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Get Ready for the Next Financial Crisis

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It was almost one year ago when Bloomberg News reported on these remarks by Mark Mobius, executive chairman of Templeton Asset Management’s emerging markets group:

“There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis,” Mobius said at the Foreign Correspondents’ Club of Japan inTokyotoday in response to a question about price swings. “Are the derivatives regulated?  No.  Are you still getting growth in derivatives?  Yes.”

I have frequently complained about the failed attempt at financial reform, known as the Dodd-Frank Act.  Two years ago, I wrote a piece entitled, “Financial Reform Bill Exposed As Hoax” wherein I expressed my outrage that the financial reform effort had become a charade.  The final product resulting from all of the grandstanding and backroom deals – the Dodd–Frank Act – had become nothing more than a hoax on the American public.  My essay included the reactions of five commentators, who were similarly dismayed.  I concluded the posting with this remark:

The bill that is supposed to save us from another financial crisis does nothing to accomplish that objective.  Once this 2,000-page farce is signed into law, watch for the reactions.  It will be interesting to sort out the clear-thinkers from the Kool-Aid drinkers.

During the past few days, there has been a chorus of commentary calling for a renewed effort toward financial reform.  We have seen a torrent of reports on the misadventures of The London Whale at JP Morgan Chase, whose outrageous derivatives wager has cost the firm uncounted billions.  By the time this deal is unwound, the originally-reported loss of $2 billion will likely be dwarfed.

Former Secretary of Labor, Robert Reich, has made a hobby of writing blog postings about “what President Obama needs to do”.  Of course, President Obama never follows Professor Reich’s recommendations, which might explain why Mitt Romney has been overtaking Obama in the opinion polls.  On May 16, Professor Reich was downright critical of the President, comparing him to the dog in a short story by Sir Arthur Conan Doyle involving Sherlock Holmes, Silver Blaze.  The President’s feeble remarks about JPMorgan’s latest derivatives fiasco overlooked the responsibility of Jamie Dimon – obviously annoying Professor Reich, who shared this reaction:

Not a word about Jamie Dimon’s tireless campaign to eviscerate the Dodd-Frank financial reform bill; his loud and repeated charge that the Street’s near meltdown in 2008 didn’t warrant more financial regulation; his leadership of Wall Street’s brazen lobbying campaign to delay the Volcker Rule under Dodd-Frank, which is still delayed; and his efforts to make that rule meaningless by widening a loophole allowing banks to use commercial deposits to “hedge” (that is, make offsetting bets) their derivative trades.

Nor any mention Dimon’s outrageous flaunting of Dodd-Frank and of the Volcker Rule by setting up a special division in the bank to make huge (and hugely profitable, when the bets paid off) derivative trades disguised as hedges.

Nor Dimon’s dual role as both chairman and CEO of JPMorgan (frowned on my experts in corporate governance) for which he collected a whopping $23 million this year, and $23 million in 2010 and 2011 in addition to a $17 million bonus.

Even if Obama didn’t want to criticize Dimon, at the very least he could have used the occasion to come out squarely in favor of tougher financial regulation.  It’s the perfect time for him to call for resurrecting the Glass-Steagall Act, of which the Volcker Rule – with its giant loophole for hedges – is a pale and inadequate substitute.

And for breaking up the biggest banks and setting a cap on their size, as the Dallas branch of the Federal Reserve recommended several weeks ago.

This was Professor Reich’s second consecutive reference within a week to The Dallas Fed’s Annual Report, which featured an essay by Harvey Rosenblum, the head of the Dallas Fed’s Research Department and the former president of the National Association for Business Economics.  Rosenblum’s essay provided an historical analysis of the events leading up to the 2008 financial crisis and the regulatory efforts which resulted from that catastrophe – particularly the Dodd-Frank Act.  Beyond that, Rosenblum emphasized why those “too-big-to-fail” (TBTF) banks have actually grown since the enactment of Dodd-Frank:

The TBTF survivors of the financial crisis look a lot like they did in 2008.  They maintain corporate cultures based on the short-term incentives of fees and bonuses derived from increased oligopoly power.  They remain difficult to control because they have the lawyers and the money to resist the pressures of federal regulation.  Just as important, their significant presence in dozens of states confers enormous political clout in their quest to refocus banking statutes and regulatory enforcement to their advantage.

