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Miseryindex2008.blogspot.com
If you didn’t know it, the House Democrats think they are looking out for your best interests regarding your recent 401(k) losses, in a discussion to confiscate them, and then nationalize them. An example of how this would effect our personal 401(k) is at the end of the post under RANT ON. Basically right now, we get a 46% return GUARANTEED on our initial investment. Under the Dem’s plan to nationalize our retirement, our return would only be 1%. So who is exactly who looking out for our best interests?

The House Democrats are discussing taking 401(k)s back to the value they were in August, 2008 before the stock market declined and restoring the 401(k) back to its full value. Then they are discussing seizing those funds and putting it into a Social Security fund that will grow by 3% each year with government bonds, which will be adjusted for inflation. The most one would be able to contribute to it each year would be 5%. A company match will no longer happen.

A plan by a professor of economic-policy, Teresa Ghilarducci, states that, all workers would receive a $600 annual inflation-adjusted subsidy from the U.S. government but would be required to invest 5 percent of their pay into a guaranteed retirement account administered by the Social Security Administration. The money in turn would be invested in special government bonds that would pay 3% a year, adjusted for inflation. [Ghilarducci’s Testamony to the House [PDF] on October 07, 2008]

“I want to stop the federal subsidy of 401(k)s,” Ghilarducci said in an interview. “401(k)s can continue to exist, but they won’t have the benefit of the subsidy of the tax break.” “I want to spend our nation’s dollar for retirement security better. Everybody would now be covered” if the plan were adopted. John Belluardo, president of Stewardship Financial Services Inc. in Tarrytown, NY has said, “From where I sit that’s just crazy.” “A lot of people contribute to their 401(k)s because of the match of the employer,” he said. “If the tax deferral goes away, the employers have no reason to do the matches, which primarily help people in the lower income brackets,” said Belluardo.

Ed Ferrigno, vice president of the Washington office of The Profit Sharing/401(k) Council of America has said, “Some of the tenor [of the hearings last week] that the entire system should be based on the activities of the markets in the last 90 days is not the way to judge the system.”

James Pethokoukis writing for the US News described the plan:

In place of 401(k) plans, she [Ghilarducci] would have workers transfer their dough into the government-created “guaranteed retirement accounts” for every worker. The government would deposit $600 (inflation indexed) every year into the GRAs. Each worker would also have to save 5% of pay into the accounts, to which the government would pay a measly 3% return. Rep. Jim McDermott, a Democrat from Washington and chairman of the House Ways and Means Committee’s Subcommittee on Income Security and Family Support, said that since “the savings rate isn’t going up for the investment of $80 billion [in 401(k) tax breaks], we have to start to think about whether or not we want to continue to invest that $80 billion for a policy that’s not generating what we now say it should.”

The Carolina Journal and LGF reported:

Democrats in the U.S. House have been conducting hearings on proposals to confiscate workers’ personal retirement accounts - including 401(k)s and IRAs - and convert them to accounts manged by the Social Security Administration. Triggered by the financial crisis the past two months, the hearings reportedly were meant to stem losses incurred by many workers and retirees whose 401)k) and IRA balances have been shrinking rapidly.

The testimony of Teresa Ghilarducci, professor of economic policy analysis at the New School of Social Research in New York, in hearings Oct. 7 drew the most attention and criticism. Testifying for the House Committee on Education and Labor, Ghilarducci proposed that the government eliminate tax breaks for 401(k) and similar retirement accounts, such as IRAs, and confiscate workers’ retirement plan accounts and convert them to universal Guaranteed Retirement Accounts (GRAs) managed by the Social Security Administration.

