Bank regulators got a sense Thursday of how their lives will be slightly different now that Elizabeth Warren sits on a Senate committee overseeing their agencies.
At her first Banking, Housing and Urban Affairs Committee hearing, Warren questioned top regulators from the alphabet soup that is the nation’s financial regulatory structure: the FDIC, SEC, OCC, CFPB, CFTC, Fed and Treasury.
The Democratic senator from Massachusetts had a straightforward question for them: When was the last time you took a Wall Street bank to trial? It was a harder question than it seemed.
“We do not have to bring people to trial,” Thomas Curry, head of the Office of the Comptroller of the Currency, assured Warren, declaring that his agency had secured a large number of “consent orders,” or settlements.
“I appreciate that you say you don’t have to bring them to trial. My question is, when did you bring them to trial?” she responded.
“We have not had to do it as a practical matter to achieve our supervisory goals,” Curry offered.
Warren turned to Elisse Walter, chair of the Securities and Exchange Commission, who said that the agency weighs how much it can extract from a bank without taking it to court against the cost of going to trial.
“I appreciate that. That’s what everybody does,” said Warren, a former Harvard law professor. “Can you identify the last time when you took the Wall Street banks to trial?”
“I will have to get back to you with specific information,” Walter said as the audience tittered.
“There are district attorneys and United States attorneys out there every day squeezing ordinary citizens on sometimes very thin grounds and taking them to trial in order to make an example, as they put it. I’m really concerned that ‘too big to fail’ has become ‘too big for trial,’” Warren said.
Just some links to get us started this morning, I am sure that there will be more information about the mass murders in Newtown, Connecticut. Check the comment section below for updates.
I have to share these two links with you however, first is this one…from Susie Madrak…thank you for posting this link Susie! We need to talk about mental illness.
This is also very sad. And infuriating. Hey, let’s cut some more mental health funding!
Friday’s horrific national tragedy—the murder of 20 children and six adults at Sandy Hook Elementary School in New Town, Connecticut—has ignited a new discussion on violence in America. In kitchens and coffee shops across the country, we tearfully debate the many faces of violence in America: gun culture, media violence, lack of mental health services, overt and covert wars abroad, religion, politics and the way we raise our children. Liza Long, a writer based in Boise, says it’s easy to talk about guns. But it’s time to talk about mental illness.
I live with a son who is mentally ill. I love my son. But he terrifies me.
Please read that post and share it!
Then there is this shit: Westboro Baptist Church Members Say They Will Protest In Sandy Hook
It is 3:33am, and I lay in bed…unable to breathe. I thought if I added these two stories to my post I could somehow fall asleep. I am sick with all this, it is horrifying…. Please…make it stop.
Now for some stories that caught my eye this past week.
Glenn Greenwald looks at HSBC, too big to jail, is the new poster child for US two-tiered justice system
The US is the world’s largest prison state, imprisoning more of its citizens than any nation on earth, both in absolute numbers and proportionally. It imprisons people for longer periods of time, more mercilessly, and for more trivial transgressions than any nation in the west. This sprawling penal state has been constructed over decades, by both political parties, and it punishes the poor and racial minorities at overwhelmingly disproportionate rates.Assistant attorney general Lanny Breuer said taking away HSBC’s US banking licence could have cost thousands of jobs. Photograph: Richard Drew/AP
But not everyone is subjected to that system of penal harshness. It all changes radically when the nation’s most powerful actors are caught breaking the law. With few exceptions, they are gifted not merely with leniency, but full-scale immunity from criminal punishment. Thus have the most egregious crimes of the last decade been fully shielded from prosecution when committed by those with the greatest political and economic power: the construction of a worldwide torture regime, spying on Americans’ communications without the warrants required by criminal law by government agencies and the telecom industry, an aggressive war launched on false pretenses, and massive, systemic financial fraud in the banking and credit industry that triggered the 2008 financial crisis.
This is ridiculous, more at the link, in fact Greenwald has updated the post since it originally was published on 12/12/12.
