Saving Big Banks While Killing Unions

Both banking and world trade are intimately intertwined.  These forces run alongside deunionization and the loss of domestic control over international business.  All over the planet except for communist China, sovereignty has increasingly become a matter of using mass populations as collateral for creating lending. The crushing of the unions continues in many countries using labor pools and private property as collateral for international banking.


Community Bankers’ Fight Heats Up on Capitol Hill –

Two bankers groups, the American Bankers Association and the Independent Community Bankers of America, are challenging each other, and their competing messages on Capitol Hill have made it easier for Democrats to ignore some of their arguments, lobbyists and Capitol Hill aides said….


...ABA officials allege the ICBA has been too willing to throw its support behind controversial legislation in exchange for modest changes in the bill. ICBA officials counter the argument, saying the ABA is conflicted because it represents both small community banks and large Wall Street firms that are often at odds with each other.


Conflicting messages from the industry “will invite the enactment of a bill that will truly hurt us badly for years to come,” ABA Chairman Art Johnson wrote in a letter to chief executives earlier this month. ICBA officials bristled at the letter, and Chief Executive Cam Fine said he felt it attacked his group’s “leadership personally,” and had his own criticism of his group’s rival.


I belong to a credit union.  I think that anyone who wants to preserve their savings and to have good relations with whoever is lending to them, should quickly join a credit union.  The commercial big banks did offer better deals than credit unions in the past but this was only because the cynical guys running the commercial banks expected to be bailed out of bad deals by the taxpayers.


Who have been stuck with the multi-trillion dollar bill thanks to wild lending by commercial bankers.  Not one credit union had to go to the Fed or Treasury to be bailed out.  Yet, credit unions have been asked to shoulder a greater and greater share of the rescue costs because they are still solvent.  I might even suggest that letting the biggest banks go bankrupt in Sept. 2008 would have fixed many regulation problems by the sheer fact that the biggest reckless bankers would all be bankrupt and thus, no longer able to screw up things even more.


Alas, they are all very much around and quite busy screwing up any attempt at cleaning up the mess by changing the rules so the biggest private bankers function more like credit unions.  When our politicians saved the reckless big bankers, this was due to the simple fact that Congress and the Presidents are owned lock, stock and barrel by powerful money interests:  Scholars and Rogues » $45 billion: a sour-tasting decade of out-of-control political spending

The $24.2 billion spent on campaign contributions is only part of the story. Over the past decade, $23 billion has been spent by corporations, labor unions, and other special-interest entities to lobby Congress and federal agencies, according to records aggregated by the center.


More than $45 billion has been spent in the decade now ending to influence legislation and regulation at state and federal levels of government. It’s only conjecture, of course, but it’s hardly likely that the bulk of those billions of dollars was intended to improve the lot of the 99 percent of adult Americans who did not make campaign contributions or made gifts of less than $200.


Where did the $24.2 billion in campaign donations come from? Only a tiny fraction, generally in the tenths of 1 percent, of Americans over age 18 make campaign contributions of more than $200. Those who give more than $1,000 are even fewer — but the amounts given by those latter donors total significantly higher.


90% of campaign donations are from entities that don’t have the public interest in mind.  If we include the quadruple billions spent on lobbying, it gets much worse.  Here is a typical example: Taxpayers Help Goldman Reach Height of Profit in New Skyscraper –

The building was a bargain — and not just because the final cost is expected to be $200 million less than the $2.3 billion price the company had estimated when construction began in November 2005. Goldman Sachs also benefited from the government’s determination to avoid losing jobs in lower Manhattan after the Sept. 11, 2001, terrorist attacks.


Building a new headquarters cater-cornered to where the World Trade Center once stood qualified the firm to sell $1 billion of tax-free Liberty Bonds and get about $49 million of job-grant funds, tax exemptions and energy discounts. Henry Paulson, then Goldman Sachs’s chief executive officer, threatened to abandon the project after delays in addressing his concerns about safety. To keep the plan on track, state and city officials raised the bond ceiling to $1.65 billion and added $66 million in benefits. The interest expense on the financing is about $175 million less over 30 years than if the company had issued corporate debt at the time, according to data compiled by Bloomberg.


