By Matt Stoller, a fellow at the Roosevelt Institute. He is the former Senior Policy Advisor to Rep. Alan Grayson. (on Twitter at @matthewstoller)
So S&P downgrades the US, and Treasuries rally. Then S&P affirms that France is a AAA rating, and the markets freaked out about Eurozone and Eurobank risk. France is “now in the crosshairs”. What should be clear by now is that S&P isn’t doing actual credit analysis. It is being a part of a community of financial oligarchs that for their own reasons want to see various communities and countries threatened with a downgrade.
Indeed, of all the players in the financial crisis, the ratings agencies were the single most embarrassing and obvious points of failure and corruption. Why did all the toxic crap get AAA ratings? Because S&P, Moody’s, etc. basically got paid for each AAA rating. Were these companies actually apologetic after blowing up the economy? Ha! Here’s testimony to the House Financial Services Committee in 2009 by S&P President Deven Sharma.
Mr. Chairman and members of the Subcommittee let me assure you of two things. First, our ratings in the mortgage-backed securities area were not venal. These were honest views expressed based on the best information available, dealing with complex instruments.
This conversation by two S&P analysts was released by the House Oversight and Government Reform Committee in 2008.
Rahul Dilip Shah: btw: that deal is ridiculous
Shannon Mooney: I know right … model def does not capture half of the risk
Rahul Dilip Shah: we should not be rating it
Shannon Mooney: we rate every deal… it could be structured by cows and we would rate it
This stuff came out in 2008. In 2009, S&P’s President got up in front of a Congressional committee and said that her company’s ratings were honest and not venal. And nothing happened! S&P still keeps going as if they are a credible institution!
A lot of people think that lobbyists call the shots in Congress, and they largely do. But they do it by knowing more than you do, by having more people and more resources, more people, more experience, and more money. This is the not-so-dirty secret of governing – Congress and the White House are seriously understaffed and underpaid. What lobbyists and think tanks do is provide expertise and legal and political help to overworked government employees. Everyone knows deep down the real trade-off here, that no one’s helping to be nice. But there are still norms.
Lobbyists tend not to be bullies, because even politicians and staffers have pride. They’re more glad-handlers, and the best ones are really fun to be around, always pass on the latest juicy gossip, or just have a good political or legal mind that can spot problems and opportunities before you can. Only one lobbyist ever yelled at me when I was a staffer; that lobbyist was from S&P.
I get all the institutional pressures of Congress, why it’s hard to stand up to power, etc. But it’s still a little baffling to me that this kind of overt obvious corruption and dishonesty went unpunished. I mean, derivatives can be confusing, but “structured by cows”, that’s ridiculous.
I guess you can count that as reason #7463278 that it should have always been obvious this White House and Congress were not serious about fixing our financial architecture.
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Matt,
Actually #7463278 is a pixel clock generation circuit, but who’s tracking, right?….grin.
I think that it is possible to have a society with an evolving balance of sharing and competition that would be much more humanistic than this stupid class system we have had for centuries…just like religion….hmmmm wonder if they are connected?
Nice post! Where from here? Keep breathing, laughing and speaking truth to the overlords of our global class society. We have nothing to lose but the chains that bind us to this reality.
ever get a feeling you are helpless ? you watching horrible crime and nothing you can do, impotent ?
This whole financial crisis starting 2008 has brought up several instances of raw corruption. Nobody does anything. Nobody goes to jail, no prosecution, no fear, lot of moral hazard. Sometimes i feel everybody knows it and sees it, but everybody thinks they dont “get it” or “cannot understand complexity of the fraud” – leaving the situation intact.
None of the AGs, or the FED, or the SEC or the president – nobody does anything.
we keep reading all kinds of fraud on this website, zerohedge etc – is it that difficult for enforcement officers to pick it up ? indifference is the worst indeed.
Financial fraud? what is that.
If there is a public news on “mom might have murdered kid” – the whole nation obsesses for months on end.
ok i will go watch “breaking bad” or “dexter” now.
Indeed, of all the players in the financial crisis, the ratings agencies were the single most embarrassing and obvious points of failure and corruption.
They’re corrupt, although to use that term is technically redundant. Since CRAs can exist only in the context of the financialized debt economy, which is inherently based on criminality and fraud, it follows that they’re inherent corrupt and fraudulent. There’s no “proper use” of CRAs even in principle.
A lot of people think that lobbyists call the shots in Congress, and they largely do. But they do it by knowing more than you do, by having more people and more resources, more people, more experience, and more money.
