Curbing Wall Street

There's been a lot of confusion over the last few days about a possible deal with US banks to settle a fifty-state lawsuit over widespread and massive foreclosure fraud. Attorneys general from all the states have been working together, and the latest word is that the Obama Administration has proposed its own framework for a agreement.

Will that agreement be a fair one for the American people? The signs don't look good. Not that it should be a surprise. Weak and misleading reporting has set the stage for a lousy deal - one that could let bankers off the hook for criminal behavior and even let them to keep their ill-gotten gains. more »

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We discussed the implications of the Madison movement in an interview on "Russia Today" television yesterday. more »

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Sometimes it's worth looking at current events through the eyes of a historian chronicling the end of an age, or those of a district attorney in a time of corruption. Come to think of it, the two perspectives aren't all that different.

However you look at it, calling the Wisconsin struggle a "labor dispute" is like calling the Battle of Normandy "a fight over a beach." There's a war on, one that's best understand by using an Latin expression popular among prosecutors: Cui bono? Who benefits? Gov. Scott Walker's union-busting budget contains buried goodies for somebody, including possibly the Koch Brothers who paid to have it drafted. More importantly, it's another step toward replacing the American dream of prosperity for all with imperial visions of massive wealth for the few. more »

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Some condescending politicians and pundits never miss an opportunity to talk down to the American people, especially when it comes to budgets. The members of Washington's political "center" encounter one another at social events, often in pleasant halls where the chill of winter is kept at bay by the warmth of oak paneling. more »

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Somebody said that regulators need real power in order to be tough and effective. He said a strong, independent consumer protection agency is needed to help prevent the next financial crisis. And that we should help the millions of "responsible" homeowners hurt by the crash, instead of demonizing them. more »

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Thanks to the generous support of billionaires and self-interested corporations, think tanks have seeded our political discourse with a lot of mistaken ideas about government spending and deficits. more »

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The President's budget has just been released, and so has a Republican alternative from the House Appropriations Committee. Reading them is like watching two people play a video game and confusing it for the real world. These budgets don't reflect competing visions so much as they do competing priorities within a commonly-held set of assumptions. They both share an artificial view of today's reality - both economic and human - that warps our vision and limits our choices. The President may be playing the game as well as he can, but what he really needs to do is stop playing altogether.

The rules of this videogame are: 1) Accept the fact that the ultra-rich will keep accumulating ever greater amounts of wealth, and will continue to exert undue influence on the political process. 2) As a result, accept the fact that we can't resist the fundamental changes to our way of life that will create. 2) Sacrifice a large part of the social programs which gave us 75 years of shared prosperity, since they're incompatible with this change. 3) Preserve and expand your political power within this virtual-reality construct.

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Can a crime be committed if there is no criminal to commit it? According to the Securities and Exchange Commission, the answer to that Zen koan is apparently "yes." The SEC collected a $50 million settlement from GE Capital after concluding that the corporation "misled investors" by committing accounting and bank fraud, but then apparently decided that no individuals were responsible.

GE has been one of corporate America's worst repeat offenders, with a long history of settlements and guilty pleas. Its behavior in this case casts a spotlight on the world of "shadow banking," where institutions can behave like banks without being banks. That's another koan-like statement, and it's a very convenient one that lets them avoid a lot of oversight and regulation.

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Slasher-Movie Economics

A vicious, savage, axe-wielding killer stalks the political landscape, yearning to draw blood, slash victims, and amputate limbs. That's not my description of austerity economics - that's how its fans talk about it.

"Austerity" is defined as "the trait of great self-denial (especially refraining from worldly pleasures)." Austerity economics, on the other hand, is the practice of denying others things that they need while at the same time ensuring your own continued privilege and comfort. This practice is usually accompanied by a round of self-congratulation for showing such courage and discipline. Its usually sinister spell has seduced Republicans into aiding and abetting felons with budget cuts that would make them de facto accomplices to a thousand crimes. And what the president's about to do will literally send chills down a million spines.

Anne Applebaum nearly worked herself into a case of the vapors when Austerians got elected in Great Britain, when she palpitatingly repeated the phrases used by journalists there to describe the new government's budget. The new British leaders, said journalists, were "axe-wielders" who were inflicting "vicious," "savage," and "swingeing (sic) cuts." (Is that what "bangers and mash" really means?)

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Here's an idea: Let's give hundreds of billions of dollars in government-backed guarantees to private banks so they can make a fortune writing mortgages without any risk to themselves. Hey, what could go wrong?

The FCIC's recent report illustrated an important lesson from the economic meltdown: Privatization, not big government, ruined Fannie Mae and Freddie Mac. Running a government program like a private corporation leads to the worst excesses of executive self-indulgence. Fannie and Freddie didn't bring down the economy, as some have claimed, but they were destroyed by the same privatize-and-deregulate philosophy that led to the crisis.

Now we're learning that Washington may be preparing to take that destructive philosophy even further. Proposals to "reform" Fannie and Freddie by privatizing them even more aren't just bad, dangerous ideas. Worse, they suggest that we're returning to the blind and mistaken ideologies of the past. If that's true, then it's only a matter of time until the next meltdown comes. more »

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