Progressive Opinion

robertreich.org — Just when you thought Wall Street couldn’t sink any lower — when its myriad abuses of public trust have already spread a miasma of cynicism over the entire economic system, giving birth to Tea Partiers and Occupiers and all manner of conspiracy theories; when its excesses have already wrought havoc with the lives of millions of Americans, causing taxpayers to shell out billions (of which only a portion has been repaid) even as its top executives are back to making more money than ever; when its vast political power (via campaign contributions) has already eviscerated much of the Dodd-Frank law that was supposed to rein it in, including the so-called “Volker” Rule that was sold as a milder version of the old Glass-Steagall Act that used to separate investment from commercial banking — yes, just when you thought the Street had hit bottom, an even deeper level of public-be-damned greed and corruption is revealed.  Sit down and hold on to your chair.

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nytimes.com — Suddenly normally calm economists are talking about 1931, the year everything fell apart. It started with a banking crisis in a small European country. Austria tried to step in with a bank rescue — but the spiraling cost of the rescue put the government’s own solvency in doubt. Austria’s troubles shouldn’t have been big enough to have large effects on the world economy, but in practice they created a panic that spread around the world. Sound familiar? The really crucial lesson of 1931, however, was about the dangers of policy abdication. Stronger European governments could have helped Austria manage its problems. Central banks could have done much more to limit the damage. But nobody with the power to contain the crisis stepped up to the plate; everyone who could and should have acted declared that it was someone else’s responsibility. And it’s happening again, both in Europe and in America.

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rollingstone.com — Someday, it will go down in history as the first trial of the modern American mafia. Of course, you won't hear the recent financial corruption case, United States of America v. Carollo, Goldberg and Grimm, called anything like that. If you heard about it at all, you're probably either in the municipal bond business or married to an antitrust lawyer. Even then, all you probably heard was that a threesome of bit players on Wall Street got convicted of obscure antitrust violations. But this just-completed trial in downtown New York against three faceless financial executives really was historic. Over 10 years in the making, the case allowed federal prosecutors to make public for the first time the astonishing inner workings of the reigning American crime syndicate, which now operates not out of Little Italy and Las Vegas, but out of Wall Street.

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commondreams.org — When Jamie Dimon, CEO of JPMorgan Chase Bank, appeared before the Senate Banking Committee on June 13, he was wearing cufflinks bearing the presidential seal.  “Was Dimon trying to send any particular message by wearing the presidential cufflinks?” asked CNBC editor John Carney.  “Was he . . . subtly hinting that he’s really the guy in charge?” The groveling of the Senators was so obvious that Jon Stewart did a spoof news clip on it. “What is going on with this panel of senators?” asked Stewart.  “They’re sucking up to Jamie Dimon like they’re on JPMorgan’s payroll.”  The explanation in a news clip that followed was that JPMorgan Chase is the biggest campaign donor to many of the members of the Banking Committee. That is one obvious answer, but financial analysts Jim Willie and Rob Kirby think it may be something far larger, deeper, and more ominous.  

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robertreich.org — The Commodity Futures Trading Commission, the main regular of derivatives (bets on bets), wants to extend Dodd-Frank regulations to the foreign branches and subsidiaries of Wall Street banks. Horror of horrors, say the banks. “If JPMorgan overseas operates under different rules than our foreign competitors,” warned Jamie Dimon, chair and CEO of JP Morgan, Wall Street would lose financial business to the banks of nations with fewer regulations, allowing “Deutsche Bank to make the better deal.” This is the same Jamie Dimon who chose London as the place to make highly-risky derivatives trades that have lost the firm upwards of $2 billion so far – and could leave American taxpayers holding the bag if JPMorgan’s exposure to tottering European banks gets much worse.

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thenation.com — Mitt Romney’s “Every Town Counts” bus tour brought the presumptive Republican presidential nominee across southern Wisconsin and into Iowa Monday and Tuesday. But the towns didn’t count enough for him to learn their real histories and their real needs. And the tour scrupulously avoided towns where Romney’s Bain Capital continues to put the hurt on American workers. That’s the problem for Romney. He has been on the wrong side of so many economic fights that it is impossible for him to play the economic populist in communities that could stand with a little populism. But the real story of Romney’s tour is the towns that don’t count with him.

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guardian.co.uk — As JP Morgan CEO Jamie Dimon showed up to Congress on Tuesday to try to explain how his "too big to fail" bank could mysteriously lose $2bn in risky trades, he was suddenly diverted to a back entrance. Why? Because Robin Hood was waiting. Nurses, healthcare and community activists were in the hallways ready to send him and the rest of his Wall Street gang a message: it's time to pay up for the damage you have done to our communities and our nation. This week, the Robin Hood campaign, which has exploded across the world, took a major step forward in the US with a stepped-up campaign that included visits by Robin Hood and his merry men and women to JP Morgan branches across the country, and scores of other actions. Today, no fewer than 40 countries have some tax on financial transactions already in place. It is time for the U.S. to step up.

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propublica.org — JPMorgan Chase CEO Jamie Dimon is on Capitol Hill again today, this time to talk to the House Financial Services committee about the bank's recent multibillion-dollar trading loss. According to his prepared testimony, Dimon plans to deliver basically the same remarks he gave the Senate banking committee last week, apologizing but giving few details. His Senate hearing was hardly a grilling; senators mostly praised him for his "emphasis on continuous quality improvement," in the words of Senator Jim DeMint, R-S.C. As we charted last week, JPMorgan happens to have plenty of connections to the Senate committee. The House committee where Dimon is appearing today has its own ties to the bank. Congressmen and staff from the committee have gone to JPMorgan and its lobbying firms. Members have also gotten hefty campaign contributions from the bank's PACs and employees.

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huffingtonpost.com — Last Wednesday, speaking at the Council on Foreign Relations, Treasury Secretary Tim Geithner had this to say about the deepening European crisis: "If you wait to move on these things and you let the market get ahead of you, then you increase the cost of the solutions." Geithner was referring to efforts by European leaders to shore up Europe's banking system and public finances, to regain the trust of money markets. But what's really at work here? It wasn't the Greek economy, accounting for about 2 percent of European GDP that deepened the crisis. It was the speculative response to the Greek situation. Geithner's comment gets the real dynamics backwards. It's not that economies are too slow to appease markets. It's that the markets have too much power to destroy economies.

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