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Wall Street’s Crimes and the Government’s Complicity

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You must read this truly disturbing article by Matt Taibbi in the recent issue of Rolling Stone.  It describes how Wall Street bankers have stolen billions of dollars with impunity, getting away with it because the lawyers from the SEC and the Justice Department who are supposed to be investigating these crimes are former executives of the very companies they are charged with scrutinizing.

The public gets screwed, fucked over on an ongoing basis by the big investment banks and by government "regulators" who look the other way when they find wrongdoing. 

Read these first few paragraphs of Taibbi's article. Then do yourself the favor of reading the rest. 

Over drinks at a bar on a dreary, snowy night in Washington this past month, a former Senate investigator laughed as he polished off his beer.

"Everything's fucked up, and nobody goes to jail," he said. "That's your whole story right there. Hell, you don't even have to write the rest of it. Just write that."

I put down my notebook. "Just that?"

"That's right," he said, signaling to the waitress for the check. "Everything's fucked up, and nobody goes to jail. You can end the piece right there."

Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world's wealth — and nobody went to jail. Nobody, that is, except Bernie Madoff, a flamboyant and pathological celebrity con artist, whose victims happened to be other rich and famous people.

The rest of them, all of them, got off. Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted. Their names by now are familiar to even the most casual Middle American news consumer: companies like AIG, Goldman Sachs, Lehman Brothers, JP Morgan Chase, Bank of America and Morgan Stanley. Most of these firms were directly involved in elaborate fraud and theft. Lehman Brothers hid billions in loans from its investors. Bank of America lied about billions in bonuses. Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling. What's more, many of these companies had corporate chieftains whose actions cost investors billions — from AIG derivatives chief Joe Cassano, who assured investors they would not lose even "one dollar" just months before his unit imploded, to the $263 million in compensation that former Lehman chief Dick "The Gorilla" Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars.

See here for the rest of Taibbi's captivating piece in Rolling Stone

 


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Volcker Over Summers and Geithner

Is it just an eclipse or a more enduring realignment of celestial objects?  Hard to know, but I took heart from the news late last week that President Obama had finally paid more heed to former Fed chair Paul Volcker’s advice than to that of the Two Wall-Street Toadies, Larry Summers and Tim Geithner.  Shoving aside Summers and Geithner, who from the get-go have been overly protective of the big banks, Obama agreed to follow Volcker’s advice to limit the size of the biggest banks, curtail their risk-taking activities, and prohibit commercial banks from proprietary trading of financial securities.  It’s about time. 

Whether it was Scott Brown’s victory on Tuesday or some other set of prods, Obama finally moved off the dime on this measure that’s been under consideration for a while and threw his weight in with Volcker, Vice-President Biden, David Axelrod, and others who had long been pushing for tougher crackdowns on the banks.  This is very good.  I would have liked to see more here, such as tight limits on compensation.  But when it comes to taking on the big banks, possibly the worst entities in our sordid economy, Obama will never be populist enough for me.

And a delightful little sidelight of this story is that Larry Summers has finally had his arrogant sails trimmed again. (When I say “again,” I’m thinking of Harvard having fired his smug, imperious ass.)  In the future, let’s see a lot more of Christina Romer, chair of the Council of Economic Advisers, and a lot less of Summers. 

(One of the problems with being too busy at times to blog is that the big news stories just keep piling up and one keeps falling behind more.  I’ve decided that mini-reactions are better than none.)


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Nail the Big Banks to the Wall

I hate the big banks and the fat-cat bankers.  All of them should be taken out and stripped, flogged, and fed to sharks.  They are worthless slime.  At least, tax their sorry, no-good asses into oblivion. 

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