Me and Big Al....I didn't see THAT coming!

I've never been a big Al Franken fan.  I love Saturday Night Live, but I never much enjoyed the skits he was in when he was a SNL regular/writer.  

Then he went on to become part of the ill-fated Air America liberal radio network, which cemented him in my mind as a far-out left winger.  And anyone who knows me knows I don't like far-out ANY wingers.

Since 2009 he's been SENATOR Al Franken of Minnesnowta.

Imagine my shock when I learned that he and I agree on something.  On the Senate Judiciary Committee he's become their main anti-trust advocate.  Right now he's all hot and bothered by the proposed $45B buyout of Time Warner Cable by Comcast.  Sic 'em Big Al!

The business interests in our country have for years been obsessed with mergers.  Through their eyes it's a way to eliminate competition, become more efficient (fewer marketing departments, fewer accounting departments, etc), and MAKE MORE MONEY.  Never mind those who will lose their jobs, or the consumers who will have less choices and have to pay more.

Combined, the new Comcast would be a cable TV and internet access behemoth.  (They already own NBC and all their subsidiaries, and Universal Studios.)  For consumers in many areas a merger would leave them no choice but to sign up with Comcast.

See where this is going?  Look at the banks:  Today just six mega-banks control the majority of the US banking industry.  Outraged by all their fees, all the ways they get into your pocket, all while producing those cute little "We're looking out for you" commercials?  *gag!*

And look at the airline industry:  Delta and Northwest are now one, United and Continental are now one, Southwest and Air Tran are now one, America West and US Air are now one, and now they've merged with American to become the biggest airline in the world.  Fees for bags?  Pay extra for a Coke?  Are in-flight pay toilets next?  Good for their bottom line for sure, but not for yours!

How come when the conservatives are making a push for de-regulation (which I more often than not agree with) they tout the increased competition it will bring to the marketplace (yea!), but when their corporate campaign contributor masters want to eliminate competition via mergers, they just obediently fall into line and vote "AYE"?   

And we just let it happen, time after time.  Do we consumers get some perverse satisfaction in getting screwed?

I believe the people should control industry.  We should dictate what products and services we want, and industry should compete to give it to us.  But these days more and more industries are dictating to us what we can have, and our job is to just stand there and open our wallets.

It seems we've long forgotten the legacy of "The Great Trust Buster", Teddy Roosevelt. *sigh*

S

The "Free Market" isn't free at all

Parasites all in a row.

It's Monday, and like many of you I have a burr under my saddle.  Where most of you are just pissed it's Monday, my heartburn is a little more complex.  The heat source of my slow burn?  The Big Banks....again.  They've found another way to screw us, and of course, since Congress gave them a wink and a nod, it's completely legal.  But should it be?

They've taken a page from the business plan of 'ol John D. Rockefeller.  He didn't actually drill for oil....he just had a stranglehold on the pipelines (and the refining process).

It seems a group of financial players, most notably Goldman Sachs, owns many of the warehouses where aluminum bought/sold on the spot market is stored.  *yawn*  I know.  

It's been one of those sleepy little secrets that hasn't drawn attention until now, but has cost us consumers big time....$5B over just the past 3 years.  Yet they've added absolutely NOTHING to the economy in the process.  They are the absolute definition of "parasite".

Huge 1500 lb blocks of aluminum that will ultimately be used in beverage cans, cars, etc, sit in one of the Goldman Sachs-owned Detroit area warehouses.  An end user, say Coca Cola, buys a bunch of them and they are shipped out.  This process before Goldman bought the warehouses took about 6 weeks.  Now it takes about 16 months.  

Why the delay?  Because Goldman's warehouses alone hold 1.5 MILLION tons, and they charge $.48 per ton per day storage fee.   Other big banks have similar schemes at play, too.

Coca Cola and other end users complained to the London Metal Exchange (who somehow is charged with setting the rules) and the LME issued an edict:  Warehousers must move out at least 3,000 tons per day.  

