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Ralph J. Dolan: America at a crossroads

Ralph Dolan poses for a portrait, Tuesday, in Northampton.

SARAH CROSBY

Ralph Dolan poses for a portrait, Tuesday, in Northampton. SARAH CROSBY Purchase photo reprints »

HAYDENVILLE — Ah, the American Dream, the sweet dream of success, has been hijacked by corporate power, particularly in our nation’s capital.

There, many representatives of the American people spend their days enthralled by money and glitz. They are served shrimp jambalaya in congressional dining rooms, get coco-butter rub-downs in the very special, very private Senate Health Spa, enjoy the universal health care they deny the rest of us and champion compensation packages for themselves that provide lifestyles the pharaohs of old would envy

What we have is government of the rich, by the rich, for the rich.

JP Morgan is a wonderful example. Here is a top-tier, highly influential bank considered to attract some of the greatest economic minds. Not only did it not foresee the economic debacle that overtook the American economy in 2008, it was up to its eyeballs in reckless derivatives, trading and required an enormous bailout from the peoples’ treasury ($12 billion).

The money comes in so easily this bank does not pause to consider it may be behaving in ways that undermine the public good. JP Morgan should be broken up into a thousand pieces and cast to the four winds for its violation of the public trust. But it is allowed to go on playing recklessly with the whole American economy and must now pay a fine (without admitting guilt, of course) for artificially driving up the price of electricity in California.

Shame on us for allowing JP Morgan to exist. JP Morgan is a fitting symbol of an economic and political model that siphons the wealth of the nation into the hands of the few and leaves the rest of us scratching and pecking.

The top 400 wealthiest individuals in the U.S. hold as much wealth as the bottom 180 million. This level of economic inequality, as the president noted in a July speech, tears at the country’s social fabric.

America is in crisis. We don’t know who we are any more. We don’t know what we believe in.

How do we define the role of government in these vast, complex, frighteningly powerful nation-states of the modern world?

Those 400 wealthiest people want government to create rules that accommodate their interests, withdraw funding allotted to uphold even a tattered safety net and get out of the way of the “invisible hand” of the economy. The rich are not the champions of the common good, as they would have us think. A rising tide, sadly, does not lift all boats. The truth is that their enormous wealth ends up in off-shore tax havens.

Another way to define government is as an instrument, collectively agreed upon, for the distribution of the wealth of the nation in some equitable fashion among all its citizens because every citizen, every human being, has an inalienable right to live in dignity.

And we know from the suffering it brings to the millions that the widening gulf between those who have money and those who don’t opens wider a Pandora’s box of social ills — hollowed-out cities, decaying infrastructure, overworked adults, fractured family life, widespread homelessness, unemployment and underemployment.

I think of the lives of the disenfranchised in America, and of the burgeoning gulag of our prison system, the desperate reaching for gratifications and distractions (sex, drugs, shopping, gambling, non-stop entertainment), the corroded sense of community, physical and mental illnesses, grinding poverty and degradation.

In the midst of all this are the rich, putting on a display of obscene consumption which the world can ill afford. A billion human beings live in conditions in which basic human needs go unmet.

America is at a crossroads. Are we going to press forward in a noble experiment of establishing a democratic society where economic justice, truly the highest form of justice, prevails? Or are we fated to slip down into greater levels of hubris, secrecy, surveillance, state-sponsored violence, war-making, king-making, and all the other travails of empire?

Ralph J. Dolan lives in Haydenville and writes a column that appears on the fourth Monday of the month.

Wait, banks are moving to the "third world"? You are saying that the transfer of call centers abroad is a result of financial reform and not of cheaper labor? We were opressing the poor banks financial practices, so they decided to not only outsource sevice, but are now also financing mortgages in developing countries because it is more profitable to deal with people abroad rather than our own middle class? That's just...funny! If that is a "fact," it just proves that your mind is so simple that you're incapable of distinguishing between the manufacturing and service sector and the argument that you were trying to make about the financial sector. These are not comparable sectors, Gary! But when you try to articulate something in your own words, rather than cutting and pasting big chunks of someone elses words, this seems to be the best you can do. So, does that mean that a "fact" for you is any bit of information, true or false, that can be shoehorned into an argument that is simple enough for you to wrap your mind around?

