Tilting at Windmills

Here is Robert Reich, ex-Secretary of Labor under Clinton making a call from the political left for people to take back control of their government from the corruption of money and power by corporations and the ultra-rich.



Sadly, it looks like the plutocrats have got things pretty well sewn up and only if there is real revolution with blood in the streets will the clock be turned back to a true republic. The US over the last few decades has passed over the Rubicon and like the age of Imperial Rome, there is a pretense of "republican" government, but the real control is in the hands of very few, very very rich people. There is no going back. There is only collapse and decay in America's future. I've given up any pretense of optimism. Dark days are ahead.

Selling Black is White, Up is Down

Here is a bit from a post by Robert Reich that nails the big lie that the political right in the US is selling to gullible electors:

Mitt Romney is casting the 2012 campaign as “free enterprise on trial” – defining free enterprise as achieving success through “hard work and risking-taking.” Tea-Party favorite Senator Jim DeMint of South Carolina says he’s supporting Romney because “we really need someone who understands how risk, taking risk … is the way we create jobs, create choices, expand freedom.” Chamber of Commerce President Tom Donahue, defending Romney, explains “this economy is about risk. If you don’t take risk, you can’t have success.”

Wait a minute. Who do they think are bearing the risks? Their blather about free enterprise risk-taking has it upside down. The higher you go in the economy, the easier it is to make money without taking any personal financial risk at all. The lower you go, the bigger the risks.

Wall Street has become the center of riskless free enterprise. Bankers risk other peoples’ money. If deals turn bad, they collect their fees in any event. The entire hedge-fund industry is designed to hedge bets so big investors can make money whether the price of assets they bet on rises or falls. And if the worst happens, the biggest bankers and investors now know they’ll be bailed out by taxpayers because they’re too big to fail.

But the worst examples of riskless free enteprise are the CEOs who rake in millions after they screw up royally.

Near the end of 2007, Charles Prince resigned as CEO of Citgroup after announcing the bank would need an additional $8 billion to $11 billion in write-downs related to sub-prime mortgages gone bad. Prince left with a princely $30 million in pension, stock awards, and stock options, along with an office, car, and a driver for five years.

Stanley O’Neal’s five-year tenure as CEO of Merrill Lynch ended about the same time, when it became clear Merrill would have to take tens of billions in write-downs on bad sub-prime mortgages and be bought up at a fire-sale price by Bank of America. O’Neal got a payout worth $162 million.

Philip Purcell, who left Morgan Stanley in 2005 after a shareholder revolt against him, took away $43.9 million plus $250,000 a year for life.

...

But as economic risk-taking has declined at the top, it’s been increasing at the middle and below. More than 20 percent of the American workforce is now “contingent” – temporary workers, contractors, independent consultants – with no security at all.

Even full-time workers who have put in decades with a company can now find themselves without a job overnight – with no parachute, no help finding another job, and no health insurance.

Meanwhile the proportion of large and medium-sized companies (200 or more workers) offering full health care coverage continues to drop – from 74 percent in 1980 to under 10 percent today. Twenty-five years ago, two-thirds of large and medium-sized employers also provided health insurance to their retirees. Now, fewer than 15 percent do.

The risk of getting old with no pension is also rising. In 1980, more than 80 percent of large and medium-sized firms gave their workers “defined-benefit” pensions that guaranteed a fixed amount of money every month after they retired. Now it’s down to under 10 percent. Instead, they offer “defined contribution” plans where the risk is on the workers. When the stock market tanks, as it did in 2008, the 401(k) plan tanks along with it. Today, a third of all workers with defined-benefit plans contribute nothing, which means their employers don’t either.

And the risk of losing earnings continues to grow. Even before the crash of 2008, the Panel Study of Income Dynamics at University of Michigan found that over any given two-year stretch about half of all families experienced some decline in income. And the downturns were becoming progressively larger. In the 1970s, the typical drop was about 25 percent. By late 1990s, it was 40 percent. By the mid-2000s, family incomes rose and fell twice as much as they did in the mid-1970s, on average.

What Romney and the cheerleaders of risk-taking free enterprise don’t want you to know is the risks of the economy have been shifting steadily away from CEOs and Wall Street – and on to average working people. It’s not just income and wealth that are surging to the top. Economic security is moving there as well, leaving the rest of us stranded.

Go read the whole post.

Pundits like to push the idea that "you get the government you deserve". But the reality is that the average voter doesn't have the time or resources to follow the political fluff thrown at him and sort the wheat from the chaff. When a corrupt political party like the Republicans in the US (and to a lesser degree the Democrats) deliberately sell a false message, it is very hard for the average person to uncover the truth.

The "Complexities" of American Law

With the full unveiling of the concept of corporations are "people" (as Mitt Romney happily repeats on the presidential nomination trail), the Citizens United case settled by the Supreme Court has demonstrated the wondefully "complex" nature of American law.

Here is a bit from a post by UC Berkeley economist Brad DeLong expatiating on the subtleties:

Justinian: How does this Fourteenth Amendment read?

Edward Coke: Like this:

Section. 1. All persons born or naturalized in the United States and subject to the jurisdiction thereof, are citizens.... No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

Section. 2. Representatives shall be apportioned... counting the whole number of persons in each State....

Justinian: So if you have more corporations in your state, you get more representatives in the legislature?

John of Salisbury: No, no, no! "Persons" in Section 2 refers only to human beings...

Edward Coke: And "persons" at the start of Section 1 refers only to human beings...

John of Salisbury: Only "persons" at the end of Section 1 refers to legal persons, i.e. corporations, as well as human beings...

If the US were consistent in its "law" then there would be a rush by the ultra-rich to incorporate all kinds of "companies", millions of companies, so that at the next election the ballot boxes could be happily stuffed with all kinds of votes from the corporate "persons" acting under the full weight of the law as laid down by the Fourteenth Amendment. If ever the poor organized themselves, it would simply require a renewed effort to incorporate some one "instant corporations" to help the "people" of America to keep the 99% in their place. Because... as the Supreme Court has affirmed, corporations are "people" too!

Politics in the "Land of the Free (to be Bought & Sold)"

America loves to thump its chest about its "democracy". But the facts say something else. Here is a bit from an article by Matt Taibbi in Rolling Stone magazine:

But the ugly reality, as Dylan Ratigan continually points out, is that the candidate who raises the most money wins an astonishing 94% of the time in America.

That damning statistic just confirms what everyone who spends any time on the campaign trail knows, which is that the presidential race is not at all about ideas, but entirely about raising money.

The auctioned election process is designed to reduce the field to two candidates who will each receive hundreds of millions of dollars apiece from the same pool of donors. Just take a look at the lists of top donors for Obama and McCain from the last election in 2008.

Obama’s top 20 list included:

Goldman Sachs ($1,013,091)
JPMorgan Chase & Co ($808,799)
Citigroup Inc ($736,771)
WilmerHale LLP ($550,668)
Skadden, Arps et al ($543,539)
UBS AG ($532,674), and...
Morgan Stanley ($512,232).

