Wall Street, redux

Chris Hedges pulls no punches at Truthdig when he discusses what's wrong with Wall Street banks:

These deeply stunted and maladjusted individuals, from Treasury Secretary Timothy Geithner to Robert Rubin to Lawrence Summers to the heads of Goldman Sachs, Morgan Stanley, J.P. Morgan Chase and Bank of America, hold the fate of the nation in their hands. They have access to trillions of taxpayer dollars and are looting the U.S. Treasury to sustain reckless speculation. The financial and corporate system alone validates them. It defines them. It must be served. This is why e-mails from the New York Fed to AIG, telling the bailed-out insurer not to make public the overpaying of Wall Street firms with taxpayer money, were sent when Geithner was in charge of the government agency. These criminals sold the public investments they knew to be trash. They used campaign contributions and lobbyists to turn elected officials into stooges and gut oversight and regulation. They took over retirement savings and pensions and wiped them out. And then they seized some $13 trillion in taxpayer money so they could lend it to us with interest. It is circular theft. This is why we will endure another catastrophic financial collapse. This is why firms like Goldman Sachs are more dangerous to the nation than al-Qaida.

These corporations don't make anything. They don't produce anything. They gamble and bet and speculate. And when they lose vast sums they raid the U.S. Treasury so they can go back and do it again. . . . The foundation has not changed. The regulations are bullshit. The old assets are still crap.

Why does any of this matter? Because dollars are fungible, and so are tax dollars. They are not pre-marked for specific uses such as paying someone tens of millions of dollars in a "bonus" that is unwittingly financed by taxpayers. Those dollars that are being wasted on Wall Street banks could be going to critically important purposes, such as developing new methods of producing energy, researching new medicines, retraining workers. Or they could be providing better nutrition to people in need, including children. Of course, those dollars would be better used than they are currently being used even if they merely remained in the possession of the workers who earned them, rather than taxing those workers and then handing those dollars to too-big-to-fail banks.

Continue ReadingWall Street, redux

Report thousands of crimes? Go to prison. Commit thousands of crimes? No problem.

Check out this incredible display of hypocrisy vividly demonstrating the raw power of money. It's a story about Bradley Birkenfeld published at DemocracyNow by Amy Goodman. Birkenfeld was a banker for the Swiss giant UBS. In 2007, he "blew the whistle on the biggest tax evasion scheme in US history." He is preparing to head to prison tomorrow to begin serving a forty-month federal sentence. The written record is clear that Birkenfeld provided inside information to the U.S. Senate, to the IRS and the Justice Department demonstrating that more than 19,000 Americans have been hiding vast amounts of financial assets in secret UBS Swiss accounts. None of these tax cheats--they have all cheated the U.S. government out of substantial tax revenue--is spending any time in jail. Who are these tax cheats who hid more than $20 billion from the U.S. government in secret Swiss accounts? Their names have not been disclosed according to Stephen Kohn, Birkenfeld's attorney:

[T]hey’re all very rich people, very powerful people. They could be judges. They could be senators. They’re all rich. They’re all probably very powerful in their local communities. How guilty were they? . . . Every year they checked a box that was a lie on their tax form that permitted them to hide millions and millions in assets. Each time they checked that box, they committed a felony. So if they were doing it for fifteen, twenty years, these are large felonies.
But wasn't there a possibility that these wealthy American tax cheats could have gotten caught without Birkenfeld's efforts? After all, weren't these rich tax cheats receiving bank statements from an big overseas bank? Nope. That "problem" was taken care of by a special arrangement between the bank and each of its tax cheat customers. According to Stephen Kohn:
They also had this thing called “mail hold.” The Swiss bank would never send them a letter, so no one could ever track it down. It was personal between that millionaire cheater and the bank. And all of their mail would be held in a secret vault. So when they traveled to Switzerland, they could sit and open all their mail, all their receipts, all their statements, and then shred them when they were done looking at them. In other words, the bank was actively facilitating the fraud, but each client was actively engaged. And these were not small frauds. These were major frauds by millionaires and billionaires. And right now, the American people don’t know who they were. Think of that. Fourteen thousand multimillionaires and, we know, billionaires had illegal accounts for years. They hold positions of authority in the United States. And the Justice Department has essentially given cover to every single one of them.
But wait! Why is Birkenfeld going to prison? Well, U.S. authorities have accused him of helping his own billionaire client hide assets--a man named Igor Olenicoff. Olenicoff ended up getting probation while Birkenfeld is going to spend four years in the slammer. All of this goes to show you that there are some mighty powerful unwritten laws here in the United States. We are a country of two versions of justice, one for the rich and another for the poor. What kind of justice do the poor get? Consider another example: 750,000 people are arrested for possession of marijuana every year, the equivalent to the entire population of South Dakota. At the same time, large monied pharmaceutical companies crank out expensive drugs that mimic virtually every street drug out there, perfectly legally and in many cases financed by the U.S. Medicare system. Yes, there are two versions of justice here in the U.S. It reminds me of that famous 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.
Anyone, rich or poor, who wants to cheat the U.S. government by stashing their possessions in an overseas bank account is welcome to do so. But if you cheat the government out of food stamps, God help you. Anyone who wants to produce mind-altering medication by starting their own pharmaceutical company is allowed to do so under the law. But if you grow marijuana at home, you'll face the full weight of the law.

