The group Occupy The Hamptons will hold a march in Southampton Village today to raise awareness of the high rate of foreclosures nationwide and on the East End.
The march will start at 1 p.m. near Agawam Park and will head up Jobs Lane and Main Street and back to Agawam Park, where there will be a short rally.
Following the march, the group will hold a general assembly at the Lutheran Church on Montauk Highway between Water Mill and Bridgehampton.
“We’re announcing to people that our group is here and also to raise consciousness of foreclosures,” said Kyle Cranston, one of the Occupy the Hamptons organizers. “We’re trying to slow down or stop foreclosures until economic conditions can change to the point where things start going back to a more normalized situation.”
The group has been holding weekly gatherings in Sag Harbor since a large rally on October 15 on Long Wharf.
Too bad most of the real occupiers are Gen X, not spoiled rotten brats...
He then proceeded to raise interest rates nine times in a short time before he left office, and in some cases DOUBLED the mortgage payments for those who practiced what he preached.
"We" have a LONG way to go, folks...
Greed - I want a 3000 square foot home on an acre and I'm willing to buy the bs that is presented to me in order to get what I want. "Honey. What does interest only mean?"
Greed - I will take advantage of this customer and tell him/her what they want to hear in order to close a deal. I will skew numbers so they actually think they can afford this home. If they foreclose we take the property and spin it. That's what my manager says ...more and the bank thinks it is a win/win (As long as the market stays at an unsustainable level.) Ooops! Uh oh. Hello American tax payers. How are ya?
2 guilty parties. The rest of us pay the bill.
Occupy accountability.
No accounatbility, no real oversight, and a craps table to go with it.
You know what your grand delusion of de-regulation, and "self-policing" gets you? Enron.
In fact, I'd give you 20 borrowers, 80 bankers.
Have you ever heard legal phrase "knew, or should have known"? It means that if the bankers are so d**n smart, worth so much more compensation, and so great at their ****** jobs, there never should have been a market crash. At all.
Apparently, they ain't worth an ounce of salt.
We have not had this great a degree of socioeconomic disparity in a CENTURY.
You have no idea what a Gaussian copula function, the derivatives market, or who David Li is, do you?
I hear about how we're supposed to admire "entrepreneurs," but the bankers and traders who have been treating our nation's economic well-being like an extreme poker game have never done a decent day's work in their lives.
Get rid of Geithner, who presided over the SEC while giving Bernie Madoff a free pass TWICE, and Larry Summers and all the other libertarian crooks who care for nothing but gambling. They're addicts and they're taking all of us down with them. Re-enact Glass Steagall and enforce the law. The prisons should be full of these guys who "don't know where the money went."
With Fannie and Freddie covering the bad loans, with no risk of losing money, ...more banks made loans to everyone, and then sold the mortgages to the Feds, who had promised to buy them. The only real risk to the banks was in not making loans, and having the Government get after them for so called discriminatory reasons. Had they not lent to the normally unqualified borrower, the banks would have had hell to pay for discrimination violations.
The government relaxed regulations and the lenders took advantage of people who were led to beleive they could buy homes.
It's the rights' wet dream-no regulation so business can rape the middle class.
I'm not saying it's right for someone to spot you as an easy mark and take advantage of you, but it's not going to kill you if take the time to assess your situation and finances and make smart decisions. If we need Mommy government to hold our hands through everything ...more then we are screwed.
It's governements job to protect the public from predatory business practices.
The biggest problem, is that people out there TRUSTED a financial institution, and most of them weren't "friends of Angelo".
Why ...more on Earth should we be able to trust our bankers, eh?
Remind me again why housing became so unaffordable? I'd really like to hear your answer...
We most likely don't need "Mommy" to always hold our hand. However, in a civilized society laws are enacted so those that do manage to take advantage of someone are summarily punished. What went down over the last thirty years has been the equivalent of fiscal anarchy.
Too much of any good thing, including freedom, is a bad thing.
Sub-prime borrowers ordinarily DID NOT qualify for fixed rate mortgages (FRM) with 600 or less credit scores. I won't say it's impossible, but the vast majority of sub-prime loans were ARM, not FRM. The crap seriously hit the fan when Greenspan raised interest rates 17 TIMES between June '04, and when he left the Fed on the last day in January, '06. That's 19 months. Then, the defaults started coming in droves.
And, IRE on the part of banks which go undetected ...more rakes in billions for them as well.
I hope you learned something today.
Plain, and simple.
"In The Great American Stickup, celebrated journalist Robert Scheer uncovers the hidden story behind one of the greatest financial crimes of our time: the Wall Street financial crash of 2008 and the consequent global recession. Instead of going where other journalists have gone in search of this story-the board rooms and trading floors of the big Wall Street firms-Scheer goes back to Washington, D.C., a veritable ...more crime scene, beginning in the 1980s, where the captains of the finance industry, their lobbyists and allies among leading politicians destroyed an American regulatory system that had been functioning effectively since the era of the New Deal. This is a story largely forgotten or overlooked by the mainstream media, who wasted more than two decades with their boosterish coverage of Wall Street. Scheer argues that the roots of the disaster go back to the free-market propaganda of the Reagan years and, most damagingly, to the bipartisan deregulation of the banking industry undertaken with the full support of “progressive” Bill Clinton. In fact, if this debacle has a name, Scheer suggests, it is the “Clinton Bubble,” that era when the administration let its friends on Wall Street write legislation that razed decades of robust financial regulation. It was Wall Street and Democratic Party darling Robert Rubin along with his clique of economist super-friends-Alan Greenspan, Lawrence Summers, and a few others-who inflated a giant real estate bubble by purposely not regulating the derivatives market, resulting in the pain and hardship millions are experiencing now. The Great American Stickup is both a brilliant telling of the story of the Clinton financial clique and the havoc it wrought-informed by whistleblowers such as Brooksley Born, who goes on the record for Scheer-and an unsparing anatomy of the American business and political class. It is also a cautionary tale: those who form the nucleus of the Clinton clique are now advising the Obama administration."
A couple more scorchers.
If Occupy wants to go say "shame on you" to the banks, then go for it. I think that's healthy. But it's about time we all occupy our own homes and become responsible adults. You ...more know why I never moved up to a McMansion? Because I knew that there was no way on Earth I could afford a half mill mortgage. JP Morgans ghost could visit me and not convince me otherwise.
Your problem is you see things as us vs. them and a me vs. you with everything. Drop your party garbage and judge things on an issue by issue basis. Either that or believe the nonsense you just wrote above if it brings you comfort.
Not to be confused with "Independence"...
Look at these boards and witness the ugliness that is party politics. Do you see an attempt at consensus here ever? I don't. It's a competition where neither side admits to the failures of their side. It sucks and it's becoming who we are. So I guess in a sense we do have ...more representative government. I'd be lying if I said it doesn't make me profoundly sad and concerned about our future.
You are right that no one basket holds all the answers. This country is the "Great Melting Pot", and represents so many cultures, and ways of life that it is impossible to suit everyone. I also agree that "We" have become "ugly". I see people every day who won't volunteer their help, unless asked to do so. I see children, and adults with manners, etiquette, and a sense of decorum so distasteful it makes me happy I had the upbringing I did. I hope that's not reveling in another's misfortune.
I will say this, though, is that people would most likely be alot happier if we had a system where everyone had to play by the same rules. In case anyone out there missed it, we don't. Alot of the dischord comes from the fact that "justice" in this country can be purchased. That's an UGLY truth. We have a financial market, where some Cornell students can take a company public, never turn a profit despite the generation of 840 million dollars from an IPO, be the posterchildren for failure, and excess, then become nothing more than an OTCBB shell company with a roughly $120M judgement against them. And, everything they did was "legal". Sometime I'll tell you about just how easy it is to turn a Chapter 7 shell company into an inflation creating, pocket lining, revenue generator over 5-7 years, and damage your native currency enriching yourself, if you know how to use your brain for "evil". I won't, and never will.
