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Christmas is suppose to be about celebrating the birth of Christ and helping our fellow-man.  Many American citizens who are not Christian celebrate Christmas.  They like the festive atmosphere, parties and holiday decorations.  We all get sucked into buying gifts and shopping during this time of year.  Why not celebrate this year in the spirit of good will, giving and caring for our fellow citizens along with going back to celebrating in the spirit of the days of our fore fathers?
Let’s all say, hey congress we care even if you don’t seem to.
 For this holiday season for the best interest of American citizens struggling to make ends meet, or to get through another day of joblessness and hopelessness everywhere across our nation.  Let’s, the rest of us still surviving the economic crisis throw a financial revolt by not buying into the consumerism of the holidays.  Basically, only purchase what we essentially need and leave the cheap Chinese crap on the shelves.  Beforehand writing or calling congress, making it clear if they don’t start doing something proactive that we can see or approve of to help the plight of ordinary Americans over Wall Street or the Banking Industry then this country can look for other ways to make up for the GDP losses else where.  Hey congress, get it from the banking industry or Wall Street.

The 12 Days of Christmas

1. Gasoline financial blackout
2. Credit card revolt (apply for no new cards, pay off balances if you can, tell them you are canceling the account  and cutting up the cards–and if you feel like it, everyone, in mass unison skip payments).
3. No purchasing of unneccessary junk items for the holidays, especially on Black Friday the day after Thanksgiving.
4. Real estate purchase avoidance
5. Utility green days–turn the power down, light candles, light a fireplace, layer up and consume less energy
6. No stock trading
7. Bank record withdrawal day (should create a banking paperwork nightmare even if we re-deposit the money on or at a later date)
8. Mass write congress and tell them what we really think day
9. Ignore media day prompting low ratings for all networks (turn the tv off for one day during a crucial ratings time)
10. Drop off all our un-needed and un-used items to local charities that cater to the homeless or that provide, food, clothes or shelter for struggling or poor Americans. Food banks in hardest hit American communities-Detroit Food Bank, Los Angeles Food Bank, Miami Food Bank, Las Vegas Food Bank, Atlanta Food Bank and national organizations Catholic Charities, Salvation Army and Feeding America
11. Invite someone in need to share the holidays with you or your family.
12. Give a cash donation to a shelter- Homeless Shelter Directory

During the 12 days of Christmas another American gave to me…food, clothing and shelter, lobbying for me.  Lowering of GDP, stock market crashing with no stock market trading.   Poor media ratings, no unneccessary purchasing and bank withdrawing.  Another day of hope, survival and possible future job for me.  Happy Holidays from the citizens of America!
Spread the word and good cheer!   Click here to view the: During the 12 days of Christmas youtube video.

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This month the biggest Wall Street companies reported their quarterly earnings. JP Morgan Chase and Goldman Sachs reported bumper earnings, Citgroup and Bank of America, not so good. But if you leave out write downs on debt, everyone had a great quarter in their capital markets businesses. Billions have been budgeted for year end bonuses.

As could be expected, the issue of Wall Street compensation raised its head again. And this time there is the weight of the federal government behind it. Banks that have taken TARP money will see their executive compensation capped. And the Federal Reserve has suggested that all large banks that fall under its jurisdiction will be reviewed on on going basis to ensure that executive bonuses do not produce risk taking behavior that could put the banking system at risk.

There are several memes that get mixed up in any discussion about Wall Street compensation in the media. Add a lot of emotion from a distraught public and it becomes for a tangled mess where the media feeds the furore but there’s no real understanding of the underlying issues. Let’s see if we can parse the issues out.

These are the issues as they are played out in the media
- Issue #1 – The taxpayer bailed out Wall Street. How can they pay themselves these kinds of bonuses.
- Issue #2 – The rest of the country is going through agonizing pain – high unemployment, pay freezes and cuts – how can these people pay themselves what they do?
- Issue #3 – Their companies have been (and some still are) hemorrhaging cash. How can they pay their investment bankers so much?

I don’t think any of these issues merit any attention from lawmakers. #1 could be argued many ways but at the end of the day, if the bank has taken TARP money and hasn’t yet returned it, the federal government as shareholder with special rights, can do as it pleases. Politics dictates that compensation should be curbed and so it will be. #2 amounts to appealing to a cold corporation’s heart – a futile endeavor. #3 is the company’s call. They have a board and shareholders. If they think that they need to pay top dollar to retain talent, then that’s what they need to do.

In my mind there are two fundamental issues that need consideration. One, is related to risk increasing compensation practices. The second is a larger issue of high, untrammeled growth in the capital markets in the last two decades.

On the first issue, everyone agrees that Wall Street’s bonus bonanzas encourage traders and management to pile on the risk, collect their super size bonuses and when things turn south, leave the shareholders to pick up the pieces. And when things go really really bad, like what happened to the markets last year, let the federal government foot the bill.

What is not clear to me is why the shareholders just stand there and let this happen. The expectation that the bank is too big to fail and that the fed will bail you out, doesn’t explain it. If you were a shareholder in Citigroup and held the stock prior to the crash, even though you were bailed out, you probably lost your shirt on Citi.

I am not sure what the answer to this is. It could be that in the normal course of things, shareholders don’t really exert any influence on the board of the company. Election of board members and votes on CEO compensation, need to see a lot more vigor in the shareholder meetings, especially in the US.

Or it could be that shareholders think they’re smart and will be able to get out before the stuff hits the fan – a variant of what the trader or management thinks – except that the employee just loses her job, the shareholder his savings.