The ignorance of the some astounds me as they clearly know nothing about the history of what actually occured in the 'bailout'. JP Morgan got no bailout - this is well know history to anybody following what was happening at the time. Sheila Bair, Hank Paulson, Neil Borofsky and Tim Geithner summoned the leaders of the largest banks in America to a MANDATORY meeting in Washington. At that time, the banks all over the world were not sure who was solvent and who wasn't and global interbank lending was freezing up around the planet due to the Lehman collapse. At that meeting these federal regulators told the bank heads that they had NO CHOICE but to accept the Tarp 'bailout' money. All the bank heads except the head of Wells Fargo refused to accept the capital infusion because it was still unknown what they would ultimately have to write off their books. According to Basel 2 rules once the banks wrote down their bad debt mostly due to the Lehman and Bear Steans bankruptcies where they kept large amount of their mortgage backed securities (Lehman was the largest global player in MBOs) they would be below mandatory capital requirements. The invited banks are the only ones allowed to be primary dealers in Fed debt. Covenants prevent these banks from buying or selling federal debt if they are not in compilance with Basel 2 capital ratio rules. Sheila Bair (the former Amherst Umass professor) supposedly threatened all the bankers who balked that as head of the FDIC, she would fire them immediately at that meeting and replace them with someone who would accept the capital injection. The bankers went back to their boards and the next day got approval to accept the 'bailout' funds where they sat on the banks books in a locked box so to speak. The minute the govt allowed them to repay the Treasury they did with dividends (I think it was the equivelent of about 8% rate - much more than the 30 year treasury yield I might add). Not a penny of this money went to the management, employees or stockholders. JP Morgan got a 25 billion injection and paid back 25 billion plus over 900 million in dividends to the Treasury. If anything, the derivatives prevented the global financial meltdown so many were afraid of. They did their job. Can we get this story straight for once? Ignorance is a frightening thing.

From Sheila's own mouth: The game plan for the meeting was for Hank to tell all the CEOs that they would have to accept government capital investments in their institutions, at least temporarily. Yes, it had come to that: The government of the United States, the bastion of free enterprise and private markets, was going to forcibly inject $125 billion of taxpayer money into those behemoths to make sure they all stayed afloat. Not only that, but my agency, the FDIC, had been asked to start temporarily guaranteeing their debt to make sure they had enough cash to operate, and the Fed was going to be opening up trillions of dollars' worth of special lending programs. All that, yet we still didn't have an effective plan to fix the unaffordable mortgages that were at the root of the crisis. The room became quiet as Paulson entered, with Bernanke and Geithner in tow. We all took our seats. He got right to the point. We were in a crisis and decisive action was needed, he said. Treasury was going to use the Troubled Asset Relief Program (TARP) to make capital investments in banks, and he wanted all of them to participate. Paulson asked Geithner to TELL EACH BANK how much capital it would accept from Treasury. He eagerly ticked down the list: $25 billion apiece for Citigroup, Wells Fargo, and J.P. Morgan Chase; $15 billion for Bank of America; $10 billion each for Merrill Lynch, Goldman Sachs, and Morgan Stanley; $3 billion for Bank of New York; $2 billion for State Street.

I wasn't too blown away by Mr. Dolan's column (no offense to him, just not my style). But I think your own rant sort of got away from you here. Whether you call it an injection or a bailout, forced or not forced, JP MOrgan got an ammount of money from the Federal Reserve, FDIC and Treasury in 2008. That sort of sounds like a "fact," but I'm still not clear on what that word means to you. Now, you DO set Mr. Dolan right in pointing out that the ammount of money that was given--and subsequently paid back--by the bank was more than twice what he seems to think it was. So was that you're point, you have a more accurate figure of the ammount in question than Mr. Dolan. Gold Star for you! FURTHERMORE, your first comment on this thread looks like a close paraphrase, if not a cut and past, of congressional testimony on TARP and/or some of the testimony Jamie Dimon has given over the years. This makes no mention of TLGP and AMLF funds, which apparantly accounted for far more of JP Morgan's part of the "bailout" than TARP. Plus, if you followed some of the testimony regarding the London Whale, Dimon has done a pretty fancy little semantic two-step regarding whether TARP funds were "requested" or "needed." But really, that has nothing to do with the point mr. Dolan was making.

The only thing that happens when the progressive social justice crowd attacks the banks is they move their business and the jobs that go with it to places in the world with friendlier environments. The last company I worked for moved 50,000 American jobs to India in the past few years. These were good paying jobs for middle class people. These banks are now putting their energy into building the economies of the 2nd and 3rd world and god bless them. Is it no wonder there are no jobs in America and the American dream is dying? Its because of progressive socialists like Mr. Dolan. The banks didn't request the 'bailout' funds and paid them back literally the day they were allowed to and with a better return than the government could have gotten if they had sold 30 year bonds. Those are the facts ma'am. The only business that have not payed back the Fed are the labor union controlled industries like with the auto bailout. That was a real bailout that will never be paid back. Why was that left out of the aritcle? The corrupt labor unions and how Obozo stole the bond holders rights to own what was left of GM and instead gave it to the unions who got him elected? And what caused the financial crisis to begin with? Its was the policies of the progressive social justice left that forced the banks to lend to people they never would have if they were not forced to by the federal government.

Gag, I just had a little throw up come up.

Probably the smartest thing to come out of your mouth in a while.

...the actual throw up, I mean.

Touche :-)

Can I steal that line?

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