Like I always say, "We" have a LONG way to go...
1. a: absence of government
b: a state of lawlessness or political disorder due to the absence of governmental authority
c: a utopian society of individuals who enjoy complete freedom without government
2. a: absence or denial of any authority or established order
b: absence of order : disorder
You really aren't that bright, are you?
How many times did Alan Greenspan raise interest rates between June 2004, and the date he left office, thus lighting the fuse for the housing bubble implosion?
I'll give you a hint, it ain't less than a "baker's dozen"...
A "victim" who continuously works over 60 hrs. a week, year round, and is not "broke". A "victim" whose job(s) you most likely could not do on your best day. A "victim" who actually knows what it's like to live with a disability, and work with it, and through it. A "victim" who survived a lightining strike, and lived to tell about it. A "victim" who will never invest his 401k money every again. A "victim" who actually KNOWS about the criminality, and clandestine undermining ...more of our formerly, properly regulated financial system that has gone on.
Kind of ironic there are no books defending Wall Street's actions over the last thirty years. Especially how they eliminated position limits, changed the definition of a physical hedger, thus removing "supply and demand" from the price determination of a commmodity.
Now things like gasoline are priced because a speculator says it's worth x amount of dollars per barrel. Saddest thing is, you've been royally reamed, and most likely ...more don't even know it...
Anyone else?
I respect their tenacity. I think by late spring it will grow considerably and
have a major impact on the presidential elections.
Fourteen hours on the road today, and I had the oppurtunity to review it.
I don't care what you think, or even if you read what I have to say. What sucks about that though, is that people who don't care because "I'm doing fine", and "It's not my problem", are why we're in the depths of fiscal disaster.
Have ...more a great night...
Maybe you should look it over, before thumbing your nose like some petulant kitty cat. It is a solid vat of statistical, and factual information. Though a bit dystopian in it's assumptions, it is a good, comprehensive piece of literature.
The difference between people like you, and people like me is that I don't let personal bias determine the information I accumulate.
At last count, 2.5 TRILLION DOLLARS IS MISSING from the Social Security coffers. All that's there is a collection of government issued bonds. Money comes in the front door, and then goes out the back door to shore up the Federal Budget to pay for things like tax cuts. Kind of dubious, don't you think?
Can you say "Ponzi scheme" boys, and girls?
~ 2009 Social Security Trustees Report
The 2010 gets even better, and more evasive in it's language regarding future outlook. There is NO CASH in the account. It's ...more nothing but bonds, on money borrowed to finance an assortment of things since Viet Nam.
"For 2010 through 2024, trust fund income, including interest income, is more than is needed to cover costs, so trust fund assets will continue to grow. Beginning in 2025, trust fund assets will diminish until they become exhausted in 2037. Tax revenues are projected to be sufficient to support expenditures at a level of 78 percent of scheduled benefits after trust fund exhaustion in 2037, declining to 75 percent of scheduled benefits in 2084."
~ Trustee Report, 2010
If they hadn't "borrowed" from it, there would be no decline.
Was there a failure to regulate reasonably and properly?, ...more Yes! Madoff and now Corzine, clear cases of fraud that regulators missed completely, or were told to ignore because of political connections. Could derivatives be better managed or regulated? Yes. But first lets make sure the underlying collateral they are derivative of is not a mortgage from a guy who cant possibly service it. The latter is a product of decades of so called "progressive" public policy, really aimed at buying votes from the less fortunate, wherein government mortgage agencies, as well as private institutions that were forced to by the government, made mortgages to the aforementioned less fortunates (who took the money and ran). And sure, everyone in the chain piled on with a vengeance when they saw the volume of money flowing. Given that it was a product of government policy, they thought the government had their back and it would keep going indefinitely. Some got bailed out in the end, some didn't.
Interesting think about Greenspan, after feeding the beast with liquidity as Fed chair until the foreclosures started flowing in, he promptly left and took a consulting job with our own John Paulson. I have no problem with Paulson profiting while everyone else was still drinking the koolaid and I dont blame him for buying political cover when the witch hunts began, but I have a problem with Greenspan the public official jumping to the private sector and taking the other side of the trade of the mess he helped create. Ethics rules anyone?
OWS manifesto contains 2 things I agree with;
1. No bailing out of investment banks (good, but don't ask them to provide liquidity to government schemes to lend to people money they don't have the means to repay)
2. Restore elements of Glass-Steagal (Good, don't include depositor funds in leverage calculations and keep Corzine's hands off them too, ie enforce reasonable laws already on the books too)
Unfortunately most of the protesters couldn't articulate or understand these, but have embraced all the Marxist/pay my student loan non sense.
Some advice to OWS:
Blaming "Wall Street" is too easy, and most Wall Street guys are just hard working fools, not unlike many small businessmen, trying to make an above average income for their family, while enjoying zero job security and no tax payer funded pensions . Do some real homework OWS, it might lead you to different addresses. Of course that addresses might also be the homes your enablers and financial supporters, 1%ers all.
Had they listened to Brooksley Born, instead of lambasting and blackballing here vastly greater experience with derivatives, we would most likely not be in this mess.
It's the same "good ole boy" network of ignoring academia and experience, for power and position.
Paul will have to explain proposals to eliminate programs and agencies that benefit and protect so many people.He also has connections to some questionable groups and people,as well as explaining in detail the contents of his newsletters.
Or are religious zealots okay if they support republican candidates?
For the record, you'd be hard pressed to find any presidential candidates on the right with ties to religious zealots, especially those *** damning America. Mere accusations of ones beliefs does not a zealot make. Prolife or belief that marital unions should be reserved ...more between a man and women doesn't make someone a religous zealot. BTW, zealotry on either side refers to the fanatical and unacceptable associations mean just that.
And to my original point, Obama has YET to be scrutinized for his associations, and as usual we see a double standard being applied to the right:
A new study finds that the media is treating President Obama’s potential opponents a lot differently than they treated him in 2007 and 2008. The Culture and Media Institute found that while the networks had virtually no interest in the connection between Obama and Reverend Jeremiah Wright, they have suddenly discovered religion when it comes to the GOP field of candidates.
CMI concludes that the mainstream media is using religion to paint the republican field of candidates as scary religious zealots, or as a means of scrutinizing differences in the candidate’s faith.
CMI found that the religion of Republican candidates was discussed 143 times in the first ten months of this year. Stories of Democratic candidates’ faith were brought up 19 times in the same time period of the 2008 election cycle.
And for the radicals on the right running,they all are courting the evangelical vote.It's the only way they'll be able to win is to promise a theocracy.I'd say that Santorum,Perry and Bachmann all are depending heavily on winning the upport of the religious right,especially since many on the RR regard Romney's religion-Mormonism- as a cult.
Once again,you fail.
Despite the fact that less than 14% of Americans are self-identified "teapartiers" and their favorability rating hovers below that of the President AND democrats and republicans, John Boehner has let the crazies rule the house. A Christmas present for dems.
As for the presidency, ...more there is no one in the field that can beat Obama which means we get to watch bagger heads explode for another four years!
Barack Obama - February 2, 2009
Bye Bye Barry.
Today the House republicans assured us that they don't want to help the economy or the people by voting down a bill that was passed by a large bi-partisan vote in the Senate.
No payroll tax extensions for working people.They opposed it when it was poposed for a year and now they opposed it when it was proposed for two months .Thanks to the House republicans,it looks like ...more all working peoples' taxes are going up at the end of the year.
Merry Christmas!!
BOTH parties have managed to create a not only fiscal, but regulatory, and legal disaster. After the last Great Depression, some of the most brilliant, and learned minds sat down to answer the question: "How can we prevent this from ever happening again?".
The answer was the Glass-Steagall Act, which basically designed and regulated our economy in a relatively stable manner for about sixty years. Then, bit by bit "smart" bankers, ...more and politicians slowly eroded the checks and balances that once existed.
