Will The Banksters Be Brought To Heel?

Yesterday we mentioned how America's Wall Street aristocracy is doing its Marie Antoinette impersonation in the face of rising unemployment, increased foreclosures and a stagnant economy-- all conditions they were instrumental in bringing about. Tomorrow this decade's version of the Pecora Commission will begin taking testimony from the banksters. In Pecora's day-- a day before the likes of Rahm Emanuel, Timothy Geithner and Lawrence Summers at the apex of the Democratic Party-- they know how to interact with banksters without ingratiating and groveling. I have low expectations. So does everyone else.

Last night the NY Times reported that Obama is looking into levying a special bankster tax to help reduce the federal deficit. Republicans, Blue Dogs and Chuck Schumer might not like it-- and its hard to believe the Three Horsemen of the Wall Street Apocalypse, Emanuel, Geithner and Summers will get behind it-- but it would probably wind up being the most universally popular thing he could do.

The bank fee would recover some of the money that taxpayers put up to bail out the financial system after its near collapse in the fall of 2008, a rescue effort that has contributed to the largest annual budget deficits since World War II.

...With popular anger building as big banks show profits and pay sizable bonuses while unemployment remains high, the Obama administration has come under pressure at home and abroad to support a financial transactions tax on institutions and to heavily tax their executive compensation.
But the United States, led by the Treasury Secretary Timothy F. Geithner, has been opposed, arguing that a transactions tax would simply be passed on to customers and a bonus tax could be easily circumvented.

The 27-nation European Union called for a global transactions tax in December and Prime Minister Gordon Brown of Britain had proposed the idea in November at a meeting of the Group of 20 developed and emerging nations, saying revenue could be stockpiled to finance any future bailouts. Separately, Britain and France have proposed a large tax on financial executives’ bonuses.

Emanuel's perspective is that Obama will need all the Wall Street criminals to continue donating to his re-election efforts if he's going to beat back the Republicans in 2012, so you can count on him trying to broker a deal the way he did with Big Pharma. Emanuel is one of them and it's unlikely he's smart enough to take into account just how loathed the banksters are among the "little people" he never interacts with. I hope I'm wrong but I have no faith in any commission created by an overly compromised Congress, a commission that is bipartisan, which only means Republicans and corporate Democrats will make sure the banksters are protected. We'll soon see if Phil Angelides has the strength to make something out of this mess. If he does, he'll be a national hero, but after hearing him and that clown Bill Thomas on NPR the other day, my expectations dropped to almost zero. I'd put a lot more faith into New York Attorney General Andrew Cuomo to effectively fight back against the banks, even if his motives are self-serving. I wish Eliot Spitzer was in action though.



UPDATE: Do You Ever Get Advice From Your Broker?

If you do, be careful. According to a client e-mail from a senior exec at Goldman Sachs, released by the NY Times this morning, that advice is more likely to benefit the company and satisfy their priorities than to benefit the clients. Goldman Sachs is refusing to explain the e-mail, which warns the client not to consider the advice as objective or even based on independent research.

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We may from time to time discuss with you Trading Ideas generated by our Fundamental Strategies Group. As part of our commitment to managing conflicts of interest appropriately, this message is to explain how the Fundamental Strategies Group interacts with other parts of our organization and how that impacts on the Trading Ideas.

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House Establishes A New Pecora Commission/Senate Passes A Very Weak Foreclosure Bill

Clown (R-OH) weeps for millions of evictions his policies caused

This afternoon, the Senate passed, 91-5, S. 896, Chris Dodd's tragically watered-down bill to prevent mortgage foreclosures. The only obstructionist assholes to vote against this inoffensive bill were Judd Gregg (R-NH) and 4 Calhounists, Jim Bunning (R-KY), Tom Coburn (R-OK), Jim DeMint (R-SC) and Jim Inhofe (R-OK). It was co-sponsored by Dick Durbin and Chuck Schumer but once the banksters stepped in, cracked the whip and defeated Durbin's amendment to put some teeth in the bill-- by giving bankruptcy a tiny bit of power over the mortgage holders-- the bill lost most people's attention. Almost a quarter of U.S. homeowners are underwater but the senators are still voting for the banksters who finance their careers. Anyone who votes for any senator-- regardless of party-- who voted against Durbin's amendment is either very rich and selfish or really teh stoopid. (Better yet, take a look at Mike Lux's 6 steps to dis-empowering Wall Street.) But even after voting down Durbin's attempt to do something real for American working families, the Republicans (and their Bayh Bloc allies) weren't finished trying to sabotage whatever was left of the bill. Since April 30th the Senate has worked on little else besides going through countless right-wing amendments meant to obstruct aiding economically hard-pressed families.