It could be that there isn’t enough disclosure. That Wall Street companies, on the pretext of not revealing proprietary information on trades and investments, is actually throwing a cloak on dodgy, heads-I-win-tails-you-lose schemes.

There could be other things going on that only behavioral economics can explain. Thinking that if everyone has been doing risky trades for so long then maybe its not that risky, is both irrational and perfectly natural.

Whatever, the reason behind it, this nexus between risk and compensation needs to be tackled head on. It is going to be a very tough problem. But not addressing it is not the answer.

The other question is also a big one. In the last two decades, the capital markets have grown much faster than the rest of the economy. The chart here shows that the profits in the US Financial sector went from about 15% of total corporate profits in 1998 to over 40% in 2007. When an industry grows at that pace, the competitive intensity is low and margins are high. The use of technology raises productivity further increasing margins. In the capital markets the only significant cost is the cost of people. When there is no or low downward pressure on prices, compensation has no place to go but up.

But is the ‘natural’ size of the industry as a share of GDP what it is today or what it was two decades ago? Can an industry that essentially allocates capital, and doesn’t really make anything, have such a large share of the GDP? Is there something in the laws of the land that make it so? For instance the credit rating industry, many say, is a creation of legislation and would not have existed at least in this twisted model of today, had it not been for an easy regulatory environment. Are there other such areas that would wilt in the face of an openly competitive field or lower entry barriers?

I don’t know the answers to these questions. But I do know that if the world has a problem with Wall Street traders, bankers and CEOs making tens of millions a year, not just in today’s recession, but beyond as well, we will need to look at taming the industry, not capping salaries. If that’s even possible at all.

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Companies that liberated themselves from the shackles of the TARP are feasting on low-interest rates and other government efforts to prop up markets—and they're partying like its 2007. Goldman Sachs is setting aside nearly $20 billion in compensation for employees this year—most of it for bonuses. Morgan Stanley set aside $5 billion for bonuses in the third quarter alone. Elizabeth Warren, who chairs the congressional panel overseeing the TARP, is aghast. "I don't understand that they don't think the world has changed in fundamental ways," she says. Asked earlier this year about the prospect of megabonuses at bailed-out Wall Street firms, President Obama said: "I'd like to think that people would feel a little remorse and feel embarrassed and would not get million-dollar or multimillion-dollar bonuses."

Shame? Self-awareness? Remorse? Come on: These are bankers we're talking about.
President Obama graduated from Harvard Law School, where Warren is on the faculty. But they'd have a better understanding of Wall Street had they spent time in Harvard's anthropology department. That's because bankers must be evaluated the way Margaret Mead approached the cultures she studied—as an insular tribe with its own mores, a society with long-accepted conventions that might strike outsiders as bizarre.
Just as Tiger Woods was placed on this earth to whack the dickens out of dimpled balls, Wall Streeters were placed on this planet to dispense and receive bonuses. Sure, firms trumpet their values. Goldman has 14 business principles, many of which could apply to a preschool. ("We stress creativity and imagination.") But betting on the direction of currencies and enriching the already rich is not a particularly edifying pursuit. Bankers toil like maniacs not because they like working in creative teams but because they like getting paid. Throughout December, tense dramas play out in office suites in Greenwich, Conn., and Manhattan as bonuses are negotiated. Traders and bankers plead their cases, threaten to leave, profess undying loyalty, and complain of betrayal. Imagine a telenovela by David Mamet—an all-male cast cursing passionately.
At most companies, bonuses are paid out of profits. No end-of-year profits, no bonuses. But on the island nation of Wall Street, they're paid out of revenues. Since the 1980s, notes Brad Hintz, an analyst at Sanford C. Bernstein, it's been the standard for half of revenues to be devoted to compensation. So long as these outfits were private partnerships, that practice didn't really matter to the rest of us. But since the 1990s, when investment banks went public, compensation has evolved into a zero-sum game between employees and shareholders. Guess who lost?
In normal industries, discretionary compensation would decline when companies suffer losses and their stocks crater. But most Wall Street firms still paid out bonuses in 2008, as shareholders and taxpayers suffered. Just as chickens can run around with their heads cut off, financial firms can pay bonuses even when they've essentially failed (AIG) or clocked massive losses (Merrill Lynch).
This year, compensation will again eat up something close to a majority of Wall Street's revenues. And while Goldman and Morgan Stanley have paid back their bailout funds, other large bonus dispensers still owe huge sums of money to the public. Every dollar they pay out in compensation is one fewer they can pay back the taxpayer. Wall Street's structure may have changed a great deal in the past year, but its culture has proved remarkably resistant to change. The recession didn't alter this custom. And neither will the public opprobrium, the disapproval of President Obama, or the threat of Federal Reserve oversight. Come December and January, we will continue to be shocked by the level of bonuses—and Wall Street will continue to be shocked that we're shocked.

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Perhaps we need a new vocabulary, one that helps us describe a society that promotes the accumulation of vast riches, bails out the rich when they take too many chances, and avoids responsibility for the common good. Even Milton Friedman would have trouble calling that capitalism.

How about the Billionaire Bailout Society?

