It's really getting pretty damn crystal clear to anyone that's bothering to pay attention. This is not rocket science. Reality's to the point where, with every passing day, we're witnessing the metamorphosis of U.S. society into tacit resignation and/or blind acceptance of blatant corporate kleptocracy. Some are even referring to it by its proper name: corporate fascism.
First you pervert the rule of law: from the Supreme Court (Citizens United v. Federal Election Commission); to a government that wholeheartedly supports a revolving-door policy -- one that virtually ensures regulatory capture -- between a bought-and-paid-for Capitol Hill and Wall Street; then, all the way down to Main Street, where (after much bloviating) we've been left pretty much to our own devices to fight rampant foreclosure fraud.
Then you prepare your military and their private sector/outsourced wetworkers to control a population that's just beginning to get a clue concerning the severity of the pillaging (from getting an even greater clue).
And, last but not least, you fully institutionalize the ongoing pillaging of Main Street by privatizing all profits and socializing all losses as they relate to the housing marketplace, which is now experiencing a crisis worse than what our country experienced in the Great Depression. Not to worry! It's only the primary asset of the "bottom 90%" of the public (ex-rentier class), since the top 10% of our nation's population own 98.5% of all investment market equity.
So, if that means letting the poor freeze to death, piling unexpected healthcare debt upon our nation's middle class, and effectively pulling out the financial rug out from under our nation's already-out-of-control, post-secondary educational system...well, the bottom 90% will just have to "share the burden," right?
Hey, what's a little collateral damage in the eyes of the U.S. status quo? (NOTE TO READERS, SEE: "Iraq," "Afghanistan.")
But, don't take my word for it...from just six weeks ago, from my progressive and now-ex-congressman (who lost his third-term bid to a Big Pharma, GOP'er)...
Soon To-Be Ex-Congressman John Hall Warns Against Creeping Fascism
By David Freedlander
December 28, 2010 5:03 p.m
In a wide-ranging interview before he prepares to leave the House of Representatives, Hudson Valley Congressman John Hall warned that the nation could quickly descend into Fascism if more is not done to curb the influence of corporate money in politics.
Speaking about the Citizen's United decision, which allowed unregulated flow of cash into campaign coffers, Hall said, "I learned when I was in social studies class in school that corporate ownership or corporate control of government is called Fascism. So that's really the question— is that the destination if this court decision goes unchecked?"
Hall said that the flow of corporate dollars is why he and the Democrats lost control of Congress.
"The country was bought," he said. "The extremist, most recent two appointees to the Supreme Court, who claimed in their confirmation hearings before the Senate that they would not be activist judges, made a very activist decision in that it overturned more than a century of precedent. And as a result there were millions of extra dollars thrown into this race."
The extra money floating around, he said, compounded the Democrats weaknesses on the economy, unemployment and the mortgage crisis. And he said that for of the accomplishments of the lame duck Congress, their failure to pass the Disclose Act—which would have at least forced corporations to reveal who they were donating to—stood out a black mark on the session....
If you want some more recent narrative on these matters, here's the NY Times' Bob Herbert in a must-read from Saturday...
When Democracy Weakens
By BOB HERBERT
February 12, 2011
As the throngs celebrated in Cairo, I couldn’t help wondering about what is happening to democracy here in the United States. I think it’s on the ropes. We’re in serious danger of becoming a democracy in name only.
While millions of ordinary Americans are struggling with unemployment and declining standards of living, the levers of real power have been all but completely commandeered by the financial and corporate elite. It doesn’t really matter what ordinary people want. The wealthy call the tune, and the politicians dance.
So what we get in this democracy of ours are astounding and increasingly obscene tax breaks and other windfall benefits for the wealthiest, while the bought-and-paid-for politicians hack away at essential public services and the social safety net, saying we can’t afford them. One state after another is reporting that it cannot pay its bills. Public employees across the country are walking the plank by the tens of thousands. Camden, N.J., a stricken city with a serious crime problem, laid off nearly half of its police force. Medicaid, the program that provides health benefits to the poor, is under savage assault from nearly all quarters.
The poor, who are suffering from an all-out depression, are never heard from. In terms of their clout, they might as well not exist. The Obama forces reportedly want to raise a billion dollars or more for the president’s re-election bid. Politicians in search of that kind of cash won’t be talking much about the wants and needs of the poor. They’ll be genuflecting before the very rich...
