Who Renounces Their American Citizenship?

Sunday, Vermont's Independent Senator Bernie Sanders tweeted, bright and early, that "Today, the 400 richest Americans are now worth a record-breaking $1.7 trillion-- more than 5 times what they were worth just 2 decades ago." I guess you can still make the kind of fortune in America that gives you the opportunity to dominate society and call the shots. These people even have their own political party-- the GOP-- and pretty much control what the Democrats do as well. I have some kind of foggy recollection about the Founding Fathers opposing the whole notion of the formation of the kind of great intergenerational wealth that gives birth to one of the worst of all governing systems, the plutocracy. It's why democracies have estate taxes. Even if Republicans don't Conservative Winston Churchill and robber baron Andrew Carnegie were very much in support of holding the development of plutocracy and oligarchy at bay with a strong inheritance or estate tax. From Chris Hayes' Twilight of the Elites:

The estate tax is designed to only affect those with vast fortunes, estates of more than $5 million. And it's logic is clear: We don't want an aristocracy of birth-- that's the very system our founders repudiated when they created a republic. Conservative Winston Churchill argued that an estate tax provided "a certain corrective against the development of a race of idle rich," and it was out of an ideological commitment to a kind of protomeritocratic vision of equality of opportunity that robber baron Andrew Carnegie, opponent of income and property taxes, argued for a steep and confiscatory tax on inheritance:

As a rule, a self-made millionaire is not an extravagant man himself... But as far as sons and children, they are not so constituted. They have never known what it was to figure means to the end, to live frugal lives, or to do any useful work... And I say these men, when the time comes that they must die... I say the community fails in its duty, and our legislators fail in their duty, if they do not exact a tremendous share.

And yet, over the past decade, this fundamental and basic means of gently enforcing some modicum of a level playing field has been gutted. In 2002, the rate for estates of more than $1 million was 50 percent, but it was diminished each year, until it was entirely phased out in 2009. It has since been restored (extended in December 2010 only for two years, for now), but at the historically rock-bottom rate of 35 percent, with a $10 million exemption for married couples. The New York Times said House Democrats opposed the deal brokered by Obama and congressional Republicans in the lame-duck congressional session of 2010 because it "would cost 68 billion, help only the richest of the rich-- an estimated 6,600 households-- and do nothing to stimulate the economy while adding to the national debt."

Over the weekend one of the U.K.'s more conservative newspapers, The Telegraph, took a look-- albeit a typically superficial one-- at Americans who renounce their citizenship. The tradition is England-- at least among wealthy rock stars-- has always been to live outside Britain enough months of the year so as to qualify for low tax rates in America or France or Spain. I dealt with dozens of them when I was at Warner Bros. Lately we've been seeing rich French tax avoiders seeking to shelter their money by moving to Belgium and the U.K. or even taking Russian citizenship. The number of Americans applying for U.K. citizenship has risen since the end of the Bush years. But most of them have already been living and working in London.

London-based American lawyers, who specialize in tax and immigration, report a threefold increase over the last five years in the number of American citizens who are giving up their citizenship-- a process known as “renunciation."

Across the world 1,781 Americans renounced their citizenship in 2011 compared with just 231 in 2008, when US tax laws changed, although it remains unknown how many are adopting British rather than any other nationality.

Many decide to give up their American citizenship after tiring of the lengthy US tax return process, which requires them to pay tax on their total income regardless of where they live.

“There’s no question that the number of people renouncing their US citizenship is increasing,” said Diane Gelon, a US tax and immigration lawyer based in London.

“I probably get a dozen cases a year now when before 2008 when the tax laws changed it was just three or four.”

...Even if a US citizen earns all their income in Britain they are liable for tax in their home country which can lead to unusual tax situations arising, said Ms Gelon.

For example, US citizens are expected to pay capital gains tax to the US government if they sell a property in Britain which is their main residence, even though a similar tax is not imposed by the British Inland Revenue.

The US rules make concessions for tax paid overseas but there is still a risk that their citizens will be hit with a large tax bill, she added.

“Actually giving up your citizenship is dead easy-- once you have an appointment with a consular official it takes a matter of minutes.

“But getting an appointment in London can take three months and that is largely because of the tax issues,” she said.

“It can be an emotional thing, to give up one’s citizenship. I’ve had clients cancelling their appointments at the embassy on the day they were due to renounce because they just couldn’t go through with it.”

Susan McFadden, another London-based US attorney who specializes in immigration matters, said: “I’ve definitely seen a surge. In the last few years it’s gone up threefold and I see through about two dozen cases a year.

“The US Embassy in London has responded to that demand-- and quite a long queue for renunciation appointments-- by streamlining the process.

“We are told they have trained additional officers to reside over renunciation processes.”

The 2011 census found 177,185 people living in England and Wales were born in the US. All American citizens are required to file a tax return on their world-wide income. The rule applies even if they have not visited the US for decades.

The US Internal Revenue Service is likely to discover tax returns have been missed in a number of different scenarios. For example, it may come to light if a citizen applies to renew a passport, is named as a beneficiary in a will or their foreign-based bank complies with new legislation which requires them to notify the US government about all American customers.

Of course, for every American who would give up his or her citizenship rather than pay his or her taxes, there are hundreds thousands of people from everywhere in the world who would do anything to get American citizenship. As an earlier Telegraph look at immigration noted, "The most common reason given by immigrants for wanting to make a home in the US is 'freedom.' It’s what drove the original settlers from Ireland and Italy, and those persecuted by Nazi Germany and the Soviet Union. But many of the repressive policies that Bush was introducing resembled those of the oppressors who had propelled people to come to the US. The 'Patriot Act' gave security forces the power to spy on people’s lives in ways the Stasi once applied in Eastern Germany. Illegal, arbitrary detentions were introduced, à la Pinochet. The use of dogs to terrorize detainees in Burma was aped in Gitmo and Abu Ghraib. The establishment of secret dungeons, or 'black sites,' where fingernail extraction and electrocution could allegedly take place, became a joint venture between government agencies and Egyptian President Mubarak.

Bush’s "war on terror" was also a "war on immigrants," Thousands of "aliens" were imprisoned without trial or access to a lawyer, many just for having Arab-sounding names... [T]he US government has indeed used "denaturalization" to get rid of its dissidents. In 1919, J. Edgar Hoover ordered the arrest of anarchist leader Emma Goldman under the newly passed Anarchist Exclusion Act, revoked her citizenship, and placed her on a ship, nicknamed the Soviet Ark, to Russia. She was never allowed back to the US.

Nearly a century later, in 2004, that same fate befell Yaser Esam Hamdi, a US citizen captured in Afghanistan in 2001. The Bush Administration imprisoned Hamdi in Guantanamo bay as an "an illegal enemy combatant," but made no formal charges for three years. Under pressure from human rights groups, Bush’s officials agreed to deport Hamdi to Saudi Arabia, as long as he renounced his citizenship. When Hamdi refused to give up his passport, the Justice Department revoked it anyway.

And then, in 2007, Rice’s State Department released a list of new “potentially expatriating acts,” including treason.

The E.U. has been in the process of making the wise decision over the past couple of years to curb bonuses for banksters and that's about to kick in-- as it is in Switzerland, a non-member. So I suspect banksters aren't among those rushing to renounce their U.S. citizenship over taxes.

The European Union moved to slap a strict limit on bank executives' bonuses in the latest effort to curb what is seen by many as corporate and banking excess.

Negotiators for the European Parliament and EU states said they reached a preliminary deal on a measure that would forbid bonuses that exceed a bankers' fixed salary. Flexible pay could increase to twice fixed salary, but only with explicit shareholder approval.

The initiative, part of a broader law that forces lenders to build up more-robust financial cushions, is designed to reduce incentives for the type of risky behavior widely blamed for contributing to the 2008 financial crisis.

The EU push comes as Swiss voters will indicate on Sunday just how deep their resentment of big executive paychecks runs when they vote on a controversial plan that would give shareholders sweeping authority over executive compensation.

The 24 items contained in the Swiss referendum, dubbed the "rip-off" initiative, would allow shareholders to block salaries, ban so-called golden handshakes and parachutes-- forms of guaranteed parting packages-- and require greater transparency on loans and pensions to executives and directors. The measure includes fines and prison sentences for violations.

