Col Hogan wrote:kalm wrote:
I agree, the county workers and the tax payers are clearly responsible for this - they chose to work for a corrupt employer and vote corrupt politicians into office.
OK, what's your recommendation?
Another bailout???
You toss out the big bad boogyman (the banks)...you mention nothing about the irresponsible, possibly criminally culpable local politicians...then go for the emotional "but think of the county workers"...
Same as a private company that the leadership runs into the ground...the workers get screwed...
What do you recommend we do???
Here's some recommended reading for you Colonel - the entire Taibbi piece I linked and the very first sentence I started the thread with.
What needs to happen is real regulation of the financial sector. Counties need sewer systems, they don't need the likes of J.P. Morgan. J.P. Morgan produces very little of value to the economy at this point and they are not helping the nations financial situation. Do I expect this to happen anytime soon? Hell no - we live in a oligarchy based in subtle and often times not so subtle bribery where if you have enough money there's no such thing as morality or regulation. Buy the locals, buy the national politicians and socialize the risks. And I'll fully agree this happens on both sides of the fence. Is this the free market you conks have in mind?
For further reading:
Bloomberg has done an excellent write-up of yet another gnarly development for Jefferson County, Alabama, the locale that was on the business end of a multibillion-dollar fleecing at the hands of J.P. Morgan Chase and other banks...
All of which sucks, of course, but the news keeps getting worse. The House Financial Services Committee has just voted to delay the scheduled implementation of reforms in the Dodd-Frank bill that would limit the ability of banks to pull Jefferson-County style scams in the future. Among other things, the new rules would have required banks to act in the best interests of their clients, and disclose daily pricing information about swaps, making it harder for banks to gouge clients.
In Jefferson County, the Alabamans were massively overcharged by Chase and other banks in large part because interest rate swaps, unlike, say, stocks, are not traded on open exchanges, so nobody knows how much they really cost. The situation is similar to what sports betting would be like if casinos did not publish the point spreads. If you walk into a casino the day before the Super Bowl and you're told the spread is Green Bay -6, you might think you're getting a good deal – but the actual spread might be nine or ten points. Wall Street is making a killing similarly overcharging states and cities and counties (and even countries like Greece) for interest-rate swaps, regularly stealing half a touchdown here and there in these billion-dollar finance transactions.
The Dodd-Frank bill, ball-less as it mostly was, did have a few provisions in it that would have tightened up the rules governing such derivative transactions. But the House Financial Services Committee voted to stall implementation of these new rules until September 2012, at the very least. The cruel irony here is that the Committee is chaired by... Jefferson County's own congressman!
That's right: Alabama Republican Spencer Bachus, who up until recently was sounding like a a real critic of these banking practices. This was Bachus a few years ago, making his own casino comparison:
When you have a county or city that is basically unsophisticated dealing with Wall Street professionals it's very similar to a person walking into a casino where the house always wins. Simply, the county and the Wall Street firms gambled with ratepayers money. While interest rates were low in the beginning, things ultimately blew up when the auction rate securities market collapsed.
That was then. Now, Bachus is the driving force behind this latest move to delay reforms. Wonder why? Just look to see who happens to be the top contributor to Bachus's campaigns for his career: J.P. Morgan Chase. Bloomberg elaborated on Bachus's ties to Wall Street, describing him as the third-biggest recipient of Wall Street cash in the House:
During his two decades in Congress, Bachus – like Frank, his predecessor as chairman – has nurtured ties to Wall Street donors who have poured cash into campaign chests of both Democrats and Republicans. He has received more than $7.1 million from political committees of finance, real estate and insurance companies and their employees, according to the Center for Responsive Politics, a Washington group that tracks campaign donations. That’s more than any House member since 1989 aside from the Republicans’ two top leaders, Speaker John Boehner and Majority Leader Eric Cantor.
If you read the whole Bloomberg piece you'll see other villains here, including Barney Frank and Michelle Bachmann(who is seeking to have all of Dodd-Frank overturned). But Bachus is the big story here. Here you have a congressman who represents a district that just happens to be the most conspicuous group of Main-Street victims of predatory banking practices in all of America -- and even he can't find a way to man up and do the right thing for his voters.
http://www.rollingstone.com/politics/bl ... a-20110531" onclick="window.open(this.href);return false;
And here's the Bloomberg piece that Taibbi is updating the story from. It's also a good read:
http://www.bloomberg.com/news/2011-05-2 ... -home.html" onclick="window.open(this.href);return false;
