Banksters Bounce Back

Remember all the talk of a V-shaped recovery around in the summer of 2010? Some amongst us have had it. Spoiler alert - it wasn't the US economy at large:

The idiot talking heads on Fox and CNN and the other assholes that sneer at Occupy Wall Street are being purposefully obtuse. There is no other way to justify their stupidity other than willful ignorance. That and the fact that they have zero empathy whatsoever and are largely insulated from what the rest of the economy is experiencing. The banksters crashed the economy, they were bailed out with taxpayer money with no strings attached, they roared back to profitability and paid themselves billions of bonuses (some of whom continued to do so while still paying back TARP funds), and they have paid no price for their crimes whatsoever. But somehow all of this makes OWS a bunch of ill informed dirty hippies. 

You tell me who is ill informed and misguided - people finally waking up to the way in which Wall Street has ruined the US economy while paying no price and simultaneously maintaining its stranglehold on the halls of power, or the fuckwits in the media sneering and acting like nothing happened.

Or We Could Just Ban It

Once upon a time, the modern derivative/future/forward contract was born, and incredibly useful financial instrument that helps anyone from ordinary farmers protecting themselves against the risk of falling prices at harvest, to airline giants seeking to limit their exposure to ever-rising fuel prices. The forward was a prudent tool, whereby two parties entered into an financial exchange - one party essentially betting that the price of the commodity would rise, while the counterparty expecting that same price to fall. Historically, these contracts actually involved the physical transfer and delivery of the underlying asset. So when that farmer bought a forward contract to sell bushels of wheat at some specified price, the counterparty would actually buy those bushels of wheat from the farmer at the specified date, at the specified price.

But like everything in American and global finance, this has been turned into a giant fucking casino whereby it primarily serves the purpose of funneling around huge sums of money in search of short-term profits while doing very little to actually serve its original purpose. The farmers and Southwest Airlines of the world now make up a very small percentage of these forwards. This makes some people enormously wealthy, while passing on the costs of rampant speculation to the rest of us in the form of rising commodity prices, especially oil.

So here's an idea - how about an outright ban on speculative hedging? It's not like there aren't a million other ways for banksters and "job creators" to slosh around their casino funds. There is some work being done on this now both by the Dodd-Frank act and Sen. Ben Nelson, of all people, but you can guarantee that it won't go far enough or even make it out of the gate with the kind of money this makes. When up to 25% of the cost of a barrel of oil is estimated to be due to this excessive speculation, you would think that it would be a common sense policy to rein it in for the sake of the American economy. Rising oil prices are overwhelmingly detrimental to our consumption based economy. But it's big business for the banksters, so don't expect to see any common sense policy any time soon.

Occupy Wall Street

More of this please.

There is a shortage of true populist protests and activism over what this country has endured at the hands of Wall Street and the way in which government has aided and abetted the banksters in shielding them from any accountability. Obama famously told top bankster CEOs that "I'm the only one standing in between you and the pitchforks." Well, we need to see more pitchforks. Sure people are pissed, but really only in rhetoric and not in action. 

And The Clean Water Act Is Killing Exxon Mobil

It's not exactly a stretch to note ad nauseum that Michelle Bachmann is big dumb idiot, but in cases like these, it's more important to remember that a large number of people (almost half of the country if you go by party split in presidential elections) accept her statements at face value and in some cases, actually believe them.

Freedom of Coercing Small Children to Work for Shit Wages

Media Matters is on a roll lately, or maybe it's just the stupid people that feed them their material. At any rate, since the Republicans and Tea Baggers are such huge fans of third world policies and third world standards of living, I for one welcome them to just shut the fuck up and collectively move themselves to a true third world nation (remember, we're only aspiring to be one at this point) and see how much they love the awesomeness and freedom and stuff.

And for all you "But Fox is fair and balanced!" types, I think it's just adorable how they are barnstorming  wall-to-wall coverage of the exact same agenda that Republicans in Congress settled on coming out of the August recess.

Thanks Captain Hindsight!

South Park:

Coon 2: Hindsight
Get More: SOUTH
PARKEric Cartman,more...

The Washington Post:

A 16-month federal investigation has concluded that BP’s efforts to limit costs on its mile-deep Macondo well in the Gulf of Mexico contributed to the blowout last year that killed 11 workers, sank the Deepwater Horizon drilling rig and created the largest oil spill in U.S. history.
The long-awaited report by the Bureau of Ocean Energy Management, Regulation and Enforcement catalogues dozens of mistakes, misapprehensions, risky decisions and failures of communication that led to the blowout and the 87-day spill that spewed nearly 5 million barrels of oil into the gulf.

