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Wall Street Reform: A Big Flop for the Big Lie Strategy?
WASHINGTON - Over the past two decades, Wall Street pushed hard to weaken government oversight and loosen regulatory restrictions on the financial industry's behavior. Once Wall Street was able to play by its own rules, old standards went out the window. The resulting binge of greed, speculation, fraud, and reckless risk-taking resulted in a financial meltdown that has cost millions of Americans their jobs, homes, and retirement savings. The federal government was forced to step in to prevent an even more chaotic and catastrophic financial collapse.
With the Bailout Lie failing, it seems more likely that reform legislation will make it through the Senate and ultimately to the White House for the president's signature, and the lobbying by the financial industry and others to influence the final makeup of the bill will undoubtedly be intense. Until the final bill is in place it's impossible to say who all the winners and losers will be - but it's clear that the Luntz-McConnell Bailout Lie is one of the losers.(Tom Schlerlitz/Getty Images) But now
that Congress is taking serious steps to stop the abuses that have cost the
nation so dearly, big Wall Street banks and their political enablers have been
doing their best to block reform. They're using every trick in the book,
including setting
up a fake grassroots group that was designed to sound like a
progressive organization. Some unconvincingly
suggested that Republicans were opposing the Senate reform bill because it wasn't tough enough on Wall
Street. A centerpiece of these obstructionist strategies has been repeating
over and over again a brazen lie that the reform legislation before Congress
would put taxpayers on the hook for "endless" bailouts. The bill
would in fact do the opposite.
Audacious Lying as Propaganda Strategy
Big lies became a staple of right-wing political strategy long before Barack Obama decided to run for President. Big lies by their nature are audacious, since they are meant to convince people to accept a version of truth that is 180 degrees from reality. Think about the Swift Boat crowd's doggedly deceptive effort to damage John Kerry by smearing his well-documented and highly decorated military service. The Swift Boat episode epitomizes the Karl Rove Machiavellian-Orwellian political approach to go after an enemy's strength, not his weakness.
Essential to the strategy is noise from the echo chamber of right-wing pundits online and on Fox News -- and unwarranted credibility from conservative members of Congress and other public officials. Since the 2008 presidential campaign, right-wing political strategists have made audacious lies the go-to strategy for opposing the Obama administration and its political goals. Let us count the ways: Birtherism, death panels, Obama is a Marxist who wants to take over the entire economy, Obama hates white people and white culture, Ivy Leaguer Sonia Sotomayor is an undeserving affirmative action anti-white-male racist, the federal hate crimes law is a "pedophile protection act" that will put preachers in jail, the Obama administration hates religion. And so on.
This list makes it clear that telling big lies is not always successful in accomplishing a particular goal, such as stopping health care reform legislation or keeping Sotomayor off the Supreme Court. But the goal and impact is often broader: taking the public option off the table, or contributing to the larger right-wing Big Lie narrative that Barack Obama is a dangerous radical whose political wings must be clipped in the 2010 elections to prevent the nation's slide into tyranny.
Which brings us to the apparent collapse of the lie that Republican leaders led by Senate Majority Leader Mitch McConnell have been deploying against efforts to bring some much-needed transparency and accountability to the financial industry: that Wall Street reform guaranteed "endless bailouts" for big banks.
The Bailout Lie seems to be falling apart under the weight of its own transparent falsity and by some GOP strategists' calculations that standing in the breach for billionaire hedge fund CEOs may not be the most effective political positioning headed into the fall elections. Recent news reports suggest that GOP leaders are now angling for a face-saving compromise, a strategic flip-flop that has given rise to what we can call Son of the Big Lie: which is to claim that their Bailout Big Lie was right all along and we should be grateful that they stuck to their guns. You can see why they think this new lie is worth a shot politically, but it's equally transparent.
Lying to Protect Big Money from Reform and Regulation
Republican congressional leaders were always in a bit of a difficult situation around the effort to bring some more effective oversight and regulation to the industry whose irresponsibility has gravely damaged the American economy and drained the U.S. Treasury.
On one hand, the GOP is closely tied to the Wall Street interests who most strongly oppose regulatory reform. On the other, right-wing tea party activists and independent voters are angry about taxpayer bailouts and their belief that Wall Street CEOs have been rewarded, rather than held accountable, for financial wrongdoing that has devastated the nation's housing market and economy. So it's not a great time to be exposed as carrying political water for billionaire hedge fund executives - the people Mitch McConnell visited begging for campaign contributions just before launching attacks on Wall Street reform.
