Inside the 'Class War'

An unusual word crept into the lexicon of the New York Times op-ed
page, the arbiter of approved thought in the age of economic collapse.
The new conservative columnist, Ross Douthat, dusted off a key phrase
associated with Marxism, "class war."

Of course, as you would expect, Karl was spinning again in his
resting place at London's Highgate cemetery by the Timesman's spin. But
in a country where, officially at least, the only classes are found in
schools, the very idea of class war is not something you read about
every day, even if the person writing about it is certainly on the wrong
side.

In fact, the current "war on Wall Street" seems all but over even
before the President signs the financial "reform" bill. We have seen
very few criminal prosecutions coming out of Obamaland. The recent
settlement with Goldman Sachs was limited to one transaction, and quite
affordable for the bank that's been called a "vampire squid on the face
of humanity." Their shares went up when the slimy deal was done, and in
any event, that $550 million they paid just represented 15 days of
profit taking.

This "war" had been notched up by the passage of laws that offended
the sensibilities and modestly threatened the bottom lines of mega
companies that rely on government as an enabler of their profitability,
not an obstacle to it.

Already the big healthcare companies are coming up with new
"affordable" plans that limit benefits and choice despite the
Administration's promises when it was passed. The banks are slithering
around the financial regulations with their usual fear campaigns, now
pressing international regulators in Basel, Switzerland to give them ten
years to satisfy proposed new requirements,

The New York Times reports:

"Wall Street is already working around
the new regulations, 'the ink is not even dry on the new rules, and
already, the bankers are a step ahead of everyone else.' The newspaper
of record characterized the bill as a plumbing operation, "a catalog of
repairs and additions to the rusted infrastructure of a regulatory
system that has failed to keep up with the expanding scope and
complexity of modern finance."

(Huh?) Weren't they coping with the aftereffects of a deliberate
scheme to deregulate and decriminalize a marketplace in the name of
"modernization" and "innovation?"

The Wall Street Journal explains:

"The legislation empowers 10
regulatory agencies with the ability to write new rules governing all
aspects of the financial industry-from the types of trades banks can
conduct to the standards for mortgages, credit cards, and ATM fees. Many
of these decisions will be made by regulators, and this has lawmakers
on both the right and the left worried: Those on the right worry about
government overreach, while those on the left worry about regulators
becoming cozy with lobbyists. Indeed, the banking industry has been
reaching out to regulators for months, and JP Morgan Chase has more than
100 teams studying the legislation."

When they say, "studying" the legislation, they don't mean studying
in any academic sense. They mean figuring out how to game it, undercut
it undermine it and sabotage it, for starters, by imposing new fees and
restructuring to evade the law. They are masters of playing this game.
So far they spent an estimated $600 million fighting the bill so they
have a big investment in assuring a business climate they can dominate'

Economist Gerald Epstein told Real News. "It's like a world cup game
where one team only has a goalie with his hands tied."

While Republicans drool about the prospects of taking back the
Congress and repealing laws they don't like, Wall Street is hardly out
of the picture. They have cut back on donations to Democrats while
industry groups like the Chamber of "Congress" mount a major campaign to
defend fat cats. Their lobbyists are in the trenches diluting what they
can, revising what they must. James Kwak of Baseline Scenario thinks
the bill was better than nothing, but adds, "it's still a missed
opportunity. And over the next couple years, as regulators (lobbyists)
write the rules necessary to implement the bill, we'll find out if
anything really has changed."

What's your guess?

Leave it to Bill Gross, a top bond salesman to tell the Wall Street
Journal bluntly, "Wall Street still owns Washington." What do other
majordomos on the Street think about the bill? Former Republican
Treasury Secretary and bailout king Henry Paulson supported it. Most of
the opposition comes from demagogues characterizing it as a Soviet-style
"takeover." Please! Lenin would have laughed at this watered down
half-measure.

And what about prosecutions? Goldman Sachs agreed to a settlement in
just one transaction, a civil, not criminal action, while not admitting
guilt. The Republicans on the SEC were against going after Goldman,
natch, although it appears that Goldman was singled out not only because
it was a symbol of public disgust with Wall Street but because it could
afford to play the role of evil symbol.

That play may have closed. A Times headline on Saturday gave that
away: "GOLDMAN WAS REGULATORS FIRST PRIZE AND IT MAY BE THE LAST."

Wall Street veteran Larry Chin asked, "Are we to think that the
Goldman Abacus-CDO transaction is the only ABS-backed CDO that employed
improper marketing? Do not be so naive. In fact, if Goldman employed
improper marketing in one deal, are we to believe they did not do the
same in many others? Do you ever find just one mouse? (Emphasis mine.)

The Goldman Abacus deal was a $2 billion transaction. A sizable
transaction, correct? Yes and no. We truly need to look at the Abacus
deal in terms of the overall ABS-CDO market. How big was that market?
Slightly more than $1 trillion in ABS-CDOs were underwritten by Wall
Street from the beginning of 2006 until the market froze in early 2008

That seems like too much money to mess with. And that's not all.
Goldman has yet to be held accountable for many of other dangerous
investment practices. A new report in Harper's examines the role Goldman
played in escalating the food crisis of 2008 when the ranks of the
world's hungry increased by 250 million.

While the government doesn't appear to have the fortitude to clean up
more crime on Wall Street, the Supreme Court is trying to insure that
prosecutors will not have the tools they need to jail wrong doers if and
when they do. The Washington Post reports, "A Supreme Court ruling
last month that gutted an anti-corruption tool favored by federal
prosecutors is jeopardizing high-profile investigations into politicians
and business executives..."

So, there you go, Wall Street has wriggled off the hook with a little
help from their friends, and is winning the new "class war." 2.1
million Americans-that's the new number-can't even get unemployment
benefits extended.

Why are no anti-war activists talking about stopping this war and
"withdrawing" from Wall Street?

The political environment seems grim, not only for Obama, but for all
progressive change. That moment may have passed. This does not mean the
public is not angry, only that's its anger is deliberately being
channeled by our media in a false direction, into bashing deficits and
Dems, not the men in the shadows who are calling the shots.

Let's realize: The financial "spill" is just as devastating as the
oil spill. And it has yet to be contained.
So if you want to "fight the power," the time for organizing and
educating is here, with a vengeance. Don't let it slip away.