Right. I understand a formal investigation was necessary, but it wasn't like these things weren't blatantly obvious on the first day after the spill.

Fox's Idea of Onerous/Job Killing Regulations

Maybe we would have more jobs only if corporations had the freedom to discriminate against people for race, color, religion, sex, national origin, disabilities, and age. THANKS A LOT OBAMA!

Goddamn job killing regulations! We gotta get the fedrul gubmint outta the way so the private market can overcome this socialist Kenyan asshole's tyranny!

I can't wrap my head around the fact that people actually believe this shit.

Learning From Our Mistakes

Nah just kidding, we wouldn't ever do that here in the good ol' US of A:

Standard & Poor’s is giving a higher rating to securities backed by subprime home loans, the same type of investments that led to the worst financial crisis since the Great Depression, than it assigns the U.S. government.
S&P is poised to provide AAA grades to 59 percent of Springleaf Mortgage Loan Trust 2011-1, a set of bonds tied to $497 million lent to homeowners with below-average credit scores and almost no equity in their properties. New York-based S&P stripped the U.S. of its top rank on Aug. 5, saying Washington politics were making the country less creditworthy.
[...]
Bank of America Corp. and Royal Bank of Scotland Group Plc sold $242.7 million of the Springleaf mortgage bonds today that are set to get S&P’s top ratings, according to people familiar with the matter, who declined to be identified because the terms haven’t been set.
[...]
The underlying mortgages represent 96.6 percent of the current value of the homes, the issuer estimates. Borrowers may have an incentive to walk away from the debt and leave investors with sizable foreclosure losses should the economy slow further and house prices continue to decline.
The securities were created by Springleaf Finance Corp., a lender to borrowers with risky credit that’s majority owned by private-equity firm Fortress Investment Group LLC and partly by former parent American International Group Inc., according to the people familiar with the offering.
[...]
Underlying loans for the bonds are on average five years old, according to a document sent to investors. Credit scores of the borrowers, none of whom has missed a payment over the past two years, average 651. The U.S. median is 711, according to Fair Isaac Corp., which creates the formulas behind FICO scores.
[...]
Of the $12.8 billion of loans made by the firm over the past decade that are still outstanding, 11.5 percent are 60 days or more delinquent, the term sheet shows. That’s a better track record than rivals, with the rate on subprime mortgages packaged into bonds averaging almost 37 percent, Bloomberg data show.
Ed Sweeney, an S&P spokesman, declined to comment on the Springleaf transaction. “We believe our ultimate success will be driven by the value investors derive from our ratings and analysis,” he said.

You can't make this shit up. Three years ago, the economy was brought to the brink of total meltdown (if you want to argue that the current state is anything dissimilar) in large part because Wall Street turned itself into a giant casino, pimping subprime loans to fuel their cocaine-addled binge on securitizing mortgage backed securities. Their accomplices were the rating agencies, who were (and as the article shows, still are) paid by the banks to issue ratings on these investments in a not-at-all conflict of interest riddled transaction. S&P's parent company, McGraw-Hill, depends on these payments for "27% of its $6.19 billion of 2010 revenues." S&P needs the banksters' business, the banksters need S&P to slap AAA ratings on their shit sandwich securities so they can make giant rips selling these scams to unsuspecting investors as solid investments. 

I would go on to discuss how this scenario from the financial crisis differs from current practice, but as the article shows, there is very little daylight between the two. Oh, well Dodd-Frank "tries" to make the banks and ratings agencies less reliant on one another, but an army of bankster lobbyists is presently ensuring that never happens since the law was weak at best and most of its rules have yet to be written or enacted. 

So there you have it. To summarize: the ratings agencies and banksters are still up to the same shit that fueled the global financial crisis, there have been no indictments of high-level banksters to date despite the widespread evidence of massive fraud and consumer and investor abuse, and the Obama administration presently wants to settle with the banksters and shield them from all future claims, litigation, and liability. 

I think I've ended a number of Wall Street related posts before with a similar tag line, but it bears repeating ad nauseum. The criminals from the biggest organized crime ring of the last 20 years savaged the global economy, caused trillions in losses  to households and investors alike, and they walked away scot free. And now they're back to those very same corrupt practices. If you ever needed a prime example of how justice is selectively applied in this country, look no further.

