The criminal, anti-democratic racket described in this NYT article is just the latest blatant display of greedy Wall Street manipulation of the global economy.
Dean Baker has a great summary of Goldman Sachs’ “savvy” track record in this Guardian/UK article. And don’t forget Matt Taibbi’s mind-boggling portrait in Rolling Stone of Goldman Sachs profiting from one self-created economic bubble after the other. And it was the finance industry who gave Scott Brown a big last-minute send-off to Washington, signaling their equal opportunity approach to looting.
I’m starting to think that a focus on unearthing the dirt behind Goldman Sachs and its political influence might shine some daylight on the criminal convergence of politics and economics at the start of the 21st century.
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But they’re NOT criminal.
GS has one responsibility–to make their investors wealthier. Sometimes those investor are fat cats sitting on oodles of inherited wealth–but sometimes it’s the local teachers’ pension fund administrator. They expect GS to know the current regulations and to work in THEIR best interests. If GS doesn’t, fund administrators will take their money to someone showing better returns. Were I to pay someone to prepare my taxes, I’d fully expect them to take advantage of every loopholes afforded by the current tax code. Investors expect the same from their money managers. I sure would.
The trouble isn’t with GS or any other bank in part in particular. The trouble is with the unregulated money markets that allow the GS’s (and so many others) to exploit these situations–it’s with governments that allow them to exist. So long as they do, expecting the sharps at the banks not to create the increasingly bizarre instruments identified in the links you posted is like expecting a shark to turn away from blood in the water.
I don’t blame the banks for acting in accordance with their natures. It’s the role of government to rein them in–and they will whatever they can do slip that noose (the head of DeutscheBank announced in Davos two weeks at the biog banking summit that he wanted banks to start “self regulating.” Sure.).
It’s government that’s failing us, and it’s worth keeping in mind that it was DEMOCRAT Bill Clinton who signed into law Phil Gramm’s bill repealing Glass-Steagall. Unfortunately, with Geithner and Summers on either side of the current throne, we’ll likely see no more in the way of any serious regulation than we have to date.
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assuming they follow the letter of the law.
Just because our gov’mint is letting them get away with their crimes doesn’t make ’em legal, and it doesn’t mean that the banks aren’t blameworthy. After all, they’re bankrolling the campaigns of the politicians who are turning a blind eye. So it’s a chicken and egg problem, and both are rotten through and through.
Goldman is using insider information to game the system, whether it’s high frequency trading or their fucking former CEO being made Treasury Secretary and working his magic to throw them our tax dollars. Straight up thieves, worse than 99% of the people we throw in jail for piddly bullshit.
That they have the aid of our government is besides the point. They ARE our government.
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But if there are no statutes regulating what they’re doing, and if their campaign contributions are perfectly legal under the law … then, again, what they’re doing isn’t, technically, criminal. Unethical? Probably. The trouble is, we’re all, to some degree, complicit–since all of our money is, at some point, tied up with them, we all–perverse as it it is–have a stake in them succeeding. That’s the real problem. I may bank at my local co-op, but due the entangled system in which we live, if they went down, I’d be fucked.
As for the bailouts, they antedated Geithner’s ascension, and it’s looking as though the taxpayers are actually going to turn a small profit. I was in favor of them then–hated doing it, but the alternative was pretty horrifying–as we’ve seen, serious economic depressions don’t usually end up with the dictatorship of the proletariat! (and in any case, it was the Fed who issued many of the guarantees).
That said, Congress is foot-dragging on the financial reform packages that have been proposed. The shame wasn’t in the bailouts, but in the wake of the same–they’re right back to the same old shit in terms of both dubious ethical practices and, as Taibbi showed, downright absurd shenanigans–NOW with the additional knowledge that a precedent has been set for guarantees. That’s what astounds me–and, apparently, a disgruntled majority of Americans.
Any candidate running for higher office should have a detailed plan in place as to how to create a series of regulatory mechanisms, and should also be able to explain how s/he plans to deal with the Fed, one of the weirder, more non-transparent entities on the planet (and, in fact, one of the few capable of what really is magic–the ability to simply generate dollars out of thin air!).
As for them being our government–they have been since the days of Hamilton, with, perhaps, a brief interval from Jackson to Lincoln. How to even begin to address that, I don’t know–I read what I can (highly recommend William Greiders’ Secrets of the Temple, but damn, it’s complicated. Telling folks to bank locally solves only a miniscule slice of the problem. There are a LOT of gray areas here (as there are everywhere).
Oddly, the most vehement opposition and the only genuinely serious approaches I’ve seen are from the libertarian right–e.g., Ron Paul and his ongoing war on the Fed. (The national Green Party has had surprisingly little to say on the subject, aside from calling for capping interest rates and re-installing Glass-Steagall–both sound enough, of course, but neither of which really addresses head on the underlying rot in any substantial way).