I assume “knowing more” means knowing more corrupt officials and having more money to bribe and blackmail them. They certainly have no more reality-based knowledge than regular working people, and indeed far less. The same goes for all “elites”, who are all actually utterly mediocre. People really need to get over the disproven notion that anyone knows how to run an economy and a polity better than normal workers and citizens.
Lobbyists tend not to be bullies, because even politicians and staffers have pride.
Obama sure doesn’t. Perhaps the most aesthetically offensive thing about him is how eagerly he presents as a corporate waterboy. Even Bush at least tried to pretend he was his own man.
The same goes for the corporate liberals who openly say they want nothing more than a literal “seat at the table”.
As for the lack of pride on the part of the “progressives”, words fail me.
“Congress and the White House are seriously understaffed and underpaid”
Well, if you think you have to meddle in each pot of soup, then this may be true. My personal feeling is however that they are overstaffed and overpaid so that they find time to meddle in areas of the world and of the country. The should much more restrict their activities to the basic needs of the country and basta. And definitely not listen to any type of consultancy or lobbyist but read and make up their own mind. All these think tanks are simply an alibi exercize to not do one’s job properly and to transfer responsibility to some undefined commitee.
Here is Darcy Burner making the case that staffers are not overpaid, but are underpaid, and that congressional offices are understaffed:
http://netrootsnation.org/node/1948
Uh, tell me why we have a congress/POTUS if they can’t figure out how to run the country? What am I missing here?
Capable of being bought or obtained for money.
Sounds like the Federal Reserve, the FDIC and the Treasury which pumped well over $13 trillion into financial institutions to fix the “housing correction,” which is what criminal gangster Hank Paulson was calling the economic collapse in 2008.
Catch me if I am wrong, but aren’t cows less threatening than parasites. In this view he could be saying, ‘I really miss those days when deals were structured by cows’.
We need more cowbell!
“it’s still a little baffling to me that this kind of overt obvious corruption and dishonesty went unpunished.”
There is nothing baffling about it. When S&P execs testified before Congress, you had kleptocrats, or to be more accurate, those working for the kleptocrats, on either side of the table, and, of course, watching from the White House. I hate to keep beating up on Stoller but he’s selling a line that the principal problem of Congress, where he worked as a staffer, is one of resources, not honesty. How can you take anyone seriously that makes such an argument? It’s like being the piano player in a cat house and saying that if they just had a few more hymnals there they would be the church choir.
I hate to keep beating up on Stoller but he’s selling a line that the principal problem of Congress, where he worked as a staffer, is one of resources, not honesty. How can you take anyone seriously that makes such an argument?
I guess you couldn’t, which is why it’s good I didn’t make such an argument. It is true that Congress is under-resourced, that is my observation. It’s also true that Congress was intentionally starved starting in the mid-1990s. This has led to all sorts of perverse and obvious problems, like a revolving door on steroids. But the under-resourcing wasn’t the cause, it was the consequence of the corruption.
Not buying it. If your point was corruption, then why not focus on that with regard to the S&P hearings? Indeed that was my point. Those who were holding the hearings were as corrupt as those they were questioning in them. And they were as corrupt as the current conservative President. No one was punished because it was stated Obama policy that he would not investigate or prosecute anybody for any past action. Democrats went along with him on this. This had the odd effect during Congressional hearings of the best and most probing questions being asked most of the time by nutcase conservative Republicans. There was nothing baffling about this.
As for ” It’s also true that Congress was intentionally starved starting in the mid-1990s”, great use of the passive voice. But if Congress was starved, it is because Congress did it to itself. I assume you wish to point fingers at Republicans, but why did the Democrats not protest, why did they not find alternate sources of expertise? But of course this is all beside the point. The construction of the kleptocracy under which we now live was begun back in the 1970s under Carter and Reagan well before the changes you say took place in the 1990s. So why wasn’t Congress, or more specifically the Democrats, asking better questions back then? The Democrats by the way controlled the House from Jimmy Carter straight through to the first 2 years of Clinton. They also controlled Congress from 2006 to 2010. Why didn’t they unstarve themselves then? If it’s not about resources, why bring up resources? The issue is corruption. The Congress is corrupt and it has such few resources too sounds like a Woody Allen joke. Why should we care?
Matt, great post exposing blatant corruption without “conspiracy-mongering” as Paul from TO put it yesterday. Conspiracy and collusion without fear is now self-evident.
