Hot List 7/21

July 21st, 2010 · · Hotlist

The great hunger lottery – How banking speculation causes food crises

In The Great Hunger Lottery, the World Development Movement has compiled extensive evidence establishing the role of food commodity derivatives in destabilising and driving up food prices around the world. This in turn, has led to food prices becoming unaffordable for low-income families around the world, particularly in developing countries highly reliant on food imports. Nowhere was this more clearly seen than during the astonishing surge in staple food prices over the course of 2007-2008, when millions went hungry and food riots swept major cities around the world. The great hunger lottery shows how this alarming episode was fueled by the behaviour of financial speculators, and describes the terrible immediate impacts on vulnerable families around the world, as well as the long term damage to the fight against global poverty. In the report we describe how the current situation came to pass, the risks of another speculation induced food crisis, and what specifically can be done by policymakers here in the UK as well as in the US and EU to tackle the problem.
Corporate Media Discover Private Spies. In Other News, No WMD in Iraq | Jeremy Scahill

Stop the presses and call the government spokespeople back from Martha’s Vineyard. The corporate media have discovered that the United States is radically outsourcing national security and sensitive intelligence operations. Cable news channels breathlessly report on the “groundbreaking,” “exclusive” Washington Post series, Top Secret America, a two-year investigation by Dana Priest and William Arkin. No doubt there is some important stuff in this series. Both Arkin and Priest have done outstanding work for many years on sensitive, life-or-death subjects. And that is one of the main reasons why this series has, thus far, been incredibly disappointing. Its greatest accomplishment is forcing a discussion onto corporate TV years after it would have had an actual impact.”
The Business Case Against Overseas Tax Havens

In the U.S., thanks in part to overseas tax havens, we have one tax system for multinational companies and wealthy individuals –and another for small businesses and ordinary taxpayers. Tax havens enable the rich and U.S. multinationals to move income and assets between global subsidiaries and dodge taxes. Responsible businesses and individual taxpayers are left to pay for U.S. infrastructure, defense, education and all the public investments that contribute to a healthy business climate and economy. How does this work? A U.S. company creates a subsidiary in a secretive low tax haven such as the Luxemburg, Bermuda or the Republic of Mauritius. In the Grand Cayman Islands, one building called Ugland House, houses over 19,000 of these corporate subsidiaries. “
Wall Street Reform: Five Key Fights After The Bill Is Signed

Obama will sign into law the first serious effort to regulate Wall Street in decades. The unfortunate truth is that it ducks several of the most critical reforms needed to protect our economy from banker abuse. As regulators work to implement the legislation, reformers must turn up the heat on Congress to adopt further reforms, and recognize political opportunities to further economic progress. Five policy fights stand out as particularly pressing. Many of these policies can be implemented this year, while others will probably have to wait until the next Congress. All of them are critical to ensuring that our financial sector works to support a healthy economy, instead of a reckless bonus machine.”
Money Laundering and the Global Drug Trade Fueled by Capitalist Elites

But now a Bloomberg Markets magazine report, “Wachovia’s Drug Habit,” reveals that drug traffickers bought that plane, and perhaps fifty others, “with laundered funds they transferred through two of the biggest banks in the U.S.,” Wachovia and Bank of America. The Justice Department charge sheet against the bank tells us that between 2003 and 2008, Wachovia handled $378.4 billion for Mexican currency exchanges, “the largest violation of the Bank Secrecy Act, an anti-money-laundering law, in U.S. history.” “A sum” Bloomberg averred, equal to one-third of Mexico’s current gross domestic product.” Since 2006, some 22,000 people have been killed in drug-related violence. Thousands more have been wounded, countless others “disappeared,” torture and illegal imprisonment is rampant. In a frightening echo of the Reagan administration’s anti-communist jihad in Central America during the 1980s, the Bush and now, Obama administration has poured fuel on the fire with some $1.4 billion in “War on Drugs” funding under Plan Mérida. Much of that “aid” is destined to purchase military equipment for repressive police, specialized paramilitary units and the Mexican Army.
The American Aristocracy