The moves in Brussels and in Switzerland, if successful, would represent the most intrusive intervention yet into how banks and corporations compensate employees and executives-- an issue that was for years considered an internal corporate matter.

The EU pay limits would apply to all European banks, including their operations abroad, as well as U.S. and other foreign banks' subsidiaries in the EU, officials representing both member states and the Parliament said. That provision may be reviewed in a few years' time, they added.

I guess greedy banksters can always move to China. I hope they do. Rush Limbaugh lives in Costa Rica now, right?

When a megabank dumps its CEO, are they supposed to just give him some cheap watch?

How much should you pay when you hurt a guy's feelings?

by Ken

There seems to be some uproar over deposed Citigroup CEO walking into the sunset with, well, who knows how many millions of dollars, or maybe tens of millions -- it's so hard to keep track when everywhere you turn there seems to be another, oh, $6-7M tied up in a nice bow. Apparently at Citigroup the stuff is just lying all over the place, waiting for some stray puppy of a CEO to be frog-marched off the premises.

Just to be clear, because I know it's hard to keep track, the $6.7M referred to in the headline below isn't Vikram's salary, or even regular bonus. It's an "incentive award" for . . . well, I'm not quite sure what for -- maybe for taking the company's profits, or maybe just for going away?

Wall Street CEO Gets $6.7 Million Payout After Crashing His Company

PAT GAROFALO
ThinkProgress / News Report
Monday 12 November 2012

Citigroup CEO Vikram Pandit was pushed out the door of his company in October after overseeing a precipitous decline in his bank's value. Overall, Citigroup lost nearly 90 percent of its stock price during Pandit's tenure. But that won't stop Pandit from walking off with $6.7 million for his last year on the job:

Citigroup said Friday that the former CEO, who resigned last month in a management shakeup, will receive an "incentive award" of $6.7 million for his work at the bank this year. Former president and chief operating officer John Havens, who stepped down along with Pandit, is getting $6.8 million, according to a filing with the Securities and Exchange Commission.

The two men will also continue collecting deferred cash and stock compensation from last year, awards valued at $8.8 million for Pandit and $8.7 million for Havens.

The company suffered a profit loss of 88 percent during the third quarter, when Pandit supposedly earned his "incentive award." During his time at Citi, Pandit made some $260 million in total compensation, even accounting for the year he took a $1 salary during the financial crisis.

Several Wall Street heavyweights have recently said that banks need to rethink the sky-high compensation they've been paying (which has helped exacerbate the nation’s income inequality). For instance, Morgan Stanley CEO called the financial industry "overpaid." "There's way too much capacity and compensation is way too high," he said.

Now I know this seems a lot of money to give people you're hustling out the door. And I suppose the normal argument would have to do with the preciousness of Vikram's and John's gifts, and the scarcity of talent capable of doing what they did for their company, or to their company. If aspiring top-level execs couldn't trust that they'd be treated this well when they're booted out -- so the argument goes -- how could they be persuaded to take on those jobs in the first place? And then where would we be? (And don't forget that year when he only made $1 for the entire year. Hey, that's less than I make!)

This is certainly a persuasive argument, but I have a better one: the moral argument. Does anyone stop to consider how hurtful this whole process of getting the boot has been to Vikram and John? Just think of their kids being taunted on the playground with ruffianly chants of "profit loss of 88 percent during the third quarter, when your dad supposed earned his incentive award." You know how cruel kids can be.

Okay, I don't know if Vikram and John have school-age kiddies, and at this pay grade I'll be damned if I'm going to look it up. Surely you get the idea. Let's say the missus goes to the supermarket to pick up some meatloaf mix, brussels sprouts, and Diet Coke, and everywhere she wheels her cart there are chatty, catty housewives murmuring and pointing. I ask you, is that right?

It's easy to take the "high road" and say these men should be sent packing with a cheap flea-market watch (with at least a new battery installed, one hopes) and maybe an Applebee's gift certificate. But that would be wrong. There's a serious wrong that's been done here. I don't know that an extra $6.7M walking money begins to make it right.

#

U.S. Still Richly Rewarding Banksters-- Demonizing Schoolteachers

I got back from London a few hours ago, and Roland will be back a few hours from now. I came back to the long steam bath I was craving. He's coming back to an uncertain job situation at McKinley Elementary School in Compton-- a situation likely to have a national impact.

"It will be," as the L.A. Weekly explained last week, "either the first school seized from its district by unsatisfied parents, or it will be the first school to fight back so hard it defeats a bold new chance at reform. And it will not be the parents on either side who make this decision, though their signatures are needed. It will be the warring giants who back them," and a move by ascendant Latinos, backed by a for-profit, anti-union charter school company (Celerity) and Michelle Rhee, to take over a formerly all-African-American school system. This is all part of Obama's so-called "Race to the Top" initiative, which is likely to have as bad an impact on education as Bush's "No Child Left Behind."

When Thomas Jefferson wrote in a letter to Charles Jarvis on September 28, 1820 that education society's protection against tyranny he didn't have for-profit corporations in mind.

I know no safe depository of the ultimate powers of the society but the people themselves; and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them, but to inform their discretion by education. This is the true corrective of abuses of constitutions power.

Conservatives, always the enemy of (costly) public education-- why would slaves need education to distract them?-- are, once again, targeting public schools as failing while they deprive them of adequate funding and, at the same time, diverting public funds to slick, for-profit education corporations like Celerity.

On the plane home yesterday I watched Oliver Stone's Wall Street Never Sleeps. "It's not about the money," says Gordon Gekko 23 years after the first film; "it's about The Game." Within a couple of scenes he's turned $100 million in shady cash into a billion dollars through the kind of predatory speculation that has driven the world economy over a cliff and that is the tip of the spear that is concentrating our nation's wealth and power in the hands of fewer and fewer selfish, greedy-- and very dangerous-- egomaniacs.

Teachers don't play The Game. And they don't ever see that kind of money. Society ranks teachers-- judging by the tiny salaries they get-- very low on the totem poll, nothing like destructive Wall Street speculators and criminal banksters who are at the top of the heap. Unions have managed to keep teachers from penury, although it's difficult for them to remind the public that if society rewards banksters and drug dealers and lawyers so much more than schoolteachers, that profession won't always attract the highest-caliber minds. Yesterday's NY Times spotlighted how the Conservative Consensus is going after unions, the public-employee ones, again. The Republicans, conservative Democrats, including Obama, and their media allies have teachers' unions, not Wall Street traders, firmly in their sights.

The Times tells it from the point of view of the Establishment, of course.

Across the nation, a rising irritation with public employee unions is palpable, as a wounded economy has blown gaping holes in state, city and town budgets, and revealed that some public pension funds dangle perilously close to bankruptcy. In California, New York, Michigan and New Jersey, states where public unions wield much power and the culture historically tends to be pro-labor, even longtime liberal political leaders have demanded concessions-- wage freezes, benefit cuts and tougher work rules.

It is an angry conversation. Union chiefs, who sometimes persuaded members to take pension sweeteners in lieu of raises, are loath to surrender ground. Taxpayers are split between those who want cuts and those who hope that rising tax receipts might bring easier choices.

And a growing cadre of political leaders and municipal finance experts argue that much of the edifice of municipal and state finance is jury-rigged and, without new revenue, perhaps unsustainable. Too many political leaders, they argue, acted too irresponsibly, failing to either raise taxes or cut spending.

A brutal reckoning awaits, they say.

African-American schoolteachers in L.A. are kicking themselves for having backed Obama and realize they made a fatal mistake. Think about that. And in New York, teachers are realizing they made the same mistake by backing Andrew Cuomo for governor.

Richard Iannuzzi, president of the New York State Teachers Union, said he expects a battle over Cuomo's plans to cut school funding and impose a 2% cap on property tax increases.
"I expect the good people in the Assembly and Senate to push back on that," Iannuzzi said. "They understand the importance of education."

Cuomo has been anticipating attacks from major public sector unions and other special interests and has recruited help from private-sector unions and the business community.

Those groups are expected to help fund an effort to fight the ad wars the traditional interest groups use to try to trample a governor's agenda.

Iannuzzi stopped short of accusing Cuomo of trying to pit public and private sector unions against each other.

"Some of his supporters are looking to drive a wedge between the haves and the have-nots, and those are the haves that are trying to drive the wedge," he said.

The "haves," he said, are those with millions of dollars to support Cuomo's agenda.

