I cite

Credit card “bill of rights” puts few restraints on banks

Credit card “bill of rights” puts few restraints on banks.

For several decades the credit card companies had used a range of aggressive and deceptive practices to lure large numbers of people into taking cards, tactics such as low “teaser” rates that would later be raised substantially and lavish campaigns on college campuses to snag financially unsophisticated students. However, now, as growing numbers of people have suffered economic difficulties due to the crisis, the banks have unilaterally reduced credit limits or closed accounts entirely based on “profiling” card holders, using presumed similarities to people who had defaulted on payments, even if the individual in question has given no indication of such difficulties.

The new legislation will, at best, dampen these practices only slightly. The bill’s main provisions include a prohibition on raising interest rates on existing balances unless payments are at least 60 days overdue and a requirement that credit card issuers give 45 days notice of increases in interest rates or other changes in an existing “agreement.” The bottom line is that interest rates and fees can still be raised, only a bit more slowly. For those already paying 20 percent or more such “restraints” will have little significance. Furthermore, as growing numbers of people lose their jobs or are hit in other ways by the economic crisis, the slight delays in the imposition of increasingly usurious terms by the banks will barely be noticeable.

The most significant change that could have been made, the imposition of a cap on interest rates and fees, was briefly floated by some Democrats, but quickly killed.

Senator Christopher Dodd, chairman of the Finance Committee and a major recipient of campaign contributions from the financial sector, is quoted by the Huffington Post as saying, "There used to be a time you could go to jail for charging rates like they charge today. Even organized crime would blanch at some of these fees. So there'll be a movement in that regard [capping interest rates and fees—WSWS]. There's [sic] obviously some legitimate arguments about opposing caps, and I'm listening to them, but frankly the overwhelming majority of people I talk to would like to see some limitation put on these rates." Senator Bernie Sanders of Vermont, who styles himself a “socialist,” proposed a 15 percent cap on credit card interest, the same as is currently in effect for credit unions. “When banks are charging 30 percent interest rates, they are not making credit available,” said Mr. Sanders. “They are engaged in loan sharking.” The amendment was overwhelmingly rejected, drawing only 33 votes of the 60 needed. In its report on the vote, the New York Times noted: “The banking industry, which had some heavyweight representatives monitoring the vote, warned that an interest rate limit could cause a sour reaction in the financial markets.” Presumably, senators who have counted on the financial services industry for a large share of their campaign contributions were conscious of the “heavyweights’” presence.

IJZS: Zizek's response to Parker

The International Journal of Zizek Studies has posted Zizek's response to a story recounted by Ian Parker:

A SHORT CLARIFICATION
Slavoj Žižek

A new text by Ian Parker is circulating around the net (available, among other sites, at
www.discourseunit.com/publications_pages/parker_papers/2004%20PINS%20Zizek.doc),
which begins with the claim that, towards the end of the 1980s, when the Communist regime
in Yugoslavia was in its death throes, I acted as a »commissar« monitoring and controlling
dissident activity – here is the full paragraph:

»Let us start with a true story. In the middle of a crisis and crackdown in Slovenia toward the end of the 1980s Slavoj Žižek telephones an academic colleague in Britain late at night. This is before Slovenia seceded from Yugoslavia and when the League of Slovene Communists was making some last desperate attempts to maintain power. The crackdown was directed at the opposition movement, in which Žižek and the artistic political grouping Neue Slowenische Kunst, were active. So, Žižek is on the phone during this political crisis in an agitated state. He tells his colleague how bad things are, that there is a total clampdown on the opposition. His colleague is sympathetic. Žižek goes on to tell him that things are even worse than that, for in every workplace a ‘commissar’ has been appointed to monitor and control dissident activity. His colleague is very sympathetic, even slightly alarmed by the picture Žižek is painting. And it is even worse than that, Žižek says, for even in the universities, in every department a commissar has been appointed to keep order. His colleague in Britain exclaims that this is indeed dreadful. And, Žižek then informs him that there is only one good thing in the midst of all this. What is that, his colleague asks. In my department, Žižek says, ‘I am the
commissar’.«

One should note the serious implications of these lines: I am accused of nothing less than being an informant of the Communist power against dissidents. Let me be as clear and unequivocal as possible: this »true story« is entirely false, everything in it is a lie. Not only was I never any kind of a »commissar,« I also never boasted – ironically or truthfully – via a phone – or any other – conversation that I am anything like that. The only thing to add is that anyone who knows a little bit about Slovenia in the late 1980s will immediately see that the »true story« doesn't make sense, for two obvious reasons. First, which »department« would be »mine«? In Yugoslavia, I was never employed at any university department - how could I then be active there as a »commissar«? Second, from (at least) the middle of 1980s, the Communist party effectively lost control over the employment politics at the university. At the Institute of Sociology where I was then formally employed (formally, since I already spent most of the time abroad), if a candidate for a job was suspected to be too closely linked to the Communist party circles, he had no chance of getting the job – at the end of the 1980s, to be »against« the regime was already a way to make a career!