From ProPublica, a report on the US water supply. Poisoning the Well: How the Feds Let Industry Pollute the Nation’s Underground Water Supply
Federal officials have given energy and mining companies permission to pollute aquifers in more than 1,500 places across the country, releasing toxic material into underground reservoirs that help supply more than half of the nation’s drinking water.
In many cases, the Environmental Protection Agency has granted these so-called aquifer exemptions in Western states now stricken by drought and increasingly desperate for water.
EPA records show that portions of at least 100 drinking water aquifers have been written off because exemptions have allowed them to be used as dumping grounds.
“You are sacrificing these aquifers,” said Mark Williams, a hydrologist at the University of Colorado and a member of a National Science Foundation team studying the effects of energy development on the environment. “By definition, you are putting pollution into them. … If you are looking 50 to 100 years down the road, this is not a good way to go.”
As part of an investigation into the threat to water supplies from underground injection of waste, ProPublica set out to identify which aquifers have been polluted.
That is just the beginning, go read the rest when you have time.
Okay, we’ve had links to outrages regarding the Fed and DoJ, and the EPA. Now on to the latest news about Obamacare…and Walmart. Walmart Workers At Risk In States Rejecting Obamacare Medicaid Expansion
If state governors follow through on plans to oppose the expansion of Medicaid under Obamacare, one substantial group of low-wage workers appears vulnerable to going without medical coverage: people who work at Walmart.
The world’s largest retailer recently outlined a new policy that will exclude from health coverage newly hired employees who work fewer than 30 hours per week, as The Huffington Post reported this month. Experts described that move as an attempt by Walmart to shift the burden of providing health coverage to the government — specifically, to Medicaid, the insurance program for the poor.
Isn’t it wonderful? /snark.
I’ve got another article to share with you, this time it is on various Federal District Courts: Help Wanted On The Federal Bench – The Dish | By Andrew Sullivan – The Daily Beast
Robert Kuttner points out that there “are now more than 100 vacancies on the federal bench, out of some 856 federal district and appellate judges, far more than on the day Obama took office”
Y’all know what this means. Why are there so many vacancies left open by the Obama Administration?
The rest of today’s links are listed below…
Finally, later in the week, TCM will be showing one of the best movies of film noir, Double Indemnity staring Babara Stanwyck and Fred MacMurray, and directed by Billy Wilder. So in connection to this film, check out the two videos below. From the Carol Burnette Show:
See you all in the comments later on today.
It’s a new season, by that I mean basketball. So tonight I am off to watch my daughter cheer for her b-ball team here in Banjoville.
Tonight’s reads have a mixture of stories for you, and I hope that you find them interesting.
I’ve got a couple of stories on dinosaurs, one real and one metaphorical…I start the post with one…and finish with one, you know how I have to have some sort of method to my madness.
On that dinosaur they call the GOP, this op/ed from Alex Jakubowski at the Daily Caller caught my eye, of all the shit spewing from the mouths of the right, this was the one voice that had any sort of genuine reason and thought. Give it a read in full, and then take a peek at the comments…of course it will never reach through those right-wing nut’s thick skulls, but it is nice to think so…anyway, here it is: My father’s party
We lost. We lost in 2008. We lost in 2012. We can say we won in 2010, but why bother? What gains did we achieve? How did we really help everyday Americans by replacing the Democratic-controlled House with a Republican one? The answer: We didn’t. We didn’t pass a single piece of important legislation and we did nothing to improve the quality of life for the American people.[...]
I have been a Republican for as long as I can remember. As far back as fourth grade I remember listening to my father talk about capitalism, individualism, and the pursuit of the dream that makes America different from every other place on Earth. Though I didn’t quite understand why at the time, my father instilled these ideas in me in order to teach me why I should always be proud of my country, the only country willing to take my family in after the terrible atrocities we faced in the Holocaust. My father has always been a Republican, and in many ways I inherited my beliefs from him.
But the party my father raised me in was never a party of absolutes: our party was one of progress, one of thought, and most of all one that believed that compromise was a trait to be honored, not despised. My father’s party, and the one I have claimed to be a part of for years, was never ashamed to work with others to do what was right, and what would move the American people forward.