McCain’s list, meanwhile, included (drum roll please):

JPMorgan Chase & Co ($343,505)
Citigroup Inc ($338,202)
Morgan Stanley ($271,902)
Goldman Sachs ($240,295)
UBS AG ($187,493)
Gibson, Dunn & Crutcher ($160,346)
Greenberg Traurig LLP ($147,437), and...
Lehman Brothers ($126,557).

Obama’s list included all the major banks and bailout recipients, plus a smattering of high-dollar defense lawyers from firms like WilmerHale and Skadden Arps who make their money representing those same banks. McCain’s list included exactly the same banks and a similar list of law firms, the minor difference being that it was Gibson Dunn instead of WilmerHale, etc.

The numbers show remarkable consistency, as Chase, Morgan Stanley, and Citigroup all gave roughly twice or just over twice as much to Obama as they did to McCain, almost perfectly matching the overall donations profile for both candidates: overall, Obama raised just over twice as much ($730 million) as McCain did ($333 million).

Those numbers tell us that both parties rely upon the same core of major donors among the top law firms, the Wall Street companies, and business leaders – basically, the 1%. Those one-percenters always give generously to both parties and both presidential candidates, although they sometimes will hedge their bets significantly when they think one side or the other has a lopsided chance at victory. That’s clearly what happened in 2008, when Wall Street correctly called Obama as a 2-1 (or maybe a 7-3) favorite to beat McCain.

The 1% donors are remarkably tolerant. They’ll give to just about anyone who polls well, provided they fall within certain parameters. What they won’t do is give to anyone who is even a remote threat to make significant structural changes, i.e. a Dennis Kucinich, an Elizabeth Warren, or a Ron Paul (hell will freeze over before Wall Street gives heavily to a candidate in favor of abolishing their piggy bank, the Fed). So basically what that means is that voters are free to choose anyone they want, provided it isn’t Dennis Kucinich, or Ron Paul, or some other such unacceptable personage.

Go read the original to get the whole story and the links to follow up.

When will the American public wake up to the charade that passes for "democracy" where the rich have bought and sold the whole process and only let the "little people" play bit roles before they are shuffled aside to let the big boys milk the system for what they want.

The whole process is so predictable that Taibbi can already read the presidential election results ten months before the election is held:

Most likely, it’ll be Mitt Romney versus Barack Obama, meaning the voters’ choices in the midst of a massive global economic crisis brought on in large part by corruption in the financial services industry will be a private equity parasite who has been a lifelong champion of the Gordon Gekko Greed-is-Good ethos (Romney), versus a paper progressive who in 2008 took, by himself, more money from Wall Street than any two previous presidential candidates, and in the four years since has showered Wall Street with bailouts while failing to push even one successful corruption prosecution (Obama).

When the "voice of the people" can be ignored because the rich have already bought the result, that isn't "democracy". That is plutocracy.

DeLong on the Financial Sickness in America

The financial "industry" is a bloated, corrupt section of the economy that grows at the expense of everything else. Here is a bit from UC Berkeley economist Brad DeLong on the Project Syndicate blog:

In 1950, finance and insurance in the United States accounted for 2.8% of GDP, according to US Department of Commerce estimates. By 1960, that share had grown to 3.8% of GDP, and reached 6% of GDP in 1990. Today, it is 8.4% of GDP, and it is not shrinking. The Wall Street Journal’s Justin Lahart reports that the 2010 share was higher than the previous peak share in 2006.

...

But if the US were getting good value from the extra 5.6% of GDP that it is now spending on finance and insurance – the extra $750 billion diverted annually from paying people who make directly useful goods and provide directly useful services – it would be obvious in the statistics. At a typical 5% annual real interest rate for risky cash flows, diverting that large a share of resources away from goods and services directly useful this year is a good bargain only if it boosts overall annual economic growth by 0.3% – or 6% per 25-year generation.

There have been many shocks to the US economy over the past couple of generations, and many factors have added to or subtracted from economic growth. But it is not obvious that the US economy today would be 6% less productive if it had had the finance-insurance system of 1950 rather than the one that prevailed during the past 20 years.

There are five ways that an economy gains from a well-functioning finance-insurance system. First, people are no longer as vulnerable to the effects of fires, floods, medical disasters, unemployment, business collapses, sectoral shifts, and so forth, because a well-working finance-insurance system diversifies and thus dissipates some risks, and deals with others by matching those who fear risk with those who can comfortably bear it. While it might be true that America’s current finance-insurance system better distributes risk in some sense, it is hard to see how that could be the case, given the experience of investors in equities and housing over the past two decades.

Second, well-functioning financial systems match large, illiquid investment projects with the relatively small pools of money contributed by individual savers who value liquidity highly. There has been one important innovation over the past two generations: businesses can now issue high-yield bonds. But, given the costs of the bankruptcy process, it has never been clear why a business would rather issue high-yield bonds (besides gaming the tax system), or why investors would rather buy them than take an equity stake.

Third, improved opportunities to borrow allow one to spend more now, when one is poor, and save more later, when one is rich. Households are certainly much more able to borrow, thanks to home-equity loans, credit-card balances, and payday loans. But what are they really buying? Many are not buying the ability to spend when they are poor and save when they are rich, but instead appear to be buying postponement of the “unpleasant financial retrenchment” talk with the other members of their household. And that is not something you want to buy.

Fourth, we have seen major improvements in the ease of transactions. But, while electronic transactions have made a great deal of financial life much easier, this should have been accompanied by a decrease, not an increase, in the finance share of GDP, just as automated switching in telecommunications led to a decrease in the number of telephone switchboard operators per phone call. Indeed, the operations of those parts of the financial system most closely related to technological improvements have slimmed down markedly: consider what has happened to the checking operations of the regional Federal Reserve Banks.

Finally, better finance should mean better corporate governance. Since shareholder democracy does not provide effective control over entrenched, runaway, self-indulgent management, finance has a potentially powerful role to play in ensuring that corporate managers work in the interest of shareholders. And a substantial change has indeed occurred over the past two generations: CEOs focus much more attention than they used to on pleasing the stock market, and this is likely to be a good thing.

Overall, however, it remains disturbing that we do not see the obvious large benefits, at either the micro or macro level, in the US economy’s efficiency that would justify spending an extra 5.6% of GDP every year on finance and insurance. Lahart cites the conclusion of New York University’s Thomas Philippon that today’s US financial sector is outsized by two percentage points of GDP. And it is very possible that Philippon’s estimate of the size of the US financial sector’s hypertrophy is too small.

Why has the devotion of a great deal of skill and enterprise to finance and insurance sector not paid obvious economic dividends? There are two sustainable ways to make money in finance: find people with risks that need to be carried and match them with people with unused risk-bearing capacity, or find people with such risks and match them with people who are clueless but who have money. Are we sure that most of the growth in finance stems from a rising share of financial professionals who undertake the former rather than the latter?

This is a pretty astounding indictment of the sleaze, corruption, and fraud in America's financial industry that has let it grow huge despite providing no real benefits to justify its larger share of national GDP.

