Cyprus Lesson: Watch Your Bank

There is a lesson from the Cyprus situation: If you are a large depositor you need to watch your back bank. You can’t just assume someone will bail out the banks — and you. The big banks have been able to keep governments from reigning them in, while getting governments to bail them out. That game is over.

From now on you have to take a look at the bank’s books and business practices and decide for yourself if your money is safe.

Right now it looks like large depositors in Cyprus’ banks are going to take a 30-40% “haircut” – meaning when the banks reopen 30-40% of their money will be gone. This is the “bailout” alternative to the banks failing and all of the money going away.

The Cyprus lesson is that deregulation and “keeping government from meddling with business” means it’s all on you now, on your own, by yourself, to watch out for your own interests. And that’s expensive. Really, really expensive.

It’s the libertarian dream, home to roost.

Not Greece

Cyprus is not like Greece. The government didn’t borrow a lot of money. What happened is that their banks failed. Cyprus’ banks seven-or-eight times the size of Cyprus’ economy when the EU average was three times, in-part because they offered tax-haven status to depositors around the world. In particular they attracted wealthy Russian and British tax-evaders. If the banks fail they will lose their money. And they were doing what big banks do with depositors’ funds — bad loan, speculation, investing in Greek bonds… It turned out that when something is unsustainable it can’t be sustained, and this time it wasn’t. The banks failed.

But it wasn’t just wealthy Russians and Brits on the line here … Cyprus’ businesses also have their money in Cyprus’ banks. So here’s the thing: If the banks just fail it would mean that every business in Cyprus would lose their money too, and be unable to make their payrolls, pay their creditors, even pay their rent.

When Banks Fail You Lose Your Money

Here is something that most people don’t understand: When banks fail every depositor loses their money. In the depression banks failed and depositors lost their money. Regular people around the country lost their savings. This is what causes bank runs – people trying to get their money out in time. The ones who don’t get there in time lose everything.

Since the depression American banks are insured up to a certain amount by the Federal Depository Insurance C-something (FDIC), and this has prevented these bank runs. When bank fails the FDIC steps in (usually on a Friday evening), closes the bank and arranges for another bank to take over the insured accounts (usually by Monday morning) and regular depositors hardly even notice the change.

European depositors with $100,000 Euros or less are also insured, so these Cypriot depositors will be repaid at some point. Amounts over that will have to wait for the banks to be liquidated, and might or might not get some pennies on the Euro.

On top of that, when banks fail you can’t get normal financing. It becomes difficult to borrow to meet the next payroll even though you have more than that due from receivables, or to get financing to upgrade your equipment even though your cash flow can handle the payments…

So governments have to step in when there is a systemic banking-system failure. If they don’t the entire economy in that country basically just shuts down.

The Cyprus Deal Means You Have To Watch Your Bank

So Cyprus needs to bail out its big banks or lose everything, and the government is making a deal with the International Monetary Fund and German and other banks for a loan to keep things going. It looks like the Cyprus bank bailout deal means depositors with amounts over the insured level are “taking a haircut” and losing 40% of their money.

Before this happened in Cyprus you usually large depositors could stick their money in a generic “bank” and if something happened a government would step in and get you most, if not all, of your money. Banks were generic banks, they held you money and when you needed it you could just get it.

But now there is a lesson: banks can fail and government might not step in and bail everyone out. You can lose your money.

You can lose your money.

This means you have to pay attention to which bank you are putting your money in. You need to look at the particular bank you are putting your money into and understand if they are playing games, speculating, hiding things from their books, making bets with a “London Whale,” using fantasy valuations or “repos” to make their books look better, laundering money for drug dealers or terrorists, etc.

It’s on you, because government’s aren’t doing it. Whether it is due to deregulation or “regulatory capture,” the banks are doing what they want, when they want and to whom they want. And no one is holding them accountable. You can lose your money.

Government is no longer functioning when it comes to big banks, so you have to do the work yourself. You can lose your money so you have to know if your bank is on the level. Good luck with that.

Anti-government types, you got what you wanted. Government is not “meddling” with businesses – at least not with the big banks. So sit back and enjoy the ride.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary

Today’s Housing Bubble Post

Yes, I am reviving the “Today’s Housing Bubble Post” that was so popular prior to the (last) crash.

In a local weekend paper today I saw a 3br, 2ba regular old house on a regular old street in a regular neighborhood in Cupertino, CA listed for $1.4 million.

