Entries in public citizen (1)


Five Dots from Cabbie to Billionaire

Sometimes the lines connecting dots are so overwhelmingly bold and darkly obvious that, despite knowing better, I find myself concentrating too much on the dots and not the lines. At any rate, I did a segment for the Alonya Show on RtTV this afternoon that covered four dots of financial dislocation. As I left the studio in a cab, a fifth dot appeared:

In Los Angeles, traveling eastward on Santa Monica Boulevard, you pass the mansion-laden enclave of Beverly Hills on your left, and a less ornate stretch of police and office buildings on your right. While we were driving, the driver revealed a mark of inequality, seemingly secret and trivial, and yet so significant.

“See that,” he gestured to a sprawling, perfectly manicured estate. “People that order a taxi from there to the airport, pay a flat rate of $30.  But over there,” he points to my right, “you’re on the meter. Forty-five bucks.”  

He shook his head, “They make 100 times more in those homes than what other people make. You tell me why the people with all the money get the cheaper fare.”

The answer was the line connecting the dots of the show I’d just taped.  They reap the benefits, because they make, or buy, the rules. A half an hour earlier, Alonya and I had discussed four other dots.

The first was an FT piece that noted there had been no new bank applications in the United States in 2011, after only 3 in 2010.  What does this mean? It means that it’s cheaper to acquire a bank with FDIC and Fed assistance, than to start a small one. Not only that, smaller banks can’t even raise the capital required to stake out a physical location. This, while mega-banks sprout like weeds on the corner of every block, capturing spacious street-front property, rolling out expensive signage, and able to negotiate better rents for their bulk presence. It is a sign of the small being crushed by the large; a situation whose side-effects include removing choice from citizens, who are left paying collusively high fees for ATM and banking services, at omnipresent, federally subsidized institutions.

The second dot was the excellent video, accompanying a petition, that Public Citizen just released called Breaking up is Hard to Do – aimed at Bank of America (but that could equally have been addressing any member of the too-big-to-fail contingent.) Alonya asked me what I thought of the video. I replied, “It’s not going to happen.” (These goliaths will remain joined at the commercial and speculative hip.) Not because it shouldn't, but because...

Our regulatory and legislative systems have been supremely indulgent of these behemoths. Here and there, the big banks emerge from settlements with fines for fraudulent practices, but it doesn’t make a dent in the risk they can manufacture, or the size to which they can grow. The Federal Reserve has ultimate regulatory authority over the big banks, and under Chairman Ben Bernanke, used that authority to approve, not reject mergers, to facilitate a cheap money party to fuel, what would otherwise have been insolvent financial giants, and to allow those same giants to re-funnel their subsidies back to the books of the Federal Reserve as excess reserves that gross .25% interest per year. Separately, the tepid Dodd-Frank Act gets watered down more each day. But even at its ‘strongest’ inception state, it didn’t break up the banks, nor reduce the risk they pose our global economy. Bank of America holds 35% MORE derivatives today than before the fall of 2008.

The third dot had to do with a billionaire index that Bloomberg created.  It provides a closer to daily tracking of the wealth of the world’s 20 most ostentatiously wealthy.  I don’t really know what to say about that.  But, whoever gave the internal go-ahead to that monstrous showcase of inequality should have perhaps included a location-tracker, so people could send their daily heart-felt awe and congratulations.

The fourth dot was the income gain of the top 1% vs. the 99% over the past year. The fact that the top 1% captured 93% (basically almost all) of the growth demonstrates that the inequality gap isn’t just widening; it’s accelerating. The more one has, the greater the cushion to soften economic Depressions. It was no different going into the 1930s Great Depression as illustrated in my novel, Black Tuesday. If you’re living paycheck to paycheck, you feel each oppressive drop of an increase in health care, education, childcare, food, energy and utilities costs. If your income isn’t growing in tandem, you are comparatively falling further down an economic hole. This accelerated income-rise-to-the-top is one more sign that when the media and Washington say we’re in an economic recovery, they have an ultra-myopic definition of who constitutes ‘we’, and it’s not the majority of the population.

That’s why there’s an Occupy Movement. As I wrote on behalf of the compelling book, "The economic elite vs. the People," “Occupy Wall Street has coalesced across towns, cities, and countries. It represents people of every race, age, and disposition as the only meaningful opposition to a winner-take-all financial system that extracted untold wealth from the global population to puff up the personal portfolios of elite executives with impunity. And until a more equitable society and system prevail, the Occupy movement is not going anywhere.” (See the rest on

All these dots and lines project a gamed world, where it is not sweat or merit that propels people forward, but connections and power and pedigree. Which brings me back to my cabbie friend.  As he dropped me off, he offered this morsel of wisdom, “Things won’t change until we’re all paying the same fares. At least, that’s a start.”