Back in January, Republican pollster and communications strategist Frank Luntz distributed a strategy memo instructing Republican officials how to obstruct Wall Street reform while confusing the American public about who was looking out for their interests. Among Luntz's key recommendations was to tie reforms to big bank bailouts. There's the 180 degree spin from reality. One of the key goals of Wall Street reform legislation being considered in both houses of Congress is preventing the need for such bailouts by clamping down on the kind of overly risky behavior that led to the financial system meltdown. The legislation has been designed to create mechanisms to shut down failing institutions in an orderly way to prevent the need for expensive improvised bailouts in the future.
So, to be clear, the purpose of the Bailout Lie was to let Republicans get away with stopping reforms that would crimp the style of Wall Street speculators while at the same time convincing tea party activists and Main Street Americans that it was somehow the Democrats doing Wall Street's bidding. That's a big bluff. But Senator McConnell is nothing if not audacious in putting the Bailout Lie to work. As MSNBC commentator Rachel Maddow noted in a recent show skewering McConnell for doggedly promoting this false attack on the legislation, "reality is not exactly how this stuff works."
Attacks on the House Reform Legislation
On February 3, Factcheck.org, a project of the Annenberg School at the University of Pennsylvania, noted that a secretive group called the Committee for Truth in Politics, was running ads in 35 markets attacking the Wall Street Reform and Consumer Protection Act which had passed the House. Factcheck's post -- "The Big Bank Bailout Bill?"- debunks the ads' claims that the reform bill amounts to a "new $4 trillion bailout for banks. If they fail. Again." More recently, USA Today reported that the Orwellian-named interest group had spent $5 million on its anti-reform ads while refusing to disclose any of its contributors.
The Factcheck.org post notes that the House bill actually puts caps on lending authority the Federal Reserve already has and would create new restrictions on the use of that authority, and that a $150 billion pot of money to help deal with future financial crises would be funded by fees from large financial institutions themselves.
We take no position on whether the $4 trillion cap is too big or too small, or whether the authority itself should or should not be granted. But there's nothing in the bill that requires that banks get this loan money at any point in time, a fact that may well be lost on viewers of the ad.
In addition, Factcheck quotes a House Financial Services Committee staffer refuting the claim that the $4 trillion is available "if [banks] fail."
"That's 1,000 percent incorrect," he says, pointing to another provision in the bill that gives regulators the authority to dissolve "systemically important" firms that are failing. "They will use a fund paid for by the industry to put it out of its misery" and "stop any spread of this sort of financial contagion that can take down the financial system or harm the economy."
It should be noted that even before Luntz blessed the strategy with his January memo, some right-wing propagandists were already trashing the House legislation. Back in December, Walking Big Lie Rep. Michele Bachmann of Minnesota called the House bill "a complete government control of the financial services industry" and said it would make bailouts permanent and givethe president the authority to make future bailouts at his own discretion. According to Bachmann's typically over the top refrain, "it isn't that socialism has occurred in our lifetime, it's in the last 18 months!"
McConnell Leads Attack on Senate Legislation
In recent weeks, Senate Majority Leader Mitch McConnell has endlessly parroted Luntz's rhetorical deceptions such as his claims that the Wall Street reform bill being considered by the Senate would result in "endless taxpayer bailouts." McConnell, who built a now-collapsing partisan wall of opposition to the reform bill, had also tried recycling another old GOP strategy on the health care bill, which is to insist that reform legislation had to be thrown out so senators could start all over on a bipartisan bill.
McConnell has had plenty of help from conservative commentators and the right-wing echo chamber. Media Matters has documented the lie's appearance in right-wing media, including Fox News and the opinion pages of the Wall Street Journal. The "bailout" language spread beyond that as well. During a CNN report on reform, the crawl on the bottom of the screen read, "Financial Fix or Wall St. Bailout?"
The Truth: Shutdowns Not Bailouts
The Bailout Lie is as bold as it is false. As President Obama himself said in taking on McConnell's charges, the Senate Majority Leader was making a "cynical and deceptive assertion that reform would somehow enable future bailouts -- when he knows that it would do just the opposite."
