The federal government’s failure to prosecute high level Wall Street executives

On Democracy Now, Juan Gonzalez asked Glenn Greenwald to comment on Barack Obama's explanation for why high level Wall Street executives have not been criminally prosecuted. Here's the exchange:

JUAN GONZÁLEZ: Well, I want to play a comment by President Obama on why his administration has not prosecuted any senior financial executives. He was speaking at a White House press conference in October of last year.
PRESIDENT BARACK OBAMA: Well, first, on the issue of—on the issue of prosecutions on Wall Street, one of the biggest problems about the collapse of Lehmans and the subsequent financial crisis and the whole subprime lending fiasco is that a lot of that stuff wasn’t necessarily illegal, it was just immoral or inappropriate or reckless. That’s exactly why we needed to pass Dodd-Frank, to prohibit some of these practices. You know, the financial sector is very creative, and they are always looking for ways to make money. That’s their job. And if there are loopholes and rules that can be bent and arbitrage to be had, they will take advantage of it. So, you know, without commenting on particular prosecutions—obviously, that’s not my job, that’s the attorney general’s job—you know, I think part of people’s frustrations, part of my frustration was a lot of practices that should not have been allowed weren’t necessarily against the law, but they had a huge destructive impact.
JUAN GONZÁLEZ: President Obama on why his administration has not prosecuted any senior financial executives. Your response? GLENN GREENWALD: That answer is incredibly deceitful and misleading in several important respects. First of all, the massive orgy of deregulation that took place that let Wall Street do many things that for decades had been criminal, took place in the 1990s during the Clinton administration and under Democratic Party control and was led by people like Larry Summers and the whole acolytes of Robert Rubin, such as Timothy Geithner, who ended up being empowered by President Obama at the highest levels of his economic policy team. So this idea that he is somehow disturbed by or in opposition to the kind of deregulation that made a lot of this behavior un-criminal is incredibly misleading, given that those are the people who continue to run his administration. Secondly, you notice that he said "some of this behavior" was not criminal. The unspoken implication of it, though, is that much of it was criminal. And, in fact, I just did an interview with Eliot Spitzer, who of course was probably the only elected official in the last two or three decades to put serious fear in the heart of Wall Street, when he was a prosecutor and attorney general and then governor. And I had said, as part of this interview, you know, I know that there’s this notion that prosecutions might be difficult of Wall Street executives, but that’s not a reason to refrain from doing them. And he actually objected and said, "You know what? Prosecutions would not be difficult." And he’s right. We have emails from Wall Street executives where internally they’re mocking the assets that they’re representing to the public as being these sterling assets, and they’re mocking them as garbage and junk. They knew that they were committing fraud. Credit agencies were purposely shielding these assets, knowing that they were junk, as well. And then a third issue that he said was, you know, "It’s not my job to comment on prosecutions." That’s particularly ironic, given that President Obama expressly argued and instructed the Justice Department not to prosecute Bush officials for the crimes that were done as part of the war on terror. He’s made comments about Bradley Manning’s prosecution and decreed him guilty in public. And yet, suddenly, when it comes to Wall Street executives, who funded his 2008 campaign and are funding his 2012 campaign, he suddenly becomes very shy and reticent and says, "It’s not my job to comment on prosecutions." He is the leader of the party. He’s the leader of the country. And the fact that we haven’t prosecuted Wall Street executives is one of the greatest national disgraces. You see in Spain, as we heard in that report, some effort to move away from that. That is his responsibility to demand that justice be applied equally. The vow that he made when he announced his presidency—run for the presidency, in the first paragraph of his announcement, he said the era of Scooter Libby justice would be over. Scooter Libby justice means, if you’re sufficiently powerful, you don’t pay a price for your crimes. That was the promise that he made when he ran, and that’s the promise that he’s so woefully failed to fulfill.

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Revolution by Amendment

The Founders of this country saw that we might need to engage in revolution to preserve government by the People. It's right in the Declaration of Independence:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed. That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.
It's that simple. Big money is making it almost impossible for regular folks to have meaningful input into the political process. The Declaration of Independence reminds us that revolution is a right, and the Constitution allows orderly revolution by enacting amendments to the Constitution. It is thus self-evidence that we need to amend the U.S. Constitution to kick the money-changers out of the halls of Congress.