"My goal, and the goal of the union movement, is to speak truth to that power," Iannuzzi said. "And what is fair is not balancing the budget on the backs of working people."

In one heartwarming scene in Wall Street Never Sleeps, the hero gets an unexpected $1,450,000 bonus check. So nice! Roland doesn't expect one like that either-- and he'll never get one. Those kinds of rewards, although strongly opposed by over 70% of Americans, show what society really values-- or at least those in the position, in our post-democracy society, to call the shots (for themselves) value... and enforce.

More than 70 percent of Americans say big bonuses should be banned this year at Wall Street firms that took taxpayer bailouts, a Bloomberg National Poll shows.

An additional one in six favors slapping a 50 percent tax on bonuses exceeding $400,000. Just 7 percent of U.S. adults say bonuses are an appropriate incentive reflecting Wall Street’s return to financial health.

A large majority also want to tax Wall Street profits to reduce the federal budget deficit. A levy on financial services firms is the top choice among more than a dozen deficit-cutting options presented to respondents.

With U.S. unemployment at 9.8 percent, resentment of bonuses and banking profits unites Americans across political, gender, age and income groups. Among Republicans, who generally are skeptical of business regulation, 76 percent support a government ban on big bonuses to bailout recipients, that’s higher than backing among Democrats or independents.
JPMorgan Chase & Co. Chairman and Chief Executive Officer Jamie Dimon got a bonus package for 2009 valued at $17 million and Goldman Sachs Group Inc.’s Chairman and CEO Lloyd Blankfein received a $9 million all-stock bonus for last year, down from his Wall Street record $67.9 million in 2007.

“The American people bailed them out and immediately they went and paid their employees very large bonuses,” says poll respondent Michael Robertson, 43, of Wayne, Michigan. “I don’t believe they should have a bonus at all for a while.”

Read the subtitles to get an interesting perspective on another battle in the class war that is gutting the American middle class:

Update: That Second Grader Who Keeps Taking Out His Penis During Class...

A teacher told me he has a pretty bright student in his second grade class, a kid that was tossed out of a charter school for bad behavior. The bad behavior is that he taking his penis out of his pants every day. So they shipped him off to public school, which can't ship him anywhere. The teacher has to deal with it as bets he can, taking away time and effort from students hungry-- or even just willing-- to learn.

David Weil posted a powerful warning about the takeover of the public schools by for profit corporations way back in October, 2009.

Unacceptable to most American citizens, the current public educational system is being radically disassembled, state by state, like Legos in a pre-school play room. In its stead is being built a new corporate educational model of non-profit and for-profit educational retail charter chains or outlets that will replace the decaying urban public schools. The public school water bag has burst and the Educational Maintenance Organizations (EMOs) are like kids scrambling for candy under a broken piñata.

For those witnessing the health care or health insurance reform dispute as it is playing out on the national landscape, they won’t be surprised when they begin to see the ‘astro turf’ groups assembled around charter schools emerge... [Arne] Duncan loves charter schools and so does President Barrack Obama and they’ve got pockets full of newly minted cash to fund them, along with the Walton Family, the Gates Foundation and of course the Eli Broad Foundation. Now that Los Angeles Unified School District has voted to turn over 250 public schools to the new ‘outside operators’ it’s time for them to move quickly to capture the headwinds of the coming educational ‘debate’; a debate which already happened, behind closed doors. The rest is show.

One week before the vote to handover the pubic schools to non-profit organizations such as Green Dot the LAUSD School Board voted to lay off hundreds of teachers. What followed were massive class size increases of fifty or more, with students sitting on the floors and teachers scrambling to accommodate the overflow (Landsberg, Mitchell, Budget cuts push some classrooms way over capacity. But alas this is preliminary planning for the new neoliberal reformers, the way it is supposed to work; public schools are purposely starved to induce failure in order to bring in the new ‘turnaround artists’ and non-profit privatization outfits to ‘fix the problem’.

Every Congressman Asked To Choose Between The Banksters And The Voters

Late yesterday the House was asked to concur with a Senate amendment that would impose an additional tax on bonuses received from bailed out TARP recipients. Having to give up a small part of outrageous bonuses seems like a cheap price to pay. Most people I know would rather see them give back the whole bonuses or, better yet, their heads. But the House voted overwhelmingly, 276-145, to tax the bonuses. Thirty-four Republicans, fingers to the wind, abandoned their crazy leadership, leaving Boehner and Cantor sputtering, and scurried across the aisle to vote with the Democrats.

I wonder how his new GOP pals in Alabama will feel about hearing that Parker Griffith had stumbled back acrosss the aisle to vote with his old party. Of course Republicans looking towards general elections where they'll have to pass themselves off as relatively sane and dodge the corruption bullet-- like notorious bankster buddies Mark Kirk (IL) and Mike Castle (DE) running for Senate seats-- ran from Boehner and Cantor as though they saw cooties crawling on their shoulders. So did many of the most endangered Republican incumbents, from Leonard Lance (NJ), Mario Diaz-Balart (FL) and Charlie Dent (PA) to Mary Bono Mack (CA) and Brian Bilbray (CA).

Still many of the biggest bribe-takers in the history of the House, the ones whose careers were most conspicuously financed by Big Finance, were the ones who abandoned their constituents and voted with the banksters yesterday. Here are the 10 worst:

Spencer Bachus (R-AL- $4,167,924)
Eric Cantor (R-VA- $3,797,035)
John Boehner (R-OH- $3,377,649)
Roy Blunt (R-MO- $3,060,005)
Pete Sessions (R-TX- $2,981,190)
Ed Royce (R-CA- $2,856,282)
Pat Tiberi (R-OH- $2,492,934)
Jeb Hensarling (R-TX- $2,478,100)
David Dreier (R-CA- $2,215,688)
Paul Ryan (R-WI- $1,740,165)

And, yes, of course Blue Dogs Bobby Bright (AL), Jim Cooper (TN) and John Tanner (TN) voted with the Republicans.

Now There Are Two Senators Brown-- One Owned By Wall Street And One Wall Street Is Petrified Of

Guess which one's the friend of working families?

On March 19-- so just shy of a year ago-- the House overwhelmingly (328-93) passed a bipartisan bill introduced by Charlie Rangel (D-NY) to tax excessive bonuses paid by and to top executives of firms receiving TARP bailouts. This was aimed at AIG executives and other greed-obsessed Wall Street banksters and career criminals.

Although leading Democrats thought the bill's chances were threatened when House Minority Leader John A. Boehner (R-Ohio) condemned it, about half of the GOP House members backed the measure. The lopsided House tally sent shock waves across the financial sector. Officials predicted dire results, saying the brightest talent could flee institutions that remain wobbly as the firms themselves leave the rescue program prematurely.

In the Senate, "Republicans voiced strong objections to the tax approach, calling it a smokescreen for the administration's faulty oversight of the Troubled Assets Relief Program. 'It sounds to me like these guys are trying to cover their tracks,' said Sen. Jon Kyl (Ariz.), the No. 2 Republican leader"-- who has accepted $3,728,644 in thinly disguised bribes from the Finance Sector since first being elected to Congress.

When the House voted, the only Democrats crossing the aisle to vote with Boehner were Wall Street shills Melissa Bean (IL), Larry Kissell (NC), Michael McMahon (NY), Walt Minnick (Blue Dog-ID), Harry Mitchell (Blue Dog-AZ) and Vic Snyder (AR). On the Republican side, even the very worst and most dependable Wall Street puppets-- Paul Ryan (WI), Eric Cantor (VA), Roy Blunt (MO), Mark Kirk (IL), Mike Castle (DE), Pete Hoekstra (MI), Ken Calvert (CA), Brian Bilbray (CA) and Mean Jean Schmidt (OH)-- abandoned Boehner, McKeon, Dreier Hensarling, Sessions and Bachus to vote with the Democrats. It was Boehner's worst defeat since he became minority leader: only two more Republicans voting with him and Wall Street than with the Democrats and Main Street.

The bill seems to have gotten lost in the Senate, a wholly owned Wall Street subsidiary. Oh, wait-- not wholly owned. There is a small group of progressive Democrats-- very small-- who are actually independent of Wall Street. You may have noticed that last week Barbara Boxer (D-CA) and Jim Webb (D-VA) introduced a bill targeting outrageous bonuses of banksters who are getting it out of TARP money.