Every day I have conversations with liberal friends who have vastly different beliefs than I do about the ideal way to solve the problems our great country faces. We talk about welfare and government dependence; we talk about taxes and shared sacrifice; we talk about immigration and national security; yet never once has any of my countless conversations with friends resulted in anything but an honest, open conversation about ways we can put aside our ideological differences to find a middle ground — one on which we can move forward for the benefit of all.
But in the end we always realize that our grand conversations, our amazing ideas of compromise and political altruism are all for naught. With both parties as they are now, none of our grand ideas have any chance of becoming a political reality. In a world where simply working with the other side is seen as a political liability, how can we hope to move forward as a generation?
As a life-long Republican, and after enduring two straight embarrassing losses, I can no longer sit by and wait for things to change. The party in which I was raised did not dictate to others how they must set policies on immigration, marriage, and abortion; the party in which I was raised thought sensibly about how to work with the other side and compromise, achieving at least in part the goals of all for the sake of the nation. As a dear friend and fellow moderate Republican recently said in an argument I have become far too familiar with, “Disagreement is not a threat to your own views.” In fact, disagreement is what can propel us forward, what can drive us to discover what policies can truly change our society for the better.
If our party is to truly change, as it is now clear it must, our focus needs to change as well. No longer can we count on a conservative, Evangelical base to provide the necessary votes to sweep a candidate into office. The party must abandon its hardline positions on abortion, immigration, gay marriage, and many other issues — many of which alienate those who are supposed to make up the future of our movement. Perhaps none said it better than moderate Republican Representative Cory Gardner of Colorado: “After tonight, the GOP had better figure out that a big tent sounds good but if there aren’t any seats in it, what good is it?” We must learn to embrace the fact that no matter our disagreements, those on the other side of any issue are not our opponents — they are our friends. No matter the difference, no matter the issue, we can and have to work together.
The United States has always moved forward on the premise that we can do better; I know now that we can, and I hope that together, we will.
Hey, that kind of talk will get you run out on a rail in the Fox News world, but I do think the possibilities of a “better tomorrow, tomorrow” are a reasonable hope some of us can have. Even if it is only a pipe dream.
More on the dinosaur party and it’s fanatics:
California to reform a law on Tuesday, one I think is very good. California Voters Scrap Draconian “Three Strikes” Law
After nearly 20 years and over $20 billion spent, California voters have voted overwhelmingly to reform our state’s draconian “three strikes” law. The statewide ballot measure, Proposition 36 , delivered a two-to-one mandate (68.6%-31.4%) to close a controversial loophole in the law so that life sentences can only be imposed when the new felony conviction is “serious or violent.”
Three strikes laws, often known as habitual offender laws, grew out of the “tough on crime” era of the 1980s and 90s. Between 1993 and 1995, 24 states passed some kind of three strikes law, but California’s 1994 three strikes ballot measure was especially harsh.
While the 1994 law required the first and second strike to be either violent or serious, any infraction could trigger a third strike and the life sentence that went with it. Therefore, petty offenses – such as stealing a piece of pizza – have led to life imprisonment for thousands of people.
Read more at the link, the best thing is that people who have been given life for petty crimes are able to request a lesser sentence, that is very fair in my opinion and in the end will help with prison overcrowding. So this should be good for many all around.
Many New York hospitals are still without power: New York’s Ongoing Blackout: Hospitals in Lower Manhattan
And there is new documents released in connection with HARP: Read the Documents Treasury Has Been Keeping Secret
This next post from the Grio made me smile…Sasha Obama’s Election Night advice to president caught on tape: ‘Behind you!’
President Barack Obama walks on stage with daughter Sasha to deliver his victory speech on election night at McCormick Place November 6, 2012 in Chicago, Illinois. Obama won reelection against Republican candidate, former Massachusetts Governor Mitt Romney. (Photo by Chip Somodevilla/Getty Images)
It was a quick but instantly memorable moment on Election Night.