Fed-driven low interest rates lead to asset bubbles. Tax cuts for the rich lead to massive wealth inequality and investors with too much money chasing fad-speculations like birds all flying off a wire at the same time.

We need a different approach. What we need for the economy is a massive infrastructure modernization effort. Since the Reagan tax cuts we have deferred maintaining our infrastructure (and cut education and everything else) and it has caught up with us.

The Congressional Progressive Caucus “Back To Work Budget” immediately hires 7 million people to fix our infrastructure and pays for it by bring tax rates on the wealthy back to Clinton levels, plus new brackets for millionaires and billionaires. And they tax capital gains at the same rate as regular income. But they don’t even bring it back to pre-Reagan levels!

How To Understand The Greece Situation

Why are the Greek people forced to take big wage cuts, lose pensions, etc., as well as forced to privatize — sell off their public holdings into the hands of wealthy 1%ers who will then rent the services back to them for a profit?
They are forced to do this to bail out banks. These banks made loans and charged fees and high interest rates according to their own evaluations of the risk of making those loans. They understood when they made the loans that people in Greece had pensions, etc. But now that the banks crashed the economy of the world, it is the fault of the lazy people of Greece for having pensions and living high on the hog, and they have to suffer so that the banks can get all their money.
Once again, banks made loans based on valuations of risk and charged fees meant to cover losses of potential defaults. They made loans to lots of people, expecting a certain default rate, and charged money according to that risk. But now that the risk is realized, they are not happy just making what they charged (which as based on the risks they understood), and want the people of Greece to cut jobs, wages, pensions, to make sure the banks are paid.
Now, watch this carefully, especially starting at 3:50. This is about Ireland, but it may as well be Greece, or here. From What Wolf and You Can Learn from the Irish Press for the GOP Debate,

“Now, why are the Irish people required to pay billions to unguaranteed bondholders under threat to the ECB.” “You people are intervening in this society causing huge damage, by requiring us to make payments, not for the benefit of anybody in Ireland, but for the benefit of European financial institutions. Now could you explain why the Irish people are inflicted with this burden.”
No response.
Also – and this is very important, note the difference between this journalist, and what we have here in the US. This journalist is willing to press the real question and is not kowtowing to the big corporate 1%er spokesman. You won’t see that on the American corporate media, not ever, if the reporter wants to keep his or her job.

Ten Years Ago We Were Paying Off The Nation’s Debt. But Then We Elected Obama.

Just ten years ago this country was running huge surpluses and paying off its debt. But then we elected Obama and all hell broke loose. Oh, wait
Something Happened

Continue reading

The Marlboro Man Can Grab a Smoke With Obama

Today begins the days of John Boehner, aka the Orange Man. Listen, you can hear his horse approaching. Oh my, it’s like a new Marlboro commercial. Guess he and Obama can grab a smoke together outside the Oval Office. Yikes! That’s a real Hallmark moment.
Early this morning, Progressive blogger, Dave Johnson extolled the virtues of the Progressive bloggers that “were right,” and he and they were correct. “It was about the jobs, jobs, and jobs.” But let’s be blunt — there are no jobs; there is no money being loaned; employment is rampant; the banks are paying a whopping 1% interest on savings; and now there is NO hope and the inmates have taken the keys!
Yeah, we know that a loss was anticipated in an incumbent year, but not one that lost hope. Sadly, the American people either stayed home, or voted for the lunatics that were responsible for the situation. Obama and all those Democratic spin masters blew it big time. They allowed the Tea Party — fueled by Frank Luntz’s rhetoric– to harness this rage and win the day. How the heck did that happen? Now, the every person in this country has just had a profound temper tantrum, and the collateral damage is huge.
Please note that a version of this article was published earlier today in the Huffington Post.