This type of plan didn’t work so well in Argentina. In Argentina, private pensions are somewhat like 401(k) accounts in the United States. Argentine lawmakers are considering a plan to nationalize about $26 billion in private pension funds. Argentina announced last month on October 21, in what has been called a “surprise bill”, that it was taking over the pension system to protect workers from losses, thus nationalizing the pension system in a way to raise funds to avoid its second default in a decade. Currently Argentina has about $150 billion in debt. More

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Karen McMahan
Democrats in the U.S. House have been conducting hearings on proposals to confiscate workers’ personal retirement accounts — including 401(k)s and IRAs — and convert them to accounts managed by the Social Security Administration. Triggered by the financial crisis the past two months, the hearings reportedly were meant to stem losses incurred by many workers and retirees whose 401(k) and IRA balances have been shrinking rapidly.

The testimony of Teresa Ghilarducci, professor of economic policy analysis at the New School for Social Research in New York, in hearings Oct. 7 drew the most attention and criticism. Testifying for the House Committee on Education and Labor, Ghilarducci proposed that the government eliminate tax breaks for 401(k) and similar retirement accounts, such as IRAs, and confiscate workers’ retirement plan accounts and convert them to universal Guaranteed Retirement Accounts (GRAs) managed by the Social Security Administration.

Rep. George Miller, D-Calif., chairman of the House Committee on Education and Labor, in prepared remarks for the hearing on “The Impact of the Financial Crisis on Workers’ Retirement Security,” blamed Wall Street for the financial crisis and said his committee will “strengthen and protect Americans’ 401(k)s, pensions, and other retirement plans” and the “Democratic Congress will continue to conduct this much-needed oversight on behalf of the American people.”

Currently, 401(k) plans allow Americans to invest pretax money and their employers match up to a defined percentage, which not only increases workers’ retirement savings but also reduces their annual income tax. The balances are fully inheritable, subject to income tax, meaning workers pass on their wealth to their heirs, unlike Social Security. Even when they leave an employer and go to one that doesn’t offer a 401(k) or pension, workers can transfer their balances to a qualified IRA. More

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Barry Grey
Democrats take charge of pushing through Bush’s bailout of Wall Street
In all essentials, the bill drawn up by the Democrats in closed-door negotiations with Treasury Secretary Henry Paulson and Republican congressional leaders, and in direct consultation with some of the most powerful figures on Wall Street, conforms to the plan first proposed by Paulson on September 19.

It gives him virtually unlimited powers to use public funds to buy mortgage-backed securities and other worthless bank assets whose value has collapsed as a result of the implosion of the housing bubble and the vast edifice of debt that was built up by Wall Street.

The Democrats’ press conference was an exercise in deceit. Speaker of the House Nancy Pelosi, flanked by Senate Majority Leader Harry Reid and the chairmen of the House and Senate banking committees, Barney Frank and Christopher Dodd, presented the windfall for the richest people in the country as though it were a punitive measure aimed at reigning in corporate greed.

“The party is over,” she proclaimed. “No longer will tax payers be forced to bail out reckless investors.”

Both candidates of the two major political parties, Democrat Barack Obama and Republican John McCain, signaled their support for the bailout bill on Sunday. They echoed the line of President Bush, who said in his weekly radio address on Saturday, “The rescue effort we’re negotiating is not aimed at Wall Street; it is aimed at your street.”

Obama boasted on the CBS News program “Face the Nation” that he has been in constant communication with Paulson on the progress of the bailout bill.

The myth that the Democratic Party represents a “lesser evil” to the Republicans, let alone a “party of the people,” is being shattered by its emergence as the most servile defender of the interests of the financial oligarchy.

The remaining obstacle to obtaining quick passage of the bill comes not from the Democratic Party, but rather from right-wing Republicans in the House of Representatives. They represent an ultra-right libertarian wing of the party which identifies social spending and government intervention in the capitalist “free market” with what they consider the ultimate evil—socialism.

The emergence of the Democrats as the leading protagonists of the administration’s bailout scheme has enabled the House Republicans to posture as opponents of Wall Street and appeal to popular opposition, while demanding billions of dollars in tax cuts for the banks and further deregulation as an alternative to using taxpayer funds to cover Wall Street’s bad debts.

The content of the proposed legislation agreed upon by the Bush administration and the Democrats exposes the lies that are being employed to defend it. It contains no provisions to provide relief for homeowners who have been victimized by predatory lending practices and face foreclosure.