David Diapers Vitter (R-LA) kicked off the circus with a pair of amendments meant to screw over the taxpayers in regard to TARP-- half a dozen from Bayh's anti-Obama bloc, Bayh, Dorgan, Kohl, Lincoln, Ben Nelson and Webb, crossing the aisle-- and some snark about the Federal Housing Administration that only got 36 votes, none from Democrats, not even Ben Nelson. What followed were a slew of rejected obstructionist amendments by Corker, Thune, DeMint, and Coburn, all meant to hamper Obama from carrying out his attempt to dig out from the mess caused by these very same Republican rubber stamps of Bush and Big Business.

The amendment by John Kerry meant to help renters who live in homes that go into foreclosure by allowing tenants to remain in their homes for the duration of their leases passed 57-39, all Democrats voted yes, along with just one Republican, Olympia Snowe.

Meanwhile on the other side of Congress, the House overwhelmingly passed (367-59a call for a new Pecora Commission, the Fraud Enforcement Recovery Act. 117 Republicans abandoned their hopelessly obstructionist leadership and joined all 250 Democrats (including even the most vile and contemptibly corrupt Blue Dogs) in voting to protect taxpayers from unfettered bankster avarice by giving the Justice Department more tools to fight fraud in the use of TARP and recovery funds, and increasing accountability for corporate and mortgage frauds, causes of the current economic collapse. Who would vote against this? Only the most ideologically-minded far right maniacs like Michele Bachmann (R-MN), John Kline (R-MN), Virginia Foxx (R-NC), Steve King (R-IA), Paul Broun (R-GA), Mike Pence (R-IN), Adrian Smith (R-NE), Lynn Westmoreland (R-GA), Jeff Flake (R-AZ), Jason Chaffetz (R-UT), Marsha Blackburn (R-TN), and Tom Price (R-GA)-- plus the worst of the House's bribed shills of the banksters:

John Boehner (R-OH- $3,045,809)
Pete Sessions (R-TX- $2,730,126)
David Dreier (R-CA- $2,118,538)
Jeb Hensarling (R-TX- $2,111,371)
Ron Paul (R-TX- $1,686,375)-- I know, I know-- the truth hurts
Geoff Davis (R-KY- $1,612,969)
Sam Johnson (R-TX- $1,565,755)
Don Manzullo (R-IL- $1,388,429)
John Linder (R-GA- $1,337,577)
Dave Camp (R-MI- $1,332,147)
Randy Neugebauer (R-TX- $1,253,775)
John Shadegg (R-AZ- $1,191,961)
Sue Myrick (R-NC- $1,140,388)
Scott Garrett (R-NJ- $1,156,599)
Dan Burton (R-IN- $965,288)
Kay Granger (R-TX- $953,275)
Patrick McHenry (R-NC- $876,350)
John Campbell (R-CA- $832,785)
John Culberson (R-TX- $808,155)
Gresham Barrett (R-SC- $786,873)
Charles Boustany (R-LA- $744,062)

Even normally dependable in-the-pocket votes for all special interests, like Eric Cantor, Thaddeus McCotter, Ken Calvert, Dan Lungren, Paul Ryan and Mean Jean Schmidt, slinked across the aisle and voted for Nancy Pelosi's bill. We reached Russ Warner, who is currently spending his time talking with residents of in a district stretching from La Canada-Flintridge to Rancho Cucamonga, and asked him if he had an idea why David Dreier would be one of the only members of Congress to vote so blatantly in favor of this kind of financially debilitating corruption. Russ was very straight-forward: "I may be a bit biased, but I can't think of a bigger hypocrite in Washington, D.C. than David Dreier. Just the other day, he was joining the chorus of legislators calling for more federal oversight in the financial sector; today, he votes against the Fraud Enforcement and Recovery Act (FERA), legislation designed to prevent the sort of criminal conduct that damages our economy and harms hard working Americans. He may talk a good game, but it seems pretty clear where David Dreier's priorities lie."

Today Barney Frank (D-MA) spoke on the floor of the House about the predatory lending bill, and about how the Republicans continue to do everything in their thankfully decreasing power to block desperately needed regulation of the financial services industry.

