Courtesy of Robert Reich here are 6 responses for those who still doubt the presidential odds of Senator Bernie Sanders ...
|John Steinbeck was born on this day (Feb. 27) in 1902.|
|The 1911 New York Triangle Factory Fire.|
|Max Blanck and Isaac Harris, owners of the Triangle Shirtwaist factory, 1910.|
Brooksley Born, head of the Commodity Futures Trading Commission, warned that not regulating derivative markets would lead to a market meltdown. She was effectively shouted down by Alan Greenspan, Bob Rubin, and Larry Summers, then replaced by President Clinton.
1. 1980s, THE “GENIE ACTS”: In the early 1980s the financial industry received what amounted to 3 wishes from the U.S. Congress. Among these wishes was legislation that allowed the Savings & Loan industry to make money off of home mortgage contracts even if they were generating losses. How can this be, you ask? Simple, Congress allowed S&Ls to use delinquent loans as a tax deduction at tax time (which meant the taxpayer picked up the tab).
IMPACT: With mortgages virtually bullet-proof, the stage was set for market players to bundle up individual mortgages (into CDOs). This is where the messy mortgage loans that helped bring down our economy began.
2.1987, THE “LET-THE BANKS-DO-WHAT-THEY-WANT” ACT: In 1987 the Federal Reserve granted commercial banks – which are FDIC insured – the authority to invest in (“underwrite”) new and risky municipal and mortgage-related securities. This was once the exclusive domain of investment banks (which weren't backed by FDIC-taxpayer money). In effect the Fed said, “Sure, go ahead and invest FDIC insured bank money in risky products … it’s not like you’re playing with taxpayer money.” Oops.
IMPACT: The commercial banking sector slowly came to depend on mortgage backed assets (i.e. CDOs and other derivative products) as their primary earning tool, jumping from about 28 percent of bank earnings in 1985 to more than 60 percent in 2005.
3. 2004, HANK PAULSON DOES A NUMBER ON AMERICA: In 2004 Goldman Sach’s then CEO, Hank Paulson, led a powerful group of financial players into the Securities and Exchange Commission’s offices. They were looking for a break. They wanted the SEC to allow them to borrow and “invest” beyond a debt-equity ratio of 12: 1 (most banks won't let you and me borrow beyond a 5:1 ratio). Paulson's request was granted. When Bear Stearns and Merrill Lynch collapsed four years later in 2008 they had debt to equity ratios of 33: 1 and 40: 1. In case you're wondering, in 2008 Hank Paulson - then as Secretary of Treasury in the Bush administration - led the charge to secure taxpayer bailout money, which was used to shield Goldman Sachs and industry friends.
IMPACT: When the SEC said "yes" to Paulson's request in 2004 they effectively said it was OK to run up ridiculous debt levels to make risky market bets on largely unregulated products.
|Nicolaus Copernicus, the famed astronomer who proved the earth wasn't the center|
of the universe, was born in Poland 543 years ago today (February 19, 1473).
* At least 14 Supreme Court justices have been confirmed during election years. You can read about it here.
* If Republicans block Obama's Supreme Court nomination, it may not be so bad. President Obama might win anyway. You can read about it here.
* In the more than 220 year history of the U.S. Senate, of all the judicial nominees that had been nominated and then filibustered (blocked) through 2013, almost half of those blocked (82) were nominated by President Obama. This helps to explain why Harry Reid changed the filibuster rules in the Senate.
|African-American History Month / Children reading in the 1950s|
|Each column above is made up of a base of 100 pallets, which are stacked 100 high. Every row of pallets |
is worth $10 billion (100 x $10b = $1 trillion). The smaller column has 42 pallet bases, worth $420 billion.