The Greedy Bastards Antidote to Rigged Energy

[Sexyeccentric1]

I am actually on chapter 3 of Dylan Ratigan's book Greedy Bastards. I have so many damn books to read and not enough time.. so I went ahead and downloaded the audible books so I can listen to some while doing my daily activities.

I ran across this article/site. I find it very eye opening as well as the book.
I highly recommend reading Dylan Ratigans book Greedy Bastards for anyone who is still perplexed about the rigging of the banking system and what lead to the 2008 financial collapse. He does a good job of explaining in lay mans terms for those of us who are not in the banking or stocks business.

Anyway here is the article if your interested in reading:
The Greedy Bastards Antidote to Rigged Energy

Author Brian Merchant

[nwarounder]

I liked this quote the best.

"The plan is simple: charge oil, gas and coal companies a small, annually increasing fee on fossil fuels sales—then collect the fees and evenly distribute them amongst the American people.".

Just think, we could apply this to every business in the country and we all could be wealthy and no one would ever have to work again, right?

[Iaintliein]

Originally Posted by nwarounder

I liked this quote the best.

"The plan is simple: charge oil, gas and coal companies a small, annually increasing fee on fossil fuels sales—then collect the fees and evenly distribute them amongst the American people.".

Just think, we could apply this to every business in the country and we all could be wealthy and no one would ever have to work again, right?

ROFLMA,
And from whom would these companies get the money to pay the fee? Customers (tax payers) are the ONLY source of revenue to companies.

When will the high and mighty left take a stand against Apple who's profit margin dwarfs that of the energy companies, who not only provides a miniscule number of US jobs vs the energy companies but also, apparently uses slave labor in China http://www.guardian.co.uk/technology...forced-interns?????

Why? because the left and their sheeple think fancy phones and ipods are important but heating, air conditioning and transportation aren't (because they have a right to those I guess, and a right to get it for nothing.

People need to take a look at the portion of the price of a gallon of gasoline that is tax vs the portion that is profit to the oil company. Then decide which actually earns their cut.

[nwarounder]

Just for the record and in case it wasn't obvious enough, I was being totally sarcastic and poking fun at the Socialist theory of the author.

[Iaintliein]

Originally Posted by nwarounder

Just for the record and in case it wasn't obvious enough, I was being totally sarcastic and poking fun at the Socialist theory of the author.

Understood, I should have quoted her instead, but you'd already picked the gem from the garbage as far as quotes go.

We are in total agreement.

Regards,

[CuteOldGuy]

So Big Energy is cooperating with Big Government to screw the people. I'm Shocked, SHOCKED!

If we got rid of the income tax, where most of these breaks are granted, gasoline and other oil products might actually adjust to market prices. Right now there is too much market manipulation, much of it coming in the tax code. We don't need more government, because as we know, government cannot be trusted with power, we need less government involvement and playing of favorites.

[Sexyeccentric1]

Was reading some interesting solutions with regard to fixing the economy with regard to the banks and loans/debts etc.

From the book end of Chapter 2 "Greedy Bastards":

How to Fix Banking 1. PUT “SWAPS” ON PUBLIC EXCHANGES In Vegas, you need to have actual money to gamble— your own money— and if you lose, you pay. But since 2000, banks, industry, and consumers have been free to take on system-threatening levels of debt (to the point of financial meltdown) without facing any requirement to risk a significant amount of their own money. And while consumer risk taking was curbed by the 2008 financial crisis, US banks continue to use America’s deposits insured by the Federal Deposit Insurance Corporation (FDIC) to fund their mad, bonus-seeking speculation. Once the banks blow through that, they borrow from the biggest money-printing house in the world, the US Federal Reserve. No one else in the world can pay themselves billions to take enormous risk with little or no money down. To end this insanity the American people must demand an end to the anachronistic “dark market” for credit insurance, or swaps, and insist that they be moved to an exchange where the risks that we all now bear can be visible to all. (You might think Treasury Secretary Tim Geithner, after his experiences during the crisis, would have led the charge to restrict or ban risky swaps, especially after the Obama administration passed a bill that began to regulate these instruments. But one of Geithner’s first decisions in using this new law was to exempt foreign currency swaps from the new regulations.) All trades on a theoretical swaps exchange must be required to meet capital requirements (or some equivalent inhibitor of risk) to stop the game of Trade a product/commodity for good.

Perhaps as important as the VICI integrity of capital requirements is the visibility that an exchange would create: we could all see who was trading and insuring what. One of the greatest obstacles in resolving the financial crisis in 2008 was the need to pay all the $ 600 trillion in swaps because central bankers couldn’t see which swaps were legitimate insurance for energy and commodities— insurance that was essential to the smooth functioning of the economy— and which were idle speculation. Because the central bankers couldn’t see the difference, they were forced to pay off everybody, including the reckless speculators. The same thing happened in the European bond market in 2011. Home lending also needs additional capital requirements in the direct home lending and consumer credit markets for both private banks and government banks such as the Federal National Mortgage Association, commonly known as Fannie Mae, and the Federal Home Loan Mortgage Corporation, known as Freddie Mac. Every loan must require a down payment. All lenders must be at risk for losses from their loans. Only by keeping a portion of the risk from the loans they make will banks’ interests remain aligned with the interests of their customers.

