’s ludicrous to believe that the private sector can create them on its own in the next decade. But Federal job creation is unthinkable with Congress in gridlock. Meanwhile the states are engaged in a massive anti-stimulus program as they cut back spending in response to crumbling revenues. It seems that the only institution left with a modicum of will and means to prime the economic pump is the Federal Reserve, with a plan called QE2 (a second round of quantitative easing, which means pumping more money into the financial sector.) (more…)

Zach Carter

Zach Carter
Economics Editor, AlterNet; Fellow, Campaign for America’s Future

Despite escalating outrage over rampant foreclosure fraud, the Federal Reserve now appears ready to eviscerate a key mortgage regulation in an effort to spare banks the losses from their own wrongdoing. Even as bank executives preposterously claim to have wronged nobody in the foreclosure process, they’re pushing hard to unwind the only serious federal rule that protects borrowers from predatory loans and improper foreclosures. As if the last decade of abuse wasn’t bad enough, banks are once again mobilizing to screw borrowers in the pursuit of epic bonuses. And once again, it appears that the Federal Reserve has become an accomplice to this nationwide mortgage scam.

This week, top mortgage officers from the nation’s largest banks are telling the Senate Banking Committee that they aren’t kicking the wrong people out of their homes. This is simply false. Problems at mortgage servicers have been going on for years, long before banks got into trouble for illegally robo-signing foreclosure documents. People are kicked out of their homes without cause in the United States every day. If the top executives at America’s largest banks don’t know this fact, they lack the competence needed to run their organizations.

Law firms that work with troubled borrowers are jam-packed with horror stories about foreclosures caused entirely by banks, not borrowers. Families who never miss a payment come home to an eviction notice, or a thug breaking down their door.

But it’s even more common for borrowers to find themselves in trouble because their bank engaged in blatantly predatory lending. There is only one serious federal remedy for predatory lending, and the Fed is now knowingly trying to gut that remedy in order to help banks avoid losses from their own fraud. The remedy is called rescission, and it works like this:

If a bank failed to make key consumer protection disclosures about a mortgage, the borrower can demand that all of the interest and closing costs on the loan be refunded. Equally important, the bank must also stop all foreclosure proceedings and give up its right to foreclose. Once the bank gives up its right to foreclose, the full amount of the mortgage, minus interest and closing costs, becomes due. This isn’t a free lunch for the borrower, especially when the value of her home has declined dramatically, but it’s better than nothing, and it does impose real costs on banks. (more…)

Robert Reich

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

Next time you hear an economist or denizen of Wall Street talk about how the “American economy” is doing these days, watch your wallet.

There are two American economies. One is on the mend. The other is still coming apart.

The one that’s mending is America’s Big Money economy. It’s comprised of Wall Street traders, big investors, and top professionals and corporate executives.

The Big Money economy is doing well these days. That’s partly thanks to Ben Bernanke, whose Fed is keeping interest rates near zero by printing money as fast as it dare. It’s essentially free money to America’s Big Money economy.

Free money can almost always be put to uses that create more of it. Big corporations are buying back their shares of stock, thereby boosting corporate earnings. They’re merging and acquiring other companies.

And they’re going abroad in search of customers. (more…)