Last year, former Kansas City Fed-head, Thomas Hoenig discussed the problems created by the TBTFs, which he characterized as “systemically important financial institutions” – or “SIFIs”:

…  I suggest that the problem with SIFIs is they are fundamentally inconsistent with capitalism.  They are inherently destabilizing to global markets and detrimental to world growth.  So long as the concept of a SIFI exists, and there are institutions so powerful and considered so important that they require special support and different rules, the future of capitalism is at risk and our market economy is in peril.

Although the huge derivatives loss by JPMorgan Chase has motivated a number of commentators to issue warnings about the risk of another financial crisis, there had been plenty of admonitions emphasizing the risks of the next financial meltdown, which were published long before the London Whale was beached.  Back in January, G. Timothy Haight wrote an inspiring piece for the pro-Republican Orange County Register, criticizing the failure of our government to address the systemic risk which brought about the catastrophe of 2008:

In response to widespread criticism associated with the financial collapse, Congress has enacted a number of reforms aimed at curbing abuses at financial institutions.  Legislation, such as the Dodd-Frank and Consumer Protection Act, was trumpeted as ensuring that another financial meltdown would be avoided.  Such reactionary regulation was certain to pacify U.S. taxpayers.

Unfortunately, legislation enacted does not solve the fundamental problem.  It simply provides cover for those who were asleep at the wheel, while ignoring the underlying cause of the crisis.

More than three years after the calamity, have we solved the dilemma we found ourselves in late 2008?  Can we rest assured that a future bailout will not occur?  Are financial institutions no longer “too big to fail?”

Regrettably, the answer, in each case, is a resounding no.

Last month, Michael T. Snyder of The Economic Collapse blog wrote an essay for the Seeking Alpha website, enumerating the 22 Red Flags Indicating Serious Doom Is Coming for Global Financial Markets.  Of particular interest was red flag #22:

The 9 largest U.S. banks have a total of 228.72 trillion dollars of exposure to derivatives.  That is approximately 3 times the size of the entire global economy.  It is a financial bubble so immense in size that it is nearly impossible to fully comprehend how large it is.

The multi-billion dollar derivatives loss by JPMorgan Chase demonstrates that the sham “financial reform” cannot prevent another financial crisis.  The banks assume that there will be more taxpayer-funded bailouts available, when the inevitable train wreck occurs.  The Federal Reserve will be expected to provide another round of quantitative easing to keep everyone happy.  As a result, nothing will be done to strengthen financial reform as a result of this episode.  The megabanks were able to survive the storm of indignation in the wake of the 2008 crisis and they will be able ride-out the current wave of public outrage.

As Election Day approaches, Team Obama is afraid that the voters will wake up to the fact that the administration itself  is to blame for sabotaging financial reform.  They are hoping that the public won’t be reminded that two years ago, Simon Johnson (former chief economist of the IMF) wrote an essay entitled, “Creating the Next Crisis” in which he provided this warning:

On the critical dimension of excessive bank size and what it implies for systemic risk, there was a concerted effort by Senators Ted Kaufman and Sherrod Brown to impose a size cap on the largest banks – very much in accordance with the spirit of the original “Volcker Rule” proposed in January 2010 by Obama himself.

In an almost unbelievable volte face, for reasons that remain somewhat mysterious, Obama’s administration itself shot down this approach.  “If enacted, Brown-Kaufman would have broken up the six biggest banks inAmerica,” a senior Treasury official said.  “If we’d been for it, it probably would have happened.  But we weren’t, so it didn’t.”

Whether the world economy grows now at 4% or 5% matters, but it does not much affect our medium-term prospects. The US financial sector received an unconditional bailout – and is not now facing any kind of meaningful re-regulation.  We are setting ourselves up, without question, for another boom based on excessive and reckless risk-taking at the heart of the world’s financial system.  This can end only one way:  badly.

The public can forget a good deal of information in two years.  They need to be reminded about those early reactions to the Obama administration’s subversion of financial reform.  At her Naked Capitalism website, Yves Smith served up some negative opinions concerning the bill, along with her own cutting commentary in June of 2010:

I want the word “reform” back.  Between health care “reform” and financial services “reform,” Obama, his operatives, and media cheerleaders are trying to depict both initiatives as being far more salutary and far-reaching than they are.  This abuse of language is yet another case of the Obama Administration using branding to cover up substantive shortcomings.  In the short run it might fool quite a few people, just as BP’s efforts to position itself as an environmentally responsible company did.