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Old-fashioned patriotism involves substantial government financial support for aggressive and even offensive journalism

Robert McChesney and John Nichols have written an excellent book advocating substantial public support (much more than the government currently gives) to support first-rate journalism. The book is titled The Death and Life of American Journalism: the Media Revolution That Will Begin the World Again (2010). This book begins with a diagnosis of modern journalism. One of the main problems is that modern journalists rely far too much on officials in power to set the news agenda. In fact, when politicians aren't arguing about an issue, it tends to go completely under the media radar. Another problem is that much of our news is regurgitated press release material issued by powerful government and business officials. "The dirty secret of journalism is that a significant percentage of our new stories, in the 40-50% range, even at the most prestigious newspapers in the glory days of the 1970s, were based on press releases." In the 1980s, the national workforce of PR specialists was about equivalent to the number of journalists in newspapers, radio and television. As of 2008, there were four times as many PR specialists as journalists. (Page 49). [More . . . ]

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It makes you wonder whether it’s worth talking

In this New Yorker article, Ezra Klein discusses the psychology of groups (including the work of Jonathan Haidt), then points out a problem with political parties trying to think and talk:

According to the political-science literature, one of the key roles that political parties play is helping us navigate these decisions. In theory, we join parties because they share our values and our goals—values and goals that may have been passed on to us by the most important groups in our lives, such as our families and our communities—and so we trust that their policy judgments will match the ones we would come up with if we had unlimited time to study the issues. But parties, though based on a set of principles, aren’t disinterested teachers in search of truth. They’re organized groups looking to increase their power. Or, as the psychologists would put it, their reasoning may be motivated by something other than accuracy. And you can see the results among voters who pay the closest attention to the issues.
Here's another cognitive hurdle for members of political parties:
In a 2006 paper, “It Feels Like We’re Thinking,” the political scientists Christopher Achen and Larry Bartels looked at a National Election Study, a poll supported by the National Science Foundation, from 1996. One of the questions asked whether “the size of the yearly budget deficit increased, decreased, or stayed about the same during Clinton’s time as President.” The correct answer is that it decreased, dramatically. Achen and Bartels categorize the respondents according to how politically informed they were. Among the least-informed respondents, Democrats and Republicans picked the wrong answer in roughly equal numbers. But among better-informed voters the story was different. Republicans who were in the fiftieth percentile gave the right answer more often than those in the ninety-fifth percentile. Bartels found a similar effect in a previous survey, in which well-informed Democrats were asked whether inflation had gone down during Ronald Reagan’s Presidency. It had, but many of those Democrats said that it hadn’t. The more information people had, it seemed, the better they were at arranging it to fit what they wanted to believe. As Bartels told me, “If I’m a Republican and an enthusiastic supporter of lower tax rates, it is uncomfortable to recognize that President Obama has reduced most Americans’ taxes—and I can find plenty of conservative information sources that deny or ignore the fact that he has.” Recently, Bartels noticed a similar polarization in attitudes toward the health-care law and the Supreme Court.
And then there is the problem that opinions without any meaningful basis (that the mandate is unconstitutional) gain legitimacy through the media/internet echo chamber:
"Once Republican politicians say this is unconstitutional, it gets repeated endlessly in the partisan media that’s friendly to the Republican Party”—Fox News, conservative talk radio, and the like—“and, because this is now the Republican Party’s position, the mainstream media needs to repeatedly explain the claims to their readers. That further moves the arguments from off the wall to on the wall, because, if you’re reading articles in the Times describing the case against the mandate, you assume this is a live controversy.” Of course, Balkin says, “if the courts didn’t buy this, it wouldn’t get anywhere.”
These are the sorts of things that pass as political thinking these days. It makes you want to ask people to leave their party affiliation at the door while discussion important issues. But how do you do that, when that affiliation has reached the level of the sacred, meaning that it is not negotiable?

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What Being An American Means To Me

I am not given to setting out pronouncements like this very often, but in light of the last several years I thought it might be worthwhile to do so on the occasion of the 236th anniversary of our declared independence. I don’t think in terms of demonstrating my love of country. My affection for my home is simply a given, a background hum, a constant, foundational reality that is reflexively true. This is the house in which I grew up. I know its walls, its ceiling, its floors, the steps to the attic, the verge, and every shadow that moves with the sun through all the windows. I live here; its existence contours my thinking, is the starting place of my feelings. The house itself is an old friend, a reliable companion, a welcoming space, both mental and physical, that I can no more dislike or reject than I can stop breathing. But some of the furniture...that’s different. I am an American. I don’t have to prove that to anyone. I carry it with me, inside, my cells are suffused with it. I do not have to wear a flag on my lapel, hang one in front of my house, or publicly pledge an oath to it for the convenience of those who question my political sentiments. Anyone who says I should or ought or have to does not understand the nature of what they request or the substance of my refusal to accommodate them. They do not understand that public affirmations like that become a fetish and serve only to divide, to make people pass a test they should—because we are free—never have to take. [More . . . ]

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