Bold type is diarist's emphasis.
And, as I've noted in many recent diaries, while the real pillaging is (rather quietly, I might add, and with typically twisted Washington D.C. spin) just getting started...
(Diarist's Note: Naked Capitalism Publisher Yves Smith has authorized diarist to reprint her blog's posts in their entirety for the benefit of the DKos community.)
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GSE Headfake: Yet More Looting Branded as “Reform”
Thursday, February 10, 2011 6:33AM
As time goes on, the various Ministries of Truth just get better and better at their stock in trade. We’ve gone from artful obfuscation like “extraordinary rendition”, and “Public Private Investment Partnerships” to stress free “stress tests” (particularly the Eurozone version) designed to get bank stocks up and credit default swap spreads down, to even grosser debasement of language. What passes for the left has for the most part been dragged so far to the right that the use of once well understood terms like “liberal” and “progressive” virtually call for definition. And the word “reform” has virtually been turned on its head. Financial services reform was so weak as to be the equivalent of a jaywalking ticket; health care reform was a Trojan horse for even large subsidies to Big Pharma and the health care insurers. But GSE reform takes NewSpeak one step further by turning the “reform” concept on its head and using the label to describe an effort to institutionalize even bigger subsidies to the mortgage industrial complex.
While Team Obama appears to have backed down from the trial balloon floated by the Center for American Progress (note that press reports give another rationale) and is expected to offer a menu of choices for “reform” in its overdue white paper on Friday, don’t be fooled. The proposals coming from the lobbyists expected to have real influence on which ideas get the green light are virtually without exception serving up such a narrow menu of choices as to constitute unanimity. We offered our take as of the release of the CAP report; a subsequent proposal by Moody’s Mark Zandi (see details here) is more of the same.
It’s as if a population suffering from a toxic reaction to mustard was now offered options ranging from Dijon to pommery to spicy brown as meaningful improvements. And this is not an exaggeration. The new GSEs (and let us not kid ourselves that that this is where the Powers That Be are driving this effort) would have an explicit government guarantee, be larger in number, and supposedly have higher capital buffers.
The problem is that any government sector guarantee for a private sector entity is a terrible idea absent very tough constraints on operations, which is the still-unlearned lesson of the financial crisis. And the idea that any higher capital standards will hold over time is dubious. Fannie and Freddie were enormously powerful lobbying forces, a de facto mainly Democrat slush fund; any new GSEs will have similar collective clout and will press for their agenda on a unified basis, which is certain to include waivers that will amount to lower equity requirements. Increasing leverage is one of the easiest ways to improve performance in a financial firm.
Now the Administration is also allegedly presenting some elements of securitization reform on Friday. We’d be glad to be proven wrong, but we anticipate any proposals will be cosmetic and/or insufficient in scope. The real problem is that the coming staged fight over GSE reform will serve as a useful distraction for what is really needed, which is much broader mortgage market reform. Pursing the GSE question largely in isolation is sure to produce bad outcomes.
For instance, one of the excuses for continuing to have a large role for the GSEs 2.0 is that the private securitization market is dead. But that is because the banks have been blocking reform and investors have gone on strike. But the lack of private market demand is then used as an excuse as to why we still need something GSE like to play a big role. That’s tantamount to killing your parents and asking for charity because you are now an orphan.
But the biggest failing is the continued massive subsidies to the banks, particularly in the housing arena, with a lack of accountability not only for past messes but ongoing train wrecks. Financial firms continue to benefit from heroic efforts to prop up asset prices as a way to preserve the banks from realizing additional losses. For instance, the Fed continues to present quantitative easing as beneficial, when it has in fact done more for the banks than the real economy. And other subsidies are not as widely recognized. From banking expert Chris Whalen:Much of this increase in the size of Fannie’s balance sheet is repurchased defaulted loans from securitization trusts, grim evidence of the generosity of Secretary Geithner in letting Bank of America (”BAC”/Q3 2010 Stress Rating: “C”) off the hook for mere single digit billions in terms of loan repurchase liabilities. The taxpayer will have to pay the cost of this gift to BAC shareholders, with interest. But excluding this inflow of financial detrius, the balance sheets of the zombie GSEs would be shrinking on ebbing industry new loan origination volume.