Yesterday Sherrod Brown (D-OH) introduced an even more stringent bill that targets any bonus over $25,000-- where the Boxer-Webb bill goes after anything over $400,000. I'm with Sherrod on this one. He says he wants to use the proceeds to help small businesses expand and hire new employees. In a talk about how Wall Street benefited from the infusion of taxpayer dollars via TARP, he explained why he thinks Main Street needs to be helped along now and how this is a way to get that started. “It’s time," he said, "for Wall Street to return the favor to Main Street. While big banks have rebounded thanks to the help of American taxpayers, small businesses are still struggling. If a big firm that received taxpayer help is now paying out massive bonuses, they should be able to help American small businesses expand operations and hire new workers. Small business growth will create jobs and get our economy back on track." His office sent out details after his press conference:

The average executive at Bank of America received a $400,000 bonus one year after the bank took $45 billion from taxpayers through the TARP program. The average worker in Ohio makes just over $41,000 a year.

Last week, insurance giant AIG-- which received $182 billion in government assistance-- paid out more than $100 million in bonuses to employees. Last year, when news of the company’s bonus plans were unearthed, employees pledged to return $45 million in bonuses. Despite this, the company has recouped less than half of that pledged amount. Investment bank Goldman Sachs-- which received $10 billion from the TARP program and $12.9 billion in taxpayer aid through the AIG bailout-- reported last week that it would pay out $16 billion in bonuses.

Despite the assistance they have received from taxpayers, many banks receiving TARP funds have cut small business lending. In November, the U.S. Treasury Department reported that the 22 largest financial institutions receiving taxpayer assistance reduced lending by $10.5 billion over the previous six-month period. These same banks reduced small business loans by another $1 billion according to a new report released in December.

Brown’s bill would impose a 50 percent tax on all bonuses-- both cash and stock pay-outs-- in excess of $25,000 given to executives at firms that received taxpayer-funded assistance through the Emergency Economic Stabilization Act of 2008. The revenues would be used to fund direct loans for small businesses administered by the Small Business Administration (SBA).

Small businesses create more than 64 percent of jobs nationwide, but many are struggling to access credit during the recession. Brown is the author of the Small Business Emergency Loan Relief Act, which would temporarily raise the maximum loan amounts for Small Business Administration (SBA) loan products and waive certain fees. Through the SBA provisions passed in the Recovery Act, more than 2,100 Ohio small businesses have received loans. Brown worked to connect more than 1,000 Ohio small businesses with resources on Recovery Act opportunities through a series of workshops he hosted across the state.

Similar legislation has been introduced in the U.S. House of Representatives by Rep. Peter Welch (D-VT).

“Fifteen months after Wall Street drove our economy off a cliff, the same big banks that survived thanks to taxpayer support have returned to their old ways. Rather than invest in our nation’s economic recovery or shore up their balances, these banks have chosen to reward themselves with excessive bonuses,” Welch said. “By diverting outsized bonuses to small business lending, this legislation will support our local economies in a way that Wall Street has failed to.”

I can imagine Rahm Emanuel and Lawrence Summers throwing darts at a picture of Sherrod Brown now, maybe even calling up Kyl and McConnell to plan some strategy. Or asking the other Senator Brown if he'd like to work with them on something more... um... Wall Street-oriented "bipartisan."

Rep. Peter Welch Introduces Bill To Tax Overly Large Bankster Bonuses

Yesterday, Vermont progressive Peter Welch introduced legislation that would tax bonuses over $50,000 paid by the financial institutions that were bailed out with taxpayer funds. Under Welch's bill, the proceeds, expected to be "billions" will go exclusively to a small-business lending program.

"As most Americans struggle to endure a long and wrenching recession, the same Wall Street bankers who came to the American taxpayer with hat in hand are now preparing to pocket record-breaking bonuses," Welch said. "Financial firms that received taxpayer assistance must remember that they owe their return to profitability to hard-working Americans."

...Welch said the legislation, for which he is seeking co-sponsors, was prompted in part by widespread popular "outrage" that banks earning substantial profits after receiving taxpayer assistance expect to funnel money into their own huge compensation packages "instead of lending" to businesses, as Congress intended.

He said those banks scaled back small-business lending by $11 billion since April 2009. Revenue created by his bill would provide low-interest loans to otherwise healthy businesses that are having difficulty obtaining credit.

Welch's proposal is pretty moderate-- the rate is only 50%, where others are sticking to the tax on financial transactions or a 75% rate-- and would effect banksters working at Citigroup, Bank of America, Goldman Sachs, JPMorgan Chase and Morgan Stanley, which have put aside $90 billion for bonuses this year. Goldman Sachs' average bonus payout this year is slated at just under $600,000, although most of the money goes to a small handful of top-level crooks gobbling up millions each. Welch's first two co-sponsors are Jim McDermott (D-WA) and Lloyd Doggett (D-TX) all of whom agree that record bank profits didn't come from anything beyond record bank hand-outs from government and their ability to borrow at near zero percent interest while charging their customers sky high, unregulated interest rates (on credit cards, for example). “When people are robbing a bank, it’s time to stop them," said Welch.

Meanwhile, as expected, the Wall Street-friendly Obama Administration-- I mean how else can you describe an Administration with seedy characters like Wall Street crooks Rahm Emanuel, Lawrence Summers and Tim Geithner at the top of the heap?-- has their own, less ambitious, proposal going to Congress. Today Obama announced a proposed tax on large banks which is intended to restrain speculation (as opposed to investment) and restrain outrageous bonuses. Wall Street says they will fight him on it and since we all know who owns the Senate...

The administration wants to collect about $120 billion from banks over 10 years, taxing banks based on the amounts they have borrowed to finance lending and other activities, according to officials who agreed to speak before the president's announcement on the condition of anonymity.

Industry executives already warn that hitting banks will hurt the broader economy because banks would seek to impose the cost of any tax on customers. Officials said the tax was designed to encourage a different result: Raising prices to give a competitive advantage to smaller banks, which would not pay the tax, and giving larger banks incentives to borrow less money or pay smaller bonuses to employees.

The avaricious banksters, many of whom view themselves, predictably, not as people lucky enough or shrewd enough to wind up in good corporate managerial positions-- these people are decidedly not entrepreneurs or heroic risk takers (other than with other people's money) or even especially innovative or brilliant-- claim that what they term "talent" will flee the industry. Does that mean we won't have another series of multi-billion dollar bank failures? Barney Frank, Chairman of the House Financial Services Committee, laughed in their faces: "I don't know where people would go for comparable salaries. I guess perhaps they could star in major motion pictures."

Well they could get jobs on K Street or run for the Senate or start a reality show or take up NFL quarterbacking. Or maybe one will invent a cure for cancer. Oh scratch that last one; inventors don't make nearly enough as banksters.

The proposal is modeled on the fee that the Federal Deposit Insurance Corp. collects from all banks to repay depositors in failed banks. The FDIC fee is based on insured deposits-- the largest funding source for bank activities-- but the new fee would be based on money raised from other sources.

The financial industry already is marshalling a case against the proposal. The American Bankers Association noted that the Treasury Department projected in December that every government program aimed specifically at stabilizing the banking industry would turn a profit. Industry executives said the tax likely would not achieve its stated purpose of placing large banks at a competitive disadvantage.

"Using tax policy to punish people is a bad idea," Jamie Dimon, chief executive of J.P. Morgan Chase, told reporters following his testimony before the Financial Crisis Inquiry Commission. "All businesses tend to pass their costs on to customers."

No one is talking about prison terms or even criminal investigations to get to the bottom of the greatest transference of wealth from ordinary working families to a handful of rich parasites.




UPDATE: As Expected...

Republicans immediately came down firmly on the side of the banksters and against consumers. Here are some of the reactions from a trio of Republican clowns on the House Financial Services Committee who have taken some of the biggest bribes from Wall Street and Wall Street lobbyists-- along with how President Obama had already addressed their specific "concerns."

Spencer Bachus (R-AL- $4,077,924) was all worked up: "There is no way the Administration can design a tax on financial firms that will not be passed on to consumers and investors in the form of higher interest rates and increased fees. The tax will only drain capital from the financial system at a time when it’s needed to create jobs and fuel economic growth."