Indeed, the provision of legislation under consideration in the Senate that McConnell and others decried as a "bailout fund" would actually create an orderly, bank-funded process for authorities to shut down - not bail out - giant financial firms that get into trouble. Sen. Mark Warner (D-VA) made clear that this wasn't the preferred option of Wall Street executives when he told the Washington Post, "No rational management team would ever choose resolution. It means shareholders wiped out. Management wiped out. Your firm is going away." As the Washington Post editorialized last month, the Senate bill "provides a way to rein in the risks" taken by large financial institutions, and "and taxpayers won't be on the hook if they nevertheless collapse."
The same is true for the House bill. Rep. Barney Frank said the legislation will provide "a mechanism for putting non-bank financial institutions out of everybody's misery."
Financial journalist Edmund Andrews has written:
"The recent bailouts kept zombie banks and AIG alive, because both the Bush administration and the Federal Reserve correctly feared that their collapse would set off a chain-reaction of failure. The bailouts were necessary because the government didn't have the authority to shut the companies down in an orderly way....The new resolution authority would give the government new powers to take over and shut down failing giants. That is quite different from bailing out a bank and keeping it alive.
Wall Street Reform-in-Waiting
With the Bailout Lie failing, it seems more likely that reform legislation will make it through the Senate and ultimately to the White House for the president's signature, and the lobbying by the financial industry and others to influence the final makeup of the bill will undoubtedly be intense. Until the final bill is in place it's impossible to say who all the winners and losers will be - but it's clear that the Luntz-McConnell Bailout Lie is one of the losers.
48 Comments so far
Show AllThis is not merely treason, this is a crime against humanity.
The hell with reform; get your money back!
I am so sick and tired of all the lying that goes on in our Congress that I can't say I have any respect whatsoever, much less trust, for that institution any longer!
None of them seem to be able to refuse taking money that any business or organization offers them no matter what it requires in terms of how they vote on any bill that comes up.
The fact that Chief Justice Roberts has now jumped on the bandwagon and finagled the Supreme Court into declaring that corporations are actually "persons," it's clear that he has joined the club as well. I wonder how much he was paid to assure that result?!?!?!?!?
The government invented the cutesy word "lobbying" to disguise the word "bribery"! Bribing a public official is a criminal act, but if you call it "lobbying," it's perfectly legitimate. Now how absolutely deceitful is that???
We've reached the point where the corporations have literally taken over Congress by means of the "lobbying system" to the point that our government is COMPLETELY BROKEN!!! And there's nothing the average citizen can do about it.
Congress itself has become nothing but a cesspool of lying and cheating - all for the purpose of the self-enrichment of its the members. I believe the public is finally catching on to this ultimate truth!
If someone wanted to introduce me to a member of Congress, I'd run the other way. I trust NONE of them!!!!
When "lobbying" is declared the crime that it actually is, and members of Congress are forced to live solely on the salaries they earn from their job, maybe they could restore some respect to their office. We need people in Congress who are beholding to NO ONE but their constituencies at home and need to enact laws to ensure this.
Well said FrankS!!
Of course there's one tiny problem: It is that very same rotten Congress that would have to enact the "new rule" that would forbid them from taking money from lobbyists or cavorting with them.
We would need serious Campaign Finance Reform where only small donations from private individuals of maybe $100 tops would be allowed.
And now we have the whole Supreme Court decision that declares corporations to be "persons".
We all realize the scope of the problem.
The question is: How to solve it?? How to REALLY solve it??
Unfortunately this will take ETHICAL, CONSTITUTIONALLY SOUND LEADERSHIP, and sadly I don't see that we have any leaders like this.
I look forward to seeing you run for office. As Frank Zappa said to the youth: 'two things: vote and run for something'
"The government invented the cutesy word "lobbying" to disguise the word "bribery"! Bribing a public official is a criminal act, but if you call it "lobbying," it's perfectly legitimate. Now how absolutely deceitful is that???"
Yeah, they're real cutesy, Frank!
"At one point, Goldman had the help of $53.4 billion of federal money, not counting anything received through the Fed's discount window or other loan facilities for which the Fed will not disclose details, Judicial decisions to do so notwithstanding. JPM Chase got $99.8 billion including the government subsidizing their acquisition of Bear Stearns and WAMU (mergers not brought up by the commission). Bank of America received $228.4 billion including their merger with Merrill Lynch (not brought up), and Morgan Stanley was handed $36.2 billion." – Nomi Prins....(http://www.alternet.org/workplace/145153/why_can%27t_we_get_anyone_to_ask_a_wall_st._ceo_the_hard_questions)...
This is just the tip of the iceberg.
