It Keeps Coming Back to the Keating 5

At the Los Angeles Times, Rosa Brooks writes:

Keating 5 ring a bell?
^{McCain's past collides with the present Wall Street debacle.}

Once upon a time, a politician took campaign contributions and favors from a friendly constituent who happened to run a savings and loan association. The contributions were generous: They came to about $200,000 in today's dollars, and on top of that there were several free vacations for the politician and his family, along with private jet trips and other perks. The politician voted repeatedly against congressional efforts to tighten regulation of S&Ls, and in 1987, when he learned that his constituent's S&L was the target of a federal investigation, he met with regulators in an effort to get them to back off.

That politician was John McCain, and his generous friend was Charles Keating, head of Lincoln Savings & Loan. While he was courting McCain and other senators and urging them to oppose tougher regulation of S&Ls, Keating was also investing his depositors' federally insured savings in risky ventures. When those lost money, Keating tried to hide the losses from regulators by inducing his customers to switch from insured accounts to uninsured (and worthless) bonds issued by Lincoln's near-bankrupt parent company. In 1989, it went belly up -- and more than 20,000 Lincoln customers saw their savings vanish.
...

But the savings and loan crisis mushroomed. Eventually, the government spent about $125 billion in taxpayer dollars to bail out hundreds of failed S&Ls that, like Keating's, fell victim to a combination of private-sector greed and the "poor judgment" of politicians like McCain.

The $125 billion seems like small change compared to the $700-billion price tag for the Bush administration's proposed Wall Street bailout. But the root causes of both crises are the same: a lethal mix of deregulation and greed.

(no subject)

HERSHEY'S The Great American Something Bar???

Let Hershey know how you feel about their dropping cocoa butter from their "chocolate" products (I had to use air quotes - it's not chocolate without cocoa butter). I told them that I was extremely disappointed and wouldn't buy or eat another Hershey product until they reversed themselves on this.

CHOCOLATE THAT ISN’T

Friday, September 26, 2008
Posted by Jim Hightower

Listen to this Commentary

Be careful out there. The corporate powers are messing with us again.

Here comes Hershey, the iconic candy company that claims to be “committed to making the world’s best chocolate.” For example, such brands as Mr. Goodbar, Milk Duds, and Take Five brag right on the label that they’re “made with chocolate.” Only … they’re not.

Chocolate, as you probably know, is made of cocoa butter. It’s yummy stuff. But get out your magnifying glass to read the labels of the Hershey bars that claim to be “made with chocolate,” and you’ll find oils from palm kernels, soybeans, sunflower, and safflower listed – but no cocoa butter. None.

How can this be? Trying to find the logic of it will cause your brain to explode, but here is the essence of the deception. The Food and Drug Administration, which regulates candy contents, says flatly that cocoa butter is the required fat for chocolate. However – under pressure from most of the industry’s big players, the FDA allows the use of such tricky phrases as “made with chocolate,” “chocolately,” and “chocolate candy” to label products that actually have zero of the good stuff in them.

It is, in other words, a government-sanctioned consumer fraud. But the industry wants to deepen the fraud by getting FDA regulators to alter the very definition of chocolate so that it no longer mentions cocoa butter. It’d be like saying that wineries could eliminate grapes and still label their product “wine.” A spokesman for the big candy makers' lobbying group says that their attempt to pervert plain language is necessary in order to “modernize” FDA’s rules and “accommodate innovation.”

It's more like accommodating a blatant consumer rip-off. The good news is that independent chocolatiers and consumers are in rebellion against this sneaky push for non-chocolate chocolate. To learn what’s going on with your own favorite chocolates, check out www.candyblog.org.

“Chocolate Lovers Pained by Candy Changes,” www.abcnews.com, September 2, 2008.