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as William Black said, GS is engaged in fraud, which is illegal. They deliberately cooked up relatively worthless financial instruments based on fraud-ridden mortgages and misrepresented them as a smart new investment… all the while making massive bets that they would be… worthless.
The problem isn’t about statutes, or evidence of criminal wrongdoing. Just like with Enron, there was criminal wrongdoing. But this time it’s so much bigger and pervasive and so far they’ve got the political protection they’ve needed. The powers-that-be are not going to pry into this because they’re terrified of what might be under the hood. It’s up to us to demand investigations, hearings, and audits. And we won’t have smoking-gun evidence to mobilize us. If we’re lucky, people like Neil Barofsky will be allowed to do his job as Special Inspector General of the TARP. He seems to be prying into the right stuff. William Black would like to see a thorough investigation along the lines of the 1932 Pecora Commission but I’m not sure how he thinks this might come about. The corporate duopoly is bankrolled by Wall Street, and the party in power even more so than the Republicans.
Watch Black talk about white collar criminology:
The shame absolutely was in the bailouts and related adventures. Barofsky says we’ve got a few trillion on the line. Zero Hedge points out about $6 trillion in liabilities in mortgage-backed securities alone. The Fed is printing money and hiding its work behind closed doors, and claiming record “profits.” Any serious investigation will undoubtedly hurt the economy, and so we won’t see a serious investigation until, well, the economy falls apart, and people can finally muster some outrage. The casino economy continues and US government liability propping it up does too.
I think it’s possible to ween ourselves off of Wall Street dependence, but you’re right that we’re fully engaged in the problem. I think you’re right that the Libertarians have found more of a voice on what’s wrong with the Fed than the Greens and there is certainly some common cause there. I think there’s probably also a non-reactionary non-racist wing of the Tea Party that is saying all of this too.
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Laughing at the non-reactionary non-racist wing of the Tea Party. They clearly have troubles of their own. But you’re right–and many of them are far angrier at what’s gone down than are liberals. Which I continue to suspect has more to do with an emotional investment in Obama than simple complacency. Were Bush doing what Obama has been–and in many ways, he would be–the left would be up in arms. (Someone recently pointed out that while everyone got into an uproar over Rahm Emanuel’s use of the words “fucking retarded” to describe progressives refusing to support Dems who wouldn’t support real healthcare reform, the real scandal was that he felt free to talk to the left that way–and that those in attendance took it).
I dunno how to reform the system. I’m impressed with folks like Greider, Prins, and Elizabeth Warren (if Obama wanted to score points with the liberal element in his party, he’d so well to give her Treasury when Geithner steps down–but I’m not sure he’d dare), and hope something comes of this. In the meantime, the best downhome activity I can think of is is supporting MAAPL and City Life/Vita Urbana as they continue to shame banks and property owners into acting with some degree of decency.
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I say this too much, but we’ve got serious problems at all levels — from individuals, households, and small businesses up through corporations, municipalities, states, the nation, and the global economy.
The accounting doesn’t add up. People and governments and businesses are borrowing in order to get by… hoping to pay down these debts… eventually… somehow or other but with no realistic plan to do so.
Decision-making and policy-making is geared towards growing the economy so that we can pay down these debts and thrive. Maximize profits and maximize tax revenue and grow the economy as much as we possibly can.
Fraud and/or corruption are pervasive at all of these levels. Not the defining characteristic, but because the accounting doesn’t work we’re either deluding ourselves or deluding others to get through to a time when it all works out.
One of the reasons the accounting doesn’t add up is because infinite growth is a physical impossibility. Global warming and peak oil will necessitate a shrinking economy and likely a shrinking population. Climate change is already taking hundreds of thousands of lives a year. What will we say when that number reaches into the millions? The economic consequences of these are hand-waved into a fairy tale of technological progress.
The bill — as in Greece — is coming due. We must reckon with this. If we do not seek to shift to a new paradigm (e.g. the Happy Planet Index replacing GDP as a measure of economic progress), we’ll be shifted kicking and screaming. The need to grow the economy has resulted in casino capitalism where the players are leveraged to the hilt, creating fake wealth with in milliseconds with fast-traveling electrons. The common wealth doesn’t have to be measured in US dollars in the bank… it can be measured in real terms.
I think this is the single most defining element of what sets the Green Party apart. It is borne out of the fact that the Green Party is an ecological party and can place our politics within the realm of the natural world where it lives. And in nature, the examples of the kind of exponential growth we are experiencing do not end well for those involved. In nature, there is zero waste, and strength in diversity. We all bring something to the table — tea baggers included. [Aside: I’d like to know what they’d disagree with in the Ten Key Values of the Greens. Surely they’d disagree with some of it. Unfortunately the left isn’t treating them as though they’re human beings with heads on their shoulders. And the Republicans have co-opted their legitimate grievances and we get the farce of well-funded astroturf Tea Party conventions.]
