Who’s Afraid of the Tea Party, or, What Are Those Silly People Talking About?

At a Rand Paul rally, a woman who intended to present Paul with an ironic award (Employee of the Month from RepubliCorps) was assaulted by Paul supporters, shoved to the ground, and then stepped on. Police had nothing to do with this, it was all the supporters of one of the Tea Party leading lights. What they thought she intended to do may never be known, but they kept their candidate safe from the possibility of enduring satire and questions not drawn from the current playbook of independent American politics. Another Tea Party candidate, Steve Broden of Texas, has allowed that armed rebellion is not “off the table” should the mid-term elections not go their way. Sharron Angle of Nevada alluded to “second amendment remedies” in a number of interviews in the past six months. “Our Founding Fathers, they put that Second Amendment in there for a good reason, and that was for the people to protect themselves against a tyrannical government,” Angle told conservative talk show host Lars Larson in January. “In fact, Thomas Jefferson said it’s good for a country to have a revolution every 20 years. I hope that’s not where we’re going, but you know, if this Congress keeps going the way it is, people are really looking toward those Second Amendment remedies.” Next to this kind of rhetoric, the vapidity of Christine O’Donnell in Delaware is more or less harmless and amusing. In a recent debate with her opponent she appeared not to know that the much-debated Separation Clause is in the First Amendment. Of course, a close hearing of that exchange suggests that what she was looking for was the exact phrase “separation of Church and State” which is not in the First Amendment. She thought she had won that exchange, as, apparently, did her staff, and they expressed dismay later when they were portrayed as having lost. The best you could give her is points for trying to make a point through disingenuous literalism. Not understanding the case law that has been built on the phrase that is in the First Amendment does not argue well for her qualifications to even have an opinion on the matter. Leading this apparently unself-critical menagerie is Sarah Palin, who despite having a dismal record in office and a clear problem with stringing sentences together has become the head cheerleader for a movement that seems poised to upset elements of both parties in the midterms. It’s one thing to throw darts and poke fun at the candidates, many of whom sound as if they have drawn their history from the John Wayne school of Hollywood hagiography and propaganda. But the real question is why so many people seem to support them. A perusal of the Tea Party website shows a list of issues over which supposedly grass roots concern is fueling the angry election season. [More . . . ]

Continue ReadingWho’s Afraid of the Tea Party, or, What Are Those Silly People Talking About?

William Black: Stop the banks. Indict the banksters.

Wire fraud and mail fraud are extremely serious federal crimes. Thousands of people who have perpetrated fraud through the mail or through telecommunications of any sort have been sent to prison for up to 20 years.  The U.S. Department of Justice warns that prosecution of wire fraud is not always merited, however. Prosecutorial resources should not be expended where fraud is a small piddling crime. For example:

Prosecutions of fraud ordinarily should not be undertaken if the scheme employed consists of some isolated transactions between individuals, involving minor loss to the victims, in which case the parties should be left to settle their differences by civil or criminal litigation in the state courts. Serious consideration, however, should be given to the prosecution of any scheme which in its nature is directed to defrauding a class of persons, or the general public, with a substantial pattern of conduct.
What, then, should we make of the decision by the biggest banks in the United States to spew millions of lies through the mail in the zealous attempts to kick people out of their houses?  Everything about this bank fraud meets the test for serious fraud.  Not isolated.  Not between individuals.  Not involving minor losses to victims.  The victims, for the most part, cannot settle their differences by litigation because they have been put into desperate financial situations by the lenders, working hand-in-hand with the bank.  And yes, this scheme is directed to defrauding a large class of persons, and the general public is going to suffer the consequences of this "substantial pattern of conduct," namely, the large tracts of foreclosed homes in their neighborhoods. Note too, that the federal fraud statutes kick up the penalty to up to 30 years in prison "if the violation affects a financial institution."  Of course, the politicians and bank are going to argue that the increased penalty only applies if the institution is the victim. Then maybe it's time to pull out that wonderful quote by Anatole France:

The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.

In steps bank regulator/investigator William Black, into the fray.  Black is one of the few nationally prominent voices I completely trust with it comes to the conduct of banks over the past few years (and yes, decade).  Here is the solution Black offers, one that politicians are going to choke on because the banks own Congress.

S&L regulators, criminologists, and economists recognize that the same recipe that produced guaranteed, record (fictional) accounting income (and executive compensation) until 2007 produced another guarantee: massive (real) losses, particularly if the frauds hyper-inflated a bubble. CEOs who loot "their" banks do so by perverting the bank into a wealth destroying monster -- a control fraud. What could be worse than deliberately growing massively by making loans likely to default, converting large amounts of bank assets to the personal benefit of the senior officers looting the bank and to those the CEO suborns to assist his looting (appraisers, auditors, attorneys, economists, rating agencies, and politicians), while simultaneously providing minimal capital (extreme leverage) and only grossly inadequate loss reserves, and causing bubbles to hyper-inflate?

This nation's most elite bankers originated and packaged fraudulent nonprime loans that destroyed wealth -- and working class families' savings -- at a prodigious rate never seen before in the history of white-collar crime. They created the worst bubble in financial history, echo epidemics of fraud among elite professionals, loan brokers, and loan servicers, and would (if left to their own devices) have caused the Second Great Depression.