The President addressed that: “What I’d say to these executives is this: Instead of sending a phalanx of lobbyists to fight this proposal, or employing an army of lawyers and accountants to help evade the fee, I suggest you might want to consider simply meeting your responsibilities. And I’d urge you to cover the costs of the rescue not by sticking it to your shareholders or your customers or fellow citizens with the bill, but by rolling back bonuses for top earners and executives.”

Scott Garrett (R-NJ- $1,325,659) was screaming all over Capitol Hill that "any tax or fee could hinder the economic recovery and further limit the industry’s ability to extend more loans." President Obama had already discussed that, although Garrett probably wasn't listening to anything by the crazy voices in his head. Obama: “Ultimately, it is by taking responsibility-- on Wall Street, here in Washington, all the way to Main Street-- that we’re going to move past this period of turmoil. That’s how we’re going to avoid the cycles of boom and bust that have caused so much havoc. That’s how we’re going to promote vibrant markets that reward innovation and entrepreneurship and hard work. That’s how we’re going to create sustained growth without the looming threat of another costly crisis. That’s not only in the best interests of the economy as a whole; it’s actually in the interest of these large banks.”

Jeb Hensarling (R-TX- $2,429,700), not exactly a professorial type, snarled that "to think that banks will loan more money if you tax them is beyond economic ignorance." He's just another congressmember so in love with his own bloviating that he ignored the president: "The financial industry has even launched a massive lobbying campaign, locking arms with the opposition party, to stand in the way of reforms to prevent another crisis. That, too, unfortunately, is business as usual. And we’re already hearing a hue and cry from Wall Street suggesting that this proposed fee is not only unwelcome but unfair-- that by some twisted logic it is more appropriate for the American people to bear the costs of the bailout, rather than the industry that benefited from it, even though these executives are out there giving themselves huge bonuses.”

And, of course, the shill the GOP is running for Ted Kennedy's old Massachusetts Senate seat joined his Republican colleagues in backing the banksters over their hard-pressed customers. Big surprise (not)!

Don't Hang The DJ-- Hang The Banksters

The big Wall Street banks have already taken defensive measures to protect themselves from physical attack... on the off-chance that the American people ever figure out that they're the real enemy of our families and our prospects for prosperity. But this weekend the NY Times reported that the big banks are girding themselves for trouble as they prepare to hand out the mega-bonuses again.

The bank bonus season, that annual rite of big money and bigger egos, begins in earnest this week, and it looks as if it will be one of the largest and most controversial blowouts the industry has ever seen.

Bank executives are grappling with a question that exasperates, even infuriates, many recession-weary Americans: Just how big should their paydays be? Despite calls for restraint from Washington and a chafed public, resurgent banks are preparing to pay out bonuses that rival those of the boom years. The haul, in cash and stock, will run into many billions of dollars.

Industry executives acknowledge that the numbers being tossed around-- six-, seven- and even eight-figure sums for some chief executives and top producers-- will probably stun the many Americans still hurting from the financial collapse and ensuing Great Recession.

I tweeted about this yesterday and someone who follows my tweets suggested that the blame belongs with the politicians, rather than with the banksters. The politicians do, after all, enable them-- when the price is right. But taking that logic a short step further, why not blame the voters? After all, it's the voters who enable to politicians-- and our payoff is just psychic and rarely very satisfying.

When I was in a position to hand out substantial bonuses, I made sure the assistants who did so much of the work, got a substantial piece of the action. And I bet there are an awful lot of assistants at GoldmanSachs who are making considerably less than the company average of nearly 600,000/per employee. (Imagine how some poor schlub at JPMorganChase feels; they only average $463,000 in bonuses.) So just imagine what the dozen guys at the tippy-top of the pyramid (scheme) are taking home. A couple making over $10,000,000? You better believe it!

Many executives are bracing for more scrutiny of pay from Washington, as well as from officials like Andrew M. Cuomo, the attorney general of New York, who last year demanded that banks disclose details about their bonus payments. Some bankers worry that the United States, like Britain, might create an extra tax on bank bonuses, and Representative Dennis J. Kucinich, Democrat of Ohio, is proposing legislation to do so.

Those worries aside, few banks are taking immediate steps to reduce bonuses substantially. Instead, Wall Street is confronting a dilemma of riches: How to wrap its eye-popping paychecks in a mantle of moderation. Because of the potential blowback, some major banks are adjusting their pay practices, paring or even eliminating some cash bonuses in favor of stock awards and reducing the portion of their revenue earmarked for pay.

...Even some industry veterans warn that such paydays could further tarnish the financial industry’s sullied reputation. John S. Reed, a founder of Citigroup, said Wall Street would not fully regain the public’s trust until banks scaled back bonuses for good-- something that, to many, seems a distant prospect.

“There is nothing I’ve seen that gives me the slightest feeling that these people have learned anything from the crisis,” Mr. Reed said. “They just don’t get it. They are off in a different world.”

In his column yesterday, Frank Rich posited that "Americans must be told the full story of how Wall Street gamed and inflated the housing bubble, made out like bandits, and then left millions of households in ruin. Without that reckoning, there will be no public clamor for serious reform of a financial system that was as cunningly breached as airline security at the Amsterdam airport. And without reform, another massive attack on our economic security is guaranteed." No one-- not the banksters and not the politicians-- are especially worried. They've got the system gamed and-- as you may have noticed-- there's no consequences at all, not only not legal consequences; there aren't even market consequences, at least not for the guys on top. Rich is hoping Phil Angelides and his Pecora-style commission will come up with something-- but Rich is too savvy to trick himself into believing it.

Angelides, the former California treasurer who is the inquiry’s chairman, told me in interviews late last year that he has been busy deploying a tough investigative staff and will not allow the proceedings to devolve into a typical blue-ribbon Beltway exercise in toothless bloviation.

He wants to examine the financial sector’s “greed, stupidity, hubris and outright corruption”-- from traders on the ground to the board room. “It’s important that we deliver new information,” he said.
“We can’t just rehash what we’ve known to date.” He understands that if he fails to make news or to tell the story in a way that is comprehensible and compelling enough to arouse Americans to demand action, Wall Street and Washington will both keep moving on, unchallenged and unchastened.

Angelides gets it. But he has a tough act to follow: Ferdinand Pecora, the legendary prosecutor who served as chief counsel to the Senate committee that investigated the 1929 crash as F.D.R. took office. Pecora was a master of detail and drama. He riveted America even without the aid of television. His investigation led to indictments, jail sentences and, ultimately, key New Deal reforms-- the creation of the Securities and Exchange Commission and the Glass-Steagall Act, designed to prevent the formation of banks too big to fail.

As it happened, a major Pecora target was the chief executive of National City Bank, the institution that would grow up to be Citigroup. Among other transgressions, National City had repackaged bad Latin American debt as new securities that it then sold to easily suckered investors during the frenzied 1920s boom. Once disaster struck, the bank’s executives helped themselves to millions of dollars in interest-free loans. Yet their own employees had to keep ponying up salary deductions for decimated National City stock purchased at a heady precrash price.

Trade bad Latin American debt for bad mortgage debt, and you have a partial portrait of Citigroup at the height of the housing bubble. The reckless Citi executives of our day may not have given themselves interest-free loans, but they often walked away with the short-term, illusionary profits while their employees were left with shredded jobs and 401(k)’s. Among those Citi executives was Robert Rubin, who, as the Clinton Treasury secretary, helped repeal the last vestiges of Glass-Steagall after years of Wall Street assault. Somewhere Pecora is turning in his grave.

Rubin has never apologized, let alone been held accountable. But he’s hardly alone. Even after all the country has gone through, the titans who fueled the bubble are heedless. In last Sunday’s Times, Sandy Weill, the former chief executive who built Citigroup (and recruited Rubin to its ranks), gave a remarkable interview to Katrina Brooker blaming his own hand-picked successor, Charles Prince, for his bank’s implosion. Weill said he preferred to be remembered for his philanthropy. Good luck with that.

Among his causes is Carnegie Hall, where he is chairman of the board. To see how far American capitalism has fallen, contrast Weill with the giant who built Carnegie Hall. Not only is Andrew Carnegie remembered for far more epic and generous philanthropy than Weill’s-- some 1,600 public libraries, just for starters-- but also for creating a steel empire that actually helped build America’s industrial infrastructure in the late 19th century. At Citi, Weill built little more than a bloated gambling casino. As Paul Volcker, the regrettably powerless chairman of Obama’s Economic Recovery Advisory Board, said recently, there is not “one shred of neutral evidence” that any financial innovation of the past 20 years has led to economic growth. Citi, that “innovative” banking supermarket, destroyed far more wealth than Weill can or will ever give away.

