They are starting to have the same sort of chutzpah that the Tea Party has. That’s what the political left sorely needs.
– Kalle Lasn, co-editor of Adbusters, on the growing anti-Wall Street protests in New York. The magazine’s July 2011 issue called for the occupation of Wall Street. (via Quotation of the Day Mailing List)
The super-rich (and their GOP supporters) appear to be running scared, given their shrill name-calling of the Occupy Wall Street protesters. Paul Krugman explains the panic:
The way to understand all of this is to realize that it’s part of a broader syndrome, in which wealthy Americans who benefit hugely from a system rigged in their favor react with hysteria to anyone who points out just how rigged the system is.
Last year, you may recall, a number of financial-industry barons went wild over very mild criticism from President Obama. They denounced Mr. Obama as being almost a socialist for endorsing the so-called Volcker rule, which would simply prohibit banks backed by federal guarantees from engaging in risky speculation. And as for their reaction to proposals to close a loophole that lets some of them pay remarkably low taxes — well, Stephen Schwarzman, chairman of the Blackstone Group, compared it to Hitler’s invasion of Poland.
And then there’s the campaign of character assassination against Elizabeth Warren, the financial reformer now running for the Senate in Massachusetts. Not long ago a YouTube video of Ms. Warren making an eloquent, down-to-earth case for taxes on the rich went viral. Nothing about what she said was radical — it was no more than a modern riff on Oliver Wendell Holmes’s famous dictum that “Taxes are what we pay for civilized society.”
But listening to the reliable defenders of the wealthy, you’d think that Ms. Warren was the second coming of Leon Trotsky. George Will declared that she has a “collectivist agenda,” that she believes that “individualism is a chimera.” And Rush Limbaugh called her “a parasite who hates her host. Willing to destroy the host while she sucks the life out of it.”
What’s going on here? The answer, surely, is that Wall Street’s Masters of the Universe realize, deep down, how morally indefensible their position is.
When was the last time you saw a major American corporation issue an official press release like this?
Either Mr. Lynch has a very poor memory or he’s lying.
Update: And now I am informed in the comments that Oracle has posted a follow-up. Terrific and now you can view Autonomy’s PowerPoint slides from the pitch meeting.
I am sure it is accurate. I wonder how many lawyers looked at this and, through an abundance of caution, warned against it? I am in awe of Larry Ellison and his apparent willingness to speak the truth directly.
And I think that this sort of press release is interesting, right now, because of how many major technology, media and retail companies are finding themselves at loggerheads with others, often in complicated ways. The disputes among companies now is not simply driven by the normal competitive environment, but rather by a large chess game on multiple levels, with literally billions at stake. Change is in the air (and in the cash register with the iPad/iPhone juggernaut) and the field is open for those with the guts to make big plays and carry them off. Alliances are ripe for creation and long-standing teams are at risk of destruction. Billions will be made and lost in the next year or two, from Wall Street to Hollywood to Silicon Valley to unnamed locales yet to be identified.
All of this is a result of rapid technological change (primarily driven by mobile device advances, social media and faster, broader Internet media streaming) and by fundamental realignments of profit opportunities brought on by the great recession. When banks don’t make money, but instead lose money in the billions, and when real estate collapses around the world and when China becomes by far the fastest growing economy, big money begins to reevaluate its opportunities. Bets are being placed on a grand scale by investment decisions and even more importantly by the decisions being made by the biggest enterprises of the day. There are multiple land rushes going on at the same time.
Perhaps this is all good news for the long run economy.
(via Daring Fireball)
Laurie Anderson explains the (non-)solution to our problems: only an expert can do it. This is one song that addresses Oprah, Iraq, torture, and Wall Street financial crimes, while being kick-ass msuically. The version below is live, but the version on the album, Homeland, is even more terrific.
The studio version is available on iTunes for those who like her work.
The size of the middle class in America has been one of this country’s greatest strengths. It demonstrated that economic success was available for many, it provided political stability and minimized unwarranted attacks on the “rich”, and wealth and opportunity was widely shared.
Notice that everything I wrote in the prior paragraph was written in the past tense. Why? Because, the middle class isn’t what it used to be and in fact is suffering more and more all the time. Pointing this out isn’t class warfare, it is identify a source of anxiety among many in the is country. There is fear among the middle class for their own economic survival and for the future awaiting their children. And some are afraid of possible negative impacts on political stability in this country, including fears of (armed) class warfare.
