West Hollywood Halloween Carnaval & Voting Tomorrow

I didn’t make it to the Rally to Restore Sanity (and/or Fear) in DC, but I had a blast attending the West Hollywood Halloween Carnaval in my hometown last night, along with 200,000 or so others.

And you know what? It was a spirited showing of what America (and the first Amendment) is all about – freedom of expression. The crowd was a microcosm of the diversity that makes our country great. The night was a celebration of our inherent creativity and the ability to accept that of others. Black, White, Hispanic, Asian, Gay, Straight, Old, Young – some came purely to revel, some to make the Guinness Book of World Records for Time-Warp Dancers on the 35^th anniversary of the Rocky Horror Picture Show, some to issue political statements with flare – saying yes to prop 19 to legalize marijuana was a popular costume –  the pot-infused air pockets punctuated the sentiment. The cops took pictures, instead of arresting people.

Beyond being one of the largest street parties in America, the Weho Halloween Carnaval is about participation. Unlike the Parade in New York City, where people line the sidewalks to watch the extravagant and awesome floats – people here ambled together - participants and audience intermixed. It struck me walking with the crowds in my short-skirt and high-heels – that this is what democracy is all about – people gathering to express themselves as individuals, while being part of something bigger, and more wonderful, as a whole.

Tomorrow is election day. The media and a slew of pundits and polls have talked all about voter disillusionment, as if false promises are the property of one party vs. another, rather than politics as we know it. All that posturing hides the real truth - people are sick of being lied to. Rhetoric doesn’t get you a job or save your house. The promise of change doesn’t guarantee that health insurance companies wont hike your rates another 14% next year, like they did this year (Blue Cross Blue Shield doesn’t play party favorites.)

Here in California, the two major party candidates for governor Meg Whitman and Jerry Brown, spent nearly $170 million dollars to get us to believe them. They blocked ‘fringe’ candidates, left, right and liberatarian – most appallingly exemplified by the arrest of Green Party candidate, Laura Wells, for the shocking act of trying to attend a debate two weeks ago. Whether you are a Democrat, Republican, Independent, Green, or Libertarian – that act of anti-participation and expression is not what American is about.  We should have more collective balls than shutting out voices outside the realm of well-funded majorities. We shouldn’t be afraid of opinion or options. 

Whatever happens tomorrow, I hope it marks a new beginning for sorely needed  hyper-expression beyond the voting booth, of the Weho Halloween Carnaval kind – in public forums, in blogs, at universities, in our homes, in the streets. 

TARP Votes Biting Back into Mid-terms?

Today’s NBC Article Bailout’s Hangover Just Won’t Go Away, was one of a growing pile of pieces on how the Democrats aren’t handling their position on TARP and Wall Street very well, compared to the Republicans, some of whom are making a big deal over it in their mid-term campaigns. I find it equally bizarre that:

a) The Democrats don’t have a general retort to the GOP and Tea Partiers painting them as the morons who gave Wall Street a platinum-coated bail-out, and

b) Certain Republicans are acting like their party took such a clear stand against TARP.

Both parties helped Wall Street back on its feet, under a Republican president, in October 2008, just as both joined hands to repeal Glass-Steagall in 1999 under a Democrat. (With notable individual exceptions.)

First, I must once again, point out that TARP was only a small portion of the multi-trillion dollar bailout and subsidization of Wall Street (for more details on why, read It Takes a Pillage, or check out my bailout tallies). But that aside, since TARP was the only Congressionally approved component of the massive financial bank stimulus package, I thought I’d take another look at how its vote went down.

TARP, aka ‘The Bailout” according to most of the media, because it’s just too complicated to talk about all the other assistance given to the banking system in one sound-bite, was the cornerstone of the Emergency Economic Stabilization Act of 2008. The EESA was the pile of verbiage that had to be adopted by Congress in order to make it seem like this was more than a reckless giveaway to stabilize the most powerful banks, and not the American economy (or at least not as measured by defaults, foreclosures, bankruptcies or job losses).

Yes, we heard from Tim Geithner, Ben Bernanke, Hank Paulson and Andrew Ross Sorkin – that things would have been so much worse without it - the Great Depression on Steroids. Yeah, helping stupid banks that created and leveraged assets they couldn’t sell was a much better strategy than helping all those stupid people who bought homes they couldn’t afford – hell, if the latter was done, who would be reaping all the bonus money? Still, it’s astonishing that the Democrats are losing ground in the polls on this issue, when both parties screwed up with respect to playing hardball with the banks that screwed the rest of the country.