Goldman-Sachs even CLANDESTINELY altered the nature of the futures markets in the early ninieties. Correspondence with the CFTC at the time UNDERMINED AN ACT OF CONGRESS, and if it weren't for the fact that they were accidentally leaked, no one would really be the wiser. That's how much your "average" American knows about how the "free market" is supposed to function.
What that series of letters basically did was alter the definition of a physical hedger, remove position limits, and essentially REMOVE supply and demand from the price determination of a commodity. Now, a commodity is worth whatever a speculator hedging bets, and fulfilling futures contracts says x commodity is worth.
Supply and demand removed as a factor from the "free market"?
HOW is that "free"?
Yes, Phil, one party screwed it up, and only one party can fix it. Brilliant observation. The problem with that is nothing Obama has tried has helped at all. And apparently, Obama by his own statements is the only one who thinks it should have been fixed in three years, which, is exactly what he got elected to do, but has failed.
Leftists fail ...more to realize both parties have had a hand in said screwing. It's always the right this, the right that and they ignore the incompetence of the left especially when we have a president who is partaking in on-the-job training, 1 trillion dollars at a time and racking record spending. Yeah, right, no said screwing going on there. Everything is peachy.
It isn't hard to see that since Mitch McConnel stated early in Obama's administration that job ONE of the republicans was to make Obvama a one-term president-and since then they have obstructed and diverted a every attempt to address problems.
Just because you disagree with him doesn't mean he hasn't done anything or been inneffective.We know why you hate hiim.It's the common thread that ties the tea party together.
SIGNING FAIR PAY FOR EQUAL WORK BILL
SIGNING STIMULUS BILL
SIGNING HEALTH CARE INSURANCE REFORM & STUDENT LOAN REFORM BILL
SIGNING THE MATTHEW SHEPARD HATE CRIME BILL
OR INCREASING FUEL EFFICIENCY IN OUR AUTOS AND TRUCKS
OR REDUCING OUR NUCLEAR ARSENAL
OR SAVING THE AUTO INDUSTRY
OR GETTING 20 BILLION ...more FROM BP
OR
the Foreign Account Tax Compliance Act of 2009, which repeals tax breaks for companies
that ship jobs overseas and replaces it with incentives to create jobs in the United States,
and a crackdown on U.S. citizens and companies using offshore accounts to avoid paying taxes
(22,000 parties identified and $210 billion in back taxes and penalties to be collected over next 10 years).
OR
Giving Expanded Benefits for same-sex partners of federal employees,
including the strengthening of the Family and Medical Leave Act,
that now allows under the law for a gay federal employee to take leave
to care for a child with a gay partner.
OR
The 100 billion in the military budget cuts that Sec. Gates has been charged with locating
OR
His public stance against the Bigoted Arizona Immigration Law
OR OTHER what some like to term as "small victories".....
Signed: Monday, May 17, 2010
Daniel Pearl Freedom of the Press Act
Signed: Friday, April 23, 2010
Caregivers and Veterans Omnibus Health Services Act of 2010
Signed: Tuesday, March 23, 2010
Patient Protection and Affordable Care Act
Signed: Thursday, March 18, 2010
Hiring Incentives to Restore Employment (HIRE) Act
Signed: Wednesday, January 27, 2010
Emergency Aid to American Survivors of the Haiti Earthquake Act
Signed: Friday, January 22, 2010
2009 Tax Breaks for Haiti Donations
Signed: Friday, October 30, 2009
Ryan White HIV/AIDS Treatment Extension Act of 2009
Signed: Thursday, October 22, 2009
Veterans Health Care Budget Reform and Transparency Act
Signed: Thursday, August 6, 2009
Cash For Clunkers
Signed: Monday, June 22, 2009
Family Smoking Prevention and Tobacco Control Act
Signed on July 13, 2010
To permanently authorize Radio Free Asia, and for other purposes
Signed on July 07, 2010
Formaldehyde Standards for Composite Wood Products Act
Signed on July 02, 2010
Homebuyer Assistance and Improvement Act of 2010
Signed on July 02, 2010
Airport and Airway Extension Act of 2010, Part II
Signed on July 02, 2010
National Flood Insurance Program Extension Act of 2010
Signed on July 01, 2010
Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010
Signed on June 25, 2010
Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010
Signed on June 17, 2010
Small Business Act and the Small Business Investment Act
Signed on June 15, 2010
A bill to amend the Oil Pollution Act of 1990 to authorize advances from Oil Spill
Liability Trust Fund for the Deepwater Horizon oil spill
Signed on June 09, 2010
Extension of Antitrust Criminal Penalties Enhancement and Reform Act
Signed on June 03, 2010
Disaster Relief and Summer Jobs Act of 2010
Signed on May 27, 2010
Minimum Essential Health Care Coverage by Veteran's Affairs
Signed on May 27, 2010
Federal Judiciary Administrative Improvements Act of 2010
Signed on May 27, 2010
Satellite Television Extension and Localism Act of 2010
Signed on May 24, 2010
Haiti Economic Lift Program Act of 2010
Signed on May 14, 2010
To provide that Members of Congress shall not receive a cost of living adjustment in pay during
fiscal year 2011
Signed on April 23, 2010
Caregivers and Veterans Omnibus Health Services Act of 2010
Signed on March 31, 2010
Prevent all Cigarette Trafficking Act
Signed on March 26, 2010
To permit the use of previously appropriated funds to extend the Small Business Loan Guarantee Program,
and for other purposes.
Signed on March 25, 2010
North American Wetlands Conservation Act
Signed on February 27, 2010
Medicare Physician Payment Reform Act of 2009
Signed on February 27, 2010
Social Security Disability Applicants' Access to Professional Representation Act of 2010
Signed on February 24, 2010
Jobs for Main Street Act, 2010
Signed on February 16, 2010
Nuclear Forensics and Attribution Act
Signed on February 12, 2010
Statutory Pay-As-You-Go Act of 2010
Signed on November 06, 2009
Credit CARD Technical Corrections Act of 2009
Signed on November 06, 2009
Worker, Homeownership, and Business Assistance Act of 2009
Signed on October 22, 2009
Veterans Health Care Budget Reform and Transparency Act of 2009
Signed on August 07, 2009
Making supplemental appropriations for fiscal year 2009 for the Consumer Assistance to Recycle and Save Program
Signed on June 22, 2009
Family Smoking Prevention and Tobacco Control Act
Signed on May 22, 2009
Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009
Signed on May 20, 2009
Helping Families Save Their Homes Act of 2009
Signed on May 15, 2009
Protecting Incentives for the Adoption of Children with Special Needs Act of 2009
Signed on April 24, 2009
Special Inspector General for the Troubled Asset Relief Program Act of 2009
Signed on April 21, 2009
Edward M. Kennedy Serve America Act
Signed on March 30, 2009
Omnibus Public Lands Management Act
Signed on March 20, 2009
To extend certain immigration programs
Signed on February 04, 2009
Children's Health Insurance Program Reauthorization Act of 2009
Not to mention that he effectively got us out of Iraq and got some guy named Bin Laden
And he did all of this with the republicans blocking and obstructing every inch of the way.
What abot the 21 months of private sector job growth?It HAS helped lower the unemployment numbers,regardless of whatever lie you are trying to pass off.But we already know that you'll just defend the the far right radicals that have obstructed and filibustered for the last 3 years.The republicans stepped on their own dick with the payroll tax extension,and the tea party is squarely to blame.Now the entire republican ...more party is self-destructing.That's waht happens when there is no leadership in the House because the speaker is afraid of the most radical and unstable wing of the party.But then,they're supported by the most radical and unstable constituents.
Obama and the left will continue to get more and more desperate and more and more vicious as they try to shift the blame to anyone they can but where the blame correctly resides.