“It was absolutely imperative that Goldman Sachs keep its world headquarters downtown,” says John Cahill, who took part in the negotiations as chief of staff to then-Governor George Pataki and now works at New York law firm Chadbourne & Parke LLP. “They had the financial resources to move anywhere.”


And Paulson then went on to the Treasury to raid it to save Goldman Sach’s neck.  He ran over there pretty damn quick, too, in mid 2006.  By that point in time, it was obvious to keen observers that the housing bubble had already popped.  These guys are not stupid.  They are smart.  They are just liars so they have to pretend to be stupid.


Anyway, he rushed over there to insure that the Treasury would bail his operations out.  And once the bail out was finished, he dashed out again.  We see already in England how these guys threaten to move out to other international bases if they are taxed like the peasants.  Ditto, here.  We can already see in other nations how financial deals gone sour can end up on the public bottom line even in places like Abu Dhabi, for example: Dubai World to Present ‘Standstill’ in Early January (Update1) – is a typical example.


Dubai made reckless real estate deals that went bad, losing over 50% of value.  It then had to be bailed out by the parent organization (literally, this is a family matter) which is now rather angry about the overhead costs of this bail out which is why it is using its sovereign power to tell lenders and people who are owed money, they will not get paid any interest nor principal for at least six months, if ever.


Unlike the British, Icelandic, Irish or US public, the Arabs are export profit powers so they can tell the bankers to jump in a lake.  Anyone who has to import lots of stuff, on the other hand, is enslaved.  The bigger the imports needed to function, the smaller the profits from exports, the worse it becomes.  The US is in an immense import overrun and thus, is extremely vulnerable to being enslaved to guarantee international banking deals including the US national debt sold to China and Japan.


As I predicted last year, China and Japan are increasingly seeing their foreign affairs converge while the gulf between the US and Japan are widening. One key issue is the US implied threat to not honor our national debts owed to Asia. Greek Credit Rating Cut to A2 by Moody’s; Bonds Rise on One-Step Downgrade: This news is important because it reminds everyone that sovereign nations can repudiate debts and these tend to be the biggest debts and thus, have a much bigger splash effect than simply banks going under.


Now, on to some auto news.  The US has ceased being a growing auto market.  It is mostly about replacing existing vehicles.  In Japan, the domestic market is declining due to more and more Japanese having smaller and smaller incomes.  As well as the population beginning to decline coupled with rising numbers of elderly who seldom buy new cars or even drive them.  But the auto market in China is exploding:  Driving mad! 4 mln cars clog Beijing roads_English_Xinhua

It wasn’t until 1997 that the number of vehicles finally reached 1 million.


Then it took five years to hit the 2-million mark in 2003 – two years after China’s accession to the World Trade Organization. Four years later, it hit 3 million. Now, after just two short years, the number has breached 4 million.


Chen Yao, a senior researcher of industrial layout and regional economy at the Chinese Academy of Social Sciences, noted that if the number of automobiles keeps growing by more than 1,000 per day, it will take just five years for the total to swell to 8 million, as many as in today’s Tokyo and New York City.


If I were to draw a graph, it would be a classic hockey stick graph.  The collapse of the Copenhagen warming meeting was blamed, by the automobile-driving West, on China.  China, in turn, points out that if as many cars were owed per capita in China like the US rates, the number of cars would be about 1 billion.  And therefore, they are a long ways from being equal with the other empires.


None of these cars were probably built in the US and shipped to China.  US automakers simply put in their plants in China and this becomes part of China’s domestic production.  The same thing goes for Japan.  China has made it quite clear, they intend to supersede the US in auto manufacturing.  Japan already has done this with Toyota now being the #1 auto producer in the world.


US auto companies continue to squeeze their own workforce and are chief importers of cars to the US since they moved production to other countries.  This is totally the opposite of China.  The UAW is quickly vanishing:  Ford offers buyouts to all hourly workers – MarketWatch

Ford (F 9.68, +0.01, +0.10%) currently employees about 41,000 hourly, union workers.


A Ford spokesman said the company does not have a target as to how many would be willing to take the buyout, adding that Ford will accommodate all who accept.


Employees have until Jan. 22 to decide whether to take the deal and those who do take the packages will begin to leave on Feb. 1. Ford said it expects most of the takers to be gone by March 1.