Here are its salient features:

1. We promote accumulation of vast fortunes without limits.
2. We shun progressive income taxes that could narrow the gap.
3. We keep most of finance deregulated even after it has collapsed so spectacularly.
4. We let the minimum wage atrophy.
5. We discourage unionization.
6. We let middle class jobs disappear.
7. We allow a revolving door between public office and high paying private sector jobs.
8. We let our public infrastructure deteriorate.
9. We belittle government and public service.
10. We promote private gain as the best way to promote the common good.
11. We force our children to pile up debt in order to get an education.
12. We live with a porous safety net.
13. We encourage health care to be a profit maximizing enterprise.
14. We allow institutions to become too big to fail.
15. We bail out the largest financial institutions when they do fail, even if that means transferring trillions to Wall Street.
16. We allow Wall Street to use its bailout money to lobby against the public interest.
17. We let Wall Street keep its bailout-created "profits" and bonuses.
18. We have no clue if the financial sector provides any real value to our economy.
19. We permit financial hucksters to buy up solid companies, load them up with debt, take the cash, and then drive them into the ground.
20. We bad-mouth as protectionist all efforts to keep jobs in this country.
21. We don't have any serious plan for returning to a full-employment economy.
22. We live in awe of billionaires.

Of course, it takes a billionaire to help us understand how the billionaire bailout society really works. Here's what George Soros said recently about Wall Street's latest profit binge:

"Those earnings are not the achievement of risk-takers. These are gifts, hidden gifts, from the government, so I don't think that those monies should be used to pay bonuses. There's a resentment which I think is justified." (Reuters)

Yes, there's resentment, but most of the action has come from the tea-baggers who are the foot soldiers for our new social order. Although the vast majority of Americans are upset about the financial casino, the bailouts and the loss of jobs, we need a progressive infrastructure to mobilize it. Perhaps the recent demonstrations at the American Bankers Association meetings in Chicago signal the start of labor and community mobilizations. It's long overdue.

It would be easy to give up. Apathy is Wall Street's best friend. But we've been here before. It took the populists several generations before they were able to bust the trusts when Teddy Roosevelt rode to office. It took decades of labor agitation and the organization of the Progressive movement before its ideas became the core of the New Deal. It took even longer for African-Americans to build a successful civil rights movement to end Jim Crow. We shouldn't expect it to be easy to build an alternative to the billionaire bailout society.

We drank the cool aid of deregulated markets and private gain as supreme values. We got drunk on its bubbles until they burst. Now we're bailing out the super-wealthy while 29 million of us need work.

Turning that around is going to take hard work and planning for the long haul. It's going to take years of education and organizational development. Twitter is a great tool, but it can't substitute for organizational structures. Most of all, it's going to take a new vision that focuses on the common good, on what ties us together, on something more precious than private gain.

What does that mean? Imagine what we could do if we had the courage to institute steep progressive taxes. Today, the top 400 wealthiest Americans have a combined net worth of about $1.5 trillion. Had progressive taxes reduced their wealth to "only" $100 million each, we would be able to endow every public college and university, two-year, four-year and graduate school, so that all of our children could go to school free, in perpetuity.

Wouldn't that be worth it?

Goldman Sachs is the global leader of social interference, selfish indulgance and lack of moral conviction and standards. They care not who they harm to earn incomes based on no social or economic benefits to anyone. They manufacture nothing, they produce nothing they contribute nothing to society.

They subscribe to the quote of Meyer Rothschild - the creator of the Central Banking System - who said:

"Let me control the money of a nation and I care not who makes its' laws"

This is from GS666.com

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The politicians are pandering to the ignorant, the ill informed and our naïve youth. I can't sugarcoat this, my friends. One of our greatest rights is debate, and I support to my death our freedom of speech in this great nation. I do not support the stifling of debate. I do not support a freedom to remain ignorant at the expense of others. I do not support practices absent of truth and reason from the "weak and stupid" or from the "strong and brightest" of minds. I do not support this stimulus legislation being portrayed as, a road to recovery. It's a road to disaster, my friends. It's no different than sitting in front of a slot machine and believing, "If I just put in another $2,700 that I don't have, I may get lucky. Let me go borrow $2,700 dollars from my children and my grandchildren so I can keep playing a losing game." The concept similarity with this Washington band of crooks and idiots is stunning and frankly, unforgivable. The chances of this bill working as written or as intended are far less likely to succeed than our slot machine payoff. Let's just recite some recent facts:

1. Stimulus refunds of $300 and $600 per person a year ago was not a success. On the contrary, it was a $150 billion squandering of borrowed money.

2. The $350 billion TARP funds went to corrupt banking institutions in December 2008 and we'll never see those funds working for the people as intended to restructure and write new loans.

3. The $350B remaining from the $700B total TARP allotment hasn't been allocated to fixing our housing problems to date as they, our representatives and appointed leaders, promised the funds would be, as a priority. It will also be given without stipulations.

These morons simply write, sign and implement legislation and have no fear of voter reprisals. With no real objective evidence, they cannot present truthfully what this bill will even accomplish or the specific number of jobs it will resurrect. If I would have gone to my employer with a proposal structured under vague and speculative reasoning, I would have had to pack a box from my desk and be escorted to the door. Just the thought of this unbelievable Washington charade makes my skin crawl.

Many are turning a blind eye to corruption, greed and blatant lies/deceptions from our legislators. We're all being duped by these clowns in new suits and ties who work three days a week, if that.

For heaven's sake America, lets all contribute a bit more critical thinking when selecting our representation. Now, we'll have "congressional oversight" with this stimulus bill. In Washington? By these fumblers?

Well, hold on for your life and the life of your family my fellow Americans because "everything goes, when everything is gone!" So the next time you pull the lever at the voting both or the slot machine, don't pull it thinking your playing with someone else's money and don't think you're going to win.

After being robbed by muggers on a street corner, the victim questioned the distribution of the money stolen by thieves.

"You know, since it was my money, I sort of hoped I would be the one to keep it", explained the mugging victim.

The thieves however said their compensation was justified since they took the risk of going to prison for stealing the money, and felt any bonuses were deserved based on the risk involved.