The Great American Credit Catastrophe

The 911 of the Middle Class is the consumer credit debacle. It is the gift that keeps on giving. The reality is that the housing crisis is just one piece of this really big, ugly mess. It seems to me that our President MUST call for immediate reform and take action through executive order. Call me politically naïve, but we need action. Unemployment continues to hover close to 10%, and higher in badly hit areas. Interest paid by the banks on savings ranges from less than 1% to maybe 2.5% on a good day. The consumer credit card companies, though regulated now sort of, ran naked through the streets jacking up everyone’s interest rates to over 15 to 30%. Yes they have to notify the poor, irresponsible slobs now before they do things, but the banks still get to burn kerosene in the town square with no permits. And we haven’t even gotten to the health insurance yahoos that have four more years for their trickery. Oh Nelly, bar the door! It’s the Wild West again as the cattle are corralled – only this time it’s the American people being herded to ruin by the giddy-up bankers and health insurance companies, not just the mortgage guys.
People are getting sick from worry. Their backs hurt, their necks are out, and they are grinding their pearly whites. Few sleep well at night. Pharmaceutical sales are up. The banks we saved are savaging us. They are bulldozing the Middle Class under mountains of debt. People are losing their homes, divorces are up, businesses are closing, and unemployment is rampant. The consumer credit world and their FICO scores are broken. They are based on a world that no longer exists. In two short years, many consumers have watched their scores collapse under an avalanche of debt. The FICO scores were calibrated for a different time when consumer credit cards were not the only source of money available, mortgages were not under water, and unemployment was not soaring. If we are ever to unwind this situation, these algorithms must be reset. Otherwise the banks will never lend again. The Middle Class needs a do-over, just like the banks got.
Yes sir, Obama stood up against the broad sweeping foreclosure legislation, and Bank of America seized the moment halting foreclosures nationwide. But we’re all holding our breath waiting for the other shoe to fall as even Progressive strategist Mike Lux gens up the netroots to re-engage with the President and Congress. It is inconceivable that people have not taken to streets in protest over their lost pensions, and the absence of any kind of interest bearing bank account — except on consumer credit cards. In fact, this week Robert Sheer wrote brilliantly about Obama’s “No Banker Left Behind” — while every normal person has been thrown under the bank bus. How did we allow the bail-out of every financial institution, while abandoning the common folk? Why are Democrats — whether conservative, moderate or netroots – not able to channel this collective anger, rage and disappointment other than to take aim at one another? Given the data, there is no way out for the once resilient Middle Class without a do-over. Instead of “No Banker Left Behind” let us heal the Middle Class by fixing the credit industry; restricting the health care industry now, not in four years; and making those banks lend the money we gave them and not hide behind FICO scores. All of the Democrats are writing, but no one is demanding change now. The Tea Party has successfully harnessed the anger and rage, but has no plan. Frankly, they are just another distraction taking our attention away from the gravity of the problems.
Mr. President, come back to us as Mike Lux laments. We need you. We, in the Middle Class, are living this nightmare everyday of our lives. Figure it out, and get the Middle Class out from under. The numbers do not lie. This is our emergency, our call to action, our 911. Friends and neighbors are collapsing from the stress when they can ill afford it. Unemployment is not going away. Consumer debt is skyrocketing. Mr. Obama, Americans are not being frivolous and irresponsible as Dr. Summers would like you to believe. They are boxed in with no escape hatch. Consider enacting a nationwide job core like the WPA, putting the banks on real notice, corralling those nasty health insurance folks, redoing the credit industry, and loosening up cash. No one is sleeping at night. People are nervous and cannot see a future.
Please, inspire us again, show emotion, get messy, and let the wrinkles show. Mr. President raise your voice in outrage. Give us voice. Come back to us. The time is now.
This was originally published on the Huffington Post earlier today.
See the pearltree below for the references for this article.
US Economy

The Real Deficit Is Jobs!

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
The real deficit is jobs. That is one more of those things that everyone can see in front of their faces, but we’re told it isn’t what it is. There aren’t enough jobs, and we’re being told this is our fault because we wanted pensions and good wages and vacations and respect and dignity and please, sir, just a little slice of the pie.
In case you haven’t noticed, the world’s economy is suddenly undergoing a classic “Shock Doctrine”-style, coordinated propaganda attack. The wealthy and powerful, having insisted that countries cut their taxes and run up debt, now insist that the middle class and poor must work harder, have their pensions reduced, sell off (to them) their publicly-held resources, and take other “austerity” steps to pay off the debt that these lazy, parasitic peasants dared to run up.
The excuse is that “the markets” will “lose confidence” in us. Apparently we aren’t working the salt mines hard enough. “The markets” — that’s the crowd who got in trouble and insisted that the world would end unless we immediately handed over to them all the rest of the money in the world — will “lose confidence” in our ability to work the mines hard enough, and will cut us off, unless we cut our pensions, sell off (to them) our resources, and promise never to be lazy and make demands for better wages, pensions, workplace safety, and do it now.
The real deficit is jobs.
History teaches that the way out of an economic slowdown is to invest in infrastructure, education and modernizing manufacturing.
Slactivist said it best the other day,

