At Rolling Stone, Matt Taibbi writes The Vampire Squid Strikes Again: The Mega Banks' Most Devious Scam Yet. An excerpt:
|Call it the loophole that destroyed the world. It's 1999, the tail end of the Clinton years. While the rest of America obsesses over Monica Lewinsky, Columbine and Mark McGwire's biceps, Congress is feverishly crafting what could yet prove to be one of the most transformative laws in the history of our economy – a law that would make possible a broader concentration of financial and industrial power than we've seen in more than a century.
But the crazy thing is, nobody at the time quite knew it. Most observers on the Hill thought the Financial Services Modernization Act of 1999—also known as the Gramm-Leach-Bliley Act—was just the latest and boldest in a long line of deregulatory handouts to Wall Street that had begun in the Reagan years.
Wall Street had spent much of that era arguing that America's banks needed to become bigger and badder, in order to compete globally with the German and Japanese-style financial giants, which were supposedly about to swallow up all the world's banking business. So through legislative lackeys like red-faced Republican deregulatory enthusiast Phil Gramm, bank lobbyists were pushing a new law designed to wipe out 60-plus years of bedrock financial regulation. The key was repealing—or "modifying," as bill proponents put it—the famed Glass-Steagall Act separating bankers and brokers, which had been passed in 1933 to prevent conflicts of interest within the finance sector that had led to the Great Depression. Now, commercial banks would be allowed to merge with investment banks and insurance companies, creating financial megafirms potentially far more powerful than had ever existed in America.
Complementary to a financial activity. What the hell did that mean?
"From the perspective of the banks," says Saule Omarova, a law professor at the University of North Carolina, "pretty much everything is considered complementary to a financial activity."
Fifteen years later, in fact, it now looks like Wall Street and its lawyers took the term to be a synonym for ruthless campaigns of world domination. "Nobody knew the reach it would have into the real economy," says Ohio Sen. Sherrod Brown. Now a leading voice on the Hill against the hidden provisions, Brown actually voted for Gramm-Leach-Bliley as a congressman, along with all but 72 other House members. "I bet even some of the people who were the bill's advocates had no idea."
Today, banks like Morgan Stanley, JPMorgan Chase and Goldman Sachs own oil tankers, run airports and control huge quantities of coal, natural gas, heating oil, electric power and precious metals. They likewise can now be found exerting direct control over the supply of a whole galaxy of raw materials crucial to world industry and to society in general, including everything from food products to metals like zinc, copper, tin, nickel and, most infamously thanks to a recent high-profile scandal, aluminum. And they're doing it not just here but abroad as well: In Denmark, thousands took to the streets in protest in recent weeks, vampire-squid banners in hand, when news came out that Goldman Sachs was about to buy a 19 percent stake in Dong Energy, a national electric provider. The furor inspired mass resignations of ministers from the government's ruling coalition, as the Danish public wondered how an American investment bank could possibly hold so much influence over the state energy grid.
There are more eclectic interests, too. After 9/11, we found it worrisome when foreigners started to get into the business of running ports, but there's been little controversy as banks have done the same, or even started dabbling in other activities with national-security implications—Goldman Sachs, for instance, is apparently now in the uranium business, a piece of news that attracted few headlines.
But banks aren't just buying stuff, they're buying whole industrial processes. They're buying oil that's still in the ground, the tankers that move it across the sea, the refineries that turn it into fuel, and the pipelines that bring it to your home. Then, just for kicks, they're also betting on the timing and efficiency of these same industrial processes in the financial markets—buying and selling oil stocks on the stock exchange, oil futures on the futures market, swaps on the swaps market, etc. […]
Blast from the Past. At Daily Kos on this date in 2006—If men were angels...:
|Like many of you, it's hard for me to understand how a core percentage of the American people are so quick to sacrifice their constitutional rights in the name of fighting terrorism. Reflecting on the question of why it is so, it's clear it's due in large part to Bush's framing of the war on terror as a fight between good vs. evil. Such a characterization has served to cast both sides in absolute terms. The terrorists are pure evil, soulless creatures with no affect who seek only to wreak death and havoc upon this earth. On the flip side, those who wage war against the terrorists are not only "good," but so righteous and pure in their crusade that they can do no wrong. That is the brilliance of Bush's strategy from the beginning—casting himself as the bearer of all things good in this fight, he has convinced his followers that there is not a shred of evil in his actions. Every act, no matter how repulsive it may to our innate sense of decency, becomes "good" because it is performed by those who fight evil. How else to explain how our society has actually accepted the fact that torture is a debatable topic? How else to explain that Scooter Libby was cast as a martyr instead of the criminal that he allegedly is?|
On today's Kagro in the Morning show, snow didn't take the live show out, but server downtime did. Greg Dworkin joined us to note that Christie is still toast, perhaps more so than ever, as reporters fill the investigative lulls with stories mining his bullying past. A new Q Poll runs head-to-heads in NY, Christie vs. Clinton and Cuomo. ACA sign-ups surge. Armando weighs in on Rand Paul's NSA lawsuit, Comcast's proposed buyout of Time Warner Cable, the NJ state police's denial that Chris Christie overflew the GWB on 9/11, and the NSA's allegation that Snowden tricked a coworker into giving him his password. Another look at TN Gop's senseless threats against VW.