I was not impressed with the President's interview on 60 minutes on Sunday and I'm going to explain why in this diary. I'll briefly address part 1 about Obama talking about income inequality way too late in the game and when pressed on it by Steve Kroft he said he was concerned but was working on balanced deficit reduction with the Congress. That's certainly not righting the wrongs when it comes to income inequality.
The president talked about math a lot, but deficit reduction reduces national income and that is a national accounting fact this president is never going to acknowledge because he either doesn’t understand it or he does and wants to suck away national income in a crisis of demand. He acknowledged somewhat that the stimulus should have been bigger but then bragged about it compared to what some in the House first suggested in comparisons(the BS Johnathan Chait line) forgetting that Paul krugman was screaming from the rooftops about the inadequacy of the ARRA compared to the demand problem while the WH smugly and condescendingly ignored him. So it hardly justifies not even trying for a bigger one even with the excuse about Congress and 60 votes. In reality it shows just how little he did try.
The bragging about bucking the trend of the Democratic party when it comes to education bothered me as well which means he's proud of hiring Arne Duncan and that he loves private schools and vouchers even though the Democratic party rightfully thinks that is not the right path and a misdiagnosis of the problem. It's also a way to give the finger to teacher's unions and blame them for everything which is wrong.
And oops, he did it again talking about the importance of “Entitlements” and his stupid deficit reduction/inter-generational accounting propaganda attack towards SS and Medicare. And yet somehow income inequality is only good for a soundbite. Oh well.
Now let’s get on to the major BS portion of the interview using half truths(like some of what they did was legal but plenty wasn't) in order to cover up this administration’s abysmal record when it comes to Wall Street prosecutions and reform at about 1:48 in. That's what disturbs me the most, his inadequate answers to the questions on the lack of accountability the 99% rightfully feel has not been pursued by this administration towards Wall Street and its Justice Department which was also interviewed by 60 minutes recently.
Yeah. OK. Dodd Frank and the strongest fake reforms since the real banking reforms of 1933(real reform) as spoken by the president. Hearing this is like a broken record that plays a song that is scratched you don't want to hear anymore because it is a lie.
This is a great response to that false statement from the President because it's funny and true.
This answer to the lack of enforcement and when it comes to the Sarbanes Oxley Act passed by Congress after the Enron debacle regarding Countrywide and Bank of America's shenanigans by Assistant Attorney General Lanny Breuer are also pathetic.
To see particularly how pathetic I recommend a piece by TheMomCat at The Stars Hollow Gazette who references one of the few 'got it right' economists Micheal Hudson's(funny how none of those are ever hired by this WH) report at i-Watch News for the back story.
There is no other way to say it and and factually if one cares about facts, any defense of this is also pathetic. I'll let Robert Reich explain why as well as what's behind Sarbanes Oxley as he did in 2010 which is still true today despite the Frankly Odd belief that Dodd Frank will stop this from happening again when we are not already enforcing laws on the books.
We now know, for example, Goldman Sachs helped Greece hide its public debt and then placed financial bets that Greece would default, using credit-default swaps to avoid risking its own capital. It’s the same tactic Goldman used for (and against) American International Group (AIG): Hide the ball, and then bet against the ball and fob off the risk to investors and taxpayers, using derivatives to remove the risky tactics from the balance sheets. Even today no one knows the fair value of the complex derivatives underlying these and related maneuvers, which is exactly the point.
Congress is now struggling to come up with legislation to stop this from happening again. And the Street is struggling to stop Congress. As of now, the Street’s political payoffs seem to be working. Proposed legislation still allows secret derivative trading in foreign-exchange swaps (similar to what Goldman used to help Greece hide its debt) and in transactions between big banks and many of their corporate clients (as with AIG).
But wait. We already have a law designed to stop this sort of fraud. It’s called the Sarbanes-Oxley Act of 2002.
Think back to the corporate looting scandals that came to light almost a decade ago when the balance sheets of Enron, WorldCom, and others were shown to be fake, causing their investors to lose their shirts. Nearly every major investment bank played a part in the fraud — not only advising the companies but also urging investors to buy their stocks when the banks’ own analysts privately described them as junk.
