Tuesday, December 20, 2016

Nurturing The Swamp... Making It More Dangerous And Powerful


Feeling vaguely sickened by the parade of Wall Street predators Trump has recruited as a cabinet? Did you expect something different? Trump is a man who will be in violation of the Constitution immediately upon taking office since his business empire has a steady flow of money coming if from a myriad of foreign sources, many of which are connected to foreign governments or from individuals connected to foreign governments. That concern is discussed in the video above by Norman Eisen, a co-founder of Citizens for Responsibility and Ethics in Washington and the former U.S. Ambassador to the Czech Republic, and Richard Painter, George W. Bush's former Counsel and chief ethics lawyer, and it's very much worth watching.

Right now I'm more concerned with the parade of shady characters he's populating the highest reaches of government with, most of whom seem as unscrupulous and predatory as he has proven to be himself. Yesterday Michael Arria, writing for AlterNet, pointed out the irony of much of this trash coming into government precisely because Obama never prosecuted the crooks behind the financial crash that Bush left us with on his way out the door-- a financial crash that left much America staggering but further enriched the Wall Street bandits Trump is bringing into government-- the foxes who will be in charge of the hen houses. "Goldman Sachs," he wrote, "one of the major symbols of the crash, has enjoyed a mammoth influence on Washington for years, but its footprint is poised to grow even larger if a couple of notable Trump nominees are confirmed. Gary Cohn, the longtime COO of the finance company, will become director of the National Economic Council; Goldman partner Steven Mnuchin might become secretary of the treasury and former Goldman investment banker Steve Bannon has already become Trump's chief strategist and senior counselor."
While many chalk up President Obama's lack of action to business-as-usual in Washington, United States history features notable crackdowns after vast financial scandals. After the crash of 1929, the head of the New York Stock Exchange went to jail and the savings-and-loan scandals of the 1980s produced over 1,000 prosecutions. The reasons behind inaction certainly transcend Obama (who received more money from Goldman Sachs during his first presidential campaign than any other donor) and point to a deep, systemic problem. After spending a year talking to the players involved, Jesse Eisenger wrote about the lack of convictions for the New York Times Magazine in 2014:
Many assume that the federal authorities simply lacked the guts to go after powerful Wall Street bankers, but that obscures a far more complicated dynamic. During the past decade, the Justice Department suffered a series of corporate prosecutorial fiascos, which led to critical changes in how it approached white-collar crime. The department began to focus on reaching settlements rather than seeking prison sentences, which over time unintentionally deprived its ranks of the experience needed to win trials against the most formidable law firms.
The numbers certainly add up. According to a report on the Justice Department's own data, white-collar prosecutions are at a 20-year low. “The decline in federal white-collar crime prosecutions does not necessarily indicate there has been a decline in white-collar crime,” the report's authors point out, “Rather, it may reflect shifting enforcement policies by each of the administrations and the various agencies.”

Those shifting enforcement policies (the "critical changes" as Eisenger called them) are exacerbated by the revolving door between the financial industry and those taxed with policing it. In his 2011 Rolling Stone piece, "Why Isn't Wall Street in Jail?" Matt Taibbi shares a story from SEC investigator Gary Aguirre:
Last year, Aguirre noticed that a conference on financial law enforcement was scheduled to be held at the Hilton in New York on November 12th. The list of attendees included 1,500 or so of the country's leading lawyers who represent Wall Street, as well as some of the government's top cops from both the SEC and the Justice Department.

Criminal justice, as it pertains to the Goldmans and Morgan Stanleys of the world, is not adversarial combat, with cops and crooks duking it out in interrogation rooms and courthouses. Instead, it's a cocktail party between friends and colleagues who from month to month and year to year are constantly switching sides and trading hats.
Perhaps the best symbol of Aguirre's insight could be found with the former Attorney General himself. After leaving the Justice Department, Eric Holder rejoined his old law firm, Covington & Burling, which welcomes a number of clients Holder declined to prosecute.

Would someone like Steve Mnuchin even be available to nominate if Obama had made any kind of effort to change this culture? In a comprehensive New Republic profile on Mnuchin, David Dayen goes beyond some of the more well-known Mnuchin controversies (his career with Goldman Sachs, his connection to the Bernie Madoff scandal and his suspicious departure from a Hollywood production company that tanked) and zeroes in on Mnuchin's time as chairman of OneWest Bank, a noted foreclosure machine that regularly dispossessed the homes of senior citizens and people of color.

In a Nation piece that also details foreclosure frauds of Trump's secretary of commerce pick Wilbur Ross, Dayen explains how Mnuchin's bank purchased predatory lender IndyMac, along with its thousands of failing mortgages. Mnuchin cut a deal with the FDIC to protect the bank from losses, so the FDIC lost $13 billion on the foreclosed homes while OneWest turned $3 billion in profit. As Dayen describes it: 
What that meant for homeowners was they were rubble to be plowed so Mnuchin could profit. Borrowers got few options to modify loans, as OneWest dashed to foreclosure. The bank pursued all of the tricks of the era-- servicer-driven defaults (where servicing companies tell homeowners they must miss payments to get help, and when they do, they move to foreclose), dual tracking (when servicers negotiate modifications and pursue foreclosures at the same time), and more. Activists ended up on this guy’s lawn demanding that the foreclosures stop.
Politico recently reported that OneWest once foreclosed on the house of a 90-year-old Florida woman, Ossie Lofton, because of a 27-cent error. Lofton had taken out a reverse mortgage and a subsidiary of OneWest sent the woman a bill for $423.30. Lofton mailed the bank $423 and then a separate check for 3 cents, not realizing the actual difference was 30 cents. Donald Trump's treasury secretary nominee and his partners then filed for foreclosure on Lofton's house in 2014-- because of the missing 27 cents.