Here are some of the other "loan facilities", complements of Prof. Rodrigue Tremblay... http://www.globalresearch.ca/index.php?context=va&aid=15350...)
• The Term Auction Facility [http://www.federalreserve.gov/monetarypolicy/taf.htm] (TAF);
• The Primary Dealer Credit Facility (PDCF);
• The Foreign Exchange Swap programs (the currency swap lines) [http://www.aleablog.com/foreign-currency-liquidity-swap-lines-redux/];
• The Commercial Paper Funding Facility (CPFF);
• The Term Asset-Backed Securities Loan Facility (TALF);
• The Agency debt, Agency mortgage-backed securities (MBS) and Treasury purchase programs;
• The Treasury's $700 billion Troubled Asset Relief Program
[http://en.wikipedia.org/wiki/Troubled_Asset_Relief_Program] (TARP);
• The payment of interest on the banks' excess reserves at the Fed.
How cute is that!
When describing congress, you left out murderers.
Uh---- Frank ----- this is not new---- (though admittedly it seems to be worse) ever hear of a guy named Samuel Langhorn Clemens? AKA Mark Twain? He mentioned in print roughly 150 years ago that the only genuine criminal class in this country was the US Congress. And this was in the day before "lobbyists" dh
The real story is not about the visible "financial crisis" but should really be about the "democracy crisis" hiding behind the front 'cover' story.
A few decades ago the few leading intellectuals and academic experts who understood and wrote about endemic cheating, looting, concentration of non-democratic power, and abuse of that power in our political economy, like; Noam Chomsky, William Greider, and David Korten were easily characterized as 'radicals' and could be just as easily censored by the media.
But today the entire leading group of Nobel laureates in economics; Akerlof, Stiglitz, Krugman along with probable future Nobels like Simon Johnson and Robert Shiller, the majority of leading political philosophers like Sheldon Wolin, former media truth tellers and authors like Christopher Hedges, Ron Suskind, and Andrew Bacevich are ALL revealing the truth about the cancer and causation of guileful EMPIRE behind this superficial story of the latest financial crisis --- and while none can be dismissed as 'radicals', the media continues to suppress the real story behind the story.
Why do you think the media is acting in such an apparently complicit way, along with the Empire's TWO-Party 'Vichy' facade of phony democratic government, in suppressing truth about the seminal cause and real scope of this crisis in American democracy?
Alan MacDonald
Sanford, Maine
This article left me confused. I always thought Michele Bachmann and Mitch McConnell were democrats. Anyway, there's no difference between democrats and republicans, right?
Right, Greg.
However the nuanced "difference between Democrats and Republicans" that you ask about are the different roles they 'play' in this marvelous WWF-style staged grudge match --- wherein the Republicans pretend to use 'eye gouging' tough techniques to help our supposedly "Capitalist Democracy" (whatever moron Bush meant by that oxymoronic term), while the Democrats pretend to use softer 'hand biting' to help "we the people" (which is the misty emotive phrase they display on their phony wrestling costumes).
Of course both these stables of performing clowns work for the exact same Global ruling-elite corporate/financial/militarist Empire --- which controls 'our' country by hiding behind the facade of a TWO-Party 'Vichy' sham of faux democracy that would bring tears of admiration to the dead eyes of Hitler and Goebbels.
Greg, you are precisely right ---- the real story is not about these paid clowns investigating the visible "financial crisis" but about they and the equally 'Vichy' corporatist media hiding the real "democracy crisis".
Best,
Alan
"Once Wall Street was able to play by its own rules, old standards went out the window."
Capitalism's rules and standards are unchanged from what they always have been. In fact, capitalism only has ONE single and immutable rule, and that is its fiduciary responsibility for the maximization of private profits.
Capitalism hasn't changed one iota. It is functioning precisely as intended. What is totally screwed up is governance. It was supposed to protect the commonweal and public interests by providing a regulatory and enforcement framework for the capitalist economy, but instead has become a wholly owned subsidiary of the same "corporate persons" persuing the same capitalist "morality" -- i.e., none at all.
Ardent, are you not quoting figures thrown out and bandied about by the Repubs?