But I have to agree with Hugh on what seems to be endemic insider blindness. That sentence leaps out as implausibly naïve for a congressional insider. And it follows your point about lobbyists calling the shots — with money tacked on the end in a way that merely suggests that they now write our laws simply because they have funding/staffing/research, “resources”, etc. — not that they engage in rank bribery, blackmail, and extortion, (however genteel) which most Americans now see clearly as sanctioned by the Supine Court itself . This naïveté is equally baffling for the “effing retarded” professional-left journalists and economists who simply refuse to allow, no matter what the evidence, that Obama himself might be a venal deceiver
Is this a case of mass-hypnosis or hysterical blindness? Are the trees too close to the forest? Or is it just ‘innocent’ self-deception: “It is difficult to get a man to understand something when his salary depends upon his not understanding it.” – Upton Sinclair
Staffers are in their 20s for the most part. Congressmen have one staffer. So they have little life experience and no or practically no industry experience (as in they might know something about whatever their parents do for a living).
Think of all the stuff Congressmen have to vote on. The staffer is the person who is supposed to inform them, among other things.
The idea that an information advantage doesn’t give you a practical advantage seems to elude you. If someone in their 40s or 50s comes in and tells you how a certain industry works and has factoids to back it up, how are you gonna buck that? It’s the problem understaffed regulatory agencies face on steroids.
This cult of wonkery and “elite knowledge” is a crock. In 99% of cases the basic moral and political nature of something is obvious to common sense. No one needed to parse the health racket bailout with an electron microscope to know it was a reactionary policy whose only effect would be to bail out and further enrich the insurance rackets (and try to force people to remain in the cash economy). No one needs that microscope to know that any cap and trade bill which could pass would never mitigate GHGs but only dish out tons of corporate welfare and blow up a carbon bubble.
That’s just two examples of allegedly “complicated” bills which are really as simple as 2+2.
Here’s some basic criteria that’ll never steer anyone wrong: Would something directly help the people, or would it channel that alleged help through corporate toll booths? Does any money go directly to the people, or down corporate ratholes.
Go with those, and you’ll achieve sufficient understanding of almost any bill, no matter what its alleged subject matter, right away.
Beyond that, obviously there’s too many staffers and if they’re paid a cent it’s too much. That’s because congress itself is an inherently criminal organization we’d do better without. Same for the rest of the “federal” government.
The information advantage doesn’t elude me at all; I don’t know how you inferred that. After all, super-lobbyists must be more knowledgeable and smarter than any of us to write healthcare and fin-reg bills, once twenty-plus pages in basic English, that now require entire forests of to print and an electron microscope, as attempter put it, to parse the Orwellese. My point was that the info gap here conspicuously obscures the greater elephant silhouetted so clearly under the rug, bribery and extortion fueled by the love of money largely ignored by staffers, who, whatever their age, apparently lack common sense, as attempter notes, to simply follow the money and measure end results. (Surely any that do are weeded out immediately.) That’s why Hugh, DownSouth, attempter and others regularly express exasperation with posts like this that seem to dance around reality.
It’s the same thing with Obama apologists (per Gibbs, the drug-addled pro-left), who can’t afford to admit the obvious, even to themselves. I don’t think it’s conscious dishonesty or stupidity but rather a fascinating case of self-deception. Their salaries depend on their not seeing certain things so they can’t. They are under a spell rendering them blind to the forest surrounding them.
“Congressmen have one staffer”??? Wherever did you get that idea? They all have dozens.
http://www.legistorm.com/browse_by_representative.html
I’ll let superlobbyist Tommy Boggs Jr. talk about why lobbyists have an advantage. This quote was in the NYT in 1979.
That was 32 years ago, before the gutting of much of the governing expertise of Congress (like the Office of technology assessment). Bribery and corruption is endemic to Congress and the White House, of course, and that’s a huge part of the problem. But only some people are willing to be bribed, so you need a strategy to make sure the rest of them don’t have any power. That’s the resource drain of which I speak. Interestingly, some of the now-very-expensive legislative publications that used to be done by Congress were privatized in 1995 and only lobbyists can afford them.
You need some sort of system to govern a country. The corrupt have one. The populists only have a skeleton of one, which only became clear during the last few years as the internet impacted the financial reform debate. Gutting the New Deal state by hiring out the experts, crushing careers in government, and building a for-profit private think tank apparatus has been very successful, on both sides of the aisle.
Here’s another example, this one from 1973, on how Nixon operated his imperial Presidency.
I don’t think they’re disputing what you’re saying about staffers being at a disadvantage. I think what they’re saying is that, just as businesses today–and they are nearly all much less scrupulous than they were 20 years ago– like their employees young and dumb, at an intellectual disadvantage and underpaid thus corruptible, Congresspersons also LIKE the “understaffed” situation that you are complaining about.
