Different strokes for different protestors

Operating on very different pieces of turf, the Occupy movement and the budding shareholder revolt are putting the status quo on notice: no more business as usual.

With May Day marches across the country earlier this month, the occupiers signaled they’re not going away. They intend to keep taking public space, protesting and reminding the country what our democracy has lost in a takeover by corporate powers.

Meanwhile, corporate shareholders appeared to be slumbering in the wake of the financial crisis, lulled by soothing predictions about economic recovery and buoyed by a stock market recovery.

But taking advantage of an advisory vote granted them in the Dodd-Frank financial reform legislation, shareholders have recently taken highly publicized swipes at excessive compensation plans for CEOs at Citibank and British Petroleum and several smaller banks.

At Citibank, 55 percent of shareholders rejected the notion that a company whose shares dropped 45 percent over the past year, wiping out $60 billion in shareholder equity, owed its CEO a $15 million salary hike. Citibank’s board said it would carefully consider the shareholders’ concerns.

CEO compensation plans narrowly won approval at General Electric, where the value of the stock has fallen 45 percent over the past 5 years, as well as at insurance giant Cigna, but not without noisy protests. At Credit Suisse and Barclays, a sizeable minority of shareholder voted against their executives’ compensation packages.

And excessive compensation is not the only thing shareholders are upset about. Some Cigna shareholders also expressed their opposition to the $1.8 million Cigna spent lobbying against health care reform in 2009.

At Wellpoint and Aetna insurance companies, shareholders want company officials to improve disclosure of their political spending, after the Center for Political Accountability found that both companies’ disclosure policies "leave significant room for serious misrepresentation of the company's political spending through trade associations."

Four of Wellpoint’s directors who are standing for reelection also face unusual no vote campaigns because the company has failed to live up to earlier commitments to improve disclosures of their political spending.

To be sure, these actions represent only a small number of corporations so far; most shareholders are approving without a fight the executive pay plans proposed by the board of directors’ compensation committees.

But like the occupiers protesting in the public square, the shareholders at these major corporations have driven a very large, sharp stake into their turf, and these first, highly publicized steps toward more accountability and transparency are likely to inspire more like them.

Occupiers, with their horizontal leaderless anarchist principles and drum circles, and shareholders, with their focus on the bottom line, might not seem to share much other than a desire for more accountability and a sense that the system as it is, isn’t working. But both groups are equally shut out of this political season, with neither party doing anything but paying the slightest lip service to their issues.

The occupiers and the shareholders are also carrying an important message for the rest of us: democracy isn’t just a matter of walking in to the ballot box and pulling the lever for our team every four years and waiting for the politicians to fix our problems.

 

 

 

 

Martin Column / Occupy / Outrage - 05/09/2012

Obama to Corporate Persons: And This is How You Thank Me?

Poor President Obama. Confronted with an economic catastrophe when he took office, he made a decision – well documented here and here, for example – to save the financial industry from its own misdeeds, foregoing the opportunity to obtain from the Wall Street CEOs any kind of quid pro quo for beleaguered taxpayers and homeowners. And what does he get in return?

Wall Street contributions to the President’s re-election campaign are down 68%, reports the New York Times.

There’s also been a drop in financial support from some of those who were all-in to elect him in 2008.  Some big-name progressive donors, dismayed by the President’s inability to hold the line on everything from foreclosures to a public health care option (which likely would have survived the Supreme Court’s widely expected invalidation of the health care reform law), are sitting this one out – at least for the moment.

Unfortunately, the worst is yet to come for the President, courtesy of the same Supreme Court. Freed from campaign spending restrictions by the court’s ruling in Citizens United, the highly-skilled right wing corporate apparatus is aiming to raise $500 million in “super PAC” money to beat Obama. Pro-Romney super PACs have already out-raised those supporting the President by a factor of eight.

This comes as no surprise to those familiar with the way big business behaves in public.

If corporations are people, as the Republican majority on the Supreme Court says, then the defining trait of the modern corporate personality is ingratitude. When all the federal bailout programs are totaled up (including indirect assistance like being able to borrow taxpayer money at super-low interest rates), Wall Street and many other firms got somewhere around $14 trillion in financial aid from Washington.

Had that money been put in the hands of the American people, it could have paid off every mortgage, credit card and car loan in the United States.

Like President Obama, we are still waiting for our thank you note from corporate America.

Instead, we get surging credit card interest rates, skyrocketing gas prices, outrageous health insurance premium increases and, adding insult to those injuries, the imposition of undisclosed inflated fees by cell phone, airline and other companies for the dishonest purpose of charging hapless consumers more than the advertised price.

Hence the need for parental supervision of corporate persons, also known as "regulation."

