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Over the past few days, more and more information is making it to the forefront of the MSM which is providing us with much greater insight as to why there's significant resistance from Wall Street relating to the potential appointment of Elizabeth Warren as Chair of the newly-formed Consumer Financial Protection Bureau.  It's now common knowledge, throughout the banking community, that our country's largest banks--still very much in need of massive cash infusions to "fix" balance sheets hammered by a decade of Wall Street greed and malfeasance, exacerbated by laissez faire governance and virtually non-existent regulatory oversight--are about to clobber the consumer public with massive new fees.

And, as we're quickly learning,  there's very little we're going to be able to do about it. Instead of the Dodd-Frank/FinReg financial reform legislation providing the necessary controls to prevent the already-heavily-favored-by-our-government, "too-big-to-fail" banks from taking their pound of flesh from the consumer public, it'll be up to the CFPB to enforce what still are--and have been--woefully weak, and still-unaffected federal laws, which give nationally-chartered banks carte blanche "preemption" over state-based regulations and their regulators.

Yes, paraphrasing an old line: The beatings of the middle and lower classes will continue until morale improves.

As we learn the government's ongoing efforts to bailout Wall Street and provide welfare for the rich are continuing, to the tune of an additional $700 billion in 2010, alone, amidst the greatest class income disparity this country's ever witnessed, at least since the Great Depression, if not since they first started tracking these statistics (years before then), and as the Senate ponders extending Bush administration tax cuts to the wealthy in coming days, we're also learning about a couple of new harsh truths...

The FinReg (Wall Street reform/Dodd-Frank bill) does NOT protect us from banker abuse.  Here's the latest from Alternet Economics Editor Zach Carter: "The Wall St. Bill Doesn't Protect Us From Banker Abuse: 5 Essential Reforms Are Still Needed."


The Wall St. Bill Doesn't Protect Us From Banker Abuse: 5 Essential Reforms Are Still Needed
Alternet.org
Posted by Zach Carter on @ 7:05 am
July 21, 2010

On Wednesday, President Barack Obama signed into law the first serious effort to regulate Wall Street in decades. The bill has much to be said for it, but the unfortunate truth is that it ducks several of the most critical reforms needed to protect our economy from banker abuse. As regulators work to implement the legislation, reformers must turn up the heat on Congress to adopt further reforms, and recognize political opportunities to further economic progress.

Five policy fights stand out as particularly pressing. Many of these policies can be implemented this year, while others will probably have to wait until the next Congress. All of them are critical to ensuring that our financial sector works to support a healthy economy, instead of a reckless bonus machine.

1. Break Up The Banks...
...
2. Tax Wall Street Gambling...
...
3. End The Foreclosure Nightmare...
...
4. Prosecute Fraud...
...
5. Stop Subsidizing Risky Business...

The new bailouts? They're coming from the same place as the old bailouts!

Effectively, we already know that the ongoing bailout of Wall Street is about to take on a whole new component, as banks raise their fees and egregious account and related service charges, bigtime: "Customers Will Pay for Bank Reform."


Customers Will Pay for Bank Reform
By MIKE HOGAN
Barron's
Electronic Investor | SATURDAY, JULY 24, 2010

Because banks won't necessarily be able to charge for things like automatic overdraft protection, they'll be looking everywhere for other sorts of fees.

CONGRATULATIONS! YOU'VE BEEN financially reformed. Get ready for new banking fees, much like the higher credit-card costs that followed Congress' last tilt at the banks two years ago.

Banks are no longer able to sign us up automatically for something most of us never use--overdraft protection. But you should realize that they make huge money on the few who do, and they need to replace that income. Big branch banks therefore will be probing to see just how amenable we are to new fees and restrictions on something we actually do use--like so-called "free" checking (see "Banking at Your Peril," April 5, 2010).

What to do? Push back. Find a better deal. Online banks, community banks and credit unions have always offered lower fees and more liberal account policies--and online brokers could be included in that club, too...