When President Barack Obama and the first family greeted an enormous crowd of supporters after being re-elected, his 11-year-old daughter Sasha got his famous enlarged ear and said “Behind you!”
The president quickly turned and acknowledged a big group of supporters he had previously ignored and waved to them, eliciting big cheers.
On a historical note, check out this abstract from Medieval.net: Of Kings and Popes and Law
Abstract: During the latter half of the 11th century through to the end of the 13th century, Europe was experiencing what is considered by some historians as “the” medieval renaissance, otherwise referred to as the European Renaissance of the Twelfth Century. The time appears to have been ripe for an explosion of cultural and intellectual advancement and change. Two fields that experienced significant development during that period were law and governance, both secular and ecclesiastical.
In England, the period which most legal historians consider to be the key formative years of the common law was the reign of King Henry II. Indeed, Sir William Holdsworth credits Henry II for “substituting one common law for that confused mass of local customs of which the law of England had formerly consisted”. But as R.H. Helmholz said, “legal history, like any other, is a history of winners, and the history of the losing side is often overlooked. That we only hint of the history of the canon law by reference to the common law is a fact of life and not to be lamented”. However, he admonishes us not to ignore the intrinsic importance of the jurisdiction once exercised by the courts of the Church in the development of the law of England.
I take up Helmholz’ challenge in this thesis and examine the relationship that developed between the English royal authorities and the Latin (Western) Christian Church from the beginning of the reign of Edward the Confessor to the end of the reign of King John. Through a review of cases reported by the Selden Society from the royal courts of Henry II, Richard I and John, I then focus my research on the 62 year period between the beginning of the reign of Henry II and the death of John, and consider the influence of the Church and State relationship on the structure and processes of the developing English royal law and its scope.
Henry Plantagenet has always fascinated me…maybe it was my interest in his wife, Queen Eleanor of Aquitaine that caused me to admire Henry, but there it is.
And finally, that other dinosaur: New Dinosaur Xenoceratops Discovered In Canada
Everybody, meet Xenoceratops foremostensis, a brand new species of ceratopsid, or horned dinosaur, discovered in the plentiful fossil beds of Canada. Weighing in at 2 tons and about 20 feet long, Xenoceratops — meaning “alien-horned face” — lived about 80 million years ago, making it one of the oldest big-bodied horned dinosaurs known to paleontologists.
Though it has only recently been identified as a separate species, xenoceratops was identified from fossils discovered in 1958, only to be misidentified for several decades before taking its rightful place as a separate species.
Well, that is all I have time for, catch ya later in the comments!
This is an open thread.
Wow, what a busy 24 hours it has been. I don’t know about you all, but my PAD (Political Affected Disorder) has been kicked into high gear. I mean, in a Ryan world, that WPA poster would say, Lack of Funds…Fuck off…you’re on your own, no need for medical care, just die already!
The thought of a Romney/Ryan presidency scares the bejebees out of me! It is frightening though, all that talk of Obama, the Socialist Kenyan Fascist Dictator, bringing on the end of the world…and this is what these nuts are pushing on us? A lying unlikable jerk robot and his Munster asshole “intellectual” cough…cough…
Well, since we don’t know what taxes Romney has paid the last few years…plus, according to Roll Call, Paul Ryan’s Tax Plan Would Slash Mitt Romney’s Tax Rate to 1 Percent : Roll Call Politics
The tax plan proposed by Rep. Paul Ryan (Wis.), the newly minted GOP vice presidential candidate, would have slashed Mitt Romney’s effective tax rate to about 1 percent in 2010, based on Romney’s tax return that year, according to a Roll Call analysis.
The Ryan tax cut, which would shave about 90 percent off of Romney’s tax bill, would result from the Wisconsin Republican’s “Roadmap for America’s Future” proposal to eliminate taxes on capital gains, dividends and interest. Since about 95 percent of Romney’s $21.6 million income came from those sources in 2010, he would pay no taxes on the vast majority of his earnings. It’s not certain exactly how low Romney’s tax bill would go, but his income from other sources amounts to about $1 million, and Ryan’s plan would set a new top rate of 25 percent. Romney’s total tax bill would have dropped from the $3 million that he paid to a few hundred thousand dollars if Ryan’s plan had been in effect.