Trump's appointment of Gary Cohn will not require Senate approval, despite the fact he'll be the chief strategist in developing economic policy, and this is probably a good thing for the president-elect. A Senate confirmation would mean lawmakers would be allowed to bring up the two years leading up to the financial crash when Cohn was co-president of Goldman Sachs.

In 2009, McClatchy's Greg Gordon reported on those years and demonstrated how the "Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting."

To avoid a conflict of interest, Cohn will have to sell his shares at Goldman Sachs. Bloomberg reports that they're worth about $210 million and that he'll be able to defer any capital gains taxes from the sale.

In April of this year the Justice Department announced that Goldman Sachs would pay out over $5 billion in a settlement connected to its sale of residential mortgage backed securities, echoing Eisenger's point about the department looking to reach settlements rather than prison sentences. "This resolution holds Goldman Sachs accountable for its serious misconduct in falsely assuring investors that securities it sold were backed by sound mortgages, when it knew that they were full of mortgages that were likely to fail," declared the statement.

It seems evident that Goldman Sachs will be able to bounce back from this punishment.
In a post at Slate yesterday, Jamelle Bouie wrote about an easily-detected pattern in the Trumpanzee Cabinet choices. "To run the government," he wrote, "he has picked men and women who disdain the missions of their assigned agencies, oppose public goods, or conflate their own interests with that of the public. It’s less a team for governing the country than a mechanism for dismantling its key institutions. And as a cadre of tycoons, billionaires, and generals, Trump’s executive branch is a rebuke to the idea that government needs expertise in governing." And it is one conflicted assemblage of knaves, miscreants, reprobates... and even a mass murderer (who isn't even one of the generals). This is the least populist Cabinet in history despite Trump's empty campaign verbiage. Bouie called it "an ungovernment brought forth by reactionary hostility to the idea of the public, a throwback to the industrial oligarchy that eventually brought American democracy to its knees... Far from 'draining the swamp' of malign influence from billionaires and lobbyists, Trump has placed them in even greater positions of power and influence... a slap in the face to those voters who see Trump as a friend to their concerns, who believe they’ve been harmed by a government that privileges the wealthy over ordinary Americans."
For Treasury, Trump has Steven Mnuchin, an investment banker who made billions off of the housing crisis. For the Department of Labor, he has Andrew Puzder, a fast-food CEO who disdains the minimum wage and backs increased automation in low-wage fields. Robots “never take a vacation, they never show up late, there’s never a slip-and-fall, or an age, sex, or race discrimination case,” he once said. For the Department of Education, he has Betsy DeVos, a billionaire “school choice” supporter who gives millions to vouchers and evangelizes charter schools and private instruction. For the Department of Energy, he has former Texas Gov. Rick Perry, who infamously wants to dismantle the agency-- when he can remember its name. For Health and Human Services, he has Georgia Rep. Tom Price, who opposes the Affordable Care Act and wants deep cuts in Medicare and Medicaid.

For the Environmental Protection Agency, he has Scott Pruitt, who describes himself as a “leading advocate” against the agency; and for the Department of Justice, he has Alabama Sen. Jeff Sessions, who opposes the Voting Rights Act and supports a rollback of federal protection for LGBT victims of hate crimes. For the Department of State, he has Rex Tillerson, CEO of Exxon Mobil, whose interests and wealth are tangled in a web of global relationships, including a close partnership with Russian President Vladimir Putin.

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At 9:40 PM, Anonymous Anonymous said...

An excellent distillation.

"...an easily-detected pattern in the Trumpanzee Cabinet choices. "To run the government," he wrote, "he has picked men and women who disdain the missions of their assigned agencies, oppose public goods, or conflate their own interests with that of the public. It’s less a team for governing the country than a mechanism for dismantling its key institutions."

Actually, there is nothing new here for an R unitary. The bushbaby placed a very similar cabinet, with a fair amount of good old-fashioned patronage to friends sprinkled in as usual. Remember "heck of a job" Brownie after Katrina? Didn't think so.

Anyone remember Warren G. Harding? Well, you'd have to in order to put the awfulness of this group into perspective. Up until now, Harding's crowd were the most corrupt. Until now, the bushbaby's were the most inept but had the most war profiteers.

I think we'll set the bar much lower with this bunch. Either just "lower" or much, much, MUCH lower. no other possibility.

Yet even in retrospect I could not justify a vote for $hillbillary, who would be at least as patronizing toward goldman-sachs. She'd been pre-paid for that.

That's how miserable our politics are.

