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Tsunami Of Disgust

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You can count me among those who believe that the non-stop Republican Presidential debates are working to President Obama’s advantage.  How many times have you heard some television news commentator remark that “the big winner of last night’s Republican debate was Barack Obama”?  As Julianna Goldman reported for Bloomberg BusinessWeek, two recent polls have revealed that Obama is no longer looking quite as bad as he did a few months ago:

Forty-nine percent of Americans approve of how Obama is handling his job, according to an ABC News/Washington Post poll and another conducted for CNN.  The rate was the highest in both surveys since a short-lived bump the president got following the killing of al-Qaeda leader Osama bin Laden in May.

Nevertheless, there is an unstoppable wave of criticism directed against the President by his former supporters as well as those disgusted by Obama’s subservience to his benefactors on Wall Street.   In my last posting, I discussed Bill Black’s rebuttal to President Obama’s most recent attempt to claim that no laws were broken by the banksters who caused the 2008 financial crisis.

The wave of disgust at Obama’s exoneration of the financial fraudsters has gained quite a bit of momentum since that outrageous remark appeared on the December 11 broadcast of 60 Minutes.  Matt Taibbi of Rolling Stone focused on the consequences of this level of dishonesty:

What makes Obama’s statements so dangerous is that they suggest an ongoing strategy of covering up the Wall Street crimewave. There is ample evidence out there that the Obama administration has eased up on prosecutions of Wall Street as part of a conscious strategy to prevent a collapse of confidence in our financial system, with the expected 50-state foreclosure settlement being the landmark effort in the cover-up, intended mainly to bury a generation of fraud.

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In other words, Geithner and Obama are behaving like Lehman executives before the crash of Lehman, not disclosing the full extent of the internal problem in order to keep investors from fleeing and creditors from calling in their chits.  It’s worth noting that this kind of behavior – knowingly hiding the derogatory truth from the outside world in order to prevent a run on the bank – is, itself, fraud!

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The problem with companies like Lehman and Enron is that their executives always think they can paper over illegalities by committing more crimes, when in fact all they’re usually doing is snowballing the problem so completely out of control that there’s no longer any chance of fixing things, thereby killing the only chance for survival they ever had.

This is exactly what Obama and Geithner are doing now.  By continually lying about the extent of the country’s corruption problems, they’re adding fraud to fraud and raising such a great bonfire of lies that they probably won’t ever be able to fix the underlying mess.

John R. MacArthur, president and publisher of Harper’s Magazine, caused quite a stir on December 14, when an essay he wrote – entitled, “President Obama Richly Deserves to Be Dumped” – was published by the The Providence Journal (Rhode Island).  For some reason, this article does not appear at the newspaper’s website.  However, you can read it in its entirety here.  MacArthur began the piece by highlighting criticism of Obama by his fellow Democrats:

Most prominent among these critics is veteran journalist Bill Moyers, whose October address to a Public Citizen gathering puts the lie to our barely Democratic president’s populist pantomime, acted out last week in a Kansas speech decrying the plight of “innocent, hardworking Americans.”  In his talk, Moyers quoted an authentic Kansas populist, Mary Eizabeth Lease, who in 1890 declared, “Wall Street owns the country.. . .Money rules.. . .The [political] parties lie to us and the political speakers mislead us.”

A former aide to Lyndon Johnson who knows politics from the inside, Moyers then delivered the coup de grace:  “[Lease] should see us now.  John Boehner calls on the bankers, holds out his cup, and offers them total obeisance from the House majority if only they fill it.  Barack Obama criticizes bankers as fat cats, then invites them to dine at a pricey New York restaurant where the tasting menu runs to $195 a person.”

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What’s truly breathtaking is the president’s gall, his stunning contempt for political history and contemporary reality.  Besides neglecting to mention Democratic complicity in the debacle of 2008, he failed to point out that derivatives trading remains largely unregulated while the Securities and Exchange Commission awaits “public comment on a detailed implementation plan” for future regulation.  In other words, until the banking and brokerage lobbies have had their say with John Boehner, Max Baucus, and Secretary of the Treasury Tim Geithner.  Meanwhile, the administration steadfastly opposes a restoration of the Glass-Steagall Act, the New Deal law that reduced outlandish speculation by separating commercial and investment banks.  In 1999, it was Summers and Geithner, led by Bill Clinton’s Treasury Secretary Robert Rubin (much admired by Obama), who persuaded Congress to repeal this crucial impediment to Wall Street recklessness.

