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Alameda Group Hosts Economics Talk by Scheer (Part II)

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(Note: This is the second blog on journalist and author Robert Scheer’s visit to Alameda; the first blog was published earlier and is still online.)

While speaking to a group of over 50 Alameda residents and visitors at the Alameda Free Library on Saturday, November 13, Robert Scheer explained the President Obama had understood many of the causes of the U.S. economic crisis, which the author explained date back to the Clinton era.

“He nailed it, so why did he bring in Clinton people and people who were getting paid by Wall Street?” Scheer asked.

Scheer argues that the banks and other financial organizations didn’t deserve a bailout. (He pointed out that ex-Citigroup CEO Sandy Weill just bought the Shanel estate in Sonoma County for $31 million, bringing one of Wall Street’s biggest gainers from the period of financial deregulation to the Bay Area.)

Homeowners and consumers deserve both more legal protection and strong government support, he says. The mortgage sellers “were trying to sign as many people as possible,” and they did, he explained.

He labels Fannie Mae and Freddie Mac “poverty pimps” in his latest book. “They used the poor and everyone else,” he said in his talk.

At the end of his talk, the journalist opened up the floor to members of the audience and began a discussion of what should be done to address our financial and economic issues. To begin, Scheer says, we should stop home foreclosures.

“We need a consumer’s movement,” he said. Rather than blaming the individual, we should be criticizing and moving to change a system that allows banks to charge interest rates of 38% for credit cards and get away with other unreasonable policiies.

He also thinks that without the power that unions once enjoyed, the interests of the middle class and its allies are being lost in the election debates and media discussions. Also, as wealth has become more and more concentrated at the top, fewer members of society strive to change the system as they move up — including politicians.

Politicians should embrace public financing, he notes. But, in general, the system is rigged against those without the funds to play. “This is not Jeffersonian democracy,” Scheer said.

To fix the broken system, we have to move for tough change, like restoring the separation of trading or investment banking and retail banking, he explains. “But the mainstream media ignores this,” Scheer added.

Fundamentally, Scheer says, it is a matter of “how we talk to people and explaining to them that real change is in their best interest, rather than repeating the same old blabber in the media.”

“Who messed up?” he asked. “Consumers assumed the documents they signed had been vetted,” in other words, had be scrutinized from a legal perspective.

“We can’t let people beat themselves up and buy the narrative that they are the ‘losers,’ ” in this situation. “It was all a scam with no protections in place,” Scheer concluded.

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Alameda Group Hosts Economics Talk by Scheer (Part I)

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Robert Scheer, editor in chief of Truthdig, spoke on Saturday, November 13, at the Alameda Free Library about the recent financial crisis. The event was organized by Alameda Public Affairs Forum.

Scheer worked for the Los Angeles Times for many years and most recently has written a book entitled “The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street” (Nation Books).

Raised in the Bronx, Scheer was a fellow at the Center for Chinese Studies at the University of California at Berkeley, where he did graduate work in economics and knew Arthur Lipow, one of the organizers of ALameda Public Affairs Forum.

Briefly, Scheer described three factors that led to the real-estate meltdown, market crash and other economic malaise of the past few years: namely deregulation of the telecommuications industry and financial sector (via the repeal of the Glass-Steagall Act), as well as welfare reform during President Clinton’s time in office.

Without the repeal of Glass-Steagall, which separated retail and investment banking, the financial institutions in the United States would not have been able to package and sell mortgages as they did over the past 10 years or so, said Scheer.

As people continue to lose there homes, he said, “We’ve accepted the fact that the system enriched a small percent of people while empoverishing many.”

The end of financial deregulation, Scheer explains, came about by the banks arguing that they couldn’t compete globally with such restraints. But President Reagan couldn’t deregulate when they pushed for reforms due to the savings and loan crisis.

Clinton, on the other hand, “was opportunistic … and did a deal with the devil,” the author said.

Another issue that contributed to the crisis was the end of certain laws enforced by the Commodity Futures Trading Commission, which Bay Area attorney and chairperson Brooksley Born unsuccessfully fought to protect during the Clinton years.

This “opened the floodgates,” Scheer said in his remarks.

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Public Affairs Group Hosts Speaker Nov. 13

The Alameda Public Affairs Forum is presenting a talk by journalist Robert Scheer from 7 to 9:30 p.m. this Saturday, November 13, at the Alameda Free Library.

The title of his talk, as well as his recent book, is “The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street.”

In his new book, Scheer lays out the bi-partisan origins of the financial scandals that wrecked the American economy and left millions unemployed. And he outlines his thoughts on why the present economic mess takes place at the same time as wars in Iraq, Afghanistan and Pakistan, along with other dangers in the Middle East.

The presentation will be followed by a discussion.

Those who wish to meet for conversation before the talk are invited to come at 6 p.m. for coffee and refreshments. And everyone is asked to bring snacks or drinks to share.

For information call (510) 814-9592.