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Michael Winship: Happy Holidays from America's Banks

(Photo by Robin Holland)

Below is an article by JOURNAL senior writer Michael Winship. We welcome your comments below.

"Happy Holidays from America’s Banks"
By Michael Winship

Never mind Barack Obama’s Audacity of Hope. It’s the audacity of the banks that takes your breath away. Mean old Mr. Potter in IT’S A WONDERFUL LIFE seems like Father Christmas by comparison.

A recent report that Citigroup and Goldman Sachs may have received preferential treatment getting doses of the swine flu vaccine was enough to give Ebenezer Scrooge the yips. Then came news that in order for us to get back the taxpayer bailout money we loaned them, Citigroup is receiving billions of dollars in tax breaks from the IRS.

And there’s a new study this week, “Rewarding Failure,” from the public interest group Public Citizen, revealing that in the years leading up to the financial meltdown, the CEO’s of the 10 Wall Street giants that either collapsed or got huge amounts of TARP money were paid an average of $28.9 million dollars a year.

In 2007, that amounted to 575 times the median income of an American family. Now, thanks in part to the banks’ monumental malfeasance that led to our economic swan dive, food stamps are now being used to feed one in eight Americans, and a quarter of all the kids in this country. A new poll from THE NEW YORK TIMES and CBS News reports that more than half of our unemployed have borrowed money from friends and relatives and have cut back on medical treatment. THE TIMES wrote that, “Joblessness has wreaked financial and emotional havoc on the lives of many of those out of work… causing major life changes, mental health issues and trouble maintaining even basic necessities.”

Yet according to the non-profit Americans for Financial Reform the reported $150 billion that Wall Street is paying itself in compensation and bonuses this year would be enough to solve the budget crisis of every one of the fifty states or create millions of jobs or prevent all foreclosures for four years.

All of this wretched excess is occurring as more and more people can’t afford a roof over their heads. Foreclosures were up another five percent in the third quarter – 23 percent more than a year ago. Fewer Americans are willing to buy foreclosed properties, and the Obama administration’s foreclosure prevention plan has been a bust so far – way too timid, critics say, and many of the banks won’t play ball, refusing to negotiate in good faith with homeowners desperate to hold on.

We got a first hand look at the crisis this week, when thousands lined up at the Jacob Javits Convention Center just a few blocks from our Manhattan offices to attend a mortgage assistance event sponsored by the non-profit Neighborhood Assistance Corporation of America (NACA). So many showed up for this leg of the “Save the Dream Tour” that on many days, staff and volunteers stayed to help until one in the morning.

NACA has had success getting homeowners and banks together to work out a deal to prevent foreclosure. But the big banks’ return to the government of the TARP bailout money with which we underwrote them over the last 14 months is a mixed blessing – great to have the cash returned so quickly, terrible because any leverage Washington held over the banks because of the loans virtually vanishes with the payback. They’re back in the saddle and not inclined to be of much assistance helping anyone else out, especially those in mortgage trouble.

As Andrew Ross Sorkin of THE NEW YORK TIMES wrote in the wake of President Obama’s Monday meeting with Wall Street’s top guns (three of whom failed to show up because of airport delays), “Executive compensation, leverage limits and lending standards were all issues that Washington said it planned to change – and when the taxpayers were the shareholders of these firms, it probably could have done so. But now the White House has been left in the position of extending invitations, rather than exercising its clout. And in the figurative and literal sense, it is getting stood up.”

Afterwards, Obama said, “The problem is there’s a big gap between what I’m hearing here in the White House and the activities of lobbyists on behalf of these institutions or associations of which they’re a member up on Capitol Hill.”

That’s putting it mildly. This week, the American Bankers Association sent out an update and “call to action” memorandum crowing over its success watering down the bank reform bill that was approved by the House and urging its members to beat back similar legislation in the Senate. Self-righteously, it concludes, “As one of your New Year’s resolutions, please vow to do everything in your power to show, and to have your colleagues in your bank show, your Senators the right path to true reform.”

It helps when the right path is paved with silver and gold. As “Crossing Wall Street,” a November report from the Center for Responsive Politics notes, “The finance, insurance and real estate sector has given $2.3 billion to candidates, leadership PACs and party committees since 1989, which eclipses every other sector…

“The financial sector has also been a voracious lobbying force, spending an unprecedented $3.8 billion since 1998, while sending an army of lobbyists to Capitol Hill to make its case. That's more money than any other sector has spent on influence peddling. Not even the health care sector, which spun up a lobbying frenzy this year over health reform, has spent more.”

The banks are making a list and checking it twice. And lest we forget, during his run for the White House, the finance sector filled Barack Obama’s stocking with $39.5 million dollars worth of campaign contributions, more than any other presidential candidate.

God bless us, every one!


