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Posts Tagged ‘Public Interest’

Between Hope and Reality: “Hope and change!”

Posted by msrb on November 8, 2008

In the Public Interest

Wed 11/5/2008

by Ralph Nader

Dear Senator Obama:

In your nearly two-year presidential campaign, the words “hope and change,” “change and hope” have been your trademark declarations. Yet there is an asymmetry between those objectives and your political character that succumbs to contrary centers of power that want not “hope and change” but the continuation of the power-entrenched status quo.

Far more than Senator McCain, you have received enormous, unprecedented contributions from corporate interests, Wall Street interests and, most interestingly, big corporate law firm attorneys. Never before has a Democratic nominee for President achieved this supremacy over his Republican counterpart. Why, apart from your unconditional vote for the $700 billion Wall Street bailout, are these large corporate interests investing so much in Senator Obama? Could it be that in your state Senate record, your U.S. Senate record and your presidential campaign record (favoring nuclear power, coal plants, offshore oil drilling, corporate subsidies including the 1872 Mining Act and avoiding any comprehensive program to crack down on the corporate crime wave and the bloated, wasteful military budget, for example) you have shown that you are their man?

To advance change and hope, the presidential persona requires character, courage, integrity– not expediency, accommodation and short-range opportunism. Take, for example, your transformation from an articulate defender of Palestinian rights in Chicago before your run for the U.S. Senate to an acolyte, a dittoman for the hard-line AIPAC lobby, which bolsters the militaristic oppression, occupation, blockage, colonization and land-water seizures over the years of the Palestinian peoples and their shrunken territories in the West Bank and Gaza. Eric Alterman summarized numerous polls in a December 2007 issue of The Nation magazine showing that AIPAC policies are opposed by a majority of Jewish-Americans.

You know quite well that only when the U.S. Government supports the Israeli and Palestinian peace movements, that years ago worked out a detailed two-state solution (which is supported by a majority of Israelis and Palestinians), will there be a chance for a peaceful resolution of this 60-year plus conflict. Yet you align yourself with the hard-liners, so much so that in your infamous, demeaning speech to the AIPAC convention right after you gained the nomination of the Democratic Party, you supported an “undivided Jerusalem,” and opposed negotiations with Hamas– the elected government in Gaza. Once again, you ignored the will of the Israeli people who, in a March 1, 2008 poll by the respected newspaper Haaretz, showed that 64% of Israelis favored “direct negotiations with Hamas.” Siding with the AIPAC hard-liners is what one of the many leading Palestinians advocating dialogue and peace with the Israeli people was describing when he wrote “Anti-semitism today is the persecu  tion of Palestinian society by the Israeli state.”

During your visit to Israel this summer, you scheduled a mere 45 minutes of your time for Palestinians with no news conference, and no visit to Palestinian refugee camps that would have focused the media on the brutalization of the Palestinians. Your trip supported the illegal, cruel blockade of Gaza in defiance of international law and the United Nations charter. You focused on southern Israeli casualties which during the past year have totaled one civilian casualty to every 400 Palestinian casualties on the Gaza side. Instead of a statesmanship that decried all violence and its replacement with acceptance of the Arab League’s 2002 proposal to permit a viable Palestinian state within the 1967 borders in return for full economic and diplomatic relations between Arab countries and Israel, you played the role of a cheap politician, leaving the area and Palestinians with the feeling of much shock and little awe.

David Levy, a former Israeli peace negotiator, described your trip succinctly: “There was almost a willful display of indifference to the fact that there are two narratives here. This could serve him well as a candidate, but not as a President.”

Palestinian American commentator, Ali Abunimah, noted that Obama did not utter a single criticism of Israel, “of its relentless settlement and wall construction, of the closures that make life unlivable for millions of Palestinians. … Even the Bush administration recently criticized Israeli’s use of cluster bombs against Lebanese civilians [see http://www.atfl.org <http://nader.org/www.atfl.org&gt; for elaboration]. But Obama defended Israeli’s assault on Lebanon as an exercise of its ‘legitimate right to defend itself.'”