Bottom line: While financial reform is needed, there’s no reason to wait for it. Sarbox is already there. And even if financial reform is enacted without loopholes, there’s no reason to think it will be enforced if laws already on the books, such as Sarbox, aren’t.
And yet we hear...
"Sarbanes Oxley is only 1 tool where we prefer to use little to none like a fool."
That last part in italics is snark but it's what Assistant Attorney General Lanny Breuer might as well have said and came close to saying. And no one is accusing you of lacking confidence? How about anyone who has read the numbers?
Federal prosecutions for financial institution fraud have continued their downward slide despite the financial troubles reported in this sector. The latest available data from the Justice Department show that during the first eleven months of FY 2011 the government reported 1,251 new prosecutions were filed. If this activity continues at the same pace, the annual total of prosecutions will be 1,365 for this fiscal year, down 28.6 percent from their numbers of just five years ago and less than half the level prevalent a decade ago. See Table 1.
The comparisons of the number of defendants charged with financial institution fraud offenses are based on case-by-case information obtained by the Transactional Records Access Clearinghouse (TRAC) under the Freedom of Information Act from the Executive Office for United States Attorneys.
Where they are now: In 2009, two Bear Stearns hedge fund managers were cleared of fraud charges over allegedly lying to investors. A probe of Lehman Brothers stalled this spring. Merrill Lynch was sold to Bank of America in the fall of 2008. As for the executives who helped crash the firm, as we reported in 2010, “they walked away with millions. Some still hold senior positions at prominent financial firms.” Dick Fuld is still working on Wall Street, at an investment banking firm. Vikram Pandit remains the CEO of Citigroup.
There's so much in these reports I could get into like the many failures this administration hired, particularly Tim Geithner(I always find it funny when I find fluff pieces praising him by some since Tim Geithner didn't know the Fed is in charge of regulating our banking system as he said he "wasn't a regulator" in testimony before Congress even though he was president of the NY Fed. That's a pretty important fact to know about our whole Monetary system before hitching one's wagon to someone just because the president picked him because Wall St wanted that pick. Anyway...
Why haven't any significant convictions happened? Aww, they say "It's just too hard" because 1 Bear Stearns case wasn't successful so let's pack up the whole concept and go home. I seem to remember someone pretty important telling the Congressional Black Caucus to "Stop whining. Stop Complaining." Me thinks that would be better put towards his own administration. Otherwise how are we supposed to take any of this seriously?
"No man is worth his salt in public life who makes on the stump a pledge which he does not keep after election." - Teddy Roosevelt
The invocation of Teddy Roosevelt by this president I found rather comical since he is a stalwart defender of much of what was wrong that Teddy Roosevelt fought to right. RJ ESkow also found it an odd invocation:
If Roosevelt's ghost had been hovering over the lectern today, no doubt it would have appreciated being remembered. But the apparition might also have repeated the words Roosevelt spoke on the same platform in 1910:"It is of little use for us to pay lip-loyalty to the mighty men of the past unless we sincerely endeavor to apply to the problems of the present precisely the qualities which ... enabled the men of that day to meet those crises."
President Roosevelt fought relentlessly against the powerful financial interests of his time, who dominated the nation in pretty much the same way they dominate ours today. J. Pierpont Morgan famously offered to "send my man around to meet your man and sort it all out," but President Roosevelt didn't want to cut deals with powerful banking interests. He wanted to make them less powerful, and he got it done.
Four years after leaving office, Roosevelt was running for President again. People back then suggested that his ideas were too extreme: A minimum wage. Women's right to vote. Direct election of Senators. An eight-hour workday. But they all came true.
Now that's change you can believe in. And here's what Teddy Roosevelt told his Kansas audience that day.