Please note that the views and opinions expressed by Michael Winship are not necessarily the views and opinions held by Bill Moyers or BILL MOYERS JOURNAL.


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Comments

I think that we should pull back are troops from the war in Afganistan.

Talk about arrogance!:

- We're way smarter than you, we had our cake, and we ate it too.

http://www.cbsnews.com/stories/2010/04/07/eveningnews/main6372933.shtml?tag=mncol;lst;5

I think my mom is planning something similar. Good luck to you.

Durham wrote, "Shoot, we been buyin' trucks we can't afford, makin' improvements to the trailer that we don't really need, but sure look perty, and all kinds a stuff it don't appear we can do no more."

Don't worry, y'all will soon sitting in your own waste

looking as unperty as the good lord never intended,

and not "feeling" a thing...

Pictures grandpa showed us from WWII travels into northern africa...they don't refer to "religion" as the "opiate" of the masses without reason

and having the DOUBLE dose of "opium"

religion AND the opium

well...there's your new "baseline" for what YOU can do under the new massers...

stop the recording and check out how they build the hut in Tanna - ooops, gets a bit colder in NORTH america....

Lordy Anna D you are a pistol. I don't know what state you live in but here in Tennessee we got us a rich tradition of living beyond our means. Shoot, we been buyin' trucks we can't afford, makin' improvements to the trailer that we don't really need, but sure look perty, and all kinds a stuff it don't appear we can do no more. As fer bein' a king, heck you flatter me girl. Fer us down here there's only one king and he's buried in Memphis. I do like that show 'Meet The Natives', and agree that their simple 'goodness' does shame us. The scene where they talked about same-sex marriage in that restaurant in New York was priceless!

David Durham wrote, in part, "The fact that living beyond one's means may now be a thing of the past could serve us well in the future."

OBVIOUSLY, the "means" were never established in the first place so your over-simplification of the "problem" is not supported by data.

But if you want "simple", may I suggest a mental break from ruling the world as a blogger on PBS

and watch The Travel Channel series called "Meet the Natives"...?

For anyone to still be using words like "socialism" which have gained mythical status in "rending asunder"

how about COMMON SENSE "native" social engineering instead...?

:-))

Look, KNOWLEDGE of the TYRANNICAL shenannigans of "big business" goes all the way back, presented in a mass-understood comedy skit, to the original Satruday Night Live crew in the 1970s. Dig it out...the drop floor underneath the chair that "inventors" had to sit in while presenting their new combustion engine design to "executors", er, I mean "executives" :-) tells it all without hyper hysterical political verbiage like "communism" and "capitalism" and "fascism"....

No, my friend, "we" have been living in a WAR zone for too long...

Indeed, a new economic "class" is "real" and coining our own "money" is not an act of insanity - rather the opposite...the most SANE thing we can do to win the battle and the war...

W.M., finicial crisis\scam should be the headline news! Thanks for returning to THE most critical story in decades!

At 1st mention of the 'BAILOUT" my comment to this blog & others was, "The banks will clean up their balance sheets and retreat to the safest loans only!"
If it was apparent to me, then most of Mainstreet shared this realization that we were revisiting the Savings & Loan rip-off permitted\supported by OUR Congress & only then did Congress act (elections on the horizon)--thanks once again!

Rich countries (USA) to pay poor countries (dictatorships)for our successful economic society, will CREDIT for the Millions & Millions in aid the USA (govt. & private)has GIVEN over the decades of our Carbon use be acknowledged & reduce the amount "OWED"?????
Climate change will take care of that snowball!

Congratulations Mr. Winship for the insight & guts to continue "The STORY of Decades"!

Billy Bob Florida

Dear Bill,
I think if William Shakespeare were alive today, I don't think the character of Dick in Henry VI would be uttering
"Let's kill all the lawyers."

Anna D you've hit on part of the way foward. Hang a sign indeed! One of the things we've got to do is make this greed unfashionable. It may sound trite but as Lincoln said, "You must use the tools you have." For too long Americans have bought into the whole 'Greed is good' thing. Wretched excess has been something to aspire to. I got mine to hell with everybody else. This sort of national mind set has served unfettered Capitalism very well. The fact that living beyond one's means may now be a thing of the past could serve us well in the future. A silver lining in the economic dark cloud. Instead of a show like 'Lifestyles of the Rich and Famous' titillating people, maybe now disgust will be the reaction. Since the 'Reagan Revolution' a comfortable middle class existance was for losers. Now that it's disappearing it maybe looks a whole lot better than it did just a few years ago. This is a good thing. To aspire to comfortable middle class is not asking too much, it's doable as a nation. It's something to be done together and can't be done with greed or excess. I sound like a socialist don't I?

David Durham wrote, in part, "Amongst the wealthy in America today this fever is rampant. It trumps everything. Country comes after it, fellow citizens are deep beneath it, even God can't compete with it."

