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Posts Tagged ‘Matt Taibbi

I’m disgusted

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Student Loan Bonanza

Illustration by Victor Juhasz

Over the last five years I’ve become more and more disgusted by both our federal government and our financial industry as a result of our entire country, and government, becoming financialized. All that matters now is how much profit can be made, regardless of the consequences to human lives, and protecting the worse financial actors from the recent financial meltdown that caused a worldwide recession.

A couple of days ago, Matt Taibbi, wrote a lengthy piece in Rolling Stone Magazine about the student loan scandal that threaten our nation’s economy.

Ripping Off Young America: The College-Loan Scandal
The federal government has made it easier than ever to borrow money for higher education – saddling a generation with crushing debts and inflating a bubble that could bring down the economy

I didn’t read this story two days ago when it was published. I wish I had since my voice now will make little difference – everyone’s moved on to the next scandal or reality show highlights. 

However much Taibbi’s rhetoric seems over the top, his actual story is accurate. A couple of years ago, the Higher Ed. journal he mentions published a story on the rapidly rising cost of a college education.

Although the journal didn’t go into the whole funding of students loans issue, the publication did lay most of the blame on institutions that went on a spending binge during the last decade, which universities defended as needing to do to “attract students”. According to the schools, competition among colleges required spas, hot tubs, outrageously expensive sports stadiums, cafeterias rivaling the best restaurants, and so much more. 



Money was cheap so colleges spent lavishly, expecting the public through taxes, to pick up the bill even as students were being saddled with higher tuition costs. Not long after that journal article came news of the UC Berkeley Chancellor being given a million dollar salary and a completely renovated (real) mansion (at the UC system) multi-million dollar expense. Within months, news broke of other chancellors receiving million dollar incomes…and other expensive perks. Like the dramatic increase in C-suite salaries, competition, you know. 



Then as the states’ began to deal with massive lost revenues following the financial crash, states cut back on higher educational funding, putting even more pressure on students in yet higher tuition costs. Even now under Obama’s Administration, as Taibbi notes, the federal government expects to make billions of dollars in profit off of student loans, especially since students cannot discharge those loans under bankruptcy. Nor were students and parents informed or warned of the hazards and total costs of those government backed loans. Now, we have millions of our young people’s lives being destroyed by the cost of loans they never understood and never expected.

To those of us who were paying attention, the inability of discharge student loans in bankruptcy is old news. The GOP Congress, under Bush 2, pushed it through, even though huge numbers of groups and people lobbied against it at the same time they turned over the student loan program to banks. What happened under that GOP sponsored and driven legislation is that student loans became one of only two financial obligations that cannot be erased in bankruptcy. The other is taxes owed. 



Taibbi is also correct about the degree requirement for even low skill workers. When I worked for Oracle back in the ’90s, even our receptionists were required to have 4-year degrees. Why, I have no idea; it’s not like someone answering the phone and forwarding calls needs an elevated education. 

Yet, in our increasing “information” economy, a degree has become a necessity…unless you agree with the recent GOP mantra that only some should attain a degree while the vast majority should forego college. To become what: checkers at Walmart or burger flippers at McDonalds? Even getting into a qualified tradesman program (not hyped for-profit ripoff programs), like plumbing or carpentry which cannot be outsourced, that actually trains apprentices and helps them with jobs are few and far between.

I keep asking but no one answers, why do we citizens continue to permit our entire economy to be financialized to the detriment of millions of families, both now and in the future? Why do we allow ourselves to be conned and lied to and abused? Why aren’t we fighting back not only with our votes but with our power to demand changes in electoral laws that protect our interests, rather than just the interests of the powerful, wealthy and connected?

As long as the voting public unwisely protects the lobbyists and wealthy donors who have far more power, influence, donor money, and ability to get their preferred message listened to and across to legislators, average Americans, and our future generations, will be nothing more than insignificant chess pawns.

It’s obvious that Obama is not really going to stand up for you. Neither will anyone on the GOP bench. Supply side, neo-liberal economics which has destroyed our jobs and our economy is all the GOP offers. And Obama’s Administration is not a whole lot better. Obama is not a progressive or a socialist or liberal. He’s center right on almost every issue. Even Republican TR was more progressive and more concerned about average Americans and new businesses and against the excesses of Wall St than Obama has been.

But nothing…absolutely nothing…will change until we voters demand that the entire campaign financing system be rebuilt from the bottom up. Corporations, so-called non-profit Super-PACs and unions are not people as all of our founders concluded and should not have First, Fourth and Fifth Amendment rights. They are nothing more than legal fictions, which our greatest legal minds stated long ago. Moreover, TR eloquently wrote when money became heavily involved in the political process, corruption occurred either by bribery of legislators or by legislators blackmailing companies. In both cases, the public loses even as legislators grow more wealthy.