The fact is that the middle class, since 1979, has shared in the benefits of increased productivity less and less, while the top executives and managers have taken an ever larger share of economic growth. Check out this chart from The New York Times. Here is part of Robert Reich’s accompanying article, which is worth a full read:
Look back over the last hundred years and you’ll see the pattern. During periods when the very rich took home a much smaller proportion of total income — as in the Great Prosperity between 1947 and 1977 — the nation as a whole grew faster and median wages surged. We created a virtuous cycle in which an ever growing middle class had the ability to consume more goods and services, which created more and better jobs, thereby stoking demand. The rising tide did in fact lift all boats.
During periods when the very rich took home a larger proportion — as between 1918 and 1933, and in the Great Regression from 1981 to the present day — growth slowed, median wages stagnated and we suffered giant downturns. It’s no mere coincidence that over the last century the top earners’ share of the nation’s total income peaked in 1928 and 2007 — the two years just preceding the biggest downturns.
Starting in the late 1970s, the middle class began to weaken. Although productivity continued to grow and the economy continued to expand, wages began flattening in the 1970s because new technologies — container ships, satellite communications, eventually computers and the Internet — started to undermine any American job that could be automated or done more cheaply abroad. The same technologies bestowed ever larger rewards on people who could use them to innovate and solve problems. Some were product entrepreneurs; a growing number were financial entrepreneurs. The pay of graduates of prestigious colleges and M.B.A. programs — the “talent” who reached the pinnacles of power in executive suites and on Wall Street — soared.
We have to restore some semblance of equal economic opportunity and equitable sharing of income in order to return America to greatness and balance.
It turns out the bankers continue to this day fabricating loan documents and using robo-signers in foreclosures, despite promise to improve their operations and bring foreclosures into legal compliance.
Several dozen documents reviewed by American Banker show that as recently as August some of the largest U.S. banks, including Bank of America Corp., Wells Fargo & Co., Ally Financial Inc., and OneWest Financial Inc., were essentially backdating paperwork necessary to support their right to foreclose.
Some of documents reviewed by American Banker included signatures by current bank employees claiming to represent lenders that no longer exist.
Many banks are missing the original papers from when they securitized the mortgages, in some cases as long ago as 2005 and 2006, according to plaintiffs’ lawyers. They and some industry members say the related mortgage assignments, showing transfers from one lender to another, should have been completed and filed with document custodians at the time of transfer.
“It’s one thing to not have the documents you’re supposed to have even though you told investors and the SEC you had them,” says Lynn E. Szymoniak, a plaintiff’s lawyer in West Palm Beach, Fla. “But they’re making up new documents.”
Why aren’t bankers going to jail over this, or at least being held in civil contempt for filing falsified documents in court?
(via The Big Picture)
Ben Stein is a pretty conservative guy and I disagree with many of his positions. However, he showed notable level-headedness yesterday in an op-ed piece about Rick Perry’s Federal Reserve statements last week.
Good for Stein. We need more people, in both parties, willing to speak the truth and demand rationality.
Well I hear the whistle blowin, it plays a happy tune
The conductor is calling “all aboard”, we’ll be leavin soon
With champagne and shrimp cocktails and that’s not all you’ll find
There’s a billion dollar bonus and no banker left behindNo banker, no banker, no banker could I find.
When the train pulled out next mornin’, no banker was left behind
– Ry Cooder, from the song No Banker Was Left Behind, recorded on his 2011 album Pull Up Some Dust & Sit Down. (via Quotation of the Day Mailing List)
.
And this time, he is not attacking Wall Street. No, his current piece of investigative journalism takes aim directly at the SEC. He details how for years the SEC has routinely destroyed records relating to certain preliminary investigations, called “matters under inquiry” or MUIs, if a formal investigation of the the matter is not opened.
This could well be a violation of Federal records law and, even worse, destroying such records means that investigators at a later time could not look to see if there was a pattern of certain behavior on institutions over time.
The article is worth a full read. But here is an excerpt:
The SEC’s inspector general is investigating the destroyed MUIs and plans to issue a report. [National Archives and Records Administration] is also seeking answers. “We’ve asked the SEC to look into the matter and we’re awaiting their response,” says Laurence Brewer, a records officer for NARA. For its part, the SEC is trying to explain away the illegality of its actions through a semantic trick. John Nester, the agency’s spokesman, acknowledges that “documents related to MUIs” have been destroyed. “I don’t have any reason to believe that it hasn’t always been the policy,” he says. But Nester suggests that such documents do not “meet the federal definition of a record,” and therefore don’t have to be preserved under federal law.