Lessons in racism: fishing

The annual lake trout fishing derby is going on in Geneva today. Paul and I jogged by there and I noticed that prizes were awarded by both fisher (age of person fishing) and fish (weight of fish). Different kinds of fish were eligible--lake trout, rainbow trout, brown trout, and land-locked salmon. This reminded me of being taken fishing in the bayous near Pascagoula, MS when I was a kid in the sixties. And it reminded me of lessons in racism.

My grandparents distinguished between fish that were for white people and fish that were for black people (not their term). More accurately, the difference was between fish that everyone ate and fish that only black people ate. If we caught these fish, we either threw back or brought them to Margaret and Sam, the old couple who worked for my grandparents. Black people ate sheepheads and croakers. White people didn't. Sheepheads were apparently too boney for white people. And white people 'just didn't like' croakers. No real reason--but that's how racism works, the difference that makes the difference, that is in something more than itself.

I recall the term 'croaker sack' as racially loaded, but I don't recall how. It suggests to me now a link to the racist unconscious in that even if it only referred to a bag of fish it turned this bag of fish into something vaguely obscene. Differently put, even if 'the facts' of everyday life on the Gulf Coast in the sixties are that there is nothing racist about 'croaker sack' it marks for me the unconscious of the Other: what were my grandparents really saying?

Not all foods, or practices of turning stuff in the world into food, are racializing. And I wonder if my grandparents or my childhood self absorbing their language thought that the racial dimension of food was fixed (the unspoken truth underlying and supporting Jim Crow) or whether if they thought that they as white people had some say, some role, in determining how food raced. For example, I recall that my grandparents ate squirrel, but rarely, maybe just once or twice and this not after the mid sixties. I recall discomfort--my grandmother's?--when the squirrel stew was prepared and served; my sense was that there was something dirty, unmentionable, about it, that it had something to do with a past that was better left forgotten. Was that because they by that point had moved on from their share-cropping poor white past to become comfortably middle class? Or was it because the civil rights movement was challenging their position and identity as white such that they needed greater distance from lesser foods? (These choices are not either/or).

I have no idea whether black people in and around Pascagoula (and Moss Point and Gautier) ate squirrels. That's also an aspect of racism, both that I don't know (a result of segregation) and that I suspect that there might something to know, some kind of indication of a racial difference that cuts through commonalities in food arising from climate and location (what grows, the fishing season) and that persists underneath centuries of slavery, exclusion, and oppression. This second aspect points again to objet a in the racist unconscious.

On the one hand, everyone (seen from the perspective of a small child) was all together, the same, all fishing in the bayous and sweating in the heat, all eating cobbler and grits and peas and greens and crab and okra and tomatoes. As a very young white child, I was around black people more than I would be after I started school; black women cared for the white babies in the nursery of First Baptist Church (the reality of the segregated churches thus didn't appear to a young child who spent all of Sunday in their care; that would come later, in Sunday school and the worship services). Black women also worked in the kitchens of the nursing home my grandfathered owned and the Blue Willow Cafe run by a friend of my mother's in Charleston. Food and care, then, weren't raced so much as they were sexed. 

On the other hand, there were total racial differences. Growing up in racism meant not only that one didn't know what the differences were (and so fantasized about them) but also that one didn't know that some of these differences were Real, that is, minimal differences, the indiscernible objet a that turned nothing into something. For example, I never remember my grandmother serving or eating or having cheese, but this doesn't seem a marker of anything.So I've always thought that southerners just don't cook much with cheese, except maybe velveeta or pimento cheese. No minimal difference here. Rather, the raced difference would be in the supposition that there is something else in the set of foods southerners eat that is different for black and white and that this something matters, that is, it attests to the jouissance that separates us from the them.

The jouissance of the croaker sack.