It's so obvious that a Randian, Greespan sponsored, "self correcting", unregulated "free-market" is the way to go. Greed, and fraud will take care of themselves! Of course they will, but only after a massive amount of damage ...more is done. It's worked SO well up to this point, I can't believe there's no dancing in the streets!
But, there seems to be plenty of protest, however...
A Sign Occupy Wall Street Is Having Political Impact
By Matt Taibbi
For those saying that Occupy Wall Street hasn't had a concrete effect, take a look at this. It's not much, but it's a little something. The leaders of the House Financial Services Committee announced yesterday that they will be holding hearings on the SEC's practice of concluding settlements with Wall Street defendants without forcing the accused to admit to wrongdoing.
This ...more whole thing seems to be the creature of ranking Republican Spencer Bachus. From his site:
"The SEC’s practice of using 'no-contest settlements' has raised concerns about accountability and transparency, and I’m pleased the Committee will examine these concerns in a bipartisan manner," said Chairman Bachus.
If they actually do something about this, then it'll be time to give them a pat on the back. But in the meantime, we can expect to see a lot of things like this in an election year marked by an absence of a real galvanizing message coming from either party. With OWS and populist anger generally filling that messaging void, there are going to be a lot of politicians who will look to capitalize by doing things like, for instance, beating up on the SEC in a few days of well-publicized but ineffectual hearings.
Spencer Bachus to positioning himself as a champion of Wall Steeet reform is, of course, hilarious. Not only was he one of the leaders of the opposition to even the very mild Dodd-Frank reform, he went out of his way to stall changes to the rules governing derivative trades that would have prevented abuses like JP Morgan Chase's rape of Jefferson County, Alabama. This was particularly egregious because Bachus, who was the House's third-biggest recipient of Wall Street money and a heavy beneficiary of donations from Chase, happened to be Jefferson County's congressman.
So this guy is no enemy of the banks. What yesterday's move does show, however, is that politicians are listening to the specific complaints of OWS. A year ago, we would never have even seen hearings like this coming from the likes of Bachus and Barney Frank, who also supported them move. But now, everybody is trying to find a way to ride the wave. It's too early to celebrate any of this, but it can't be a bad thing.
Obama and the Rule of Law
By Jeff Connaughton
Long silent and now contradictory, President Obama needs to deliver a clarifying speech about our financial markets and the rule of law. Speaking in Kansas on December 6, he 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 ...more 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 Justice Department's repeated decisions not to risk losing at trial against Wall Street executives don't make these person's actions legal. (If a district attorney can't prove the actual thief stole your wallet, that doesn't make stealing legal. It simply means that, regrettably, a malefactor goes unpunished.) As Securities and Exchange Commission Enforcement Director Robert Khuzami said in Senate testimony in 2009, Wall Street perpetrators "are smart people who understand that they are crossing the line" and "are plotting their defense at the same time they're committing their crime."
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."
The Obama Justice Department hasn't tried a single Wall Street executive in a criminal court. Against a handful, it decided to let the S.E.C. bring civil charges of fraud, which are easier to prove. So if defendants' wrists are merely being slapped by the S.E.C. instead of cuffed by the Justice Department, Obama has only his appointees to blame.
For three important reasons, the President needs to explain why the Justice Department has filed away its investigations of big banks and Wall Street firms without indicting anyone. First, American confidence in the system is deeply shaken. Second, it strains credulity for millions of Americans -- and has impelled thousands of them to occupy public places in protest -- that no banking or insurance executive deserves criminal prosecution for the actions that brought on the financial crisis. Third, by failing to prosecute a single high-profile Wall Street actor today, the Administration is failing to deter financial fraud tomorrow.
The jury is out (alas, only metaphorically) on whether Wall Street practices that accompanied the financial crisis amounted to criminal fraud. Some legal commentators have concluded that the causes of the crisis were systemic and not the result of malfeasance or conspiracy. The debate about whether practices were illegal or simply unethical will never be resolved because only a jury can render a verdict after weighing the evidence, presented by opposing counsel, for each element of an alleged crime. That said, independent fact-finders like the Financial Crisis Inquiry Commission, the Senate Permanent Committee on Investigations, and the bankruptcy examiner for Lehman Brothers have compiled compelling evidence of what, to many, certainly looks like fraud.
But did the Justice Department's senior leadership even make targeting high-level fraud a top priority? Did it plan, staff, fund, and direct a thorough, probing investigation of each of the primary potential defendants? While I was working in the Senate, conversations I had with Justice Department officials led me to believe that it didn't. As the New York Times and New Yorker have reported, the Department's leadership never organized or supported strike-force teams of bank regulators, F.B.I. agents, and federal prosecutors for each of the potential primary defendants and ignored past lessons about how to crack financial fraud. When Senator Ted Kaufman (D-DE) and I met privately with Department officials in September 2009, one of them explained they were dependent on investigators to bring them cases (which typified, I believed, their passive approach). And, for their part, the investigators were receiving no help from bank regulatory agencies (in the 1990s, successful prosecutions after the savings-and-loan scandal hinged on referrals from the responsible supervising agencies, which provided key roadmaps for F.B.I. investigations).
The Justice Department, F.B.I., and bank regulatory agencies failed to design a prosecutorial strategy that would've indicted and perhaps convicted many top executives who knew that their banks were selling fraudulent securities that bundled together thousands of largely bad loans. These loans, known in the industry as stated-income loans and (more glibly and more accurately) as liar loans, were issued without verifying the borrowers' income. A former executive in charge of fraud investigations at mortgage lender Countrywide Financial told 60 Minutes that mortgage fraud at her firm was "systemic," but federal investigators never contacted her. The U.S. attorney in Los Angeles has already declined to prosecute Countrywide executives. The Senate's Permanent Subcommittee on Investigations found that approximately 90 percent of WaMu's home-equity loans were stated-income loans, creating, in the words of Treasury Department Inspector General Eric Thorson, a "target rich environment for fraud." Yet the U.S. Attorney in Seattle decided not to indict anyone at WaMu.
Failure to disclose material information is another form of potential fraud. Merrill Lynch, for example, understated its risky mortgage holdings by hundreds of billions of dollars. Executives at Lehman Brothers assured investors in the summer of 2008 that the company was sound, even though the bankruptcy examiner later concluded that Lehman had engaged in "actionable balance-sheet manipulation."
Yes, with financial fraud, criminal intent is difficult to prove, especially when a defendant relied on professional advice from accountants and lawyers (and in some cases may even have been acting with the knowledge of the bank's regulator, who was apparently more concerned about the bank's financial soundness than about full disclosure to investors). But we shouldn't outsource the interpretation of fraud laws to a potential defendant's accountant and lawyers. And why haven't prosecutors used provisions in the Sarbanes-Oxley Act, which put in place tough criminal sanctions in the wake of Enron and other cases of massive corporate frauds? In the absence of an aggressive, targeted effort by the Justice Department, we'll never know whether crimes may have been proved beyond a reasonable doubt.
Why didn't this happen? I wish I knew. At the Senate oversight hearings, Justice Department officials assured the Judiciary Committee that every lead was being pursued and every rock turned over. Doubtless they'll continue to claim this. Yet 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 1986, speaking about the failure of another president's Justice Department to vigorously prosecute white-collar crime, former Chairman of the Senate Judiciary Committee and current Vice President Joseph Biden said that "people believe that our system of law and those who manage it have failed, and may not even have tried, to deal effectively with unethical and possibly illegal misconduct in high places." Until this president stops calling Wall Street's deleterious actions "not illegal," he's failing to deter -- and therefore effectively encouraging -- future financial fraud. And until he gives a clear and full explanation of the inadequate response of his Justice Department and S.E.C., he and his appointees are helping to undermine the public's faith in equal justice under the law.
***Jeff Connaughton is the former chief of staff to former U.S. Senator Ted Kaufman (D-DE), who chaired two Senate Judiciary Committee oversight hearings on financial fraud prosecutions in 2009 and 2010.
If you learned anything from your 8th grade science teacher, I would hope that it would be the capability of critical thought, and empirical analyzation of data.
