Wednesday, January 26, 2011

GOP Corporate Shills Were On A Rampage Yesterday Trying To Get Obama To Do Their Dirty Work


Yesterday Shahien Nasiripour reported at HuffPo that there is plenty of cause for criminal prosecutions on Wall Street. That isn't really news, except for one thing. The opinion came from the bipartisan panel appointed by Congress to investigate the financial crisis. The 10 member panel, headed by Phil Angelides, has concluded that several financial industry figures appear to have broken the law and has referred multiple cases to state or federal authorities for potential prosecution.
Among those who testified were the heads of the nation's largest financial institutions-- all of them recipients of multi-billion dollar public bailouts. Among those who testified were Lloyd Blankfein, chief executive of Goldman Sachs Group Inc.; Jamie Dimon, chief of JPMorgan Chase & Co.; and Robert Rubin, a former Goldman chief and Clinton administration Treasury Secretary, who later held a prime executive chair at Citigroup. The panel also questioned Federal Reserve Chairman Ben Bernanke and his predecessor, Alan Greenspan.

The commission drew on testimony from less prominent senior executives with intimate knowledge of how Wall Street engaged in modern-day financial alchemy, turning mountains of dubious mortgages into seemingly rock-solid investments rated as safe as American Treasury bonds.

Richard Bowen, former chief underwriter for Citigroup's consumer-lending unit, testified that, in the middle of 2006, he discovered more than 60 percent of the mortgages the bank had purchased from other firms and then sold to investors were "defective," meaning they did not satisfy the bank's own lending criteria.

Keith Johnson, former president of Clayton Holdings, one of the top mortgage research companies, testified that some 28 percent of the loans given to homeowners with poor credit examined by his firm for Wall Street banks failed to meet basic standards. Yet nearly half appear to have been sold to investors regardless, he added.

At the same time, the Atlantic reported that former Wall Street blue chip investment bankers, Bear Stearns, (crooks who have since moved on to Goldman Sachs and Bank America) cheated clients out of billions of dollars. But, as long as we're talking about business leaders, I want to tell you a little story about new developments in my former business, the music industry-- but not billions of dollars-- about some t-shirts. I'm retired and just blog these days and don't follow it too closely but people call me from time to time to relate one outrage or another. The other day, a multi-multi-platinum artist/businessman called me to tell me how the chairman of a major label-- meaning, top manager, not owner-- was up to no good with a scam that is becoming more and more standard operating procedure. This record company chairman does own a company though-- a merchandising company that has no formal relationship with the corporation he runs. He waddled over to see one of his label's artists the other day-- one he had never seen play live and perhaps never even heard on tape (no one knows for sure)-- and tried to first bribe them and then, after they demurred, strong arm them into wearing his merchandising company's products in public performances. The basic economics of this scam is that he uses corporate money to build up his own personal merch company's value. I don't know if it's technically illegal-- though it should be since he has a fiduciary responsibility to the shareholders of the company he manages. I do know it's unethical and dysfunctional. And, like I said, more and more standard. Now take a look at this tweet from Speaker Boehner celebrating the fact that one of his most severely retarded new members, Nan Hayworth of Westchester, NY, had finally memorized the #1 Republican talking point: "Government doesn't create jobs, business does."

Obviously, they both do-- and, more often than not, fairly miserably. Or, really well. There are great businessmen who do an amazing job and there are also great government managers who do. And both sectors have their disasters as well. The Democratic Party, for all its faults, seems to recognize that. The other party doesn't and approaches it from a blinkered, if not blind, ideological perspective.