The two token measures initially proposed by congressional Democrats—enabling bankruptcy judges to amend mortgage terms to allow distressed homeowners to avert foreclosure and allotting 20 percent of any profits accrued by the government from the resale of bank assets to a housing fund—were stricken from the final deal under pressure from Wall Street and the Republicans.

Obama personally intervened last week to oppose the inclusion of the bankruptcy court provision, which has been fiercely opposed by the banking industry.

The Democrats dropped a proposal to impose a fee on the banks that will sell their junk assets, at inflated prices, to the government, and then profit from the eventual resale of the assets.

Supposed restrictions on pay and incentives for executives of firms that offload their debts to the government are toothless. There is no cap on salaries or other basic forms of compensation, and nominal limits on severance packages for “some” executives of “some” of the companies can be easily circumvented.

The so-called “independent oversight” panel of the bailout program is a fraud. It consists of the treasury secretary himself, the chairman of the Federal Reserve Board, the chairman of the Securities and Exchange Commission, the director of the Federal Home Finance Agency and the secretary of the Housing and Urban Development Department. All of these agencies are pliant tools of Wall Street and all have been instrumental in pushing the bailout plan.

The “Congressional Oversight Board” will consist of five “financial experts”—i.e., Wall Street bankers and big investors—chosen by the House and Senate majority and minority leadership. They are entrusted with overseeing the Wall Street firms that will be hired by the treasury secretary to manage the bailout program.

Much has been made by the Democrats of the fact that “only” the first $250 billion of Paulson’s $700 slush fund will be allocated with the passage of the bill. This is being presented as a major protection for taxpayers.

In fact, the next $100 billion will automatically be allocated once Bush requests it, and Congress’ ostensible power to withhold support for the final $350 billion is rendered meaningless, since it will be subject to presidential veto.

The text of the measure declares that Congress authorizes Paulson or his successor to spend the full $700 billion, and the figure of $700 billion is itself a fictional limit. A more realistic estimate of the sums to be handed over to Wall Street can be seen in the bill’s provision to increase the US public debt from $10 trillion to $11.3 trillion—a rise of $1.3 trillion.

The bill includes huge windfalls for the banks that are being concealed from the public. It authorizes the Securities and Exchange Commission to suspend accepted accounting standards in order to permit the banks to value their asset-backed securities at the price of purchase, rather than their actual market value.

And it includes tax breaks for companies that hold preferred stock in Fannie Mae and Freddie Mac, the mortgage finance giants that were taken over by the government earlier this month.

These two provisions alone will give the banks a freer hand to engage in accounting fraud and speculation and reward them with billions in windfall profits.

The corrupt character of the process by which this handout to Wall Street is being carried out was indicated in a report in Saturday’s New York Times. The article dealt with the lobbying campaign of the American Bankers Association, and noted: “As of Friday night, it appears the association got nearly everything it wanted.”

It gave a small glimpse of Wall Street’s bribery of congressmen, including those spearheading the bailout. “The association also hosts many fund-raising events,” it said, “like a $1,000-a-ticket fund-raising luncheon last March at Johnny’s Half Shell Blue Room on behalf of Representative Barney Frank, chairman of the House Financial Services Committee and a key player in the bailout package.”

What is taking place is a vastly undemocratic process. As even the US media has acknowledged, the bailout is opposed by the vast majority of the American people. They, however, have absolutely no say in the matter.

In secret discussions, behind the backs of the people and within a few weeks of a national election, an unprecedented bailout of the most powerful financial interests is being rammed through. Its content and far-reaching implications are being concealed by a barrage of banalities and lies.

This infusion of cash into the US banks will do little if anything to stave off an economic catastrophe that is enveloping the working people of the United States and the entire world. Tens of millions face the loss of their jobs, their pensions and their life savings. But their crisis is not addressed by the bailout program.