Sadly, no govenment has taken on this issue and tried to cut the financial industry down to size to make it more economically efficient. Exactly the opposite has occurred. Over the last 30 years great laudatory sermons have been given about "enterprise" and "unleashing business from regulation" when in fact this has proven to be catchwords for turning a blind eye to corruption and crime on an unimaginable scale. The American people have been hoodwinked and lied to and nobody has yet been held accountable because the rich and powerful have bought off the politiians.

How to Know That Your Government is Rotten

Here is a bit from a Washington Post article that points out that while the "representatives" of the people have gotten fabulously wealthy over the last 25 years, the common people are either treading water or slowly sinking:

Between 1984 and 2009, the median net worth of a member of the House more than doubled, according to the analysis of financial disclosures, from $280,000 to $725,000 in inflation-adjusted 2009 dollars, excluding home ­equity.

Over the same period, the wealth of an American family has declined slightly, with the comparable median figure sliding from $20,600 to $20,500, according to the Panel Study of Income Dynamics from the University of Michigan.

The comparisons exclude home equity because it is not included in congressional reporting, and 1984 was chosen because it is the earliest year for which consistent wealth statistics are available.

The growing disparity between the representatives and the represented means that there is a greater distance between the economic experience of Americans and those of lawmakers.

...

The growing financial comfort of Congress relative to most Americans is consistent with the general trends in the United States toward inequality of wealth: Members of Congress have long been wealthier than average Americans, and in recent decades the wealth of the wealthiest Americans has outpaced that of the average.

In 1984, the 90th percentile of U.S. families had holdings worth six times the median family’s; by 2009, the 90th percentile was worth 12 times the median family, according to the University of Michigan study, a longitudinal panel survey. These figures include home equity.

This growing inequality, not surprisingly, is seen in Congress. Not only has the median wealth increased, but the proportion of representatives who have little besides a home has shrunk. In 1984, one in five House members had zero or negative net worth excluding home equity, according to the disclosures; by 2009, that number had dropped to one in 12.

When the guardians of the government are stuffing their pockets with money while the people are slowly sinking, things are rotten. There is corruption and incompetence in government.

The Republicans loved to say that "government is the problem, not the solution". That's got it wrong. The problem is that the government politicians are the problem, not the solution. These "elected representatives" have been using their power to feed at the trough of government, taking money from lobbyists, selling their votes, all while they have been telling the ordinary citizens that the problem is "big government", not crooked, greedy politicians.

Rather than pass laws to help their constituents. These pigs have been feasting off tax money while blaming "big government" for everything. They are hypocrites, crooks, and liars. And they and their buddies, the elite 1% are doing this at the expense of the bottom 99%.

Note: From this same article. Here is how the rich view themselves as deserving their wealth. This is what a guy who married into the Phillips petroleum empire says of how "hard work" will make you a billionaire:

In 1973, Kelly married Victoria Phillips, an heir to the oil fortune. Kelly’s financial disclosure forms show that among her holdings is stock in Phillips Resources Inc., which is valued at between $5 million and $25 million and which generated more than $100,000 annually in dividends.

Four years out of college in 1974, Mike and Victoria were able to buy a home for $50,000, roughly twice the median value of homes in Pennsylvania at the time, a large, stately house close to downtown.

In 1997, Kelly bought his dad’s business from him, taking out a $1.6 million mortgage to pay for it.

When discussing his wealth and how it came to him, Kelly, who was called “Millionaire Mike” during the 2010 campaign, grows animated.

“The way my dad taught me was pretty basic: You have to kill more than you eat. You gotta wake up every day before anyone else, you better get to work, and you better stay later than everybody else,” he said. “I’m a rich guy because I’ve worked hard. I gotta work every fricking day. Listen, nobody gives it to you. I compete. I’m not the only guy selling hot dogs at the ballpark, okay?”

I don't doubt he worked hard. But tens of millions of people work hard, real hard. A lot of poor people hold down two jobs at minimum wage working incredibly hard. But they don't "build up" car dealerships. This guy Mike Kelly, a Republican, worked hard. I don't doubt it. But he didn't get fabulously wealthy from working hard. His dad owned a car dealership and he bought out his father (probably at a steeply discounted price) and he married an heiress to a fortune. I bet a lot of janitors would me multi-millionaires if their fathers owned car dealerships and they married heiresses. And I bet they would be millionaires if they only put in an "average day" at work. It wasn't the hard work that made Mike Kelly rich. It was his education, his connections, his charm, probably his "flexible" ethics, and certainly some good old fashioned hard work.

America's Love Affair with the Rich

Here is an excellent post by Joshua M. Brown on his blog The Reformed Broker. I've bolded some key bits:

Dear Jamie Dimon,

I hope this note finds you well.

I am writing to profess my utter disbelief at how little you seem to understand the current mood of the nation. In a story at Bloomberg today, you and a handful of fellow banker and billionaire "job creators" were quoted as believing that the horrific sentiment directed toward you from virtually all corners of America had something to do with how much money you had. I'd like to take a moment to disabuse you of this foolishness.

America is different than almost every other place on earth in that its citizenry reveres the wealthy and we are raised to believe that we can all one day join the ranks of the rich. The lack of a caste system or visible rungs of society's ladder is what separates our empire from so many fallen empires throughout history. In a nation bereft of royalty by virtue of its republican birth, the American people have done what any other resourceful people would do - we've created our own royalty and our royalty is the 1%. Not only do we not "hate the rich" as you and other em-bubbled plutocrats have postulated, in point of fact, we love them. We worship our rich to the point of obsession. The highest-rated television shows uniformly feature the unimaginably fabulous families of celebrities not to mention the housewives (real or otherwise) of the rich. We don't care what color they are or what religion they practice or where in the country they live or what channel their show is on - if they're rich, we are watching.

When Derek Jeter was toyed with by the New York Yankees when it came time for him to renew his next hundred million dollar contract, the people empathized with Derek Jeter. Sure, this disagreement essentially took place between one of the wealthiest organizations in the country and one of the wealthiest private citizens - but we rooted for Jeter to get his money. Nobody begrudged him a penny of it or wanted a piece of it or decried the fact that he was luckier than the rest of us. In the American psyche, Jeter was one of the good guys who was deservedly successful. He was one of us and an example of hard work paying off.

Likewise, when Steve Jobs died, he did so with more money than you or any of your "job alliance" buddies - ten times more than most of you, in fact. And upon his death the entire nation went into mourning. We set up makeshift shrines to his brilliance in front of Apple stores from coast to coast. His biography flew off the shelves and people bought Apple products and stock shares in his honor and in his memory. Does that strike you as the action of a populace that hates success?

No, Jamie, it is not that Americans hate successful people or the wealthy. In fact, it is just the opposite. We love the success stories in our midst and it is a distinctly American trait to believe that we can all follow in the footsteps of the elite, even though so few of us ever actually do.

So, no, we don't hate the rich. What we hate are the predators.

What we hate are the people who we view as having found their success as a consequence of the damage their activities have done to our country. What we hate are those who take and give nothing back in the form of innovation, convenience, entertainment or scientific progress. We hate those who've exploited political relationships and stupidity to rake in even more of the nation's wealth while simultaneously driving the potential for success further away from the grasp of everyone else.