Has there really been a "give away" of a trillion dollars? Seems to me (and I readily admit to ignorance) that at least some of the "tarp" money has been paid back????? has it not???? Did not the loan aid to GM not get reapaid last week? Have not many of the banks accepting tarp loans paid them back with interest already to escape what was to them onerous conditions limiting executive pay? I am not sure anyone except those responsible for accounting for taxpayer money in the program knows the answer to this question, but would it not be appropriate to have that information in hand before making claims that are sensational, at the very least? dh
What I don’t understand is how a public official can blatantly lie and deceive the American people and cause them to make inappropriate decisions regarding their democratic responsibilities and not be held accountable for the lies. We have even seen where the Bush-Cheney lies were responsible for congress to grant them war authority. So, it is not like the lies don’t have serious and even grave repercussions. And yet, they are apparently protected from punishment or even reprehension. It would seem to me that our elected representatives are free to take bribes and to misrepresent the facts surrounding important issues and their only risk is being called a liar by their colleges. Even the press seems to take these lies lightly, even at times lending credibility to them. This is obviously seriously wrong and yet we do nothing about it. How can we be proud of this kind of democracy and what are we teaching our kids?
Forget teaching the kids values. The only value they know these days is that the price of success in today's world is whatever you have to do or pay to get it. Check out these stats (one professor's experience):
"53% of my upper-class students have cheated on a test or plagiarized a paper while at Iowa State, 91% know someone who has, and 18% know someone who has been punished for academic dishonesty. The figures on my first-year students are, respectively, 19%, 71%, and 10%."
http://dsa.csupomona.edu/judicialaffairs/whatswrong.asp
So much for trying to instill values like honesty and integrity in youth!
I agree it's surprising that public officials can get away with so many crude lies. I guess we need better reporting, particularly on TV and radio, to point out to people that these lies are, in fact, lies. But how can that happen when Rush and Billo are the most popular broadcasters in the country?
If we could find a way to counter the Republican all-purpose strategy of telling The Big Lie, we could change the history of the future. Looking back over decades of Republican misrule, the Big Lie is the decisive factor enabling them get away with their crimes.
Oh, and why is it that Rush and Billo are the most popular broadcasters? At least we should be able to figure out the answer to that question... even if it turns out we can't do anything about it.
Turn off fox and increase Americas IQ.; is very true. Democracy now.org & therationalradical.com are my favorites . People have to turn off that spin & b.s. that is spewed by corporate owned media . It is like volley ball back & forth crap; slam them and support the media reformers like common dreams and deciphered links will help. Howard Zinn wrote about them & so did Kenneth c. Davis { the big lie hucksters }. Amy Goodman & David Goodman's books are hard hitting & more factual I believe than fuxx bulls**t . Free lunch by David cay Johnston reveals follow the money ; too much corruption nothing new under the sun it is in the KJV as well one point is when Christ was killed & the murderer barrabas released & the collusion of the doctrines of man were right there involved with the sell out scribes: But the hucksters never quit because the ignorance & filthy lucre sake is better than christ like:
their entire defense today is they "did not withhold" "crucial information" from their clients
................
but that is not good enough,
they are supposed to act on the best interests of their clients ....... and not sell their clients down the river just because the clients didn't know what questions they should ask
...............
the same thing with, "they had the same opportunity to buy any of our products"
yes but customers depend on expert advise to be guided to the right products
not sent to the product they know will fail so they can bet against it in the futures and make a fortune at the expensee of their clients
Investment counselors have a fiduciary responsibility to look after their clients' interest, even before their own. You're exactly right. Investment counselors cannot set their clients up for failure and reap financial rewards because of that failure.
Blankfein and the rest of these sons of bitches need to spend long prison terms in the dark places that their pals over at Halliburton and Bechtel have built for other terrorists.
Check out this interesting article on the domination by the Wall Street gang, who pull the strings of both of their puppet parties controlling US politics.
http://www.wsws.org/articles/2010/apr2010/pers-a27.shtml
I understand your point about WSWS's preachy conclusions in their editorial pieces, but in the case that you cite here, I don't see anything illogical about their conclusion.
The working class will have to mobilize against the fascist Amerikkkan government for any meaningful change to occur. Who else will lead us out of this dwonward spiral towards a full-blown dictatorship if not the working class?
That is like saying in order to get rich I need money.
OK
How to organize the working class to do anything... they don't say.
If intellectuals are involved in this idea, from my experience I suspect they will spend all there organization time arguing over who is real "working class".
As a member of the Unitarian-Universalist Congregation of Columbia, SC, I understand your experience with "intellectuals". Defining the working class could be an on-going project for at least a year or so.
I agree with you about the preachy conclusions on the WSWS website but I find their essays factually correct and on point. They do an excellent great job researching their articles.