*   *   *

So what does the bill accomplish?  It inconveniences banks around the margin while failing to reduce the odds of a recurrence of a major financial crisis.

On May 17, Noam Scheiber explained why the White House is ”sweating” the JPMorgan controversy:

In particular, the transaction appears to have been a type of proprietary trade – which is to say, a trade that a bank undertakes to make money for itself, not its clients.  And these trades were supposed to have been outlawed by the “Volcker Rule” provision of Obama’s financial reform law, at least at federally-backed banks like JP Morgan.  The administration is naturally worried that, having touted the law as an end to the financial shenanigans that brought us the 2008 crisis, it will look feckless instead.

*   *   *

But it turns out that there’s an additional twist here.  The concern for the White House isn’t just that the law could look weak, making it a less than compelling selling point for Obama’s re-election campaign.  It’s that the administration could be blamed for the weakness.  It’s one thing if you fought for a tough law and didn’t entirely succeed.  It’s quite another thing if it starts to look like you undermined the law behind the scenes.  In that case, the administration could look duplicitous, not merely ineffectual.  And that’s the narrative you see the administration trying to preempt   .   .   .

When the next financial crisis begins, be sure to credit President Obama as the Facilitator-In-Chief.


 

Buddy Roemer Struggles to Become Visible

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His crusade against corruption in politics has made him the invisible Presidential candidate.  The mainstream news media have no interest in him.  His anti-status quo message is probably the reason why.  Andrew Kreig of Washington’s Blog reported that Buddy Roemer appeared with reformed ex-convict / former lobbyist Jack Abramoff before a cozy, standing-room-only audience of 120, convened on March 22 by the non-partisan Committee for the Republic.  For those unfamiliar with Buddy Roemer, Kreig provided this summary of the candidate’s background and political perspective:

“I don’t think the answer is the Republican Party,” said the former two-term governor of Louisiana, who became a Republican in 1991 and returned to politics last year after a 16-year absence.  Earlier, he served four terms as a Democratic congressman beginning in the 1980, running unopposed in his last three races.

“And,” he continued, “I don’t think the answer is the Democratic Party.”  He says both parties are controlled by special interests and political action committees (PACs), whose checks he has refused to take since his first race three decades ago.

*   *   *

The big knock on Roemer is that he lacks high poll numbers and name recognition, doubtless because GOP debate-organizers excluded him.  Yet he was doing better in certain key criteria than some other candidates invited repeatedly for nationally broadcast debates.  Roemer concluded that his basic problem was that GOP chieftains did not want him to describe his reform message.

Therefore, Roemer’s campaign is now focused on winning the Americans Elect nomination to be on the November ballot in all 50 states.  Then he wants 15% support in poll numbers so he will be included in debates with the Democratic and Republican nominees.

On December 12, I discussed some of the criticism directed at Americans Elect.  Most notably, Richard Hansen, a professor at the University of  California at Irvine Law School, wrote an essay for Politico, which was harshly critical of Americans Elect.  Professor Hansen concluded the piece with these observations:

But the biggest problem with Americans Elect is neither its secrecy nor the security of its election.  It is the problems with internal fairness and democracy.  To begin with, according to its draft rules, only those who can provide sufficient voter identification that will satisfy the organization – and, of course, who have Internet access – will be allowed to choose the candidate.  These will hardly be a cross section of American voters.

In addition, an unelected committee appointed by the board, the Candidates Certification Committee, will be able to veto a presidential/vice presidential ticket deemed not “balanced” – subject only to a two-thirds override by delegates.

It gets worse.  Under the group’s bylaws, that committee, along with the three other standing committees, serves at the pleasure of the board – and committee members can be removed without cause by the board.  The board members were not elected by delegates; they chose themselves in the organization’s articles of incorporation.

The bottom line:  If Americans Elect is successful, millions of people will have united to provide ballot access not for a candidate they necessarily believe in – like a Ross Perot or Ralph Nader – but for a candidate whose choice could be shaped largely by a handful of self-appointed leaders.