Meanwhile, back on Main Street...

The middle class in America is radically shrinking. Don't take my word for it: "22 Statistics That Prove The Middle Class Is Being Systematically Wiped Out Of Existence In America."

(Another "must-read," IMHO.)


The Middle Class in America Is Radically Shrinking. Here Are the Stats to Prove it
Posted Jul 15, 2010 02:25pm EDT by Michael Snyder in Recession
From The Business Insider

*    83 percent of all U.S. stocks are in the hands of 1 percent of the people.
*    61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.
*    66 percent of the income growth between 2001 and 2007 went to the top 1% of all Americans.
*    36 percent of Americans say that they don't contribute anything to retirement savings.
*    A staggering 43 percent of Americans have less than $10,000 saved up for retirement.
*    24 percent of American workers say that they have postponed their planned retirement age in the past year.
*    Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.
*    Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.
*    For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.
*    In 1950, the ratio of the average executive's paycheck to the average worker's paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.
*    As of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.
*    The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation's wealth.
*    Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.
*    In the United States, the average federal worker now earns 60% MORE than the average worker in the private sector.
*    The top 1 percent of U.S. households own nearly twice as much of America's corporate wealth as they did just 15 years ago.
*    In America today, the average time needed to find a job has risen to a record 35.2 weeks.
*    More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying.
*    or the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.
*    This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.
*    Approximately 21 percent of all children in the United States are living below the poverty line in 2010 - the highest rate in 20 years.
*    Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.
*    The top 10 percent of Americans now earn around 50 percent of our national income.

And, here's, IMHO, some of the most poignant commentary on the destruction of our middle class, from none other than Ms. Warren, herself (from my diary from December 6, 2009):

#            #            #

THE GREAT STRUCTURAL CHANGE: "America Without A Middle Class--It's Not As Far Away As You Might Think"

In "AMERICA WITHOUT A MIDDLE CLASS--IT'S NOT AS FAR AWAY AS YOU MIGHT THINK," congressional Wall Street bailout oversight panel chair Elizabeth Warren, who may very well be this country's foremost expert on the economic plight of the middle class, points out just how close we are to the abyss. After you review her Wiki bio, linked at the beginning of this paragraph; I think you'll agree with my observation regarding her authoritative position on these matters.

Indeed--much more than any monthly employment report or quarterly Gross Domestic Product statistic--it is all about the great structural change that Reich references in his quote, above. And, IMHO, no individual has focused upon this subject during the Great Recession, over the past 18 months, moreso than Simon Johnson. More from him, down below, but first a quick recap of Warren's commentary, starting with this paragraph...


Today, one in five Americans is unemployed, underemployed or just plain out of work. One in nine families can't make the minimum payment on their credit cards. One in eight mortgages is in default or foreclosure. One in eight Americans is on food stamps. More than 120,000 families are filing for bankruptcy every month. The economic crisis has wiped more than $5 trillion from pensions and savings, has left family balance sheets upside down, and threatens to put ten million homeowners out on the street.

In [http://images.huffingtonpost.com/...
 these graphics], Warren explains how this crisis started more than a generation ago, but how, as Reich explains it (see quote above), the Great Recession just "dramatically accelerated" it.

And, via this set of of graphics, Warren explains how, despite millions of families putting a second parent in the workforce, higher costs have outlapped additional income. She notes...


...higher housing and medical costs combined with new expenses for child care, the costs of a second car to get to work and higher taxes combined to squeeze families even harder. Even with two incomes, they tightened their belts. Families today spend less than they did a generation ago on food, clothing, furniture, appliances, and other flexible purchases -- but it hasn't been enough to save them. Today's families have spent all their income, have spent all their savings, and have gone into debt to pay for college, to cover serious medical problems, and just to stay afloat a little while longer.

--SNIP--

...now the crisis has swamped millions of middle class families.