Even now — despite its near-death experience, despite the departures of Weill, Prince and Rubin-- Citi remains as imperious as it was before 9/15. Its current chairman, Richard Parsons, was one of three executives (along with Lloyd Blankfein of Goldman Sachs and John Mack of Morgan Stanley) who failed to show up at the mid-December White House meeting where President Obama implored bankers to increase lending. (The trio blamed fog for forcing them to participate by speakerphone, but the weather hadn’t grounded their peers or Amtrak.) Last week, ABC World News was also stiffed by Citi, which refused to answer questions about its latest round of outrageous credit card rate increases and instead e-mailed a statement blaming its customers for “not paying back their loans.” This from a bank that still owes taxpayers $25 billion of its $45 billion handout!

If Citi, among the most egregious of Wall Street reprobates, feels it can get away with business as usual, it’s because it fears no retribution. And it got more good news last week. Now that Chris Dodd is vacating the Senate, his chairmanship of the Banking Committee may fall next year to Tim Johnson of South Dakota, home to Citi’s credit card operation. Johnson was the only Senate Democrat to vote against Congress’s recent bill policing credit card abuses.

Though bad history shows every sign of repeating itself on Wall Street, it will take a near-miracle for Angelides to repeat Pecora’s triumph. Our zoo of financial skullduggery is far more complex, with many more moving pieces, than that of the 1920s. The new inquiry does have subpoena power, but its entire budget, a mere $8 million, doesn’t even match the lobbying expenditures for just three banks (Citi, Morgan Stanley, Bank of America) in the first nine months of 2009. The firms under scrutiny can pay for as many lawyers as they need to stall between now and Dec. 15, deadline day for the commission’s report.

I wonder how many people will take Rich's warning of a ticking time bomb seriously. Let me guess that no one will, at least no one who will do one damn thing about it. or is Ron Paul's day coming?

Bonus Time Is Here Again-- Only Not For The American People

Barry Ritholtz' chart tells the story

The banksters and their lobbyists continue paying off members of Congress, Congress continues repaying them with our tax dollars in the form of more bailouts, and they keep rewarding themselves with bigger and bigger bonuses. This has got to stop.

Staff at Goldman Sachs staff can look forward to the biggest bonus payouts in the firm's 140-year history after a spectacular first half of the year, sparking concern that the big investment banks which survived the credit crunch will derail financial regulation reforms.

A lack of competition and a surge in revenues from trading foreign currency, bonds and fixed-income products has sent profits at Goldman Sachs soaring, according to insiders at the firm.

...Critics of the bonus culture in the City said the dominance of a few risk-taking investment banks is undermining the efforts of regulators to stabilise the financial system.

Vince Cable, the Liberal Democrat treasury spokesman, said: "The investment banks more than any other institutions created the culture of excessive leverage, excessive risk and excessive bonuses that led to the downfall of the financial system. Now they are cashing in and the same bonus culture has returned. The result must be that we are being pushed to the edge of another crash."

The disgraceful trash Max Baucus and Chuck Grassley are calling the Senate Finance Committee's health reform proposal is just a thinly-disguised bailout for an Insurance Industry that everyone hates-- almost everyone. Corrupt politicians like Baucus and Grassley love the Insurance CEOs. They scratch each others' backs. Insurance Giants have spent $1,219,675,114 on lobbying Congress in the last decade-- but that doesn't count the $316,522,578 in direct payments to candidates and members of Congress. And I bet it wouldn't surprise any regular DWT reader to hear that some of the most violent opposition to single payer-- or even a compromise public option-- comes from the members of the Senate, like Baucus and Grassley-- who have profited the most from Insurance CEOs' generosity. Among the worst shills-- and this is just insurance cash, not the whole Medical-Industrial Complex, which is far more-- is this dirty dozen corrupt and sleazy characters:

John McCain (R-AZ)- $2,885,602
Ben Nelson (DLC-NE)- $1,210,299
Max Baucus (DLC-MT)- $1,182,613
Arlen Specter (D-R-PA)- $1,037,205
Joe Lieberman (DLC-CT)- $1,035,302
Mitch McConnell (R-KY)- $928,007
Chuck Grassley (R-IA)- $888,724
Kent Conrad (DLC-ND)- $825,337
Jim Bunning (R-KY)- $793,999
Orrin Hatch (R-UT)- $664,057
Kit Bond (R-MO)- $644,571
Dick Shelby (R--AL)- $637,748

And if you're worried about Blanche Lincoln, don't. She's gotten $462,383 out of them and this year she's #2 on the list of who the health insurance industry is financing.

Back to the banksters for a moment. Last week the banksters' man on the inside, Treasury Secretary Tim Geithner, looked at members of Congress and told them, with a straight face, exactly what they wanted to hear: "No one should assume that the government will step in to bail them out if their firm fails." As Gretchen Morgenson explained in the NY Times yesterday, talk is cheap. Its especially cheap when your audience is as scripted and full of shit as you are. Geithner was trying to "sell" Congress-- or maybe the public-- on the weak and ineffective bankster-approved remake of the financial regulatory framework. As Morgenson points out, "there’s precious little in the 88-page document about how the government will eliminate systemic risks posed by financial firms that aren’t allowed to fail because they’re simply too big or to interconnected to other important economic players here and abroad."

It's kind of ironic that we'll hearing this from the Obama Administration just hours after Rahm Emanuel shoved a $108 billion loan guarantee up Congress' collective rear end for European bank bailouts under the auspices of the IMF.

Rather than propose ways to shrink these companies and the risks they pose, the Geithner plan argues instead for enhanced regulatory oversight of the behemoths. This suggests the taxpayer safety net will be larger after our national financial train wreck, not smaller.

More than two years after the crisis began, “too big to fail” remains “too problematic to address” with anything other than more souped-up regulation. Given that earlier efforts at policing these entities failed so miserably, why should anyone think that a new-and-improved regulatory approach will fare better?

If Obama Wants To Get Serious About Rescuing The Country Nationalizing Failed Banks Looks Like The ONLY Option

A huge error that must be corrected, quickly

Last week we wrote quite a bit about Alan Grayson's Pay for Performance Act of 2009, a law that means to end the Republican "no strings attached" bailouts of big corporations. Under Grayson's bill, the Treasure Department has oversight of compensation for companies taking taxpayer money so that there will be no more instance like $3.5 billion (of $10 billion in bailout money) going directly into the pockets of the banksters (in the form of unjustifiable "bonuses"), as happened under Bush's bailout "plan." Grayson's bill was supported by every single Democrat, including the Blue Dogs, in the House Financial Services Committee-- and two Republicans broke with the obstructionists and voted for it as well.

With Republicans screaming bloody murder-- and calling for their smelling salts-- Grayson reminded the American people that "This bill will show which Republicans are so much on the take from the financial services industry that they're willing to actually bless compensation that has no bearing on performance and is excessive and unreasonable. We'll find out who are the people who understand that the public's money needs to be protected, and who are the people who simply want to suck up to their patrons on Wall Street."

Grayson's bill passed by a wide margin, 247-171, 10 Republicans abandoning their party's corporate maters to vote "yes" and, shamefully, 8 Democrats voting with the GOP, mostly reactionaries who habitually vote with Republicans on core issues-- the Walt Minnicks (Blue Dog-ID) and Harry Mitchells (Blue Dog-AZ).

But before Grayson's vote came to the floor on April 1, another Blue Dog corporate whore, Melissa Bean (IL), offered an amendment meant to water down the bill for her Big Business campaign contributors. Her amendment, which was opposed by most Grayson and by the vast majority of Democrats (190)-- but, naturally enough, embraced by Republicans-- is meant "to allow institutions that enter into a payment schedule with Treasury on terms set by Treasury to no longer be subject to the bonus and compensation restrictions created by the Act." It passed 228-198.

Even with the public so angry about the banksters blatantly ripping off the public and holding the economy for ransom until their self-entitled greed is sated, virtually all Republicans plus reactionary Democrats like Bean and her ilk, are still counting on everyone forgetting or just getting over it by the 2010 midterms. Bean doesn't represent, in the true sense of the word, the working families of Lake and McHenry counties. She represents the special interests who have lavished immense sums of money on her. The sector which would be most salubriously effected by her sneaky amendment-- finance/insurance.real estate-- has funneled $1,725,806 into her political career, far more that the average House member. And they know they can always count on her to sell out her constituents and lead like-minded Democrats across the aisle to vote with Republican shills serving the same corporate masters.