The Fragile Enterprise System

Hang on, let me roll my eyes some more:

The names have become synonymous with corporate wrongdoing — and forceful prosecution: Not just Enron, but also WorldCom, Tyco, Adelphia, Rite Aid and ImClone. In the early part of the last decade, senior executives at all these companies were convicted and imprisoned.

But by 2005, a debate was growing over aggressive prosecutions, as some business leaders had been criticizing the approach as perhaps too zealous.

That May, Justice Department officials met ahead of a session with a cross-agency group called the Corporate Fraud Task Force. It was weeks after Justice Department lawyers had presented to the Supreme Court their case against Arthur Andersen, which was seeking — successfully, it would turn out — to overturn its criminal fraud conviction in a prominent case.

In the meeting, the deputy attorney general at the time, James B. Comey, posed questions that surprised some attendees, according to two people there who asked to remain anonymous because they were not supposed to discuss private meetings.

Was American business being hurt by the Justice Department’s investigations?, Mr. Comey asked, according to these two people, who said they thought the message had come from others. He cautioned colleagues to be responsible. “It was a total retrenchment,” one of the people said. “It was like we were going backwards.”

Read the whole thing. It details how our lazy third world joke of a regulatory structure has granted us the awesome reality in which we will probably never see high-level prosecutions from the financial crisis, because that might be too "zealous" or "hurt American business."

But hey, we may get like a million bucks or two, and then we can all pat ourselves on the back for a job well done and that the banksters feel really, really sorry for what they did. And it'll never happen again! 

I love the smell of the free market in the morning.

It's the Banksters' World

We are just living in it.

Then there are the more subtle subsidies and protections. Take regulatory forbearance. In 2009, regulators gave banks a gift on their commercial real estate loans. They allowed banks to look primarily at whether the loans were current, rather than at whether the underlying value of the property had declined. Of course, given the commercial real estate collapse, this had the effect of protecting banks from write-downs.

Banks and regulators say this is justified because an underwater borrower isn’t necessarily going to default. True, but it’s hard to see how those borrowers — and therefore the banks — are better off for the crash in their collateral.

[...]

Another way taxpayers coddle the biggest banks is by implicitly guaranteeing their derivatives business. JPMorgan, widely viewed as safe and well managed, is a huge beneficiary here. It had $79 billion worth of derivatives on its books in the first quarter. Even if it’s hedged, prudent and has thin margins, it’s still going to throw off a nice chunk of profits.

Institutions on the other side of these trades wouldn’t enter contracts without believing that they have some underlying protection — protection that comes from the government.

“No sensible person would put a nickel on deposit in the normal course given the enormity and opacity of the derivatives portfolios,” said Amar Bhidé, a former trader and business professor at the Fletcher School. “It’s entirely a function of deposit insurance and the implicit guarantee that the JPMorgan counterparties have.”

The government’s actions in the financial crisis only cemented that certainty. Counterparties and investors that were previously not guaranteed, like holders of money market funds, were protected at every turn.

This bailout never ended. “In effect, we nationalized the biggest banks years ago,” Mr. Allison said. “We implicitly guaranteed them. The taxpayers are still the ultimate owners of the risk in those banks — they just don’t get equity returns for that ownership.”

We here in murika believe in the free market so much that we shield the banksters from ever being exposed to its ills. 

(Via Atrios)

Bankster Justice?

I got excited when I read this Greenwald headline. I should have known better. There will be about as many criminal prosecutions from the financial crisis as there have been from the explosion of the national security state and all of the atrocities associated with it.

Which is to say - zero.

Freedom to Poison Yourself on the Water of the Free Market

John Cole offers the following on the GOP's increasingly strange hatred of EPA:

As chance would have it, today in my post office box (another government service that I absolutely cherish) there was a piece of mail from the local public service department, where I get my water. It was an annual EPA required report, detailing in clear English, where my water comes from. Half of it is treated surface water from the Ohio River, the rest is from deep wells along the banks of the river. The report outlined backup plans should the Ohio become contaminated (more and more likely as Pennsylvania allows drillers to simply dump whatever the fuck they want in the water), and then went on and provided the annual data on the level of contaminants in my drinking water.

I like this. I think it is valuable for a number of reasons, beyond simply keeping me informed. It also verifies that the folks who provide me my water are keeping an eye on things, and providing a safe, clean product that I and my neighbors can consume. It’s the very model of good government. This is why we band together to form government- to do things that would be impossible to do otherwise.