Here in New York, we hated watching real estate and financial services elitists drive up the prices of everything from affordable apartments to martinis in midtown with the reckless speculation that would eventually lead to mass layoffs, rampant joblessness and the wreckage of so many retirement dreams. No one ever asked the rest of us if we minded, it just happened. I'm sure people across the country can tell similar stories.

So please, do us all a favor and come to the realization that the loathing you feel from your fellow Americans has nothing to do with your "success" or your "wealth" and it has everything to do with the fact that your wealth and success have come at a cost to the rest of us. No one wants your money or opportunities, what they want is the same chance that their parents had to attain these things for themselves. You are viewed, and rightfully so, as part of the machine that has removed this chance for many - and that is what they hate.

America hates unjustified privilege, it hates an unfair playing field and crony capitalism without the threat of bankruptcy, it hates privatized gains and socialized losses, it hates rule changes that benefit the few at the expense of the many and it hates people who have been bailed out and don't display even the slightest bit of remorse or humbleness in the presence of so much suffering in the aftermath.

Nobody hates your right to make money, Jamie. They hate how you and certain others have made it.

Don't be confused on this score for a moment longer.

If only the American people really took the sentiments of this post to heart. They could break the chains of financial and political abuse they have been under for 30+ years of the "Reagan Revolution".

Corruption in High Places

Here is a bit from a post by Matt Taibbi in his Rolling Stone blog:

Obama and Geithner: Government, Enron-Style

Strongly recommend this piece at the Huffington Post by Jeff Connaughton, a former aide to Senator Ted Kaufman. Jeff is one of the smartest guys on the Hill and is particularly strong on issues surrounding Wall Street and the regulatory system. In this piece, he takes apart the oft-stated mantra that what Wall Street firms did during and after the crisis was maybe unethical, but not illegal.

He takes particular aim at Barack Obama, who recently tossed that line out on 60 Minutes in what I thought was one of the real low moments of his presidency. Here’s Jeff’s take:

Speaking in Kansas on December 6, [Obama] said, "Too often, we've seen Wall Street firms violating major anti-fraud laws because the penalties are too weak and there's no price for being a repeat offender." Just five days later on 60 Minutes, he said, "Some of the least ethical behavior on Wall Street wasn't illegal." Which is it? Have there been no prosecutions because Wall Street acted legally (albeit unethically)? Or did Wall Street repeatedly violate major anti-fraud laws (and should thus find itself in the dock)?

The President is confusing "legal" with "difficult to prosecute successfully."

The notion that what Wall Street firms did was merely unethical and not illegal is not just mistaken but preposterous: most everyone who works in the financial services industry understands that fraud right now is not just pervasive but epidemic, with many of the biggest banks committing entire departments to the routine commission of fraud and perjury – every single one of the major banks, for instance, devotes significant manpower to robosigning affidavits for foreclosures and credit card judgments, acts which are openly and inarguably criminal.

Banks and hedge funds routinely withhold derogatory information about the instruments they sell, they routinely trade on insider information or ahead of their own clients’ orders, and corrupt accounting is so rampant now that industry analysts have begun to figure in estimated levels of fraud in their examinations of the public disclosures of major financial companies.

Beyond that, as Jeff points out, Obama is simply not telling the truth about the supposedly insufficient penalties available to regulators. Employing the famous "mistakes were made" use of the passive tense, Obama copped out in his December 6 speech by saying that “penalties are too weak." As Jeff points out, what Obama should have said is that "the penalties my own regulators chose to dish out were too weak":

Moreover, the President is misleading us when he says that Wall Street firms violate anti-fraud law because the penalties are too weak. Repeat financial fraudsters don't pay relatively paltry -- and therefore painless -- penalties because of statutory caps on such penalties. Rather, regulatory officials, appointed by Obama, negotiated these comparatively trifling fines. This week, the F.D.I.C. settled a suit against Washington Mutual officials for just $64 million, an amount that will be covered mostly by insurance policies WaMu took out on behalf of executives, who themselves will pay just $400,000. And recently a federal judge rejected the S.E.C.'s latest settlement with Citigroup, an action even the Wall Street Journal called "a rebuke of the cozy relationship between regulators and the regulated that too often leaves justice as an orphan."

What makes Obama’s statements so dangerous is that they suggest an ongoing strategy of covering up the Wall Street crimewave. There is ample evidence out there that the Obama administration has eased up on prosecutions of Wall Street as part of a conscious strategy to prevent a collapse of confidence in our financial system, with the expected 50-state foreclosure settlement being the landmark effort in the cover-up, intended mainly to bury a generation of fraud. Here’s how Jeff puts it:

In Ron Suskind's book, Confidence Men, he quotes Treasury Secretary Timothy Geithner as saying, "The confidence in the system is so fragile still... a disclosure of a fraud... could result in a run, just like Lehman." The Obama Administration is pushing hard for a 50-state settlement with the major banks for their fraudulent foreclosure practices, even though several state attorneys general have rejected this approach because, in their view, it would shield too much wrongdoing. Regrettably, Obama's top officials and lawyers seem more eager to restore the financial sector to health than establish criminal accountability among the executives who were in charge.

In other words, Geithner and Obama are behaving like Lehman executives before the crash of Lehman, not disclosing the full extent of the internal problem in order to keep investors from fleeing and creditors from calling in their chits. It’s worth noting that this kind of behavior – knowingly hiding the derogatory truth from the outside world in order to prevent a run on the bank – is, itself, fraud!

This is exactly the mindset that led Lehman to the abuses of the "Repo 105" accounting trick, in which loans were disguised as revenues in order to prevent the outside world from knowing the dire state of the bank’s balance sheet.

Now Obama and Geithner are engaged in the same sort of activity, only they’re trying to prevent a run not on an individual bank, but the entire American financial services sector. Geithner seems really to believe that if fraud were aggressively policed, and the world made aware of the incredible extent of the illegality in our markets, that international confidence in the American financial sector would plummet and our economy would suffer – and suffer, incidentally, on Barack Obama’s watch.

I was a big fan of Obama in 2008. I had read his books and followed the campaign. I was sucked into deeply believing in his "change you can believe in" and "hope" themes. I'm especially bitter by how he has proven himself to be a liar. He stole the vote because he knowingly promised one thing and did another. He is better than the Republican idiot, but Obama is an abomination and doesn't deserve the presidency. But, sadly, people better vote for him rather than the horse pucky that the Republicans will nominate.

It is criminal that the US political system throws up such crappy candidates... and allows them to lie their into power. There is no "representative" democracy if voters have to take a pig in a poke.

Egypt in the Throes of Another Revolution

To defeat cruel leaders and a country with a tiny elite is very hard. You can kill the monster who officially runs things, but quickly a new monster grabs the reins of power and re-imposes the cruel regime. That is exactly what is happening in Egypt.

Here is a bit from an excellent article by Ahdaf Soueif in the UK's Guardian newspaper:

Since Friday the military has openly engaged with civilian protesters in the heart of the capital. The protesters have been peacefully conducting a sit-in in Ministries' Street to signal their rejection of the military's appointment of Kamal Ganzouri as prime minister.