Leading up to the 2008 election, 74 Senators: 39 Democrats, 34 Republicans and 1 Independent (Joe Lieberman) approved the EESA that validated TARP; (notably this included Democrats Christopher Dodd, who later co-authored the benign financial “reform” bill, Barack Obama who was prepping Geithner to be his Treasury Secretary a month later,  both New York Senators, Hilary Clinton and Chuck Schumer, Harry Reid, and Joe Biden. The GOP rosters included John McCain (R-AZ). So, from a technical, mathematical standpoint – 80% of the Democrats approved the Act that spawned TARP (and enabled the Fed to pay the banks interest on the monies they then hoarded with the Fed instead of lending or using them for customer debt restructurings afterwards – a figure that rose to approximately  $1 trillion today in excess reserves from nearly nothing before the Act passed).  But, 70% of the Republicans also voted for the package.  That 10% difference in approvals is hardly earth-shattering, more than anything it shows the blind adherence to the notion that Wall Street must be bolstered to keep the entire universe from shattering apart.

A total of 25 Senators;  9 Democrats, 15 Republicans and 1 Independent (Senator Bernie Sanders) voted No. So of those against it, 60% were Republicans, and 40% were Democrats or Independent. Still, that’s only 30% of the Senate GOP and 20% of the Democrats. The Democrats should have been more opposed to TARP, or at the very least argued for TARP with MANY MANY strings, this is true. But, it’s not like the GOP was viscerally opposed as  a general stance either.

The Democrats who voted No on TARP up for reelection are:  Russ Feingold (D-WI) and Ron Wyden (D-OR).  The Republicans are: Richard Shelby (R-AL), Mike Crapo (R-ID)and Jim DeMint (R-SC).

Will Bank Reform Chase Jobs from NYC?

Today, I was asked to comment on whether bank reform would chase jobs from New York City, for a new 30 issues in 30 days website created for the Brian Lehrer Show. The other commenters (we're all being called 'wonks') think it would. I don't. We'll be talking about it on air this Thursday morning at 10:15 AM EST.

You can follow the debate, or add your thoughts here. 

This is my take: Meaningful bank reform wouldn’t result in a tangible number of jobs leaving New York City (aside from the yearly pilgrimage of hedge fund god wannabe’s to Connecticut for better tax treatment). As we have witnessed firsthand, recently – it is the inevitable crash of improperly restrained, reckless banking activity that gives rise to widespread economic pain, including job cuts, throughout multiple sectors.

During the past two years since the banking system was given an unprecedented adrenalin shot of cheap money, guarantees, toxic asset transfers, and Fed backing for the biggest institutions to become bigger, two things have happened: Wall Street profits and bonuses have come roaring back, and job prospects and conditions for those outside of the financial industry, have deteriorated. None of that is because of the financial reform bill, not least because no stipulation from that bill has taken effect. Secondly, the bill is exceptionally weak in general.

The financial reform bill doesn’t meaningfully alter the banking landscape. It doesn’t make bigger banks smaller – instead, the Federal Reserve decisions to allow Goldman Sachs and Morgan Stanley to become bank holding companies, to enlarge Bank of America through the acquisition of Merrill Lynch, JPM Chase through the acquisitions of Bear, Stearns and Washington Mutual, and Wells Fargo through the acquisition of Wachovia have only consolidated federally backed practices. Any related job cuts came through the cast-offs that occur when companies merge. They were thus, a result of the opposite of bank reform or prudent regulation.

Further, under the Dodd-Frank Act, banks won’t have to separate into investment vs. commercial entities as they did when Glass-Steagall was enacted in 1933, which would contain problems and choices resulting from the creation of speculative assets at entities providing deposit and lending services to Main Street. The bill barely limits proprietary trading and hedge fund ownership, plus banks don’t garner a sufficient enough revenue percentage for this to make a huge difference. At any rate, prop spinoffs are tending to be staffed by current employees, so no job change there.

The financial reform bill won’t change Wall Street – one need only to look at the recent Bloomberg survey stating that half the financial execs polled, expect their bonuses to rise by 50% or more, to know that banking is at status quo. Meanwhile, people in other fields, from fashion to journalism, teaching to sculpting, caring for the sick to caring for the elderly, don’t have the same prospects for bonuses or jobs. If we had meaningful financial reform, we might be better protected from the next round of speculative excess that will explode in our faces, causing more job losses. We would be better insulated from the illusionary highs and crushing lows that Wall Street can imbue on the rest of the city. Meanwhile, job losses in New York City have not been the result of strong regulation, but of a financial sector that wasn't regulated enough, and still isn't.