Why Goldman Sachs Is the Greediest and Most Dastardly of the Wall Street Pigs | Corporate Accountability and WorkPlace | AlterNet

Why Goldman Sachs Is the Greediest and Most Dastardly of the Wall Street Pigs
(or reason 2, 998 why what the Obama administration is doing is not evidence of socialism but rather evidence of desperate measures to save a dying, greedy capitalism. We could call it late finance capitalism, financial monopoly capitalism, debt capitalism, or, something with a history: Mafioso Capitalism. It's what we called the Russian form that emerged in the shock treatment of privatization as everything public was expropriated. Our version is of course much more extreme and advanced--makes you almost proud to be an American--because it's rooted in expropriating not just current public funds, but private savings (the exsanguination of all savings funds, funds themselves that were part of the buy off of the middle class). So, it's not the return of Mafioso Capitalism, but it's public face--they don't even have to hide it anymore.)

So, while these golden ones are loudly repudiating the $10 billion public subsidy they took from us, they are coyly retaining at least 40 billion of our dollars to stay afloat -- a tidy sum that does not include any restrictions on pay levels. Coincidentally, Goldman has since announced that it is setting aside nearly $5 billion to be distributed at the end of the year as compensation for its executives, including payments for outlandish bonuses for those at the top.

Saying that such-and-such is the greediest bunch of bankers on Wall Street is like someone claiming to have the biggest hairdo in Dallas -- the competition is fierce. But that's quite a head of hair atop Goldman Sachs. Well, sniff the executives, we merely play the game according to the rules we're given.

Sure, and the Mafia plays its game strictly according to Hoyle. The difference is that the Mafia must actually break the rules, while Wall Street simply hires lobbyists and politicians to write the rules.

Indeed, Goldman Sachs has been nicknamed "Government Sachs" by its rivals, for it always seems to have at least one of its top officials strategically placed inside government to bend federal financial rules to its benefit. In the 1990s, for example, two Goldman foxes -- Robert Rubin and Larry Summers -- were inside the Clinton administration henhouse, where they helped craft the deregulation scams that enriched their former banks, before the scams caused the crash of our economy.

Commonplaces: cuddles and cringes

Walter Ong (The Presence of the Word):

What one finds in the doctrine and use of the commonplaces are thus the essential tendencies which an oral culture, as described by Lord and Havelock, develops because of its information storage problem: a tendency to operate verbally in formulas and formulaic modes of expression combined with a tendency to group material for memory and recall around action in the human lifeworld, thus around interactions between persons and around questions of virtue and vice, plus a tendency, which combines the two foregoing tendenceis, to make indivudals themselves into types, thereby shaping them to formulaic treatment (84-85).

And what about today? To think this in terms of tagging misses the force of attachment at stake, the affective pull. I propose that the equivalents in secondary orality are cuddle and cringe, that is, first something cute, something that stimulates a kind of happy nostalgia or longing and, second, something that incites aversion, disgust, perhaps some schadenfreude.

The pattern of cuddle or cringe can be traced via cats. Seriously. From catscans, to lolcats, to the recent 'play me off, keyboard cat!' we find cats functioning as affective markers, as more than icons (so nineties) bur actual images that induce us to cuddle or cringe.

Kitty-mnemonics: we remember cats, but forget nearly everything else.

Scathing Watchdog Report Blasts Securities and Exchange Commission Oversight

t r u t h o u t | Scathing Watchdog Report Blasts Securities and Exchange Commission Oversight.

The number of SEC enforcement attorneys declined 11.5 percent from 2004 to 2008 while cases were closed prematurely or not investigated at all, the report says. Although a wide range of cases is pursued, "one attorney told us of closing several cases that were promising but which could not be pursued for lack of resources," according to the report.

Other times, lack of specialized experts, such as accountants and those knowledgeable about trading, weren't available, causing delays. Over four years, penalties and disgorgements declined by 84 percent - to $256 million in fiscal 2008, compared with $1.59 billion in 2005.

Financial Opacity at the Helm

t r u t h o u t | Financial Opacity at the Helm.(By Paul Jorion for Le Monde)

In principle, transparency assures confidence: if one knows the financial situation of one's counterparties, one understands the risk involved in dealing with them. Unless, of course, the information available reveals their insolvency. This last point explains the authorities' ferocious resolve against any attempt at transparency which would have revealed financial establishments' widespread insolvency. Therefore, transparency had to be fought.

With opacity now at the helm, confidence has disappeared. How can anyone hope, under these conditions, for a business recovery? Fortunately, there is an alternative to confidence: solidarity.