Ganzouri announced that no violence would be used to break up the Cabinet Office sit-in. Moments later the military took on the protesters. For a week Military Police and paratroopers had kidnapped activists from the streets, driven them off in unmarked vehicles, interrogated them and beaten them. On Friday they kidnapped Aboudi – one of the "Ultras" of the Ahli Football Club. They gave him back with his face so beaten and burned that you couldn't see features – and started the street war that's been raging round Ministries' Street for the last three days.

The protesters have thrown rocks at the military. The military has shot protesters, and thrown rocks, Molotov cocktails, china embossed with official parliament insignia, chairs, cupboards, filing-cabinets, glass panes and fireworks. They've dragged people into parliament and into the Cabinet Office and beaten and electrocuted them – my two nieces were beaten like this.

They beat up a newly elected young member of parliament, jeering: "Let parliament protect you, you son of … ". They took a distinguished older lady who's become known for giving food to the protesters and slapped her repeatedly about the face till she had to beg and apologise. They killed 10 people, injured more than 200, and they dragged the unconscious young woman in the blue jeans – with her upper half stripped – through the streets.

The message is: everything you rose up against is here, is worse. Don't put your hopes in the revolution or parliament. We are the regime and we're back.

How to Buy and Election

Here is a bit from an article in Salon.com on the source of campaign finance money in the US:

The hidden infrastructure of the 2012 campaign has already been built.

A handful of so-called Super PACs, enabled to collect unlimited donations by the continued erosion of campaign finance regulations, are expected to rival the official campaign organizations in importance this election. In many cases, these groups are acting essentially as outside arms of the campaigns.

These are America’s best-funded political factions, their war chests filled by some of the richest men (and almost all are men) in the country.

More than 80 percent of giving to Super PACs so far has come from just 58 donors, according to the Center for Responsive Politics analysis of the latest data, which covers the first half of 2011. The Republican groups have raised $17.6 million and the Democratic groups $7.6 million. Those numbers will balloon, with American Crossroads, the main Republican Super PAC, aiming to raise $240 million.)

If you want the names named, go read the whole article.

The US is sliding into "banana republic" status because the politics and the judicial branch have been bought off with the idea that "corporations are people" with "rights" to "speech". The joke is that corporations have no limit on their donations, but real breathing humans do have a limit. And of course, the Supreme Court has decided that the ultra-rich can set up Super-Pacs to allow them to use big dollar amounts to skew elections to favour the ultra-rich.

Politics in America

The US is one of the few countries in the world where legal fictions have the rights of citizens and human being have "rights" only insofar they they don't try to exercise them. It is an Alice In Wonderland country.

Here is Robert Reich:

A funny thing happened to the First Amendment on its way to the public forum. According to the Supreme Court, money is now speech and corporations are now people. But when real people without money assemble to express their dissatisfaction with the political consequences of this, they’re treated as public nuisances and evicted.

First things first. The Supreme Court’s rulings that money is speech and corporations are people have now opened the floodgates to unlimited (and often secret) political contributions from millionaires and billionaires. Consider the Koch brothers (worth $25 billion each), who are bankrolling the Tea Party and already running millions of dollars worth of ads against Democrats.

Such millionaires and billionaires aren’t contributing their money out of sheer love of country. They have a more self-interested motive. Their political spending is analogous to their other investments. Mostly they want low tax rates and friendly regulations.

Wall Street is punishing Democrats for enacting the Dodd-Frank financial reform legislation (weak as it is) by shifting its money to Republicans. The Koch brothers’ petrochemical empire has financed, among many other things, candidates who will vote against environmental protection.

This tsunami of big money into politics is the real public nuisance. It’s making it almost impossible for the voices of average Americans to be heard because most of us don’t have the dough to break through. By granting First Amendment rights to money and corporations, the First Amendment rights of the rest of us are being trampled on.

This is where the Occupiers come in. If there’s a core message to the Occupier movement it’s that the increasing concentration of income and wealth poses a grave danger to our democracy.

Yet when Occupiers seek to make their voices heard — in one of the few ways average people can still be heard — they’re told their First Amendment rights are limited.

The New York State Court of Appeals along with many mayors and other officials say Occupiers can picket — but they can’t encamp. Yet it’s the encampments themselves that have drawn media attention (along with the police efforts to remove them).

A bunch of people carrying pickets isn’t news. When it comes to making views known, picketing is no competition for big money .

Yet if Occupiers now shift tactics from passive resistance to violence, it would spell the end of the movement. The vast American middle class that now empathizes with the Occupiers would promptly desert them.

I may be wrong, but if you refuse to give political rights to people, then they will organize and seize those rights by bloody revolution. The words of Thomas Jefferson are prophetic: The tree of liberty must from time to time be refreshed with the blood of patriots and tyrants. It is its natural manure.

William Black Addresses Occupy LA

This is well worth listening very carefully to:



The tragedy is that Obama had the chance to take office and clean up the corruption. But he didn't. He allowed the Bush admin to walk away scott free. He has allowed fraudulent corporations to avoid justice. These crimes are behind the growing inequality in the US.

Reclaiming America

Here is Lawrence Lessig on a new coalition to educate Americans about the corrupting influence of big money in politics and their society:

Lawrence Lessig Welcomes Rootstrikers to United Republic from Rootstrikers on Vimeo.

More details at unitedrepublic.org.

The Numbed Electorate

Here is a nice insight by Robert Reich into 2012's presidential election. He expects it to be a mind-numblingly dull experience:

... paradoxically the presidential race that officially begins a few months from now is likely to be as passionless as they come.

President Obama will be supported by progressives and the Democratic base, but without enthusiasm. His notorious caves to Republicans and Wall Street — failing to put conditions on the Street’s bailout (such as demanding the Street help stranded home owners), or to resurrect Glass-Steagall, or include a public option in health care, or assert his constitutional responsibility to raise the debt limit, or protect Medicare and Social Security, or push for cap-and-trade, or close Guantanamo, or, in general, confront the regressive Republican nay-sayers and do-nothings with toughness rather than begin negotiations by giving them much of what they want — are not the stuff that stirs a passionate following.

Mitt Romney will surely be the Republican presidential candidate — and Romney inspires as little enthusiasm among Republicans as Obama does among Democrats. The GOP will support Romney because, frankly, he’s the only major Republican primary candidate who does not appear to the broader public to be nuts.

But Republicans don’t like Romney. His glib, self-serving, say-whatever-it-takes-to-win-the primaries approach strikes almost everyone as contrived and cynical. Moreover, Romney is the establishment personified — a pump-and-dump takeover financier, for crying out loud — at the very time the GOP (and much of the rest of the country) are becoming more anti-establishment by the day.

At this point neither the Republican right nor the mainstream media wants to admit the yawn-inducing truth that Mitt will be the GOP’s candidate. The right doesn’t want to admit it because it will be seen as a repudiation of the Tea Party. The media doesn’t want to because they’d prefer to sell newspapers and attract eyeballs.

