Wall Street-- All Is Forgiven?

What better vehicle to declare Wall Street banksters no longer villains than the Wall Street Journal? And that's exactly what Patrick O'Conner did this morning. "As political villains go," he wrote, "Wall Street seems to be enjoying something of a reprieve." He claims "its image is on the mend" and that only about a third of Americans view Wall Street negatively.

No industry was more battered on the airwaves in 2012 than the financial-services sector. Candidates, parties and outside groups aired a total of more than 280,000 political ads that mentioned Wall Street, “Big Banks,” corporate “bailouts” or some other reference to the industry, according to a tally by Kantar Media’s Campaign Media Analysis Group, which tracks advertising for campaigns and outside groups. Even when presidential ads are stripped out, the total spots eclipsed 200,000 airings.

That’s not the case this year. By mid-August, roughly 15,000 ads aired that referred to Wall Street or the financial-services industry, according to CMAG numbers, a sliver of the 2012 tally. The theme has only surfaced in 28 races, including a handful of governors’ races.

The 2008 financial crisis generated plenty of animus for big financial institutions, particularly those that received a piece of the roughly $430 billion the Treasury Department doled out as part of the Troubled Asset Relief Program. The parties seized on different messages, but disdain for Wall Street was a bipartisan crusade in the last two election cycles… The share of Americans who view the industry positively also edged up seven percentage points, to 21% from 14%.

That rehabilitation might be welcome news to the politicians who rely on big financial sector companies to fuel their fundraising. So far, banks, insurance companies and other financial-services firms are the top donors to the parties, candidates and outside groups, dishing out more than $281 million, according to the Center for Responsive Politics. That’s more money than the combination of lawyers, organized labor and the health-care sector donated.

…[Elizabeth Wilner:] “Political advertisers have practical reasons for letting up on some of their most generous donors. But since they’re hardly above whacking Wall Street if they perceive it as a way to win, the drop-off suggests that, at least for now, they don’t see it that way.”

So far this cycle, the Finance Sector has given $148,543,210 to candidates for Congress, $89,724,597 to Republicans and $58,739,217 to Democrats. Of this cycle's 15 politicians who have taken the most from the banksters, only one, Ro Khanna, is a non-incumbent. All 5 Democrats taking huge legalistic bribes from Wall Street are as crooked as their Republican counterparts and all 5 are conservative stooges for Big Business with the kind of clout Wall Street is eager to invest in.

• John Boehner (R-OH)- Speaker- $2,664,676
• Eric Cantor (R-VA)- oops- $1,848,125
• Jeb Hensarling (R-TX)- Chair Financial Services Committee- $1,428,259
• Paul Ryan (R-WI)- Chair, Banking Committee- $1,225,756
• Kevin McCarthy (R-CA)- Majority Leader- $1,003,136
• Joe Crowley (New Dem-NY)- Ways and Means Committee- $956,722
• Jim Himes (New Dem-CT)- Financial Services Committee- $918,800
• Scott Garrett (R-NJ)- Chair, subcommittee on Capital Markets- $912,363
• Pat Tiberi (R-OH)- Chair, subcommittee on Revenue Measures $821,450
• Ed Royce (R-CA)- Financial Services Committee- $821,218
• Patrick Murphy (New Dem-FL)- Financial Services Committee $801,750
• Steve Stivers (R-OH)- Financial Services Committee- $799,309
• Steve Israel (Blue Dog-NY)- DCCC Chair, Appropriations Committee- $769,050
• Pete Roskam (R-IL)- Ways and Means Committee- $702,149
• Ro Khanna (CA)- bankster dream candidate to take out Mike Honda- $678,890

This morning Yves Smith reminded her readers that the settlements the Feds have been making with the banksters are about headlines, not about accountability, let alone Justice.

Over the last year, the Administration has entered into a series of bank settlements over various types of mortgage misconduct. The sudden rush to generate headlines from misdeeds that have been covered in the media in lurid detail during and after the crisis looks an awful lot like an effort to stem continuing criticism over the abject failure to punish banks and more important, their execs for blowing up the global economy for fun and profit, particularly since the Dems are at serious risk of losing control of the Senate in the Congressional midterms.

But as much as the media dutifully amplifies the multibillion headline value of these pacts, we’ve reminded readers again and again that all of these agreements have substantial non-cash portions which are ludicrously treated as if they have the same value as cold, hard cash. As we’ve reminded readers often, it’s critical to keep your eye on the real money, since the rest of the total is almost without exception things the bank would have done anyhow (or even better, giving banks credit for costs actually borne by others, like modifying mortgages that the bank merely services, meaning the bank gets a credit for a writedown imposed on an investor).

Tuesday the NY Times was barking up a similar tree. "Once again last month," reported William Cohan, "we were treated to the sorry spectacle of Attorney General Eric H. Holder Jr. holding a news conference to proclaim that a “too big to fail” bank had been brought to justice for its reprehensible behavior in the years leading up to the 2008 financial crisis. All things considered, it was fine theater with the obvious caveat that nothing even remotely close to justice had been served."

That Mr. Holder prefers large settlements to prosecutions is no surprise to anyone familiar with the so-called Holder Doctrine, which stems from his now-famous June 1999 memorandum-- when he was deputy attorney general-- that included the thought that big financial settlements may be preferable to criminal convictions because a criminal conviction often carries severe unintended consequences, like loss of jobs and the inability to continue as a going concern. (See Andersen, Arthur, for instance.)

That Mr. Holder, as attorney general, is following through on an idea that he proposed as a subordinate 15 years ago does not make his behavior any less infuriating. The fact is that by settling with the big Wall Street banks for billions of dollars-- money that comes out of their shareholders’ pockets-- Mr. Holder is allowing them to avoid the sunshine that Louis Brandeis wrote 100 years ago was the best disinfectant. Instead of shining the bright light on wrongdoing that took place at the Wall Street banks, Mr. Holder’s settlements allow them to cover it up permanently.

And that helps no one. The American people are deprived of knowing precisely how bad things got inside these banks in the years leading up to the financial crisis, and the banks, knowing they will be saved the humiliation caused by the public airing of a trove of emails and documents, will no doubt soon be repeating their callous and indifferent behavior.

Instead of the truth, we get from the Justice Department a heavily negotiated and sanitized “statement of facts” about what supposedly went wrong. In the case of JPMorgan, the statement of facts was 21 pages but contained little of substance beyond the fact that an unidentified whistle-blower at the bank tried to alert her superiors to her belief that shoddy mortgages were being packaged and sold as securities. Her warnings went unheeded and the mortgages were packaged and sold all the same.

The explicit details of the bank’s wrongdoing were contained in a civil complaint that Benjamin B. Wagner, the United States attorney for the Eastern District of California, had drafted and threatened to file publicly if JPMorgan didn’t settle. Fearing disclosure of the contents of the complaint, JPMorgan caved to Mr. Holder’s demands. The bottom line was JPMorgan paid the $13 billion, in cash and in-kind, and the American people were deprived of finding out exactly what the bank did wrong.

Funny that wasn't mentioned in today's Wall Street Journal article about how people don't hate the banksters as much any more and how crooked politicians (see list above) can breath easy and take bribes without worrying about blowback from enraged constituents defeating them at the polls. How many years ago was 60 Minutes talking about cases with prosecutorial merit. (Part 2 is up top.)