12 April 2011

Gangsters of New York: The Real Housewives of Wall Street and Welfare for the Richest

This is tip of the iceberg stuff that might be defended by some as just the sort of thing that happens incidentally when one manages a large program under duress. So sorry. Nothing to see here, so move along.

That is like the defense being offered in the Raj Rajaratnam insider trading trial today that the defendant, Mr. Rajaratnam, is SO smart that he really didn't need all that insider information that people like Rajat Gupta had been giving him. I doubt they will get an acquittal giving all the tape recordings that they have, but they seem to be playing for a settlement, a wristslap and a fine and disgorgement of profits. That is the traditional outcome when some medium sized macher falls into the occasional government investigation of financial corruption.

The point of showing this here is to highlight the need for financial reform, transparency in government and especially at the Fed which handles huge sums of money and disburses them without effective oversight.

What is especially repugnant is not so much the epidemic of graft and corruption that has crippled the country and infested the regulators and the government. What is especially repugnant is the well financed campaign to go after the victims, the taxpayers and defrauded investors, and to force them to bear the brunt of the pain caused by that graft and corruption, by playing on the meanest and lowest impulses in the people.

And this after providing even more tax cuts and subsidies so these looters and white collar criminals could keep even more of their ill gotten gains. Now that takes some arrogant nerve, and some certainty in the service of your bought and paid for servants in the government, and the stupidity of the average person.

Iceland's voters have had the courage to say 'no.' It remains to be be seen what Ireland will do.

But one has to wonder how far this all goes, and why there was such a knee jerk impulse in so many places to bail out the banks and the insiders, and take the broader public to its knees through a calculated campaign of 'austerity' that plays on the impulse to make someone pay, preferably someone who is weak, and unable to effectively fight back, some outsider or scapegoat, some other.

And why do these disclosures keep showing up on the blogosphere and in relatively marginal publications while the mainstream media maintains its silence? I have been waiting for this story to surface, but I did not expect it to come from the sportswriter at Rolling Stone.

There will be some solemn mumblings on the network news, and then some Wall Street nightcrawler will be brought on the Sunday morning discussion programs to explain why these things are an anomaly, an unfortunate isolated incident, and how we have to stay on the bigger picture, handing out pain for everyone but those who caused the problem, and continue to cripple the real economy by distorting it through graft and corruption and the subornation of perjury and abuses of power.

And Dodd-Frank made the Fed the major regulatory body for the financial sector, and the bought and paid servants of big business continue to try and strangle all other competing regulators like Elizabeth Warren and the Consumer Protection Agency in the cradle.

Perhaps reform is too difficult, and the issues too complex, for anything to be done but surrender the Constitution to the monied interests and the oligarchs. They seem so powerful, and so clever, and after all, they hold your credit cards, and iPods, and favorite television shows hostage.

I would like to believe, even now, that all the people throughout history, ordinary men and women, who have stood for liberty, sometimes against fearsome odds, and given their pain and even their lives, the last full measure of their devotion, for the idea of a free America, shall not have done so in vain, with their memory shamefully dishonored by their children.  That at some point the people will rouse themselves from their slumber, slow to act, but deliberate and unstoppable once they are stirred.  And then the real work of reform and rebuilding can begin.

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustained recovery.

Rolling Stone
The Real Housewives of Wall Street
By Matt Taibbi
April 12, 2011 9:55 AM ET

America has two national budgets, one official, one unofficial. The official budget is public record and hotly debated: Money comes in as taxes and goes out as jet fighters, DEA agents, wheat subsidies and Medicare, plus pensions and bennies for that great untamed socialist menace called a unionized public-sector workforce that Republicans are always complaining about. According to popular legend, we're broke and in so much debt that 40 years from now our granddaughters will still be hooking on weekends to pay the medical bills of this year's retirees from the IRS, the SEC and the Department of Energy.

Why Isn't Wall Street in Jail?

Most Americans know about that budget. What they don't know is that there is another budget of roughly equal heft, traditionally maintained in complete secrecy. After the financial crash of 2008, it grew to monstrous dimensions, as the government attempted to unfreeze the credit markets by handing out trillions to banks and hedge funds. And thanks to a whole galaxy of obscure, acronym-laden bailout programs, it eventually rivaled the "official" budget in size — a huge roaring river of cash flowing out of the Federal Reserve to destinations neither chosen by the president nor reviewed by Congress, but instead handed out by fiat by unelected Fed officials using a seemingly nonsensical and apparently unknowable methodology...

Read the rest of this story here.

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