The media are keeping the story of Rick Perry’s cringe-inducing implosion going for the same reason they’re keeping the story of Herman Cain’s equally painful decline going — because the public is forever fascinated by the gruesome sight of dying candidacies. With Bachmann, Perry, and Cain gone or disintegrating, the right wing-nuts of the GOP have only one hope left: Newt Gingrich. His star will rise briefly before he, too, is pilloried for the bizarre things he’s uttered in the past and for his equally bizarre private life. His fall will be equally sudden (although I don’t think Gingrich is capable of embarrassment).

And so we’ll be left with two presidential candidates who don’t inspire — at the very time in American history when Americans crave inspiration.

Instead of a big debate about the basics (how to truly restore jobs and wages, financial capitalism versus product capitalism, the place and role of America in the world, how to rescue our democracy), we’re likely to have a superficial debate over symbols (the budget deficit, the size of government, whether we need a “businessman” at the helm).

This means political passions are likely to move elsewhere — finding their voices in grass-roots movements, social media, demonstrations, boycotts, and meet-ups — on the Main Streets and in the backwaters, and only episodically in the mainstream media or in normal election-year events.

In some ways this may not be such a bad thing. The regressive right has had thirty years to build itself into a political power. Newly-energized progressives (Occupiers and others) need enough time to develop concrete proposals and strategies. What’s the rush? If polls are to be believed, most of the nation is progressive, not regressive (witness last Tuesday’s results in Wisconsin and elsewhere). So it is, after all, only a matter of time.

Yet viewed another way, a passionless presidential race may be dangerous for America. The nation’s problems may not wait. They require bold action, and soon.

I'm willing to believe the scenario that Reich is laying out. The tragedy of US politics is that all of the politicians, left and right, is corrupt and "owned" by the top 0.01%. What is the point in taking "politics" seriously if there is no connection between what the candidate says and what the candidate does. Right now, the real agenda of the politicians is that one dictated by the ultra-rich. They promise wonderful things as candidate, but don't deliver becaus they are bought-and-sold by the rich who dictate their votes.

Matt Taibbi Sees a Glimmer of Hope

In his Rolling Stone blog, Matt Taibbi sees the first sign that the judicial system is standing up to the corrupt banks and the collusion of the Obama administration with corruption on a monumental scale:

Federal judge Jed Rakoff, a former prosecutor with the U.S. Attorney’s office here in New York, is fast becoming a sort of legal hero of our time. He showed that again yesterday when he shat all over the SEC’s latest dirty settlement with serial fraud offender Citigroup, refusing to let the captured regulatory agency sweep yet another case of high-level criminal malfeasance under the rug.

The SEC had brought an action against Citigroup for misleading investors about the way a certain package of mortgage-backed assets had been chosen. The case is very similar to the notorious Abacus case involving Goldman Sachs, in which Goldman allowed short-selling billionaire John Paulson (who was betting against the package) to pick the assets, then told a pair of European banks that the “designed to fail” package they were buying had been put together independently.

This case was similar, but worse. Here, Citi similarly told investors a package of mortgages had been chosen independently, when in fact Citi itself had chosen the stuff and was betting against the whole pile.

This whole transaction actually combined a number of Goldman-style misdeeds, since the bank both lied to investors and also bet against its own product and its own customers. In the deal, Citi made a $160 million profit, while its customers lost $700 million.

Goldman, in the Abacus case, got fined $550 million. In this worse case, the SEC was trying to settle with Citi for just $285 million. Judge Rakoff balked at the settlement and particularly balked at the SEC’s decision to allow Citi off without any admission of wrongdoing. He also mocked the SEC’s decision to describe the crime as “negligence” instead of intentional fraud, taking the entirely rational position that there’s no way a bank making $160 million ripping off its customers can conceivably be described as an accident.

“Why should the court impose a judgment in a case in which the SEC alleges a serious securities fraud but the defendant neither admits nor denies wrongdoing?” And this: “How can a securities fraud of this nature and magnitude be the result simply of negligence?”

Rakoff of course is right – the settlement is nuts. If you take Citi’s $160 million profit on the deal into consideration, what we’re talking about then is a $125 million fine for causing $700 million in damages. That, and no admission of wrongdoing.

...

So to recap: a unit of Citigroup, having repeatedly violated the same laws and having repeatedly violated the SEC’s own cease-and-desist orders and injunctions, is dragged into court one more time for committing a massive fraud.

And what does the SEC do? It doesn’t even bring up Citi’s history of ignoring the SEC’s own order, slaps the bank with a fractional fine, refuses to target any individuals, allows the bank to walk away without an admission of wrongdoing, and puts a cherry on the top by describing the $160 million heist not as a crime, but as unintentional negligence.

There is a lot more in Taibbi's post. Go read the whole thing.

I sure hope Matt Taibbi is right and that this is the dawning of a new day, a better day for America. But I'm pretty pessimistic given the craven political position of the Republicans as the party of the 0.01%, the Obama administration as a handmaiden to crime and corruption, and the spineless behaviour of the Democrats. It is nice to hope that 1 out or 3 branches of government is recovering its senses and will put up a fight to protect the bottom 99%, but it is way to early to believe in real change and 1 out of 3 is still a losing position!

... and here is Matt Taibbi in a different post on his Rolling Stone blog taking on the corrupt politics that is so intent on shoveling big bucks to the fraudsters and criminals while squeezing the life blood out of the bottom 99%:

David Brooks, the [gratuitous insult deleted], wrote this this morning entitled "Mitt Romney, the Serious One." In it, he explained how Romney’s recent decision to unveil a plan for reforming the entitlement system "demonstrates his awareness of the issues that need to define the 2012 presidential election."

Romney grasped the toughest issue – how to reform entitlements to avoid a fiscal catastrophe – and he sketched out a sophisticated way to address it.

So we had a giant financial crash in 2008 that necessitated a bailout costing a minimum of nearly $5 trillion and perhaps ultimately costing $10 trillion more, we have foreclosure crisis with more than million people a year losing their homes, and we have a burgeoning European debt disaster that threatens to devastate the global financial system – and the chief issue facing the country, according to Brooks and the Times, is reforming the entitlement system?

The column goes on to throw bouquets on Romney’s plan to semi-privatize Medicare and Social Security. Romney’s ideas are not as draconian as Paul Ryan's, but they do pave the way for Wall Street’s ultimate goal – full privatization of Social Security and Medicare.

Think about what such reforms might mean. Your typical Medicare/Social Security recipient might already have been ripped off three different ways in this era.

He might have been sold a crappy mortgage or a refi by a Countrywide-type firm (which often targeted the elderly). He might then also have unwittingly become an investor in such mortgages and seen the value of his retirement holdings devastated (many of the banks sold their crappy mortgage-backed securities to state pension funds).

Lastly, if he paid taxes, he saw part of his tax money go to pay off the bets the banks made against these same mortgages.

So now that Wall Street has ripped off this segment of society three times, it makes all the sense in the world that Mitt Romney – a former Wall Street superstar who was a chief architect of the modern executive-compensation-driven corporation – is coming back and telling us that we need to cut their Medicare and Social Security benefits in order to defray the cost of the previous three scams.

...