The US auto industry had 1.5 million UAW members.  Today, it is less than a quarter this number and with the recent buyouts, it will rapidly reach the vanishing point.  An awful lot of union workers voted for Reagan who was a union-buster.  They figured, it really didn’t matter all that much, Reagan was so inspiring to them, telling them all sorts of lies.  Lying is now normal.  The union bosses worked hard to corrupt Congress but they had only peanuts to work with compared to bankers who can make money appear out of thin air.  So they were outbid.  Not to mention, virtually all US media is anti-union.


As for unions in Japan, the news is the same: 2009/12/14 20:11 – Record Percentage Of Firms Cut Wages In 2009. Paradoxically, due to the miserable job situation in Japan and the mass layoffs (and rising suicides and family murders) the numbers tracking unions go up:朝日新聞社):1st rise in unionization in 34 years – English

The unionization rate rose 0.4 percentage point from a year earlier to 18.5 percent as of the end of June. It had steadily declined from the peak of 34.4 percent in 1975. The number of company employees fell 1.1 million from a year earlier to 54.55 million.


Note that Japan, like the US, has seen union membership decline over 50% since 1975.  The global inflation caused by a collapse of the value of the dollar and the oil boycotts hammered Japanese unions just as hard as US unions.  During the Japanese bubble years of the mid-1980’s, this loss of union power didn’t matter.  But ever since the Eternal Depression was imposed on the Japanese workers, their wages and political power collapsed.


BBC News – China loses WTO media imports appeal

The WTO wants Chinese firms to be able to import US DVDs, CDs, computer games, books and magazines and films. The US and China have been embroiled in a number of trade disputes recently. “Today America got a big win,” said US Trade Representative Ron Kirk. “We are pleased that the WTO has found against China’s import and distribution restrictions.”


The Chinese hate losing sovereign powers.  The US gave this up long ago, very stupidly.  The US can’t negotiate directly with China, we have to go to a foreign entity and beg them to save us from trade deals we don’t like.  90%  of the time, this foreign entity which is basically run by international bankers, says, ‘No.’  End of story.


The US was very stupid, losing sovereignty this way.  China may be forced to open their doors to US entertainment stuff but they will close it again the Japanese way: by making it very hard to sell these goods via various means and bureaucratic systems.  The US has never really pried open trade doors via the WTO.


Chinese Group Won’t Buy U.S. Gold Mining Company –

A company controlled by the Chinese government has notified the Obama administration that it is withdrawing its application to buy a Nevada gold mining company to avoid a conflict after federal officials raised “serious, significant and consequential national security” concerns…


…..Officials at the Treasury Department, which oversees the review panel known formally as the Committee on Foreign Investment in the United States, have not publicly said what the explicit cause of the security concern is, as the process is confidential.


But in meetings with Firstgold executives, the federal officials cited the proximity of the company’s four Nevada properties — most of which operate on leased federal land — to the Fallon Naval Air Station, as well as “other sensitive and classified security and military assets that cannot be identified,” according to a summary of a conference call held last week.


The Chinese buying spree intensifies.  The US can lock China out of US businesses but this doesn’t stop other trade rivals like the Japanese or Germans, from doing the same thing, too.  And here is a Chinese news story about how they are expanding their naval reach:  China’s third escort mission returns home from Somali waters_English_Xinhua

Two frigates with Chinese People’s Liberation Army (PLA) Navy returned home Sunday to a naval base in the Zhoushan Islands in eastern China, after escorting close to 600 vessels to protect them from pirate attacks in Somali waters.


The radar-evading hulled FFG-529 Zhoushan and FFG-530 Xuzhou were welcomed at the base by Ding Yiping, deputy commander of the PLA Navy.


The Chinese know that international trade profits translates into international diplomatic and military power.  The US still can use predator assassin robot killing devices to murder civilians in countries that are not at war with us but our diplomatic power is in very severe decline.  The US was reduced to going to the Copenhagen meeting only to haggle over how much money we were planning to hand over to other sovereign leaders so we can drive our cars awhile longer.


Money that we don’t have and must borrow from China, of course.  And this is the difference between creditor nations and debtor nations.  A distinction the US public hears little about and barely understand.