To Republicans, though, this is an evil thing. And this is why I get so livid at the assholes in the media who cover the Republicans and give us the he said/she said version of things. If Republicans had their way, you and your kids would likely be drinking contaminated water and no one would be around to tell you about it. That’s the facts in the case, not “Bachmann claims the EPA kills jobs, while Democrats disagree.” This is why our media is failing us. When Republicans want to end the EPA, it’s not some esoteric debate about big government Democrats and small government conservatives. It’s not he said/she said. It’s “they don’t want you to know about all the shit GE dumped in the Hudson, and furthermore, they don’t want GE to clean it up, either, and as a matter of fact, GE should not be regulated in any way shape or form and should be free to dump shit in your water” versus “we need some sensible regulations to limit the harm corporations do to the environment so we can protect the population and make sure we have clean drinking water.”

I honestly don't understand this either, or how the Republican base has become so unhinged from reality that they actually go along with this shit. It's really not a partisan issue that we ought to have some basic form of government accountability that ensures, at a minimum, that the water we drink and the air we breathe is, you know, conducive to sustaining human life.

Anniversary of an Uninteresting Event

It never happened, you know, because mutant microbes ate all the oil.

Carcinogenic Water - It's a Gas

Natural gas, frequently hailed as a cleaner, safer alternative to our dependence on oil, is not without its own litany of issues:

Millions of gallons of potentially hazardous chemicals and known carcinogens were injected into wells by leading oil and gas service companies from 2005-2009, a report by three House Democrats said Saturday.

The report said 29 of the chemicals injected were known-or-suspected human carcinogens. They either were regulated under the Safe Drinking Water Act as risks to human health or listed as hazardous air pollutants under the Clean Air Act.

Methanol was the most widely used chemical. The substance is a hazardous air pollutant and is on the candidate list for potential regulation under the Safe Drinking Water Act.

And this is by far my favorite part about the chemicals used in this process:

The report said many chemical components were listed as "proprietary" or "trade secret."

We have Bush/Cheney to thank for that btw. So we have known carcinogens being introduced into sources of drinking water, and energy companies deem these same chemical mixtures to be proprietary. A trade secret can be defined as information which, if released to the general public or obtained by a competitor, could cause the owner of that information significant, adverse economic harm. In other words, energy companies derive economic benefits and  profits from their continued ability to inject enormous volumes of carcinogenic and otherwise unknown fluids and chemicals into our water tables.

The New York Times had a good story on fracking a few months back, which revealed that the effects on groundwater are not limited to carcinogens, but also radioactivity. That and  public wastewater treatment plants are ill-equipped to properly process these substances, so massive amounts of toxins are being poured into our lakes and rivers:

In Pennsylvania, these treatment plants discharged waste into some of the state’s major river basins. Greater amounts of the wastewater went to the Monongahela River, which provides drinking water to more than 800,000 people in the western part of the state, including Pittsburgh, and to the Susquehanna River, which feeds into Chesapeake Bay and provides drinking water to more than six million people, including some in Harrisburg and Baltimore.

Lower amounts have been discharged into the Delaware River, which provides drinking water for more than 15 million people in Philadelphia and eastern Pennsylvania.

Pennsylvania is really the epicenter for all of this, and its new wingnut governor is making sure that the industry is regulated only by the invisible hand:

Gas producers are generally left to police themselves when it comes to spills. In Pennsylvania, regulators do not perform unannounced inspections to check for signs of spills. Gas producers report their own spills, write their own spill response plans and lead their own cleanup efforts.

A review of response plans for drilling projects at four Pennsylvania sites where there have been accidents in the past year found that these state-approved plans often appear to be in violation of the law.

At one well site where several spills occurred within a week, including one that flowed into a creek, the well’s operator filed a revised spill plan saying there was little chance that waste would ever enter a waterway.

Sound familiar?

BP PLC's 582-page regional spill plan for the Gulf, and its 52-page, site-specific plan for the Deepwater Horizon rig are riddled with omissions and glaring errors, according to an Associated Press analysis that details how BP officials have pretty much been making it up as they go along. The lengthy plans approved by the federal government last year before BP drilled its ill-fated well vastly understate the dangers posed by an uncontrolled leak and vastly overstate the company's preparedness to deal with one.

