Thursday, December 03, 2009

Economic Recovery Means Choosing Between Water and Food?

The bailed-out-billionaires who we, the people rescued from the consequences of their own actions are returning the favor by hiking interest rates on existing credit card debt; lowering and extinguishing small business credit lines; creating new categories of fees, while increasing existing ones; finding new ways to create, package and sell debt, collecting millions in fees and commissions; arguing against fundamental protection for consumers, all the while, flaunting their outrageous bonuses, taking their level of greed to an all new level.

But, that's not all. They have far more underhanded ways of fleecing the taxpayers, especially in the poorest, most vulnerable parts of the county. For example, bailed-out AIG is forcing the poor to choose between running water and food.

Middlesboro and Clinton are two tiny, impoverished towns in southern Kentucky with a combined population of 12,000. In 2008, Middlesboro's per capita income was $13,189 a year, only a few hundred dollars more than the average worker earned in third-world Mexico. That is if they were lucky to even get a job. Real unemployment hovers somewhere around 30%, and the state is so broke that half the people eligible for unemployment benefits can't receive them. Life may be tough and most people live in poverty, but that doesn't mean they can't be made a little poorer. That's the lesson locals learned after bailed-out insurance villain AIG took over their water utility and instantly raised rates to squeeze an extra $1 million in profits out of its new customers, forcing some to consider choosing between running water and food.
Obviously, profit is the key concern of private corporations and not the public interest. Yet, we allow these huge corporations, including the banks we just bailed out to lobby elected officials to act against the public interest, throwing the lives of many of our most vulnerable citizens under the bus. Even if you have no concern for those less fortunate, it's in all of our interest to stop the outrageous behavior of the corporate and political elite because eventually we will find ourselves sharing space under the very same bus.

However, there might be some hope, if the Senate and financial industry do not get their way, as they are sure to present giant roadblocks, arguing against financial regulatory reform, and in particular, against the creation of a new consumer protection agency. Nevertheless, the House Financial Services Committee voted 31-27 yesterday for the bill President Obama handed to Congress in June, for the overhaul of financial-services regulation that include shifting costs of a failure to the financial industry, giving regulators the power to break up healthy firms and and setting up a new Consumer Financial Protection Agency, which would bolster oversight of derivatives and limit incentives in executive pay that spur excessive risk taking. The measure will be added to a broader regulatory bill the House will debate and vote on next week.

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