Ryan also proposes eliminating the estate tax, which would benefit Romney’s heirs by tens of millions of dollars.
Ryan’s “Roadmap” plan on his website says eliminating taxes on capital gains, interest and dividends would promote savings.
And speaking of Ryan Budget, take a few minutes to check out Nuns on the Bus…because I am sure they are going to be one of the groups to watch now that the coward, who refused to meet with these Nuns on a Mission, has been picked as Romney’s VP.
I still can’t stand Obama, and I still feel he intends to mess with Social Security, Medicare and Medicaid: Obama’s Second Term Agenda: Cutting Social Security, Medicare, and/or Medicaid « naked capitalism
This is probably the least important Presidential election since the 1950s. As an experienced political hand told me, the two candidates are speaking not to the voters, but to the big money. They hold the same views, pursue the same policies, and are backed by similar interests. Mitt Romney implemented Obamacare in Massachusetts, or Obama implemented Romneycare nationally. Both are pro-choice or anti-choice as political needs change, both tend to be hawkish on foreign policy, both favor tax cuts for businesses, and both believe deeply in a corrupt technocratic establishment.
So while the election lumbers on like the death rattles of the wounded animal known American democracy, no one on either side is asking what the plan is for the next term. For Obama, his team is going into rooms of donors and shouting “Supreme Court”, while mumbling something about bipartisanship and $4 trillion, or Simpson-Bowles. What this means is that term two of the Obama White House will be organized around cutting entitlements.
The White House already tried cutting all three main entitlement programs, last year (cuts to Medicaid are actually cuts to Obamacare, for what it’s worth, since an expansion of Medicaid was a key plank of the new health care law).
Read the rest…it is quite upsetting.
In fact, I am going to move away from Romney and Obama, and bring you some stories you may have missed during all the hubbub.
It is beyond ridiculous, and this next link shows just how f’d up this DOJ decision is: AZ Woman Imprisoned — After Producing Her Birth Certificate | Crooks and Liars
Guilt has nothing to do with punishment — that is, as long as you’re not a Wall Street banker. In Arizona, if you “look” foreign, that’s enough to put you in jail indefinitely, without bail – even after you produce your birth certificate:
Recently, the Maricopa County Attorney’s Office alleged Briseira Torres, a shy, 31-year-old single mom from Glendale, was here illegally and that Briseira Torres was not her real name.
She was accused of three counts of forgery, in part because her driver’s license had her real name on it, which the MCAO thought was bogus. Following her arrest, she was held without bond in Estrella Jail for 4 1/2 months.
Torres lost her home and car because she couldn’t make the payments as she endured Estrella’s harsh conditions, lousy food, and detention officers.
Bold emphasis is Susie Madrak’s not mine,
In the pile of paperwork they provided to the court, to the prosecutor, and to U.S. Immigration and Customs Enforcement was a silver bullet: a sworn statement from Arizona’s Office of Vital Records attesting to the legitimacy of documents on file for Torres.
Among these docs is Torres’ birth certificate, showing she was born August 14, 1981, in Avondale.
Salvatierra asked the court to remand the case back to the grand jury.
Judge Carolyn Passamonte did just this, noting in her minute entry that Torres’ long-form birth certificate was “clearly exculpatory evidence that should have been presented to the grand jury.”
The judge remarked that the documents on file with Vital Records had been “available to the state,” and in oral arguments, the prosecutor had to admit that he’d never bothered to pull the file and inspect it.
Can you believe this crap? As Susie says,
…her legal birth certificate was right there, the whole time of her incarceration. A cop with a bug up his butt decided to act as if it didn’t exist. If only her name was Goldman Sachs!