Pecora Commission Redux?

You probably never heard of the Pecora Commission (unless you're a LaRouche nut)-- at least not until Nancy Pelosi said she wants to model a new legislative commission after it last night. It's a good idea. The original 1932 commission, which was established by the Senate Banking Committee, was charged with figuring out why the stock market crashed in 1929, leading to the Great Depression, and what Congress could do to prevent it from happening again.

When it was first established, the GOP was still the dominant political party, and the commission was widely viewed as a way to whitewash its own responsibility for the Depression. In the 1932 elections, the GOP was destroyed at the polls, losing 101 seats in the House and 13 seats in the Senate. When the Pecora Commission reconvened after the election there were only 35 Republicans left in the Senate, a number that was further reduced as the party continued espousing right wing ideology and obstructionism-- as they are doing today-- and by 1936 there were only 25 Republicans left in the Senate and 88 in the House. The new chairman, Florida Democrat Duncan Fletcher, fired the incompetent Republican staffers and the commission got rolling in a serious fashion.

Wall Street disgraced itself at the hearings, declaring it knew better what was right for the country than voters did and the public realized that the grand captains of industry were just pumped up highway bandits intent on looting and plundering. It came out, for example, that the wealthiest Americans, like J.P. Morgan, paid no income taxes and that the entire financial system was gamed on behalf of a few multimillionaires. The Commission's work helped open the public's eyes to what Republican economics really meant and the Democrats were able to pass a broad array of new regulations to keep the avarice and greed of the banksters in check. Obviously Wall Street fought the reforms with all its considerable might-- and never stopped.

The Pecora Commission didn't predict that the banksters would rise again and spend $2.2 billion in bribes-- and even more in lobbying-- to game the system in their favor again. Nor could the Pecora Commission do anything to prevent politically-illiterate voters and dittoheads from electing Hoover and Coolidge-like candidates (and worse)-- venal and corrupt deregulators from Phil Gramm to George Bush-- and all the human detritus between. The existence of the garbage in our political system is a function of a purposefully and systemically corrupt campaign finance regime and of a poorly educated (to describe it in the kindest possible terms) electorate. The fact that the level of ethics and political leadership among the champions of working families also leaves something to be desired, has shackled us to successive governments dedicated to serving special interests at the expense of society and, especially, at the expense of working families and the middle class. The work of the Pecora Commission was eroded under Reagan and Clinton and the then obliterated and buried under Bush. The elimination of the Glass-Steagall Act was just the shining jewel in the crown of the deregulatory mania that is the true heart and soul of the GOP.

And the result: another Republican Party-caused depression. Which brings us back to last night's declaration by Speaker Pelosi to initiate a new Pecora Commission. She acknowledged that "the American people are demanding 'discipline and accountability' after the multibillion-dollar federal bailouts, [and] promised Wednesday to create a legislative commission with broad oversight to investigate the causes of Wall Street irregularities and their full costs to taxpayers."

"They investigated what happened in the markets," including conflicts of interests and irregularities that set off such devastating effects on the U.S. economy, she said. When the commission issued its findings during the administration of President Franklin Delano Roosevelt, "they had tangible recommendations," she said, which helped generate widespread public support for major banking system reforms and new securities laws.

Pelosi said she discussed the matter with Treasury Secretary Timothy Geithner on Wednesday and will raise the matter with her colleagues in the House of Representatives next week. She said her actions have been sparked by the observation that, no matter where she travels in the United States, she hears concern about financial irregularities.

"People are very unhappy with these bailouts," particularly multimillion-dollar bonuses paid out to executives of failing firms like American Insurance Group, or AIG, that have received federal bailout funds, she said.

"Seventy five percent of the American people, at least, want an investigation of what happened on Wall Street," the speaker said to applause.

"We're going to have a commission ... even if it is only in the House of Representatives," Pelosi pledged, saying it would allow Americans "to have a clearer understanding of how we got here-- and the risk that's been taken by the taxpayers in all this."

"That's what we would do with this commission, is to make sure it does not happen again." she said.

She said the move coincides with legislation she soon will send to President Obama on financial institution regulation and reform, "so we have transparency ... discipline and accountability to the American taxpayer."

Don't expect the Republican Party to take this laying down. They're planning more tea parties and there are even rumors that Alaska may join Rick Perry's secession movement; maybe Glenn Beck will even renounce his American citizenship if Congress tries to rein in the banksters.