Despite the veneer of democracy created by having “delegates” choose a presidential candidate through a series of Internet votes, the unelected, unaccountable board of Americans Elect, funded by secret money, will control the process for choosing a presidential and vice presidential candidate – who could well appear on the ballot in all 50 states.

Roemer’s ability to survive this questionable nomination process is just the first hurdle.  Even if he wins that nomination, he will be confronted by critics of Americans Elect to defend that organization’s controversial nomination procedure.  Nevertheless, if none of his opponents from that nomination campaign step up to oppose the result, Roemer might just breeze through any questions concerning that issue.

One interesting way to get a look at Buddy Romer is to read his Twitter feed – (@BuddyRoemer).  Roemer’s staff members occasionally post tweets about such subjects as the candidate’s desire to restore the “Made in America” label so that consumers would have the choice to buy products from manufacturers who employ their neighbors.  Here are some of Buddy’s own tweets:

If Santorum and Gingrich don’t get the GOP nomination, will they return to lobbying?  Or keep their records clean for 2016?

“Few men have virtue to withstand the highest bidder.” – George Washington

RT “@maximosis:  The more people wake up from their tacit acceptance of the corporatocracy, the more apparent these abuses will become.”

“The people do not control America, the big checks do.”

From 1998-2010, the Financial, Insurance, Real Estate sectors spent $6.8 BILLION in lobbying & campaign donations.

Millions $$ in earmarks go to top Congressional campaign donors.  Here are some striking examples >>http://thelobbyisteffect.com/2012/02/28/earmarks-are-a-microcosm-of-how-government-works/ #corruption

At his campaign website, supporters are encouraged to post tweets to Romer’s Twitter feed in addition to making contributions within the self-imposed, $100 limit.  At the “Blog” section, there are links to videos of the candidate’s television appearances.  A visit to the “Issues” section of his website will reveal Roemer’s position on banking reform:

As a small business banker, Buddy Roemer is proud to have chosen smart investments that kept his bank on solid footing while others were taking bailouts from the government to remain solvent.  Banking is too important to be left to the bankers, but Buddy recognizes that regulation of the industry must be a fine balance between too much and too little.

That sure sounds better than Romney’s “regulations kill jobs” theme and Obama’s track record of giving the banks everything they want, with revolving doors connecting the West Wing to Citigroup and Goldman Sachs.

The big question will be whether (as the Americans Elect nominee) Romer could accumulate the support from 15% of poll respondents so that he could participate in the Presidential debates with Obama and Romney.  It sure would be interesting to see him on the stage with those two.  The public might actually take interest in the process.



 

Wall Streeters Who Support The Occupy Movement

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Forget about what you have been hearing from those idiotic, mainstream blovaitors – who rose to prominence solely because of corporate politics.  Those bigmouths want you to believe that the Occupy Wall Street movement is anti-capitalist.  Nevertheless, the dogma spouted by those dunder-headed pundits is contradicted by the reality that there are quite a number of prominent individuals who voice support for the Occupy Wall Street movement, despite the fact that they are professionally employed in the investment business.  I will provide you with some examples.

On October 31, I discussed the propaganda war waged against the Occupy Wall Street movement, concluding the piece with my expectation that Jeremy Grantham’s upcoming third quarter newsletter would provide some sorely-needed, astute commentary on the situation.  Jeremy Grantham, rated by Bloomberg BusinessWeek as one of the Fifty Most Influential Money Managers, finally released an abbreviated edition of that newsletter one month later than usual, due to a busy schedule.  In addition to expressing some supportive comments about the OWS movement, Grantham noted that he will be providing a special supplement, based specifically on that subject:

Meriting a separate, special point are the drastic declines in both U.S. income equality – the U.S. has become quite quickly one of the least equal societies – and in the stickiness of economic position from one generation to another.  We have gone from having been notably upwardly mobile during the Eisenhower era to having fallen behind other developed countries today, even the U.K.!  The net result of these factors is a growing feeling of social injustice, a weakening of social cohesiveness, and, possibly, a decrease in work ethic.  A healthy growth rate becomes more difficult.

