This video is an oldie but a goodie.

It’s as relevant today as it was when it first aired.

Check it out and tell us what you think.

For those who don’t want to click through, it’s a video of a little girl asking Wall Street bankers if they have exploited anyone today. And if so, who?

Image from NPR

#occupywallstreet!

Killer cantaloupes: Listeria outbreak takes 17 lives.

Military chaplains can perform a few more weddings now.

Sean Penn strikes again!  Activist/actor heads to protest in Egypt.

Philadelphia’s home to some new pop art!

Don’t look up! More drama for the National Cathedral.

The Help may have had some unconventional help of it’s own.

Women on Wall Street an Endangered Species.

Back to School Night at Public School Confusion! (The name may be more fitting than you think)

What are you watching?

Hulu belongs to Who?

Thanks to icanhazcheezburger.com

We at USDemocrazy have been told it can be tough being wealthy. You know…there’s a world wide shortage of good butlers these days and solid gold yachts are a PILL to maintain.

And no one, NO ONE has symapthy for these poor rich people.

Why? Because the gap between the rich and the rest of us is growing!

In a passionate look at income inequality for Slate Magazine Timothy Noah states that:

surely the growing income chasm between the poor and middle class and the rich, between the Sort of Rich and the Rich, and even between the Rich and the Stinking Rich, make it especially difficult to reestablish any spirit of e pluribus unum.

Luckily average folks may have more in common with the wealthy as the recession is helping to close the gap.  Democracy in America notes that

From 2007 to 2008, the richest 1% of Americans lost 8.4% of their income, compared with a 2.6% drop in earnings for the average America. The very richest, the top .01% of Americans, saw their income drop even further, by 12.7%.

Even if in the future people feel bad for the wealthy currently they don’t.  This lack of understanding (and for Wall Street general hatred) is starting to get on their nerves.

As former AIG Vice President Jake DeSantis eloquently said last year when asked to return part of his bonus:

None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.

Recently as reported by the New York Observer this sentiment is growing; bankers are sick of being beaten up, especially by the White House:

“I think of it first as a language issue,” a managing director at one of the largest private-equity firms in the city complained, when asked to explain the anger at the administration. “The language they use is the language of villainy and populism.”

Snidely responding Paul Krugman had this to say:

We’re in the new Gilded Age — but while the old robber barons said “The public be damned”, the new ones say “Ma! He’s looking at me funny!”

Things may only be getting worse for the rich.  Not only are they the target of distrust but they are poor compared to another group: THE $UPER RICH!

How rich is $UPER RICH?  Free Exchange provides a report on this new level of rich.  We’d add a comment but theirs sums up our thoughts.

“,,,In 2007, it is likely that the top five hedge fund managers earned more than all five hundred S&P 500 CEOs combined.“

The bolding is mine. I wish there were something more than bolding I could do; an emoticon with its jaw on the floor might work well.

But enough of our ramblings on the wealthy.  Quite frankly we at US Democrazy are perfectly happy with the freedom provided by living out of our cars.  However, you may have different thoughts so chime on in.

Thanks to Wikicommons.

We’re not Nazis! France responds to criticism of Roma expulsion.

Look out Wall Street. Elizabeth Warren to advise in creation of Consumer Protection Bureau.

To see the sun again. Trapped Chilean coal miners expected to be freed by November.

There is a fifth dimension beyond that which is known to (the non-Wall Street) man. It is a dimension as vast as space (within a banker’s penthouse) and as timeless as infinity. It is the middle ground between light and shadow, between science (i.e. economics) and superstition (i.e. economics), and it lies between the pit of man’s (investment) fears and the summit of his (financial) knowledge. This is the dimension of (greedy) imagination. It is an area which we call the (legal) Twilight Zone.

Lucky for you, USDemocrazy is ready to dive into the murky world of high finance to try and figure out what’s going on.

Last Friday, April 16, the Securities and Exchange Commission (SEC) filed a civil suit against Goldman Sachs for fraud.