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Filed under .money matters, Free Trade

22 responses to “Saving Big Banks While Killing Unions

  1. nah
    “People who know the industry and know Goldman Sachs know that it is a giant hedge fund, but it’s wrapped in an investment banking wrapper,” says Samuel Hayes, a professor emeritus of investment banking at Harvard Business School in Boston. The public “would be horrified to think that their tax dollars were going to a hedge fund.”
    so what do we get for our money… a superstructure of ‘cant touch me’ management
    its not like theres any rules to rigid to bend, these guys are like super hero crooks, the ones that have ambitions to rule the world from outside any nations borders…. tampering with global pretense to vindicate their own divested power in mankind
    and we get humiliated by the millions in passing
    i was all for letting these crooks cash out to their own demise… banking is not a bad idea, so people can make money doing it, therefore there will be banking with or without goldman sachs and gang
    and i would have prefered to save taxpayer leverage to NOT save bullshiters and re-order investement out of goldman sachs
    profits never die

  2. charlottemom

    In the struggle between labor and capital, US labor has been soundly beaten (and our corrupt capitalism is dying). China — as world’s labor engine and next iteration of (post American) capitalism lives on.

    Our politics coopted by lobbyists as special interest groups — healthcare, AIPAC, etc — prove its not about amassing voters (unions), it’s about amassing money (to grease the corrupt machine). gov does not represent the voters….but they do fear the voters (in a fear of mob outbreak kind of way) . Look at Nelson and Landrieu ,gamed the system and sold out only after managed to secure “goodies” to keep up the pretense of a working gov system. Bread and circuses.

    And our economic system — where to begin? Unfavorable trade agreements, production & manufacturing sectors gutted .

    Painful times ahead as our society and culture “transition” out of preeminence in the world. What a comedown that will be.

  3. CK

    As long as china does not fall into the democracy mistake, they will avoid most of the issues that merka has failed at.

  4. Duski

    “Editor’s note: One of the first articles ever to appear on Truthdig was a dig led by Orville Schell, who asked the question “China: Boom or Boomerang?” Years later, with China’s economy continuing to thrive amidst a global economic meltdown, the answer seems obvious. But a boom to what end? China’s rise is well documented, yet it remains one of the most misunderstood countries in the world.

    China will soon become “the most powerful and influential country in the world,” says celebrated journalist Martin Jacques. It is predicted that by 2050, China’s economy will be twice that of the United States. What will Beijing do with all that power and influence?”

    And then it goes into topic… Interesting views.

  5. nah

    Moore said that newspapers, bought up by corporations in the last generation, have pursued profits at the expense of news gathering. By basing their businesses on advertising over circulation, newspaper owners have neglected their true economic base and core constituency, he said…
    news news news news news
    i used to buy the paper… but theres no content vs. rivals… so i will spend my money on choice materiel
    and your site bans bout nearly all urlz

  6. nah

    double u double u double u

  7. nah

    December 22, 2009 at 6:10 pm

    I’ve been saying it for years. Old media is dead, and good riddance. The Internet provides more and better information than any elitist, corporatist dead-tree rag could ever provide.

    So often in a heated argument, someone will cry for SOURCES! And so often I have to roll my eyes at the disparagement of Internet-based sources in favor of “real” sources like NYT, WaPo, or WSJ.


    Yeah, the “real” news brought to you by the same people make your cigarettes, patent organisms and food, and dump millions of tons of toxic waste into your water sources.

    Sheep to the slaughter.

    seriously what is better than real honesty about the facts boi


    ELAINE; Unfortunately, many, many ‘alternative’ sites are just as full of lies, deceptions and goofy belief systems. There is no ‘pure source’.

  8. nah
    “If all this solar development took place in the Mojave, the higher you climb the more industrialized the vistas would look,” Mr. Myers said recently as he walked past bighorn sheep tracks and scrambled up a peak overlooking the Trilobite Wilderness Area.
    like how is California a progressive state…. they sell themselves as a world class power but in truth marginalize the natural resources and ability of the rest of the nation to compete globaly… the hydro states are building wind farms on the most scenic 1 of a kind gifts they have to offer the nation… and all California wants to do is suck it all down via national energy markets they practically invented to pull bullshit stunts like this
    to be honest the dont have the finances to be americas choosey mom


    ELAINE: My grandaddy, who lived in California since before 1900, used to snarl, in his old age, ‘Damn Easterners should go back to where they came from..’ as he contemplated how his once rural view from Pasadena was swamped by the growth of LA. It was literally a small ranch town when he arrived nearly a century earlier.