In numerous columns Gideon Levy, writing in Haaretz, strongly criticized the Israeli government’s assault on civilians in Gaza, including attacks on “the heart of a crowded refugee camp… with horrible bloodshed” in early 2008.

Israeli writer and peace advocate—Uri Avnery—described Obama’s appearance before AIPAC as one that “broke all records for obsequiousness and fawning, adding that Obama “is prepared to sacrifice the most basic American interests. After all, the US has a vital interest in achieving an Israeli-Palestinian peace that will allow it to find ways to the hearts of the Arab masses from Iraq to Morocco. Obama has harmed his image in the Muslim world and mortgaged his future—if and when he is elected president,” he said, adding, “Of one thing I am certain: Obama’s declarations at the AIPAC conference are very, very bad for peace. And what is bad for peace is bad for Israel, bad for the world and bad for the Palestinian people.”

A further illustration of your deficiency of character is the way you turned your back on the Muslim-Americans in this country. You refused to send surrogates to speak to voters at their events. Having visited numerous churches and synagogues, you refused to visit a single Mosque in America. Even George W. Bush visited the Grand Mosque in Washington D.C. after 9/11 to express proper sentiments of tolerance before a frightened major religious group of innocents.

Although the New York Times published a major article on June 24, 2008 titled “Muslim Voters Detect a Snub from Obama” (by Andrea Elliott), citing examples of your aversion to these Americans who come from all walks of life, who serve in the armed forces and who work to live the American dream. Three days earlier the International Herald Tribune published an article by Roger Cohen titled “Why Obama Should Visit a Mosque.” None of these comments and reports change your political bigotry against Muslim-Americans– even though your father was a Muslim from Kenya.

Perhaps nothing illustrated your utter lack of political courage or even the mildest version of this trait than your surrendering to demands of the hard-liners to prohibit former president Jimmy Carter from speaking at the Democratic National Convention. This is a tradition for former presidents and one accorded in prime time to Bill Clinton this year.

Here was a President who negotiated peace between Israel and Egypt, but his recent book pressing the dominant Israeli superpower to avoid Apartheid of the Palestinians and make peace was all that it took to sideline him. Instead of an important address to the nation by Jimmy Carter on this critical international problem, he was relegated to a stroll across the stage to “tumultuous applause,” following a showing of a film about the Carter Center’s post-Katrina work. Shame on you, Barack Obama!

But then your shameful behavior has extended to many other areas of American life. (See the factual analysis by my running mate, Matt Gonzalez, on http://www.votenader.org <http://nader.org/www.votenader.org&gt;). You have turned your back on the 100-million poor Americans composed of poor whites, African-Americans, and Latinos. You always mention helping the “middle class” but you omit, repeatedly, mention of the “poor” in America.

Should you be elected President, it must be more than an unprecedented upward career move following a brilliantly unprincipled campaign that spoke “change” yet demonstrated actual obeisance to the concentration power of the “corporate supremacists.” It must be about shifting the power from the few to the many. It must be a White House presided over by a black man who does not turn his back on the downtrodden here and abroad but challenges the forces of greed, dictatorial control of labor, consumers and taxpayers, and the militarization of foreign policy. It must be a White House that is transforming of American politics– opening it up to the public funding of elections (through voluntary approaches)– and allowing smaller candidates to have a chance to be heard on debates and in the fullness of their now restricted civil liberties. Call it a competitive democracy.

Your presidential campaign again and again has demonstrated cowardly stands. “Hope” some say springs eternal.” But not when “reality” consumes it daily.

Sincerely,
Ralph Nader

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Posted in AIPAC lobby, corporate interests, Israel, Palestinians, Wall Street bailout | Tagged: , , , , | 5 Comments »

Rolling the Dice on Derivatives

Posted by terres on October 14, 2008

Moderators hope that Mr Nader is NOT attempting to promote Mr Buffet’s type of capitalism as one preferable to ‘casino capitalism’ because the two types are one of the same. TERRES

In the Public Interest

by Ralph Nader

The derivatives markets of today have become a high stakes casino of unimaginable magnitude. Wall Street’s bets have gone bad, and now the whole financial system is in peril. In a best-case scenario, it appears, the taxpayers will be required to rescue the system from itself. This is why Warren Buffet labeled derivatives “weapons of financial mass destruction.”