This man has little to gain politically by making this statement. To my knowledge he is not running for office, nor does he need to pander to the populace to garner votes.
Is it just possible that he may be repentant? In the grand scheme of things, ...more even Greenspan was, though to a pathetic degree...
Jeff Connaughton: Where Are the Cops on Wall Street?
by on February 5, 2011
This post is adapted from a speech delivered Nov. 2, 2010, to more than 300 financial regulators and Wall Street executives during a panel discussion entitled “Financial Crisis and Financial Crimes” at the Federal Reserve Bank of New York. I’m going to address briefly four questions, all of which go to the integrity and competitiveness of our capital ...more markets. First, was there fraud at the heart of the financial crisis? Second, has the law enforcement response so far achieved effective levels of deterrence against financial fraud? Third, are federal law enforcement agencies sufficiently capable of detecting fraud and manipulation, particularly in markets that are increasingly complex? And finally, should Wall Street itself care about all this? In short, my answers would be yes, no, no and yes. But I think it would be a mistake to view the financial crisis and government’s response as partisan issues. Indeed, on June 3, in the midst of the Senate debate on the Dodd bill, I picked up my Wall Street Journal and read the following : “The left says Congress is counting too much on the wisdom of discredited regulators. ‘We should follow in the footsteps of our forbears from the 1930s who made the tough decisions and wrote bright-line laws which lasted for over 60 years–until they were repealed,’” said Sen. Ted Kaufman (D., Del.). “The right counters with an attack on big government. Sen. Richard Shelby (R., Ala.) blasts the new consumer-finance regulator as ‘the Democrats’ new bureaucracy’ and ‘a massive expansion of government influence in our daily financial lives.’” I called the columnist and said politely: There’s only one flaw with your thesis: Senator Shelby voted FOR the Brown-Kaufman amendment to limit bank size and leverage! Why are we the “left” and he is the “right”… when on the major issue of “Too Big to Fail” we came out at the same place? To me, it is a conservative view to want to go back to what had worked in the past. Senator Kaufman wanted short bills that draw hard statutory lines, that firmly resolve inherent conflicts of interest, and that give regulators clear guidance. Now, to Question 1: Was there fraud at the heart of the financial crisis? On this question, the left and right clearly came together during the 111th Congress. Co-authored by Senate Judiciary Committee Chairman Pat Leahy, Senator Chuck Grassley and Sen Kaufman, the Fraud Enforcement Recovery Act — or FERA, as it is known — received 92 votes on the Senate floor and was signed into law by President Obama in May 2009. FERA authorized an additional $165 million in resources to federal investigators and prosecutors to target fraud connected to the financial crisis. From the beginning we recognized there was a wide spectrum of behavior: from those banks that never even issued sub-prime mortgages, to those who perhaps recklessly but not criminally assumed housing pricings would never fall — to those who had actual knowledge that they were engaged in fraudulent behavior, lined their own pockets, failed to disclose material information and left investors holding the bag. Even if there were only a few bad apples, well-trained law enforcement officials needed additional resources to sort through the mountain of actors, transactions and evidence, and FERA was designed to give it to them. The counter-narrative is that all information about the underlying mortgages was disclosed, even if buried deep in the documents; that the markets themselves were not distinguishing among the quality of the underlying mortgage pools, pricing all mortgage-backed securities on the basis of the evaluations stamped on them by the credit rating agencies; that buyers were not performing due diligence; and therefore any fraud that might have occurred was isolated and played a minor role. There may be some truth to this counter-narrative, at least in part because the disclosures that were made can make it very difficult for prosecutors to prove beyond a reasonable doubt the necessary element of criminal intent. (Parenthetically, if so, what does that tell us about the adequacy of disclosure rules and the ability and efficiency of our most sophisticated market players to understand this information?) But let me focus on the information that we know was NOT disclosed, both in the case of Washington Mutual as uncovered by the staff of the Permanent Subcommittee on Investigations and Lehman Brothers as described by the bankruptcy Examiner’s Report. As early as 2005, internal audits by WaMu revealed stunning lapses in underwriting standards. An audit of two large Southern California origination offices had confirmed fraud rates of 58 and 83 percent . The extensive — and perhaps systemic — fraud uncovered by these audits was never disclosed, and yet WaMu officials chose to continue with business as usual. Just last month, two witnesses before the Financial Crisis Inquiry Commission alleged similar cover-ups. Clayton Holdings, a firm that reviewed loans filed on behalf of investment banks, noticed significant underwriting deficiencies in the loans sold for securitization in 2006 and 2007, yet investment banks continued to package the mortgages and sell the resulting securities to investors, never disclosing Clayton’s findings. Was this material information that WaMu and other banks had a duty to disclose to investors? That is for prosecutors, judges and juries to decide; but it sure looked that way to committee investigators. Another example of likely fraud is described by the Examiner’s Report in the bankruptcy of Lehman Brothers, which concluded that Lehman executives manipulated the balance sheet by failing to disclose Repo 105 transactions . In fact, the whole purpose of these short-term transactions was to suggest capital reserves were higher by $50 billion than they actually were just before reporting periods. Finally, recent revelations about the foreclosure mess strongly indicate that fraud — and possibly criminal perjury — were system-wide at many of the loan servicers selected by the banks. And just as troubling for the derivatives markets, there may have been fraud or systemic recordkeeping failures (or both) that will cloud title for many securitized mortgages. Question 2: Has the law enforcement response to the financial crisis so far been adequate to deter financial fraud? Twice, Chairman Leahy has asked Senator Kaufman to chair oversight hearings on FERA, in December 2009 and again in September 2010. At those hearings — which featured officials from the Justice Department, FBI and SEC — Senator Kaufman expressed his full support and appreciation for the hundreds of law enforcement personnel who are working tirelessly on this effort, but also voiced his frustration about the lack of prosecutions against executive and boardroom-level officials. Many commentators have asked: Where are the cases? There have been many successful cases brought against mortgage brokers, as well as an impressive list of recent cases against Ponzi schemes and insider trading. But after the Bear Stearns verdict, we have seen no further criminal indictments at major firms for behavior connected with the financial crisis. As for civil suits brought by the SEC, two federal judges have each put the question squarely on the table: Are the SEC settlements achieving the level of deterrence that the facts demand? Are they holding the responsible individuals adequately to account? Or are they in effect just sending a bill to be paid by the current shareholders? As for WaMu officials, why hasn’t the US Attorney in Seattle brought a case? Or the SEC against former Lehman Brothers executives? I really don’t have a clue. The role of Congress stops after asking whether the agencies are coordinating and engaged in a foundational strategic approach and whether there are any systemic obstacles preventing effective law enforcement. The Justice Department and SEC have testified publicly that they are continuing a robust investigative effort and that cases are still in the pipeline. These are no doubt complicated cases that take time to develop. Regardless of the election results, I predict the new Congress will continue to demand accountability and provide law enforcement with all the resources it needs to pursue complex financial fraud. It’s good policy and good politics — for BOTH parties. Question 3: Does federal law enforcement have in place systems that permit it to monitor and uncover ongoing fraud and manipulation? Well, clearly not, as the experience of the last two years demonstrates. First, the FBI cannot do the investigative work alone. Senator Kaufman has repeatedly urged the bank regulatory agencies to play a stronger role in developing criminal referrals, as was ultimately the case in the Savings & Loan crisis. The WaMu hearings revealed that the Office of Thrift Supervision was almost a fraud enabler. This regulatory culture must change, and it is. Between the first oversight hearing in December, 2009 and the second in September, 2010, the number of criminal referrals provided by the bank regulatory agencies has increased from ZERO to a small but significant number, according to the Justice Department. Second is an example Senator Kaufman has focused on extensively in the past 15 months: Technology advances in trading markets have caused law enforcement and regulatory agencies to fall far behind in their ability to monitor and detect manipulation by high-speed, algorithmic traders. In only a few years time, the equity markets have jumped from two exchanges to more than 50 trading venues, becoming so mind-numbingly complex that even