What is the cause of the suit?  In a nutshell:

1) A hedge fund, Paulson & Co., helped Goldman Sachs create a financial instrument called a CDO (collateralized debt obligation… big words, we know).  These CDOs are basically a bundle of mortgages.

2) Paulson & Co. purchased insurance on these CDOs ( in case these mortgages go sour, i.e. folks can’t pay their bills). Paulson & Co., having built the CDOs, were now betting that they would fail.

3) Goldman Sachs sold the CDO (created in step 1 above) to investors… And here’s the kicker, without telling them that Paulson & Co. (who were betting on the securities failures) had helped design the CDO.

The SEC is arguing that this is fraud as Goldman Sachs failed to acknowledge a conflict of interests.

If this is true then, as Slate’s Daniel comments, their plan went perfectly:

Goldman collected a fat fee for building and peddling the deck. One Goldman client (Paulson) made out like a bandit shorting it. And several other Goldman clients (the unfortunate banks who bought pieces of the CDO) got their faces ripped off.

Just because things worked out doesn’t mean Goldman Sachs committed fraud.  Erik Gerding, of The Conglomerate, points out that

even though Paulson’s role in selecting the deck wasn’t disclosed to investors, the deck itself likely was. In other words, investors probably were told of the assets put into the CDO

So will Goldman Sachs be taken to the cleaners by the SEC or will the case work out in their favor?

It is tough to tell.  Some questionable actions were taken by Goldman Sachs (many involving upper management) but fraud is a tough thing to figure out as Alan M. Dershowitz, a legal expert for the Daily Beast, points out:

No experienced lawyer could have predicted with accuracy, at the time they were doing it, whether what Goldman is accused of doing would fall on the wrong or right side of the ever-changing “fraud” line—if there even is a line.

Also, despite everyone’s shock and outrage over Goldman Sachs, similar things have happened.  NPR’s “This American Life” uncovers a similar trick that was pulled by Magnetar, a hedge fund whose methods are as smart as its name (the wonderful song at the top of this page is about Magnetar’s scheme).

So what should you take away from this?

Crazy things are continuing to happen in the financial world (and will always happen).  Due to this you should do three things:

One is to check out what  some smart people are saying at the New York Times.  
Secondly,  start a hearty debate in our comments section about whether Goldman Sachs actions were right or wrong. Finally, find out more information on this ever-evolving financial world we live in. 

Remember, we’re all in this together!

Thanks to Wikicommons.

Question: Do you remember that recent financial crisis that was going to (play scary music) DESTROY THE WORLD AS WE KNOW IT!?! (in case you don’t… crawl out from under your rock and check out US Democrazy’s past coverage).

Fortunately for us, politicians everywhere agreed to do everything possible to ensure that such a crisis did not happen again.

Unfortunately, these politicians cannot seem to agree on… what exactly “everything possible” means…

Like everything in Washington these days, reform of the financial and banking industry (which helped create the almighty mess we are stuck in) is in a partisan deadlock.

There was some progress made in 2009 when the House of Representatives passed a financial reform bill last December.

Since then, that bill has languished in the clutches of the US Senate (an organization about as fast as molasses up hill in January).

But HARK! (play triumphant music) all that is about to change!  A Senate version of the bill may be emerging!

The Wall Street Journal reports that a potential Senate bill, among other things, would place the Federal Reserve in charge of consumer protection in the financial markets.

(You can view the consumer protection part of the plan, spearheaded by Senator Chris Dodd, here…brought to you by Mother Jones).

Reform should be bringing out cheers, right? Well, some don’t seem to think this bill contains much reform at all.

The blog Calculated Risk snidely remarks on the proposal that

wasn’t the Fed already responsible for consumer financial protection?

Don’t think Calculated Risk are the only one who picked up on this.

Heather Booth, Executive Director of the Americans for Financial Reform (AFR), an alliance of organizations promoting changes in the way Wall Street us regulated, issued this statement on the Senate proposal:

The revised proposal does not provide what is needed to protect American families or the financial system as a whole: a strong, independent Consumer Financial Protection Agency

Yesterday, Paul Krugman, Noble winning economist, wrote in a similar vein that this bill

eliminates a key plank of the Obama administration’s proposals, the creation of a strong, independent agency protecting consumers.

