Monthly Archives: March 2009

Wall Street, Washington, and the Broken Economy

On March 4, 2009, Wall Street Watch released a damning report about the cause of the current economic meltdown, “Sold Out: How Wall Street and Washington Betrayed America.” This report “has one overriding message: financial deregulation led directly to the financial meltdown.”

Part I of the report documents a dozen specific deregulatory steps (including failures to regulate and failures to enforce existing regulations) that enabled Wall Street to crash the financial system:

  1. In 1999, Congress repealed the Glass-Steagall Act, which had prohibited the merger of commercial banking and investment banking.
  2. Regulatory rules permitted off-balance sheet accounting — tricks that enabled banks to hide their liabilities.
  3. The Clinton administration blocked the Commodity Futures Trading Commission from regulating financial derivatives — which became the basis for massive speculation.
  4. Congress in 2000 prohibited regulation of financial derivatives when it passed the Commodity Futures Modernization Act.
  5. The Securities and Exchange Commission in 2004 adopted a voluntary regulation scheme for investment banks that enabled them to incur much higher levels of debt.
  6. Rules adopted by global regulators at the behest of the financial industry would enable commercial banks to determine their own capital reserve requirements, based on their internal “risk-assessment models.”
  7. Federal regulators refused to block widespread predatory lending practices earlier in this decade, failing to either issue appropriate regulations or even enforce existing ones.
  8. Federal bank regulators claimed the power to supersede state consumer protection laws that could have diminished predatory lending and other abusive practices.
  9. Federal rules prevent victims of abusive loans from suing firms that bought their loans from the banks that issued the original loan.
  10. Fannie Mae and Freddie Mac expanded beyond their traditional scope of business and entered the subprime market, ultimately costing taxpayers hundreds of billions of dollars.
  11. Read the rest of this entry

Guest Blog: Sam Rhodes

Juneau, Alaska–In efforts to make our voices heard by Alaska legislators on the Employee Free Choice Act and public employee pension reform, 130 ASEA/AFSCME Local 52 members converged on the capital for an educational conference highlighted by lobbying and an exciting rally. The event took place over two days, February 18th and 19th.

Prior to meeting legislators in person to lobby, Local 52 members received in-depth information on the voting records and tendencies of legislators whose votes we need for passage of the proposed measures under consideration.

Next, our members met with their legislators in personal one-on-one meetings to add their personal touches to the context of the Employee Free Choice Act and Alaska legislation in the forms of HB 30 and SB 54. The latter measures seek to return public employees to a defined benefit [retirement plan] from the present defined contribution (401k). The defined benefit was erased and replaced with the defined contribution by the Alaska Legislature in 1995 as a cost-saving mechanism, resulting in minuscule savings since its enactment.

The event included an all-union rally on the capitol steps where over 350 Alaska unionists turned out to remind the Alaska legislature that if talking fails to get our voices heard, we don’t mind yelling a little. Read the rest of this entry