professional traders have difficulty telling you with confidence what happens to their orders. As we’ve moved from floor-based to electronic systems, the systems that undergird regulatory surveillance have become ridiculously outmoded. After the May 6 flash crash, it took armies of SEC and CFTC staff more than three months to collect and analyze the trading activity for that single day. What does that say about their ability to monitor that activity in real time on an ongoing basis? This is not a new problem. After Black Thursday in 1987 and another market event in 1989, Congress passed the Market Reform Act in 1990 to expand the SEC’s authority to enhance its ability to recreate unusual trading days and to detect illegal trading activity. In 20 years, the SEC has never used that authority! The Commission proposed a rule in 1991 and then re-proposed it in 1994, but never adopted it. Finally, on April 14, 2010, the Commission proposed a rule that would require tagging of high frequency and other large volume traders. And because of the proliferation of market venues, we have huge gaps in the audit trails collected by the exchanges, and so the Commission after the flash crash also proposed a consolidated audit trail. We’ll see if the Commission finally adopts these rules. In the meanwhile, do we know whether some algorithmic traders — whose servers are co-located at every exchange, who trade in microseconds and whose volumes currently represent 70 percent of the daily trading in the equity markets — are engaged in manipulation? How can we know, one way or the other? The systems still aren’t in place to monitor and police their activity. Neither has the Commission provided any guidelines for what type of electronic trading behavior in the current microsecond environment would equate to manipulation. We’ve heard concerns from the SEC about spoofing or layering (when orders are issued and immediately cancelled for the purpose of feigning interest in buying a stock to manipulate its price), momentum ignition strategies, liquidity detection strategies that enable front-running of mutual fund and pension fund orders, and most recently about quote stuffing (when a trader enters a huge numbers of electronic orders in an effort to slow one market center and capitalize on latency arbitrage opportunities at other market centers). Without guidelines or monitoring, as Senator Kaufman has said repeatedly, it’s like the Wild West. In Australia, in a review of algorithmic trading published February 8, the Australian Securities Exchange called on the Australian Securities and Investments Commission to, “Ensure that… market manipulation provisions… are adequately drafted to capture contemporary forms of trading and provide a more granular definition of market manipulation.” In the UK, noting that some market participants may not be sure that spoofing or layering is illegal, on September 1, 2009, a spokeswoman for the Financial Services Authority said, “This is to clarify that it is.” FINRA, to its credit, recently brought a manipulation case that resulted in fines and individual bans against an electronic trading firm named Trillium, but that was for activity that took place four years ago. Clearly, that’s not enough. Finally, to my last question: Why should all of us care? I think we can all agree that effective law enforcement is vital to preserving the credibility of our capital markets; that our economy cannot succeed in the long-term unless we restore and maintain financial stability; and that investor confidence is critical to the success of the market. But this is not a job for law enforcement alone. Wall Street should recognize that it is in its long-term interests to work cooperatively with government to curb Wall Street excesses. The actions of a few bad apples — if they go undetected and unpunished — can indeed put in peril confidence in the entire system. If not, it won’t be long before a consensus will form among non-financial U.S. companies and millions of American investors: “We’re going to strongly support government efforts to stop any and all reckless behavior before it hurts the economy again.” It’s mindboggling to me that the financial crisis was not horrific enough to bring about wholesale and effective change now. If extensive fraud is uncovered in the foreclosure mess, with much of the action taking place at the state, not federal level, I predict the public’s reaction will not be tame. As for the equity markets, however, Americans vote today in the polling booths, investors will continue to vote with their feet if they believe the markets are rigged against them. Senator Kaufman’s term, and my time as a Senate staffer, has ended, but this is not a fight for one Senator to wage. These are questions that go to the foundations of the rule of law and America’s future economic success.
****For the common good, I hope you answer them well.*****
If you haven't read it, that leaves you unqualified.
"Technology advances in trading markets have caused law enforcement and regulatory agencies to fall far behind in their ability to monitor and detect manipulation by high-speed, algorithmic traders. In only a few years time, the equity markets have jumped from two exchanges to more than 50 trading venues, becoming so mind-numbingly complex that even professional traders have difficulty telling you with confidence what happens ...more to their orders. As we’ve moved from floor-based to electronic systems, the systems that undergird regulatory surveillance have become ridiculously outmoded. After the May 6 flash crash, it took armies of SEC and CFTC staff more than three months to collect and analyze the trading activity for that single day. What does that say about their ability to monitor that activity in real time on an ongoing basis?"
Our society needs to make some serious fundamental changes if we are going to survive. If you look at all the parallels to the "Robber Baron" era, it's quite staggering. We need a change in social conscience, in societal convention, and general education. In far too many cases, the ...more "criminals" are outfoxing, and outmoding the fiscal "cops". Selling, exploiting, or generally whoring oneself out the the biggest campaign contributor must cease. We all deserve a far better world, where personal ego, greed, and self entitlement does not outweigh personal merit. Exactly the kind of ego that drives someone to hoard far more of society's resources, than they need to survive. All avarice comes at the expense of the many.
This is a time in history to be well informed, well versed, and unadulteratedly P****D OFF.
But, that only happens if you pry for every detail of every action, every motion, every small step that led us to where we are today. Only if you have a care for people in depressed places, who have been saddled with three generations worth of debt via "dirty hands". WIth our technological prowess, we should be landing on Mars. and even mining it by 2035. But, wait, it costs too much. Living "high on the hog", THAT'S what's important, right? Last time I looked at History, luxury never solved anything. Caused more than just a few revolutions, though.
We need balance. Stability. Sustainability. Smart things, and smarter people. Intelligent infrastructure, and the planning to maintain it. Civic duty not because "God", or "The Lord" said so, but simply because peace is the way to build a future, and dischord is the way to destroy it.
Worried about CO2? You should be. But, I'd worry more about methane. Far worse as a "heat blanket", it can react with sulfur dioxide from volcanic activity, creating hydrogen sulfide. Hydrosulfuric acid can be more than rather harmful. Hydrogen sulfide, plus four oxygen molecules is deadly. Possibly resulting in irreversible, permanent damage in high enough concentrations. If we aren't careful, we could end up living ungerground via hydroponics, and the Seed Bank, if we live as a species at all. We can create a future, that is carbon neutral AND the technology exists as this is being written. We can have viable petroleum substitutes, without using food for fuel. You can use algae to create lipids, bacteria to produce methanol, and NOT use food for fuel.
I think the real question is about what's more important: Money, or a planet to live on...
By Thomas Frank
Publication Date: January 3, 2012
From the bestselling author of "What's the Matter with Kansas?", a wonderfully insightful and sardonic look at how the worst economy since the 1930s has brought about the revival of conservatism
Economic catastrophe usually brings social protest and demands for change—or at least it's supposed to. But when Thomas Frank set out in 2009 to look ...more for expressions of American discontent, all he could find were loud demands that the economic system be made even harsher on the recession's victims and that society's traditional winners receive even grander prizes. The American right, which had seemed moribund after the election of 2008, was strangely reinvigorated by the arrival of hard times. The Tea Party movement demanded not that we question the failed system but that we reaffirm our commitment to it. Republicans in Congress embarked on a bold strategy of total opposition to the liberal state. And TV phenom Glenn Beck demonstrated the commercial potential of heroic paranoia and the purest libertarian economics.
In Pity the Billionaire, Frank, the great chronicler of American paradox, examines the peculiar mechanism by which dire economic circumstances have delivered wildly unexpected political results. Using firsthand reporting, a deep knowledge of the American right, and a wicked sense of humor, he gives us the first full diagnosis of the cultural malady that has transformed collapse into profit, reconceived the Founding Fathers as heroes from an Ayn Rand novel, and enlisted the powerless in a fan club for the prosperous. What it portends is ominous for both our economic health and our democracy.
