It looks like Bank of America read my 5-point plan to fix their image problem. News is leaking this week that the troubled mega-bank is freezing the salary of their CEO Brian Moynihan and awarding him no cash bonus after a bad year for the company.
This quote was included in a Bloomberg article:
“They’re setting an example from the top, saying, ‘You know what? If the company doesn’t do well, our CEO isn’t going to do as well,’” said Jeanne Branthover, a managing director at Boyden Global Executive Search Ltd. in New York.
This, of course, is exactly the kind of reaction Bank of America wants. But this kind of special praise is ridiculous. This is how executive pay is supposed to work — tied to the success (or lack thereof) of the company. The fact that Bank of America’s decision stands out as some kind of commendable deviation from the norm shows just how completely big-bank executives have rigged the system in their favor and shielded themselves from the accountability and consequences that are just a fact of life for the 99%.
Meanwhile, as Brian Moynihan figures out how to feed his family on only $950,000 this year, homeowners across the country continue to lose their homes because of the big banks’ aggressive foreclosure tactics.
This video from Cuentame highlights the story of Arturo de los Santos, an ex-marine in Los Angeles whose family is facing eviction for missing mortgage payments. The kicker? The de los Santos purposefully missed those payments on their bank’s advice that it would speed up their loan modification process. Instead of the promised relief, Chase bank turned around and foreclosed on the family.
When opponents of housing relief try to argue that the only people suffering are irresponsible homeowners who took out mortgages they couldn’t afford, they ignore the massive amounts of fraud and deception that have led to stories like this.
Until banks like Chase and Bank of America come clean about their illegal, immoral records and start doing something to fix the massive damage they’ve done to American families, they deserve no praise.
Since the height of the 2008 financial crisis, one of the most vocal critics of unrestrained capitalism has been Pope Benedict XVI. His 2009 encyclical Caritas in Veritate (“Love in Truth”) devoted significant attention to the ways in which modern economic systems no longer necessarily align with the common good.
Addressing a group of seminarians in Rome on Wednesday night, Benedict continued his strong critique of marketplace idolatry. According to Vatican Radio, Benedict said that:
“[t]he world of finance, while necessary, no longer represents an instrument that favours our wellbeing or the life of mankind, instead it has become an oppressive power, that almost demands our adoration, mammon, the false divinity that truly dominates the world.”
This critique is particularly timely as Catholic politicians like John Boehner and Paul Ryan fight to block or repeal efforts to reform and regulate the financial markets that caused the economic crisis, such as the Dodd-Frank law that regulates big banks and establishes new protections for consumers.
Correction: This post was originally attributed to Nick Sementelli in error
New Bottom Line has a useful visualization of the inadequacy of the recent mortgage fraud settlement between 49 state attorneys general and the big banks. You can read more about their campaign for a real investigation and larger settlement here.
As Dan noted last week, the conservative outrage about the President Obama’s remarks at the National Prayer Breakfast has been ridiculous.
But in his remarks at CPAC Friday, former Arkansas governor Mike Huckabee took these attacks to a new level, using false claims about the President’s personal charity to discredit his popular, sensible call for enacting fair levels of taxation on the wealthiest Americans instead of placing the entire burden of deficit reduction on the vulnerable
There are two big distortions here. First, Huckabee puts words in the President’s mouth. The President did not say, as Huckabee claims, that “Jesus would want us to pay higher tax rates.” He said that Jesus’s saying “unto whom much is given, much shall be required” coincides with his belief that he and other high-income earners can afford to give up some of their tax breaks, particularly when keeping those breaks would require punishing people who are already struggling to make ends meet.
But more misleadingly, Huckabee goes on to personally attack the President for allegedly only giving 1% of his income to charity (9% less than the Biblical minimum for tithing). This is just factually untrue.
The President’s tax returns are publicly available. If Huckabee had bothered to look them up, he would’ve found that last year the President gave $245,000 or 14% of his income to charity.
From CNN Money
The ultimate point of Huckabee’s smear is to reinforce a common conservative rebuttal to the case for government: if we cut the safety net no one will get dropped because private charity will take care of it. While this claim may help morally whitewash the GOP’s decidedly immoral attacks on vulnerable people, it’s also not true.
As nearly 5,000 pastors from around the country have testified directly, religious congregations cannot shoulder the entire burden of caring for and protecting the most vulnerable – the federal government’s resources are indispensable. What’s more, federal programs have the unique, counter-cyclical function of ramping up to protect hard-hit families when times are bad and charities are struggling as well.
Huckabee also resurrects a common, fatally flawed argument for right-wing economics:
It is the job not of the government but of Christian believers to stand up and reach out to people in need. We will never do that on a penny out of a dollar and when we give that sparingly, it will necessitate the government giving more glowingly
That Christian believers aren’t currently giving enough to meet the full need of their fellow citizens is something Huckabee can certainly be upset about, but it’s anything but an argument for cutting crucial support programs or failing to raise adequate revenue to fund them.
The best argument Huckabee could be implying is that high tax rates are collecting the money people would otherwise be donating to charity. If we would only lower taxes, he might suggest, charitable giving would increase. The problem is that while the research on this claim is mixed, it’s clear that tax cuts aren’t guaranteed charity-boosters.
Even in the cases where tax cuts do lead to some increased giving, only a small portion of private charity actually goes to address the needs of the most vulnerable — more common are gifts to causes like cultural institutions or academic alma maters. On the other hand, the Center on Budget and Policy Priorities reminds that 92 percent of food stamp funding goes directly to meeting hard-hit families nutrition needs.
No matter how you slice it, there’s no way for Huckabee and conservatives who agree with him to get around the fact that the social safety net is irreplaceable. If they don’t think it’s worth paying for, they should at least admit they’re ok with the real human damage cuts would have, instead of arguing that everything will be alright in spite of the clear evidence to the contrary.
Last Friday at lunchtime, Occupy DC protested outside the Marriot Wardman hotel hosting CPAC, raising their concerns about the way the conservative agenda puts inside represented the desires of the 1% before the needs of the 99%.
Unfortunately, many of the CPAC participants around me who came out to gawk at the demonstration focused on the perceived differences between the constituencies inside and outside the hotel, dismissing the protesters as lawless, misguided rabble-rousers motivated by personal envy and animosity.
But given the Tea Party-influenced cries against bailouts and crony capitalism taking place at the conference, I think they’d have found key areas of agreement with the Occupiers about if they had stopped to listen.
Here’s an Occupy speaker from Our DC explaining his frustration with the way that corporations like PEPCO, the DC electric utility company, make hundreds of millions in profits while paying little to nothing in taxes (PEPCO actually has a negative tax rate thanks to all of their tax rebates).