The contrast with the big banks could not be sharper. While the middle class has been caught in an economic vise, the financial industry that was supposed to serve them has prospered at their expense. Consumer banking -- selling debt to middle class families -- has been a gold mine. Boring banking has given way to creative banking, and the industry has generated tens of billions of dollars annually in fees made possible by deceptive and dangerous terms buried in the fine print of opaque, incomprehensible, and largely unregulated contracts.

As Warren concludes, "families are ready for a change." At this point she discusses her proposal for a "Consumer Financial Protection Agency" (CFPA). But, she also notes how the banking lobby has swung, "...into action against the Agency, fighting with all their lobbying might to keep business-as-usual... And if those practices crush millions more families, who cares -- so long as the profits stay high and the bonuses keep coming."

#            #            #

So, what should be done?

The truth of the matter is, more and more information is also coming to the fore that's telling us what we're hearing from our government's economic managers is running quite counter to what  we've seen. (See: "Seeing vs. Doing," by Gretchen Morgenson, from Saturday's NY Times.) Then again, hindsight is 20/20, right?

We're told: "No more taxpayer bailouts." But, the truth is, those bailouts have not only continued, right through the first two quarters of this year; they've increased some $700 billion. (See: "SIGTARP QUARTERLY REPORT TO CONGRESS.")

And, while "welfare for the rich" may take on different shapes and names, going forward, the bottom line is whether you call them "taxpayers" (footing the bill) or "consumers" (paying the way), we're basically talking about the same people paying the price, now aren't we?

Meantime, "Our Jobless Recovery Continues" (Brad Delong, 7/23/10).   Then again, pramatically speaking, the use of the term, "recovery," is a stretch for most...voters.

While corporate profits are increasing, tremendously for many in the Fortune 500, the jobs are not following. Our leaders are looking around in amazement, wondering, "Where Did the Jobs Go?"

And, when you reappoint a Republican as Fed Chair, it's no wonder we're hearing about extending Bush's tax cuts for the rich from the guy: "Bernanke Says Extending Bush's Tax Cuts Would Maintain Economic Stimulus."

(Hmmm....Where was Bernanke in the fight for unemployment insurance extensions over the past few weeks?)

The truth on where many of the jobs went, and where they're going, is now coming to the fore, too--despite many in the MSM trying to posit otherwise--and, it's this, IMHO: "Anomalous Capacity Shrinkage," from Tim Duy (Economist's View 7/23/10).

With all of these Rubinists and rightwingers managing our economy, it's obvious that "Obama's Econ Team Needs Checks & Balances: Choose Elizabeth Warren."

The only way Main Street's going dig itself out of this, anytime soon, is if we start pushing for a genuine voice for us in the administration, at least as far as financial services are concerned. Not just lip service, but someone in a position to actually DO something for us, immediately.

So, once again...we can just listen to our nation's economic managers, and Main Street may "see" what happens, or, we may "do" what's necessary, right now, to insure some semblance of a positive result on our behalf, at least as far as consumer financial protection is concerned.

#            #            #

As I posted it in my diary on Saturday, IMHO, while there's still time, you can be a part of that effort, too...

Support the Bold Progressive's appeal to our senses and sign the petition to appoint Liz Warren to that position.

And...

Take this letter from Congresswoman Carolyn Maloney and, leaving the signature space blank, send it along to YOUR congresscritter for their John Hancock.]

Or...

Just get in touch with the White House and tell 'em: "To hell with the Senate confirmation...please, just get it done, Mr. President!"

#            #            #

As Gretchen Morgenson reminded us in Saturday's NY Times, our economic hindsight's becoming clearer by the day. We're seeing more and more truth with every passing news cycle.

They say that knowing the problem is half the solution. The other half of the solution involves doing something about it.

The title of this post is: "The Real Warren/CFPB Story: The True Cost of Wall St. 'Reform.'" So, what is the real price for reform? As the status quo have determined it, and as Liz Warren has been reminding us for years, too, it appears to be just about...everything.

Originally posted to http://www.dailykos.com/user/bobswern on Sun Jul 25, 2010 at 11:07 PM PDT.

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