Advocating the turning over of Social Security management to Wall Street after the 2008 crash is a little like asking Paris Hilton to pilot Air Force One, or tabbing Charlie Sheen to manage the inventory of a hospital pharmacy – completely nuts, but to David Brooks, that makes Mitt Romney the “serious” candidate.

Again, go and read the original post to get the whole article as well as the embedded links to referenced material. It is well worth your while.

It is utterly depressing to read Matt Taibbi's exposés. But it is essential reading. The only way to stop the rot, corruption, and criminality is to understand what is happening and individually decide "enough!" and then band together through democratic agitation to stop the agenda to destroy the bottom 99%. The Occupy Wall Street is but one manifestation of what is needed. Much more is needed. Democracy is messy, it is slow to get riled, and it works in mysterious ways, but it is the only tool guaranteed to effect real change. The idiots calling for "revolution" are asking for blood on the streets and failure. Real change is slow, painful, and democratic.

Technological Optimism

I'm a big fan of technology. I buy into the Julian Simon view that any "limits to growth" are wrong-headed because it ignores the fact that the ultimate resource is human ingenuity.

Here are some bits out of Paul Krugman's latest NY Times op-ed looking at the upcoming future for solar energy:

For decades the story of technology has been dominated, in the popular mind and to a large extent in reality, by computing and the things you can do with it. Moore’s Law — in which the price of computing power falls roughly 50 percent every 18 months — has powered an ever-expanding range of applications, from faxes to Facebook.

Our mastery of the material world, on the other hand, has advanced much more slowly. The sources of energy, the way we move stuff around, are much the same as they were a generation ago.

But that may be about to change. We are, or at least we should be, on the cusp of an energy transformation, driven by the rapidly falling cost of solar power. That’s right, solar power.

...

These days, mention solar power and you’ll probably hear cries of “Solyndra!” Republicans have tried to make the failed solar panel company both a symbol of government waste — although claims of a major scandal are nonsense — and a stick with which to beat renewable energy.

But Solyndra’s failure was actually caused by technological success: the price of solar panels is dropping fast, and Solyndra couldn’t keep up with the competition. In fact, progress in solar panels has been so dramatic and sustained that, as a blog post at Scientific American put it, “there’s now frequent talk of a ‘Moore’s law’ in solar energy,” with prices adjusted for inflation falling around 7 percent a year.

This has already led to rapid growth in solar installations, but even more change may be just around the corner. If the downward trend continues — and if anything it seems to be accelerating — we’re just a few years from the point at which electricity from solar panels becomes cheaper than electricity generated by burning coal.

And if we priced coal-fired power right, taking into account the huge health and other costs it imposes, it’s likely that we would already have passed that tipping point.

But will our political system delay the energy transformation now within reach?

Let’s face it: a large part of our political class, including essentially the entire G.O.P., is deeply invested in an energy sector dominated by fossil fuels, and actively hostile to alternatives. This political class will do everything it can to ensure subsidies for the extraction and use of fossil fuels, directly with taxpayers’ money and indirectly by letting the industry off the hook for environmental costs, while ridiculing technologies like solar.

Krugman is making the point that the upcoming 2012 elections are going to be important for many reasons. A big one is that they will decide whether the political right gets to continue blocking technological advance in the energy area. The sad fact is that China is quickly becoming a leader in this area (along with Germany) and the US, which used to lead the world, will soon be a "has been" and utterly negligible. All thanks to the Neanderthal thinking of the Republican party that favours the rich and corruption over the American people and a better future.

You Have "Rights" Until You Exercise Them

In America they pound their chests over their democracy and their political "liberty" and all the "rights" their citizens have. But from my perspective all I can see is that you have the right to cut your own throat, to lose your job, and to have your children starve. Those aren't the rights that were written up in the Constitution, but those are the "rights" given to ordinary people -- but not the billionaires who can buy rights as they please -- in contemporary American society.

The response of the "free" media in the US to Occupy Wall Street makes this utterly obvious...

First, here is an Atlantic Wire story about Lisa Simeone:

With yesterday's news that Lisa Simeone was fired from her one radio gig but retained at her other, we now have word on what exactly both radio shows were thinking when they made their decision. Simeone was canned as host of Soundprint, a documentary show, after it came to light that she participated in the Occupy D.C. protests, but she's keeping her hosting duties at her other show aired on NPR, World of Opera, as the two shows are produced by different companies. Maryland-based Soundprint Media Center, which produces Soundprint but is not part of NPR, said Simeone's participation in the protest clearly violated NPR ethics code, which the company adopted for itself because "listeners don't know the difference between NPR and independent producers across the country," the AP reports. Moira Rankin, the president of Soundprint, clarifies the company's decision in the report:

In my mind, it's fine if you want to be a leader of an organized protest movement, but you can't also be in a journalistic role. You can't be the host of a journalism program and plead that you are different than the reporter who is going to come on a minute after you introduce the program.

However, World of Opera, distributed nationally by NPR, is produced by WDAV, a classical-music radio station in North Carolina, and it doesn't see any conflict of interest where Soundprint does. "Ms. Simeone's activities outside of this job are not in violation of any of WDAV's employee codes and have had no effect on her job performance," a station spokesperson wrote in an email to the AP. Interestingly, although the national network itself "questioned" Simeone's activism, saying that its code of ethics applies to cultural radio shows like hers, NPR is emphasizing that it can't take action against someone it doesn't employ. "We are not her employer, but she is a host for a show that we distribute," an NPR spokesperson told the AP. "She's a public person who represents NPR and public radio."

For the record, Simeone defends her choice to protest here:

I find it puzzling that NPR objects to my exercising my rights as an American citizen -- the right to free speech, the right to peaceable assembly -- on my own time in my own life. I'm not an NPR employee. I'm a freelancer. NPR doesn't pay me. I'm also not a news reporter. I don't cover politics. I've never brought a whiff of my political activities into the work I've done for NPR World of Opera. What is NPR afraid I'll do -- insert a seditious comment into a synopsis of Madame Butterfly?

Second, here is an Atlantic Wire story about Caitlin E. Curran:

The people who make shows for NPR stations, dinged by the perception that they're a bunch of kneejerk liberals, are proving themselves to be very, very touchy about how their employees participate with Occupy Wall Street. Today, Gawker has posted the first-hand account of Caitlin E. Curran, a Brooklyn-based former freelancer for The Takeaway, which is co-produced by NPR-member station WNYC and Public Radio International, who was fired from her public radio gig as a part-time web producer after her boss discovered she (briefly) participated in an Occupy protest.

Update 2: We've added WNYC's response below, in which the station says Curran was fired because, "When Ms. Curran made the decision to participate in the protest and make herself part of the story, she violated our editorial standards."

Update: We initially used "NPR" in the headline for this story which is incorrect because the show The Takeaway is more identified with NPR competitor PRI even though it airs alongside NPR programming. We've corrected the error, but there's also this point to make: the public radio economy contains many independent actors alongside NPR. There is the national organization, local broadcasters, independent producers and distributors all involved in programming on what listeners would consider "NPR stations." So, while NPR is not a centralized organization that controls all of public radio, the "NPR is liberal" critics are prone to paint with a broad brush. If anything, Curran's story illustrate how far the fear of looking too liberal has permeated the entire public radio ecosystem.