In the spill scenarios detailed in the documents, fish, marine mammals and birds escape serious harm; beaches remain pristine; water quality is only a temporary problem. And those are the projections for a leak about 10 times worse than what has been calculated for the ongoing disaster.

There are other wildly false assumptions in the documents. BP's proposed method to calculate spill volume judging by the darkness of the oil sheen is way off. The internationally accepted formula would produce estimates 100 times higher.

More specifically, Gov. Corbett's early decisions have ensured that there will essentially be no regulation of the natural gas industry whatsoever:

Gov. Tom Corbett wants to hand authority over some of the state’s most critical environmental decisions to C. Alan Walker, a Pennsylvania energy executive with his own track record of running up against the state’s environmental regulations.

Walker, who has contributed $184,000 to Corbett’s campaign efforts since 2004, is CEO and owner of Bradford Energy Company and Bradford Coal, which was once among Pennsylvania’s largest coal mining companies. He also owns or has an interest in 12 other companies, including a trucking business and a central Pennsylvania oil and gas company.

Walker was Corbett’s first appointee—he chose him to lead the Department of Community and Economic Development in December, before taking office. Now, as Corbett stakes much of the state’s economy on Marcellus Shale gas drilling, a paragraph tucked into the 1,184-page budget gives Walker unprecedented authority to “expedite any permit or action pending in any agency where the creation of jobs may be impacted.” That includes, presumably, coal, oil, gas and trucking.

And regulators must now obtain approval from Corbett political appointees before they are actually permitted to do their jobs:

Oil and gas inspectors policing Marcellus Shale development in Pennsylvania will no longer be able to issue violations to the drilling companies they regulate without first getting the approval of top officials.

That’s according to a directive laid out in a series of emails received by the Department of Environmental Protection staff last week and leaked to ProPublica. The emails say the new edict applies only to enforcement actions related to Marcellus Shale drilling and that failure to seek prior approval “will not be acceptable.”

The memos require that each of the hundreds of enforcement actions taken routinely against oil and gas operators in Pennsylvania each month now be approved by the department’s executive deputy secretary, John Hines. The memos are raising concerns that the state’s environmental inspectors can no longer act independently and that regulations could be overridden by the political whims of the state’s new governor, Tom Corbett.

When I read about stories like these, it makes me hopeful that people will eventually realize and remember what colossal assholes Republicans are once they're in power. Certainly voters in Wisconsin, Ohio, and Florida are starting to get that memo. There's literally no depths to which they won't sink. With the modern Republican party, we are no longer talking about an opposition movement that seeks a more "common sense" version of Democratic policies, no matter how hard they try to market their ideals as such. This current group has moved the party so far to the extreme right that many of their policies have the effect of dismantling swaths of society. They want to codify pervasive income inequality as a central tenet of American society, kick the poor and elderly off of Medicaid and Medicare, prohibit your right to unionize, deny the existence of and do nothing about climate change, dictate to women what they can and can not do with their bodies, substitute religion for science, and turn a blind eye to private enterprise and allow them to do whatever they want because the resultant free market trickle down will always outweigh the societal or environmental cost, even if it means poisoning your water and destroying our oceans. And they are one of our two national political parties.

Realizing this is the start. Remembering it at the ballot box is what really matters, but I am hopeful that the current bunch of teatards and wingnut governors and state legislatures will actually prove to be a Democratic net benefit going into 2012.

I Think There is a Word to Define This

What do they call it again when you sell a product to an individual or institution knowing full well that you are misrepresenting the product's quality, features, or safety?

Rather than assess risk accurately, two major rating agencies sold their top seals of approval to their investment bank clients, blessing products that the agencies themselves knew to be undeserving, the Senate Permanent Subcommittee on Investigations concluded in a report released Wednesday. By repeatedly debasing their standards, these agencies helped banks sell shoddy securities to unsuspecting investors, inflating the value of assets that turned out to be worth far less, the report has found.

The senate panel, led by Carl Levin (D-Mich.) and Tom Coburn (R-Okla.), levels a two-part charge against the rating agencies: Not only did these companies help inflate a dangerous bubble, the report says, but they also bear responsibility for popping it, as their abrupt downgrades of mortgage-linked securities in 2007 helped set off the panic that caused markets around the world to collapse.

