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

Newly released AIG emails further impugn Tim Geithner

What would you think about the Federal Reserve Bank of New York telling AIG to intentionally withheld from public scrutiny that AIG was paying 100 cents on the dollar for credit default swaps at the same time that AIG was crying for a bailout from the public, thereby hiding from the public that the public was functionally bailing out Goldman Sachs and other large banks? What would you think about the fact that Tim Geithner headed the New York Federal Reserve when this was going on? Eliot Spitzer, William K. Black and Frank Partnoy sum up the issue:

Today, a Bloomberg story revealed that under Timothy Geithner's leadership, the Federal Reserve Bank of New York told AIG to withhold details from the public about its payments to banks during the crisis. This information was discovered when emails between the company and the Fed were requested by representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.
Who owns AIG? The taxpayers own 80% of it. Therefore, AIG should release the emails. Who can and should make this decision?
The taxpayer's stake in AIG is held by the A.I.G. Credit Facility Trust, whose three trustees are Jill M. Considine, a former chairman of the Depository Trust Company and a former director of the Federal Reserve Bank of New York; Chester B. Feldberg, a former New York Fed official who was chairman of Barclays Americas from 2000 to 2008; and Douglas L. Foshee, chief executive of the El Paso Corporation and chairman of the Houston branch of the Federal Reserve Bank of Dallas. We call on these three officials (interestingly all former Fed officials) to immediately release the documents we request. The value of these documents, if it were ever in doubt, was certainly proved by today's revelations. Release the emails.
See also, this earlier post on a NYT op-ed by Spitzer, Black and Partnoy.

Continue ReadingNewly released AIG emails further impugn Tim Geithner

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.

New Center to explore the role of religion in politics at Washington University

Wonderful news from Washington University in St. Louis, Missouri. The Danforth Foundation has made a huge financial contribution to create a specialized Center on Religion & Politics. Former U.S. Senator John Danforth was instrumental in making this possible. The following is from the Center's press release, which was issued last month:

$30 million endowment gift from Danforth Foundation funds creation of center

Washington, D.C., Dec. 16, 2009 — Washington University in St. Louis is establishing a scholarly and educational center that will focus on the role of religion in politics in the United States, according to Chancellor Mark S. Wrighton.

“The establishment of the John C. Danforth Center on Religion & Politics reflects the legacy of Jack Danforth and his belief in the importance of a civil discourse that treats differences with respect,” Wrighton said in making the announcement Dec. 16 at the National Press Club in Washington, D.C.

“The center will serve as an ideologically neutral place that will foster rigorous, unbiased scholarship and encourage conversations between diverse and even conflicting points of view,” Wrighton said.

“Knowing that religious values and beliefs can either encourage or undermine civility, the center and its educational programs and scholarly research can provide a bridge between religious and political communities and will inform new kinds of academic explorations focusing on the relationships between the two. We think that’s a worthy goal.”

The creation of the center, which includes the recruitment of five new faculty members with endowed professorships, is being made possible by a $30 million endowment gift from the St. Louis-based Danforth Foundation. It is believed to be the largest gift of its kind made to a university to fund such an academic center.

The center opens January 2010 and will convene public conferences and lectures to address local, state and national issues related to religion and politics and also will offer an educational program in religion and politics, including an interdisciplinary undergraduate minor in religion and public life.

The new faculty appointments will be in the area of American religion and politics and will complement the work of scholars already on the Washington University faculty in the departments of history, anthropology, literatures and religious studies. The new faculty members will hold joint appointments between the new center and existing academic departments.

The center will attract visiting scholars to St. Louis and create opportunities for interaction with Washington University faculty, students and members of the St. Louis community. It also plans to publish and disseminate proceedings of conferences and results of studies by faculty, visiting scholars and students of the center.

“Historically, the responsibility for this kind of dialogue has most often been left to universities with religious connections,” said Danforth. “But great non-sectarian institutions like Washington University combine rigorous academic standards with traditions of civil conversation, and that’s why this is the perfect place for such a center. Few issues are more critical to the well being of a democracy than how religious beliefs — or the denial of such beliefs — co-exist with civic virtue and of how the ‘truths’ of the one are made compatible with the toleration and good will required by the other.”

The Columbia Missourian (based in Columbia, Missouri), provides additional context:

John Danforth, 73, of St. Louis, has often been at odds with others in the GOP because of his concerns about the influence of the Christian right. In newspaper columns, speeches and in a book, he has argued that Christian conservatives have focused on divisive issues that polarize Americans.

Washington University Chancellor Mark Wrighton said the center in St. Louis will reflect Danforth's belief "in civil discourse that treats differences with respect."

"The center will serve as an ideologically neutral place that will foster rigorous, unbiased scholarship and encourage conversations between diverse and even conflicting points of view," Wrighton said.

This is a wonderful development. Washington University is a first-rate center of scholarship, and there might not be a more important topic in these times. Here is yet more information on the new Center, from Washington University's website. I very much like the motto for the Center: "Common ground for civil dialogue."

Continue ReadingNew Center to explore the role of religion in politics at Washington University

The sad modern purpose of government

Monbiot.com points out what "progress" has come to mean for government:

Progress is measured by the speed at which we destroy the conditions which sustain life. Governments are deemed to succeed or fail by how well they make money go round, regardless of whether it serves any useful purpose. They regard it as a sacred duty to encourage the country’s most revolting spectacle: the annual feeding frenzy in which shoppers queue all night, then stampede into the shops, elbow, trample and sometimes fight to be the first to carry off some designer junk which will go into landfill before the sales next year. The madder the orgy, the greater the triumph of economic management.

Related topic: Down with the GDP!

Continue ReadingThe sad modern purpose of government