Undernews is the online report of the Progressive Review, edited by Sam Smith, who has covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

March 18, 2009



Reuters -
Connecticut's attorney general said he had "significant doubts" that $165 million of bonuses recently awarded by American International Group Inc are required under state law. "AIG is shamelessly shielding itself behind the Connecticut Wage Act, a joke of a justification for squandering scarce taxpayer resources," Attorney General Richard Blumenthal said in a statement on Tuesday. "We should use any and every well-founded legal weapon to recapture these baseless bonuses." Blumenthal said his office will "carefully investigate" the merits of AIG's claims, but added: "Corporate collapse demands accountability -- not windfall payments."

Harold Meyerson, Washington Post -
A plausible solution would be for the government to assume control of those banks that are insolvent, as it routinely does when banks go under. It could then install new management, wipe out the shareholders, take the devalued assets off the banks' books, restart lending and restore the banks to private control at a modest profit for the taxpayers. There may be reasons that Geithner's plan makes more sense than this one, but if they exist, Geithner has failed to explain them.

It's certainly not because Americans are dead set against bank nationalization: A Newsweek poll this month found that 56 percent of respondents supported it. Hell, Alan Greenspan supports it. But Geithner seems unable to imagine a banking system not run by its current leaders or owned by its current shareholders or engaged in the same arcane securitization practices that led to its collapse. An administration that is busily creating alternatives to our health-care system and our energy policies is being dragged down by a Treasury secretary who cannot conceive of an alternative to our catastrophic system of banking.

Fortunately, Geithner is not the only public servant grappling with banking's daily outrages. In the Senate, Vermont's Bernie Sanders, joined by Illinois' Dick Durbin, has introduced a bill to cap the interest rates on credit cards. Even as banks are borrowing funds from the Fed interest-free and are counting on taxpayer largess to keep them from going bust, they are still charging usurious rates of interest. In 2007, the Demos Foundation found that one-third of credit card holders were paying rates in excess of 20 percent, in some cases as high as 41 percent, and the rates have not dropped notably since then.

Once, states were able to regulate their banks' rates, but in 1978 the Supreme Court ruled that banks operating nationwide could charge whatever they wished if they moved their operations to states that had no usury laws, such as South Dakota. Shortly thereafter, Citigroup moved its credit card headquarters to South Dakota, and, as we know, Americans began funneling more and more of their money to the banks. Sanders's bill would cap interest rates at 15 percent, which is the same rate cap that Congress set 30 years ago for federal credit unions.

In 1991, New York Republican Alphonse D'Amato authored a bill to cap credit card rates at 14 percent. It passed the Senate 74 to 19, but died in the House. Today, as populist rage at the banks rises, Congress and the administration should be racing to pass the Sanders bill.

Buckminster Fuller, Critical Path, 1982 -
There were a number of individual bankers who went far beyond unwise banking practices and who, as individuals, took personal advantage of the information they had of individual depositors' affairs and of their privilege as top bank officers to do truly inimical things to enrich their own positions. Few today remember that a half-century ago a number of New York and Chicago's top bankers were sentenced into penitentiaries-the New Yorkers into Sing Sing-the senior partner of J. P. Morgan and Company, the president of the National City Bank, the president of Chase Bank. Every one of them had been found to be doing reprehensible financial tricks. They were selling their own friends short. They were opening their friends' mail and manipulating the stock market. They were manipulating everybody. They were way overstepping the moral limits of the privileges ethically existent for officers in the banking game, so a great housecleaning was done by the New Deal.


As this is written the White House is suppressing the video, but here's how Sky News in the UK reports it

Sky News - A teleprompt blunder has led to Barack Obama thanking himself in a speech at the White House in a St Patrick's Day celebration.Irish Prime Minister Brian Cowen was just a few paragraphs into an address in Washington when he realized it all sounded a bit too familiar. It was. He was repeating the speech President Barack Obama had just read from the same teleprompter. Mr Cowen stopped, turned to the president and said: "That's your speech." A laughing Mr Obama returned to the podium to take over but it seems the script had finally been switched and the US president ended up thanking himself for inviting everyone to the party.

The Examiner reports that Obama received a $101,332 bonus from AIG in the form of a political contribution during the campaign. Dodd and Obama were the biggest AIG congressional beneficiaries.


Some people claim
that instant runoff voting is too difficult for voters to understand. Rob Richie of Fair Vote counters that with some date from the recent IRV election in Burlington VT:

- Burlington spent all of $995 to educate the town's 33,000 voters, about three cents a voter.

- Out of nearly 9,000 ballots in the mayoral race, a recount determined there was only a single over vote was cast -- meaning 99.99% validity

- More than 80% of voters ranked a second choice, with the exact same rate of 82% in the lowest-income wards and 82% in the highest-income wards


When TR Reid
was writing for the Washington Post, he was one of those reporters we read just because the byline. Now Reid is planning to run for the Colorado state legislature as a Democrats. Reid was bureau chief in Tokyo, London, and Denver.

ABC Australia - A survey of Australian journalism students found 90 per cent of students do not like reading the newspaper, preferring to source news from commercial television or online media.


NY Times - Air Force officials acknowledge that more than a third of their unmanned Predator spy planes - which are 27 feet long, powered by a high-performance snowmobile engine, and cost $4.5 million apiece - have crashed, mostly in Iraq and Afghanistan.


USA Today
- More babies were born in the USA in 2007 than ever before, driven by increases in fertility rates, teen birth rates and childbearing by unmarried women, according to new government data. The preliminary report from the National Center for Health Statistics is gleaned from birth records and shows that most of the growth - to a record 4.31 million births - was fueled by adult women. The previous record for births in a single year was in 1957 with 4.30 million. Birth rates rose for women in their 20s, 30s and early 40s. An estimated 1.7 million babies were born to unmarried women, comprising just under 40% of all births in the USA. Teens accounted for 23% of births. "I don't think the U.S. was heading to a baby boom that would have mirrored the 1950s," says Hans-Peter Kohler, a research associate at the University of Pennsylvania's Population Studies Center. . . But Kohler says it's "striking" that the USA has had a sustained increase in birth rates at a time when such rates are declining in many developed countries. And he says it's remarkable that the U.S. increases occur "across so many different population groups and so many age categories."


Anonymous Anonymous said...

Bucky Fullers 'Critical Path' has one of the best banking histories I've ever read. That book is just as important now as 27 years ago.

March 18, 2009 7:21 PM  
Anonymous Anonymous said...

Funny how the USA Today article didn't mention the impact of our splendid 'abstinence only' policies on our birth rates. If We had proper science in the matter and decent social conditions things would definitely be different.

March 22, 2009 11:23 PM  

Post a Comment

<< Home