Earlier this year, we allowed the estate tax to lapse entirely. Billionaires are now free to take a lifetime of accumulated wealth and pass it on to their heirs. We’ve come full-circle from the last Gilded Age. So it’s worth looking back at Andrew Carnegie’s Gospel of Wealth for a reminder of why we needed an estate tax in the first place: The growing disposition to tax more and more heavily large estates left at death is a cheering indication of the growth of a salutary change in public opinion….Of all forms of taxation, this seems the wisest. Men who continue hoarding great sums all their lives, the proper use of which for public ends would work good to the community, should be made to feel that the community, in the form of the state, cannot thus be deprived of its proper share…This policy would work powerfully to induce the rich man to attend to the administration of wealth during his life, which is the end that society should always have in view, as being that by far most fruitful for the people.
Goldman’s Go-Round – Paying the Piper and Still Coming Out on Top

First, the $600 million that Goldman paid to British taxpayers is a stark reminder that it is past time for the United States to tax the banks that have gone on to tremendous paydays after being bailed out; $12.9 billion was funneled to Goldman via the bailout of the American International Group alone. Why is Britain ahead of the United States on this score? When will American taxpayers see similar payback? Next is the more disturbing question: Did the S.E.C. let Goldman off too easy? As has been widely noted, the $550 million settlement, which has been approved by a federal judge, is chump change compared with Goldman’s bonus pool, and less even than Goldman’s depressed second-quarter profits. “
Gov’t Economic Policies Seen as Boon for Banks and Big Business, Not Middle Class or Poor: Overview | Pew

Fully 74% say that government policies over the past two years have done a great deal (53%) or a fair amount (21%) to help large banks and financial institutions. Majorities also say that large corporations (70% great deal/fair amount) and wealthy people (57% great deal/fair amount) have been helped. By contrast, 68% say government policies have helped small businesses not at all (29%) or not too much (39%); 68% also say middle-class people have received little or no help from these policies. And about the same percentage (64%) says poor people have not been helped.”
Will Criminals Exploit Cap and Trade?

The Obama Administration’s cap and trade proposals are misguided. Money laundering is very easy when you have an opaque pricing structure with little in the way of regulatory protections. It’s the environmental equivalent of credit default swaps. Worse, the cap and trade system doesn’t work. The European model introduced a quantity-based (capped) carbon trading system (CTS) with offsets. And, as Bill Mitchell has pointed out, Phase I was a disaster because more permits were issued than there was pollution and the market collapsed from the excess supply of permits. Phase II of the scheme was fatally compromised by heavy lobbying from large polluters who were able to gain under priced pollution permits.”
Elizabeth Warren and the Definition of “Controversial”

Recall that the charge of “too controversial” was not made by Senate Democrats against Gary Gensler, the former Goldman Sachs executive appointed by President Obama to head the Commodity Futures Trading Commission. It was not made by most Senate Democrats against Larry Summers, a hedge fund executive subsequently appointed to a top economic position in the administration. It was not made against Citigroup executive Jack Lew when last week he was appointed to head the Office of Management and Budget. And it wasn’t made against Tim Geithner, who orchestrated massive taxpayer giveaways to major banks during his time at the New York Fed. “
15 Symptoms of a Deadly Disease That’s Destroying Capitalism & America’s Democratic Values

1. Gross denial of any moral damage caused by their rampant greed. 2. Narcissistic egomaniacs with secret “God complexes” 3. Paranoid obsessives about secrecy, guilt and non-disclosure. 4. Power-hungry need to control government using “Trojan Horses” 5. Borderline personalities who regularly ignore “conflicts of interest.”
Breaking Impasse, Senate Extends Jobless Benefits

The Senate broke a stalemate over extending unemployment benefits for Americans who have been out of work for six months or more, voting to override Republican objections. On a 60-to-40 vote, the Democratic-led Senate agreed to cut off debate on the $34 billion plan to distribute added unemployment compensation through November for those who have exhausted their standard 26 weeks of aid. The 60 yeas were the minimum needed to overcome the threat of a filibuster and advance the bill to a final vote, expected later on Tuesday, when it is all but certain to pass. Two Republicans, Senators Susan Collins and Olympia J. Snowe of Maine, joined 56 Democrats and two independents in voting for the legislation; 39 Republicans and one Democrat, Senator Ben Nelson of Nebraska, opposed it.
Sign the Petition: Forget what Timothy Geithner thinks. We want Elizabeth Warren to police Wall Street.

The petition reads: “Elizabeth Warren has proven that she is willing to stand up to Wall Street on behalf of consumers and is the logical choice to lead the Consumer Financial Protection Bureau. Tim Geithner is a longtime Wall Street insider, and if he’s recommending against Elizabeth Warren that’s all the more reason to appoint her.” As chair of the bailout oversight panel, Elizabeth Warren held Wall Street executives’ feet to the fire and proved time and time again that she was not afraid to speak out.