The police ultimately arrested the victim, as his excited attitude over the robbery lead them to take him in on a disorderly conduct charge.

"We needed to keep the peace in this situation, and it seemed the robbers had the upper hand for the most part but needed our assistance in maintaining calm in what could have turned into a volatile situation," a person close to the investigation said under the condition that their identity not be revealed, since they didn't have the authority to speak on the matter.

"If all these victims would just stay calm, then the thieves and those in authority will work things out in way that will be beneficial to both them and those regulating the situation." the anonymous source stated. "Besides, it's a free market economy and hindering robbery might tend to sway us toward socialism. Considering the potential profit of some of these thieves strictly regulating them could have a tendency to depress the market's recovery."

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ATTN: Employees of Goldman Sachs

We did it. Bottom of the ninth, down by three, bases loaded, and we cranked another grand slam to the moon. They may have shot Lennon, but nothing can kill the Beatles.

I admit things looked bleak for a minute there. We had to convert to a bank holding company and were forced to accept a taxpayer bailout. It felt un-American. Terribly unbanksmanly. But we accepted the money, knowing that we could magically weave it into a much larger mountain of money.

We had a few hard months there, didn’t we? They regulated our corporate jet so that we could no longer use it to fly from hole to hole on the green. Dave had to drain his money pool to half capacity. I stopped injecting gold into my blood. They don’t call it a recession for nothing. One day, we’ll look back on the year we received only five-figure bonuses and laugh.

Wanting to celebrate our renewed success is natural, but it’s important that we don’t go crazy here. Remember, ten per cent of the non-bank country is unemployed, and even those who are working have “real” jobs, where payment is proportional to the creation of a “product” or a “service.” Those poor bastards. So I ask that, in celebrating our raping of the stock market, we show restraint in the following ways:

    * Please limit high-fives and chest bumps to a dozen a day.
    * Don’t wear your crowns, except around the office.
    * Stop paying for things in Monopoly money—I understand it is the same as real money to us, but there have been some complaints.
    * For now, let’s take down the giant scoreboard that reads “Main Street: zero. Wall Street: a billion gazillion bajillion.”

Furthermore, to avoid drawing criticism from the press, this year the bonuses, expected to be comically large, will be distributed in blood diamonds, which can be easily concealed in a briefcase so it looks like we’re working.

I’d like to thank everyone who made this possible—for a second time. Respect to President Obama for keeping us in the green. Thanks to the big guy upstairs (me). And let’s not forget all the ordinary Americans, who, for some unfathomable reason, have refused to put us behind bars. We are literally taking money out of their wallets. Seriously, with these returns we are making Madoff look like a little kid with his hand caught in the cookie jar. Amateur!

Yours in money,

Lloyd Blankfein, C.E.O., Goldman Sachs

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Wall Street is about to learn an overdue lesson in humility.

A year removed from the global economic crisis they created, executives of the financial companies responsible have yet to disassociate themselves of the notion they deserve the obscene sums they pay themselves.

Do they make anything of value?
Do they contribute anything tangible to society?

Do they heal the sick or comfort the afflicted?

The answers, of course, are no, no and no. They simply move money from one place to another and take a cut. Yet even after being bailed out by U.S. taxpayers who will shoulder the bill for years to come, the delusional titans of Citigroup, Bank of America, AIG and their brethren believed they were still deserving of stipends that would make a king blush.

No more.

On Wednesday, a frustrated Obama administration indicated it will cap pay to the chief executives of companies the Treasury rescued last year.

According to the New York Times, details of the plan will be divulged over the next few days, but the seven companies that received the most TARP money will have to learn to live much more modestly. The 25 best-paid executives, the Times said, will be paid up to 90 percent less than last year. In fact, no top executive will receive more than $200,000 in total compensation.

It's about time.

But, as the infomercials say, there's more.

Any executive who wants more than $25,000 in special benefits -- think country clubs, private planes and limousines -- first will have to get government permission.

Obviously, Wall Street failed to understand Americans had had enough.

While the bankers who hatched the financial shenanigans in lower Manhattan continued to pocket paychecks in the tens of millions, ordinary Americans bailing them out were being handed pink slips as a consequence of the economic train wreck.

Yes, the bailout was necessary. Without it, the economy would have buckled. Unfortunately, it came with too little oversight. Even as they took billions in TARP money, executives whined that their substantial payment packages were necessary to keep them in their plush offices. Bewildered Americans asked why, but the Bush administration acquiesced.

Now, a year later, those who thought they were too big to fail are going to have to answer to those who were too small to save.

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Glenn Greenwald

Saturday April 4, 2009 08:35 EDT

Larry Summers, Tim Geithner and Wall Street's ownership of government

White House officials yesterday released their personal financial disclosure forms, and included in the millions of dollars which top Obama economics adviser Larry Summers made from Wall Street in 2008 is this detail:

Lawrence H. Summers, one of President Obama's top economic advisers, collected roughly $5.2 million in compensation from hedge fund D.E. Shaw over the past year and was paid more than $2.7 million in speaking fees by several troubled Wall Street firms and other organizations. . . .
Financial institutions including JP Morgan Chase, Citigroup, Goldman Sachs, Lehman Brothers and Merrill Lynch paid Summers for speaking appearances in 2008. Fees ranged from $45,000 for a Nov. 12 Merrill Lynch appearance to $135,000 for an April 16 visit to Goldman Sachs, according to his disclosure form.