Yesterday at Salon Glenn Greenwald pointed out why we can't even turn to the executive branch for relief from Wall Street and their minions in Congress. Obama's two top economic advisors, Tim Geithner and Larry Summers are as in the pockets of Wall Street as you;d expect any Republican bucket of slime to be.

Lawrence H. Summers, one of President Obama's top economic advisers, collected roughly $5.2 million in compensation from hedge fund D.E. Shaw over the past year and was paid more than $2.7 million in speaking fees by several troubled Wall Street firms and other organizations....

Financial institutions including JP Morgan Chase, Citigroup, Goldman Sachs, Lehman Brothers and Merrill Lynch paid Summers for speaking appearances in 2008. Fees ranged from $45,000 for a Nov. 12 Merrill Lynch appearance to $135,000 for an April 16 visit to Goldman Sachs, according to his disclosure form.

Glenn accuses Summers of taking "advance bribes" from Goldman Sachs and Merrill Lynch and it would be impossible for anyone to look at the evidence and interpret it any other way. "And," Glenn reminds us, "it's paying off in spades."

People like Rubin, Summers and Gensler shuffle back and forth from the public to the private sector and back again, repeatedly switching places with their GOP counterparts in this endless public/private sector looting.  When in government, they ensure that the laws and regulations are written to redound directly to the benefit of a handful of Wall St. firms, literally abolishing all safeguards and allowing them to pillage and steal.  Then, when out of government, they return to those very firms and collect millions upon millions of dollars, profits made possible by the laws and regulations they implemented when in government.  Then, when their party returns to power, they return back to government, where they continue to use their influence to ensure that the oligarchical circle that rewards them so massively is protected and advanced.  This corruption is so tawdry and transparent-- and it has fueled and continues to fuel a fraud so enormous and destructive as to be unprecedented in both size and audacity-- that it is mystifying that it is not provoking more mass public rage.

And it wasn't just Glenn writing about this yesterday. The Washington Post didn't miss very clear signals from the Obama Administration that they plan to protect the banksters-- not just from angry mobs with pitchforks, but from any attempt by Congress to recoup the stolen money. They're giving in to demands from the banksters that they won't cooperate with Obama's rescue package, not even if it plunges the country into a decade of Depression, unless they get all the money they decide they are entitled to. And Openwheel in Michigan makes the point that the auto industry bondholders and investors won't budge an inch until they get theirs-- regardless of the fact that the government already funneled billions of taxpayer dollars their way-- the no strings attached kind. Apparently they believe that money is their due and not something meant to help rescue the nation.

Nationalization should have been the answer months ago. It will save us a lot of money and misery if Obama makes the move tomorrow morning. The Sunday Guardian has some shocking news-- and it makes more sense than most of what we've been hearing from Obama's economic team. Elizabeth Warren works for Congress, not for the Obama banksters, and as the TARP watchdog she's about to demand the removal of the nation's top failed banksters!

Warren, a Harvard law professor and chair of the congressional oversight committee monitoring the government's Troubled Asset Relief Program (Tarp), is also set to call for shareholders in those institutions to be "wiped out". "It is crucial for these things to happen," she said. "Japan tried to avoid them and just offered subsidy with little or no consequences for management or equity investors, and this is why Japan suffered a lost decade." She declined to give more detail but confirmed that she would refer to insurance group AIG, which has received $173bn in bailout money, and banking giant Citigroup, which has had $45bn in funds and more than $316bn of loan guarantees.

Warren also believes there are "dangers inherent" in the approach taken by treasury secretary Tim Geithner, who she says has offered "open-ended subsidies" to some of the world's biggest financial institutions without adequately weighing potential pitfalls. "We want to ensure that the treasury gives the public an alternative approach," she said, adding that she was worried that banks would not recover while they were being fed subsidies. "When are they going to say, enough?" she said.

Virginia Foxx-- Is She Corrupt? Crazed? Or Both?

Unlike some of her colleagues, Virginia Foxx can read, even quasi-dramatically... if haltingly. And she's not a total idiot. After all, it was Foxx, the proud owner of a prosperous Christmas tree farm, who offered a resolution praising Christmas tree farms. Now, many people claim-- and with good reason-- that she's one of the dozen most radical right extremists in Congress. Her voting record would attest to that assessment. In fact when 11 members of the KKK Caucus in the House were the only members to vote against aid to the victims of Hurricane Katrina, crazy Virginia Foxx may not have brought her sheets but she was in the forefront of the lunatic fringe racists (Lynn Westmoreland R-GA), Joe Barton (R-TX), Steve King (R-IA), Tom Tancredo (R-CO), Scott Garrett (R-NJ), etc). 213 of her fellow Republicans joined all 196 Democrats to pass the bill 410-11. And in case anyone missed the point, ole Virginia was one of only 33 die-hard segregationists to vote against extending the Voting Rights Act. It passed 390-33 but all kinds of racist slime stood with Foxx against it-- all the regular suspects, from Westmoreland, Tancredo, King and Garrett to Patty McHenry (R-NC), Gary Miller (R-CA), Jeb Hensarling (R-TX), Jo Bonner (R-AL), Tom Price (R-GA), John Linder (R-GA), Dana Rohrabacher (R-CA), Mac Thornberry (R-TX), Nathan Deal (R-GA), Phil Gingrey (R-GA), John Shadegg (R-AZ), etc.

In the video below, Virginia Foxx, who adamantly and proudly supports using taxpayer money to enrich multimillionaire banksters with fat bonuses, demands to know if Florida Congressman Alan Grayson considers her corrupt. I know Congressman Grayson and he's too much of a gentleman to point out how corrupt Virginia Foxx is-- and I'm not talking about the kinds of Christmas trees that grow on her farm, either.

Virginia Foxx has never voted against a bill deregulating banksters or any other kind of corporate predators since she got into Congress. And she's gotten her share of the $2.2 billion in bribes that the finance/insurance/real estate sector has doled out to federal elected officials. She's perfectly comfortable voting on their priority legislation-- and always exactly the way they want her to-- despite having taken $377,862 from them just since 2004. And while the FIRE sector makes up the biggest bulk of her contributions, her voting record reads like a to-do list for corporate lobbyists across the whole spectrum of Big Business. She scarfs up $50,600 from Big Oil and votes for the energy bills that have helped wreck our country's competitiveness. AgriBusiness has paid her off to the tune of $271,640 and she's always there to vote against family farms and for unsustainable corporate farming. Big Pharma and HMOs found that a quarter million dollars bought them a lot of loyalty from Virginia Foxx, no matter that their vision of "health care" meant the folks in Forsyth County, Boone, Stokes and even her own hometown of Mount Airy would have to do without. So, in answer to crazy Virginia Foxx' question if people think she's corrupt-- how could anyone not! Today the normally unflappable Barney Frank lost patience with her idiocy and asked the raving lunatic, who was shouting "Regular order!" for no apparent reason, "What is the gentlewoman from North Carolina talking about?!"



Most Republicans joined Foxx yesterday in voting against Grayson's bill, H.R. 1644 which amends the executive compensation provisions of the Emergency Economic Stabilization Act to prohibit unreasonable and excessive compensation and compensation not based on performance standards. It passed 247-171, with only 10 Republicans voting in favor of keeping taxpayer money out of the pockets of crooked banksters. A small gaggle of misguided Democrats, mostly slimy aisle-crossing Blue Dogs like Walt Minnick (ID), Ann Kirkpatrick (AZ), Harry Mitchell (AZ) and Jim Matheson (UT) voted with the Republicans, although the GOP's own confused whip, Eric Cantor was too frightened to vote either way and just took the cowardly way out: "Present," he squeaked. A little afterthought: of the 10 Republicans voting for Grayson's legislation 5 of them are endangered incumbents from Florida: Ileana Ros-Lehtinen, the notorious Diaz-Balart Brothers, Ginny Brown-Waite, and Bilirakis the Younger. I suspect voters in Florida are really pissed off about executives getting fat paychecks out of taxpayer funds while the state's economy circles the toilet and more and more homes go into foreclosure while the unemployment rate accelerates. Or maybe they just like Alan?