Though I respect Nader greatly and know that he is committed to 'confronting this damn Empire', I don't like his use of the waffle term "consumer-investor(s)" instead of the egalitarian and far more powerful and honest democratic term 'citizens'.
Ralph, you are known as the greatest 'consumer advocate' of our time, and I know you should really be given as much credit as a 'democracy advocate' against this damn guileful corporate/financial/militarist Empire that has the people by the throat ---- but a 'democracy advocate' fights for people and "citizens" not for the vague disaggregated and disembodied base of "consumer-investors" --- whatever the hell that means.
Thanks for your founding support of the new "Anti-Empire" People's Movement with Kevin Zeese and others on both the principled progressive left AND the libertarian anti-war right.
Best,
Alan
I think Ralph uses in this instance, "consumer-investor", to describe protecting citizens who are engaged in an act of consuming or investing. Ralph is well versed in what constitutes citizenry, and it is reasonable for him to make the assumption that it is simply a given that the "consumer-investor" is fundamentally a citizen.
So as long as we have businesses and banks, poor Ralph is stuck with the need to sometimes describe citizens as being "consumer-investors".
He's been doing this kind of thing for a very long time, the consumer and investor protection thing. I don't think it is in any way a sign that Ralph is slipping into the gaping jaws of capitulation.
I have no doubt in Ralph's integrity. But it's more of a marketing thing. Citizen trumps consumer, investor, businessman,banker, etc...Citizens give their blessing to rulers to reign over them...and remove it too. Citizens lay down the law, the rules of the game, and consumers/investors/bussinessmen/bankers must obey. Citizens consent to let wise statesmen/women set policy for all...and remove that consent if they prove to be unwise. Citizens are supreme in a democratic republic. An organized Union of citizens is the most powerful force in the land. THAT is the idea that must run through everyone's mind, with every breath.
You really had to stretch to make this complaint.
q
It's like single-payer & healthcare reform. If the D's are serious about wallstreet reform(& they are not),let them reinstate glass-steagall & ALL of FDR's reform package, and add to THAT if need be (which they won't). Then they'll prove themselves true reformers (which they'll fail this test).
“Too Big to Fail” is not the issue ---- “Too Empire for democracy” is the real issue the corporatist media is hiding.
And none of these FTEs (_____ Tools of Empire) from either ‘Vichy’ party or the corporatist media is going to do squat.
The real story is not about the visible "financial crisis" but should really be about the "social democracy crisis" hiding behind the front 'cover' story.
A few decades ago the few leading intellectuals and academic experts
who understood and wrote about endemic cheating, looting, concentration of
non-democratic power, and abuse of that power in our political economy,
like; Noam Chomsky, William Greider, and David Korten were easily
characterized as 'radicals' and could be just as easily censored by the
media.
But today the entire leading group of Nobel laureates in economics; Akerlof,
Stiglitz, Krugman along with probable future Nobels like Simon Johnson and
Robert Shiller, the majority of leading political philosophers like Sheldon
Wolin, former media truth tellers and authors like Christopher Hedges, Ron
Suskind, and Andrew Bacevich are ALL revealing the truth about the cancer
and causation of guileful EMPIRE behind this superficial story of the latest
financial crisis --- and while none can be dismissed as 'radicals', the media
continues to suppress the real story behind the story.
Why do you think the media is acting in such an apparently complicit
way, along with the Empire's TWO-Party 'Vichy' facade of phony democratic government, in suppressing truth about the seminal cause and real scope of this crisis in American social democracy?
Alan MacDonald
Sanford, Maine
I doubt if McCain/Palin would have won, the Republicans would be trying to regulate anything big business does for profit.
Regulation is a light form of socialism, which I think is why the repubs often call the dems a bunch of "socialists" and seem to get away with it.
I also think the repubs are usually, not always, bigger liars than the dems.
That is the little bit of difference I see in the main Parties so far.
There was fraud in the 8 trillion dollar housing bubble but so far the fraudsters are still running the show.