*   *   *

Sitting on planes over the last several weeks with nothing to do but read and think, I found myself worrying increasingly about the 1% and the 99% and the appearance we give of having become a plutocracy, and a rather mean-spirited one at that.  And, one backed by a similarly mean-spirited majority on the Supreme Court.  (I will try to post a letter addressed to the “Occupy … Everywhere” folks shortly.)

Hedge fund manager Barry Ritholtz is the author of Bailout Nation and the publisher of one of the most widely-read financial blogs, The Big Picture.  Among the many pro-OWS postings which have appeared on that site was this recent piece, offering the movement advice similar to what can be expected from Jeremy Grantham:

To become as focused and influential as the Tea Party, what Occupy Wall Street needs a simple set of goals. Not a top 10 list — that’s too unwieldy, and too unfocused.  Instead, a simple 3 part agenda, that responds to some very basic problems regardless of political party.  It must address the key issues, have a specific legislative agenda, and finally, effect lasting change.  By keeping it focused on the foibles of Wall Street, and on issues that actually matter, it can become a rallying cry for an angry nation.

I suggest the following three as achievable goals that will have a lasting impact:

1. No more bailouts: Bring back real capitalism
2. End TBTF banks
3. Get Wall Street Money out of legislative process

*   *   *

You will note that these three goals are issues that both the Left and the Right — Libertarians and Liberals — should be able to agree upon. These are all doable measurable goals, that can have a real impact on legislation, the economy and taxes.

But amending the Constitution to eliminate dirty money from politics is an essential task. Failing to do that means backsliding from whatever gains are made. Whatever is accomplished will be temporary without campaign finance reform . . .

Writing for the DealBook blog at The New York Times, Jesse Eisinger provided us with the laments of a few Wall Street insiders, whose attitudes are aligned with those of the OWS movement:

Last week, I had a conversation with a man who runs his own trading firm.  In the process of fuming about competition from Goldman Sachs, he said with resignation and exasperation:  “The fact that they were bailed out and can borrow for free – it’s pretty sickening.”

*   *   *

Sadly, almost none of these closeted occupier-sympathizers go public.  But Mike Mayo, a bank analyst with the brokerage firm CLSA, which is majority-owned by the French bank Crédit Agricole, has done just that.  In his book “Exile on Wall Street” (Wiley), Mr. Mayo offers an unvarnished account of the punishments he experienced after denouncing bank excesses.  Talking to him, it’s hard to tell you aren’t interviewing Michael Moore.

*   *   *

I asked Richard Kramer, who used to work as a technology analyst at Goldman Sachs until he got fed up with how it did business and now runs his own firm, Arete Research, what was going wrong.  He sees it as part of the business model.

“There have been repeated fines and malfeasance at literally all the investment banks, but it doesn’t seem to affect their behavior much,” he said.  “So I have to conclude it is part of strategy as simple cost/benefit analysis, that fines and legal costs are a small price to pay for the profits.”

Mr. Kramer’s contention was supported by a recent analysis of Securities and Exchange Commission documents by The New York Times, which revealed “that since 1996, there have been at least 51 repeat violations by those firms. Bank of America and Citigroup have each had six repeat violations, while Merrill Lynch and UBS have each had five.”

At the ever-popular Zero Hedge website, Tyler Durden provided us with the observations of a disillusioned, first-year hedge fund analyst.  Durden’s introductory comments in support of that essay, provide us with a comprehensive delineation of the tactics used by Wall Street to crush individual “retail” investors:

Regular readers know that ever since 2009, well before the confidence destroying flash crash of May 2010, Zero Hedge had been advocating that regular retail investors shun the equity market in its entirety as it is anything but “fair and efficient” in which frontrunning for a select few is legal, in which insider trading is permitted for politicians and is masked as “expert networks” for others, in which the government itself leaks information to a hand-picked elite of the wealthiest investors, in which investment banks send out their “huddle” top picks to “whale” accounts before everyone else gets access, in which hedge funds form “clubs” and collude in moving the market, in which millisecond algorithms make instantaneous decisions which regular investors can never hope to beat, in which daily record volatility triggers sell limits virtually assuring daytrading losses, and where the bid/ask spreads for all but the choicest few make the prospect of breaking even, let alone winning, quite daunting.  In short:  a rigged casino.  What is gratifying is to see that this warning is permeating an ever broader cross-section of the retail population with hundreds of billions in equity fund outflows in the past two years. And yet, some pathological gamblers still return day after day, in hope of striking it rich, despite odds which make a slot machine seem like the proverbial pot of gold at the end of the rainbow.  In that regard, we are happy to present another perspective:  this time from a hedge fund insider who while advocating his support for the OWS movement, explains, in no uncertain terms, and in a somewhat more detailed and lucid fashion, both how and why the market is not only broken, but rigged, and why it is nothing but a wealth extraction mechanism in which the richest slowly but surely steal the money from everyone else who still trades any public stock equity.