Newt Gingrich was advocating getting rid of the EPA entirely again-- a dream for Republicans and their Big Business, big polluting masters. And a bunch of others were advocating for the privatization of public schools, Social Security and Medicare-- in fact, that was the philosophical Ayn Randian underpinnings of Paul Ryan's SOTU rebuttal last night. And then there was all that carrying on from the Chamber of Commerce Reps-- primarily Boehner and his Ways and Means chair, Dave Camp, whining about the NAFTA-like "free trade" legislation the corporatists are so eager for-- a virtual death knell to America's middle class and, therefore, a death knell to the democracy they all despise so thoroughly. Jeremy Scahill caught this one from Rumsfeld:

Predators from the U.S. Chamber and Boehner and his cronies are on the warpath to pass more horrendously destructive-- to working families-- "free trade" legislation. This week Public Citizen focused on all the lies swirling around from those circles in anticipation of Obama's promise to get even friendlier to Big Business than he's already been-- although I don't see how that would be possible without an official party switch.
• Whether trade creates U.S. jobs depends on net export gains and reducing the trade deficit. Our past trade pacts and policies have done the opposite. More of the same trade deals are boost the trade deficit and cause more job loss. As Paul Krugman wrote in a recent column “Trade Does Not Equal Jobs: “If you want a trade policy that helps employment, it has to be a policy that induces other countries to run bigger deficits or smaller surpluses. A countervailing duty on Chinese exports would be job-creating; a deal with South Korea, not.”
• U.S. export growth under past Free Trade Agreements (FTAs) like the ones with Korea, Colombia and Panama that Obama will pitch has been less than half that to countries with which we do not have FTAs! Our FTAs have created an export penalty! 
• The U.S. International Trade Commission's (USITC) official study of the Korea FTA that Obama will emphasize concluded that the deal would increase the U.S. trade deficit. This from the ITC which has always concluded past FTAs will cut the defiict.
• Korea FTA's chief U.S. negotiator, Karan Bhatia, noted in a speech to a Korean audience, that it was a “myth” that “the U.S. will get the bulk of the benefits of the FTA.” He said: “If history is any judge, it may well not turn out to be true that the U.S. will get the bulk of the benefits, if measured by increased exports.” He added that, in the instance of Mexico and other countries, “the history of our FTAs is that bilateral trade surpluses of our trading partners go up,” meaning that the U.S. trade deficit with those countries increased.
•  Beware of administration claim that the Korea FTA will "support" 70,000 jobs. This figure reflects ONLY the expected export gains, not the net. Given the ITC says the result will be a net increase in the U.S. trade deficit, this figure is disingenuous. The real issue is   what net effect the Korea FTA will have on U.S. employment.
• The Economic Policy Institute projects American job losses from the Korea FTA at 159,000.
• The USITC study identified nine losing U.S. economic sectors that include many high-wage industries, including auto and electronics manufacturing and green jobs in the non-auto transportation sector.
• The December 2010 Obama supplemental Korea trade deal does not alter the increased trade deficit, job loss findings.
• The auto manufacturing industry will lose a significant number of workers due to the Korea FTA, according to the ITC. The deal was celebrated by the Korean Automobile Manufacturers Association.
• Lack of currency manipulation disciplines in the Korea FTA mean agriculture could also lose out

And did Obama let them down? Today he's in Manitowoc, Wisconsin stumping for his and the Republican's NAFTA-like betrayal of American workers. During the midterms, we spoke a lot about Boehner's problem with the Midwestern paper mills he was helping China destroy. But it isn't just Boehner. The Alliance For American Manufacturing posted some findings Obama ought to look into more closely before he decides he belongs on the Republican "free trade" band wagon that's running over the American middle class.
An AAM report in 2009 found that the Chinese paper industry has massively boosted production via illegal subsidies over the past decade, costing tens of thousands of jobs throughout the U.S. paper industry and increasing the massive U.S. trade deficit with China.

Along with paper, manufacturing has traditionally been Wisconsin's strongest employment sector, above even farming.  More recently, however, Wal-Mart has been Wisconsin's top employer.

While 436,500 Wisconsinites still work in manufacturing, that figure is down from 594,100 in 2000-- a 27% cut in manufacturing jobs.  The state has lost 52,200 jobs to China since 2001, or 1.83% of overall employment.

Wisconsin is the most manufacturing-dependent state in the nation. President Obama deserves credit for his trade enforcement efforts so far, but his visit today will hopefully spur an even more immediate push to revitalize the nation's industrial base, including in hard-hit Wisconsin.

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