Corporate money had already eroded the democratic process under the patchwork of campaign finance laws that pre-dated Citizens United. Our report, “Sold Out: How Wall Street and Washington Betrayed America” (PDF) gets right to the bottom line. Between 1998 and 2008, Wall Street invested $5 billion in Washington, a combination of money for lobbying and campaign contributions that won deregulation and other policy decisions that enabled the Money Industry to do as it pleased. The ensuing orgy of unbridled speculation came to a halt in 2008 when the big banks threatened to shut down the system unless they got trillions of dollars in loans, tax breaks and other taxpayer bailouts.

But by deregulating corporate money in Citizens United, the U.S. Supreme Court has empowered a crime wave of corporate influence peddling that will dwarf anything this country has ever seen.

Take, for example, Sacramento – California's integrity-free zone.

$ A half-decade-long battle to force health insurance companies to open their books and prove they need rate increases was crushed by industry lobbyists, forcing angry consumers to mount a ballot measure of their own.

$ A package of bills backed by the state’s Attorney General to prevent banks from abusing the home foreclosure process – dubbed the “Homeowners Bill of Rights” – has been blocked by the banking industry, which spent over $70 million on lobbyists and lawmakers in California between 2007 and 2011.

$ A bill that will deregulate telephone service, sponsored by the state’s two biggest phone companies, AT&T and Verizon, is sailing through the state legislature, much as electricity deregulation did in 1998 – to disastrous consequences for California taxpayers.

Once upon a time, average citizens might have had a voice in these policy debates.  Now that corporate America is locked and loaded, we don't stand a chance.

Citizens United / Harvey Column / President Barack Obama / Supreme Court - 04/23/2012

Phony Moderates, Real Power

Beware wolves dressed in moderates’ clothing.

Especially the “fresh thinking” as gussied up by the group calling itself “Third Way,” which tries to put a genteel, highbrow facade on its advocacy for increasing austerity and financial insecurity for the majority of Americans.

Digging beneath the sunny platitudes about promoting growth, you will find that the organization is chock full of high finance types and their political servants, so it’s no surprise that they’re more interested in rethinking what they like to belittle as entitlements and boosting too big-to fail banks than they are in raising questions about the financial system.

And they’re not laying down these proposals just to hear themselves talk.

These people have real power to set the terms of the debate and strongly influence decision-makers.

The most obvious example is President Obama’s new chief of staff, Bill Daley, the former top official of J.P. Morgan who sits on Third Way’s board.

He’s just the latest in a string of  bad appointments the president has made to oversee the nation's economy, from Tim Geithner and Larry Summers to Gene Sperling, the Goldman-Sachs alum who fought for financial deregulation in the Clinton White House, who was recently appointed to replace Summers on the Council of Economic Advisers. Then there's Jeffrey Immelt, GE’s CEO the outsourcing, plant-shutting ace who Obama put in charge of reducing the unemployment rate.

For his part, Daley seems to have earned his job as the president’s chief adviser by fighting against financial reform, especially from the Consumer Financial Protection Bureau.

The mainstream media has worked hard to foster the idea of centrism, with Third Way as a prime proponent of “moderate ideas.”

But there’s nothing moderate about the continuing unhealthy influence of corporate America over our political process, fostering policies that are turning us into something more like a Third World country polarized between haves and have nots than the land of opportunity for all.

There’s nothing moderate about the fear-driven wealth and power grab, otherwise known as the federal bailout, that entrenched the wealth built for a select few in the years of the bubble economy, while it increased economic insecurity for the rest of us. As Neil Barofsky, TARP’s inspector-general, pointed out in his most recent report, it also entrenched the political and financial clout of “too big to fail” financial institutions.

There’s nothing moderate about the austerity agenda of shared sacrifice which consists of cuts to Social Security, Medicare and education.

There’s nothing moderate about the attack on the economic system that was built in the wake of the Great Depression and World War II, which combined the power of the free market with a system of regulation and safety nets. That attack, with its intellectual underpinnings in the work of the economist Milton Friedman, was launched in the 1980s and has been carried forward by politicians of both parties.

Meanwhile, two of the most impassioned politicians standing up to that attack, from opposite ends of the spectrum, would probably be characterized by the mainstream media as extremist: Sen. Bernie Sanders, the independent socialist from Vermont, and Rep. Ron Paul, the libertarian from  Texas. Those two men, who would probably find much to disagree on, worked together to pass a bill to audit the highly secretive activities of the Federal Reserve during the bailout.

You may or may not agree with Sanders or Paul either, but they aren’t afraid to challenge a status quo which props up the powerful while undermining the powerless.

You can scour Third Way’s materials and you won’t find anything that challenges the risky practices of financial institutions that wrecked our economy. You won’t find anything that challenges the power equation that props up the status quo. Behind its rhetoric of moderation, Third Way knows which side it’s on.

Consumer Financial Protection Agency / Financial Reform Legislation / President Barack Obama - 02/08/2011

Just Who is Us, Mr. President?