They can then work the crony system unmolested, while you go look for another job. If you’ve worked in the private sector lately, then you know all about that “so leave” dynamic and I don’t need to tell you.
Clearly, some Congresspersons are more corrupt than others, but apparently a critical mass of Congresspersons likes it just the way it is, including those in the D-Party, which hasn’t been “out of power” nearly as much as it likes to pretend.
If the D-Party really didn’t like having its legislation written by lobbyists, it could have changed it for its big fore-ordained 2008 Presidential win.
Meanwhile, it’s Republican voters who complain that they just want them to READ the d*amn 1500 page bills!, a virtue of anti-government sentiment, I guess.
JTFaraday,
I don’t dispute your points, but that’s not what they wrote. They basically argued I was too stupid/naive/corrupt to understand that the system is set up to advantage corrupt insiders instead of recognizing that I was simply sketching out the details of one specific way that political elites created advantages for the corrupt. It’s not the only way, there are others.
Thanks, Matt. Superlobbyist Tommy Boggs Esq. Jr.’s date quote exposes just how far beyond redemption this system really is. It clearly cannot be reformed from within.
I apologize for dissing your integrity and intelligence from a few lines, likely rhetorical. I could also interpret your line as “I am shocked, shocked, that this kind of overt obvious corruption and dishonesty went unpunished.” Many of us feel so burned by sellouts we’ve become hypersensitive to insiders/former insiders showing even partial defense of Boggs bankrupt system. You also write:
Bribery and corruption is endemic to Congress and the White House, of course, and that’s a huge part of the problem. But only some people are willing to be bribed, so you need a strategy to make sure the rest of them don’t have any power.
Isn’t the “only some are willing to be bribed” and disempowering the others also a little too hopeful? To an outsider it seems that only a dwindling minority is not either wholly in thrall or overwhelmed at this point, even Kucinich and Sanders. Those few surviving and retaining their humanity among so many reptiles are truly admirable. I do appreciate your work, and Grayson’s too; I hope he can get back in the fight cage.
Matt is absolutely accurate on this point-had you been collecting NY TIMES articles-cut-outs of deregulatory legislation, of underfunding agencies of “oversight”, of
slamming those who would do “transparency”, then coupled with ever fewer “corporate media” alternatives…
Rating agencies vs. dating agencies – which do you think have more success rates?
“I hate to keep beating up on Stoller”
Why? He has a job and earns a living. Many do not. A bit more due diligence in the public square is not much to ask for.
Here is the mystery that I would like to see explained – whatever venal game Obama is playing with himself, I do not think it involved being downgraded. On the one hand, I agree with Yves – this is clearly a narcissist in the worst. On the other hand, he appears to act as a serf to inbred wealth to the point of self destruction. How to reconcile that? If he has any interest in re-election, the eternal posture of post-bipolar-partisan “Bygones” Obama is a bit too risky. Complete disconnect from reality? Inflated sense of prospects against a GOP even more venal than himself? Defeat in 2012 as ultimate proof of how far he was ahead of his times – that the nation simply wasn’t ready for the Raw Deal and the Grandiose Bargainer? Whatever his flaws, the man had enough cunning to set up a stunningly fraudulent and stunningly successful campaign, and the ambition to do it – how to square this with his insistence on ruining not just the nation, but possibly his own re-election?
A lot of folks are trying to characterize Obama – you have put forth a short one that has some interesting aspects.
How can it be any more incredibly crystal clear that Obama’s personal agenda is to aid and abet the elites, plutocrats, and oligarchs ? To the credit of more and more of the pundits and even the main-stream media, more folks are certainly coming to that fundamental realization – certainly including our sterling and eloquent Yves. I personally was certainly fooled and taken in and went through the process of going from puzzlement in the couple months after his inauguration, to wondering what assumptions he/his could possibly be making, to a shaking of the head at what appeared to be a cluelessness and/or ineptitude, to many months later finally coming to grips with the only remaining possibility being that he just simply only identified with the elites-plutocrats-oligarchs, and that he had virtually no concern for the well-being of the country as a whole or the ordinary citizens.
The puzzlement still remains, although it is pretty inconsequential in the face of the result, as to how he became what he is – especially with his personal background. Did he escape his origins by adopting the plutocrats to his heart ? Did he come to identify with the elites in his associations at Harvard, etc. ? Who knows – and it matters little.