The anonymous hedge fund analyst concluded his discourse with this point:

In other words, if you aren’t in the .1%, you have no access to the derivatives markets, you have no access to the special deals that hedge funds and other wealthy investors get, and you have no access to the resources, information, strategic services, tax exemptions, and capital that the top .1% is getting.

If you have any questions about what some of the concepts above mean, ask and I will try my best to answer.  I’m a first-year analyst on Wall Street, and based on what I see day in and day out, I support the OWS movement 100%.

You are now informed beyond the influence of those presstitutes, who regularly attempt to convince the public that an important goal of the Occupy Movement is to destroy the livelihoods of those who work on Wall Street.


 

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John Ashcroft Was Right

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Many commentators have expressed surprise about the extensive criticism directed against President Obama by liberals.  During the new President’s third month in office, I pointed out how he had become the “Disappointer-In-Chief” – when he began to elicit groans from the likes of Keith Olbermann and Rachel Maddow.  President Obama has continued on that trajectory ever since.  More recently, Obama’s mishandling of the economic crisis resulted in a great cover story for New York Magazine by Frank Rich, entitled, “Obama’s Original Sin”.  Although Frank Rich may have been a bit restrained in his criticism of Obama, Marshall Auerback didn’t pull any punches in an essay he wrote for the New Economic Perspectives website entitled, “Barack Obama:  America’s First Tea Party President”:

Cutting public spending at this juncture is the last thing the US government should be doing.  Yet this President is pushing for the largest possible cuts that he can on the Federal government debt.  He is out-Hoovering the GOP on this issue.  He is providing “leadership” of the sort which is infuriating his base, but should endear him to the Tea Party.  This is “the big thing” for Barack Obama, as opposed to maximizing the potential of his fellow Americans by seeking to eliminate the scourge of unemployment.  Instead, his big idea is to become the president who did what George Bush could not, or did not, dare to do:  cut Medicare, Medicaid and Social Security.  What more could the Tea Party possibly want?

Glenn Greenwald of Salon has been a persistent critic of President Obama for quite a while.  Back in September of 2010, I referenced one of Glenn Greenwald’s exceptive essays about Obama with this thought:

Glenn Greenwald devoted some space from his Salon piece to illustrate how President Obama seems to be continuing the agenda of President Bush.  I was reminded of the quote from former Attorney General John Ashcroft in an article written by Jane Mayer for The New Yorker.  When discussing how he expected the Obama Presidency would differ from the Presidency of his former boss, George W. Bush, Ashcroft said:

“How will he be different?  The main difference is going to be that he spells his name ‘O-b-a-m-a,’ not ‘B-u-s-h.’ ”

John Ashcroft’s prescient remark could not have been more accurate.  Who else could have foreseen that the Obama Presidency would eventually be correlated with that of President George W. Bush?  Although it may have seemed like a preposterous notion at the time, it’s now beginning to make more sense, thanks to a very interesting piece I read at the Truthdig website entitled, “If McCain Had Won” by Fred Branfman.  Branfman began with a list of “catastrophes” we would have seen from a McCain administration, followed by this comment:

Nothing reveals the true state of American politics today more, however, than the fact that Democratic President Barack Obama has undertaken all of these actions and, even more significantly, left the Democratic Party far weaker than it would have been had McCain been elected.

More important, the sentence immediately following that remark deserves special attention because it forms the crux of Branfman’s analysis:

Few issues are more important than seeing behind the screen of a myth-making mass media, and understanding what this demonstrates about how power in America really works – and what needs to be done to change it.

