Goldman Sachs is sitting pretty, having—with taxpayer help—defeated its competitors and recouped the losses on its gambling debts (which contributed greatly to causing the recession in the first place. And now, the real Obama, who looks more and more like a corrupt Republican every day, is putting into law a program that will ensure that, whatever economic catastrophe may ever occur in the future, Goldman will come up a winner. Carefully avoiding the problem of insufficient government regulation (the open door that led to the recession), the new law will ensure a permanent pipeline of taxpayer funds to protect the millionaires of Goldman Sachs.
Concerning that law-in-the-making, FDIC Chair Sheila Bair testified to Congress:
The oversight council described in the proposal currently lacks sufficient authority to effectively address systemic risks.
Ouch! Would someone please explain to me why Geithner is still employed by the U.S. Government?
Actually, Senator Maria Cantwell has explained this mystery:
...the nation's largest banks are posting record profits....many of these banks have resumed their old habit of using other people's money to gamble with the same risky unregulated derivatives that led us into this crisis.
In the midst of the worst economic crisis since the Great Depression and with job losses and home foreclosures mounting, it's no wonder the rest of us are asking how this can be allowed to continue.
Look no further than the powerful lobbying arm of the financial services sector, which has spent at least $220 million this year lobbying Congress to stave off new rules to prevent another collapse.
For a real lesson in civics as it actually works in modern America, here are the gory details of one particularly egregious case of how your officials in Washington sold you down the river to please their masters on Wall Street.
It's simple - the American people do not control their government. In fact, even the government does not appear to control the government: Wall Street does.
As for the rest of the economy, manufacturing in the
And it is not just
A huge crash is now starting….Occupancy rates are going down. Rent rates are going down and the capitalization rate -- the return that investors are demanding to buy a property -- are going up.
Note that I am citing both Bloomberg and the World Socialist Web Site, sources that you might not expect to be sending the same message.
In case you think I am being too flip or unfairly focusing on the bad news, here, in simple English, is the academic summary of the state of affairs by
Emergency rescue operations have increased concentration in the banking industry, and the too-big-too-fail (TBTF) doctrine may have been abused by many of our once-illustrious financial companies. A variety of miscreants imposed enormous costs on innocent bystanders by dragging the economy down. And taxpayers have been forced to shoulder a variety of huge actual and potential bills. All this suggests the need for fundamentally rethinking the rules and regulations that govern our financial system. [Thanks to Econobrowser for pointing out this paper.]
For the details, consider the Congressional testimony by Robert Johnson, Director of Economic Policy at the Roosevelt Institution, that the House Financial Services Committee is trying to suppress to protect the guilty:
the most important dimension of all of the needed financial reforms is the precise intersection between Too Big to Fail financial institutions and OTC unregulated derivatives….. We have a financial architecture in place governing derivatives that has failed profoundly. The bailout costs, lost output around the world, and breathtaking rise in unemployment are the result of that financial failure. [Thanks to Democracy Now, perhaps the most honest news service in the U.S., for revealing this.]
Brooksley Born, head of the Commodity Futures Trading Commission and target of intense hostility from the Washington-Wall Street cabal that brought us this recession, recently put it like this:
we have to close the regulatory gap. ... We cannot afford as a society to go forward with an enormous unregulated market that poses this kind of danger because it’ll happen again if we don't take the appropriate steps. ... We need to take a lesson from the existing futures markets where exchange trading has been safe. As much as possible of the over-the-counter derivatives market should be traded on a regulated derivatives exchange. The transaction should be cleared on a regulated clearinghouse. There should be robust federal regulation of any remaining OTC derivatives market. And personally, I think that remaining market should be limited as much as possible to no more than the customized contracts that are needed for specific businesses to hedge particular business risks.
In case the above make your eyes glaze over, try this even blunter statement from McClatchy, a news source vastly more reliable than the ones you normally pay attention to:
Why didn't Wall Street firms tell potential investors that the bonds they were selling them were rotten? Why did their business partners, including subprime mortgage lenders, ignore glaring evidence that borrowers weren't qualified and give loans to virtually anyone with a heartbeat?
The answer is simple: Because they could.
For the details of how the near-criminal, if not literally criminal, process going from a single tricky mortgage to a naïve homebuyer to large-scale fraudulent Wall Street investments occurred, read the full McClatchy article. But the above quote is the bottom line.
Evidence that Washington is "governing for the elite:"
- emphasis on bailing out Wall Street with trickle-down for the people;
- no punishment for Wall Street executives;
- officials like Elizabeth Warren appear to be getting the cold shoulder from the White House.
What would help to change my mind about Washington:
- taxing derivatives;
- tight oversight of all derivatives trading (i.e., "moving derivatives trades onto regulated exchanges");
- ending the exemption of derivatives trading from regulation, including regulation under state gambling laws(!);
- a law making it illegal for senior officials in financial arms of the government to come from Wall Street or banking positions (that constituting a clear presumption of conflict of interest) and the removal of all such officials;
- reenactment of Glass-Steigal;
- replacement of Geitner by Warren;
- making it illegal, with stiff jail sentences for corporate executives, for a company to purchase a mortgage without informing the homeowners;
- breaking up Goldman Sachs into separate companies;
- creating a comprehensive regime for breaking up failing companies that are "too big to fail;"
- new "trust-busting" legislation for the financial industry.
Government for the People
Elizabeth Warren, TARP Superwoman
Sheila Bair, FDIC Chairwoman
Maria Cantwell, Senator
Dennis Kucinich, Presidential candidate 2008 so if you failed to vote for him…
Government for the Elite
Melissa Bean, congresswoman from Wall Street and member of House Financial Services Committee