To me personally what has somewhat muddied the waters has perhaps been some of his ineptitudes, his fecklessness, and his seeming lack of much fortitude. That just obscured somewhat his increasingly apparent personal agenda.
But whatever the shrouds, we are still left with what seems can only be assessed as a destructive leadership at a time when the rest of the governing structure has abdicated and been completely captured by the oligarchies.
Whither goes the United States of America ? Can she rise again considering all of the draconian limits of resources and environment that strangle us ? Let us hope – Obama got that right, in any case, even if it was a perverted message from him.
It seems Rahm Emanuel was right about progressive IQs (as “effing retards”), though much cagier are the pro-left whose salary depends on willful blindness (or heavy drug use). It must be great sport for the PTB to bet on how long they’ll assume the position while holding their ankles or remain under the oval office desk, on their knees without pads.
Open-mindedness, generosity, and being slow to anger and judgment are liberal virtues, but it’s finally become impossible to pardon Obama’s war crimes, his dishonesty and betrayal, or his depraved indifference toward those to whom he sold his “change elixir”. A friend struggling to salvage some redeeming quality in Obama suggested he may suffer from Stockholm syndrome, possibly even implicit/explicit threats to his family’s safety (against the carrot of elite wealth). It may be a conspiratorial stretch, but it would explain his more recent haggard, even cowed facade. He’s clearly lost some vital spark, though maybe it’s only because he sees little point in pretense.
http://www.csmonitor.com/USA/2011/0812/Police-torture-cases-from-Daley-era-vex-Chicago-s-Rahm-Emanuel
Obama is simply bought and sold-the worst, and the worse than the worst is still to come-
http://www.democracynow.org/2011/8/12/bipartisan_super_committee_turns_to_cutting
then, he will be gone, so Bush taxcuts will be made permanent..
You think there will be an election?
I think it is clear that the rating agencies did not use all available information to evaluate the risk of MBS during the bubble. They can make even less of a case for a systematic analysis in evaluating the US, France, etc. I recently posted a brief comparison of CRA ratings of Goldman Sachs MBS issued 2005-2007; subsequent default rates (Moody’s 2009 evaluation) and Goldman disclosures of risk in a sample of prospectuses. CRA rating were essentially flat, projected loss jumped in 2006, and Goldman did sound verbal predictions of increased risk of default. It was clear that the CRA did not use available information in their ratings. For those who like efficient market theory, it proves the corollary that investors who ignore available information will underperform the market. The paper and chart is available at http://ssrn.com/abstract=1899631.
Thanks, Mr. Barnett.
It’s truly amazing the loan tapes exist, show massive fraud, and were completely ignored by S&P and the subsequent media.
Bill Black tried to point them out, but team Obama… well, team Obama are a bunch of nasty, lying, corrupt, shitheads.
I’m not sure who said it, but I once saw a quote that would apply here: “Never jump to the conclusion that something is due to criminal behaviour when gross incompetence might suitably explain it.” (Okay, so I’m paraphrasing a comment I read over a year ago.)
So after a couple of centuries we are not suppose to jump to the conclusion that we live in a class structured society?
All this pain is just due to a bit of incompetence…..anybody got a bridge they want to sell oy?
I wonder why incompetence always seems to favor the rich.
Exactly right…incompetence would lead to random results.
None of this looks random, if you follow the money.
Oh, we definitely live in a class structured society.
That doesn’t really rebut the point above, though. A class structured society may be the natural consequence of most human interaction and organization, not necessarily the nefarious plan of a few masterminds. I’m agnostic as to the real reason (yes, the *horror*…), but you need a lot more evidence to prove that this is a brilliantly conceived and executed plan rather than something akin to the fractal patterns one sees in the mountains because of the water erosion generated by gravity pulling rainfall down the slope.
I really do doubt that people are smart enough to pull this off without unforeseen consequences. Human intelligence and foresight are far too limited, in my experience. And seriously, we’re talking about the inbred inherited rich and lucky wildcatters being the “masterminds”? Sorry, man, a lot of really smart people are not sociopaths and don’t necessarily go into high income pursuits. This just doesn’t add up. The rich are often dullard, myopic bullies who have ended up in a pre-existing system that rewards their mostly mindless bullying.
Just because one ends up with classes does not mean it was the plan of one of the classes.
Innocent because they didn’t know better? That plea never works in the hood, or for the poor.
“How could we have known?” That’s Ben Bernanke’s excuse for never mentioning the bubble. That imploded. That resulted in yet another great transfer of wealth to the owner/ruler class.
