Multinational Monitor Editor's Blog

There is only one solution to the twin problems of escalating health care costs and the epidemic of the uninsured: a Medicare-for-All, single payer system.

Unfortunately, the healthcare debate on Capitol Hill has evolved without serious consideration of the Medicare-for-All single payer health proposal. There are many reasons for this, but one is that many who actually support Medicare-for-All have claimed that the proposal is "not feasible."

With the House leadership having settled on a single proposal, now is the time to set aside worries about feasibility. The House process is resolved. Members of Congress should have the opportunity to vote on the merits, up-or-down, on a Medicare-for-All single payer health proposal.

Whether they will have this chance is in the hands of Speaker Nancy Pelosi, and likely to be decided today. Contact her right away to urge that the House be permitted to vote on a Medicare-for-All single payer health proposal. Call (202) 225-0100 or (as a second best alternative, submit comments on the Speaker's web page.

One year ago, Lehman Brothers declared bankruptcy, bringing to a head the growing chaos on Wall Street.

In the days and weeks that followed Lehman’s September 15, 2008, collapse, credit markets would freeze, the stock market plunged, the government took a controlling interest in AIG, Wachovia and Merrill Lynch merged themselves out of existence, the Congress approved a plan to spend $700 billion to bail out Wall Street, the Federal Reserve innovated an array of programs involving trillions of dollars worth of support for Wall Street and the credit markets, and the national economy -- and much of the global economy -- declined precipitously.

As the crisis unfolded, it quickly became commonplace to suggest that nothing would ever be the same, on Wall Street or in the national economy. The Wall Street goliaths had been humbled -- and many had gone out of business, via merger or bankruptcy. Deregulation went out of style and even former Federal Reserve Chair Alan Greenspan indicated that the conceptual underpinnings of his deregulatory approach had proven flawed.

One year later, it is clear that the conventional wisdom emerging as the crisis developed was wrong.

Can things get still worse in Washington?

Yes, they can. And they will, if the Supreme Court decides for corporations and against real human beings and their democracy in a case the Court will be hearing today, Citizens United v. Federal Election Commission.

Until reaching the Supreme Court last year, this case has involved a narrow issue about whether an anti-Hillary Clinton movie made in the heat of the last presidential election is covered by restrictions in the McCain-Feingold campaign finance law. However, in a highly unusual move announced on the last day of the Supreme Court's 2008 term, the justices announced they wanted to reconsider two other pivotal decisions that limit the role of corporate money in politics.

The Court ordered a special oral argument on the issue, before the full start of their 2009 term in October.

The Court will today hear argument on whether prior decisions blocking corporations from spending their money on "independent expenditures" for electoral candidates should be overturned. "Independent expenditures" are funds spent without coordination with a candidate's campaign. The rationale for such a move would be that existing rules interfere with corporations' First Amendment rights to free speech.

One hundred and fifty years jail time for Bernard Madoff is a good thing.

To listen to the victims of his swindle, or read their words, is to appreciate the very far-reaching ways in which Madoff's quiet crime has wreaked havoc on the lives of thousands of families.

Federal District Judge Denny Chin was absolutely right in denouncing Madoff's crimes as "extraordinarily evil," and giving him the maximum sentence. Punishment is no substitute for prevention, but the sentence provides a modicum of justice to the victims and will exert some modest deterrent effect against future potential swindlers.

The 150-year sentence is headline grabbing, but what should surprise us is not that Madoff got such a long sentence, but that other corporate criminals escape with light sentences or no criminal prosecution at all.

There are major gaps and shortcomings in the Obama administration's financial regulatory proposals, formally released today, and the proposals alone leave the financial sector vulnerable to future crisis. Still, it's nice to be able to say that the proposal does contain meaningful reforms.

Whether those meaningful reform proposals become law is no sure thing, and will depend on the administration's willingness to stare down Wall Street -- which still retains immense political power, despite its partial self-immolation -- and on whether a mobilized public demands Congress act for consumers, not contributors.

The 85-page draft released today is qualitatively different than the bullet-point plans previously issued by the Treasury Department. It contains detailed proposals, spanning across the financial regulatory spectrum, not easily summarized. Here are only some key elements -- first, the good, then the bad.

The Obama administration's budgetary Machiavellianism has backfired.

Seeking to avoid a direct up-or-down vote on a proposal to send $108 billion to the International Monetary Fund, the administration, at the last moment, had the money stuck into a supplemental appropriations bill to fund the wars in Iraq and Afghanistan.

That maneuver turned out to be too clever by a turn.

Whatever the woes of General Motors -- and they are substantial -- it does not follow that the government needed to drive the company into bankruptcy. With at least $50 billion in government supports undergirding the new GM, the Obama administration auto task force deciding GM's fate could have steered the company away from bankruptcy court. If it had so chosen, it could have acquired the company outright -- a much better course to advance the legitimate public interest in rescuing GM.

What in the world is the Obama administration thinking? The GM bankruptcy -- entirely avoidable -- seems designed to hurt every constituency it is supposed to assist.

First, as to the avoidability issue: There's no doubt that chronic mismanagement and the deep recession have left GM in dire straits. But with the government pouring tens of billions of dollars into the company, it is clear that needed restructuring could have been done outside of bankruptcy. By last week, even the problem of bondholders who sought $27 billion from the company (the government and GM were offering a 10 percent stake in the new company) was moving to resolution. Yet the Obama administration's auto task force has plunged GM into bankruptcy nonetheless. Why? There's no obvious answer to that question.