But even if SEC officials manage to dodge criminal charges, it won’t change what happened: The nation’s top financial police destroyed more than a decade’s worth of intelligence they had gathered on some of Wall Street’s most egregious offenders. “The SEC not keeping the MUIs – you can see why this would be bad,” says Markopolos, the fraud examiner famous for breaking the Madoff case. “The reason you would want to keep them is to build a pattern. That way, if you get five MUIs over a period of 20 years on something similar involving the same company, you should be able to connect five dots and say, ‘You know, I’ve had five MUIs – they’re probably doing something. Let’s go tear the place apart.’” Destroy the MUIs, and Wall Street banks can commit the exact same crime over and over, without anyone ever knowing…
It goes without saying that no ordinary law-enforcement agency would willingly destroy its own evidence. In fact, when it comes to garden-variety crooks, more and more police agencies are catching criminals with the aid of large and well-maintained databases. “Street-level law enforcement is increasingly data-driven,” says Bill Laufer, a criminology professor at the University of Pennsylvania. “For a host of reasons, though, we are starved for good data on both white-collar and corporate crime. So the idea that we would take the little data we do have and shred it, without a legal requirement to do so, calls for a very creative explanation.”
We’ll never know what the impact of those destroyed cases might have been; we’ll never know if those cases were closed for good reasons or bad. We’ll never know exactly who got away with what, because federal regulators have weighted down a huge sack of Wall Street’s dirty laundry and dumped it in a lake, never to be seen again.
Senator Charles Grassley is all over this.
From the LA Times:
Two years after the last recession ended, Wall Street is showing rising fear that the U.S. economy could be headed for a new downturn….Despite some relief that Washington could forge an eleventh-hour compromise on the debt ceiling, analysts said the prospect of even modest federal budget cuts in an anemic economy was spooking markets.
“Investors are looking past the budget situation and realizing this is an austerity plan,” said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. “We have an economy that’s struggling to stay afloat and we don’t have the ammunition to keep prodding it forward.”
(Mother Jones via Balloon Juice)
For extra credit, answer the following questions:
The correct answers are yes, yes, and, by far the most damaging of all, yes.
Unemployment in the US is now at 9.2%. If you include people who want to work, but are working only part time or have given up looking for now, the rate is 16.2%, or about 1 in 6 of all American adults.
Given these grim numbers, three years after the largest collapse of a financial bubble since the Great Depression, there should be calls for a sensible economic response. Such a response would include short-term tax reductions and Federal spending increases, married to long-term debt reduction. In times of economic collapse, while citizens and business need to retrench and rebuild their balance sheets, the Federal government should increase outlays over the short- and medum-term in order to offset, to the extent possible, the collapse of demand and spending in the private economy. Deficit reduction could be triggered when unemployment reaches a reasonable (but not perfect level), say, 7.5%.
The stimulus bill early in 2009 was enacted for this purpose and, while the GOP clamors that it “failed,” the fact is that it did preserve and create some jobs, and the current economy is better that would be without that action. If there was a failure, it was that the stimulus was too small.
Paul Krugman in January, 2009:
Even the C.B.O. says, however, that “economic output over the next two years will average 6.8 percent below its potential.” This translates into $2.1 trillion of lost production. “Our economy could fall $1 trillion short of its full capacity,” declared Mr. Obama on Thursday. Well, he was actually understating things.
To close a gap of more than $2 trillion — possibly a lot more, if the budget office projections turn out to be too optimistic — Mr. Obama offers a $775 billion plan. And that’s not enough.
Now, fiscal stimulus can sometimes have a “multiplier” effect: In addition to the direct effects of, say, investment in infrastructure on demand, there can be a further indirect effect as higher incomes lead to higher consumer spending. Standard estimates suggest that a dollar of public spending raises G.D.P. by around $1.50.
But only about 60 percent of the Obama plan consists of public spending. The rest consists of tax cuts — and many economists are skeptical about how much these tax cuts, especially the tax breaks for business, will actually do to boost spending. (A number of Senate Democrats apparently share these doubts.) Howard Gleckman of the nonpartisan Tax Policy Center summed it up in the title of a recent blog posting: “lots of buck, not much bang.”
The bottom line is that the Obama plan is unlikely to close more than half of the looming output gap, and could easily end up doing less than a third of the job.
The approach outlined above is Economics 101 and the basic teaching of John Maynard Keynes. [As a side note, it is unfortunate that the overwhelming expenditure of Federal dollars at the time of the collapse went Wall Street and other financial entities who themselves were the fundamental source of the bubble, rather than to truly stimulative spending.]
But instead of calling for increased Federal spending over the short term, the GOP is demanding immediate, substantial cuts in Federal expenditures. And the President is calling for tax increases, along with expenditure cuts. Taken together both the GOP and President are advocating a powerful austerity program, the worst policy approach to address a shortfall in aggregate demand, leading to underperformance of the economy. Both approaches powerfully reduce demand.
