When JP Morgan Chase CEO Jamie Dimon dropped a bomb on the financial world two weeks ago by announcing that the bank had lost at least $2 billion on a series of trades that went bad on a London-based investment desk, Tennessee Sen. Bob Corker (R) was among the first lawmakers to call for investigations and hearings into the trade. Today, Corker got his first chance to get some answers, as the top regulators from the Commodities Futures Trading Commission and Securities and Exchange Commission appeared before the Senate Banking Committee.

But it wasn’t JP Morgan’s losses that Corker seemed concerned with. Instead, with advocates for stronger financial rules (including President Obama himself) pushing for a re-examination of pending regulations instituted by the 2010 Dodd-Frank Wall Street Reform Act, Corker was worried that the JP Morgan losses would bolster the case for a stronger Volcker Rule — the yet-to-be-finalized regulation that would ban federally-insured banks from engaging in certain types of risky trading:

CORKER: I fear that you’re under pressure, that a lot of calls are being made, that the administration is concerned that the American people are going to wake up and look at the last three years as a bad dream. … This big Dodd-Frank bill really doesn’t address real-time issues. And what you’re going to do is cause this Volcker Rule to become something that it was never intended to be.

Watch it:

Regulators are indeed facing pressure to strengthen the Volcker Rule, and as I wrote yesterday, that pressure is legitimate. Though it is unclear whether JP Morgan’s trade would have been subject to the rule, it is clear that the Volcker Rule as proposed was stronger than it is in its latest draft form. But JP Morgan and its cohorts on Wall Street played a major role in watering it down. That lobbying created a loophole that may have kept JP Morgan’s trade legal even under the rule.

Risky trades designed to make bank’s massive profits — known as proprietary trades — were at the center of the financial crisis that ultimately ended with taxpayers bailing out America’s biggest banks. Regulations like the Volcker Rule (and others included in Dodd-Frank) are aimed preventing taxpayers from having to foot the bill again in the future. The JP Morgan loss has given regulators and policymakers a golden opportunity to re-examine those rules and make sure they are sufficiently strong.

That may seem an inconvenience to lawmakers, like Corker, who opposed the regulations in the first place. To Americans who have to backstop this risky trading even when it goes drastically wrong, though, the chance to strengthen the rules should be a welcome one.

President Obama’s campaign and the Democratically-aligned SuperPAC Priorities USA have begun airing separate ads featuring former employees who were laid off thanks to Bain Capital, the private equity firm once helmed by Mitt Romney. But rather than pushing back against the campaign, the Romney camp is instead going after the employees featured in the ad.

Senior Romney aide Stuart Stevens dismissed the latest ad as “performance art gibberish” in an interview with the Associated Press. The ad features former GST Steelworkers laid off after Bain Capital closed their plant.

Deflections of reporters’ questions about to Mitt Romney’s tenure at the head of Bain Capital have become something of a speciality for the campaign, but Stevens’ remarks explicitly go after workers who have lost their jobs thanks to Bain:

“Shouting louder and getting more angry is not very persuasive,” Stevens said in response to the line of attack. “The idea that people are walking around with less of a paycheck or higher gas prices because of something Bain Capital did 20 years ago is absurd.”

As the AP notes, the Romney campaign has thus far failed to settle into a single unified response to criticisms stemming from relationship with Bain. This despite the fact that it has been a proven liability for years, since Romney’s unsuccessful 1994 Senate run.

During the Great Recession, Ohio has cut its budget to ribbons, reducing funds for health services, higher education, and K-12 education. The budget cuts are so severe that some towns might officially cease to exist (due to disincorporation).

However, it seems that Gov. John Kasich (R-OH) and the Republican legislature feel that the state has money to burn on tax cuts for the financial industry:

An Ohio Legislative Service Commission analysis said the bill “may decrease GRF (general revenue fund) revenue by an uncertain amount, though the revenue loss may be up to $30 million per year, when compared to the introduced version of the bill.”

The potential of a $23 million to $30 million tax cut for financial institutions drew fire from Democrats at a time when schools and local governments are suffering from significant budget cuts.

Kasich’s original plan was meant to be revenue neutral, but the legislature cut it up until it turned into a gift to the banks worth millions of dollars. As Policy Matters Ohio noted, the justification for cutting banks’ taxes — that they will use the money to increase lending — is fundamentally flawed:

The idea that cutting bank tax rates will fuel more lending and a stronger economy is misplaced. Since many Ohio banks already are “flush with cash,” as a representative of the industry puts it, cutting their taxes is unlikely to lead to new lending. Ohio banks are doing well, as a Feb. 28 press release from the Ohio Bankers League entitled “Bumper Quarter for Ohio Banks” attests, and are in no need of a tax cut.

“We’re basically giving the banks … a $25 million gift every year,” said state Rep. Mike Foley (D). “But we’re also doing that in the context of an economy and state budget in Ohio that has been wracked and harmed and hurt and mangled by the financial industry that we’re giving benefits to today.”

A judge from the National Labor Relations Board has overturned a union election at a Target store in New York in which workers ostensibly voted against becoming the first of the retail giant’s locations to organize. The judge ordered Target, which is notorious for its anti-labor practices, to hold a new election after agreeing with the United Food and Commercial Workers, who had accused the company of intimidating workers ahead of the election, Bloomberg Businessweek reports:

The decision comes almost a year after The United Food and Commercial Workers Union Local 1500 contested the 137-85 vote against unionization in June 2011. It argued that Target illegally intimidated workers for months leading up to the vote. Target denied the allegations. [...]