This calls to mind an old story:

But knowing their hypocrisy, he said unto them, “Why are you putting me to the test? Bring me a dime and let me see it.”
And they brought one. Then he said to them, “Whose head is this — FDR’s or Herbert Hoover’s?”
They answered, “Roosevelt’s.”
And he said unto them, “Right. So shut up. Have you morons already forgotten the 20th Century? When the choice is between imitating what worked and what really, really didn’t work, why are you pretending it’s terribly complicated?”
And after that, no one dared to ask him any question.

I’m not an economist, but we’ve got five applicants for every single job opening. If you tell me that the best response to that situation is to lay off hundreds of thousands of teachers, I will not accept that this means that you’re smarter and more expert than I am. I will instead conclude — regardless of your prestige or position or years of study — that you’re a moral imbecile.

According to the Labor Department,

By the end of 2009, the jobless rate stood at 10.0 percent and the number of unemployed persons at 15.3 million. Among the unemployed, 4 in 10 (6.1 million) had been jobless for 27 weeks or more, by far the highest proportion of long-term unemployment on record, with data back to 1948.

That’s right, it was the policies of austerity that created a depression, and the policies of job-creation, infrastructure investment and taxing the wealthy to pay for it that got us out. But that was back when We, the People were still in charge.
In other news:
Number Of Millionaires Grew Amid Recession.

The rich grew richer last year, even as the world endured the worst recession in decades.

Top 1 Percent of Americans Reaped Two-Thirds of Income Gains in Last Economic Expansion, Income Concentration in 2007 Was at Highest Level Since 1928, New Analysis Shows,

Two-thirds of the nation’s total income gains from 2002 to 2007 flowed to the top 1 percent of U.S. households, and that top 1 percent held a larger share of income in 2007 than at any time since 1928, according to an analysis of newly released IRS data by economists Thomas Piketty and Emmanuel Saez.
During those years, the Piketty-Saez data also show, the inflation-adjusted income of the top 1 percent of households grew more than ten times faster than the income of the bottom 90 percent of households.

Top 1% Increased Their Share of Wealth in Financial Crisis,

According to his analysis, the top 1% held 34.6% of all national wealth in 2007. By Dec. 31, 2009, they held 35.6%.
Meanwhile, share of national wealth held by the bottom 90% fell to 25% from 27%.

Corporate Wealth Share Rises for Top-Income Americans

In 2003 the top 1 percent of households owned 57.5 percent of corporate wealth, up from 53.4 percent the year before, according to a Congressional Budget Office analysis of the latest income tax data.
. . . For every group below the top 1 percent, shares of corporate wealth have declined since 1991.
. . . Long-term capital gains were taxed at 28 percent until 1997, and at 20 percent until 2003, when rates were cut to 15 percent. The top rate on dividends was cut to 15 percent from 35 percent that year.

See if you can make the connection. They want us to cut back our pensions, cut our wages, sell off our resources and work harder, to pay back the money that was borrowed and handed to them.
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Wall Street Extreme Poker Challenge

Watch as the most corrupt “Too Big To Fail” bank CEOs play a spirited game of “Taxpayer Hold ‘Em” … Not with their money … but with yours! And sign our petition to send the message to Congress that it is time to put an end to taxpayer bailouts once and for all by breaking up the big banks and putting an end to “Too Big to Fail.”
Sign the Petition!

NEW WALL STREET BAILOUT TOTAL $4.6 TRILLION IN FEDERAL FUNDS DISBURSED

The Center for Media and Democracy is the SourceWatch people. I worked on the Election Protection Wiki with them last year, helping fight Republican voter suppression leading uop to the election.
I have been helping out a bit with their new project, which was announced today:

CMD RELEASES NEW WALL STREET BAILOUT TOTAL
$4.6 TRILLION IN FEDERAL FUNDS DISBURSED
New Tally Focuses on Expansive Role of Federal Reserve