There is one reasonable way out of the morass. Laura Tyson:
There is a logical way out of this policy conundrum: pair temporary fiscal measures targeted at job creation during the next few years with a multiyear, multitrillion-dollar deficit reduction plan that would begin to take effect once the economy is closer to full employment. Pass both now as a package. Current signals from Washington indicate that this way out will be not taken: instead, partisanship and politics will trump logic and premature fiscal contraction will undermine the already anaemic recovery. Even worse, a political stalemate over the debt limit could precipitate a financial crisis…
More from Krugman:
Updated: And lest you believe that fiscal stimulus will cause a spike in inflation and interest rates, take a look at this chart from the Federal Reserve Bank of St. Louis:
As you can see despite the large deficits from 2007 on, and constant harangues from inflation hawks about the purported danger of such deficits, while unemployment remains high, there is no sign whatsoever of surging interest rates (reflecting a lack of inflation). Of course, this should not be surprising given the huge underutilization of our productive resources reflected in the unemployment numbers. Inflation is cause by too many dollars chasing too few assets. Our country is currently brimming with unused and underutilized assets. The low interest rates shown also reflect a continuing willingness on the part of international investors and sovereign funds to purchase our Treasury obligations. Simply stated, despite the deficits and Federal debt, the rest of the world continues to view the US as a safe haven. (via Paul Krugman)
And there is this from David Leonhardt:
Financial crises have long hangovers, and this one is no exception. Home sales and car sales remain depressed, nowhere near their earlier peaks, even though the population has continued growing. Europe still has the potential to upset global financial markets. If Congress doesn’t act on the debt ceiling soon, so does the United States.
In all kinds of ways — consumer demand, the federal deficit, even the weather — the medium-term future is highly uncertain. But this uncertainty, while the main problem, is not the only problem. We are also committing an unforced economic error. We’re cutting government at the same time that the private sector is cutting.
It is the classic mistake to make after a financial crisis. Hoover and even Roosevelt made a version of it in the 1930s. The Japanese made a version of it in the 1990s. Now we are making it.
If so, be very, very afraid.
The check had Njoku’s name and address on it and was issued by JP Morgan Chase. But the Chase Customer Banker who handles large checks at the Auburn branch was immediately suspicious.
“I was embarrassed,” Njoku said. “She asked me what I did for a living. Asked me where I got the check from, looked me up and down—like ‘you just bought a house in Auburn, really?’ She didn’t believe that,” he said.
The Customer Banker said the check looked fake, so she took it, along with Njoku’s driver license and credit card, and called Bank Support.
After waiting for about 15 minutes, Njoku said he got impatient and told Chase he was leaving to do an important errand. By the time he got back, the bank was closed. Njoku said he called customer service and asked them what he should do. He says they told him to go back to the bank the next day to get his money.
But when Njoku arrived, it wasn’t the money that was waiting for him.
“They just threw me in jail; they called the police and said this guy has a fraudulent check,” Njoku said.
Auburn police arrested him for forgery – a felony crime.
“I was like – you’re making a mistake, you’re making a mistake, don’t take me to jail, I got work tomorrow. I can’t afford to miss work,” he said.
Njoku was taken to jail on June 24, 2010, which was a Thursday. The next day, Chase Special Investigations, realized it was a mistake. The check was legitimate. The Investigator called Auburn Police and left a message with the detective handling the case, but it was her day off. So Njoku stayed in jail for the entire weekend. Finally, on Monday, he was released.
President Obama, speaking at the LGBT Gala in New York last week, again refused to endorse same-sex marriage. Such refusal came as New York, lead by Andrew M. Cuomo, was legalizing same sex marriage in the state. Why Obama cannot bring himself to openly support a freedom that the majority of citizens now supports is beyond confusing. His failure to support same-sex marriage is a betrayal of his promises of equal rights for all.
This is yet another in a long string of disappointments for those of us who voted for him, expecting that he would alter the policies of the Bush administration. We are still in Iraq and Afghanistan. Guantanamo remains open. The DOJ has refused to investigate credible claims that we tortured prisoners in the so-called war on terror using the cover of wrong-headed opinions from the Office of Legal Counsel. Our civil liberties continue to be eroded by the extension of the Patriot Act and new spying tools claimed by the FBI. We are fighting a third war in Libya, without Congressional approval, despite Administration claims that we are not involved in hostilities. The big banks have been bailed out but not homeowners who owe billions to the banks as a result of abusive loan tactics. No officials of the banks have been convicted for wrongdoing.
Change? Hope? Nope. Not from Obama.
This is too, too good.