Okay, they're SICK from worship of a primitive fetish - "money". And their science is LYING. Their math is: More misery for others = more money for ME ME ME.

SO NOW WHAT???!!!

Don't GAS (give a sh-t) about them as it is SO CLEAR that not only do they not CARE about anybody, they are PREDATORS toward the "good"...

USE everyone one of their million dollar, "course in miracles" mimicy PR verbiage against THEM.

Unable to predict what will happen to the "economy" in 2010 with any certainty...?

Well then I guess a 30 year mortgage is the present future - all paid off since NO ONE will be in the same "job" for 30 years

because not even one year commitment to sprucing up the Interstate Bridges from collapsing is a hand-wringing, bosom heaving exercise in "fiscal responsibility"...?

Seriously, when any one REALLY starts deconstructing their "logic", we might need to just hand a sign on WALL STREET ASYLUM FOR THE CRIMINALLY GREEDY and barb wire the place up...scheesh.

It's starting to get dowright creepy how many people seem to have thought Obambi was the second coming...yikes...what a LOST generation wanderign around - should be easy enough to just HIDE the levers of "power" through their GPSs :-)


It is time for another Declaration of Independence, but this time, independence from our own government. And it should be called: The American Evolution, won peacefully without a war.

=
MJA

It happens a lot. Throughout history you find examples of it. A strange fever that effects those with wealth. Kings were famous for it. I must be more wealthy than you. Being simply rich won't do. To have everything I want, many times over, is not enough. Wretched excess becomes the goal, the Grail, the thing that will slake the thirst. a million dollars a year is nothing, ten million a pittance, a hundred million not enough if that other guy made two hundred. Amongst the wealthy in America today this fever is rampant. It trumps everything. Country comes after it, fellow citizens are deep beneath it, even God can't compete with it. These Bankers paid themselves almost thirty million a year. They want this to continue as 'reform' that is 'real'. But it won't be enough. They've got the fever. They would ruin the country, starve children and rape all the lands of the earth to sate their hunger for more. And all that ruin, rape and starvation would, for them, be nothing more than a public relations problem.

Matt Taibbi hit the nail on the head, the Democrat party rolled over 25 years ago and decided partisan political victories were more important than progressive values and the lives of a majority of Americans who are held hostage by a system bought and paid for by big money.

The financial collapse was well on its way by mid 2007 and the Democratic Party had more than enough time to select an established progressive icon with significant national political experience to take on the worst financial collapse in 80 years. As Bob Kuttner said, there is an abundance of non-corporate Democrats in Congress who are committed to a true Progressive agenda.

Running a rookie with little national experience at this point in time is characteristic of a narcissistic party leadership with a very narrow personal agenda. There is still three years left in this administration’s term and right now is an excellent time to bring in a VP with an abundance of past national experience and an established reputation as a true Progressive supporter. A President Biden would be able to hit the ground running and not be facing additional OJT to fight against a hardened Republican Party that doesn’t suffer from numerous fractured coalitions or a totally ineffective Congressional leadership.

Great Show..Nothing is going to change in our country to help the American Public, until all Lobbists and their Money is Out-Lawed in the United States. Until Civil unrest gains the attention of the present adminastration, things will remain the statis quo. Our elected officials have sold the american people out for a buck from Big Business. What is it going to take to get our country back from the Bankers, CEO's and Elected Represenitives, Civil War ? Seems Like it.
Something has to be done, to stop this wrong.
Always love Bills Show...Keep it up

You treat the "financial sector" and the "health care sector" as separate. It is more correct to treat the insurance industry as part of the financial sector. "Health care" should refer to health care. The insurance industry profits from withholding payments for health care, not by providing health care.

Portland, Oregon. Last night's intense, almost surgical probes by Bill, Robert and Matt of the "debacles" confronting "we the People" has to be one of the most courageous viewed on PBS in 2009. Winship's probe of the financial industry was equally bold. We now have a fresh definition of avarice, fraud, and other words people know. Bill's list fascinates me, but AFFLUENZA (published some time ago) tells me that some of us saw the egomania on the part of those buying trophy homes and other items for which the Wall Street "precipce" is but a symptom. Read it! We join others who,today, will not shove their way through Portland's many high-end stores, real or plastic cash in hand. "Happy holidays" suffices, and that is our wish for the Moyers family and staff--and for fellow JOURNAL fans, too, from this old house in the City of Roses.

did you see mark fiore's "bonusmas" vid?
it's very clever...
http://www.markfiore.com

btw, happy holidays to all at the journal...we love ya here in orlando. sorry to hear y'all are dropping the weekly format. but i am curious to see what "the next incarnation" will be...:)

Terrific programs.Don't quit, We need you more than ever.
Your Dec. 18 program wasso informative, as usual.

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