Eideard

With little fanfare, China’s currency has appreciated significantly in the last year and a half, leading many economists to question whether the exchange rate is still the most important economic issue for the United States to press with China’s leaders.

The rise of the renminbi — up 12 percent since June 2010 on an inflation-adjusted basis and 40 percent since 2005 — has helped American companies by effectively reducing the cost of their products in China. In the last two years, American exports to China have risen sharply…

In his Oval Office meeting on Tuesday with Xi Jinping, China’s vice president and likely next leader, President Obama discussed the currency as one of the trade practices that concerned the United States. That meeting — and tough public comments by Vice President Joseph R. Biden Jr. — continued a three-year campaign by the administration to convince Chinese leaders that a stronger currency is in their interest…

Administration officials and members of Congress have chosen not to emphasize the appreciation publicly, partly to keep pressure on China. Widespread discussion of the change could reduce support in Congress for a bill that would impose sanctions on Chinese imports to the United States and that Beijing strongly opposes…Passing legislation based on a lie doesn’t upset Congress or the White House at all.

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As much space as they deserve
Daylife/Getty Images used by permission

All of the post-mortems on the CNBC Republican debate focused on the sad, but hilarious, senior moment Gov. Rick Perry suffered when he couldn’t remember the third federal agency he wants to eliminate.

…But what also stood out as perplexing — and stunning — was how all of the candidates were unwilling to hold Wall Street accountable for the deplorable economic condition the nation continues to find itself in.

When the housing crisis was raised, Mitt Romney and most of the others chose to unleash their rage on the consumers and the financial reform bill that was passed after the crisis hit, instead of on the shady practices of Wall Street…

The favorite GOP bogeyman is Fannie Mae and Freddie Mac, the government-backed housing lenders. Yet anyone with half a brain knows that those institutions brought on Democrats and Republicans on their payroll in order to ensure that Congress would let them continue practices as usual.

During the debate, Newt Gingrich was asked about the $300,000 he was paid by Freddie Mac in 2006, which he said was for “advice.” He was quick to say he did no lobbying on behalf of Freddie Mac, but we all know that his presence, along with other former politicians and political strategists from both parties, greatly helped the company prevent congressional scrutiny…

What Gingrich and the other candidates absolutely refused to do was tell the public that one of the biggest proponents of an aggressive home ownership plan in America was President George W. Bush…

It is beyond clear that we got into this huge mess because we were too lax in holding banks accountable. Getting rid of the Glass-Steagall Act, thus allowing commercial banks and investment banks to merge, was a disaster.

Not a single GOP candidate said we should put the provision separating those activities back in place…

In no way can I remove the role the consumer played in the economic debacle, but for the GOP candidates to act like we had too many regulations, and that’s why Wall Street bankers lost their minds, is deplorable…

How in the world can we trust that any of these candidates will care about the Average Joe, Jane, Jose, Jimmy, Janice or Jamila if they are elected president, when they won’t even hold Wall Street accountable in a debate?

Roland Martin pretending that we’re just discovering that the Republican Party is a wholly-owned subsidiary of the US Chamber of Commerce is a bit disingenuous.

Anyone hear a moderator ask if anyone understands evolution, BTW?

 
“Every successful movement has a soundtrack,” the songwriter Tom Morello told reporters after he had tried to fire up the crowd at the Occupy Wall Street Protest last week with a Woody Guthrie tune and one of his own labor songs.

Perhaps he is right, but the protesters in Zuccotti Park in Lower Manhattan have yet to find an anthem. Nor is the rest of the country humming songs about hard times. So far, musicians living through the biggest economic disaster since the Great Depression have filled the airwaves with songs about dancing, not the worries of working people.

Where have all the protest songs gone?

To be sure, a handful of songwriters are tackling the issue. Ry Cooder, the blues and rock guitarist known for his exploration of roots music, lambastes bankers and conservatives in his latest album, “Pull Up Some Dust and Sit Down” (Nonesuch). Similarly, Mr. Morello, who began his career as the guitarist and chief ideologue for the band Rage Against the Machine, makes an unapologetic call for leftist revolution in his new album, “World Wide Rebel Songs” (New West Records)…

Yet none of these songs have been big hits, and none are likely to have the impact that a song like Bob Dylan’s “Blowin’ in the Wind” had in the early 1960s.

The scarcity of songs about the economic disaster stands in contrast to the flurry of pop songs in the mid-2000s blaming President George W. Bush’s foreign policy for the wars in Iraq and Afghanistan. Antiwar songs came not only from stalwarts like R.E.M. and Neil Young but also from younger performers like Green Day, Bright Eyes and Pink…

“A Darth Vader-like president makes a great target,” Mr. Morello said. “One of the reasons the air has gone out of the balloon of protest songwriting is people hung their hopes on the Obama administration…”

The lack of a coherent message on the left has been evident at the Wall Street protest. “I have not heard a single song that sums up what we are trying to do here,” said Martían Hughes, a 24-year-old college student, after Mr. Morello’s performance. “Nor have I heard a single message.”