Here was/is their game (scam)-- Major Wall Street players passed the word all along their supply chain (mortgage brokers, lenders, rating agencies) to send them all the housing loans they could gather--legitimate or otherwise. And paid all the folks down the chain good money for whatever they sent in. Once the stuff was off the mortgage originators hands they went out and wrote more mortgages. The Wall Streeters then placed these individualized mortgages into giant securities. Next the ratings agencies (Moody's ,Standard and Poor) were told/coaxed/bribed into giving AAA ratings to what was a mixed bag of subprime toxic junk flavored with occasional top-rated pickings. AAA ratings were the key to the scam. Once you have that rating you can sell they stuff to pensions funds, banks, etc. anyone who is looking for "safe" investments. In effect, the scammers took junk and sold it as gold. When the housing market tanked, mortgage loans dried up, monthly mortgage payments went up, people lost their jobs and their homes... but,the Wall Streeters made out like bandits.
The devil is in the details, as they say. For instance, the remark about the House bill being an orderly way to wind down "non-bank institutions." Here's the rub: almost all of the big players were given bank holding company status, precisely so they could borrow money from the Fed at exceptionally low rates. By Frank's definition, all of the worst offenders would not be subject to those constraints, because, by definition, they're now commercial banks.
Moreover, the House fund provides for $150 billion, paid by the top Wall Street firms. How long to populate that fund? They certainly aren't going to demand that those firms give up all profits for four or five years, and there's nothing to stop the managers from eating up all the profits in bonuses if they're threatened with levies to fill the fund. As importantly, if this is, say, a ten-year project, how does that help if the major miscreants shit out another major catastrophe in the next two or three years?
And, IIRC, the Senate bill specifies a reserve of only $50 billion, attainable more quickly, perhaps, but, virtually useless in a total meltdown. And, if prior experience is any gauge, the Senate will get its way, rather than the House, on most legislation. Therefore, emphasizing the provisions of the House bill is a bit of a red herring.
There are three things that would prevent the excesses of the last decade, and those are repeal of Gramm-Leach-Bliley, repeal of the Commodity Futures Modernization Act, and tough regulation of OTC derivatives trades, and some tough enforcement backing it all up. None of those things have happened. To my mind, the current bills are just tinkering around the edges of the problem, and the loopholes in them are big enough to drive a Brinks truck through....
So true--- but if they did anything more than tinker around the edges they would have to admit that the problem is systemic and that means that they also are both a part of the problem and and are incompetent and unable to fix it--and that would mean that we should get rid of them too. The moral bankruptcy of our financial system is tied to the immorality of our government. For either to be reformed both will have to be--or else the whole thing will have to tumble, and we will have to start over. That is what I think will have to happen. It wont be easy on us. If I have to go down with the ship--I'd like to see a few people in authority suffer too--hanging is too good for most of them.
Greece's credit rating was downgraded to junk status and Portugal's debt was lowered on fears the trouble could spread. Thanks to Goldman Sachs!
Goldman Sucks--Obama's buddies.
People for the American Way sez: "As President Obama himself said in taking on McConnell's charges, the Senate Majority Leader was making a 'cynical and deceptive assertion ...' "
***
I'm guessing the error belongs to the PFTAW writer/editor and not to Obama, but making McConnell the "Majority Leader" is a hell of an illustrative Freudian slip.
"For now, there's enough misinformation and incoherence from the GOP to choke on."
I'm beginning to think there's an implicit division of responsibility in Congress: the Democrats are responsible for putting up reasonable legislation, and the Republicans are responsible for cutting it down to size.
Similarly, the Republicans are responsible for spreading "misinformation and incoherence," while the Democrats are responsible for making such weak replies that a big segment of the public is convinced anyway that the Republicans have it right.
The net result is to maintain the status quo, which is what both sides really want.
I've even figured out the answer to the question, "Why do they want to keep the status quo?"
The answer is, these politicians need jobs. If they don't get re-elected they will be unemployed. In the status quo situation, the incumbent politicians do have jobs. Therefore they want to maintain the status quo, because nobody likes to lose a job involuntarily.
Isn't that brilliant of me to figure out this obvious stuff?
Politically active rich people are overwhelmingly greedy, instant gratification types. They are not interested in growing the economy in a sustainable way for the entire future of the planet. They realize that they will die of old age before the planet kills them off because they want all the jack right now and are leaving a path of devastation in their wake.
Politicians are even shorter attention span on gratification. George Washington and Tom Jefferson no longer need to apply. The political parties get rid of these kinds right away. The next election and the connections after office that 'fill the old coffers' (Bush the inferior) are considered long term thinking. They are however like grass in the wind so scare and threaten them with primary challenges and protests and they will change positions fast. Knowing this, the Faux Nooz racist rehab of the nuttier elements of the T Baggers is just what the Rove ordered to get nut jobs and empty suits elected that can be forced into unanimously moronic positions like sheep to the slaughter. Just love that bring a chicken to the Doctor health care plan from the Republican running to replace Harry Reed. That a person this stupid, out of touch, corrupt or just plain nuts could be selected by a political party and be leading in polls in a state wide election is absolutely priceless.