Now that your blood pressure is up, check this out: Mississippi county accused of running ‘school-to-prison pipeline’ | The Raw Story
The U.S. Department of Justice has accused officials in Lauderdale County, Mississippi of running ‘a school-to-prison’ pipeline that jails juveniles for even minor school disciplinary problems.
A letter sent by the civil rights division on Friday charges that the Lauderdale County Youth Court, the Meridian Police Department, and the Mississippi Division of Youth Services have been violating the constitutional rights of children in Lauderdale County and the City of Meridian.
According to the letter, an investigation launched last December revealed that “the agencies have helped to operate a school-to-prison pipeline whereby children arrested in local schools become entangled in a cycle of incarceration without substantive and procedural protections required by the U.S. Constitution. The department’s findings show that children in Lauderdale County have been routinely and repeatedly incarcerated for allegedly committing school disciplinary infractions and are punished disproportionately, without constitutionally required procedural safeguards. Children have also been arrested at school for offenses as minor as defiance.”
“Furthermore,” it continues, “children on probation are routinely arrested and incarcerated for allegedly violating their probation by committing minor school infractions, such as dress code violations, which result in suspensions. The department’s investigation showed that students most affected by this system are African-American children and children with disabilities.”
Meridian is known for the murders of three civil rights workers, back in 1964, aka “the Mississippi Burning” case.
In 2009 the Southern Poverty Law Center brought a class-action lawsuit against the Lauderdale County Juvenile Detention Facility, accusing it of keeping youths “crammed into small, filthy cells and tormented with the arbitrary use of Mace as a punishment for even the most minor infractions — such as ‘talking too much’ or failing to sit in the ‘back of their cells.’”
An agreement was reached at that time to reform the jail system and consider alternative methods of handling school disciplinary issues, but problems have continued in what an SPLC representative now calls “a broken system.”
The Justice Department letter cites a pattern of unconstitutional conduct that includes both failure to assess probable cause before arresting school children and failure to provide proper due process with regard to alleged probation violations.
A few weeks after the Justice Department investigation began last winter, Lauderdale County took steps to shut down its juvenile detention center and send youthful offenders instead to a neighboring county. That action was apparently considered inadequate, and officials are now being told they must enter into “meaningful negotiations” to end the violations within sixty days or face a federal lawsuit.
That is disturbing, I know, and I don’t want to end on a bad note, I mean it is Sunday…and since we started out mentioning the Nuns on the Bus, let’s end with a story about another activist nun.
Shawn Poynter for The New York Times
Sister Megan Rice, 82, is one of three people arrested in a break-in at a nuclear complex in Oak Ridge, Tenn.
She has been arrested 40 or 50 times for acts of civil disobedience and once served six months in prison. In the Nevada desert, she and other peace activists knelt down to block a truck rumbling across the government’s nuclear test site, prompting the authorities to take her into custody.
She gained so much attention that the Energy Department, which maintains the nation’s nuclear arsenal, helped pay for an oral history in which she described her upbringing and the development of her antinuclear views.
Now, Sister Megan Rice, 82, a Roman Catholic nun of the Society of the Holy Child Jesus, and two male accomplices have carried out what nuclear experts call the biggest security breach in the history of the nation’s atomic complex, making their way to the inner sanctum of the site where the United States keeps crucial nuclear bomb parts and fuel.
“Deadly force is authorized,” signs there read. “Halt!” Images of skulls emphasize the lethal danger.
I’ll tell you one thing…I see an Michael Bay action film in this story.
With flashlights and bolt cutters, the three pacifists defied barbed wire as well as armed guards, video cameras and motion sensors at the Oak Ridge nuclear reservation in Tennessee early on July 28, a Saturday. They splashed blood on the Highly Enriched Uranium Materials Facility — a new windowless, half-billion-dollar plant encircled by enormous guard towers — and hung banners outside its walls.
“Swords into plowshares,” read one, quoting the Book of Isaiah. “Spears into pruning hooks.” The plant holds the nation’s main supply of highly enriched uranium, enough for thousands of nuclear weapons.