Continue ReadingReport thousands of crimes? Go to prison. Commit thousands of crimes? No problem.

The strong stench of corruption at Freddie Mac and Fannie Mae

What does it tell you when there is no independent Inspector General for a federal agency that oversees $6 trillion in mortgages? This is not a thought experiment. It is undisputed reality. And there is good reason to suspect that something utterly corrupt is going on at Fannie Mae and Freddie Mac. There are pointed allegations jointly made by progressive blogger Jane Hamsher and fiscal ultra-conservative Grover Norquist, who don't see eye to eye on much of anything. But they have come together to urge that we allow the light of day to fall onto Fannie Mae and Freddie Mac. The allegations are detailed, and you can read them here. The center of the storm is the current White House Chief of Staff, Rahm Emanuel. A rejected FOIA request only makes these allegations more troubling. The allegations are exacerbated by the fact that the Acting Inspector General was dismissed early this year through the effects of legislation pushed through by Rahm Emanuel. The fact that $800 Billion in taxpayer funds is at stake (more than $7,000 for each one of the 111,000,000 American households) makes this all the more surreal. To put this $800B number in perspective, the Defense Secretary just made a big announcement that we should set aside a "mere" two billion dollars for "nation building." A second set of allegations has also been made: that the White House is facilitating the cover up of potential malfeasance at Fannie Mae and Freddie Mac until the 10-year statute of limitations has run out on Rahm Emanuel. All of this incredibly disturbing. If Mr. Obama is the man he portrayed himself to be during the campaign, he will immediately appoint an independent Inspector General in order to get to the bottom of this.

Continue ReadingThe strong stench of corruption at Freddie Mac and Fannie Mae

Lengthy bill = mischief

What do Americans think of 2,000 page health reform bills? Here's what Zogby found out:

More than 80 percent of Americans agree that Congress drafts lengthy, complex bills to hide spending on special interests and to prevent constituents from understanding what's in them before a vote is taken, according to a new survey. According to a Zogby poll conducted last week, 83.5 percent of respondents agreed at least “somewhat” with the lengthy-bill premise, and 61.2 percent of Americans agreed strongly. Only 14.4 percent disagreed, and just 5.8 percent did so strongly.

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Bill Moyers: Our Capitol’s being looted

Bill Moyers, Robert Kuttner and Matt Taibbi had a vigorous discussion focusing on the health care "reform" and Wall Street "reform": Moyer's take-home statement from the video:

Truth is, our capitol's being looted, republicans are acting like the town rowdies, the sheriff is firing blanks, and powerful Democrats in Congress are in cahoots with the gang that's pulling the heist. This is not capitalism at work. It's capital. Raw money, mounds of it, buying politicians and policy as if they were futures on the hog market.
Robert Kuttner:
[T]hose of us who consider ourselves progressives invested so much in this remarkable figure, Barack Obama. And we read our own hopes into him. We saw him as a potentially great president. We saw this as a potentially transformative moment, I certainly did, where he could've chosen to be the kind of president Roosevelt was. And it turns out that's not who is characteralogically and that's not how he chose to play the moment.
Matt Taibbi:
[T]his individual mandate that's going to force people to become customers of private health insurance companies, the Democrats are going to end up owning that policy and it's going to be extremely unpopular and it's going to be theirs for a generation. It's going to be an albatross around the neck of this party . . . The Democrats are in exactly the same position that the Republicans were in once the Iraq War turned bad. All the Republicans have to do now is sit back and watch the Democrats make a disaster out of this health care effort. And they're going to gain political capital whether they're in the right or not. And I think it's a very- it's a terrible thing for the party.

Continue ReadingBill Moyers: Our Capitol’s being looted