We didn’t “end up” with classes, America has always been a class structured society. Given the current wealth distribution, the vast majority of dullard myopic bullies are not rich. No brilliantly conceived and executed plan is required to lead to our present condition, but it’s not all mountains and rainfall, either. A few nefarious masterminds pursue their own individual extraction of wealth from the rest of us, most of the extant rich follow along out of comfortable familiarity, and the current situation results, along with plenty of unforseen consequences for everybody.
It is really tribal, you share commonalities. At work you may be in the tribe of middle management and in the tribe of your department, IT. You may be also a tribal member of your church and center your social and business life around your church. Class is too simplistic.
I was warned about several topics when I went traveling in the Midwest and South. I was told the second question I would be asked in the Midwest is what church do you belong to? This would establish my tribal membership. Catholic was a non-starter.
Excessively paid CEOs are frequently rewarded for their access rather than brilliance. Most decisions are made by a team of outside professionals and the board, the CEO undertakes the plan agreed to. If the plan fails, the CEO is not punished and often rewarded. These executives are members of a tribe and often are recycled.
Speaking of undertakers, folks might want to download a copy of The Quintessence of Capitalism by Werner Sombart for enjoyable reading on the train or plane. He traces the concept of wealth throughout history with attention to the process of capitalism.
An undertaker is a person that creates and implements a plan that ultimately transfers wealth. There are many types of undertakers. One of the earliest were the money changers of the London stock exchange. They became stock-jobbers or middlemen that arranged a stock transfer between sellers and buyers. They operated like exotic securities traders in the shadow banking system. They pulled selling and buying prices out of thin air and pocketed the difference. This was an undertaking.
The person that conceives a plan is called a Conqueror (think military conquest), they are single minded and remove all obstacles to the plan. The plan is undertaken by a legion of participants. The efforts leading to Warren’s removal were not whimsy, she was an obstacle to a plan for the future. She has no hope of running for office where she might have even a smidgen of influence.
..all you need is heavily documented-footnoted history-and
to read:
http://www.amazon.com/Killing-Hope-C-I-Interventions-II–Updated/dp/1567512526/ref=sr_1_1?s=books&ie=UTF8&qid=1313211826&sr=1-1
http://www.amazon.com/Wall-Street-History-Beginnings-Enron/dp/0195170601/ref=sr_1_2?s=books&ie=UTF8&qid=1313211865&sr=1-2
Quod licit jovi non licit bovi…
Annuit Cœptis
Money was created against an asset that was then burned (fossil fuels). The debt against which the money was created remained in existence. This is a large part of the global debt today.
As there is no asset tot sell in order to raise the cash (not considering the interest burden for a moment) the debt can not be repaid and those that own it will get nothing.
This is a result of the adoption of fiat currency to enable the oil/credit based financial system.
Follow the link below to read about Roboeconomics, the logical bugfix to our economic and financial system as to overcome our current woes. Forever.
http://www.sunreign.com/info/Roboeconomics
The ongoing financial crisis is like watching “The Sopranos”. His world is totally corrupt but nobody explains how Tony Soprano makes his money.
A lame attempt by an outsider:
1) Corporations and the Media all have a stake in the corruption. No one stands up and says deregulation means no rules, no laws, no jail time. A Casino has more rules than Wall Street or Bank of America.
2) Corporations are people. They can buy, sell and offshore people, jobs and money at will. The US government is run by and for corporations.
3) Payroll Taxes are the last source of wealth to be jacked by privatization now that Pensions and Housing have been gutted and the Forever Wars are unaffordable by a diminished America.
I’m still fretting over yesterday’s article by Yves on the S&P downgrades of some munis in Massachusetts. The towns were supposedly not in any financial duress but were downgraded anyway in an unusual move for the S&P. And Yves outlined the politics behind the S&P, McGraw, et. al., which indicates a clear conservative direction and purpose to all this. And if privatization or elimination of Social Security and Medicare are the goal, it is just another attempt by the relentless rich to prevent their ill-gotten wealth from deteriorating. If the S&P can be this political we should get an injunction against it. It should be dissolved. It is not a well known fact that the Fed’s mandate includes buying up munis to help out cities during hard times. At least it is nice to know that the Fed ignores the S&P nonsense about the AA+ it received. But its is unnerving to remember that the Fed accepted the S&P ratings during the MBS failure. Makes me wonder.
Whoa….
First, the Mass action was Moody’s.
Second, they are being reviewed for a possible downgrade. Hasn’t happened yet.
