Tag: Wall Street

In Part 4 of his continuing series about the causes of and possible fixes for the ongoing economic and banking crisis with Paul Jay of The Real News, Dr. Robert Johnson, Director of Financial Reform for the Roosevelt Institute, and Executive Director of the Institute for New Economic Thinking (INET) discusses his ideas of the main principles for the kind of legislation needed to remedy the situation.

Johnson notes that without fundamental changes in the way the Obama Administration is dealing with, and a new regulatory framework governing, the actions of investment banks on Wall Street and the forms of financial instruments like derivatives that they can create and sell, that another very serious economic crash, almost certainly worse than what we’ve seen so far, is a virtually certainty to occur, probably sooner than later, and that firms that are “too big to fail” must be allowed to fail.

You can watch all four parts of this interview under the tag Robert Johnson.

Following Part 1 and Part 2, Dr. Robert Johnson, Director of Financial Reform for the Roosevelt Institute, and Executive Director of the Institute for New Economic Thinking (INET) (a project with George Soros), in this third part of a series of discussions with Paul Jay talks about the real choices that were ignored by the Obama White House for financial reform in dealing with the financial crisis rather than simply pumping money into the investment banks.

Also see (on the flip):

What Congress Did Not Want You to Read: Robert Johnson’s Testimony on OTC Derivative Market

Saturday, 11/7/2009, by Lynn Parramore at New Deal 2.0 (a project of the Roosevelt Institute)

   When you know you are about to do something unpopular you try to hide it. For instance, the public would never know that over 140 banks (not counting credit unions) have gone under this year because their announced failures only happen on Friday evenings.

  Another extremely unpopular event would be another round of bailouts for Wall Street banks. That’s why the provisions are hidden deep within the financial reform bill.

 For all its heft, the bill doesn’t once mention the words “too-big-to-fail,” the main issue confronting the financial system.

  Instead, it supports the biggest banks. It authorizes Federal Reserve banks to provide as much as $4 trillion in emergency funding the next time Wall Street crashes. So much for “no-more-bailouts” talk. That is more than twice what the Fed pumped into markets this time around. The size of the fund makes the bribes in the Senate’s health-care bill look minuscule.

 Believe it or not, this is not the most outrageous thing Washington has done in the last week.

Yesterday in Crony Capitalism we heard Dr. Robert Johnson of the United Nations Commission of Experts on International Monetary Reform under the Chairmanship of Joseph Stiglitz, and Executive Director of the Institute for New Economic Thinking (INET), talking with Real News CEO Paul Jay about the causes of the economic crisis and about some of his suggestions for banking and financial reform.

Today in Part 2 Johnson and Jay continue the discussion addressing the question of whether the White House governs Wall Street or whether it’s the other way around…

Dr. Robert A. Johnson currently serves on the United Nations Commission of Experts on International Monetary Reform under the Chairmanship of Joseph Stiglitz. He is also the Director of Economic Policy for the Franklin and Eleanor Roosevelt Institute (FERI) in New York. Dr. Johnson was previously a managing director at Soros Fund Management where he managed a global currency, bond and equity portfolio specializing in emerging markets. Prior to that time, Dr. Johnson was a managing director of Bankers Trust Company managing a global currency fund. He also served as Chief Economist of the U.S. Senate Banking Committee under the leadership of Chairman William Proxmire (D. Wisconsin) and before that, he was Senior Economist of the U.S. Senate Budget Committee under the leadership of Chairman Pete Domenici (R. New Mexico).

Here Johnson talks with Paul Jay of The Real News about how we got into the current and continuing economic mess, and makes some suggestions for banking and financial reform and a way out of the mess.

  You might have heard about how Washington is going to crack down on Wall Street banks. It was something about regulations and Fat Cats.

  Yet if you look at what is going on today, you would come to the exact opposite conclusion.

 The Internal Revenue Service on Friday issued an exception to long-standing tax rules for the benefit of Citigroup and a few other companies partially owned by the government. As a result, Citigroup will be allowed to retain billions of dollars worth of tax breaks that otherwise would decline in value when the government sells its stake to private investors.

