Captured Government’s Increasing Irrelevance Shows #Occupy’s Importance

Our captured political institutions make themselves increasingly irrelevant by not addressing the problems of the 99%. Each day we see more examples of our government being "captured" by and serving the interests of the top 1% against the rest of us. Even as more and more people take to the streets in protest, Washington ignores We, the People, continuing to serve only the top few. Here are just a few examples, just from this week, showing what our 1%-captured government is doing even as the 99% of us protest.

Lobbyists Tell Senate To Keep Unhealthy School Lunches

This week the Senate sided with lobbyists and voted to block science-based recommendations protecting our kids’ health. The Dept. of Agriculture had proposed a rule promoting healthy food for kids in federally-subsidized school lunches, limiting starches and increasing healthy vegetables served to increasingly obese kids. But as always happens now with our goverment, lobbyists swarmed and the Senate voted to block the science-based health rules. Senate votes for unlimited potatoes in schools [1],

Amended was a spending bill that includes dollars for the Agriculture Department. The House passed a similar bill earlier this year including language that would ask the department to rewrite its school lunch rules entirely. Republicans have singled out the potato proposal in criticizing the rules, saying the government shouldn't be dictating what kids eat.

Yep, there it is again: Republicans saying that corporations, not government, should be making the decisions. And they tried to deflect people, saying this is only about "potatoes" to make it sound silly and delegitimize science. Continuing,

"USDA's proposal was about helping kids to eat a very wide variety of vegetables and I think that point has been lost in all this," said Margo Wootan, director of nutrition policy at the advocacy group Center for Science in the Public Interest, which pushed for the standards. "Other vegetables have a hard time competing with potatoes."

This is about our kids' health! But the Senate votes with the lobbyists. What is wrong with us that this can happen in our country? But this is just the kind of thing we have come to expect daily from DC.

Fed Caputured By Big Banks

It's not just Congress that's captured. This week the Fed is letting Bank of America transfer the risk of derivatives onto taxpayers. This is a stealth bailout, moving an unknown amount of risk onto the books of a government-insured entity. Business Week explains, in Bank of America Bosses Find Friend in the Fed [2],

Bank of America, which got hit with a credit- rating downgrade last month by Moody’s Investors Service, has moved an undisclosed amount of derivative financial instruments from its Merrill Lynch unit to its biggest commercial-banking subsidiary. The latter is loaded with insured deposits and has a higher credit rating than Merrill or the parent company.

The Federal Deposit Insurance Corp. is objecting to the transfers. That part is easy to understand: More risk for the retail lender means more risk for FDIC-insured deposits, which ultimately are backstopped by the U.S. government.

... Shifting the derivatives to the commercial lender may let Bank of America avoid collateral calls and termination fees stemming from the rating downgrade. Some Merrill clients may prefer having their contracts with the higher-rated unit. In short, the Fed’s priorities seem to lie with protecting the bank-holding company from losses at Merrill, even if that means greater risks for the FDIC’s insurance fund.

If these derivatives go bad and the FDIC runs out of money, guess who has to pay up. Hint: It's us, the 99%, not the 1% at the top of B of A. This kind of thing is why people are in the streets. And even with people in the streets, it still happens.

Settling Instead Of Prosecuting

This week the government "settled" fraud charges against Citibank – with no criminal charges for the fraud. The "punishment" was for Citibank to pay a $95 million fine, plus restitution of some of the defrauded amount, amounting to a tiny fraction of a single quarter's profits. This "settlement" was not even the first time Citibank was allowed to "settle" for fraud committed during the runup to the crash. NY Times: Citigroup to Pay Millions to Close Fraud Complaint [3],

Citigroup on Wednesday agreed to pay $285 million to settle a civil complaint by the Securities and Exchange Commission that it had defrauded investors... The transaction involved a $1 billion portfolio of mortgage-related investments, many of which were handpicked for the portfolio by Citigroup without telling investors of its role or that it had made bets that the investments would fall in value.

... Neither the S.E.C. nor the Justice Department would say whether the case raised questions about whether Citigroup had been involved in any criminal wrongdoing. But the case highlights a growing frustration felt by foreclosed homeowners, investors and Wall Street protesters alike that few, if any, senior banking executives have faced criminal charges for losses growing out of the financial crisis.

Slaps On Wrists

Also this week a former Senate Republican staffer, caught in the Abramoff lobbying/payoff corruption scandal received … wait for it … a whopping 5 hours jail time [4] for his crimes. (Note – he did cooperate with prosecutors.) As a Republican Senate staffer he traveled to the Mariana Islands with Abramoff, and received other payoffs, then became a lobbyist.

Not Just Government

Those are just a few examples of our esteemed government in full-capture operation from just this week. But it isn't just our political institutions that are captured. Our major media has been captured -- purchased actually -- by a very few giant corporations.

Here is just one example of what that corporate control means. In a democracy the public needs accurate information, so they can make the right choices. But our corporate-owned major media does not provide the information that a functioning democracy demands.

Last week Republicans in the Senate filibustered the President's "jobs bill." The filibuster didn't just block the President's bill, it blocked the Senate from debating any jobs bills. But media coverage of the filibuster avoided informing the public that Republicans had again used the filibuster to obstruct action.

Here are a few examples of America's corporate media avoiding informing the public that Republicans filibustered the jobs bill that the public overwhelmingly approves of. Note as you read these headlines that a majority of the Senate voted for the bill, which was filibustered.

• "Turned Back" - NY Times: President’s Jobs Measure Is Turned Back in Key Senate Test [5]
• "Stalls" - Politico: Obama jobs bill stalls in Senate [6]
• "Rejects" - ABC News: Senate Votes to Reject Jobs Bill [7]
• "Kills" - Time: Senate Votes to Kill Obama's Jobs Bill [8]"Votes Down" - USA Today: Senate votes down Obama's $447 billion jobs package [9]

So voters are fed enough information to decide that "the Senate" rejected, killed, stalled, rejected the bill -- not that the Republicans filibustered it. That would be "too much information."

Ignore We The People, Occupy Results

Last week, in Washington Ignored The People, And Now You’ve Got #Occupy [10], I wrote,

What did the politicians in Washington think would happen? They forgot about the "We, the People" part of our Constitution. After bailing out the banks and bankers and interests of the top 1% they fiddled while our jobs burned and mortgages defaulted. With people losing their incomes, pensions and healthcare they worried about deficits instead of jobs and cut back on essential services. They smugly spouted slogans at us and thought we'd be fooled and pacified. People voted for change and they didn't get change. And now people are in the streets.

Over at naked capitalism, the post David Graeber: On Playing By The Rules – The Strange Success Of #OccupyWallStreet [11] explains the importance of #occupy. Please read the whole thing if you have time - this is history.

After all, how could there have been a more perfect alignment of the stars than happened in 2008? That year saw a wave election that left Democrats in control of both houses of congress,[5] a Democratic president elected on a platform of “Change” coming to power at a moment of economic crisis so profound that radical measures of some sort were unavoidable, and at a time when popular rage against the nation’s financial elites was so intense that most Americans would have supported almost anything. If it was not possible to enact any real progressive policies or legislation at such a moment, clearly, it would never be. Yet none were enacted.[6] Instead Wall Street gained even greater control over the political process, and, since Republicans proved the only party willing to propose radical positions of any kind, the political center swung even further to the Right. Clearly, if progressive change was not possible through electoral means in 2008, it simply isn’t going to possible at all. And that is exactly what very large numbers of Americans appear to have concluded.

[12] [13]