..bought and sold deregulatory legislation can be easily tracked and impossible to deny. Linking subsequent events
is also simple..an education in Poly-Sci helps, especially
from tumultuous times…it also is easier when we see the same things perpetrated by the same people, that were done
in South America-Central America..now perpetrated upon our own people:
http://www.amazon.com/Confessions-Economic-Hit-John-Perkins/dp/0452287081/ref=sr_1_1?s=books&ie=UTF8&qid=1313212130&sr=1-1
http://www.amazon.com/Shock-Doctrine-Rise-Disaster-Capitalism/dp/0312427999/ref=sr_1_1?s=books&ie=UTF8&qid=1313212169&sr=1-1
..based upon “Chicago Boys” same ideology…
In London during the current mayhem a student, with no previous criminal record, was sentenced to six months jail for stealing a case of water valued $5.95. Whereas bankers, financial institutions, rating agencies, looted the world economy for trillions of dollars and nobody is held accountable. Not only that but these ‘felons’ are now demanding that the rest of us suffer cuts in order to pay for their misdeeds. World gone made.
oops, World gone mad.
Oh yeah it’s a mad world. Examples of what you’ve mentioned are everywhere, particularly in US Prisons. We lead the world in putting people in jail, many incarcerations are the result of malignant rent seeking process. It will only get worse, no one wants a better way or idea, they’ll validate what they do as being necessary for safety. Notable, scary similarities to the 20th Century.
…more Blacks incarcerated each year than graduate from university..
I would like to reference my above post. We are tribal, even for a night. Mackay wrote Memoirs of Extraordinary Popular Delusions which you may download. It is a collection of essays about herd behavior beyond reason. This does not mean that lessons cannot be learned. A looter is a looter and hopefully will learn a lesson that will be freshly remembered for the rest of their lives. They participated in a crime against society, regardless of perceived grievances. There was little chance of a positive outcome and much downside risk.
What “society” would that be? Your own Margaret Thatcher said there is no society. So she must agree that no so-called rioter (rioter against what?) could commit an infraction against it, no?
But seriously, what society? I think these people know damn well, contrary to your lies, that there is no society for them, only a wasteland, and only an alien assault upon them.
Actually it was a very violent crime against society that should not be encouraged by leniency. Most likely these idiots will be counseled and released, if appropriate, but for now, throw the book at them.
What the hell are you trying to say?
I think there are two separate issues here (at least). One is the CRAs and their failures. If there were no bias, they would have under-rated as much as they over-rated. I haven’t seen any evidence of this to date.
The second issue raised by the OP is the deliberate under-funding of government agencies (including Congress). We saw a month ago the Repugs in Congress gut the SEC funding in a deliberate attempt to eviscerate the already-weak Dodd-Frank reforms. Similar with the underfunding of the IRS, the FDA, etc. This isn’t an accident, folks, it’s part of a well-thought out strategy.
In this respect this paragraph I think is incredibly important:
“A lot of people think that lobbyists call the shots in Congress, and they largely do. But they do it by knowing more than you do, by having more people and more resources, more people, more experience, and more money. This is the not-so-dirty secret of governing – Congress and the White House are seriously understaffed and underpaid. What lobbyists and think tanks do is provide expertise and legal and political help to overworked government employees. Everyone knows deep down the real trade-off here, that no one’s helping to be nice. But there are still norms.”
One of the tropes of the populist rage types going back to Howard Jarvis is term limits. We passed them in California and it only made matters worse, for the very reasons cited above. The lobbyists knew more than the elected officials.
At the end of the day, one of life’s great truths is that you don’t get what you don’t pay for. If we’ve allowed a hollowing out of expertise in government then the villains will run amok and our civilization will fail.
Phichibe
This is just dumb. Look who was in charge of the OCC. He was a Bank lobbyist for chrissakes. And after he left, he’s at a powerful Bankster lawfirm (for chrissakes). It’s worse but more obvious at the Pentagon. There is no brain drain in the Gubmint, the check writers within the Gubmint work by and for industry. Class dimissed!
ouch. to be spanked in public is a rebuke. to be spanked by someone who can’t spell is mortifying. make that mordiphiing.
phichibe
“one of life’s great truths is that you don’t get what you don’t pay for.”
I’ve always preferred that way of putting it. Much more concise.
i really don’t care what S&P thinks. I don’t think the market has a high regard for S&P either.
S&P as bitchy gossip and reputation assassin. How is it that its pronouncements have any more political clout other than its ability to put some ideas and concepts into the media as psychological war, propaganda for austerity. Does anyone really think that their opinions are nothing but pure fabrications purposed to reinforce a fading social reality. If people are not bloody and bowed, make them think they are about to be, if the right people start to talk about them in the wrong way. It was the financial sector that crashed, not the government. It was the government that reestablished the banks, the manufacturers and calmed the citizenry with quick action. Not the ratings agencies.
