The Economic Crisis: A Brief Glossary And Fact Sheet

Posted by CODEPINK Staff

CODEPINK has been part of the Occupy Wall Street movement from the beginning. There are many issues that we’ve been speaking out about, especially as they relate to the need to reduce war spending so that funds can be redirected toward domestic needs. But what are these domestic needs that require our attention? Here is a glossary and link round-up we’ve created of some commonly-used terms and issues that have come up at local occupations around the country.

Bank Bailouts

In 2008, George W. Bush approved the Troubled Asset Relief Program (TARP) allowing the US government to bail out banks and other corporations using taxpayer money. Here is a list of companies that received bailout money.

Interestingly, Hank Paulson, former CEO of Goldman Sachs, was Secretary of the Treasury when Goldman Sachs received $10 billion in bailout funds.

Citizens United v. Federal Election Commission

In 2010, the US Supreme Court ruled that corporate funding of independently-produced “electioneering communications” is protected under the First Amendment which guarantees the constitutional right to freedom of speech. This 5-4 ruling struck down the provisions of the McCain-Feingold Act prohibiting corporations from funding commercials featuring candidates within 60 days of a general election or 30 days of a primary election.

Federal Reserve

The “Fed” was established in 1913 in response to a series of financial panics, particularly bank runs. The Federal Reserve System serves as the central bank for the United States. It has a Board of Governors which functions as a government agency, but member banks are considered private institutions.

Foreclosure Crisis

Instead of working with people faced with foreclosures to help them keep their homes, many banks have gone ahead with foreclosing on homes. Many if not most of the foreclosures occurring in the current economic crisis have been associated with fraudulent practices by the financial industry.  In addition to the obvious ethical problems with these fraudulent practices, the foreclosure crisis is directly related to economic hardship; many people have lost their homes due to unemployment, unaffordable mortgages, and other factors. Home values tend to decrease in areas with abandoned and/or foreclosed properties, which only adds to the problem. TruthDig has more information about the foreclosure crisis.

Glass-Steagall Act

The Banking Act of 1933 established the Federal Deposit Insurance Corporation (FDIC), which guarantees deposits in member banks. It also enacted a separation between investment banking (banks that issue securities) and commercial banking (banks that accept deposits). The Gramm-Leach-Bliley Act of 1999  repealed Glass-Steagall, effectively allowing commercial banks to invest consumer assets into speculations, which led to the dot-com bubble/bust, as well as the current financial crisis.

Student Loan Debt

 The total amount of outstanding student loan debt will surpass $1 trillion this year. While consumers are generally reducing their credit card and home loan debt, student loan debt has doubled in the past 10 years.  About 8.8% of student loan borrowers are currently in default—that is, more than 9 months behind on student loan payments. Unlike other loans, federal student loan debt cannot be shed in bankruptcy.

Super Committee

The United States Congress Joint Select Committee on Deficit Reduction was created by the Budget Control Act of 2011 with the stated goal of cutting $1.5 trillion from the deficit through spending cuts, tax reforms, and other measures. The so-called Super Committee consists of these Senators and Representatives: Sen. Murray, D-Washington; Sen. Baucus, D-Montana; Sen. Kerry, D-Massachusetts; Sen.  Kyl, R-Arizona; Sen. Portman, R-Ohio; Sen. Toomey, R-Pennsylvania; Rep. Becerra, D-California; Rep. Clyburn, D-South Carolina; Rep. Van Hollen, D-Maryland; Rep Hensarling, R-Texas; Rep. Upton, R-Michigan; Rep. Camp, R-Michigan.

Peace Action has many resources for the  grassroots movement to Move The Money  away from war and toward jobs, infrastructure, education, health care, and other vital programs and services.