That's $135,000 paid by Goldman Sachs to Summers -- for a one-day visit.  And the payment was made at a time -- in April, 2008 -- when everyone assumed that the next President would either be Barack Obama or Hillary Clinton and that Larry Summers would therefore become exactly what he now is:  the most influential financial official in the U.S. Government (and the $45,000 Merrill Lynch payment came 8 days after Obama's election). Goldman would not be able to make a one-day $135,000 payment to Summers now that he is Obama's top economics adviser, but doing so a few months beforehand was obviously something about which neither parties felt any compunction.  It's basically an advanced bribe.  And it's paying off in spades.  And none of it seemed to bother Obama in the slightest when he first strongly considered naming Summers as Treasury Secretary and then named him his top economics adviser instead (thereby avoiding the need for Senate confirmation), knowing that Summers would exert great influence in determining who benefited from the government's response to the financial crisis.
Last night, former Reagan-era S&L regulator and current University of Missouri Professor Bill Black was on Bill Moyers' Journal and detailed the magnitude of what he called the on-going massive fraud, the role Tim Geithner played in it before being promoted to Treasury Secretary (where he continues to abet it), and -- most amazingly of all -- the crusade led by Alan Greenspan, former Goldman CEO Robert Rubin (Geithner's mentor) and Larry Summers in the late 1990s to block the efforts of top regulators (especially Brooksley Born, head of the Commodities Futures Trading Commission) to regulate the exact financial derivatives market that became the principal cause of the global financial crisis.  To get a sense for how deep and massive is the on-going fraud and the key role played in it by key Obama officials, I highly recommend watching that Black interview (it can be seen here and the transcript is here).
This article from Stanford Magazine -- an absolutely amazing read -- details how Summers, Rubin and Greenspan led the way in blocking any regulatory efforts of the derivatives market whatsoever on the ground that the financial industry and its lobbyists were objecting:

As chairperson of the CFTC, Born advocated reining in the huge and growing market for financial derivatives. . . . One type of derivative—known as a credit-default swap—has been a key contributor to the economy’s recent unraveling. . .
Back in the 1990s, however, Born’s proposal stirred an almost visceral response from other regulators in the Clinton administration, as well as members of Congress and lobbyists. . . . But even the modest proposal got a vituperative response. The dozen or so large banks that wrote most of the OTC derivative contracts saw the move as a threat to a major profit center. Greenspan and his deregulation-minded brain trust saw no need to upset the status quo. The sheer act of contemplating regulation, they maintained, would cause widespread chaos in markets around the world.
Born recalls taking a phone call from Lawrence Summers, then Rubin’s top deputy at the Treasury Department, complaining about the proposal, and mentioning that he was taking heat from industry lobbyists. . . . The debate came to a head April 21, 1998. In a Treasury Department meeting of a presidential working group that included Born and the other top regulators, Greenspan and Rubin took turns attempting to change her mind. Rubin took the lead, she recalls.
“I was told by the secretary of the treasury that the CFTC had no jurisdiction, and for that reason and that reason alone, we should not go forward,” Born says. . . . “It seemed totally inexplicable to me,” Born says of the seeming disinterest her counterparts showed in how the markets were operating. “It was as though the other financial regulators were saying, ‘We don’t want to know.’”
She formally launched the proposal on May 7, and within hours, Greenspan, Rubin and Levitt issued a joint statement condemning Born and the CFTC, expressing “grave concern about this action and its possible consequences.” They announced a plan to ask for legislation to stop the CFTC in its tracks.

Rubin, Summers and Greenspan succeeded in inducing Congress -- funded, of course, by these same financial firms -- to enact legislation blocking the CFTC from regulating these derivative markets.  More amazingly still, the CFTC, headed back then by Born, is now headed by Obama appointee Gary Gensler, a former Goldman Sachs executive (naturally) who was as instrumental as anyone in blocking any regulations of those derivative markets (and then enriched himself by feeding on those unregulated markets).
Just think about how this works.  People like Rubin, Summers and Gensler shuffle back and forth from the public to the private sector and back again, repeatedly switching places with their GOP counterparts in this endless public/private sector looting.  When in government, they ensure that the laws and regulations are written to redound directly to the benefit of a handful of Wall St. firms, literally abolishing all safeguards and allowing them to pillage and steal.  Then, when out of government, they return to those very firms and collect millions upon millions of dollars, profits made possible by the laws and regulations they implemented when in government.  Then, when their party returns to power, they return back to government, where they continue to use their influence to ensure that the oligarchical circle that rewards them so massively is protected and advanced.  This corruption is so tawdry and transparent -- and it has fueled and continues to fuel a fraud so enormous and destructive as to be unprecedented in both size and audacity -- that it is mystifying that it is not provoking more mass public rage.
All of that leads to things like this, from today's Washington Post:

The Obama administration is engineering its new bailout initiatives in a way that it believes will allow firms benefiting from the programs to avoid restrictions imposed by Congress, including limits on lavish executive pay, according to government officials. . . .
The administration believes it can sidestep the rules because, in many cases, it has decided not to provide federal aid directly to financial companies, the sources said. Instead, the government has set up special entities that act as middlemen, channeling the bailout funds to the firms and, via this two-step process, stripping away the requirement that the restrictions be imposed, according to officials. . . .
In one program, designed to restart small-business lending, President Obama's officials are planning to set up a middleman called a special-purpose vehicle -- a term made notorious during the Enron scandal -- or another type of entity to evade the congressional mandates, sources familiar with the matter said.