Corrupt bankers must be prosecuted
More than one thousand bank executives were prosecuted after the Savings and Loan scandal of the 1980's under Republican President Ronald Reagan. This week's 60 Minutes report presented overwhelming evidence of criminal behavior at the major banks. The Financial Crisis Inquiry Commission provided a wealth of evidence suggested criminal acts, as did the Senate Subcommittee on Investigations. I analyzed information about leading executives at my former employer, AIG, that also seemed to suggest blatant illegal activity.
Yet, up to now, not one senior executive at a major financial institution has been prosecuted. There is no excuse for the Obama Administration's failure to prosecute anyone.
Teddy Roosevelt told the citizens of Osawatomie that "I believe that the officers, and, especially, the directors, of corporations should be held personally responsible when any corporation breaks the law."
Personally responsible, the man said.
Meanwhile the Obama Justice Department sits idly by as the SEC continues to let major corporations pay slap-on-the-wrist fines for executive criminality - fines that are often paid by the same shareholders they deceived - while "neither admitting nor denying wrongdoing."
But what would RJ know, he only worked at AIG. I'll expand on his point; Teddy Roosevelt made barn burning speeches against J.P Morgan’s huge railroad monopoly Northern Securities Company and then used the Sherman Anti-Trust to break it up with public support behind him because of those speeches. And then a new paradigm had been established in Washington after that, and Roosevelt would go on to file suit against more than 40 major corporations during his presidency.
That's why he was known as the Trust Buster. And yet we hear that monopolies can be regulated with weak legislation made in back room deals assuming they are not a huge problem. To invoke Teddy Roosevelt while opposing Brown Kaufman during the financial reform debate and working to kill it, this administration is pretty much antithetical to the memory of Teddy Roosevelt.
Especially remembering how the president was caught mocking a real bank rescue(by Paul Krugman) in favor of the lost decades Japanese zombie bank rescue plan without the export orientated economy under it like Japan has to fall back on, because our President loves free trade deals.
One objection you keep hearing to
nationalizationpre-privatization as part of a bank restructuring effort is that the US financial system is just too big and complex. Here’s Obama himself, presumably repeating what his advisers told him:"Sweden, on the other hand, had a problem like this. They took over the banks, nationalized them, got rid of the bad assets, resold the banks and, a couple years later, they were going again. So you’d think looking at it, Sweden looks like a good model. Here’s the problem; Sweden had like five banks. [LAUGHS] We’ve got thousands of banks. You know, the scale of the U.S. economy and the capital markets are so vast and the problems in terms of managing and overseeing anything of that scale, I think, would — our assessment was that it wouldn’t make sense."
Oh I get it! look a little to the right and you just might see just how clueless this president can be(even if you add Investment banks it's ridiculous). I like pictures as you know by now as sometimes they are worth a thousand words or 5 words. You are wrong, Mr. President.
I point this out to show just how clueless the next excuse I'll feature is and that's, "We don't have enough money or resources! Boo hoo hoo!" If that was really a problem, which it isn't, why did this administration work to kill Brown Kaufman which would have broken up these institutions and made the financial sector smaller instead of controlling like 60% of GDP?
David Sirota and Matt Taibbi spell it out well.
Tracking an individual example of this phenomenon, Matt Taibbi makes clear that it’s really difficult to overstate just how revealing this kind of thing is. Wall Street crooks who stole trillions of dollars are rewarded by the administration with additional trillions in bailouts. Meanwhile, those crooks’ now-impoverished victims — so poor they are on food stamps, mind you — are being targeted by the same administration for criminal investigation for allegedly making a few extra bucks on recycling empty bottles.
Taken together, these microcosmic examples (and there are plenty of others) all illustrate an inconvenient truth: namely, that law enforcement decisions today are not being guided by resource questions or dispassionate analyses of priorities, they are being guided by political will.
In states, it’s not that governors and attorneys general (other than those in New York, Nevada and California) want to go after financial fraud but can’t; it’s that they don’t want to go after that fraud, and they do want to shut down anti-Wall Street demonstrations. Why? Because, in the words of Democratic Gov. John Hickenlooper of Colorado, they fear the demonstrations are “something that could easily catch on.”