 I bet you were starting to worry about the TARP banks, and if they could still afford to give out multi-million dollar bonuses to their executives. I know I was. Thanks to an IRS rules change, they still can.

Obama’s effort on the signature issue of healthcare has been truly pathetic.  More generally, he seems to have no problem with US citizens paying tithes and bailouts directly to US corporations as government policy, despite what he says publicly.  

Populist Rhetoric and Symbolic Actions

Barack Obama is so mad at Wall Street! Here, just look at what he told 60 Minutes last night:

BARACK OBAMA: I did not run for office to be helping out a bunch of fat cat bankers on Wall Street…Nothing has been more frustrating to me this year than having to salvage a financial system at great expense to taxpayers that was precipitated, that was caused, in part by completely irresponsible actions on Wall Street…the people on Wall Street still don’t get it. They don’t get it…you guys are drawing down $10, $20 million bonuses after America went through the worst economic year that’s it’s gone through in decades, and you guys caused the problem.

But he’s not just all talk. He’s also taking action! He’s so furious he’s going to have an hour-long meeting with Wall Street executives. Dear god in heaven!

Meanwhile, the banksters continue pissing on Barack Obama’s shoes, even after he put on a public show to berate them for their financial malpractice.

… Said one CEO who attended: “I expected to be taken to the woodshed, but the tone was quite the opposite.”

Said another senior exec with knowledge of the meeting: “The whole thing was so telegraphed that not much was accomplished, other than giving Obama a PR stunt … He might have sounded mean on ’60 Minutes,’ but during the meeting he was a hell of a lot nicer.”

So far, the dude’s been painfully, strikingly ineffectual, with resulting outcomes always favoring corporations and screwing the public, even though health care and job prospects suggest a fucking blowout for Democrats in 2010.  Worst, his actions, as distinct from his “word-itude,” suggest he is a total corporate sell-out willing to alter the Constitutional fabric of our nation.  Never mind the ineptitude and ineffectualness of Mr. Constitutional Law. And never mind 2010. What a total fuck-face.

The wily liberals finally come clean on Obama and their own damn selves:

You didn’t really expect hope and change, did you?

Shorter Brad “Ich bin der Prozess” @Sadly, No!:

Barack Obama’s failings are OUR fault!

As the realizations begin sinking in, the excuses for Barack Obama’s loathsome and herculean efforts to prop up the status quo of the ruling class at all costs-and I do mean ALL COSTS, human and financial–are variegated and mind-numbing.  Not to mention schtupid and counterproductive.

Taibbi’s spanking the President on his massively corrupt Wall Street bail-out should cause the man to resign in disgrace.  Immediately.  Taxpayers could be on the hook for $24 trillion in gambling losses?  With no percentage in any upside, strong anti-reform measures, and potentially on the hook for further, ongoing, crippling gambling losses?  While we lose our livelihoods, homes, pensions, public services, AND get shafted on mandated private health insurance?  Maybe Brad fundamentally disagrees with Taibbi’s painfully accurate assessment of the President:

I basically agree with everything the guy says

Leider, nein.    Like many others, Brad is just relieved that Obama is not the second coming of Dick Cheney or Anton Chigur.  And that’s good enough for him.  I guess he’s still got his job.  And his home.  And his health insurance.  Your expecting anything more than not expanding torture to a mall near you  is not really Obama’s fault.  It’s our fault.  For reading the man’s signals wrong.

At the end of his Rolling Stone article, Taibbi asks

What’s most troubling is that we don’t know if Obama has changed, or if the influence of Wall Street is simply a fundamental and ineradicable element of our electoral system. What we do know is that Barack Obama pulled a bait-and-switch on us. If it were any other politician, we wouldn’t be surprised. Maybe it’s our fault, for thinking he was different.

To which Brad aka Joseph K “I am one who is on trial here!” responds:

Well, yeah, it sort of is.

Now I get what Obama really meant by “The Audacity of Hope,” subtitled, “The Recklessness.”    