I have frequently discussed the criticism directed at Obama from the political Center as well as the Left (see this and this).  I have also expressed my desire to see Democratic challengers to Obama for the 2012 nomination (see this and this).  In the December 20 edition of The Chicago Tribune, William Pfaff commented on John R. MacArthur’s above-quoted article, while focusing on the realistic consequences of a Democratic Primary challenge to Obama’s nomination:

John MacArthur’s and Bill Moyers’ call for the replacement of Barack Obama as the Democratic presidential candidate next year is very likely to fail, and any Democratic replacement candidate is likely to lose the presidency.  As a veteran Democratic Party activist recently commented, this is the sure way to elect “one of those idiots” running for the Republican nomination.  Very likely he is right.

However, the two may have started something with interesting consequences.  Nobody thought Sen. McCarthy’s challenge was anything more than a futile gesture.  Nobody foresaw the assassinations and military defeat to come, or the ruin of Richard Nixon.  Nobody knows today what disasters may lie ahead in American-supervised Iraq, or in the dual war the Pentagon is waging in Afghanistan and Pakistan.  The present foreign policy of the Obama government is fraught with risk.

As for the president himself, the objection to him is that his Democratic Party has become a representative of the same interests as the Republican Party.  The nation cannot bear two parties representing plutocratic power.

The current battle over the payroll tax cut extension reminded me of a piece I wrote last August, in which I included Nate Silver’s observation that it was President Obama’s decision to leave the issue of a payroll tax cut extension “on the table” during the negotiations on the debt ceiling bill.  My thoughts at that time were similar to William Pfaff’s above-quoted lament about the nation’s “two political parties representing plutocratic power”:

As many observers have noted, the plutocracy has been able to accomplish much more with Obama in the White House, than what would have been achievable with a Republican President.  This latest example of a bipartisan effort to trample “the little people” has reinforced my belief that the fake “two-party system” is a sideshow – designed to obfuscate the insidious activities of the Republi-Cratic Corporatist Party.

It’s nice to see that the tsunami of disgust continues to flow across the country.


Awareness Abounds

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November 12, 2009

When I started this blog in April of 2008, my focus was on that year’s political campaigns and the exciting Presidential primary season.  At the time, I expressed my concern that the most prominent centrist in the race, John McCain, would continue pandering to the televangelist lobby after winning the nomination, when those efforts were no longer necessary.  He unfortunately followed that strategy and went on to say dumb things about the most pressing issue facing America in decades: the economy.  During the Presidential campaign of Bill Clinton, James Carville was credited with writing this statement on a sign in front of Clinton’s campaign headquarters in Little Rock:  “It’s the economy, stupid!”  That phrase quickly became the mantra of most politicians until the attacks of September 11, 2001 revealed that our efforts at national security were inadequate.  Since that time, we have over-compensated in that area.  Nevertheless, with the demise of Rudy Giuliani’s political career, the American public is not as jumpy about terrorism as it had been — despite the suspicious connections of the deranged psychiatrist at Fort Hood.  As the recent editorials by Steve Chapman of the Chicago Tribune and Vincent Carroll of The Denver Post demonstrate, the cerebral bat guano necessary to get the public fired-up for a vindictive rampage just isn’t there anymore.

President Obama’s failure to abide by the Carville maxim appears to be costing him points in the latest approval ratings.  The fact that the new President has surrounded himself with the same characters who helped create the financial crisis, has become a subject of criticism by commentators from across the political spectrum.  Since Obama’s Presidential campaign received nearly one million dollars in contributions from Goldman Sachs, he should have known we’d be watching.  CNBC’s Charlie Gasparino was recently interviewed by Aaron Task.  During that discussion, Gasparino explained that Jamie Dimon (the CEO of JP Morgan Chase and director of the New York Federal Reserve) has managed to dissuade the new President from paying serious attention to Paul Volcker (chairman of the Economic Recovery Advisory Board) whose ideas for financial reform would prove inconvenient for those “too big to fail” financial institutions.  As long as JP Morgan’s “Dimon Dog” and Lloyd Bankfiend of Goldman Sachs have such firm control over the puppet strings of “Turbo” Tim Geithner, Larry Summers and Ben Bernanke, why pay attention to Paul Volcker?  The voting public (as well as most politicians) can’t understand most of these economic problems, anyway.  I seriously doubt that many of our elected officials could explain the difference between a credit default swap and a wife swap.

