Congressional Letter re Finance

I sent the following to my two Colorado Senators:

Please support Sen. Sherrod Brown's SAFE Banking Act of 2012 to rein in "too big to fail" banks.  JP Morgan's $2 billion loss announced yesterday shows how seriously out of control our banking industry is, only a few years after the 2008 Lehman debacle.  Although JP Morgan claims that its "hedging" was not in violation of the Volker rule, I think that it likely was.  JP Morgan was just gambling with its depositors' money, trying to make a quick buck, which was almost riskless, because the US taxpayers are still guaranteeing the assets of the "too big to fail" banks.

Simon Johnson of MIT and the IMF has called for Jamie Dimon to resign.


You are just throwing away America's money guaranteeing the foolish bets of fat cats on Wall Street.  I can't tell you how disappointed I am that President Obama threw Elizabeth Warren under the bus after all she did to establish the Consumer Financial Protection Bureau.  She was the only one in Washington speaking out for the middle class, and now she is gone.

I don't have much hope.  The US Congress is largely dysfunctional.  We have no fiscal policy.  Ben Bernanke has so far saved us from disaster with monetary policy, but he can't singlehandedly save the world.  You could give him a little help.

Two of the most important additional things the Congress could do are

-- Put the Bowles-Simpson proposals back on the table to address our financial crisis.  They were reasonable; they addressed the most important issue facing the US, and they have been ignored by the Congress.

-- Reinstate the Glass-Steagall Act.  The repeal of Glass-Steagall, led in Congress by Republican Phil Gramm and signed by President Bill Clinton, was responsible for the financial crash of 2008 and the current rogue activities of the big banks.  Banks should be banks, not gambling casinos.  

War Didn't Help

In today's NYT, Paul Krugman talks about how World War II pulled the US out of the Depression, although people back then also said that stimulus would not work.

It reminded me of the difference between World War II and the Iraq and Afghanistan wars.  First Roosevelt in WW II called on all of America to pay for the war, although it still ran up enormous deficits.  Bush said, "Go shopping," to support the Iraq war; you don't need to pay taxes.  If Bush had attempted to pay for the Iraq war, we probably would have had fairer, more equitable taxes, which would have done something to mitigate the perception that the current US tax system is seriously unjust.  We grew up hearing about the merits of the American progressive tax system that taxed the rich more than the poor, and now we find that we have a regressive tax system that taxes the poor more than the rich.  The Republicans argue that the rich still pay the bulk of the taxes, which is true, but only because they earn the bulk of the income.  Also, defenders of the current system seldom bring payroll taxes into the discussion, because if they did, the disparity would be even worse.  It's true that many very poor people don't pay income tax, but many more of them pay payroll taxes for Social Security and Medicare.

The other disparity between the rich and the poor that the war widened is between those who defend America and those who stay home and make money while the soldiers fight.  In the old days, especially when there was a draft, the stay-at-homes were shamed as "war profiteers," but today they are hailed as "entrepreneurs."  In WW II almost everybody who was healthy fought; today almost all soldiers come from the lower classes, and disproportionately from small towns and rural areas, where there is still some feeling of patriotism.  Ironically, the 9/11 attack on the twin towers was directed at America's richest 1%, but the 1% by and large didn't fight back, it hired the 99% to fight and die for them.  Now when those soldiers come home seeking jobs, the 1% that owns everything usually turns its back on them.

The US has regressed so far back toward the old feudal system that we don't need new laws or an updated Constitution, we need a new Magna Carta.  Welcome to the 13th century!

Guantanamo Trials Are Legal Failure

The "trial" of the 9/11 terrorists in Guantanamo signals a significant failure of the American legal system.  The victims of 9/11 deserve better, because no one will believe that justice will have been done.  The prisoners may be guilty, but many victims of lynchings and other mob violence over the years have also been guilty.  The sign of civilization would be a fair trial, but Congress and the Obama administration have balked at allowing a fair rial.  The military lawyers in Guantanamo will do their best, but they have been put in an impossible situation.

25th Anniversary of MTCR

The following is a press release from the US Department of State:

Formed by the (then) G-7 industrialized countries in 1987, the Missile Technology Control Regime (MTCR) is an informal political understanding among states that seek to limit the proliferation of missiles and related technology; it is not a treaty. Since its creation, 27 additional countries have joined the MTCR, and many other countries have adhered unilaterally to the MTCR Guidelines or otherwise control exports of MTCR Annex items.

Originally focused on restricting exports of nuclear-capable ballistic missiles and related technology, the Regime expanded its scope in 1993 to cover unmanned delivery systems capable of carrying all types of weapons of mass destruction (WMD) -- chemical, biological, and nuclear. In 2002, the MTCR Partners (members) made terrorism an explicit focus of the Regime. Both of those steps were in direct support of the WMD nonproliferation objectives of the Biological Weapons Convention, Chemical Weapons Convention, and Nuclear Nonproliferation Treaty.

The MTCR seeks to limit the risks of proliferation of WMD by controlling transfers that could make a contribution to delivery systems (other than manned aircraft) for such weapons. More broadly, the MTCR Guidelines (export control policies) and Annex (list of export-controlled items) have become the international standard for responsible missile-related export behavior. The MTCR and its Annex were implicitly endorsed in UN Security Council Resolution (UNSCR) 1540 of 2004, which affirms that the proliferation of WMD delivery means constitutes a threat to international peace and security and requires all UN Member States to establish domestic controls against such proliferation. The MTCR Annex also forms the basis of the list of missile-related items prohibited from being transferred to Iran under UNSCRs 1737 and 1929, and to North Korea under UNSCR 1718.

Over the course of the Regime’s 25-year history, the efforts of MTCR member countries have reduced the number of countries possessing missiles capable of delivering WMD, the global inventory of such missiles, and the number of countries interested in acquiring such missiles. The establishment by MTCR member and adherent countries of missile-related export controls has significantly reduced the availability to proliferators of support from the countries possessing the most and best technology. The export controls, information-sharing, and patterns of cooperation fostered by the MTCR also have resulted in the interdiction of numerous shipments of equipment intended for missile programs of concern. All of these measures have made it more difficult, time-consuming, and costly for proliferators to produce or acquire WMD capable missiles.

As it has done since 1987, the United States will continue to work through the MTCR to reduce the global missile proliferation threat by restraining the missile-related exports of an expanding number of countries and by increasing the pressure on proliferators to abandon their missile programs. The United States continues to encourage all non-member countries to support the MTCR’s efforts and to unilaterally abide by MTCR standards in the interest of international peace and security.

The MTCR currently has 34 members: Argentina, Australia, Austria, Belgium, Brazil, Bulgaria, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Ireland, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Poland, Portugal, the Republic of Korea, the Russian Federation, South Africa, Spain, Sweden, Switzerland, Turkey, Ukraine, the United Kingdom, and the United States.