The biggest lie of all is that western 'democracies' actually have anything to do with 'democracy'. But the lies around anything to do with money are a close second, and closely related - he who controls the money controls the country, and in no western 'democracy' is the money actually democratically controlled - only a very tiny fraction of the citizens of such countries actually have any idea at all of what is going on with the money, in terms of where it comes from and who controls it.
The 'big lie' in Canada is that the Canadian people got too greedy and stupid and ran up a huge national debt, and now have to pay for their earlier excesses through fewer government services and etc. For the real story of how a small cadre of corrupt bankers and government officials, with the assistance of the media of course, have stolen over two trillion dollars from Canadians over the last 30-odd years, and continue to steal tens of billions yearly - What Happened? http://www.rudemacedon.ca/what-happened.html .
(and then for a happier read, an account of a fictional country where the bankers have been booted, and the US wannabe regime changers get an ass-kicking as well - Green Island http://www.rudemacedon.ca/greenisland.html )
The youthful may be excused for not seeing a repetitive cycle unfolding.
Had existing regulations (Glass-Steagall, 1933) not been voided by Clintonista legislation or Bushesque neglect, current circumstances would have been avoided. This, however, was not to be the case.
As the current theater of inquiry progresses, newer and even more indiscernible investment product/schemes are being launched to disregard and circumvent even the spirit of any regulation. Of course, when later uncovered, they too will be greeted by cries of "shocking!" by our bought and paid for elected meat puppets.
Looks like the fix is in all over the place.
Last night (4/27) on their Nova program PBS presented "Mind Over Money". On their website they claim: "Using analysis and experiment, this film explores why economists failed to predict the 2008 crash and why we so often make irrational financial decisions."
This breathless "expose" steps all over itself revealing the startling facts:
> The average person often makes emotionally driven financial decisions that are not mathematically rational. (Damn, who knew? Viewers are not supposed to have heard of Edward Bernays, etc.)
> Many economists (especially the NeoCon Chicago school) know this is an historical fact but prefer to ignore it because they can't write equations to account for irrationality. And, in academic circles, if you don't have an equation you aren't real. The script then rather dismissively mentions that this is the basis for criticisms of John Maynard Keynes who not only had the effrontery to point out that mass markets are frequently and unpredictably irrational but committed the ultimate blasphemy by asserting that government regulation is the only workable offset to market insanity.
> So, they conclude, the real cause of the 2008 crash was the irrational exuberance of stupid consumers and investors who believed promoters when they should have known better and thereby created yet another economic bubble doomed to collapse. Economists did not foresee this because free markets, which regulate themselves, just don't work that way... even though they do.
The absurdities of this theme were supported with "lab" demonstrations of human gullibility and impulsiveness. Never was there mention of the fact that laws enacted and enforced during the mid-20th century were designed to protect both individuals and the national economy from predators (con artists) who understand and take advantage of these vulnerabilities. Therefore, the producers found no need to acknowledge that the bubble exoansion and crash of '08 came quickly on the heels of deregulation.
And never did they venture close to the root cause of the crash: massive, unmitigated FRAUD. In the regulatory vacuum created by the neocons, millions of pigeon drop schemes (sub-pime mortgage sales) were aggregated into huge ponzi schemes that rolled on up to the Fed and then right back out to the U.S. taxpayer. No need to upset anyone with that because this is now the land of unrestricted opportunity - for those who are long of tooth - and screw the stupid suckers who deserve what they get because it's their fault anyway.
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When the producers at PBS decided to use the formerly respectable Nova format to run this shameless propaganda, they lost their soul and they lost me.
Sadly, Bill Moyers retires from PBS tomorrow.
He can turn out the lights as he leaves.
The efforts of our dear captain of industry might soon become the final words spoken just before the sinking of the Edmund Fitzgerald by Gordon Lightfoot. "It was nice to know you" spoken to all of his anxious men before the mighty ship up ended and went to the bottom. We have a good captain who want to get us ashore. Let him.
There seems a massive failure of reason in this.
Much of what the article describes is well put, but denying Democrat responsibility in the bailout or imagining that the party has any general intent of really biting its masters on Wall Street seems as big a lie as any.