If that isn't illegal, it is as close to it as one can get.  And it is a blatant attempt by the White House to brush aside -- circumvent and violate -- the spirit if not the letter of Congressional restrictions on executive pay for TARP-receiving firms.  It was Obama, in the wake of various scandals over profligate spending by TARP firms, who pretended to ride the wave of populist anger and to lead the way in demanding limits on compensation.  And ever since his flamboyant announcement, Obama -- adopting the same approach that seems to drive him in most other areas -- has taken one step after the next to gut and render irrelevant the very compensation limits he publicly pretended to champion (thereafter dishonestly blaming Chris Dodd for doing so and virtually destroying Dodd's political career).   And the winners -- as always -- are the same Wall St. firms that caused the crisis in the first place while enriching and otherwise co-opting the very individuals Obama chose to be his top financial officials.
Worse still, what is happening here is an exact analog to what is happening in the realm of Bush war crimes -- the Obama administration's first priority is to protect the wrongdoers and criminals by ensuring that the criminality remains secret.  Here is how Black explained it last night:

Black:  Geithner is charging, is covering up. Just like Paulson did before him. Geithner is publicly saying that it's going to take $2 trillion — a trillion is a thousand billion — $2 trillion taxpayer dollars to deal with this problem. But they're allowing all the banks to report that they're not only solvent, but fully capitalized. Both statements can't be true. It can't be that they need $2 trillion, because they have masses losses, and that they're fine.
These are all people who have failed. Paulson failed, Geithner failed. They were all promoted because they failed, not because...
Moyers:  What do you mean?
Black: Well, Geithner has, was one of our nation's top regulators, during the entire subprime scandal, that I just described. He took absolutely no effective action. He gave no warning. He did nothing in response to the FBI warning that there was an epidemic of fraud. All this pig in the poke stuff happened under him. So, in his phrase about legacy assets. Well he's a failed legacy regulator. . . .
The Great Depression, we said, "Hey, we have to learn the facts. What caused this disaster, so that we can take steps, like pass the Glass-Steagall law, that will prevent future disasters?" Where's our investigation?
What would happen if after a plane crashes, we said, "Oh, we don't want to look in the past. We want to be forward looking. Many people might have been, you know, we don't want to pass blame. No. We have a nonpartisan, skilled inquiry. We spend lots of money on, get really bright people. And we find out, to the best of our ability, what caused every single major plane crash in America. And because of that, aviation has an extraordinarily good safety record. We ought to follow the same policies in the financial sphere. We have to find out what caused the disasters, or we will keep reliving them. . . .
Moyers: Yeah. Are you saying that Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong?
Black: Absolutely.
Moyers: You are.
Black: Absolutely, because they are scared to death. . . . What we're doing with -- no, Treasury and both administrations. The Bush administration and now the Obama administration kept secret from us what was being done with AIG. AIG was being used secretly to bail out favored banks like UBS and like Goldman Sachs. Secretary Paulson's firm, that he had come from being CEO. It got the largest amount of money. $12.9 billion. And they didn't want us to know that. And it was only Congressional pressure, and not Congressional pressure, by the way, on Geithner, but Congressional pressure on AIG.
Where Congress said, "We will not give you a single penny more unless we know who received the money." And, you know, when he was Treasury Secretary, Paulson created a recommendation group to tell Treasury what they ought to do with AIG. And he put Goldman Sachs on it.
Moyers: Even though Goldman Sachs had a big vested stake.
Black: Massive stake. And even though he had just been CEO of Goldman Sachs before becoming Treasury Secretary. Now, in most stages in American history, that would be a scandal of such proportions that he wouldn't be allowed in civilized society.

This is exactly what former IMF Chief Economist Simon Johnson warned about in his vital Atlantic article:  "that the finance industry has effectively captured our government -- a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises."   This is the key passage where Johnson described the hallmark of how corrupt oligarchies that cause financial crises then attempt to deal with the fallout:

Squeezing the oligarchs, though, is seldom the strategy of choice among emerging-market governments. Quite the contrary: at the outset of the crisis, the oligarchs are usually among the first to get extra help from the government, such as preferential access to foreign currency, or maybe a nice tax break, or—here’s a classic Kremlin bailout technique -- the assumption of private debt obligations by the government. Under duress, generosity toward old friends takes many innovative forms. Meanwhile, needing to squeeze someone, most emerging-market governments look first to ordinary working folk—at least until the riots grow too large. . . .

As much as he campaigned against anything, Obama railed against precisely this sort of incestuous, profoundly corrupt control by narrow private interests of the Government, yet he has chosen to empower the very individuals who most embody that corruption.  And the results are exactly what one would expect them to be.
* * * * *
I was on the Moyers program last night after the Black interview -- along with Amy Goodman -- discussing the media's role in this establishment corruption (that segment can be viewed here), and yesterday morning I was on C-SPAN's Washington Journal with the primary topic being this blatant, sleazy oligarchical control of both the Executive and legislative branches (which can be seen here).

UPDATE:  Just to get a sense for how propagandistic, sycophantic and fact-free are the most extreme Obama worshippers in our "journalist" class, consider this recent article from The New Republic's Noam Scheiber in which he urged the White House to "free its economic oracle" -- Summers -- and defended and praised Summers on the ground that "his exposure to Wall Street over the years has been limited."  As Jonathan Schwarz asks, citing the massive compensation on which Summers engorged himself by feeding at the Wall Street trough last year:  "I wonder what would have constituted 'significant' exposure to Wall Street? Maybe if he'd worked for D.E. Shaw full time? (Amazingly, Summers was paid $5.2 million for a part-time position.)"

The financial services industry (mostly US based companies) caused a near-collapse of the world economy. Where's the penalty paid by the people who got huge bonuses in the past for those deals that imploded with such world-wide impact? A lot of those people still live in the mansions, drive the cars, enjoy the private clubs bought with those ill-gotten bonuses.