“Target completely poisoned the democratic process from day one,” said Patrick Purcell, assistant to the president of the UFCW Local 1500 in an interview with The Associated Press. “And now a judge agreed with everything we said.”

UFCW workers complained of intimidation immediately after the vote last year, and in November, the NLRB found additional evidence that Target officials illegally threatened to close the store if workers organized. It also found that Target supervisors “interrogated workers about their union activity,” complains the judge apparently found to be true.

In March, Target announced that it was temporarily close the store for six months for renovations, a move workers alleged was in retaliation for their organization efforts (1,100 Target stores are undergoing renovations nationwide, but most will remain open throughout the process). According to workers who filed the complaint, those who were the most vocal in their union support were deemed ineligible for transfers to other stores or for re-hire once the store re-opened, and they were given paltry severance packages to boot.

Target, however, says it “respectfully disagrees” with the decision and that its actions leading up to the election were “fair and legal.”

Our guest bloggers are Sabina Dewan, Director of Globalization and International Employment at the Center for American Progress Action Fund, and Jordan Bernhardt, Special Assistant with the Economic Policy team at CAPAF.

The Senate Appropriations Committee will meet this afternoon to mark up the budget for the State Department and USAID. Included in the administration’s $51.6 million budget proposal is a $770 million request for the Middle East Incentive Fund. The Senate should include money for the Fund in the budget bill it passes.

A number of countries in the Middle East and North Africa are undergoing unprecedented transitions that will either yield to free, equal and stable societies, or ones that are perpetually mired in conflict, violence and instability. The Middle East Incentive Fund is essential to help bring necessary economic and political reforms and create good jobs to promote stability, quell anti-Americanism and nudge these volatile nations towards democracy.

What’s at stake goes beyond the Arab people’s aspirations for a better life. How these nations manage their turbulent transitions has implications for stability in the region and the strategic interests of the United States.

Economic woes were a driving force behind the revolutions that began last year. For too long, too many bright Arab citizens dreamed a seemingly impossible dream of having just jobs with good pay, decent working conditions and opportunities to make a better life for themselves and their families. The revolutions have created an opportunity to break the cycle of jobless growth that has plagued the region for many years.

Read more

Jon Corzine, the former chief executive of bankrupt financial firm MF Global, received an $8 million pay package in the year his company plummeted into bankruptcy and faced a shortfall in customer funds totaling $1.6 billion.

Corzine resigned from the firm and turned down an $11 million severance package after MF Global filed for bankruptcy in October, and he is not likely to realize the more than $5 million of his pay package that is tied to the firm’s now worthless stock. But he didn’t walk away empty-handed, the Wall Street Journal reports:

About $5.35 million of Mr. Corzine’s compensation came in the form of stock options, which are now worthless as a result of MF Global’s failure. Still, the former New Jersey governor and Goldman Sachs Group Inc. chairman got more than $3 million in cash compensation, including a $1.25 million bonus.

Though Corzine may be the most extreme example, he isn’t the only financial industry CEO whose pay is out-of-whack with the performance of the company he oversees. In 2011, Bank of America CEO Brian Moynihan made six times what he made in 2010 even as the bank’s stock price was cut in half. Goldman Sachs CEO Lloyd Blankfein’s pay increased 13.7 percent (to $19 million) in 2011, even as shareholder return declined 45.6 percent. Wells Fargo CEO John Stumpf received a 2.1 percent bump in pay (to $17.9 million); the company’s shareholders saw their returns decline 9.5 percent.

And then there’s Citigroup CEO Vikram Pandit, whose pay package was the most disproportionate to his company’s performance, according to a Wall Street Journal analysis:

“CEO pay during 2011 was more firmly correlated to how well companies fared in the stock market,” the Wall Street Journal reported Monday. But that doesn’t seem to be the case on Wall Street, where leading companies into scandals, settlements, and even bankruptcy apparently earns executives millions of dollars.

Back in February, Mitt Romney asserted that he’s “not concerned with the very poor,” because “we have food stamps, we have Medicaid, we have housing vouchers, we have programs to help the poor.” However, according to an analysis by the Center for Budget and Policy Priorities, Romney’s economic plan would throw 13 million people off of food stamps entirely or force him to cut benefits by nearly $2,000 per family per year:

Cuts in the Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp Program) would throw 13 million low-income people off the benefit rolls, cut benefits deeply — by over $1,800 a year for a family of four — or some combination of the two. These cuts would primarily affect poor families with children, seniors, and people with disabilities.

These deep cuts would be necessary because of the huge tax cuts Romney has proposed, alongside a promise to balance the budget. This estimate assumes that Romney would offset at least some of those tax cuts, even though he has yet to lay out a plan to do so. Thus, it’s entirely possible that even more would have to be cut if Romney were to keep his promise to balance the budget without offsetting his tax cuts.

As CBPP put it, “by 2022, if the budget had to be balanced while taxes were cut, the proposals would require cutting entitlement and discretionary programs other than Social Security and core defense by more than half. And if policymakers offset none (rather than half) of Romney’s tax cuts by reducing tax preferences, they would have to cut these programs by more than 70 percent.” Food stamps kept more than five million people out of poverty in 2010 and last year reduced the number of children living in extreme poverty by half.