U.S. Economic/Financial News
Walker Wants To Take Away Clean Water and Power
Feb. 23 (EIRNS)The longer the protests jam up the works in Wisconsin, the more comes out about the real agenda of Gov. Scott Walker and his minions in the Republican-controlled legislature. Not part of Walker's budget repair bill, but equally damaging, is legislation introduced in both houses of the legislature that would repeal a Department of Natural Resources rule that requires municipal governments to disinfect their drinking water supplies. The rule, which went into effect last Dec. 1, only affects 12% of the state's municipal water supplies, as the other 88% already employ the required measures. The two Republican sponsors say that disinfecting drinking water is too expensive. In response, Democrats have labeled the bill the "Poison Our Drinking Water Act."
Mark Borchardt, a groundwater disease specialist and a staff member of the state's Environmental Protection Agency Advisory Board, told the Capital Times, "You might as well legislate that the sun rises in the west." Borchardt did a study that demonstrated that 13% of acute gastrointestinal illnesses in Wisconsin municipalities, that don't disinfect their water supplies, is tied to dirty drinking water. "I think the data is overwhelming," he said. "Why this law is being proposed without even looking at the scientific work, I don't understand." Perhaps the GOP thinks that water-borne illnesses are cheaper than science?
Meanwhile, another piece of Walker's plan, which is part of the budget bill, is garnering more attention. The bill allows Walker to sell off or lease state-owned power plants without the approval of the Public Service Commission and without competitive bidding. While the existence of the provision is not news, people in the state are now connecting the provision to the support of Walker by the billionaire Koch brothers, who were Walker's second-largest campaign contributors, at $43,000, and helped fund a multi-million-dollar attack-ad campaign against Walker's opponent, Milwaukee Mayor Tom Barrett. Though there is some debate as to exactly what the Kochs, whose company supplies coal to Wisconsin power plants, expect to gain from that provision of the bill, it's clear that the bill, overall, fits their union-busting agenda. (See InDepth for more on Walker and the Koch brothers.)
Fed's Hoenig Demands, 'Break Up the Big Banks'
Feb. 23 (EIRNS)Kansas City Federal Reserve president Thomas Hoenig called for a "Glass-Steagall-type" of break-up of large financial institutions, in a speech in Washington, D.C. today, and said they "pose a threat to our capitalistic system. I am convinced that the existence of too-big-to-fail financial institutions poses the greatest risk to the U.S. economy. They must be broken up. We must not allow organizations operating under the safety net to pursue high-risk activities."
Hoenig called for "restoring Glass-Steagall-type regulation." He also said, "Protected institutions must be limited in their risk activities, because there is no end to their appetite for risk and no perceived end to the public purse that protects them."
On the present financial condition, Hoenig said, "In my view, it is even worse than before the crisis. As well-intentioned as the Dodd-Frank Act may be, it will not improve outcomes."
In the question period at the meeting of Women in Housing and Finance, Hoenig also said the Fed money-printing policy was creating bubbles, and pointed to an "international agricultural land bubble" as one of them.
Bernanke Accused of Triggering Global Protests with Hyperinflation
Feb. 23 (EIRNS)A Wall Street Journal op-ed today by its former deputy editor George Melloan attacks Federal Reserve chairman Ben Bernanke for money-printing and igniting global inflation.
"When the Fed sneezes money, the weak economies of the world, and the poor masses vulnerable to price rises in the necessities of life, catch pneumonia," Melloan wrote. Bernanke's denials at the National Press Club recently, when accused of hyperinflating food prices and triggering the uprisings in North Africa, were false: Other countries don't have "internal inflation controls" with which they can stop dollar-printing inflation, and "the only one failing to acknowledge it is Bernanke himself."
Melloan points out that, at the G-20 meeting last week, a number of central bankers said the Federal Reserve is exporting rapid inflation. He says the severe U.S. inflation of the late 1970s, driven by the Fed, triggered the Iranian Ayatollahs' 1979 revolution. Now, "Fed's policies are stoking a rise in prices that is contributing to political unrest."