Amazingly, there seems to be some lingering sense that current-day derivatives properly perform an insurance function.

Case in point: Alan Greenspan, the former Federal Reserve Chairman. Greenspan says the world is facing “the type of wrenching financial crisis that comes along only once in a century,” but, reports the New York Times, “his faith in derivatives remains unshaken.” Greenspan believes that the problem is not with derivatives, but that the people using them got greedy, according to the Times.

This is quite a view. Is it a surprise to Alan Greenspan that the people on Wall Street — said to be ruled only by the opposing instincts of greed and fear — “got greedy?”

This might be taken as just a bizarre comment, except that, of course, Alan Greenspan had some considerable influence in driving us to the current financial meltdown through his opposition to regulation of derivatives.

A series of deregulatory moves, blessed by Alan Greenspan, helped immunize Wall Street derivatives traders from proper oversight.

In 1995, Congress enacted the Private Securities Litigation Reform Act (PSLRA) of 1995, which imposed onerous restrictions on plaintiffs suing wrongdoers in the stock market. The law was enacted in the wake of Orange County, California’s government bankruptcy caused by abuses in derivatives trading. An amendment offered by Rep. Ed Markey would have exempted derivatives trading abuse lawsuits from the PSLRA restrictions. In defeating the amendment, then-Representative and now-SEC Chairman Chris Cox quoted Alan Greenspan, saying “it would be a grave error to demonize derivatives;” and, “It would be a serious mistake to respond to these developments [in Orange County, California] by singling out derivative instruments for special regulatory treatment.”

The New York Times reports how the Commodity Futures Trading Commission aimed for some modest regulatory authority over derivatives in the late 1990s. Strident opposition from Treasury Secretary Robert Rubin and Alan Greenspan spelled doom for that effort.

Senator Phil Gramm helped drive the process along with the Commodities Futures Modernization Act of 2000, which deregulated the derivatives market.

Defenders of deregulation argued that sophisticated players were involved in the derivatives markets, and they could handle themselves.

It’s now apparent that not only could these sophisticated players not handle themselves, but that their reckless gambling has placed the entire world’s financial system at risk.

It seems to be then a remarkably modest proposal for derivatives to be brought under regulatory control.

Warren Buffet cut to the heart of the problem in 2003: “Another problem about derivatives is that they can exacerbate trouble that a corporation has run into for completely unrelated reasons,” he wrote in his annual letter to shareholders. “This pile-on effect occurs because many derivatives contracts require that a company suffering a credit downgrade immediately supply collateral to counterparties. Imagine, then, that a company is downgraded because of general adversity and that its derivatives instantly kick in with their requirement, imposing an unexpected and enormous demand for cash collateral on the company. The need to meet this demand can then throw the company into a liquidity crisis that may, in some cases, trigger still more downgrades. It all becomes a spiral that can lead to a corporate meltdown.”

That is to say, our current problems were foreseeable, and foreseen. There is no excuse for those who suggest that present circumstances –what many are calling a once-in-a-hundred-years event — were unimaginable during earlier debates about regulation.

Some ideologues continue to defend derivatives from very strict government control. As Congress moves to adopt new financial regulations next year, hopefully the proponents of casino capitalism will be given no more credence than those insisting that the sun revolves around the earth. [End.]

It would be interesting to see Alan Greenspan nominated for the 2009 Nobel Prize for economics!

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Posted in Commodity Futures Trading Commission, Phil Gramm, PSLRA, Ralph Nader, Warren Buffet | Tagged: , , , , | Leave a Comment »

In the Public Interest

Posted by feww on October 2, 2008

Behind The Deregulatory Curtain

by Ralph Nader

The current finger pointing by the deregulation crowd in Congress and their ideological soul mates in the media reminds me of the 1939 film classic The Wizard of Oz. It is as though these spin masters want us to pay no attention to the government officials behind the deregulation curtain.