Neil Cavuto apparently doesn't. You see, it isn't just Republicans in Congress who are trying to transfer taxpayer money to crooked executives. Longtime Big Buisness shill Cavuto is now certifiably insane. I guess Fox keeps him on the air because a psychotic breakdown is entertaining.

If You Thought The AIG Bonus Story Was Explosive... Wait 'Til You Hear What Went Down At Merrill Lynch

Will Ken Lewis get a corner cell? With a window?

Matt Renner is breaking the story at Truthout about how the Merrill Lynch Bonus Payments Dwarf AIG's. NY Attorney General Cuomo's office is getting to the bottom of the story but Renner's got a key paragraph that paints a grisly-- pitchfork inspiring-- picture:

In its last days as an independent company, Merrill gave performance-based bonuses exclusively to employees earning $300,000 a year or more and holding a rank of vice president or higher, according to their financial statements. $3.62 billion was handed out to these executives - a sum equal to 36.2 percent of the $10 billion in taxpayer funds that were allocated to Merrill as part of the Troubled Asset Relief Program (TARP) before the bonuses were paid.

So over a third of the $10 billion Bush gave his bankster buddies went directly into the pockets of the incompetent crooks most responsible for the failure of the company! Dennis Kucinich, who chairs the House Domestic Policy Subcommittee is launching an investigation that is likely to result in the firing of Bank of America CEO Ken Lewis, who made the Merrill Lynch deal without letting his shareholders know about the bonuses when they were asked to vote on the merger. (Sign SEIU's petition that calls for the ouster of one of the worst and most dangerous of the crooked banksters in America.)

But that isn't today's only bankster news. TPM has more on Joseph Cassano, the thief who ran AIG's Financial Products division and ran off with a $34 million bonus last month. It looks like the Feds will be able to extradite him from London and arrest him-- but not for theft but, like the way they got Al Capone, on tax charges.

An ABC News investigation found that Cassano set up some dozens of separate companies, some off-shore, to handle the transactions, effectively keeping them off the books of AIG and out of sight of regulators in the U.S. and the United Kingdom.

"This is the other very important issue underneath the AIG scandal," said [tax law expert Jack] Blum. "All of these contracts were moved offshore for the express purpose of getting out from under regulation and tax evasion."

Watch the video of the ABC News report. It's starting to look like what Cassano and AIG have been up to is helping set up tax scams so that corporations and very rich people wouldn't have to pay any, a hallmark of Republican economics and something heartily encouraged by the Bush Regime and their apologists inside and outside of Congress.

And as breathtaking as the sum of taxpayer dollars AIG has managed to put down in its post-crisis nationalized afterlife, the zombie insurer might possibly have indirectly scammed the government out of more money back in its Triple-A days. Today the Wall Street Journal explores AIG's euphemistically-named "tax structuring" business in a story about an IRS battle with Hewlett-Packard over an offshore entity -- or what the IRS terms a "sham that lacked economic substance and a business purpose"-- that AIG set up for the company to collect $132 million in tax credits. AIG's tax business, is "even bigger than the credit-default swaps business that led to the company's meltdown," a person "familiar with the business" tells the Journal. But that might be compartmentalizing things: we are beginning to suspect the credit default swap business and the tax "structuring" business were the same thing-- not just because they served the same end.

An attorney and tax shelter expert we spoke with today says AIG FP was one of the biggest players in the business of engineering offshore tax shelters for corporate and private clients that resembled a multibillion dollar tax evasion scheme called Son of Boss (we don't have time to figure out why) that thousands of corporations and wealthy individuals used to book phony capital gains losses and evade most or all of their income taxes in the late nineties and early 00s. The mind-numbing litany of esoteric loopholes such tax shelters employ to concoct said phony losses is something you don't want to hear about at this hour-- trust us-- but they are generally anchored by a set of exotic unregulated derivative securities whose 'notional value' can help fabricate losses that don't actually exist. Which is where Cassano came in-- only, obviously, the losses existed.

Forbes: "Maybe It's Time To Shut Off The Funding" From Wall Street To Democrats

If you've been following our A.I.G. coverage it would be hard to have missed the way we keep calling for campaign finance reform as a way of guarding against this kind of catastrophe-- the Depression in general, not just some unjust corporate bonuses. Wall Street-oriented magazine Forbes has looked at the same data we have-- and come up with a very different conclusion. Forbes thunders that an honest politician "is one who stays bought" and how some of the damn Democrats who took legalized bribes from A.I.G. and the entire FIRE sector (finance/insurance/real estate)-- some $2.2 billion in direct "donations" for federal elected officials since 1990 plus $3,443,208,346 in lobbying-- i.e., indirect bribes often of even murkier legality-- since 1998, are not serving A.I.G.'s "special interests" right now.

"And it wasn't just AIG," bitches Forbes: "Wall Street in general gave profligately to Barack Obama, and to Democrats generally, in 2008. Yet now, when the polls shift [ahh... so that's what they think the difference is, the polls] all of those politicians who were so happy to take the cash are suddenly pretending they have never even heard of Wall Street. Instead they're getting behind punitive taxes, protesters steered to executives' homes and what both the Financial Times and the New York Daily News have called a 'witch hunt' against bankers and brokers."

Well, not a witch hunt-- maybe an investigation-- aimed at criminal banksters and brokers who are misappropriating taxpayers' money. But to the self-entitled Wall Street set and their spokespersons at Forbes and the Wall Street Journal all money belongs to the Masters of the Universe.

If these donations had been given out of love and admiration, Wall Street donors would have reason to feel jilted. But if-- as is generally the case with political donations-- they were more in the order of protection money, then Wall Street donors may instead feel duped. They might want to ask themselves what protection, exactly, they got for their investment.

...[M]aybe it's time to shut off the funding. Politicians are already gearing up for the 2010 election season. That means many of the same members of Congress who are currently running with the lynch mob will be back in search of more contributions soon enough.

Perhaps folks in the financial industry should tell them no and consider donating to candidates who believe in free markets-- and who possess a bit of backbone-- instead. If incumbents' offers of "protection" are illusory, you might as well support people who believe in what you do. A Congress with a sense of decency and a respect for markets would be better protection than the questionable gratitude of politicos anyway.

Well, I agree. It is time to get the bribes out of government-- and to put the Wall Street and K Street and Capitol Hill Culture of Corruption figures on trial and in prison. Duke Cunningham, Jack Abramoff and Bob Ney were all thrown in jail but they were small potatoes compared to the entire culture that expects special interests to be served up to the highest bidders.

Go back a moment to last week's vote on the A.I.G. bonuses. Who were the 93 members of the House-- six Democrats and 87 Republicans-- who voted that wealthy corporate executives are entitled to get hundreds of millions of dollars in bonuses from the taxpayers? Let's look it at like this: your average, garden variety House member took in a couple hundred thousand dollars from the FIRE sector. But not the banksters' biggest advocates-- they got much more, in some cases, as much as senators. Take apologist numero uno, Spencer Bachus (R-AL), for example. He's the ranking Repug on the House Financial Services Committee and his bribes totaled close to $4 million dollars, beaten only by the corrupt Chairman of House Ways & Means, Charlie Rangel (D-NY- $4,276,926) who did all he could behind the scenes to water down the tax-the-bonuses bill, although, unlike Bachus he did vote for it in the end. John Boehner (R-OH- $3,045,809), on the other hand, stuck with the banksters, as did a disgraceful array of some of Congress' most corrupt characters, like Pete Sessions (R-TX- $2,730,126), David Dreier (R-CA- $2,118,538), Jeb Hensarling (R-TX- $2,111,371), Melissa Bean (Blue Dog-IL- $1,725,806), Peter King (R-NY- $1,385,668), John Linder (R-GA- $1,337,577), Steve LaTourette (R-OH- $1,271,387), Randy Neugebauer (R-TX- $1,253,775), John Shadegg (R-AZ- $1,191,961), Scott Garrett (R-NJ- $1,156,599), and Buck McKeon (R-CA- $1,015,098)... all House members who got over a million in legalized bribes from the FIRE sector who defended the corporate bonuses. Coincidence? I don't think so. And I know one Financial Services Committee member they're not going to he shoveling money at. Alan Grayson's legislation to limit executive compensation for companies being bailed out with taxpayer money is being marked up today.