Curran was canned after her boss found the now-famous photo of her (right) holding a sign with paraphrased text from The Atlantic's Conor Friedersdorf, from his post on the Occupy movement. She chronicles what happened after that in her post:

My boyfriend, Will, and I decided to take Friedersdorf's words and use them, perhaps more literally than he intended. We printed them out, taped them to poster board, and headed to the Occupy Wall Street march in Times Square, on October 15. The plan was for Will to hold the sign, and for me to observe what happened and post reports to my personal Twitter account ... But, inevitably, Will developed sign-holding fatigue, and I took over momentarily.

That's when a photographer snapped the Occupy picture reblogged 'round the world. So she decided that all of this notoriety would make for great radio, so he pitched a segment idea on her experience on The Takeaway. But a day later, she got the boot from The Takeaway, which said she "violated every ethic of journalism," according to Curran. All this of course echoes the firing of Lisa Simeone after she was found to be working as a spokesperson for Occupy D.C. Curran, like Simeone, offered a defense of her actions on Gawker:

My thinking ran along the same lines as Simeone's. It's unclear to me how our participation, on our personal time, in a non-partisan movement warrants termination from our jobs. If the protest is so lacking, in terms of message and focus, then how can my involvement with it go against The Takeaway's ethical policies? In other words, if I'm associated with a party-less movement (and barely associated, since that was only the second time I've attended an Occupy Wall Street event), and have never exercised bias in editing The Takeaway's website, what's the harm?

Here is the full statement from WNYC spokesperson Jennifer Houlihan:

Caitlin Curran was a freelance news producer for The Takeaway, a morning news program co-produced by WNYC and Public Radio International (PRI). In that capacity she was expected to observe the general standards of journalistic practice and more specifically WNYC's editorial guidelines which require that editorial employees be free of any conflict that might compromise the work of the show overall. The Takeaway has covered the Occupy Wall Street story since its beginning through active reporting on the protests and the positive and negative responses to those events. When Ms. Curran made the decision to participate in the protest and make herself part of the story, she violated our editorial standards. At that time the program made the decision to no longer use her services as part of the production team.

It is lovely to have liberties that are purely theoretical. It is ridiculous to have rights that can only exist in your mind and never be acted upon. But that is "democracy" in America, the land of the "free", home of the "brave", where lollipops hang from the trees and the bastard billionaires dance across the landscape dressed as sugar plum fairies assuring everybody that if they get just "one more tax cut" then they will create jobs for everyone!

Get Ready for Another Big Bailout

Here is a bit from a post by Matt Taibbi in his Rolling Stone blog:

... when it comes to commercial banking, Bank of America is as bad as it gets.

The markets, of course, have lately come to agree, as B of A has lately been downgraded again to just above junk status. The only reason the bank is not rated even lower than that is that it is Too Big To Fail. The whole world knows that if Bank of America implodes – whether because of the vast number of fraud suits it faces for mortgage securitization practices, or because of the time bomb of toxic assets on its balance sheets – the U.S. government will probably step in to one degree or another and save it.

The government’s patronage of the bank was never clearer than in recent weeks, when B of A quietly decided to move trillions of dollars (trillions, not billions) in risky Merrill Lynch derivatives contracts off Merrill’s books and onto the books of the parent/retail arm, Bank of America.

This decision was done at the behest of counterparties to those transactions, who wanted those contracts placed under the aegis of Bank of America, whose deposits are insured by the FDIC. The move was made, according to reports, so that Bank of America could avoid posting $3.3 billion in collateral to satisfy the company’s creditors. In other words, Bank of America just got You the Taxpayer to co-sign as much as $53 trillion worth of dicey derivative contracts.

The FDIC wasn’t pleased by the move, but the Fed apparently encouraged it. Bloomberg, citing people with “direct knowledge” of the deals, reported that,

The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting, said the people. The bank doesn’t believe regulatory approval is needed, said people with knowledge of its position.

So the primary regulator of the banking industry is encouraging a functionally insolvent megabank to respond to a credit downgrade by pushing its most explosively risky holdings onto the laps of the taxpayer.

...

A series of lawmakers on the Hill, including most notably Sherrod Brown, Carl Levin, and Bernie Sanders, are trying to figure out if there’s any way to stop this transaction, but of course there is not. Upstate NY congressman Maurice Hinchey put it best. "What Bank of America is doing is perfectly legal – and that's the problem,” he said.

This is exactly why the Glass-Steagall Act needs to be reinstated: without a separation of Investment Banks and Commercial Banks, what we end up getting is taxpayer-guaranteed gambling. Instead of encouraging prudence and savings by insuring deposits in commercial banks, the FDIC is now being turned into a vehicle for socializing speculative losses.

So our government is not only no longer encouraging fiscal conservatism, it is doing exactly the opposite, i.e. encouraging speculation and risk-taking. That this is happening in the fever of the OWS movement, and at a time when top politicians from Barack Obama on down are paying lip service to public complaints against Wall Street, should tell you everything you need to know about whether or not we can expect this government to voluntarily enact real changes, and stop making the taxpayer eat Wall Street’s pain.

This is criminal. The FDIC should refuse. But obviously the Obama administration is backing the Federal Reserve and allowing this abomination to go ahead. Shame on Barack Obama!

Bill Black on Defusing the Financial Crisis

Hard to believe but we are three years into the Financial Crisis of 2008 and still there has been no effective solution. Here is a video in which Bill Black discusses the situation. At 3:35 in the video he comes out with the recommendations which I favour: fire Geithner, fire Bernanke, fire Eric Holder:



I like the bit about getting the FBI to stop wasting time on the "little folk" and go after the frauds of the big banks.

At 7:50 into the video, Bill Black identifies positive actions that Obama could take immediately without any action by Congress. It is simple: get the regulatory agencies to police the financial industry!

Obama has failed the people because he had a chance to come in and clean up the slime of 30 years of "trickle down" economics in which lobbying by corporations has absolutely corrupted the US government. At 9:50 in the video, Bill Black calls Obama an "abject failure" for failing to rein in the corruption of the financial industry and the his indifference of failure of the regulators to take seriously their duty to regulate.

Why Wall Street Always Wins in Politics

Here's a bit from an article in Mother Jones about Elizabeth Warren. Look at the money being marshalled by Wall Street to defeat her:

Warren is expected to win the Democratic nomination, which won't be formally decided until next September. A survey by Public Policy Polling last month, just after she entered the race, gave Warren a two point edge over Brown. But the race is expected to be a battle. Warren has already raised $3 million in an abbreviated first quarter of fundraising, and Brown has $10.5 million cash on hand—much of it from Wall Street.

The attack ads are already lined up and ready to go to try to take her down. Hopefully she wins. She is an honest person not yet corrupted by politics (and is hopefully uncorruptable, but you can't tell).

Go read the rest of the article to see how the right wing press is trying to trip her up by painting her as a "radical" over Occupy Wall Street.

After you digest the above, you are ready to read Matt Taibbi's post on his Rolling Stone blog entitled "Wall Street Isn't Winning – It's Cheating".