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View Diary: The Seduction of Cynicism (227 comments)

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  •  The Seduction of rewarding those that waste crisis (12+ / 0-)

    Sorry, I offer my rebuttal:

    People That Excuse Wasting the Crisis in 2008 Don’t Get to Lecture Anyone

    Even though you were on the right side during the crisis, now you want those rewarded that wasted the crisis(making him fit the thesis of my diary) and you seem unaware that making the right decisions during those periods of crisis are why those achievements you mention happened, not supporting the President/Democrats no matter what. There was plenty of pressure after the crash of 2008, which is why TARP failed at first, but Senator Obama whipped for the passage of the 3 page TARP which is just a drop in the bucket compared to the overall bailout from the FED. And then he continued the bailouts with PPIP and the phantom stress tests which are make believe as well.

    Also you can't make someone do what they don't want to do. The white house just isn't interested in resurrecting Glass Steagall. They actively whipped Republicans to oppose it thanks to our Wall St. Treasury Secretary our President chose instead of someone like you.

    How the Government Failed to Fix Wall Street

    Four years have passed since Lehman Brothers’ collapse; two since Obama signed financial reform into law; one since the occupation of Zuccotti Park. But the Justice Department has yet to convict a single high-profile banker. And despite the Dodd-Frank reform package, critics suggest that the system is hardly safer than it was in 2008—from JPMorgan’s beached “whale” to MF Global’s missing billions. In a recent report (PDF), the International Monetary Fund called the capital markets just as “vulnerable” to crash and fraud as they were four years ago.

    Why? There’s no simple, satisfactory answer. But in recent weeks, memoirs by crisis insiders, like former Federal Deposit Insurance Corporation Chairman Sheila Bair, have shed new light. Interviews with officials -- from former senator Ted Kaufman to former Justice Department prosecutors -- lend further color to the crystallizing narrative. The Obama Justice Department was too timid and short-staffed to hunt down the bad guys. The White House, Treasury Department, and Federal Reserve stifled or sold out real financial reform, leaving megabanks too big to fail, and dangerous crisis-era practices untouched.

    Months after taking office, Obama told the CEOs of the nation’s third biggest banks, “My administration is the only thing standing between you and the pitchforks.” It has served as an effective shield.

    [.......]

    Senator Kaufman and his former chief of staff, Jeff Connaughton—author of a new bookrecall several frustrating meetings with Justice Department officials. In September 2009, Kaufman met with Lanny Breuer, then Assistant Attorney General for the Criminal Division, to ask why so few cases were underway. According to Kaufman and Connaughton, Breuer explained that “we take the cases the FBI brings to us.”

    In an interview, a high-ranking Democratic official and Justice Department veteran called that explanation “disturbing … While some federal prosecutors might just sit and wait to see what comes through the door, the good ones are ready, willing, and able to initiate investigations on their own.” As Barofsky puts it, “I’d be hard pressed to say if a single additional case was made becomes of one of these task forces.” Kaufman adds: “It was pretty damning that there were no referrals from the regulatory agencies on this.”

    Connaughton says that Kaufman’s office then called a U.S. attorney's office, a full two months after the Breuer meeting, to ask about prosecutions progress. The office told the senate staff that the Justice Department had only just been in contact, “asking [them] if they were working on any financial fraud cases.” By then, says Kaufman, “the trail had gone cold” on several promising cases, from Washington Mutual’s mortgage lending fraud to charges of false reporting at the ratings agencies. In late-November, 2009, the Justice Department lost its high-profile case against two Bear Stearns hedge-fund managers: a huge blow to morale.

    [.......]

    The lack of prosecution might be easier to swallow if the banks had been prodded to change their ways. But in the aftermath of the crisis, legislative efforts to institute systemic changes were resisted or outright blocked by the White House, the Treasury, and the Fed. One such effort was a 2010 amendment, proposed by then-Senator Kaufman and Senator Sherrod Brown (D-Ohio), to cap the size of a single bank’s assets to 10 percent of GDP—at the time, that would have required breaking up JPMorgan, Wells Fargo, and Bank of America. As recently as this July, Sandy Weill—the creator of the original superbank, Citigroup—endorsed this proposal.

    As has been well documented, Larry Summers, then director of the National Economic Council, and Treasury Secretary Tim Geithner fought this and other reform efforts. Both tried privately to dissuade Senators Brown and Kaufman from pursuing their amendment, and asked other lawmakers to vote against it, according to Kaufman and his staffers. Instead, Geithner reached across the aisle to recruit Republicans in an effort to “water down” extant Dodd-Frank proposals and kill the Brown-Kaufman amendment, writes former FDIC chair Sheila Bair in her just-published memoir. As Kaufman told me, he was “surprised” that he couldn’t “get some Republicans” to vote for his bank breakup.

    So there it is. The White House and Tim Geithner specifically were instrumental in defeating the Brown Kaufman amendment which would have broken the banks up. You see, when the White House wants to get something done it can get something done even getting Republicans to defeat Senators Sherrod Brown(whom is worth supporting and luckily will pull it out most likely in Ohio) and Ted Kaufman's amendment that is still desperately needed. This kills the excuses about the stimulus, the lack of a real bank rescue to fix the TARP model on top of the 7.7 trillion of dollars of bailout money from the Fed (29 trillion globally including guarantees), and having no accountability for Wall St.

    The President wanted Tim Giethner, Larry Summers, and he wanted a Too Big to Fail financial system preserved by Dodd Frank that will not prevent bailouts like he said as history will attest. Not only that, derivative contracts are now pricing in the implicit bailouts our President said won't ever happen again happen while he claimed in the debate Dodd Frank was the most sweeping reforms since the Great Depression. That is false, so the whole debate on Dodd Frank flustered him and Romney was then allowed to criticize it (for the undefined provisions which are undefined and thus ineffective) while pretending he wanted some effective regulation which is also BS.

    Though Romney is worse the bar is pretty low and there will likely be another financial crisis soon(JP Morgan's 6 billion London whale already happened) and people have a right to be cynical especially once the oligarchs are rewarded once again for their financial manipulation and mechanization while the Washington grand bargain in 2013 speaks of a phantom deficit crisis that will crush working people all around.

    ‎"Bipartisan usually means that a larger-than-usual deception is being carried out." - George Carlin / Help get $ out of politics! Vote for my artwork!

    by priceman on Wed Oct 24, 2012 at 12:14:44 AM PDT

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