Once again, Dan Gerstein of Forbes.com has directed a water cannon of common sense on the malaise blaze that has been fueled by a plague of ignorance.  In his latest piece, Gerstein tossed aside that tattered, obsolete handbook referred to as “conventional wisdom” to take a hard look at the reality facing all incumbent, national politicians:

It’s the stupidity about the economy in Washington and on Wall Street that’s driving most voters berserk.  Indeed, the financial system is still out of whack and tens of millions of people are (or fear they soon could be) out of work, yet every day our political and economic leaders say and do knuckleheaded things that show they are unfailingly and imperviously out of touch with those realities.

Gerstein’s short essay is essential reading for a quick understanding of how and why America can’t seem to solve many of its pressing problems these days.  Gerstein has identified the responsible culprits as three groups:  the Democrats, the Republicans and the big banks — describing them as the “axis of cluelessness”:

We have gone long past “they don’t get it” territory.  It’s now unavoidably clear that they won’t get it — and we won’t get the responsible leadership and honest capitalism we want–until (as I have suggested before) we demand it.

Surprisingly, public awareness concerning the root cause of both the financial crisis and our ongoing economic predicament has escalated to a startling degree in recent weeks.  This past spring, if you wanted to find out about the nefarious activities transpiring at Goldman Sachs, you had to be familiar with Zero Hedge or GoldmanSachs666.com.  Today, you need look no further than Maureen Dowd’s column or the most recent episode of Saturday Night Live.  Everyone knows what the problem is.  Gordon Gekko’s 1987 proclamation that “greed is good” has not only become an acceptable fact of life, it has infected our laws and the opinions rendered by our highest courts.  We are now living with the consequences.

Fortunately, there are plenty of people in the American financial sector who are concerned about the well-being of our society.  A recent study by David Weild and Edward Kim (Capital Markets Advisors at Grant Thornton LLP) entitled “A wake-up call for America” has revealed the tragic consequences resulting from the fact that the United States, when compared with other developed countries, has fallen seriously behind in the number of companies listed on our stock exchanges.  Here’s some of what they had to say:

The United States has been engaged in a longstanding experiment to cut commission and trading costs.  What is lacking in this process is the understanding that higher transaction costs actually subsidized services that supported investors.  Lower transaction costs have ushered in the age of  “Casino Capitalism” by accommodating trading interests and enabling the growth of day traders and high-frequency trading.

The Great Depression in Listings was caused by a confluence of technological, legislative and regulatory events — termed The Great Delisting Machine — that started in 1996, before the 1997 peak year for U.S. listings.  We believe cost cutting advocates have gone overboard in a misguided attempt to benefit investors.  The result — investors, issuers and the economy have all been harmed.

The Grant Thornton study illustrates how and why “as many as 22 million” jobs have been lost since 1997, not to mention the destruction of retirement savings, forcing many people to come out of retirement and back to work.  Beyond that, smaller companies have found it more difficult to survive and business loans have become harder to obtain.

Aside from all the bad news, the report does offer solutions to this crisis:

The solutions offered will help get the U.S. back on track by creating high-quality jobs, driving economic growth, improving U.S. competitiveness, increasing the tax base, and decreasing the U.S. budget deficit — all while not costing the U.S. taxpayer a dime.

These solutions are easily adopted since they:

  • create new capital markets options while preserving current options,
  • expand choice for consumers and issuers,
  • preserve SEC oversight and disclosure, including Sarbanes-Oxley, in the public market solution, and
  • reserve private market participation only to “qualified” investors, thus protecting those investors that  need protection.

These solutions would refocus a significant portion of Wall Street on rebuilding the U.S. economy.

The Grant Thornton website also has a page containing links to the appropriate legislators and a prepared message you can send, urging those legislators to take action to resolve this crisis.

Now is your chance to do something that can help address the many problems with our economy and our financial system.  The people at Grant Thornton were thoughtful enough to facilitate your participation in the resolution of this crisis.  Let the officials in Washington know what their bosses — the people — expect from them.