The current system of financialization of our entire economy and political bribery and blackmail are killing our country and destroying the lives of our children and grandchildren. Just throwing these “bums” out and replacing them with another set of bums changes nothing since the incentives remain the same. Nothing will change but the faces. If America is to recover, the voters must demand new and strict new election donor laws, including a Constitutional Amendment and prohibitions on party gerrymandering, that puts power back into hands of voters again.

As voters, parents and workers, we must demand real change that protects our interests. Ask and demand all legislative candidates promise in their first term to promote election changes that prohibit lobbying donations and lobbyists writing legislation, make all campaign donations even to SuperPacs transparent and online within 24 hours, and a Constitutional Amendment that eliminates all non-human entities First, Fourth and Fifth Amendment rights.

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Written by Valerie Curl

August 17, 2013 at 3:54 PM

Plutocracy Rising- An Important Discussion

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This week Bill Moyers interviewed Matt Taibbi of Rolling Stone and Chrystia Freeland, editor of Reuters Digital and author of a new book, Plutocrats: The Rise of the New Global Super Rich and the Fall of Everyone Else.

At no time in US history have the plutocrats accumulated so much wealth, not even during the Gilded Age. Nor has the gap between the very top incomes and the middle class been so stark. Worse, the gap is growing.

Both journalists spent years covering USSR/Russia and saw first hand the move from communism to a plutocratic society in which a few had extreme amounts of money while everyone else had very little. They both say the US is beginning to look like Russia or a Latin American third world nation. And they’re both worried by what they see happening in the US…as well as the political blindness, political and public intellectual capture, and the corruption of traditional values in which those who have large wealth are viewed as superior beings simply because of their wealth.

Chrystia Freeland asserts that the reason Obama is now so hated by the plutocracy is because he doesn’t appear in awe of them so their feelings are hurt. I’d say it was their egos which were hurt by his failure to hold them special awe. But both reporters say that if the political class were braver, and less dependent upon fundraising, new policies could be developed that mitigated the worst of this inequality that may eventually destroy the US economy.

This is an important discussion that should be watched by every single voter before the next election.

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Related article:
The Economist: The rich and the rest

Written by Valerie Curl

October 21, 2012 at 9:06 AM

John Boehner Exposed

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After reading Rolling Stone political writer Matt Taibbi‘s exposés on the Jefferson County, AL, municipal bond fraud, the Tea Party, and the foreclosure fraud, I’ve become a big fan of his reporting. He’s often rude, certainly irreverent, but blatantly honest in his criticism and his praise.

Now, he’s taken on Speaker of the House, John Boehner. Here’s a taste:

If you’re interesting in getting to know the real John Boehner, Taibbi offers an interesting insight into what makes this politician tick.

The Democrats have plenty of creatures like Boehner. But in the new Speaker of the House, the Republicans own the perfect archetype — the quintessential example of the kind of glad-handing, double-talking, K Street toady who has dominated the politics of both parties for decades. In sports, we talk about athletes who are the “total package,” and that term comes close to describing Boehner’s talent for perpetuating our corrupt and debt-addled status quo: He’s a five-tool insider who can lie, cheat, steal, play golf, change his mind on command and do anything else his lobbyist buddies and campaign contributors require of him to get the job done.

Taibbi doesn’t pull any punches when describing what Congressional aides on both sides of the aisle think of him. Or what a raucous mess the next two years are likely to be.

Written by Valerie Curl

January 20, 2011 at 6:26 PM

Why Do Americans Protect the Really Rich?

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Modern Day Robber Barons

Illustration by Victor Juhasz

For months, I’ve tried to figure out why Americans have such a schizophrenic relationship with the super rich.

On the one hand, American people hate elites who attend prestige private universities, live in private gated communities, and make more money that they can ever spend. One the other hand, Americans vote to protect low tax rates on the uber wealthy as well as the radical income disparity that threatens our nation’s stability and economic progress even while denying millions of hard working middle income Americans extended unemployment.

Some national surveys suggest that the reasons Americans simultaneously hold these split attitudes regarding the rich is because thy either see themselves as rich or they believe they will become rich on day. Yet, well publicized new U.S. data refutes both of those beliefs. Still, even when American voters are aware of this new data, they continue to ignore it favor of old beliefs systems.

So, today I had one of those epiphany moments when I read NY Times columnist Nicholas Kristof who has traveled the world to all of the poorest countries and seen the worst governments in action.

The top 1 percent of Americans owns 34 percent of America’s private net worth, according to figures compiled by the Economic Policy Institute in Washington. The bottom 90 percent owns just 29 percent.