From there, Branfman went on to explain how and why McCain would have made the same decisions and enacted the same policies as Obama.  Beyond that, Branfman explained why Obama ended up doing things exactly as McCain would have:

Furious debate rages among Obama’s Democratic critics today on why he has largely governed on the big issues as John McCain would have done. Some believe he retains his principles but has been forced to compromise by political realities. Others are convinced he was a manipulative politico who lacked any real convictions in the first place.

But there is a far more likely – and disturbing – possibility.  Based on those who knew him and his books, there is little reason to doubt that the pre-presidential Obama was a college professor-type who shared the belief system of his liberalish set …

*   *   *

Upon taking office, however, Obama – whatever his belief system at that point – found that he was unable to accomplish these goals for one basic reason:  The president of the United States is far less powerful than media myth portrays.  Domestic power really is in the hands of economic elites and their lobbyists, and foreign policy really is controlled by U.S. executive branch national security managers and a “military-industrial complex.”

The ugly truth strikes again!  The seemingly “all-powerful” President of the United States is nothing more than a tool of the plutocracy.  It doesn’t matter whether the White House is occupied by a Democrat or a Republican – the policies (domestic, foreign, economic, etc.) will always be the same – because the people calling the shots are always the same plutocrats who control those “too big to fail” banks, the military industry and big pharma.  As Branfman put it:

.   .   .   anyone who becomes president has little choice but to serve the institutional interests of a profoundly amoral and violent executive branch and the corporations behind them.

Perhaps in response to the oft-cited criticism that “if you’re not part of the solution – you’re part of the problem”, Fred Branfman has offered us a proposal that could send us on the way to changing this intolerable status quo:

But however important the 2012 election, far more energy needs to be devoted to building mass organizations that challenge elite power and develop the kinds of policies – including massive investment in a “clean energy economic revolution,” a carbon tax and other tough measures to stave off climate change, regulating and breaking up the financial sector, cost-effective entitlements like single-payer health insurance, and public financing of primary and general elections – which alone can save America and its democracy in the painful decade to come.

Wait a minute!  Didn’t Obama already promise us all of that stuff?

Perhaps the only way to achieve those goals is by voting for Independent political candidates, who are not beholden to the Republi-cratic Corporatist Party or its financiers.  When the mainstream media go out of their way to pretend as though a particular candidate does not exist – you might want to give serious consideration to voting for that person.  When the media try to “disappear” a candidate by “hiding” that person “in plain sight”, they could be inadvertently providing the best type of endorsement imaginable.

The same level of energy that brought Obama to the White House could be used to bring us our first Independent President.  All we need is a candidate.


 

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Balance Provokes Outrage

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December 13 marked the launch date for an organization named No Labels.  The group describes itself this way:

No Labels is a 501(c)(4) social welfare advocacy organization created to provide a voice for America’s vital center, where ideas are judged on their merits, a position which is underrepresented in our current politics.  No Labels provides a forum and community for Americans of all political backgrounds interested in seeing the nation move not left, not right, but forward.  No Labels encourages all public officials to prioritize the national interest over party interest, and to cease acting on behalf of narrow, if vocal, special interests on the far right or left.

Although No Labels has both a Declaration and a Statement of Purpose, you will find the most useful information about the group on its Frequently Asked Questions page.

As a political centrist, I found most of what I read at the No Labels website appealing enough, although I disagreed with a bit of it.  First of all, the group would have been more aptly-named, “No Polarization” since they aren’t really opposed to labels, as they explained:

We are never asking people to give up their labels, only put them aside to do what’s best for America.

Besides – I enjoy using labels to describe people.  Some of my favorite labels include:  corporatist, plutocrat, oligarch and tool.  Another statement on the No Labels website with which I disagreed was the following remark, from their Statement of Purpose:

We can’t seem to break our addiction to foreign oil.

I would suggest:  “We can’t seem to break our addiction to carbon-based energy sources.”  There is no such thing as “foreign oil”.  The so-called, “American” oil companies are all incorporated in the Cayman Islands and none of them pay income taxes to our government.  All of our oil comes from multinational corporations and it is commingled with “Muslim oil” and “Venezuelan Communist oil” at storage depots.  If the people from No Labels insist on treating us as idiots in the same manner as the two major political parties, they will deservedly fail in their mission.