Our Generation Got Old

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October 13, 2008

As John McCain’s Presidential campaign goes swirling down the toilet during the final desperate weeks of its existence, we see its surrogates cling to the non-issue of Obama’s contact with 1960s radical activist, Bill Ayers.  As I said on October 2, McCain missed his chance to take control of this race by opposing the 700-billion-dollar “bailout bill”, which has yet to inspire the confidence of the investing public, foreign markets or the banks.  By reuniting with his old ally from the “campaign finance reform” days, Democratic Senator Russ Feingold of Wisconsin, as well as Democratic rising star, Senator Maria Cantwell of Washington, the “Blue Dog” Democrats and the so-called “House Republicans” led by Jeb Hensarling and Mike Pence, McCain could have secured his position as the man who would take the Republican Party into the new century.  Instead, he chose to follow the advice of the lobbyists who run his campaign:  Steve “Skinhead” Schmidt and (Jeffrey Dahmer look-alike) Rick Davis.  These “Guys on the Plane” (if I may steal an expression from Peggy Noonan) have their careers rooted in the negative campaigning strategies created by Lee Atwater and refined by Karl Rove.  These operatives have no other cards to play.  They have no experience in successful reliance upon a strategy, based solely on portraying their own candidate in a positive way.

As the nation’s economic condition becomes more perilous, the McCain campaign leans more heavily on its claim that Obama’s contacts with Bill Ayers should determine the outcome of the 2008 Presidential election.

At this point it’s starting to get funny.  Worse yet  … it is an indicator (to me, at least) of how old I am and how old my generation has become.  Back in my old home town (a place called Chicago) there is a writer for a local paper called the Chicago Tribune.  His name is John Kass.  Kass is an outspoken opponent of Chicago’s current mayor, Richard M. Daley and Kass has a nickname for him, just as I have nicknames for such worthy characters as Senator Joe “The Tool” Lieberman.  On Sunday, October 12, Kass expressed his outrage that Marilyn Katz, Ayers’ fellow member of the 1960s radical group, Students for a Democratic Society (SDS), is involved in Obama’s Presidential campaign.  Kass took particular umbrage at the fact that Marilyn Katz now has a successful public relations firm called: MK Communications.  According to Kass, MK Communications now represents the Chicago Police Department, City Colleges of Chicago, the city’s “Law Department” (actually referred to as the Office of the Corporation Counsel for the City of Chicago), and numerous other city departments  … including the venerable “Streets and San”.  Kass seemed like a shoe salesman trying to fit an old foot that was accustomed to the “militant radical” style of the 1960s, into the new, 21st century, “Terrorist” model. It  doesn’t fit.  The militant radicals of the 1960s used small bombs to make political statements.  There is an absence of information about the number of alleged casualties or injuries resulting from such bombings.  Today, “terrorists” use small bombs to take down airplanes and they use airplanes to take down skyscrapers.  The use of the “terrorist” label to a 1960s radical is an obvious stretch.

The rant by the Tribune’s Kass about how former radical, Marilyn Katz, has become a “mainstream” figure in Chicago’s Public Relations business community, reminded me of an old song.  On August 17, 1969, Grace Slick and her band, Jefferson Airplane, woke up the crowd at the Woodstock Music and Arts Fair with what she described as “morning maniac music”: the title song from their upcoming album, Volunteers.  Included among the song’s lyrics was the following passage:

One generation got old.
One generation got soul.
This generation got no destination to hold.

The Marilyn Katz story and the Bill Ayers story tell me that our generation got old.  The former radicals of that era are now playing important roles within what they used to consider an archaic milieu, referred to as “the establishment”.  Nevertheless, many members of this latest “establishment” generation are in a fight to retain the claim of having “soul” by helping to bring an African-American to The White House for the first time in this nation’s history.  The crowds at the McCain and Palin rallies have expressed their fear of what an Obama Administration might bring to America.  These McCain supporters have been able to replace their fears of how they are going to economically survive from day to day and how to fund their retirement plans with the fears conjured up by Schmidt, Davis and their ilk.  The ball is now in the court of the Obama campaign to help establish a legacy for these people and all Americans – by righting the ship capsized by the “perfect storm” of greed, corruption and deregulation.  Another three-pointer would be nice.