A couple of instant reactions to the article:

I’m afraid many of those sustained by the vague, generalized ennui and discomfort that sings about Occupying Wall Street – have parents who work down the street in one of the brokerage houses or are busy back home in Indiana selling life insurance. The occupiers will be around for what seems like a long time to TV talking heads. But, geeks who write games and sociology majors in Boston will find jobs – and vanish – before laid-off teachers do in Wisconsin.

May 6, 2010
Daylife/Reuters Pictures used by permission

Regulators in the United States and overseas are cracking down on computerized high-speed trading that crowds today’s stock exchanges, worried that as it spreads around the globe it is making market swings worse…

Regulators are playing catch-up. In the United States and Europe, they have recently fined traders for using computers to gain advantage over slower investors by illegally manipulating prices, and they suspect other market abuse could be going on. Regulators are also weighing new rules for high-speed trading, with an international regulatory body to make recommendations in coming weeks.

In addition, officials in Europe, Canada and the United States are considering imposing fees aimed at limiting trading volume or paying for the cost of greater oversight.

Perhaps regulators’ biggest worry is over the unknown dynamics of the computerized stock market world that the firms are part of — and the risk that at any moment it could spin out of control. Some regulators fear that the sudden market dive on May 6, 2010, when prices dropped by 700 points in minutes and recovered just as abruptly, was a warning of the potential problems to come. Just last week, the broader market fell throughout Tuesday’s session before shooting up 4 percent in the last hour, raising questions on what was really behind it…

High-frequency trading…done by independent firms or on special desks inside big Wall Street banks, now accounts for two of every three stock market trades in America…

Even the traders’ authorized activities are coming under fire, especially their tendency to shoot off thousands of orders a second and suddenly cancel many. Long-term investors like pension funds complain that the practice makes their trading harder…

In the United States, the Securities and Exchange Commission has been looking into the new market structure for almost two years…Looking and looking and looking. Though it gets in the way of lunch – sometimes.

And the S.E.C. last year proposed what would be an even more high-powered monitoring system called a consolidated audit trail that would gather data on trades in real time from all United States exchanges, and be a powerful tool in helping regulators piece together events in case of another flash crash…

That’s called building a better barn door after the stables are empty. But, the SEC will have sufficient information on how to construct a great looking screenplay about one more failure to act on behalf of investors.

Thanks, Eric

Mike Luckovich / AJC

New Republican legislation in the House and Senate would force the U.S. government to reroute huge amounts of money to China and other creditors in the event that Congress fails to raise its debt ceiling…

If passed, Pat Toomey’s (R-PA) plan would require the government to cut large checks to foreign countries, and major financial institutions, before paying off its obligations to Social Security beneficiaries and other citizens owed money by the Treasury…

That’s where Toomey’s idea supposedly comes in. And yet, according to the Treasury Department, his plan wouldn’t actually avoid a default, or its catastrophic consequences.

“[T]his idea is unworkable,” said Deputy Treasury Secretary Neal Wolin in a statement. “It would not actually prevent default, since it would seek to protect only principal and interest payments, and not other legal obligations of the U.S., from non-payment. Adopting a policy that payments to investors should take precedence over other U.S. legal obligations would merely be default by another name, since the world would recognize it as a failure by the U.S. to stand behind its commitments.”

The full impact of an actual default is unclear, but Treasury, and independent experts have warned that it would among other consequences, cause an enormous loss of wealth among U.S. citizens. Under the circumstances, one would think that the government’s top priority would be ensuring that citizens owed money by the Treasury would take precedence over, say, foreign governments. But that wouldn’t be the case if Toomey and some House Republicans, including Republican Study Committee Chairman Jim Jordan (R-OH), get their way.

The Administration thinks such a policy would be tone deaf. “Such a policy would also be unacceptable to American servicemen and women, retirees, and all other Americans, who would rightly reject the notion that their payment has been deemed a lower priority by their government,” Wolin added…

“I think it is a dreadful idea,” Sen. Kent Conrad (D-ND) told National Journal. “Basically what they are saying is, pay China first. Are we going to forget about the American public and the things that they need? Somehow they are secondary? And paying the Chinese and the Japanese is the first priority of this country..?

You have to be wearing blinders made of boiler plate to ignore how committed the Republican Party is to Big Oil and Big Money. Still, blatant butt-kissing like this is so contemptible. Couple it with Republican willingness to crap on the needs of ordinary citizens — rejecting any priority for social security or medicare payments, funding for veterans administration hospitals — puts their display of ethical corruption down lower than a snake’s belly.

Cripes. Rattlers in my neck of the prairie would be offended by being compared to Republicans.

Daylife/Reuters Pictures used by permission

Raj Rajaratnam, the hedge-fund tycoon and Galleon Group co-founder at the center of a U.S. insider-trading crackdown, was found guilty of all 14 counts against him in the largest illegal stock-tipping case in a generation.

A jury of eight women and four men in Manhattan returned its verdict today after hearing evidence that Rajaratnam, 53, engaged in a seven-year conspiracy to trade on inside information from corporate executives, bankers, consultants, traders and directors of public companies including Goldman Sachs Group. He gained $63.8 million, prosecutors said.