Today, the Real Economy Project of the Center for Media and Democracy (CMD) released an assessment of the total cost to taxpayers of the Wall Street bailout. CMD concludes that multiple federal agencies have disbursed $4.6 trillion dollars in supporting the financial sector since the meltdown in 2007-2008. Of that, $2 trillion is still outstanding.
CMD’s assessment demonstrates that the Federal Reserve has provided by far the bulk of the funding for the bailout in the form of loans amounting to $3.8 trillion. Little information has been disclosed about what collateral taxpayers have received in return for these loans. CMD also concludes that the bailout is far from over as the government has active programs authorized to cost up to $2.9 trillion and still has $2 trillion in outstanding investments and loans.
Learn more about the 35 programs included in our tally by visiting our Total Wall Street Bailout Cost Table, which contains links to pages on each bailout program with details including the current balance sheet for each program.
“While the Treasury Department is patting itself on the back for recouping Troubled Asset Relief Program (TARP) funds and allegedly making money off of its aid to Citigroup, our accounting shows that these programs were a relatively small portion of the federal funds that have gone out the door in support of the financial sector. Far more has been done to aid Wall Street through the back door of the Federal Reserve than through the front door of Congressional appropriations,” said Mary Bottari, Director of CMD’s Real Economy Project.
“The tally shows that more scrutiny needs to be given by policymakers and the media to the role of the Federal Reserve especially as the Fed has accounted for the vast majority of the bailout funds, yet provides far less disclosure and is far less directly accountable than the Treasury,” said Conor Kenny, the researcher who collected the data on the bailout.
CMD has presented its work in a table that shows: funds disbursed, maximum funds that were at-risk at the height of the bailout, and actual funds still outstanding for each program. CMD is also making available a Financial Crisis Tracker, a widget for the table that can be downloaded to websites to get up-to-date numbers on the financial crisis and the bailout. The Wall Street Bailout table will be updated monthly and will be a tremendous resource for reporters and the public alike.
WALL STREET BAILOUT COST TABLE can be accessed here.
KEY FINDINGS can be accessed here.
FINANCIAL CRISIS TRACKER can be accessed here.

Low Interest Rates Are A Tax On People Who Don’t Take Risks

Low interest rates are a tax on people who save money. And they are a subsidy for the big banks. They are just one more Wall Street bailout.
Holding interest rates as low as they are causes hardship for many. It makes savers look for higher returns. Retired people who were lucky enough to put money away can’t afford to get by. It causes people to take risks like putting money in the stock market, where it can be lost. It makes people susceptible to scams.
But the consequences can be a lot worse than that. Read this: Public Pensions Are Adding Risk to Raise Returns

But states and other bodies of government are seeking higher returns for their pension funds, to make up for ground lost in the last couple of years and to pay all the benefits promised to present and future retirees. Higher returns come with more risk.
“In effect, they’re going to Las Vegas,” said Frederick E. Rowe, a Dallas investor and the former chairman of the Texas Pension Review Board, which oversees public plans in that state. “Double up to catch up.”
. . . Most have been assuming their investments will pay 8 percent a year on average, over the long term. This is based on an assumption that stocks will pay 9.5 percent on average, and bonds will pay about 5.75 percent, in roughly a 60-40 mix.

They assume 8%? Who is kidding who? Everybody knows this is not realistic, but they are allowed to keep the assumption on the books.

“Nobody wants to adjust the rate, because liabilities would explode,” said Trent May, chief investment officer of Wyoming’s state pension fund.

This is the same thing as allowing banks to not “mark to market” their mortgage portfolios. Everyone knows the banks are insolvent, but they are allowed to keep from writing down these toxic assets. Or the government buys them up from the ones with political influence…
Just HOW bad is the problem?

Colorado has been assuming its investments will earn 8.5 percent annually, on average, and on that basis it reported a $17.9 billion shortfall in its most recent annual report.
But the state also disclosed what would happen if it lowered its investment assumption just half a percentage point, to 8 percent. … the plan’s shortfall would actually jump to $21.4 billion.

So they are reporting a $17.9 billion shortfall if the assumption is a fantasy 8.5% return. If they lower that to a still-fantasy 8% assumption they would have to report a $21.4 billion shortfall.
So just how bad would it be if they reported an honest assumption?
We are not out of the financial crisis until all of the accounts are honest and transparent.

Who Is Really “Anti-Business”?

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.
In the Bloomberg story today, Obama Doesn’t ‘Begrudge’ Bonuses for Blankfein, Dimon, President Obama, spoke up about the huge Wall Street bonuses handed out this year,

“I know both those guys; they are very savvy businessmen,” Obama said in the interview yesterday in the Oval Office with Bloomberg BusinessWeek, which will appear on newsstands Friday. “I, like most of the American people, don’t begrudge people success or wealth. That is part of the free- market system.”