Anyway, the issues at the personal and policy levels can be systematically addressed by a growing grassroots political movement. Those street actions you mention are vital but if they’re not connected to growing a coherent political force then what hope is there of enacting sane policy responses and seeing them through? The Greens can be, should be, and kinda-sorta are taking on municipal level, state level, and federal level campaigning to build this coherent force. With people so rightly distrustful of their government it might prove difficult to get people signing up to vote, to demonstrate their power and their voice on election day, and to continue to problem-solve and organize electorally. But we’ll never know, and there are signs like Scott Brown that many people still have some level of hope that they can use their vote to express themselves. Let’s see if they/we can figure out how to use their vote to build a political force for revolutionary change.
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… about what Teabaggers might disagree with. As the Green Key Values are described on the GRP page–not much, really. Probably non-violence. Though the far right is divided between those who want to nuke the middle east and those who want to bring every soldier home from everywhere
But as they find their way into the national platform, probably more: federal funding for abortions, monetary reparations, hate crime legislation, prohibitions against school vouchers, immigration, and: “a federally funded entitlement program to support children, families, the unemployed, elderly and disabled, with no time limit on benefits.” Nor do I consider their objections to be utterly without merit. Except for their objections to gay rights/marriage business, which is grounded entirely in bigotry and which is not only absurd, but seems to run counter to their states-rights and libertarian principles.
But what’s interesting is that these are mostly culture war issues, and not essentially economic ones. This is where a Nader seems to me so important–he plays down the culture war stuff (and takes a lot of heat for it, especially for his comments about “genital politics”) and focuses precisely on the issues that pose the greatest threat to our political and economic prosperity (or even survival).
I’d be willing to trade off on any number of these issues so as to gain their support for a genuine economic revolution. I have no religious commitment to either the national platform nor the Ten Key Values–they serve as useful guideposts, but they’re hardly sacred. In a perfect world we’d all subscribe to them; in this world, we have to choose our priorities and decide what coalitions we need to build in order to achieve the most desirable among them. Which means compromise.
That said, after watching the Palin rallies last year, it’s hard to overlook a genuine streak of willfull know-nothingism and an unmistakeable whiff of various forms of bigotry. But if your goal is to get your candidate elected, then simply dismissing the angry right is strategically stupid.
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have a look at this account of the “dueling declarations” floating around CPAC. It does suggest that I may be too generous in regard to the Teabaggers, in that they’re pretty devoted to a damn free markets–and that, presumably includes the money markets. On the other hand, denials aside, it would appear that the emphasis on free markets is evidence of some astroturfing going on here. Who knows? Maybe trying to interpret the real mindset of an average teabagger–or assuming there is such a thing– doesn’t make any more sense than does doing the same with Greens. It’s a weird year, though, for sure.
But while they seem rather naive in some regards–their wholly deregulated world seems like something of a particularly nasty piece by Bosch–they may yet outsmart the GOP leadership. They’re willing to jettison a lot of the culture war baggage themselves:
That’s a very interesting development and a smart one: identify that one unifying principle, don’t try to fight with everyone on dozens (or Ten…) of ideological fronts at once. This is what I’m arguing the left (Greens) should do.
It’s admittedly trickier over here, since the left, generally, and the Democratic Party in particular, have for so long been a loosely cobbled-together assortment of special interests, each of whom demands to have their pet issues front-and-center, and many whose economic and cultural positions clash. But we can all agree that 4% of the population controlling the majority of its wealth is bad. And even the natural-grass teabaggers would agree with that. And that way lies real populism, and the potential for progressive victories.
I want Debs. Actually, I want Huey Long.
I want campaign slogans like Make the Fuckers Share the Wealth. No ambiguity.
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I’m just going to cut to the chase. Are you saying you have information on Goldman Sachs engaging in insider trading? Because insider trading is illegal.
I’d like to see what kind of proof you have. Names, dates, etc.
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and I’ll get back to you!
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From April
http://www.pbs.org/moyers/jour…
And there’s this (more recent) interesting interview with Taibbi:
http://www.examiner.com/x-1842…
And some more articles:
http://www.businessinsider.com…
http://www.zerohedge.com/artic…
http://www.theatlantic.com/doc…
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That Johnson article in The Atlantic is terrific. And horrific–his “grim but necessary” conclusion doesn’t spark much hope in me.
Interesting, though, to see an IMF-style analysis of the US. Pretty fine line between superpower and banana republic after all.