The government is tasked with defending our social order within its territory. S&P is tasked with being the provider of essential information as a critical component of the financial infrastructure. It failed to provide in its task and the heart of capitalism had another seizure. It failed to warn its clients that they would go out of business by the hundreds. Failed banks for this year 63, no end in sight. They can’t even make assessments for the industry that they built their reputation on. Nation states with their own currencies and the power to tax have to face the coordinated assault from within, in America it is the assault of the fifth column called the republican party causing the political obstruction that is the pretext for the S&P belaboring of the obvious.
Compartmentalization much?
“It was the financial sector that crashed, not the government. It was the government that reestablished the banks, the manufacturers and calmed the citizenry with quick action. Not the ratings agencies.”
Your imagined separation of Gubbmint and the financial sector is clearly childlike. Most *did not* want the financial sector (Criminals) to be rewarded. You are a relentless idiot on this blog – it’s just amazing how void you are.
Let’s keep it civil ,jeeze. In a way the hot head is correct, we are in Bush’s emergency third term. Let’s examine the Bank Friendly Democrat Party. Greenwald described the debt game that was played this summer. Basically, Sen. Harry Reid and Rep. Nancy Pelosi, Sens. Dick Durbin (D-IL), Kent Conrad (D-ND) and Mark Warner (D-VA), are the Democratic half of the so-called Gang of Six. These Democrats are putting forward a proposal to raise working class taxes while cutting taxes for the rich, and to slash $3 trillion from programs that are critically important for the poor and the sick.
Folks,
You mean to say anyone believed Bush-Paulson after Bush-Cheney-Rumsfeld-Rice, etc??
Here’s twice Pulitzer Prize winning reporters Bartlett and Steele on what really happened=TARP-it was piracy, by “bait
and switch”, folks..just like Iraq-911..(building 7 and so much more cover-up-we don’t know of what..)
http://www.globalresearch.ca/index.php?aid=15420&context=va
Mark Warner’s political career needs to be closed out the way his constituents close their accounts at Capital One. If we’re to ask why Banksters have “gotten away with it” look no further then their caretakers in the Senate.
Incidentally, Bernie Sanders is an independent.
If Michelle Bachman cites S&P as evidence that she’s right, there’s not much more needs be said about S&Ps irrelevance.
The reality is the markets (but not the press) ignored S&P this week.
Consider:
S&P said nothing re France this week (till late), yet the press was agog that an S/P downgrade on her and her banks was imminent. This was accepted as common wisdom as the explanation for the trigger for the collapse in Fr bank (and Euro) stocks. That’s proven to be complete BS but..
So there was no press investigation into the rumors that Asia was becoming wary of funding FR banks, (for good reason), which is the more relevant story to probe.
Few blogs remained objective during the hysteria.
There’s a wonderful irony this week. The Sunday Mail article that triggered the rout on SG shares (and fueled the Euro share collapse) was based on a respected bloggers fictional musings on a collapse scenario. She made the fatal mistake of using real names in her essay, without putting a ‘This is a War of the Worlds Broadcast” disclaimer at the top. That has been corrected, but is small comfort to investors, as it was small comfort to the crazed citizens of NY and NJ who tuned in late that night to the radio broadcast.
The more fatal mistake, which led to the subsequent MAIL apology to SG, was that the MAIL reporter cited the fiction as his(or her) source. (Be forwarned Yves).
So this weeks drama really had little to do with that pissant S/P. It’s amazing O won’t put the final nail in their coffin today and be done with it. Only a total wuss would pass up this opportunity to destroy his opponents most vulnerable weapon.
It was absurdly amusing to watch S/P scramble to reassure that they had no intention of downgrading FR. Didn’t the press get it. wink, they were just fucjing with the Americans. France isn’t quite on their radar screen. Jeez, Markets you were supposed to disrupt the UST auctions, not take down the Euro banks.
O could have shut them down last Sunday. He just needed to act like a Frenchman and say, PFFT they got it wrong on MBS,CDO…, They are wrong this time too. The Europeans would have understood.
It was the perfect time to shine a light on what S/P Rep enablers are up to. They really don’t give a shit if their capriciousness brings down the Euro economy, as long as Michelle’s apparently less loony friends deliver on her promise to make O a one term president.
But O chose not to act. Quelle idiote!!
..it’s between Ron Paul and Rick Perry…Obama needs badly to step aside..