Free-market system? These huge bonuses are for the Wall Street robber-barons that caused the financial collapse, took taxpayer dollars to prop up their fortunes, and get free money from the Federal Reserve with which to “trade” — speculate, gamble, call it what you want. Meanwhile they spend hundreds of millions of dollars “lobbying” (bribery) to fight any kind of financial reforms or consumer protections from enactment, and to make sure that no such think as a “free market” with honest competition never threatens their dominance of business and government.
So why is the President talking like this [note: see update below], at a time when so many Americans are out of work, losing their homes, and falling into poverty? Because he doesn’t want to be perceived as “anti-business.” From the story,

Obama sought to combat perceptions that his administration is anti-business and trumpeted the influence corporate leaders have had on his economic policies. He plans to reiterate that message when he speaks to the Business Roundtable, which represents the heads of many of the biggest U.S. companies, on Feb. 24 in Washington.

Meanwhile a Senate filibuster blocked the President’s great nominee, Craig Becker, from serving on the National Labor Relations Board. So the Labor Board remains non-functional. The filibuster kept workers from being fairly represented, and the Board itself from having a tie-breaking vote so they can resolve labor disputes so the “free market” can function as it should, with workers able to bargain for better wages, benefits and working conditions.
These two stories this week present quite a contrast, and send mixed and demoralizing signals to the country. President Obama doesn’t want to “appear” to be “anti-business.” Meanwhile giant, monopolistic corporations and Wall Street are chewing up Main Street and keeping smaller businesses from competing, while their lobbyists keep the legislature from getting anything done at all.
Let’s talk about this “anti-business” label and how it is used.
I wrote a post the other day titled, Tax Cuts HURT Small And Medium Businesses, championing small and medium businesses in their struggle to survive against the giant monopolistic corporations that are crushing them. Summary: struggling businesses don’t pay taxes, so tax cuts only give more ammunition to the giants that are crushing them. In the comments at one of the places it was posted I was accused to being “anti-business.”
Apparently championing small and medium businesses – America’s job-creating, innovative engine – is “anti-business.” If you look around, being anything but a servant to Wall Street and the giant monopolistic corporations earns you the label, “anti-business.”
The Power Of Words
This got me thinking about the ways this label, “anti-business,” gets used. It is always used by corporate/conservative types, against anyone who questions the power of Wall Street and the giant monopolistic corporations that are strangling smaller businesses, workers and democracy.
The President nominates a great candidate for the Labor Board, then worries that he is perceived as “anti-business.” Labels like “anti-business” are powerful accusations and come from very, very powerful people. (Like this or this.)
Last year, in the post Misuse Of The Words Protectionism And Trade Is Making Us Poorer I wrote,

Language has tremendous power. People like George Lakoff and Drew Westin, who study the use of language in political discussion, say that our choice of words has the power to actually affect the “wiring” or neuron circuits that our brains use to think.
The corporate marketers and political persuaders have certainly learned the power of language to influence us. It has even gotten to the point where “neuromarketing” uses MRI and EEG to study how our brains react to certain stimuli so they can be used to market and persuade.
In politics I think that we have even reached a point where we give words more power and importance even than the ideas the words represent. In the Bush years we learned that the persuaders believed they could “create their own reality.”
[. . .] words are used as weapons by professionals who wish to distract us from things that are in front of our own faces.

So how do we fight this? One way is to recognize our own power as citizens in a democracy. In America the people – Main Street – are supposed to be in charge of things, and the purpose of business and finance is supposed to be to serve our interests and needs, not the other way around. Why else would We, the People have set this system up, anyway? So we need to internalize this understanding, and believe in it. We are supposed to be in charge. We, the People are supposed to be telling businesses how they are supposed to operate, setting the rules and regulations, defining the playing field on which they operate. We need to have a sense that it is improper for businesses to be involved at all in the decision-making about the rules under which businesses operate. It must be this way because business interests will always, always try to tilt the rules against the free market and in their own favor, giving them advantages over other businesses.
This isn’t about being “anti-business” at all, it is about being in favor of a level playing field, where the innovative small and medium companies have a fair chance to compete. It is the giant monopolistic corporations that are “anti-business.”
Believe it.
Update – Greg Sargent looked at the transcript and has a more nuanced interpretation.