A demonstrator stands outside the New York Stock Exchange in New York, September 29, 2008. REUTERS/Shannon Stapleton. Image may be subject to copyright.

Indeed, the right-wing pundits and the revisionists in Congress are spending an inordinate amount of time falsely claiming that our nation’s current financial disaster stems from the Community Reinvestment Act, a law passed by Congress and signed into law by President Jimmy Carter in 1977. The primary purpose of this modest law is to require banks to report on where and to whom they are making loans. Community organizations have used the data produced as a result of this law to determine if banks were meeting their lending obligations in the minority and lower-income communities in which they do business. Congress passed this law because too many lenders were discriminating against minority borrowers. “Redlining” was the name given to the practice by banks of literally drawing a red line around minority areas and then proceeding to deny people within the red border home loans – even if they were otherwise qualified. The law has been in place for 30 years, but the right-wing f  ringe claims it somehow is responsible for predatory lending practices that date back just to the beginning of this decade.

Notice what these revisionists are not mentioning.

No “thank you” to former Senator Phil Gramm for pushing the repeal of the Glass-Steagall Act.. This law was passed in the wake of the stock market crash of 1929 – and designed to separate banking from securities activities. In 1999, when Congress passed the Gramm-Leach-Bliley Act and in so doing repealed Glass-Steagall the banks strayed into rough waters by looking for fast money from risky investments in securities and derivatives.

As predatory lending mushroomed out of control, the regulators — key among them, the Federal Reserve and the Office of Comptroller of Currency — sat on their hands. The Federal Reserve took exactly three formal actions against subprime lenders from 2002 to 2007. Bloomberg news service found that the Office of Comptroller of the Currency, which has authority over almost 1,800 banks, took three consumer-protection enforcement actions from 2004 to 2006.

No “tip of the hat” to the Bush Administration for preempting state regulators and Attorneys General from using state consumer laws to crack down on predatory and sub-prime lending by national banks.

And, let us not forget the folks at Fannie Mae and Freddie Mac. Imagine allowing these two government sponsored enterprises–that were weakly regulated by HUD–to claim they were meeting the national housing goals by counting the purchase of subprime loans. Back in May of 2000, our associate Jonathan Brown warned that it would be inappropriate and counterproductive to encourage Fannie and Freddie to meet the housing goals by purchasing subprime loans. Too bad our members of Congress and the regulators at HUD were infected with deregulatory zeal. Former Texas Senator and current UBS executive Phil Gramm — would-be President John McCain’s Treasury Secretary-in-waiting — pushed through the Commodities Futures Modernization Act of 2000, which deregulated the derivatives market. With help from his wife, Wendy, the former head of the Commodity Futures Trading Commission who went on to a post on the Enron board of directors, Gramm removed the controls on Wall Street so it could in  novate all sorts of exotic financial instruments. Instruments far riskier than advertised, and now at the core of the financial meltdown.

The SEC, through its “consolidated supervised entities” program, decided that voluntary regulation would work for the investment banking sector. Not surprisingly, this was a scheme cooked up by Wall Street itself. The investment banks were permitted to double, triple and go 20 times (and more) down on their bets by using lots of borrowed money. They made minimal disclosures to the SEC about what they were doing, and the SEC didn’t bother to review those disclosures adequately. Too bad for the investment banks — and the rest of us — they made lots of bad bets. The SEC has now closed the voluntary program, though now there aren’t any major investment banks left (the two remaining ones have converted themselves into conventional banks).

It is time to start paying very close attention to government officials behind the deregulation curtain. Let your Members of Congress know you are not willing to bailout the gamblers on Wall Street with a no-strings attached pile of taxpayer dollars. The time for regulation is upon us.

Posted in Fannie Mae, Federal Reserve, Glass-Steagall Act, SEC, subprime | Tagged: , , , , | 7 Comments »