And now they do....from one of their warehouses to another of their warehouses down the street.  It's just a big shell game.  Oh, and it isn't as if the LME is truly impartial.  They get 1% of all storage fees collected.  *stinky*

And it gets worse.  Thanks to intense bank lobbying, the Securities and Exchange Commission has approved a plan that will allow JPMorgan Chase, Goldman Sachs, and BlackRock to buy up to 80% of the copper on the market.  They also have "interests" in oil, wheat, cotton, electricity generation, and more. 

Just FYI, JPMorgan is currently negotiating the terms of a $500M settlement with the Feds for electricity rate rigging.  *I'm not feelin' the love*

Experts say that by owning oil pipelines, port facilities, and warehouses, it gives them inside info on who's producing, moving, buying, and selling commodities, enabling them to make timely speculative purchases for themselves. It amounts to virtual "insider trading".  (A 2011 internal Goldman memo suggested that speculation drove up the price of a barrel of oil by a third, or about $10 per fill-up for the average driver.)

To my super-conservative friends who say we need less regulation and government interference (which I must admit sounds very good on paper), understand this:  The "free market" isn't free.  It's rigged.  

The bankers have simply set themselves up as middlemen.  They are adding NOTHING to the economy.  They are just parasites sucking the life out of society's producers.  Just because it's "legal" doesn't make it right.

S

And nobody saw this coming? Really?

Once again it has been brought to my attention that the world's economy is royally screwed up.  This time it's the tiny island/nation of Cyprus in the eastern Mediterranean that has imploded.  It seems Cyprus and its banks have become a major tax safe-haven for the world's oligarchs, particularly the newly-rich Rooskies.

Except, as with banks almost everywhere, the Cypriot banks didn't have enough safe places to invest their depositor's money.  Instead they chose the high-yield but also high-risk route and invested in Greece.  Yes, THAT Greece.  

Here's the problem in a nutshell:  There is too much money concentrated in the hands of too few people.  The wealthy have already bought essentially everything they want....homes, islands, exotic cars, planes, trains, jewels, art....and they still have trillions of dollars left over. Their excess cash just piles up and they often have no where but high-risk places to put it.  That's a disaster just waiting to happen.  

Meanwhile, with too much of the world's wealth in the hands of too few, there isn't enough left for the masses to buy enough of the things that spurs production and creates jobs.  That's why unemployment is so high worldwide.  The wealthy simply can't buy enough "stuff" to keep the rest of the world busy producing it.

So how do you fix it?  No, you don't just pull a "Robin Hood" and confiscate money from the rich and drop it on the poor.  That's a double-bad move.  The rich won't have any incentive to work because they'll just have their gains taken away from them, while the poor won't have any incentive to work because they'll just be handed a windfall for doing nothing.  

So what then?  Level the playing field.  We need a new tax code written on a clean sheet of paper and not just another band-aid on what we have now.  Start right now phasing out all the hundreds (thousands?) of tax credits and deductions and subsidies that are increasingly making our "free-market" economy anything but.  

The idea that we need to give all those loopholes to the wealthy so they can have more money to "invest" in the economy is bull!  They have several trillion (with a "T") dollars on the sidelines right now doing very little.  (And let's be honest....it isn't just the wealthy that benefit from loopholes.  We all benefit from a few....it's just that the rich's are bigger.)

Without special favors for a few I think you'd see in short order income becoming more equal based on the efforts of those working and not just flowing one-way to those who know someone important or can afford a lobbyist.  

The rich can still work and get richer, but it will be due to their superior intelligence or by the sweat of their brow and not by just knowing a congressman willing to sponsor their heavily camouflaged loophole.  More well paid workers = more  consumers = more production = more tax revenue.  See how this works?

It's called "growing the economy", and it's not a new idea.    We've heard a lot of talk about it recently, but very little movement towards it.  That's because some toes will have to be stepped on for it to work.

Finding someone willing to do a little "toe stomping" is the first challenge.  Any volunteers?

S