Another urban legend the banks are eagerly promoting is that we wouldn’t have a 30 year mortgage market ex the GSEs. Nonsense, we did before the crisis, in jumbo mortgages. And ironically those effectively had better disclosure than other private label mortgages. There were so many fewer mortgages in a jumbo than a normal securitization that the investors could eyeball them a tad. But the industry has resisted calls for better loan level disclosure, both pre crisis and now.
The old rule in Wall Street is everything can be solved by price. So the issue is not that there would not be a 30 year mortgage market; the implicit claim is that the price would be so high as to kill housing. The problem (to the extent there is a problem) is NOT the uninsured 30 year mortgage, but the further intervention in the mortgage market thanks to the Fed targeting mortgage spreads directly in the first QE and continuing to influence them indirectly by targeting intermediate-maturity Treasury bond yields in QE2 (note that the degree to which the Fed is actually affecting yields is hotly debated; one study of QE one found it only had 17 basis points of impact so this may be less of an issue that many believe).
The premium for the unsubsidized jumbo product was a mere 25 basis points pre-crisis; even now its 75 basis point. This is far from a huge premium. Indeed, since the CAP proposal estimated that its plan would result in mortgage spread being 50 basis points higher than now, it suggests there is no reason for the government to be in the business of guaranteeing mortgages on anything approaching a Fannie/Freddie scale. There are much simpler, less bankster-enriching ways to provide subsides to particular groups or underserved areas, such as providing credit directly or using tax breaks.
Getting the government out of the mortgage finance business could lead to banks providing more alternatives particularly ones where he takes more interest rate risk in return for a lower interest rate. The US 30 year fixed rate mortgage is borrower favorable to an exceptional degree and is a holdover from the protracted post war period of stable interest rates. Lenders might offer floating rate mortgages with floors and ceilings (this was the only product available in the co-op market in New York City in the early 1980s and consumers had a favorable experience with it), or mortgages with tougher prepayment penalties, or restrictions on refis (corporate bonds often have those provisions, they aren’t unusual).
We’ve managed to skip over the real elephant in the room, the ongoing fraud in courtrooms all over the US to deal with the breakdown of procedures and documentation. How can we talk about monster subsidies to a sector rife with consumer abuse and probable criminal activity without having a real investigation and cleanup first? That’s putting the cart before the horse in a very serious way. And that’s by design,
Yves wrote the above post on Thursday...only to awaken to Friday's headlines which continue to underscore the concept of "just when you think you've seen it all..."
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Here's a link to another post by Naked Capitalism Publisher Yves Smith, where we're told that CoC security firm HBGary works for the Department of Justice, too: "Chamber of Commerce Law Firm Studied Disinformation, Smear and Coercion Campaign Against Opponents."
Chamber of Commerce Law Firm Studied Disinformation, Smear and Coercion Campaign Against Opponents Yves Smith
Friday, February 11, 2011 6:56 AM
On the one hand, it’s a badge of honor of sorts to see the most powerful political lobby, the Chamber of Commerce, have its operatives moving from the “ignore you” to the “fight you” stage of engagement. The flip side is that the tactics that they are willing to consider don’t reflect at all well on their commitment to principles like the rule of law or decency.
ThinkProgress today broke the story of the dirty works being considered. Readers may be aware of a massive leak of e-mails of the security firm HB Gary Federal which made the mistake of trying to hack the computers of Anonymous, the group that has taken to punishing organizations that cut off donations to Wikileaks.
Anonymous obtained and leaked the internal messages and rubbed HB Gary’s face in it a bit too.
The e-mail dump exposed some dirty laundry, namely that of a disinformation campaign that HB Gary plus two other “security” firms Palantir, and Berico Technologies (which together called themselves Team Themis had started to map out for a law firm the Chamber of Commerce works actively with, Hunton & Williams. From ThinkProgress:According to one document prepared by Team Themis, the campaign included an entrapment project. The proposal called for first creating a “false document, perhaps highlighting periodical financial information,” to give to a progressive group opposing the Chamber, and then to subsequently expose the document as a fake to undermine the credibility of the Chamber’s opponents. In addition, the group proposed creating a “fake insider persona” to “generate communications” with Change to Win. View a screenshot below:
The security firms hoped to obtain $200,000 for initial background research, then charge up to $2 million for a larger disinformation campaign against progressives. We don’t know if the proposal was accepted after Phase 1 was completed.