The actions of Sister Rice, a New York native who grew up on a prosperous block in Morningside Heights, and her companions, ages 57 and 63, are a huge embarrassment for President Obama. Since 2010, he has led a campaign to eliminate or lock down nuclear materials as a way to fight atomic terrorism. Now, the three — two of whom, including Sister Rice, are free and are awaiting trial in October — have made nuclear theft seem only a little more challenging than a romp in the Tennessee woods.
In interviews this week, Sister Rice discussed her life — somewhat reluctantly at times — and kept emphasizing what she called “the issue.”
You need to read the rest of the story…but isn’t she wonderful?
Can you imagine who would play Sister Rice and her two male accomplices? I see Diana Rigg as Sister Rice, of course with her Avengers background, it will be a spectacular performance. As for the men, one of them has to be Bruce Willis and the other must be Samuel L Jackson. I can just hear the catch phrase as it trickles off of Jackson’s tongue, “Bless this, muthafukkaz…”
Have a wonderful day and please share what are you all reading about this fine Sunday morning?
One of the weirdest memes I’ve heard recently is that no economist or person with a finance background could have seen the global financial crisis coming. That’s quickly followed by no one knew it would be so deep and so hard to escape. Then, there’s the entire weirdness surrounding the tropes that just cutting taxes and balancing budgets will solve all the problems.
I read this Galbraith article over at Truthdig and wanted to share it because it just says all that many of us economists saw coming, see happening, and shake our heads at now. I personally expected the subprime credit markets to blow up sometime in 2005. I was watching the subprime contagion spread into the major banks by 2006. I heard from Social Workers what kinds of crap was being pushed on to their clients. You can ask my colleagues. I was vocal about it. The only people that seem flummoxed are those that were taken in by Fama and his Chicago acolytes. They are also the ones spreading the worst nastiness now. It does not surprise me that Paul Ryan is one of their groupies. They’ve been perpetually wrong on things.
I don’t have a lot of time to do a big analysis of this. I also think that Saturday is the last day you want to read it. Anyway, go read the article. It’s excellent.
The most important common ground was over the depth and severity of the financial crisis. We placed it in a different league from all other financial events since the early thirties, including the debt crises of the eighties and the Asian and Russian crises of the late nineties. One of us called it “epochal” and “history-making.” And so it has turned out. What distinguishes this crisis from the others are three facts taken together: (a) it emerges from the United States, that is, from the center, and not the periphery, of the global system; (b) it reflects the collapse of a bubble in an economy driven by repetitive bubbles; and (c) the bubble has been vectored into the financial structure in a uniquely complex and intractable way, via securitization.
Bubbles are endemic to capitalism, but in most of history they are not the major story. In the nineteenth century, agricultural price deflation was a larger problem. In the twentieth, industrialization and technology set the direction. It was only in the information technology bubble of the late nineties that financial considerations including the rise of venture capital and the influx of capital to the United States following the Asian and Russian crises—came to dominate the direction of the economy as a whole. The result was capricious and unstable—vast investments in (for instance) dark broadband, followed by a financial collapse—but it was not without redeeming social merits. The economy prospered, achieving full employment without inflation. And much of the broadband survived for later use.
The same will not be said for the sequential bubbles of the Bush years, in housing and now commodities. The housing bubble—deliberately fostered by the authorities that should have been regulating it, including Alan Greenspan and Ben Bernanke—pushed the long-standing American model of support for homeownership beyond its breaking point. It involved a vast victimization of a vulnerable population. The unraveling will have social effects extending far beyond that population, to the large class of Americans with good credit and standard mortgages, whose home values are nevertheless being wiped out. Meanwhile, abandoned houses quickly become uninhabitable, so that, unlike broadband, the capital created in the bubble is actually destroyed, to a considerable degree, in the slump.
We’re still seeing overheated securitized assets. We’re seeing more canaries in the mine again. Think JP Morgan’s big hedge. We never have the right minds in the District dealing with the problem. This has been the case for all of this century. There’s a lot of bad thing bubbling in the financial markets right now. Now is the time to bring in the people that knew better. Not the same old suspects.