2. CANCEL SPECULATIVE DEBT— AND CLAW BACK BONUSES Some of the promises that were made in the days of reckless gambling and irresponsible reliance on taxpayer money can’t be kept. But as Mohammed El-Erian, CEO of the investment firm Pimco, told me, “The question is, how do you share that burden? So far the burden has been felt mainly by the real economy and households.” Ordinary Americans have paid for bankers’ mistakes. But while US home owners are under siege by creditor predator banks, and millions of unemployed debt holders are forced into a Survivor-like fight with one another over scraps, bondholders have been paid a hundred cents on the dollar with newly printed money. Banks have been bailed out with printed money. The real sacrifices have all been made by ordinary people in the forms of increased public debt, reduced pension payments, and reduced health benefits. We must require not only that banks retain more capital but also that when they place bad bets, they pay the price for their losing bets themselves. Otherwise we are stuck with the worst of two economic systems: like a capitalist country, we have private banks that keep their profits. But like a communist country, we have a system where banking losses are charged to the government. Only when we end this corporate communism will we realign the interests of the banks with the investors they serve. The way to do this is debt reduction or cancelation. If the system is so out of control that we can use a computer to fabricate trillions in new money by simply adding some zeros, then surely we can find a way to delete some zeros as well. By definition, if you can print it, you can cancel it. As we have already seen, a swap can either be an insurance policy that helps to lower long-term costs for a business or a bet by an outsider on whether a given company or country will succeed or fail. Putting swaps on a public exchange would create the visibility for all to see the difference between commodity insurance that is critical to the economy and speculative bets that are not much different from gambling. In fact, Richard Grasso, former chairman of the New York Stock Exchange, suggested to me in a personal interview that the speculative bets that fueled the financial crisis could be reclassified legally as online gaming— and then cancelled. His technical explanation: “I believe regulators should require the product to be registered with a central clearing agent (like an exchange) and thus able to be monitored globally to prevent contracts being written in excess of the debt obligations they are designed to insure (corporate or sovereign). This is easily accomplished by [regulators] and Treasury issuing a cross-markets rule adopted by non-US counterparts. Any contracts written outside these requirements would be deemed null and void by regulators as simply online gaming.” Similarly, bonuses collected by CEOs and board members of AAA-rated financial institutions on the basis of profits from reckless speculation should be “clawed back” and repaid. These leaders were the custodians for their institutions, with the responsibility to determine how much risk was safe to take. They should not keep bonus pay for losses caused by their own bad decisions just because those losses were covered by the government— that is, by ordinary taxpayers. The threat of future clawbacks will keep their personal interests aligned with the financial interests of their institutions and their country.

3. REVISE THE TAX CODE TO ENCOURAGE LONG-TERM INVESTMENT, NOT SHORT-TERM EXTRACTION It seems to me that if we agree that there’s nothing morally wrong with getting rich or being poor and that we want people to use their wealth in ways that increase productivity, then that’s what our tax code should encourage. Maybe we should tax spending— consumption— rather than income, and let the tax code discourage short-term investors and reward long-term investors. If you find a way to use your computer to extract money from the stock market in a few seconds, you should be taxed very high. If you commit your money for years and launch a business and build something new that others can use, you should be taxed low. A well-run country is like any well-run business: greedy, but long-term greedy. We need a tax code that will bring out the “long-term greedy” in every American.

4. DON’T LET WALL STREET BUY THE RULES The basic secrets of the derivatives market are now known, but the crisis was not caused simply by a failure of understanding. It was caused by a failure of our political system. In 2009 alone, banks spent $ 220 million lobbying against new regulations such as capital requirements and lobbying in favor of spending cuts to get budget deficits under control. But as Simon Johnson has written, “[ The banks’] rhetoric is misleading at best. At worst it represents a blatant attempt to shake down the public purse.” When the political conversation turns to debt, it usually hides the reasons we ran up this debt and the fundamental culpability of the greedy bastards on Wall Street. When Wall Street isn’t buying access to our legislators, they are buying the very ratings agencies relied on by pension managers to evaluate how risky a given investment is. Wall Street banks pay Standard & Poor’s and Moody’s to rate their bonds. The better the rating, the more the banks can sell, and the more money ratings agencies and banks make. But considering the massive risks given to the world’s pension and insurance managers by Wall Street and the ratings agencies, shouldn’t the risk evaluation be paid for by the group buying the investment— not selling it?

5. HOLD AN INTERNATIONAL RESET MEETING Historically, debt reset meetings have come after global conflicts such as World War II and the American Civil War. In these meetings, governments realigned the interests of countries and financial institutions using tools such as infrastructure banks (which provide temporary lending when private institutions no longer can), tax reforms, debt cancelations, and new banking regulations. Given our previous hellish experiences with large-scale war, however, I suspect that many of us would prefer to fix the problem first and skip the war. We cannot allow giant creditors to turn fights over debt into currency wars and then into real wars. Our opportunity in this generation is to resolve the global debt imbalance with a new Marshall Plan before a war begins.