I was particularly amused by the fact that so many people expressed outrage about the founding of No Labels.  The new organization managed to draw plenty of ire from an assortment of commentators during the past week and it made for some fun reading.  One of the “Founding Leaders” of No Labels is John Avlon of the Huffington Post.  He recently wrote this essay in response to spleen-venting by Rush Limbaugh on the right and Keith Olbermann on the left – both of whom expressed displeasure with the inception of the new association:

“If we do this right, we can discredit this whole mind-set of the ‘moderate center’ being the defining group in American politics,” said Rush.  “Because this No Labels group is going to end up illustrating what a fraudulent idea that whole concept of, ‘There are people who decide issue by issue.  On the left they like certain things, on the right they like certain things.’ ”

So Rush believes that there are no principled Americans who decide what they believe on different policies issue-by-issue.  For someone who talks about freedom a lot, he doesn’t have much faith in free will or free-thinking.  He doesn’t believe that Americans — especially independent voters — can consider themselves fiscally conservative but socially liberal.  You either walk in lockstep as a social conservative and fiscal conservative or you are a ‘hard-core liberal’ — libertarians, apparently, need not apply.

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Keith Olbermann named No Labels one of the “worst persons in the world” last night (a badge of honor he gave to me earlier this year).  He called us “wolves in sheep’s clothing,” and “a bunch of fraudulent conservative Democrats pretending to be moderates and a bunch of fraudulent Republicans pretending to be independents.”  Again, there’s the impulse to divide and deny the legitimacy of anyone who doesn’t conform to a hyper-partisan view of politics.

Conservative columnist George Will provided this amusing bit of speculation that the entire effort might simply be a pretext for Michael Bloomberg’s Presidential ambitions:

Often in the year before the year before the year divisible by four, a few political people theatrically recoil from partisanship.  Recently, this ritual has involved speculation about whether New York Mayor Michael Bloomberg might squander a few of his billions to improve America by failing to be elected president.

Oh, snap!  Good one, George!

The strangest reaction to the kick-off of No Labels came from Frank Rich of The New York Times.  The relevant portions of Mr. Rich’s rant seemed to be based on the theme that the Republican-dominated 112th Congress will be intransigent and therefore, President Obama along with his fellow Democrats, must fight intransigence with intransigence.  This formula for gridlock would ultimately prove more harmful to Democrats than Republicans.

The Frank Rich diatribe was particularly bizarre because it rambled all over the place, with rants about people and subjects having nothing to do with No Labels.  Peter Orszag has no connection to No Labels.  So, why did Frank Rich go off on the wild tangent about Orszag, Citigroup and Scott Brown’s contributions from the financial sector as though any of them might have had something to do with No Labels?  Forget about what John Avlon told you concerning Keith Olberman’s putting No Labels on his “worst persons in the world” list.  According to Frank Rich, the entire No Labels effort is actually a “a promotional hobby horse for MSNBC”.  It gets weirder:  Rich believes that because a political consultant (Mark McKinnon) and a fund-raiser (Nancy Jacobson) are “prime movers” for No Labels . . .  therefore “No Labels itself is another manifestation” of the syndrome wherein “both parties are bought off by special interests who game the system and stack it against the rest of us.”  At this point, the only factoid I can find to support that allegation is the inclusion of the term “foreign oil” in the group’s Statement of Purpose.  So, I’ll keep an open mind.  Besides, I enjoy a good conspiracy theory as well as Jesse Ventura’s television program with the same name.  Nevertheless, it becomes difficult to stick with Frank Rich’s theory that by failing to seek re-election as Senator of Indiana, Evan Bayh deliberately “facilitated the election of a high-powered corporate lobbyist, Dan Coats, as his Republican successor”.  The fact that Bayh’s father, former Senator Birch Bayh, is a lobbyist is interposed to emphasize the likelihood that Evan will also become a lobbyist.  Is this discussion being offered to explain that Evan Bayh “stepped aside” to allow Dan Coats to become Senator because Bayh has a genetic pre-disposition to the “Lobbyist Code of Dishonor”?  If so, in what manner does this impact No Labels?  Guilt by association?

The animosity generated by this group’s stand against what it calls “hyper-partisanship” demonstrates that the opponents of No Labels are advocates of hyper-partisanship.  In the days ahead, it will be interesting to see who else speaks out to “give acrimony a chance”.


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