These downgrades, the report says, were the "most immediate trigger" to the financial crisis, forcing a parasitic financial apparatus of lenders, regulators, rating agencies and investment banks to reckon with the weak economic underpinnings of its profits. The basic outline of this catastrophe has been widely reported, but Wednesday's release presents in vivid detail the roles of the key players, including those of Moody's Investors Service and Standard & Poor's Financial Services, the two leading rating agencies.

Like the banks they served, these two rating agencies focused on short-term profits above the integrity and long-term health of their institutions, a trove of internal documents uncovered by the Senate panel show.

Oh right, I remember now - I think that is commonly referred to as fraud, or at least that's what it is referred to in circles outside of Wall Street and DC. It's more or less the cost of doing business for banksters, as is noted in the NY Times this week as they again highlight that not one criminal prosecution of prominent financial executives has taken place since the financial crisis began. But you know, prosecuting white collar crime is "hard," and the FBI has terrorism to worry about and stuff. It's really a matter of priorities; there has not been any significant prosecution of these individuals because the Justice Department does not want to prosecute and does not give a shit sufficiently enough to allocate the necessary resources. One witnessed a very different situation following the savings & loan crisis of the 1980s:

But several years after the financial crisis, which was caused in large part by reckless lending and excessive risk taking by major financial institutions, no senior executives have been charged or imprisoned, and a collective government effort has not emerged. This stands in stark contrast to the failure of many savings and loan institutions in the late 1980s. In the wake of that debacle, special government task forces referred 1,100 cases to prosecutors, resulting in more than 800 bank officials going to jail. Among the best-known: Charles H. Keating Jr., of Lincoln Savings and Loan in Arizona, and David Paul, of Centrust Bank in Florida.

[...]

As the crisis was starting to deepen in the spring of 2008, the Federal Bureau of Investigation scaled back a plan to assign more field agents to investigate mortgage fraud. That summer, the Justice Department also rejected calls to create a task force devoted to mortgage-related investigations, leaving these complex cases understaffed and poorly funded, and only much later established a more general financial crimes task force.

It's just not a priority, and that won't be changing any time soon. This is the rule, not the exception. Glenn Greenwald expertly pointed out yesterday this flawed  and pervasive double standard in the American justice system, one that extends well beyond the banksters. And let's not forget that while there have been no criminal prosecutions, there have similarly been no civil cases or sanctions either. The banksters and all their friends on Wall Street made billions fucking over the country and the global economy. They continue to lavish even larger bonuses and compensation upon themselves. And all of this is going on while millions are foreclosed upon or struggle to keep their homes, and our government subjects them to bullshit lobbyist/bankster-written programs (like HAMP) before they are entitled to any remediation or aid. Because as I have said before, we don't want to throw good taxpayer money after bad, or reward unscrupulous or irresponsible individuals. As with our justice system, the state is only interested in siding with you or lending extraordinary economic aid if you are a plutocrat.

No Conflict of Interest Here

Remember that whole BP oil spill thing? Something happened last summer. Anyway, I forget, cuz you never hear about it anymore, and magical fairies cleaned up the entire Gulf of Mexico and there is no more oil anywhere to be found. Hooray!

But even though there's no more oil, whatsoever, and it was all eaten up by microbes and Jesus, there still remains the $20 billion fund set aside to compensate victims of the now-completely-cleaned-up-and-non-existant-nothing-to-see-here-spill. Ken Feinberg was selected to oversee that fund, and you will be glad to know he is taking this shit on pro bono:

Feinberg, a Washington lawyer who previously administered the 9/11 Victim Compensation Fund, and his law firm negotiated a contract with BP to be paid $850,000 a month for overseeing the Gulf Coast Claims Facility, which doles out compensation to victims of the oil spill. That salary comes up for review every three months, Vitter said. . . . He also said the $850,000 a month salary “seems staggering, particularly in that it’s not tied in any way to any certain number of hours worked by any certain number of people.”

I am sure he'll be completely impartial and empathetic to the victims when he's a paid contractor of BP making $10 million a year. 

The Double Standards in Financial Justice

It's amazing (depressing, really) how entrenched it has become in our national conscience that financial elites ought to be able to do whatever the fuck they want, expect the government to come to their rescue when they inevitably blow up the economy, and pay no price for their crimes. Numerous, overt cases of fraud, billions of dollars shoveled into their coffers, essentially free money from the Fed's discount window, and not so much as a single major indictment out of the Department of Justice.