Nothing short of removing all senior officers who directed, committed, or acquiesced in fraud can be effective against control fraud. We repeat: Foreclosure fraud is the necessary outcome of the epidemic of mortgage fraud that began early this decade. The banks that are foreclosing on fraudulently originated mortgages frequently cannot produce legitimate documents and have committed "fraud in the inducement." Now, only fraud will let them take the homes. Many of the required documents do not exist, and those that do exist would provide proof of the fraud that was involved in loan origination, securitization, and marketing. This in turn would allow investors to force the banks to buy-back the fraudulent securities. In other words, to keep the investors at bay the foreclosing banks must manufacture fake documents. If the original documents do not exist the securities might be ruled no good. If the original docs do exist they will demonstrate that proper underwriting was not done -- so the securities might be no good. Foreclosure fraud is the only thing standing between the banks and Armageddon.

I should add that there are many cases where foreclosure is perfectly appropriate.  On the other hand, there are hundreds of thousands of cases where disreputable loan originators such as Ameriquest and Countrywide systematically lied to borrowers, sticking them into loans that the borrowers had no hope of paying off when the hyper-charged "adjustable rate mortgage" came into effect two or three years later.  Add in the deceitful "yield spread premiums," hidden fees and the many lies about prepayment penalties, and you've got enough fraud to fill the courts of this land for many years to come, where banks who foreclosed based on these shameful scenarios should be punished and forced to make amends to the homeowners.   That is what should happen.

Continue ReadingWilliam Black: Stop the banks. Indict the banksters.

On reclaiming the United States

Last week, I had the opportunity to attend a fund-raising Gala for Missouri GRO (Grass Roots Organizing). GRO is an impressive progressive organization. It was founded by a small handful of rural activists, mostly women who, according to a history of the organization written by Tony Pecinovsky, "wanted more accountability from politicians and big businesses alike." Most of its members are people who live in rural Missouri, "people who live in small towns not necessarily known for their progressive politics." GRO is part of a nationwide network of progressive organizations, National People's Action, that has coordinated local activist organizations pushing hard for health care reform, Wall Street financial reform and other important issues. GRO is anything but shy. Consider this account (from the literature handed out at the gala event last week):

GRO carried out a winter-long anti-payday lending campaign that backed QC Holdings [Owner of the company that runs one of the biggest payday lending chains in the country] into a corner of public scrutiny and legislative pressure. On April Fools' Day we learned the Missouri legislature gave the payday loan industry a solo "hearing," led by theVice Chair of the Financial Institutions Committee, who owns a payday loan store inCabool, Missouri. The industry went totally unchallenged. They took over our public domain. So we decided to take over QC Holding's private domain in corporate words, Overland Park, Kansas. . . . We mobilized all150+ of our people up 15 floors on elevators to take over the corporate penthouse suite of the Missouri's largest payday lending operation.

In short, GRO has made a lot of noise where corporate power is runing amok. Because of this moxie, GRO has earned the respect of many in Missouri and outside of Missouri. At its fund-raising gala last week, GRO filled a large downtown St. Louis hotel ballroom with supporters who gathered to hear the keynote speech delivered by John Nichols, Washington Correspondent of The Nation Magazine. Nichols is also co-founder (with Robert McChesney) of Free Press, one of the country's leading media reform organizations. Prior to speech, John Nichols gave me permission to videotape his speech so that I could make it available here at Dangerous Intersection. In Part I of his speech, Nichols makes the argument that we do not really have a debt crisis. He passionately explains what kind of crisis we actually do have. In Part II of his speech, Nichols takes a hard critical look at the United States Supreme Court decision, Citizens United v. FEC. Nichols reminded the audience that the first American tea party was an anti-corporate tea party. Toward the end of Part II, Nichols argues that in order to take our country back, we will need an anti-corporate revolution-- we will need to go around the "corrupted" United States Supreme Court by organizing at the grass roots and enacting a Constitutional amendment declaring that "No corporation is the equal of a citizen" and "Citizens are supreme."

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Christine O’Donnell’s usefulness

At the NYT, Frank Rick points out that Christine O'Donnell is quite useful to the Republican Party because she gives the heart and soul of the party cover:

By latching on to O’Donnell’s growing presence, the Rove-Boehner-McConnell establishment can claim it represents struggling middle-class Tea Partiers rather than Wall Street potentates and corporate titans. O’Donnell’s value is the same as that other useful idiot, Michael Steele, who remains at the Republican National Committee only because he can wave the banner of “diversity” over a virtually all-white party that alternately demonizes African-Americans, Latinos, gays and Muslims.

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Welcome to the new Plutocracy!

“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” -- Warren Buffett, currently the world's third richest person
Most Americans have the sense that something's wrong in our country, and most realize that it's intimately tied up with money and politics. Those who have not studied the issues deeply could be forgiven for thinking we have a foreclosure problem, or an unemployment problem, or a Democrat problem, or a Republican problem, or a problem with Congress as a whole, but the truth is more important than those symptomatic issues. The truth is that we are now living in a nakedly plutocratic state-- that is, a state which is run by, and for, the wealthy. Or perhaps a corporatocracy (a state run by, and for, corporations), but they are functionally the same thing.

Continue ReadingWelcome to the new Plutocracy!