President Obama went down to the playground where Wall Street bullies have been beating up kids and taking their lunch money. He suggested that the bullies should help create rules that would stop them from beating up kids.

How lame is that?

One blogger compared Obama’s timid performance to FDR’s attack on Wall Street for its rabid opposition to the New Deal. But I kept thinking about the other Roosevelt, the one who took on the railroad trusts.

While Teddy Roosevelt was far from perfect, he had his moments: “A typical vice of American politics,” he said, “is the avoidance of saying anything real on real issues.” He could have been talking about Obama.

What we saw on Thursday was a terrible thing: a brilliant and articulate president of the United States unwilling or afraid to tell it like it is.

It’s not the Republican minority who pose the greatest danger to real financial reform. It’s the powerful Wall Street wing of the majority Democrats who don’t want to offend the bankers. Our representatives need to know we want real reform, not just lip service that basically preserves the status quo. Our representatives need to have the courage to support the stronger proposals by Sens. Kaufman, Brown, Shaheen, and Merkley that would do more to actually break up the big banks and put limits on their risky gambling.

Mr. President: Let’s get real. Let’s say out loud that banks and bankers have grown too powerful.

Let’s get real. It’s absolutely not in the banks’ interest to “join us” in supporting reform. By suggesting that as the solution, you abandon your own credibility and avoid the “real issues” of a government corrupted by those bankers’ money.

Stop negotiating with Wall Street. Cop to their massive financial support for your campaign, and those of your colleagues in Congress. And tell Wall Street change is coming whether they like it or not.

Martin Column / President Barack Obama / Too Big To Fail - 04/23/2010

The Reform Charade

Remember when the president’s chief of staff, Rahn Emmanuel,  strode onto the political stage and stirringly channeled Churchill, saying: “Never waste a crisis?”

It turns out that what he was really saying was: “Never waste an opportunity to reward your campaign contributors.”

Two years after the credit meltdown that crippled our economy, the financial system remains way too complicated and continues to reward high risk and focus on short-term profits that offer few benefits to those who aren’t bankers.

And even after the fiasco we’ve been through, the banks continue to  snooker the snoozing watchdogs.

Last week, the Wall Street Journal reported how 18 banks have continued to manipulate their financial reporting to disguise from regulators their real level of risky borrowing.

And this is after the generous, no strings attached bailout that put trillions of taxpayer-backed dollars into the hands of the big banks.

We need a massive overhaul. What we’re getting instead is a charade, tricked out by a Democratic leadership intent on rewarding failure, propping up the status quo and labeling that reform.

One of the few U.S. senators who’s offering a stronger version of reform and consistent candor on the shortcomings of the leadership’s proposals is the man who replaced Vice President Joe Biden. Sen. Ted Kaufman, D-Delaware, said last month: “After a crisis of this magnitude, it amazes me that some of our reform proposals effectively maintain the status quo in so many critical areas, whether it is allowing multi-trillion-dollar financial conglomerates that house traditional banking and speculative activities to continue to exist and pose threats to our financial system, permitting banks to continue to determine their own capital standards, or allowing a significant portion of the derivatives market to remain opaque and lightly regulated.”

The Democratic senators would do well to be guided by the words of someone who was one of them not long ago, who was particularly astute about the toxic influence of lobbyists and campaign cash on our economy and the political process.

Back when he was a U.S. senator, President Obama wrote in the Financial Times in 2007 that the subprime crisis “was also a parable of how an excess of lobbying and influence can defeat the common sense rules of the road, placing both consumers and the nation’s well-being at risk.”

Washington, Obama wrote, “needs to stop acting like an industry advocate and start acting like a public advocate.”

Candidate Obama wouldn’t have been shocked by the new report from the Treasury Department’s Inspector General about how the two regulating agencies which were supposed to watching over Washington Mutual bungled the job before the bank collapsed in 2008, under the weight of worthless subprime mortgages, resulting in the largest bank failure in U.S. history.

It turns out that regulators were well aware of the foul odors coming off the carcass of Washington Mutual’s loan business. But the Office of Thrift Supervision continued to find the bank “fundamentally sound” and didn’t raise alarms until days before it collapsed.

We can’t let our leaders ignore these harsh lessons that came with such a high price. They may be able to squander a crisis, but without some meaningful change to rein in the financial industry, the crisis may waste the rest of us.

Martin Column - 04/12/2010

Quotable: Sen. Ted Kaufman

"After a crisis of this magnitude, it amazes me that some of our reform proposals effectively maintain the status quo in so many critical areas, whether it is allowing multi-trillion-dollar financial conglomerates that house traditional banking and speculative activities to continue to exist and pose threats to our financial system, permitting banks to continue to determine their own capital standards, or allowing a significant portion of the derivatives market to remain opaque and lightly regulated."

Sen. Ted Kaufman, D-Delaware, March 11, 2010

Homepage Content / Quotable - 04/01/2010