    So I say to anyone in California, ‘You guys should ALL leave, you ALL wrecked the views I remember as a child when I lived in Death Valley. Damn!’

  9. nah

    Taliban blow up Pakistan girls school: official
    If the muslim insurgency of radicalism cant be put down when the fanatics are pulling stunts like this, by the very same population they victimize
    says alot about the region and the hopeless state of security in asia… the only militia that can be brought to bear is a radical muslim racist classist sexist buncha’ hoogabooguhs
    couldnt even view it as a civil war just some progressive class struggle that is slowly becoming entrenched paranoid history…. while the children die at the hands of their fathers…. its really sick

  10. nah,2817,2357518,00.asp
    Though its focus is admirable – providing $100 laptops to children in developing nations – the OLPC program has struggled to catch on. A presence on late last year expanded its reach, but the group kicked off 2008 by losing the support of Intel and then cut its staff by 50 percent in January 2009.
    These guys are so badass… AND google is teaming up with wireless providers to sport a new linux android platform like yesterday… the future of mankind looks good…
    at least when you ‘search’ the future of mankind on google


    ELAINE: They should give all Third world kids iPhones. And iPods, too. 🙂

  11. JSmith

    “The US auto industry had 1.5 million UAW members. ”

    And the companies gave the unions what they wanted in the 80s, and now those companies are bankrupt. (This is what we call “cause and effect”.)

    Way to go, unions. You won.

  12. JSmith

    “so often I have to roll my eyes at the disparagement of Internet-based sources ”

    And I spend a fair amount of time rolling my eyes at the Internet-based sources.

    On the internet you can always find someone who agrees with you, no matter how far out in space you may be.

  13. DrKrbyLuv

    In a way it is ironic that the socialist programs espoused by unions that perpetually vote democratic are being screwed by the democrats.

    Maybe this will be a wake-up call for the dupes that support either party. They are of course, both controlled by the same banking cartel and their corporate cronies.

  14. bob

    elaine, merry Christmas and Happy new year. Bob

  15. emsnews

    Thanks, Bob. I went out tonight to do snow plow work and fell on the slippery ice. It hurt like hell. Isn’t global warming fun?

  16. Paul S

    “Way to go, unions. You won” That’s not even close to what happened. It doesn’t even make sense on its face. Why would any group deliberately destroy their employment? Actually, American car company management “owns” the lions share of the blame. Ford, GM, Chrysler management absolutely refused to face up to import challengers such as Toyota and Honda. Result? American car companies got their collective clocks cleaned by the Japanese–and others. American car company management, against ALL evidence to the contrary, continued to believe they “owned” the American car market AND they could serve up their crappy cars in a take-it-or-leave-it manner. American car company management had such a bitter hatred of the Unions they didn’t care about anything else except destroying the UAW. So much for the Free Market. Anytime American management fails they stop their drivel about “Free” Markets, but only long enough to screech for a taxpayer bailout. How socialist of them!

  17. JSmith

    “Why would any group deliberately destroy their employment?”

    Ancient Chinese saying: be careful what you ask for; you may just get it.

    Samuel Gompers was once asked, “What do unions want?” He replied, “More.” But after a while there is no “more.”

    They built some crap cars, too. For a long time you could tell the people who put the cars together just didn’t give a damn.
    “I went out tonight to do snow plow work and fell on the slippery ice. It hurt like hell.”

    OUCH! Are you OK, Elaine?

    ” Isn’t global warming fun?”

    You’re confusing climate and weather.

  18. Paul S

    That’s right; blame the unions for all the problems. Not the design engineers or the marketing people or the dealers. Ask people you know how many of them have had problems with the dealer who sold them their American car. I’ve dealt with Olds dealers, Buick dealers and more than one GM dealer. Bottom line: they make you want to buy a Toyota. Or a Honda. Or a Nissan, etc. In the 80’s the biggest UAW local in Michigan had about 80,000 members. Today this same UAW local has about 785 members. How much longer will people blame the Unions? When there are zero UAW members? The problem will still be there: management. These are the guys who thought they could compete against Toyota making cars in factories that were built in the 1930’s. No. Detroit’s failures center mainly around the folks running things. American car company management thought they could outsource all their labor costs and all would be well. Wrong.

  19. nice share you have here, keep up the good work !

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