The oligarch’s president

Charles Ferguson is the director of the new documentary, "Inside Job", which is generating a lot of buzz. It is narrated by Matt Damon, and explains the financial crisis that began in 2008 and continues to this day. Ferguson has contributed an article to the War Room blog at Salon.com, and it's a stunningly clear indictment of the plutocracy that has taken over both the American economy and its political system. Please, do yourself a favor, and read the entire thing. Did you read it? Good, now we're ready to continue. Here's the part that I'd really like to draw your attention to (emphasis mine):

It is, in short, overwhelmingly clear that President Obama and his administration decided to side with the oligarchs -- or at least not to challenge them. This raises the question of why they have made this choice, and whether it is a correct (in the sense of rationally self-interested) calculation on their part. As to the "why," several explanations have been proposed. One is that the president, as a matter of individual psychology, is extremely conflict-averse, preferring to avoid fights no matter how important. A second hypothesis is that the president is simply doing the most he can, given the political climate and the furious lobbying effort with which he is confronted. This explanation, however, is belied by the personnel appointments, among other evidence. A more disturbing possibility is that the Obama administration has simply codified a new strategic equilibrium in American politics, one first devised by the Clinton administration, in which both parties are supine with regard to the financial sector and the wealthy. [More . . . ]

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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 . . . ]

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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.

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Republican and Tea Party efforts to stop minority voting in 2010 elections

The NAACP says the Tea Party has racists, and needs to do a better job of policing its ranks despite Tea Party efforts to kick out avowed racists. But, an even more sinister effort seems to be underway by concealed and veiled contributions to Tea Party efforts in general and those for voter suppression in particular. Two billionaire brothers have seemingly set up the financial foundation for the Tea Party and other groups’ efforts to oppose any change in the political environment that the brothers deem unacceptable to their extreme far right wing philosophy. The efforts of the groups supported by the billionaire brothers apparently are now are focused on voter suppression in states such as Illinois, Wisconsin and Nevada where key Democratic seats in the US Senate are up for re-election in two weeks. The seat once held by President Obama, the seat held by Senate Majority leader Harry Reid, and the seat held by the Democratic author of campaign finance reform, Russ Feingold are all in play. Republicans or the Tea Partiers are involved in alleged “voter security” efforts in all three states. See, also, this video. And see here, here, here and here. In Nevada, Tea Party candidate Sharron Angle has run a number of highly charged ads about alleged support by Senator Reid of “illegal aliens.” [More . . . ]

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