In my lifetime I've seen an ok prez (DDE), a fairly good if truncated one (JFK), a terrifically good AND bad one (LBJ), a despicable human being that wasn't an awful prez (RMN), an unelected placeholder (GRF), our finest EX-president (JEC) and an unbroken string of corrupted neoliberals, neocons, intellectual pygmies and emotional infants (Reagan, bush, Clinton, cheney/bushbaby, obamanation, and der fuhrer upcoming).

The common thread among the unbroken string is that each was worse than the previous... and each was elected, more or less, and affirmed by voters. At the very least, when vote fraud was overt and when courts overreached their constitutional charters, the only sound heard were crickets.

We can blame the media having been assimilated into the corporate owned and operated DC crowd, but in 1980 when Reagan was "teaching" us his irrational math and using subtle racism to win the south AND committing treason to keep hostages in bondage so that he could have an electoral advantage, we still had a fair media. Stupid voters elected that piece of shit anyway.

And everyone since has been worse, yet stupid voters keep voting for worse.

Look folks, what the fuck do you expect? We'll elect a pinhead malignant narcissist who will magically morph into the next coming of FDR and save us?

At 11:04 PM, Anonymous Anonymous said...

Re: "Trump’s executive branch is a rebuke to the idea that government needs expertise in governing."

Herr Hair's executive branch is also a rebuke to the idiotic notion that "the general welfare" of an entire nation flows most efficiently from the sum of actions to indulge individual greed.

John Puma

At 5:08 AM, Anonymous Hone said...

Excellent blog Howie. Good first comment, above. Yes, history shows us that this has been building for a long while. That old expression, "Complacency is the enemy of Democracy," is so true. Things kept rolling along despite it all, as everything was slowly being dismantled, until now. You can point to each predecessor in the Oval Office as nudging us towards the cliff. Bill Clinton, for example, with his roll backs of Wall Street regulations and raising the limits on ownership of the media.

Obama continued the downward trajectory, unfortunately. He did not stand up to the monsters before him when he entered office. Perhaps he did not see the extent of the nightmare bubbling underneath the surface. Did any of us really? We believed in our country and its solidity. Now that the gloves are off, we are seeing what true Republicans look like: monsters who care nothing about our government institutions, the American people, the environment or democracy itself. They have unleashed the big tangerine monster on us all and it is clear that they will work in conjunction with each other. Their own aims will be realized and they will hurt Americans badly. Together, Trump and the Republicans, along with Putin and who knows else, will destroy our country and beyond. Am I exaggerating? I am so sad to say, I don't think so. It is truly frightening. What will happen during Trump's first hundred days?

I have been carrying on for ages about Obama's two glaring faux pas since he entered the Oval Office. He did not appoint special prosecutors to go after the banks and Wall Street for the financial and housing collapses. And he did not go after George W. Bush et al, for their lies and deceit that led us into the Iraq War and the horrific policies and torture during those years. If Obama had gone after the former, the American people would certainly have been cheering his actions and perhaps the banks could have been broken up and brought under control, and more Wall Street regulations would have been put into place. Regarding the latter, by not exposing those in the Bush administration and hold them accountable - he laid further groundwork that the President can get away with anything. Trump surely thinks he can do whatever he wants. He struts around acting like he now owns the place.

What will happen under Trump with potential military interventions and wars, and what will happen here against our own citizens? Given his bellicose, bullying, revengeful, impulsive personality, he will soon be the head of the armed forces and have a trigger finger on that nuclear button. What will he do with the military within the USA? Go after citizens he does not like? What about his private security forces? What will they be up to? The parallels with Nazi Germany are there for all to see.

At 7:16 AM, Anonymous Anonymous said...

Excellent Hone.

I would add that NO WARS since WWII have been properly declared by the Senate, as the constitution demands.
Reagan started the arbitrary war by executive order meme in Grenada.
Cheney started the perpetual arbitrary war by order of the new 4th branch meme in Iraqafghanistanyemensudan. He also began the illegal on it's face meme of kidnapping, torture, murder and indefinite imprisonment, repudiation of habeas corpus memes. He also began the arbitrary political assassination by EO meme with drones.
obamanation continued each, expanded most and made the drone murder meme even more ubiquitous. He also refused to take any action to seek legal redress for any of the victims of the bank fraud schemes that stole $20 trillion. Instead he and the fed mortgaged taxpayers' futures to make the criminals whole again.
Same note on those who committed the atrocities of kidnapping, torture and murder in the perpetual Islamic war.

The inevitable culmination of all this is herr drumpf and his team of clones of Hitler's inner circle of the '30s.

And voters had sooooo many opportunities to change direction all along the way.
But at EVERY opportunity, voters chose to affirm each arrogation of power and every atrocity meme.

At 4:56 PM, Anonymous Anonymous said...

To Hone, well said. However, when something is "there for all to see", it remains for the viewer to correctly process what they see.

Americans are just too ignorant and stupid to correctly process what we're seeing in historical context... even CURRENT context.

Awful is an absolute. Horrible is a worser absolute.

I again remind everyone to look up Rev. Neimoller's famous quote... and see if it means anything.


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