Watchdog Bites | Iron Law of Wages | Critical Mass of Crazy | Race to the Bottom

Watchdog Bites—Since 2007, Harvard Law School professor Elizabeth Warren has been making the case for a Financial Products Safety Commission that would evaluate financial instruments before bankers or brokers sell them to the public. Considering the wealth lost since the economy began to slide into a recession, a commission protecting individuals from high-risk securities and mortgages should be an easy sell. Not, however, for the businesses selling the financial instruments that would be regulated. Steve Bartlett, the CEO of the Business Roundtable (which represents companies such as Wells Fargo, J.P. Morgan Chase, and Fidelity Investments), told the Senate Banking Committee in March that the finance industry opposes a government watchdog with authority over the products it markets. Bartlett (a former mayor of Dallas) is a former Republican member of the U.S. House, where he served on what is now the Financial Services Committee.

Warren chairs the Congressional panel monitoring the Troubled Assets Relief Program. She had already laid down a warning for financial-sector lobbyists, whose influence has waned since commercial banks and bank holding companies created the recession: “They can either fight and try to defend an increasingly untenable position, or they can start a new path advocating smarter regulations,” she said. On March 26, Reps. Bill Delahunt (D-MA) and Brad Miller (D-NC) introduced a bill creating a financial services safety commission. A similar bill was introduced in the Senate by Sens. Charles Schumer (D-NY) and Dick Durbin (D-IL). Warren predicted the current financial crisis more than two years ago, when she warned about lending practices such as teaser rates on mortgages, designed to convince borrowers that their rates would be far lower than they ended up paying.

Iron Law of Wages—Speaking at a New America Foundation forum in Washington, D.C., Challengemagazine editor Jeff Madrick pointed to low wages as a primary cause of the current recession. Today, a male in his thirties earns less after taxes than a male in his thirties earned in 1970. Wages for women have increased, but women have been closing a historical gap that separates them from male workers and continue to earn 80 percent of what their male counterparts earn. “Keep in mind that our wages are no longer the highest in the world,” Madrick said. “We were the highest in the world . . . but that ended thirty years ago. We became the biggest economy in the world with high wages, because high wages created demand without over-borrowing.”

Critical Mass of Crazy—They have never been rational or grounded, but lately the right-wing radio/TV invectorate seems more shrill and unhinged than ever. An on-air substitute for radio host Laura Ingraham referred to First Lady Michelle Obama as “trash.” “That’s what [Obama’s] married to,” Tammy Bruce told Ingraham’s audience. “You know what we’ve got, we’ve got trash in the White House.” Bruce was attacking Michelle Obama for speaking with a “phony” black accent while addressing African-American students she visited in the D.C. schools. Not to be outdone, Ingraham attacked John McCain’s daughter Meghan on another issue of substance, Ms. McCain’s weight. Then there was Rush Limbaugh’s riff on the “well-known Kenyan Barack Ogabe.” Limbaugh’s claim that he accidentally confused Obama (“Ogabe”) with Zimbabwean President Robert Mugabe doesn’t exactly pass the racism smell test. In his new primetime spot on Fox TV News, Glenn Beck describes a rumor about FEMA concentration camps as a claim he is unable to debunk. Serving up Internet hysteria so that it almost passes for news might be a new low for Fox. At least New World Order conspiracy theorists like Alex Jones, who broadcast to a fraction of the audience reached by Fox, pull no punches when they report (as fact) on FEMA concentration camps and mass graveyards our government is preparing for us.

Race to the Bottom—South Carolina and Texas lead the nation in the amount of federal stimulus money Republican governors are trying to return to Washington. South Carolina Governor Mark Sanford rejected $700 million, trailed by Texas Governor Rick Perry at $555 million. Sarah Palin of Alaska comes in third, in her attempt to reject $288 million. Bobby Jindal of Louisiana rejected $98 million. Haley Barbour of Mississippi—$56 million. The Alaska Legislature is moving to override the governor. So Palin can, as former Sen. John Glenn once said, “vote no and take the dough,” —using her principled refusal of stimulus funds to cultivate the extreme right in the Republican Party (the base) at no cost to Alaskans.