U.S. PIRG and the AFL-CIO joined Americans for Financial Reform in a detailed comment letter urging issuance of a strong Volcker rule by the financial regulators. It’s a 72-page pdf
comment letter that basically comes down to one simple thing. We tell the financial regulators: don’t let big banks make taxpayer-backed bets. The rule implements Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as proposed by former Federal Reserve Chairman Paul Volcker and implemented into law by the consumer and investor champions, Senators Jeff Merkley (OR) and Carl Levin (MI).
Excerpt from our joint letter:
There are significant positive elements in this proposed rule. But it still falls well short of fully implementing the statute. It is clear from both the legislative history and the text of the statute that in passing the Volcker Rule Congress sought fundamental change in the American financial system by restoring basic firewalls between the banking system and the capital markets. In the proposed rule, the regulators have not placed the statutorily required limitations on permitted capital market activities. Instead, they have gone to some effort to preserve business as usual in important areas. This includes practices at the center of the financial crisis, such as dealing in illiquid and customized products for which no market exists and bank participation in securitizations. The metrics-based oversight regime favored by the regulators here, while positive in many respects, simply will not work unless it is accompanied by clear restrictions on the scope of permitted activities.
Stop me if you’ve heard this one before: the House and Senate GOP plan to attach an amendment forcing the approval of the Keystone XL pipeline to a completely unrelated piece of legislation. This time around, it’s the transportation bill that is getting the Keystone amendment. While killing the worst transportation bill ever offered wouldn’t be a total tragedy, the GOP’s continued attempts to force through the pipeline at any cost is starting to get old.
We’ve discussed all the reasons the Keystone XL pipeline should be rejected. Among the many: the pipeline is not a job creator, the environmental consequences of the pipeline will be disastrous, and it will do little to bring us closer to energy independence. Adding to this list, the claims of reinvigorating the steel industry seem to be false. Just last week, Representative Mike Doyle challenged TransCanada to certify its claim that 75 percent of the steel would come from North America because he had discovered that 148 miles of the pipeline had already been constructed in India.
Meanwhile, the real job creator is continually ignored. A new report details how investments in clean energy and environmental sustainability resulted in one of the few sectors to report job growth during a time of overall job loss. While the total number of jobs created dropped by one percent in 2007-2008, green jobs grew during that same time period by five percent.
If you’re married, you’re probably planning to file your taxes jointly; most couples do. You should know that spouses filing a joint return are generally each liable for all of the tax owed on that return—but the law provides equitable relief when one of the spouses has no control over, or perhaps no knowledge of, how the household’s financial situation is reported.
This “innocent spouse” relief is especially important for women: 90 percent of those who request relief from joint liability are women, 65 percent of those who request relief make less than $30,000 a year, and some are survivors of domestic violence.
Section 6015(f) of the Internal Revenue Code provides that equitable relief is available for innocent spouses, but the determination rests on a “facts and circumstances” test.
More horrors out now from the Chinese serf-labor system involved in creating Apple products like iPads, iPhones and Kindles. It turns out many of the workers churning out millions of the devices in unendurable conditions at Foxconn and other factories are also forced laborers as young as 16.
The Hong Kong-based Students and Scholars Against Corporate Misbehavior (SACOM) says, “Legions of vocational and university students, some as young as 16, are forced to take months-long “internships” in Foxconn’s mainland China factories assembling Apple products,” according to Alternet. One study found in some Foxconn factories, which employ 1.3 million people in China, up to 50 percent of the workforce were students.
SACOM and others report that schools teaching journalism, hotel management and nursing threatened students with failure if they did not take a factory position. The Chinese government-owned Global Times noted that “automotive majors at a vocational school in Zhengzhou, capital of Henan, were also forced to serve as interns for Foxconn before they were given their diplomas.
Apple’s formula for mammoth profits, which topped $13 billion last quarter, depends upon a steady supply of forced laborers who are put through a torturous training to accustom them to the factory working conditions.
Rules to prevent financial fraud or toxic dumping or faulty medical devices — these don’t destroy the free market. They make the free market work better. — President Obama, State of the Union Address, 1/24/12
Over the past year, discussion over regulations has frequently been distortedly one-sided, as if their only possible effect on the economy and markets is to cause damage. The Obama administration itself has often failed to add balance to this conversation, so it was heartening to see the president lay out a more comprehensive assessment in his State of the Union address.
In the address, President Obama focused most on the financial crisis and regulations. He, appropriately, stated that the roots of the economic collapse and ongoing economic troubles included regulatory inadequacy: “In 2008, the house of cards collapsed. We learned that mortgages had been sold to people who couldn’t afford or understand them. Banks had made huge bets and bonuses with other people’s money. Regulators had looked the other way, or didn’t have the authority to stop the bad behavior.”
So the effective implementation of strong financial regulations can not only provide needed protections to individual borrowers and savers, they can also abet financial stability, in all these ways making the free market “work better.”
A fuller version of the President’s claim would also include the following reasons why regulations can help the free market work better and help the economy.
The Affordable Care Act has saved nearly 3.6 million people enrolled in Medicare $2.1 billion on their prescription drugs in 2011, finds a new report by the U.S. Department of Health and Human Services (HHS).
HHS Secretary Kathleen Sebelius says the health care reform law signed by President Obama in 2010 is already saving money for millions of Americans with Medicare. As we move forward, we will close the donut hole completely and save even more money for everyone with Medicare.
The Affordable Care Act—which Republican lawmakers are fighting to repeal—provides a 50 percent discount on brand-name prescription drugs and, beginning this year, a 14 percent discount on generics. Last year, it provided a 7 percent discount on covered generic medications for people who hit the prescription drug coverage gap known as the donut hole, with more than 2.8 million beneficiaries receiving $32.1 million in savings on generics.