To be clear, as Marcy Wheeler points out, Team Themis group had been asked to do Phase 1 on spec. So there was clearly an interest in this sort of work.
A second element of this campaign was to discredit prominent figures, which was the same approach that HB Gary pitched to Bank of America regarding Glenn Greenwald, which HB Gary deemed to be a target by virtue of his pieces sympathetic to Julian Assange and Bradley Manning. This is now in the terrain of private detectives looking to find “compromising” information. Again from ThinkProgress:
One of the targets was Mike Gehrke, a former staffer with Change to Win. Among the information circulated about Gehrke was the specific “Jewish church” he attended and a link to pictures of his wife and two children…
This tactic of targeting opponents’ personal lives and family was not simply a random event. Rather, it was a concerted and deliberate effort to use anything possible to smear the Chamber’s political opponents. To dramatize his firm’s intimidation tactics, Barr sent an email to Hunton & Williams attorney John Woods that contained personal details about fellow Hunton attorney Richard Wyatt, who was representing the Chamber. The email was intended to show Woods and Wyatt how “vulnerable” they are:
The Chamber of Commerce issued a pious and legalistic denial:We’re incredulous that anyone would attempt to associate such activities with the Chamber as we’ve seen today from the Center for American Progress. The security firm referenced by ThinkProgress was not hired by the Chamber or by anyone else on the Chamber’s behalf. We have never seen the document in question nor has it ever been discussed with us.
Duh, the firms were not yet “hired” because no money had changed hands. And note the denial is limited to a specific document and discussions around it. The idea that Hunton & Williams would spend a lot of cycles on an effort that its client would not be interested in entertaining seems quite a stretch. As Marcy Wheeler tells us:Note, first of all, that they’re not denying hiring Hunton & Williams, the law firm/lobbyist which they hired last year to sue the Yes Men. They’re not even denying that they retain Hunton & Williams right now….
They didn’t hire HBGary and they didn’t read the particular document TP linked to.
But that is far short of denying that they’ve been discussing such a plot with HBGary and/or Hunton & Williams.
Now this is getting into the coercion territory (and I use this word quite deliberately, since libertarians insist that only the state has the power to coerce). HB Gary sought to discredit Glenn Greenwald to the point where he would worry about “professional preservation,” meaning being able to get paid white collar work. But the snooping and the children’s photos point to leveling more basic threats to physical security. Now we have no idea of how low Team Themis would go, but if you don’t think this sort of thing goes on, I suggest you wake up and smell the coffee. I know antiforeclosure lawyers who have gotten the “somebody is going to get hurt if you don’t back down” and “we know where your children are” threats. One had his neighbor alert him to the fact that a black SUV with six men parked behind his house and the men had broken in. The police intercepted them, and nothing appeared to have been removed, but one wonders what the intent was (recall the bugging scene from The Lives of Others).
Since HB Gary also works for the Department of Justice, the odds of it being busted for hacking into home computers is zero. But it also seems naive to think that many of the people they are targeting will back down so easily. True, the act of breaking into someone’s computer, the knowledge of that degree of surveillance, is for the vast majority of people, worse than any dirt one might find. And people who decide to take a stand against the current power structure are by nature somewhat outside it, and in many cases not hostage to the sort of bourgeois conformism that seems to be the logic underlying this sort of thing.
As much as this is creepy and reflects badly on the prospective perps, it also shows how a climate of economic insecurity and class stratification has lowered the bar for effective coercion. HG Bary wouldn’t default to these sort of strategies if they weren’t normally effective. But something is seriously amiss in the body politic if people who are merely on the anti corporate side of the debate can expect to be subjected to surveillance, character/professional reputation assassination, and perhaps even threats to their safety.
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You see, nowadays, they leave out a few words when it's implied to us that the well-being of companies such as Bank of America are "...matters of national financial security."
The truth is, Bank of America's well-being, is..."a matter of financial security to our nation's elected officials."