Why does it matter? It matters because bankruptcy may further tarnish GM's already very weakened brand, and make recovery for the company much more difficult. It matters because it creates some unique problems. And it matters because it forecloses -- or, at least makes more difficult -- other ways to reorganize the company.

This month's G20 meeting ended with one overriding tangible agreement: A commitment by the rich countries to provide more than $1 trillion in assistance (mostly in the form of loans) to developing countries.

This money is desperately needed. Although they had nothing to do with mortgage-backed securities or credit default swaps, developing countries are getting worst hit by the global economic meltdown. The World Bank conservatively estimates that 53 million more people will be trapped in deep poverty due to the crisis.

Fleeing foreign investors, plummeting remittance earnings, falling commodity prices and shrinking export markets are devastating developing countries, leaving them in dire need of infusions of hard currency.

So, the G20 move is to be applauded … except that the entire purpose of the G20's assistance may be thwarted by the institution through which the G20 countries chose to channel most of the money: the International Monetary Fund (IMF). (There's also the matter that the $1 trillion figure overstates what will actually be delivered, and includes previously pledged money.)

What if the Obama administration treated the auto industry like Wall Street?

There'd be no talk of potential bankruptcy, no firing of executives, no demands to shed failing subsidiaries, no demands for honest accounting, no insistence that creditors share some of the companies' pain. And we certainly wouldn't hear about re-writing contracts, heretofore described as sacrosanct.

Instead, we'd be hearing about a scheme to get private sector players "now sitting on the sidelines" to invest in absorbing the auto industry's excess capacity.

We'd see the Treasury Department announcing a Public-Private Investment Plan to tap hedge funds' pools of capital and expertise to create demand for autos that GM and Chrysler could manufacture but are presently unable to sell at a satisfactory price. These excess cars would be called "legacy assets" (the euphemism for failing mortgage-related securities, more widely called "toxic").

Watch out if you live in or visit Washington, D.C.

If you see a camera or microphone, be careful not to be trampled by a politician rushing to shout their "outrage" at AIG, and its brazen scheme to pay $165 million in bonuses to employees at the company unit responsible for driving the company to the edge of insolvency.

Maybe the politicians really are outraged. (They definitely know their constituents are.) But it would have helped if they had expressed some outrage -- and opposition -- during the decades-long period of deregulation that brought us the AIG collapse and the financial meltdown.

It is indeed unfathomable that AIG went ahead with the bonus payments, and that the Treasury Department and Federal Reserve failed to act to stop the bonus payments before they were made.

What is vital now is that the public's righteous anger is not expressed only as "no." There are a lot of things to which We The People do need to say "no." But we need a lot of "yes's," too. We need to demand that policymakers impose public controls over the financial sector. The financial sector restraint, shrinkage and displacement agenda is long and diverse, but there are a number of lessons that flow directly from the AIG debacle.

Is it fair to complain about the actions of the financial deregulators?

Could anyone reasonably have foreseen the consequences of a decades-long regulatory holiday for the financial sector?

In a word, yes.

In preparing "Sold Out: How Wall Street and Washington Betrayed America," a report that documents a dozen deregulatory steps to financial meltdown, it was remarkable to see that, at almost every step, public interest advocates and independent-minded regulators and Members of Congress cautioned about the hazards that lay ahead. Those ringing the alarm bells were proven wrong only in underestimating how severe would be the consequences of deregulation.

What can $5 billion buy in Washington?

Quite a lot.

Over the 1998-2008 period, the financial sector spent more than $5 billion on U.S. federal campaign contributions and lobbying expenditures.

This extraordinary investment paid off fabulously. Congress and executive agencies rolled back long-standing regulatory restraints, refused to impose new regulations on rapidly evolving and mushrooming areas of finance, and shunned calls to enforce rules still in place.

"Sold Out: How Wall Street and Washington Betrayed America," a report released by Essential Information and the Consumer Education Foundation (and which I co-authored), details a dozen crucial deregulatory moves over the last decade -- each a direct response to heavy lobbying from Wall Street and the broader financial sector, as the report details. (The report is available here.) Combined, these deregulatory moves helped pave the way for the current financial meltdown.

Here are 12 deregulatory steps to financial meltdown:

Financial deregulatory mania over the last three decades led directly to the current financial meltdown.

Were the deregulators acting out of principle? Perhaps.

But it couldn't have hurt that the financial sector invested a staggering $5.1 billion in political influence purchasing in the United States over the last decade.

The money flows are laid out in gruesome detail in "Sold Out: How Wall Street and Washington Betrayed America," a report that my colleague Jim Donahue and I wrote, along with a team of contributors from the Consumer Education Foundation and my organization, Essential Information. The report is available here. **

What a year for corporate criminality and malfeasance!

As we compiled the Multinational Monitor list of the 10 Worst Corporations of 2008, it would have been easy to restrict the awardees to Wall Street firms.

But the rest of the corporate sector was not on good behavior during 2008 either, and we didn't want them to escape justified scrutiny.

So, in keeping with our tradition of highlighting diverse forms of corporate wrongdoing, we included only one financial company on the 10 Worst list.

Here, presented in alphabetical order, are the 10 Worst Corporations of 2008.