Huge reward distorts thinking- it's simple as that. People will pretty much do anything for such large sums, such dumping subprime securities falsely labeled AAA on clients who trusted their integrity. Offering insurance coverage with no reserve to back up that promise when the claim comes in.

Risk and reward must be paired. The game has been rigged on the Wall Streets of the world ... up is their take, down is our collective loss.

No, we need not tolerate such inequity. The magnitude of inequity is a core problem.

Read more at: http://www.huffingtonpost.com/2009/10/20/wall-street-bonuses-vs-no_n_324281.html

Image via Wikipedia

Republicans created TARP. They, along with the tacit approval or apathy of libertarians and Austrians who should be fighting these subsidies every day instead of self-righteously condescending to sufferers, love flushing money down the toilet, whether it be a big-government hand-out to incompetent, inefficient corporations, or by defecating down the military rat-hole by giving generous contracts to KBR, Boeing, Lockheed Martin, and Blackwater while ignoring the needs of our brave fighting men and women and demonizing the working poor when they receive much-needed assistance essential to securing their human rights.

Body armor for troops and essential services for their families? Republicans say "No!". But when it comes to subsidizing bloated contractors, Republicans say it best:

"God bless our military contractors!"
-Representative Duncan Hunter (R)

Read more at: http://www.huffingtonpost.com/2009/10/20/wall-street-bonuses-vs-no_n_324281.html

BIRTH OF A NEW SYSTEM: STAGES OF REMOVING CORRUPT 0LD SYSTEM

Natural progression of stages from 0LD to NEW:

Stage 1: Disillusionment: Realize PROBLEMS are so Severe Reform seems Impossible! Some Chance of Reform exists!

Stage 2: Erosion: Characterized by a chipping away at 0LD SYSTEM with Facts, Complaints, Evaluation of Inequities­+Imbalance­s. ANGER is expressed. Some Chance of Reform still exists but growing uncertainty!

Stage 3: Detachment: All interest and commitment to saving 0LD System is LOST as discussions shut down! Disenchantment with 0LD System increases while intensified conflict decreases as FOCUS moves to defining the NEW SYSTEM! “Dream of a NEW Future” without 0LD Problems!

Stage 4: Dismantling: Building Knowledge and Courage to replace 0LD System with New System brings Enormous Relief of past Disillusionment. Some anxiety, initial confusion, and fear exists but resolves as New System becomes clearer.

Stage 5: Mourning: Removes ghosts of 0ld System as process moves to NEW Concrete Goals and Objectives. Anger at 0ld System is released and removed.

Stage 6: BIRTH of Fully Defined New System: Concentration on Choices, Clear Vision of things to come, Excitement, Evaluation of Alternatives and Risks, and Near Final Definition of Structure of the New System! Detailed Plan of action is developed.

Stage 7: Implementation and Hard Work: Renewed vitality, Pursuit of Goals, Finalize Policy Issues+Management Issues+Laws and Legal Definitions. Goals are Reached and Aspirations Achieved+R­ealization of New Balance of Power. New Confidence rises in final stage as Hard Work Follows.

Read more at: http://www.huffingtonpost.com/2009/10/20/wall-street-bonuses-vs-no_n_324281.html

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If you read between the lines of my previous two posts, you will easily detect a person who believes that the only way to prevent abuse is the rule of law.

In finance, we need to re-enact old laws (Glass Steagal, etc) and outlaw again behavior that was illegal up to 2000. We need to pass new laws to deal with the modern reality of world financial markets.

All of our laws should be aimed at protecting the common good. The common good is not being served by a financial industry that is, right now, totally out of control and being run by what are really sociopaths.

Our financial systems work. They are, however, delicate and full of nuance. We lack restraints with teeth to keep the systems upon which we all depend from being abused by a few.

When I say a few, let's be very clear about this. We now know that the catastrophe in CDS was caused by less than 20 people. If you gather all top executives of all major financial institutions in the U.S., you would have less than 10,000 people. There are a little over 300 million people in the U.S.

Whose interests should be served?

We need tough laws and even tougher enforcement.

Lastly, it is widely known that the favorite expression at Bear Sterns was "F...k you!" yelled as loudly as possible even to customers.

People playing with big amounts of OPM cannot be trusted.

Read more at: http://www.huffingtonpost.com/2009/10/20/wall-street-bonuses-vs-no_n_324281.html

Image by Thomas Hawk via Flickr

Americans, more than almost any other people, are historically pretty tolerant of the rich and the privileged. We hold no rancor or jealousy for their wealth, even when it is gained merely by inheritance and not through labor.

But Americans are now viewing the looting of the Middle Class by the people who occupy the top one percent of the American pyramid. People who number but a few hundred thousand, at most, who have gotten a strangle hold on most of the prosperity and income growth of the nation for the past ten years.

Americans will celebrate those who create and profit from their creations, but they have less and less tolerance for having their own families and small businesses looted by banks and financial institutions that are manipulating the government with their highly-paid lobbyists (many of whom are former elected officials.)

Destroy the American Middle Class at your own risk.

Read more at: http://www.huffingtonpost.com/2009/10/20/wall-street-bonuses-vs-no_n_324281.html

Image by stargazer95050 via Flickr

I pledge subservience
To the greed
Of the Too Big To Fail Banks of America
And to the oligarchy
For which they stand
One nation, under Goldman, uncontrollable
With usury and inequity for all

Read more at: http://www.huffingtonpost.com/2009/10/20/wall-street-bonuses-vs-no_n_324281.html?page=14&show_comment_id=33188330#comment_33188330

Image by h.koppdelaney via Flickr

First off, in this economy, 15% unemployment, if you can't find qualified people willing to work without multi-mill­ion-dollar bonuses, you're a loser and ought to be ousted. (I'm probably not the only one who got laid off this year, then rehired at 15% less than I was making before.)