I suppose the evisceration of Nuremberg is my fault too.  And torture.  And lying about Afghanistan.  While accepting a peace prize.   Well, yeah, maybe I should go to jail for abetting war crimes.  Can anyone tell me what is the procedure for prosecuting myself?   The rules are kind of opaque around here anymore.  A little help?  Anyone?  Please?

You didn’t really expect hope and change, did you?

Sadly, yes.

By believing passionately in something that still does not exist, we create it. The nonexistent is whatever we have not sufficiently desired.

Franz Kafka

At West Point last week, Obama said, “We’ll support Afghan ministries, governors, and local leaders that combat corruption and deliver for the people.  We expect those who are ineffective or corrupt to be held accountable.”  

David Broder must be freaking out.  It sounds like Obama is advising Afghans to exact retribution, engage in partisan witch hunts, have show trials, and turn their country into a banana republic.    

Why Is Obama Worried By Corruption in Afghanistan? . . .

Obama’s weakest position, in our view, has been his determination to “look forward, not backward” regarding the apparent crimes of the Bush administration. That stance has never made sense, and it makes even less sense now that Obama has announced plans to send 30,000 more U.S. troops into Afghanistan.

At the heart of the Obama plan is a push to root out corruption in Afghanistan. And that’s ironic because Obama has shown no interest in rooting out corruption here at home.   Why the surge in Afghanistan?  Obama hopes to stabilize the country and turn it over to the government of President Hamid Karzai. Unfortunately, the Karzai government is flagrantly corrupt, marked by cronyism and electoral fraud.

Sounds a lot like the Bush administration, doesn’t it?  But Obama wants Americans to forget all the pain that was inflicted upon our democracy over the past eight years.

If Obama actually gave a flying fuck about accountability, he’d bring the Predator drones home and fly them over Wall Street.  As soon as a corrupt CEO, banker, hedge fund manager or credit default swapper showed up in the street he’d get his ass blown to Hell.  Obama could call it winning the hearts and minds of the American people.  He could call it liberation. Francis Scott Key VII would see it from that Brooklyn homeless shelter he lives in and could write a song about it.  Here in the twilight’s last gleaming, we could finally get some useful results from our $900,000,000,000,000,000,000,000,000 defense budget.

Maybe I’m missing something here . . .  Did the Taliban destroy our economy?  Is the Taliban looting our Treasury?  Did the Taliban take control of Congress?  Is the Taliban using it as a weapon against us? Who’s doing all that?  

We all know who’s doing that.  So does Obama.  But there won’t be any Predator drones over Wall Street.  He won’t have a Predator or two following Dick Cheney around either. He’d rather let Dick strut around like the greatest warrior of all time and call him a traitor every day of the week and twice on Fox News Sunday.    

I don’t remember Mr. Five Deferments being red, white, and blue to the bone when the Vietnam War was raging.  I don’t remember him joining the Army because he had no place to go, I don’t remember him landing in Kandahar with an eagle and a flag tattooed on his arm. But he sure likes to give those warmongering speeches.   A fat man in a blue Mercedes drives him to the door, he pumps himself up like he’s Patton crossing the Rhine, scowls his message of endless war, and basks in the applause of every other psychopath in the room.    

Something about being a lying asshole all your life makes you hard that way.

Finally a Representative body, that knows WHO they work for …

Class war breaks out in the U.K.

The Labor government announces a tax on exorbitantly-paid bankers. American populists gnash their teeth in envy

By Andrew Leonard, Dec 9, 2009

Unsurprising headline of the year: “U.S. Probably Will Avoid Matching U.K. 50 percent Bonus Tax.”

Alistair Darling, the U.K. Chancellor of the Exchequer, announced the tax — aimed squarely at overpaid bankers

[…]

From Bloomberg:

“There are some banks who still believe their priority is to pay substantial bonuses,” Darling said in Parliament. “I am giving them a choice. They can use their profits to build up their capital base. If they insist on paying substantial rewards, I am determined to claw money back for the taxpayer.”

Paul Krugman says the move is “entirely reasonable.” Justin Fox asks, “why the heck not?” Felix Salmon says “well done.”

But don’t expect a repeat across the pond.

http://www.salon.com/technolog…

Interesting … maybe the People CAN Fight back?