Moreover, the bailout has set into motion a further monopolization of financial resources in the hands of a few banks—JPMorgan Chase, Bank of America, Citigroup. What is being presented as a solution to the financial crisis is a reorganization of power within the ruling class that will lead to an even greater concentration of wealth and a further deterioration of the conditions of working people. More

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Patrick Martin
Leading congressional Democrats have given their approval to a vastly expanded program of US covert warfare against Iran, according to an article by investigative reporter Seymour Hersh, published in the New Yorker, and made available on the magazine’s web site Sunday. (See “Preparing the Battlefield—The Bush Administration steps up its secret moves against Iran”)

President Bush issued a Presidential Finding, a classified notification to top congressional leaders about the covert program against Iran, last year, after the Democrats took control of the Senate and House of Representatives in the November 2006 elections. The Finding called for a series of operations, including funding of separatist groups working among Iran’s Arab and Baluchi minorities, as well as the kidnapping of members of the Iranian Revolutionary Guard for interrogation across the border in Iraq and targeting individuals within Iran for assassination.

Hersh reports that Bush carried out the legal requirement that he notify the Democratic and Republican leaders in the House and Senate, as well as the chairman and ranking members of the intelligence committees. The four Democrats are House Speaker Nancy Pelosi, Senate Majority Leader Harry Reid, Senate Intelligence Committee chairman Jay Rockefeller, and House Intelligence Committee chairman Silvestre Reyes. More

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Alternet
House Speaker Nancy Pelosi claims that a key positive feature of the new wiretap “compromise” is that the bill reaffirms that the President must follow the law, even though the same bill virtually assures that no one will be held accountable for George W. Bush’s violation of the earlier spying law. In other words, in the guise of rejecting Bush’s theories of an all-powerful presidency that is above the law, the Democratic leadership cleared the way for the President and his collaborators to evade punishment for defying the law.

So, why should anyone assume that the new legislative edict demanding that the President obey the law will get any more respect than the old one, which established the Foreign Intelligence Surveillance Act of 1978 as the “exclusive” means for authorizing electronic spying? It wasn’t that Bush and his team didn’t understand the old law’s language; they simply believed they could violate the law without consequence, under the radical theory that at a time of war — even one as vaguely defined as the “war on terror” — the President’s powers trump all laws as well as the constitutional rights of citizens. More

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Patrick Martin
In a display of parliamentary maneuvering that combined cynicism and cowardice, Democratic members of the US House of Representatives voted unanimously to kill an impeachment resolution against President Bush introduced by Democratic Congressman Dennis Kucinich of Ohio.

Kucinich himself participated fully in the farce. He introduced the resolution Monday and read out the 35 articles of impeachment for crimes ranging from the lying pretexts given to the American people for the war in Iraq to torture at the US detention camp in Guantanamo Bay, Cuba and illegal domestic spying. Then he moved to send the resolution to the House Judiciary Committee, whose chairman John Conyers has long rejected any effort to hold Bush constitutionally accountable.

House Speaker Nancy Pelosi ruled out any impeachment of Bush as soon as the Democrats won control of Congress in November 2006. Impeachment resolutions against Cheney were introduced in May and November of 2007 and killed each time by the Democrats, in the same fashion as the Bush impeachment resolution Wednesday.

There is no question that, unlike Bill Clinton, who was impeached for lying about a private sexual encounter, George W. Bush is guilty of offenses that meet the “high crimes and misdemeanors” standard set by the US Constitution. More

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Photo futureatlas.com

…the chairman of Hillary Rodham Clinton’s campaign, Terry McAuliffe, uttered four words that the Fox News Channel would not soon forget. “Fair and balanced Fox!,” he exclaimed, noting that the network was the first to project Clinton’s Pennsylvania primary win. The next day it showed up in promotions. All of a sudden, the once-frosty relationship between Fox News and the Democratic candidates seems to have grown warmer. Clinton and Barack Obama, who steadfastly refused to attend Fox-sponsored debates last year, are now giving plenty of interviews as they court Fox’s viewers, who are largely white, conservative and undecided.
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