That also means that the top 10 percent controls more than 70 percent of Americans’ total net worth.

Emmanuel Saez, an economist at the University of California at Berkeley who is one of the world’s leading experts on inequality, notes that for most of American history, income distribution was significantly more equal than today. And other capitalist countries do not suffer disparities as great as ours.

“There has been an increase in inequality in most industrialized countries, but not as extreme as in the U.S.,” Professor Saez said.

One of America’s greatest features has been its economic mobility, in contrast to Europe’s class system. This mobility may explain why many working-class Americans oppose inheritance taxes and high marginal tax rates. But researchers find that today this rags-to-riches intergenerational mobility is no more common in America than in Europe — and possibly less common.

I’m appalled by our growing wealth gaps because in my travels I see what happens in dysfunctional countries where the rich just don’t care about those below the decks. The result is nations without a social fabric or sense of national unity. Huge concentrations of wealth corrode the soul of any nation.

And then I see members of Congress in my own country who argue that it would be financially reckless to extend unemployment benefits during a terrible recession, yet they insist on granting $370,000 tax breaks to the richest Americans. I don’t know if that makes us a banana republic or a hedge fund republic, but it’s not healthy in any republic.

This seems inconceivable at a time when millions of American families risk losing their homes as a result of outright mortgage scams and the ability feed and clothe their children – poverty rates are at their highest since the early ’60s – and millions more have seen their savings and retirements accounts decimated by an unregulated derivatives market in which all the players had a hand in pushing these highly complicated products that no one understood onto unsophisticated buyers worldwide. Communities all across America have been fiscally destroyed by the havoc these products wreaked, leading to significant higher tax rates and/or far fewer services at the local and state level.

As Investigative Reporter Matt Taibbi of Rolling Stone reports:

[T]he state of Florida had created a special super-high-speed housing court with a specific mandate to rubber-stamp the legally dicey foreclosures by corporate mortgage pushers like Deutsche Bank and JP Morgan Chase. This “rocket docket,” as it is called in town, is presided over by retired judges who seem to have no clue about the insanely complex financial instruments they are ruling on — securitized mortgages and laby­rinthine derivative deals of a type that didn’t even exist when most of them were active members of the bench. Their stated mission isn’t to decide right and wrong, but to clear cases and blast human beings out of their homes with ultimate velocity. They certainly have no incentive to penetrate the profound criminal mysteries of the great American mortgage bubble of the 2000s, perhaps the most complex Ponzi scheme in human history — an epic mountain range of corporate fraud in which Wall Street megabanks conspired first to collect huge numbers of subprime mortgages, then to unload them on unsuspecting third parties like pensions, trade unions and insurance companies (and, ultimately, you and me, as taxpayers) in the guise of AAA-rated investments. Selling lead as gold, shit as Chanel No. 5, was the essence of the booming international fraud scheme that created most all of these now-failing home mortgages.

and

Birmingham [AL] became the poster child for a new kind of giant-scale financial fraud, one that would threaten the financial stability not only of cities and counties all across America, but even those of entire countries like Greece. While for many Americans the financial crisis remains an abstraction, a confusing mess of complex transactions that took place on a cloud high above Manhattan sometime in the mid-2000s, in Jefferson County you can actually see the rank criminality of the crisis economy with your own eyes; the monster sticks his head all the way out of the water. Here you can see a trail that leads directly from a billion-dollar predatory swap deal cooked up at the highest levels of America’s biggest banks, across a vast fruited plain of bribes and felonies — “the price of doing business,” as one JP Morgan banker says on tape — all the way down to Lisa Pack’s sewer bill and the mass layoffs in Birmingham.

The point Kristof makes in his recent columns on the growing income inequity is one I’ve tried to make, albeit perhaps less well, in previous blogs from my studies of world history. The point Kristof makes is that you cannot have a stable and growing economy as well as a stable political system when so few recognize the benefits at the expense of so many. The reason the French, the Russians, the Chinese, and so many others worldwide revolted was income disparity, wherein the populace began to see through the the rhetoric and propaganda of the rich to the result of their own miserable lives.

This country has never believed in class superiority so it’s hard to believe one is growing within its borders. Yet, it does exist now just as it did during the era of the Robber Barons. Americans once voted to break the back of the Robber Barons and can do so again if and only if the voters choose not to become yet another banana republic. But they haven’t, even as other countries once considered “banana republics” left that status behind.

As Kristof writes,

Earlier this month, I offended a number of readers with a column suggesting that if you want to see rapacious income inequality, you no longer need to visit a banana republic. You can just look around.

My point was that the wealthiest plutocrats now actually control a greater share of the pie in the United States than in historically unstable countries like Nicaragua, Venezuela and Guyana.

The question is Americans wake up to what these other countries decided?

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