The trial came as Manhattan U.S. Attorney Preet Bharara promised to crack down on “rampant” illegal trading on Wall Street. Rajaratnam was convicted on five counts of conspiracy and nine counts of securities fraud. Prosecutors today said he faces 15 1/2 years to 19 1/2 years in prison at his July 29 sentencing.

“Rajaratnam, once a high-flying billionaire and hedge fund manager, is now a convicted felon, 14 times over,” Bharara said in a statement after the verdict. “Rajaratnam was among the best and the brightest — one of the most educated, successful and privileged professionals in the country. Yet, like so many others recently, he let greed and corruption cause his undoing…”

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Two women are fending off a vicious man-handling of investor protection. As Congress pettily wrangles over the debt limit and the next budget, Mary Schapiro and Elizabeth Warren are fighting to protect you against the ravages of Wall Street.

Wall Street and its Republican allies would like to make the Dodd-Frank financial reforms disappear. The money trust has been pouring millions into lobbying to eviscerate the budget of the Securities and Exchange Commission and blocking the formation of the Consumer Financial Protection Bureau…

While the SEC gathers most of its revenue from fees and fines, it can’t seed key investor protections like an office of investor advocate without the additional funds. Its budget was supposed to double under Dodd-Frank over the next five years. The money trust wants to keep the status quo and de-fund the agency…

Elizabeth Warren is fighting a separate battle to save the funding and independence of her consumer bureau, which President Obama asked her to start up. Republicans have proposed that another commission run the agency or answer to other regulators, which is the bureaucratic equivalent of neutering it.

The consumer bureau, Warren hopes, would curb anti-consumer credit practices in banking. Her common-sense approach is simple: Boil every credit agreement down to a plain-language form that tells you how much it will cost you, is it affordable and is it the best deal. That’s something that would benefit every American who gets a credit card, mortgage or other financing.

Not only are GOP proposals punitive to Warren’s fledgling agency, they are unfair. No other banking agency would have to answer to a commission or be hostage to Congressional appropriations. The Office of the Comptroller of the Currency, a banking regulator, has a single director and obtains its budgets from bank fees, for example…

There shouldn’t even be a fight over these two agencies. After the money trust nearly deep-sixed the global economy in 2008, triggered a massive recession and unemployment, they should welcome more cops on the beat. They are like three-year-olds with a pile of money and an endless supply of finger paint. They need parental supervision or things will get messy again.

The Republican Party and their fraternal flunkies in the Democrat Party would like nothing better than to leave investment banks and their frontmen in the “analyzing” business free to handicap every Main Street individual who invests on their own. Keeping the markets a closed corporation as far as honesty and opportunity are concerned – remains the operating framework of politicians bought and paid for by Wall street.

The real legacy of Ronald Reagan

There’s been talk that George W. Bush was so inept that he should trademark the phrase “Worst President Ever,” though some historians would bestow that title on pre-Civil War President James Buchanan. Still, a case could be made for putting Ronald Reagan in the competition.

Granted, the very idea of rating Reagan as one of the worst presidents ever will infuriate his many right-wing acolytes and offend Washington insiders who have made a cottage industry out of buying some protection from Republicans by lauding the 40th President.

But there’s a growing realization that the starting point for many of the catastrophes confronting the United States today can be traced to Reagan’s presidency. There’s also a grudging reassessment that the “failed” presidents of the 1970s – Richard Nixon, Gerald Ford and Jimmy Carter – may deserve more credit for trying to grapple with the problems that now beset the country…

With his superficially sunny disposition – and a ruthless political strategy of exploiting white-male resentments – Reagan convinced millions of Americans that the threats they faced were: African-American welfare queens, Central American leftists, a rapidly expanding Evil Empire based in Moscow, and the do-good federal government…

When it came to cutting back on America’s energy use, Reagan’s message could be boiled down to the old reggae lyric, “Don’t worry, be happy.” Rather than pressing Detroit to build smaller, fuel-efficient cars, Reagan made clear that the auto industry could manufacture gas-guzzlers without much nagging from Washington.

The same with the environment. Reagan intentionally staffed the Environmental Protection Agency and the Interior Department with officials who were hostile toward regulation aimed at protecting the environment. George W. Bush didn’t invent Republican hostility toward scientific warnings of environmental calamities; he was just picking up where Reagan left off.

Reagan pushed for deregulation of industries, including banking; he slashed income taxes for the wealthiest Americans in an experiment known as “supply side” economics, which held falsely that cutting rates for the rich would increase revenues and eliminate the federal deficit.

Over the years, “supply side” would evolve into a secular religion for many on the Right, but Reagan’s budget director David Stockman once blurted out the truth, that it would lead to red ink “as far as the eye could see.”

RTFA. Lots of detail – even though it skips over a couple of my favorites: Reagan could have helped the young movement for environmentally-smart building technology just by staying out of the way. Instead his anti-science ideology demanded the removal of solar panels from the White House.

He essentially invented the concept of “homeless” by shutting down every public health hospital he could, ending psychiatric care for tens of thousands – especially VietNam vets with PTSD.