The Senate's median net worth is $2.63 million; in the House, it's $756,00. Given that, and the way this club often seems so out of touch with the rest of us, I'm making Congress my One-Percenter of the Week.
By MSN Money partner on Thu, Jan 5, 2012 4:56 PM
By Michael Brush
Just a few days into the new year, and we're already blitzed with wall-to-wall election coverage. But the fun is only just beginning. ...more Before this election year is out, scores of congressional candidates will join the presidential contenders already dominating the airwaves.
If you observe their endless debates and expensive attack ads and get a sense that these candidates are out of touch with many of the pedestrian problems faced by the rest of us -- oh, say like trying to balance a family budget -- it's not just your imagination.
While most Americans saw their incomes and wealth slip in the past several years, the wealth of our reps in Washington, D.C., has grown by leaps and bounds. The key takeaway here: Being a millionaire would make any normal person a One-Percenter, a member of the nation’s wealthiest group. In Congress, it just makes you average.
So rather than a CEO this week -- we’ll get back to them – I’m making Congress my One-Percenter of the Week.
Consider these numbers:
Nearly half of the members of Congress are millionaires, according to the Center for Responsive Politics (CRP), a Washington watchdog.
The median net worth of a U.S. senator was $2.63 million in 2010, the most recent year for which financial data are available. That was up 11% from the year before, says CRP.
The median estimated net worth for House members was $756,765.
The median net worth of House members almost tripled from 1984 and 2009, while the net worth of Americans declined slightly during the same time, according to the Washington Post and the University of Michigan.
"It's no surprise that so many people grumble about lawmakers being out of touch," said Sheila Krumholz, CRP executive director. And it's not only the news of their costly yachts and expensive vacations that rankles.
It's also the sense that our One-Percenter reps in Washington aren't doing enough to help the rest of us, perhaps because they are so distracted by their embarrassingly rancorous bipartisan arguing -- which has earned them their most unfavorable ratings in years.
Bickering over the budget last summer, for example, brought the threat of a U.S. credit rating downgrade, helping to shave billions off our stock holdings in just a few painful weeks.
A recent Congressional Budget Office study found that public policy efforts -- in the tax code and through programs like Medicaid -- now do less to combat income inequality than they did in 1979.
And three years after the worst financial meltdown in decades -- which many blame on lax oversight of the financial sector by Washington -- our economy is improving, but not fast enough to provide jobs for the millions who are unemployed.
It’s not hard, either, to suggest a little bias toward the One Percent, and a bipartisan one. For all the talk about rescinding the portion of the Bush tax cuts that apply to the highest income brackets, they survived two years with a Democratic president and Democratic majority in both houses of Congress as well as the current, divided Congress. And late in 2011, House Republicans took lots of criticism for stalling on a 2% payroll tax that by its nature helped those in the lower brackets more than the One Percent.
So who’s richest in Congress?
Rep. Darrell Issa, R-Calif., tops the CRP list as the wealthiest of the lot, with an estimated 2010 net worth of $448 million. He's followed by Rep. Michael McCaul, R-Texas, with an estimated net worth of $380 million. (For a look at a list from Roll Call and CNBC, read "The 15 richest members of Congress.")
Just how did these reps get so wealthy? Probably not on the $174,000 they make a year, despite the juicy perks like extra pay for senior posts and generous medical and pension benefits. Most likely, they're so much richer than the rest of us simply because campaigning is expensive, so politics naturally attracts wealthy people. Many of them made their riches in real estate, or they got their wealth through inheritances and marriage.
But shrewd stock picking also clearly help. Studies by Alan Ziobrowski at Georgia State University conclude that our reps regularly outperform the markets by large amounts due to the “significant information advantage” they derive from their jobs.
Our reps may actually be a lot wealthier than the numbers provided by CRP suggest, since so much of their wealth goes unreported. The top bracket for assets of spouses is "more than $1 million," which means that family net worth is likely undervalued in many cases. Plus their annual filings exclude the value of government retirement accounts, primary residences and personal property not held for investment -- like artwork and cars
Times are tough, everybody is in debt, and everybody lives on credit.
On this particular day a rich German tourist is driving through the village, stops at the local hotel and lays a €100 note on the desk, telling the hotel
owner he wants to inspect the rooms upstairs in order to pick one to spend the night.
The owner gives him some keys and, as soon as the visitor ...more has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his
debt to the butcher.
The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer.
The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel.
The guy at the Farmers' Co-op takes the €100 note and runs to pay his drinks bill at the taverna.
The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him "services"
on credit.
The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note.
The hotel proprietor then places the €100 note back on the counter so the rich traveller will not suspect anything.
At that moment the traveller comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money, and leaves
town.
No one produced anything.
No one earned anything.
However, the whole village is now out of debt and looking to the future with a lot more optimism.
And that, Ladies and Gentlemen, is how the bailout package works
Greece is the distraction for the feeble minded, and it's quite obvious you missed the point of the anecdote.
Be out of work for more than six months, and try holding on in this alleged "free market". It's more likely you end up like the limping gazelle on the savanna.
GOOD LUCK!!!!!!!!!!!
by Matt Taibbi
While America focused on New Hampshire, a classic example of revolving-door politics took place in Washington, going almost completely unnoticed. It’s a move that ranks up there with the hire of Louisiana congressman Billy Tauzin to head the pharmaceutical lobbying conglomerate PhRMA -- at a salary of over $2 million a year -- immediately after Tauzin helped ram through the Medicare Prescription ...more Drug Bill, a huge handout to the pharmaceutical industry.
In this case, the hire involves Walter Lukken, who toward the end of the Bush years was the acting head of the Commodity Futures Trading Commission. As the chief regulator of the commodities markets, it was Lukken’s job to spot and combat speculative abuses and manipulations that might have led to artificial price hikes and other disruptions.
In 2008, the last full year of his tenure, Lukken presided over some of the worst chaos in the commodities markets in recent history, with major disruptions in the markets for food products like wheat, cotton, soybeans, and rice, and energy commodities like oil.
Most notoriously, 2008 saw a historic spike in the price of oil futures, an enormously destructive speculative bubble that peaked in July of that year at the lunatic high price of $146 per barrel (Goldman, Sachs at the height of the mania was telling investors oil might go to $200 a barrel).
It was Lukken’s job to spot the speculative abuses leading to disruptions like that bubble, but he didn’t do it. Instead, he repeatedly insisted that there was nothing untoward going on, most notoriously through testimony before the House and the Senate at the height of the oil boom.
In testimony that summer, Lukken continually insisted that the price surge was due to normal supply-and-demand forces, ignoring the far more obvious explanation of a massive inflow of cash from commodity index speculators.
Despite data showing that the amount of commodity index speculation had grown from $13 billion in 2003 to more than $260 billion as of March 2008 -- in other words, the amount of money betting on a rise in commodity prices had risen by a factor of twenty during that time -- Lukken on May 7, 2008 told the Senate that a more likely explanation for the surge could be found in the growth of industrial demand from places like China, and also, get this, in changes in the weather:
These are extraordinary times for our markets with commodity futures prices at unprecedented levels. In the last three months, the agricultural staples of wheat, corn, soybeans, rice and oats have hit all-time highs. We have also witnessed record prices in crude oil, gasoline and other related energy products. Broadly speaking, the falling dollar, strong demand from the emerging world economies, global political unrest, detrimental weather and ethanol mandates have driven up commodity futures prices across-the-board.
On top of these trends, the emergence of the sub-prime crisis last summer led investors to increasingly seek portfolio exposure in commodity futures. As the federal regulator of these products, the CFTC is closely monitoring these growing markets to ensure they are working properly for farmers, investors, and consumers. To date, CFTC staff analysis indicates that the current higher futures prices generally are not a result of manipulative forces.