But when it comes time to helping the average citizen in something so basic as keeping them in their homes? We better make goddamned sure that government aid only goes to "deserving" individuals:

“Their behavior did not well serve the country,” said Rep. Zoe Lofgren (D-CA), who led House negotiations to enact the change, known as “cramdown.” It was “extremely disappointing.”

Instead, the administration has relied on a voluntary program with few sticks, that simply offers banks incentives to modify mortgages. Known as Home Affordable Modification Program, or HAMP, the program was modeled after an industry plan. The administration also wrote it carefully to exclude millions of homeowners seen as undeserving.

The administration launched the program with a promise that it would help 3 million to 4 million homeowners avoid foreclosure, but it’s likely to fall far short of that goal. The Congressional Oversight Panel now estimates fewer than 800,000 homeowners will ultimately get lasting mortgage modifications.

[...] 

But the president struck a cautious note when he unveiled the plan in February 2009. The program will “not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans,” said Obama. “It will not reward folks who bought homes they knew from the beginning they would never be able to afford.”

It's a good thing that we were so judicious in choosing which banks to bail out, not rescuing any unscrupulous or irresponsible institutions, or throwing good taxpayer money after bad behavior, or reward folks who dealt in shit securities and CDOs that they know from the beginning were shit securities and would have dire consequences for their clients and the economy. HAMP has ultimately been a laughable failure because it uses the very criminals responsible for the financial crisis as intermediaries for aiding their own victims. That's about as brilliant as putting known child molesters in a position of oversight of young boys. Wait, bad example. But why else can't we help homeowners?

The measure faced stark conservative opposition. It was opposed by Republicans in Congress and earlier by the Bush administration, who argued that government interference to change mortgage contracts would reduce the security of all kinds of future contracts.

“It undermines the foundation of the capitalist economy,” said Phillip Swagel, a Bush Treasury official. “What separates us from [Russian Prime Minister Vladimir] Putin is not retroactively changing contracts.”

Sanctity of contracts! Because contracts are only secure and capitalism can only fire on all cylinders and flourish and enable the Free Market Jesus to bless us all when only moneyed elites are allowed to break them and do whatever they want and still have society come to their rescue. Helping the masses is something only commies would do. 

You hear this refrain no matter who you talk to: crying about the thought of someone scamming the welfare state while we spend $900 billion a year on defense, or whining about a lazy/undeserving homeowner receiving cramdown on their mortgage while Wall Street engages in the wholesale fucking of the country and continues doing business as usual. We have our heads so far up our own collective asses focusing on the wrong problems that it's a wonder that we even manage to function as a nation.

What Would You Say...Ya Do Here?

The New Yorker has a decent piece that summarizes our joke of a regulatory system:

These failures weren’t accidents. They were the all too predictable result of the deregulationary fervor that has gripped Washington in recent years, pushing the message that most regulation is unnecessary at best and downright harmful at worst. The result is that agencies have often been led by people skeptical of their own duties. This gave us the worst of both worlds: too little supervision encouraged corporate recklessness, while the existence of these agencies encouraged public complacency.

The obvious problems of graft and the revolving door between government and industry, in other words, were really symptoms of a more fundamental pathology: regulation itself became delegitimatized, seen as little more than the tool of Washington busybodies.

I really don't think that regulation itself is seen as illegitimate simply because it's imposed by government. What is seen as illegitimate is any obstacle that impedes their supposed right to make enormous profits at the expense of any modicum of corporate social responsibility or ethics. Never mind that mine shaft isn't getting any ventilation - proper safety measures would be too costly. The blowout preventer is a shell of what it should be? Forget that - $500,000 is way too steep to install a proper countermeasure, and nothing could possibly go wrong. We're leveraging ourselves to the the hilt and selling shit securities that we know are worthless? No big deal - we've got short-term gains, and the US taxpayer will clean up the mess.

Installing competent regulators with a legal framework that actually has some teeth would be a start. But nothing will ever change until there is a wholesale reversal in the culture of these corrupt organizations, and that isn't likely to happen soon, if ever. And why should they change? There is simply zero incentive for them to do so. They have Congress bought and paid for, who continue to push the bull shit notion that the way to economic prosperity is to allow industry and the free market to DWTFTW. And when their bloodlust for cash finally causes an explosion, an oil spill, an economic implosion, all they have to do is take their seats in front of Congress, say they didn't see it coming, face no criminal or civil penalties, and they're back in business by Monday morning.

I'll eat my words if we ever see any heads roll for the financial crisis or the Gulf oil spill. But I'm not holding my breath.