When normal conditions prevail in the markets, measures for the maintenance of competition suffice to assure good order. But in the case of widespread insolvency, another rationale takes over for a more critical and urgent task: life support, not for individual companies, but for the system in its entirety. Then the authorities ask each company to act "as though" all the others are solvent until further notice. Solidarity has another advantage over transparency: it makes the return of regulation less pressing.

The Failure of the Economy and the Economists

t r u t h o u t | The Failure of the Economy and the Economists.(a review of Animal Spirits from the NYRB

But what makes credit default swaps like betting on the temperature is that, in the case of many if not most of these contracts, the volume of swaps outstanding far exceeds the amount of debt the specified company owes. Most of these swaps therefore have nothing to do with allocating genuine losses of wealth. Instead, they are creating additional losses for whoever bet incorrectly, exactly matched by gains for the corresponding winners. And, ironically, if those firms that bet incorrectly fail to pay what they owe - as would have happened if the government had not bailed out the insurance company AIG - the consequences might impose billions of dollars' worth of economic costs that would not have occurred otherwise.

This fundamental distinction, between sharing in losses to the economy and simply being on the losing side of a bet, should surely matter for today's immediate question of which insolvent institutions to rescue and which to let fail. The same distinction also has implications for how to reform the regulation of our financial markets once the current crisis is past. For example, there is a clear case for barring institutions that might be eligible for government bailouts - including not just banks but insurance companies like AIG - from making such bets in the future. It is hard to see why they should be able to count on taxpayers' money if they have bet the wrong way. But here as well, no one seems to be paying attention.

Why has there been so little discussion of fundamental issues like this distinction among losses? Why is so little said about the trade-off between the goal of allocating the economy's capital efficiently and the need to shrink the enormous costs of the financial industry in doing so? One obvious reason is political. There is a long arc from Roosevelt's acceptance of a useful role for government institutions and government regulation to the conviction of Reagan and Thatcher that the government is never the solution but actually the problem. A second, closely related reason is ideological: the faith, personified by Alan Greenspan with his early dedication to the writings of Ayn Rand and his staunch opposition to regulations while chairman of the Federal Reserve, that private, profit-driven economic activity is self-regulating and, when necessary, self-correcting.

The economists George Akerlof and Robert Shiller suggest a third reason. In their view, the problem is also intellectual - a systematic failure of thinking on the part of their fellow economists. Taking the title of their new book from a phrase famously used by John Maynard Keynes, Akerlof and Shiller argue that what is missing in the worldview of today's economists is sufficient attention to "animal spirits," by which they mean the psychological and even irrational elements that figure importantly in so many other familiar aspects of personal choices and personal behavior, and that, they believe, pervade economic behavior too.

Akerlof and Shiller identify five distinct elements in what they call "animal spirits": confidence, or the lack of it; concern for fairness, that is, for how people think they and others should behave - for example, that a hardware store shouldn't raise the price of snow shovels after a blizzard despite the increased demand; corruption and other tendencies toward antisocial behavior; "money illusion," meaning susceptibility to being misled by purely nominal price movements that, because of inflation or deflation, do not correspond to real values; and reliance on "stories" - for example, inspirational accounts of how the Internet led to a "new era" of productivity. The omission of these five aspects of "animal spirits," they argue, blocks conventional economics from either understanding today's crisis or providing useful ideas for dealing with it.
...

Haiku Dave: WWJW?

The Christian White House

under Bush pondered,"who would 

Jesus waterboard?"

Branko Milanovic: Global Crisis

Two Views on the Cause of the Global Crisis – Part I.

The credit-fueled system was further helped by the ability of the US to run large current account deficits; that is, to have several percentage points of its consumption financed by foreigners. The consumption binge also took the edge off class conflict and maintained the American dream of a rising tide that lifts all the boats. But it was not sustainable. Once the middle class began defaulting on its debts, it collapsed.

We should not focus on the superficial aspects of the crisis, on the arcane of how “derivatives” work. If “derivatives” they were, they were the “derivatives” of the model of growth pursued over the last quarter a century. The root cause of the crisis is not to be found in hedge funds and bankers who simply behaved with the greed to which they are accustomed (and for which economists used to praise them). The real cause of the crisis lies in huge inequalities in income distribution which generated much larger investable funds than could be profitably employed. The political problem of insufficient economic growth of the middle class was then “solved” by opening the floodgates of the cheap credit. And the opening of the credit floodgates, to placate the middle class, was needed because in a democratic system, an excessively unequal model of development cannot coexist with political stability.