With the economic collapse last year, many mainstream voices suddenly started to talk about alternatives to capitalism. The economy seems to be stabilizing a bit, but as we’ve discussed many times, people are still suffering and jobless. Yet Citigroup is getting more tax breaks, and Ben Bernanke is Time’s Man of the Year.

Can capitalism be saved, and is it worth saving? We’re thinking big this Wednesday with Nicole Gelinas of the Manhattan Institute and Max Fraad Wolff of the New School.

Back in May, Marcy Wheeler and I met with Chris Dodd, and I asked him if he knew, as Chairman of the Senate Banking Committee, which banks the Fed was lending to. He said he’d find out and get back to me.  He finally did.  He asks the Fed why he shouldn’t know these things, they told him, and he sent me their response.  The letter is below the fold.

There’s an interesting historical note about why the Senate divides itself into committees. When the Senate first convened in 1785, the Senate found that it could not irritate and disappoint enough constituents fast enough on enough issues. So the Senate split iself up into committees and thus became able to vastly increase the number of people they aggravated with their self-serving bullshit.

All of this is a long-winded way of saying that while the full Senate sells us out on health care, Chris Dodd is getting ready to sell us out on bailouts, yet again. On Thursday, Fed Chairman Ben Bernanke’s nomination is coming up for a vote in the Banking Committee, which is chaired by Dodd. Dodd, while moderately progressive on health care and civil liberties, is simply horrid on Wall Street issues, and will probably be turned out of office by his constituents because it is so transparent that he just doesn’t understand the anger and pain of the people screwed by Goldman Sachs, etc. The crazy thing about the current moment is that, on accountability for the mess on Wall Street, some Senate Republicans are more populist and aggressive than Democrats (watch Jim Bunning just destroy Bernanke in his hearing).

Charlie Cook says that Dodd’s chance of holding onto his seat is fairly poor, despite the berry blue nature of Connecticut. So Dodd is trying some fake populism, with a credit card bill here and a meek banking regulatory bill there. People can see through this. The acid test on reform, and the one that Republicans will use in their ads against Dodd (and every Senate Democrat who votes yes on Bernanke), is that no one is getting fired for the mess they caused. Not one regulator. And while during the S&L crisis, over 1,000 white collar executives went to jail, this time, the criminals are writing the reform legislation.

Real populism would mean hearings and blame, mass firings of regulators, and actual oversight. Fake populism is what Dodd is doing. On Thursday, despite four holds on Bernanke’s nomination (three Republicans, one Democrat), Chris Dodd is going to make his personal contribution to the no accountability era by jamming Bernanke through his committee. These holds, you understand, are there because Bernanke has failed to create job growth, and is keeping Fed lending decisions secret. And it’s not like Bernanke is some great liberal; Bernanke wants to cut Social Security because it is, as he says in literally quoting Willie Sutton (a far inferior bank robber to the ones Bernanke regulates), where the money is. Bernanke is against a jobs bill, and he wants to close the deficit on the backs of poor, old people. He’s literally Pete Peterson’s wet dream of a Fed Chairman. And this is the guy Dodd is going to bat for. Of course, even if Bernanke gets through the committee, there’s no guarantee he’ll get through the full Senate. Dodd is just tossing the potato to another vulnerable incumbent, the oh-so-principled Harry Reid.

That’s why, back in May, when Marcy and I were able to sit down with Dodd, we wanted to know about the trillions of dollars of loans that the Federal Reserve pumpted into the banking system. We asked him if he knew who got this money, and he hemmed and hawed about the Fed’s independence, but finally committed to asking the Fed. Zero Hedge took our video, and mocked Dodd for not knowing the difference between the various classes of institutions that we bailed out. But we wanted an answer, and Dodd said he’d get one.

And finally, here it is. The letter I got from Dodd is below. Basically, he says that the Fed told him they don’t want to release the names of the banks who borrowed from them because then banks will be reluctant to borrow from them again. And he’s not going to follow up with the Fed, because they already said they aren’t going to tell him, and that is apparently enough for him. The kicker, though, was the ending.

As Chairman of the Banking Committee I understand how important it is that the central bank, as the lender of last resort, be able to add liquidity to the market so that small businesses can meet payroll, people can get car loans and families can send their kids to college. In the current economic climate, we cannot afford to create disincentives for financial institutions to lend. But that does not mean that we give the Federal Reserve carte blanche and I will continue to look for responsible opportunities to increase transparency at the Federal Reserve.

Several of the holds on Bernanke are due to Bernanke’s secretive use of Fed funds to prop up banks. His confirmation hearing literally is the responsible opportunity to “increase transparency” at the Federal Reserve.

And Dodd, rather than embracing transparency, is fighting for secrecy and bailouts. Maybe that’s why he’s losing back home.  Maybe he thinks nobody will notice, or perhaps he’s just covered for the banks so long that he does it without thinking. I can’t say. But it still is possible for other members of the committee to vote “no” on Bernanke, and report out a narrow vote to the full Senate floor.

Someone has to deliver a wake-up call to Obama that he isn’t going to be getting his bailouts forever in return for a junk insurance bill. Fortunately, there are other members on the committee. Liberal Sherrod Brown and Jeff Merkley may vote “no,” since they ostensibly care about the working people who have had their pension funds eviscerated by Bernanke’s poor work as Fed chair. Michael Bennet is vulnerable and has shown some courage, so he’s a possible no vote. Jack Reed can be progressive and is very knowledgeable on financial issues, and Jon Tester might have some dim memory in his head of once representing the people who elected him. The rest of the committee who could move their vote is listed below.

Let them know you don’t like Bernanke and want a no vote. There aren’t that many calls on this guy outstanding, so you could make the difference.

(photo: vistavision)

The sole defense of this massive corporate giveaway, formally known as the Senate health care reform bill, is that it would still do some “good,” helping millions of the uninsured. Unfortunately, the bill would dramatically worsen the quality of current insurance coverage for tens of millions Americans, thanks to the new excise tax on insurance plans. It is unlikely that any of the remaining “good” in this bill will outweigh the massive amount of harm.

Most of the “help” this bill will do is dubious at best. Help is being defined as giving insufficient subsides to Americans now forced by the government to buy extremely expensive, poorly regulated, junk insurance. Without banning annual limits and an extremely high out-of-pocket cap (which thanks to a massive loophole is not really capped at all), the insurance regulations are basically meaningless. Having this new, mandated “coverage” will not stop you from being bankrupted by accumulated medical debt should you get seriously ill. Insurance that does not protect you from financial ruin if you get sick makes a mockery of the entire concept health insurance.

The harm this bill will do thanks to the excise tax on employer-provided insurance benefits is enormous. The health care bill is designed with the goal of making millions of middle class Americans’ health insurance coverage much worse. That is not a bug, it is a feature.

The excise tax is meant to force your employer to cut back your insurance benefits, reduce your coverage, and increase your co-pays and deductibles. This is not the conclusion of partisan think tanks, bloggers, or activists, this is the conclusion of the non-partisan Congressional Budget Office (CBO) and the Center for Medicare and Medicaid Services (CMS). They CBO concluded:

[A]n estimated 19 percent of workers with employment-based coverage would be affected by the excise tax in that year [2016]. Those individuals who kept their high-premium policies would pay a higher premium than under current law, with the difference in premiums roughly equal to the amount of the tax. However, CBO and JCT estimate that most people would avoid the cost of the excise tax by enrolling in plans that had lower premiums; those reductions would result from choosing plans that either pay a smaller share of covered health care costs (which would reduce premiums directly as well as indirectly by leading to less use of covered medical services), manage benefits more tightly, or cover fewer services.