By insisting that the spike was “not a result of manipulative forces,” Lukken helped Wall Street in its efforts to avoid reforms that might have prevented such abuses, like the closing of a series of loopholes and exemptions that allowed a handful of major speculators to play a lopsided role in the setting of commodity prices.
So what was Lukken’s reward for helping the financial services industry avoid such reforms? Well, Lukken has just been named to head the Futures Industry Association, or FIA, the chief lobbying arm of futures investors.
This follows the Tauzin pattern of revolving-door hires: a government official carries water for a powerful industry, then moves on to take the cushy job with the industry’s lobbying arm once he leaves office.
Among people who follow these markets for a living, the Lukken hire had an embarrassingly over-the-top quality, like a CEO who goes the appearances-be-damned route and puts his 23 year-old secretary/mistress on the board of directors.
Mike Masters is head of the Masters Capital Management hedge fund and also chairman of Better Markets, a new non-profit advocacy group that promotes the public interest in the labyrinthine vagaries of the financial markets, and especially the commodities markets. He describes the hiring of Lukken as an extreme example of revolving-door politics.
“It’s not the revolving door. It’s the express elevator,” he says.
Masters remembers Lukken because the two men both testified before the Senate in that summer of 2008; he recalls watching the CFTC chief, aghast, when the latter continued to insist that there was nothing abnormal going on in the commodities world, despite a historic series of disruptions.
“And it wasn’t just oil,” Masters says. “There was the debacle in the wheat markets, with cotton, with soybeans and corn, there were riots in the Phillipines over the rice markets. And Lukken was saying everything’s okay. It was crazy.”
It was a see-no-evil, hear-no-evil approach to government oversight, which had far-reaching consequences in that crisis year. The CFTC, remember, also has purview over derivatives, meaning the failure to prevent the disastrous swap positions accumulated by the likes of AIG also falls, in part anyway, at the CFTC's doorstep.
A Dow Jones news story contained a hilarious summary of Lukken’s blase administrative style, in which he was described as having downplayed the whole being-a-stickler-for-rules aspect of regulation:
When Lukken headed the CFTC, he backed a more flexible, "principles-based" approach to regulation, different from what was seen as the prescriptive and "rule-based" methods employed by the Securities and Exchange Commission, which polices stock markets.
Obviously this kind of thing has been going on forever in Washington, but some revolving-door hires feel worse and more shameless than others, and this is one of those. But really it's the same old story: regulators keep falling down on the job, and keep getting rewarded for it by Wall Street, and nothing gets done about it.
First published February, 2000
When American colonists declared independence from England in 1776, they also freed themselves from control by English corporations that extracted their wealth and dominated trade. After fighting a revolution to end this exploitation, our country's founders retained a healthy fear of corporate power and wisely limited corporations exclusively to a business role. Corporations were forbidden from ...more attempting to influence elections, public policy, and other realms of civic society.
Initially, the privilege of incorporation was granted selectively to enable activities that benefited the public, such as construction of roads or canals. Enabling shareholders to profit was seen as a means to that end.
The states also imposed conditions (some of which remain on the books, though unused) like these:
* Corporate charters (licenses to exist) were granted for a limited time and could be revoked promptly for violating laws.
* Corporations could engage only in activities necessary to fulfill their chartered purpose.
* Corporations could not own stock in other corporations nor own any property that was not essential to fulfilling their chartered purpose.
* Corporations were often terminated if they exceeded their authority or caused public harm.
* Owners and managers were responsible for criminal acts committed on the job.
* Corporations could not make any political or charitable contributions nor spend money to influence law-making.
For 100 years after the American Revolution, legislators maintained tight controll of the corporate chartering process. Because of widespread public opposition, early legislators granted very few corporate charters, and only after debate. Citizens governed corporations by detailing operating conditions not just in charters but also in state constitutions and state laws. Incorporated businesses were prohibited from taking any action that legislators did not specifically allow.
States also limited corporate charters to a set number of years. Unless a legislature renewed an expiring charter, the corporation was dissolved and its assets were divided among shareholders. Citizen authority clauses limited capitalization, debts, land holdings, and sometimes, even profits. They required a company's accounting books to be turned over to a legislature upon request. The power of large shareholders was limited by scaled voting, so that large and small investors had equal voting rights. Interlocking directorates were outlawed. Shareholders had the right to remove directors at will.
In Europe, charters protected directors and stockholders from liability for debts and harms caused by their corporations. American legislators explicitly rejected this corporate shield. The penalty for abuse or misuse of the charter was not a plea bargain and a fine, but dissolution of the corporation.
In 1819 the U.S. Supreme Court tried to strip states of this sovereign right by overruling a lower court's decision that allowed New Hampshire to revoke a charter granted to Dartmouth College by King George III. The Court claimed that since the charter contained no revocation clause, it could not be withdrawn. The Supreme Court's attack on state sovereignty outraged citizens. Laws were written or re-written and new state constitutional amendments passed to circumvent the Dartmouth ruling. Over several decades starting in 1844, nineteen states amended their constitutions to make corporate charters subject to alteration or revocation by their legislatures. As late as 1855 it seemed that the Supreme Court had gotten the people's message when in Dodge v. Woolsey it reaffirmed state's powers over "artificial bodies."
But the men running corporations pressed on. Contests over charter were battles to control labor, resources, community rights, and political sovereignty. More and more frequently, corporations were abusing their charters to become conglomerates and trusts. They converted the nation's resources and treasures into private fortunes, creating factory systems and company towns. Political power began flowing to absentee owners, rather than community-rooted enterprises.
The industrial age forced a nation of farmers to become wage earners, and they became fearful of unemployment--a new fear that corporations quickly learned to exploit. Company towns arose. and blacklists of labor organizers and workers who spoke up for their rights became common. When workers began to organize, industrialists and bankers hired private armies to keep them in line. They bought newspapers to paint businessmen as heroes and shape public opinion. Corporations bought state legislators, then announced legislators were corrupt and said that they used too much of the public's resources to scrutinize every charter application and corporate operation.
Government spending during the Civil War brought these corporations fantastic wealth. Corporate executives paid "borers" to infest Congress and state capitals, bribing elected and appointed officials alike. They pried loose an avalanche of government financial largesse. During this time, legislators were persuaded to give corporations limited liability, decreased citizen authority over them, and extended durations of charters. Attempts were made to keep strong charter laws in place, but with the courts applying legal doctrines that made protection of corporations and corporate property the center of constitutional law, citizen sovereignty was undermined. As corporations grew stronger, government and the courts became easier prey. They freely reinterpreted the U.S. Constitution and transformed common law doctrines.
One of the most severe blows to citizen authority arose out of the 1886 Supreme Court case of Santa Clara County v. Southern Pacific Railroad. Though the court did not make a ruling on the question of "corporate personhood," thanks to misleading notes of a clerk, the decision subsequently was used as precedent to hold that a corporation was a "natural person."
From that point on, the 14th Amendment, enacted to protect rights of freed slaves, was used routinely to grant corporations constitutional "personhood." Justices have since struck down hundreds of local, state and federal laws enacted to protect people from corporate harm based on this illegitimate premise. Armed with these "rights," corporations increased control over resources, jobs, commerce, politicians, even judges and the law.
A United States Congressional committee concluded in 1941, "The principal instrument of the concentration of economic power and wealth has been the corporate charter with unlimited power...."
Many U.S.-based corporations are now transnational, but the corrupted charter remains the legal basis for their existence. At ReclaimDemocracy.org, we believe citizens can reassert the convictions of our nation's founders who struggled successfully to free us from corporate rule in the past. These changes must occur at the most fundamental level -- the U.S. Constitution.
Thanks to our friends at the Program on Corporations, Law and Democracy (POCLAD) for their permission to use excerpts of their research for this article.
Please visit our Corporate Personhood page for a huge library of articles exploring this topic more deeply. You might also be interested to read our proposed Constitutional Amendments to revoke illegitimate corporate power, erode the power of money over elections, and establish an affirmative constitutional right to vote.