Secondly, a handful of millionaires spending gobs of cash in New York City restaurants and Long Island marinas is not going to "trickle down" to people hurting in Ohio or California.

The better everyone does, the better everyone does. Because that means people will be spending money in their local economies, and local businesses will be able to hire more people.
That's how you build an economy.

We the people have to do two things:

-- disengage from corporate America, no more Walmart, no Chinese goods, no big banks, no Wall Street 401k investments. Buy things from your neighbors, trade, barter, reuse, re-purpose anything that can be made to work again. Find the community banks and credit unions and start moving your business there. Buy local food, no imports.

-- vote out all incumbents in all offices from the local to state to national level. They have ceased to work for the taxpayer, they are owned and operated by business interests. Getting elected has become an industry that has perverted the process of running for office.

If we do not rise up and walk away, we will be diminished serfs in a modern version of feudalism.

Our children will not be proud of us.
Our freedom is at stake here, a freedom that the wealthy elites have not wanted bestowed on us for hundreds of years. If there is a chance to squash this grand experiment called the United States of America and the freedom that the middle class and lower class have enjoyed during its brief existence, I fear that they will make that move.

Read more at: http://www.huffingtonpost.com/robert-l-borosage/where-will-the-jobs-come_b_328022.html

Who are these people?
I am not referring to the pathetic parents of "Balloon Boy," whose fake drama I have been unable to escape while on the treadmill this week, thanks to my gym's insistence on tuning its flat-screen TVs to Wolf Blitzer's nonstop self-parody.
The Colorado incident was significant only in the tawdriness of those who perpetrated the made-for-TV scam and their allies in the mindless media who covered this sham "reality" so relentlessly. But even so it was enough to push aside most consideration of the true hoax reported last week with far less fervor: the obscene rewards that Wall Street bankers bestowed upon themselves for ripping off our economy.
The people I want to know more about are the superrich who expect to be rewarded for their failures, like the folks at Goldman Sachs who will receive $16.71 billion in bonuses--an average of $530,000 per employee--this year after their company did as much as any to bring the world economy to the brink of disaster.
"The Guys from Goldman Sachs" is what The New York Times once called them in recognition of their chokehold on the federal government. Their power is marked by the two treasury secretaries who led the fight to legally enable and then reward Wall Street for its obscene excesses. Why wasn't there a CNN stakeout at the homes of former Goldman-execs-turned-treasury-chiefs Robert Rubin and Henry Paulson aimed at finding out how they feel about the almost $7 billion profit that Goldman Sachs made in the last two quarters in the wake of the government's bailout of the firm?
They were both deeply involved last fall, along with Rubin protégé and current Treasury Secretary Timothy Geithner, then head of the New York Fed, in saving Goldman as archrival Lehman Brothers was forced to go belly up. As opposed to Lehman, Goldman was allowed to change its status and become a commercial bank qualifying for Federal Reserve and TARP funding. Goldman received $10 billion in immediate bailout funds, and we are supposed to be grateful that the company has paid it back in return for an end to any pretense of government control over its executive compensation. The additional cool $12.9 billion that Goldman received from the government as a pass-through from the bailout of AIG to cover Goldman's toxic paper is money the investment bank has no intention of ever paying back.
The rationale for saving Goldman and the other too-big-to-fail usurers was that the rescue would increase lending to businesses and consumers and thus revive the economy. But Goldman made money last quarter by shunning such loans and instead putting the government-guaranteed low-interest money it now can borrow toward acquisitions and bond and stock trading. As The New York Times reported: "Titans like Goldman Sachs and JPMorgan Chase are making fortunes in hot areas like trading stocks and bonds, rather than the ho-hum business of lending people money."
Under the headline "Bailout Helps Fuel a New Era of Wall Street Wealth," Times reporter Graham Bowley detailed many of the enabling favors that the government, under two presidents, extended to Goldman, like clearing the way for the company to issue bonds guaranteed by the FDIC. "It may come as a surprise that one of the most powerful forces driving the resurgence on Wall Street," the Times reported, "is not the banks but Washington. Many of the steps that policy makers took last year to stabilize the financial system--reducing interest rates to near zero, bolstering big banks with taxpayer money, guaranteeing billions of dollars of financial institution debts--helped set the stage for this new era of Wall Street wealth."
It should not come as a surprise to Timothy Geithner, who, as The Wall Street Journal reported last week, talks to the honchos of Goldman more often than to members of Congress ostensibly in charge of banking legislation. Nor will it shock the lobbyists for Wall Street--augmented, as The Nation reported last week, by the pro-Goldman efforts of former Democratic congressman and faux populist Dick Gephardt--that the rich will emerge richer from this deep recession in which so many Americans have lost everything. The die is cast: People working in finance grabbed two-thirds of the growth in GDP, with the rest of us scrambling for the other third.
Nor will the situation change anytime soon. The House Financial Services Committee is in charge of writing new rules to protect consumers, but as the respected Sunlight Foundation reports, 27 of the 71 members of that committee receive at least one-fourth of their campaign funds from the financial industry, with the rest of the committee members not far behind.
Now if we could get one of the banking lobbyists to float a duct-taped flying saucer balloon, Wolf Blitzer might cover the real hoax.

Read more at: http://www.huffingtonpost.com/robert-scheer/zooming-in-on-the-years-b_b_328174.html