Likewise at the federal level, it’s not that President Obama wants to pursue Wall Street crime. It’s that as the biggest recipient of Wall Street cash in American history, he is making deliberate decisions both to avoid prosecuting the financial sector, and to continue past policies that make prospective prosecutions more difficult than they need to be – all while playing to old “welfare queen” demagoguery with a new election-year effort to villainize food-stamp recipients.
If you want to complain about some #OWS protesters not wanting to get involved in any elections or believing in the bought corrupt system I've shown here, perhaps suggesting progressive state AGs like those on team Schneiderman might be a legitimate course. After all, President Obama's Justice Department doesn't really care about people suffering from the foreclosure crisis and we know this by the dirty banker deal they support.
This private debt deflation overhang from the busting of the housing bubble and the vampire squid known as Wall Street and its tentacles in it are continually making the economy and the people living in it suffer greatly because consumers cannot put their money into the economy and this actually inverts the demand curve because they can't cash out their assets anymore because prices are falling(which would normally lead to increased demand but not now). Debt that can't be paid won't be paid so there needs to be some debt forgiveness for consumers via principle write downs etc.
This all goes back to what James K. Galbraith said about credit not being something that flows when you throw trillions of people's tax dollars at it, it's a contract that relies on the rule of law being applied to all parties, but even more for the banks and mortgage brokers working with them that have the most information as I illustrated with this piece before my OWS pieces.
I don't think enough normal Democratic voters understand that wide ranging legal principle really does apply to any microeconomic future aspiration anyone might have. This includes any mortgage, student loan agreement to go back to school, or any other legal contract anyone may want to enter into in the future to improve one's financial standing assuming that is still possible at all in this new Gilded Age. If it is possible all of it, absolutely all of it is actually factually dependent on making those with big pockets and political access follow the law.
If you don't demand rule of law for it all, specifically when it comes to the big stuff, the whole foundation of our system, financial or otherwise, even what's behind our money, doesn't exist. It should exist and it should be as strong as it has been in the past because it defines who we are as a country. Don't let any politician convince you that giving that up is all right. It's not!
It's wrong! Nation states and the economies their laws support are not legit and cannot function for everyone unless we demand our so called Representatives from the president on down adhere to and respect the rule of law. The rule of law is not just a foreign policy issue or a Constitutional issue, as many think of when it's spoken. The rule of law is the most important aspect of our entire economy(Monetary and fiscal policy) and our entire economic system.
It's not going to be OK if you just have faith. You have to learn to think, not just how to believe. The kinds of laws you passively accept being unenforced(whether by loyalty to the president or Democrats in Congress) do construct the kind of economy you actually live in, live with, and how this economy actually functions. This is true whether you like it or not or whether you like the way I said it or not.
If you don't demand the economy you want, if you don't demand the kind of country you want, or if you don't demand the type of economic system you want you will be left entirely out of the debate and right now you are for the most part. This is why #OWS spawned and luckily is here to stay.
You see, when you make excuses for the economy you don't want by excusing and only lightly admonishing the defrauding of investors, home owners, and all consumers that form the basis of the real economy you help strengthen this unequal neoliberal Gilded Age nightmare we are living in. And when you do so merely because you want to support the politician or party in office, you do bear some responsibility for that and all the damage that then ensues.
Occupy Wall Street gets this and despite the regurgitation of corporate owned media talking points I hear too much even on this blog about #OWS not standing for anything clear or how they need to emulate a "wed yourself to a party that doesn't care about you" MoveOn. org top down failure of a model, the message is obvious and strong. Income inequality is on the map thanks to Occupy Wall Street. No Democrat put it there, they're stuck in deficit fear monger mode, whether it's in the short term or the long term. If anything, they kept it out of the debate which is where your well being takes a hit.
And if after all this that I've explained to you, you still don't get it or you still want to regurgitate factless anti #OWS propaganda about #OWS being "too confusing and not standing for anything," I'll ask you a simple question:
WHAT DO I HAVE TO DO? DRAW YOU A PICTURE?!