Not only that but Mr. Krugman goes so far as to say that

it’s time to draw a line in the sand

and that no reform bill is better than

such a watered-down reform.

Now the question may be forming in your head (at least it did in ours), how could a reform bill, such as that passed by the House of Representatives, with support from the White House and many Americans become watered down?

Arianna Huffington, namesake of the Huffington Post, conjectures that the weakening of the bill was due to the banking lobby .

A couple of hundred million dollars later, and we’re left with this punch-to-the-gut of reform, from the top-line summary of Dodd’s plan: “the independent agency proposal would be dropped.”

Representative Barney Frank, a key player in the House of Representative’s reform, states the weak Senate bill is because

Procedurally, the Senate Republicans are killing this or watering it down,

We’ve taken a look at what the experts have said on this issue… perhaps it’s best we hear from those who will be most affected by this so-called reform. That would be YOU.

That’s right, we want you to go to the top right of this article, where it says “leave a comment”, click that spot and write your thoughts.  Otherwise we may just have to write them for you.

Last Sunday, we saw TV cat fights involving lions, tigers and even President Obama!

That’s right, on Sunday President Obama had his catty claws out. In an interview he referred to America’s Wall Street bankers as a bunch of “fat cats”.

To make the name calling worse, it was only a day before Mr. Obama was scheduled to meet with these very same top bankers.

What was this meeting about (clearly not another friendly beer summit)?

In Obama’s own words:

America’s banks received extraordinary assistance from American taxpayers to rebuild their industry — and now that they’re back on their feet, we expect an extraordinary commitment from them to help rebuild our economy

Obama was having a hissy-fit at the bankers. He wants them to start lending money again so that businesses can start growing again and in turn hire people (again).

Now normally most people would jump at a chance to meet the President.  However Obama’s cold words and the cold weather kept some bankers at home.

Bad weather grounded the commercial flights for the CEO’s of Goldman Sachs and Morgan Stanly, as well as the Chariman of Citigroup.

The big question is will this meeting result in increased lending by the brow-beaten bankers?

Shahien Nasiripour, at the Huffington Post, doesn’t think so.

He could be wrong though.  After the meeting, Bank of America announced that it would increase loans to small and mid-sized businesses by $5 billion in 2010.

Who knows maybe those “fat cats” are cuter than people think?

Pixar animation studios and Walt Disney Pictures

We at USDemocrazy enjoy a good summer blockbuster movie. We also enjoy seeing movies of great quality and craftsmanship. So we were amazed to see this week a summer blockbuster movie with great quality and craftsmanship (now there is a rarity).

“UP” is the newest film from the Jedi masters of animation at Pixar. After nearly four years of production “UP” burst into the cinemas with great fanfare. It was the opening film at his year’s Cannes film festival (first for an animated cartoon). It is currently no 1 in North American box office sales with $68.2 million in ticket sales earned in its first weekend.

There is much to admire in the film… great characters, brilliant artistry, clever humor. We at USDemocrazy want to salute Pixar for one particular element of the film… its pursuit of excellence.

Not long ago Wall street and Toy retailers were “UP” in arms about Pixar’s new film. They sensed that Pixar was not showing enough business savvy by featuring a film that starred a 78 year old codger with a PG rating (a first for Pixar).

Pixar for its part, shrugged off the remarks. Peter Doctor the director for “UP” recently said the film’s commercial prospects never crossed his mind.

“We make these films for ourselves,” he said. “We’re kind of selfish that way.”

John Lasseter a co-founder of Pixar claims the studio doesn’t consider marketability in the projects it chooses.

“Quality is the best business plan”

And a very successful business plan that is! Pixar films have generated a combined $2.65 billion at North American alone!

Just a thought… maybe other major companies (Say, like GM) should regard Quality as the best business plan.

We at USDemocrazy want to thank Pixar for proving to Hollywood, Wall Street and all others that the best road to success is not down market but “UP” market. 

Check out the movie and give us your thoughts!