September 2012 archive

Crossposted from DocuDharma

Who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled.

Breuer Admits That Economists Have Convinced Him Not to Indict Corporations

by emptywheel

Posted on September 14, 2012

I’ve become increasingly convinced that DOJ’s head of Criminal Division, Lanny Breuer is the rotting cancer at the heart of a thoroughly discredited DOJ. Which is why I’m not surprised to see this speech he gave at the NYC Bar Association selling the “benefits” of Deferred Prosecution Agreements.  (h/t Main Justice) He spends a lot of his speech claiming DPAs result in accountability.

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But the real tell is when he confesses that he “sometimes-though … not always” let corporations off because a CEO or an economist scared him with threats of global markets failing if he held a corporation accountable by indicting it.

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None of this is surprising, of course. It has long been clear that Breuer’s Criminal Division often bows to the scare tactics of Breuer’s once and future client base. (In his speech, he boasts about how well DPAs and NPAs have worked with Morgan Stanley and Barclays, respectively.)

It’s just so embarrassing that he went out in public and made this pathetic attempt to claim it all amounts to accountability.

Crony Capitalism, American Style

L. Randall Wray, EconoMonitor

September 16th, 2012

Our nation’s top cops freely admit that they have no interest in prosecuting criminal behavior perpetrated by our elite 1% at the top of our crony capitalism pyramid. As reported at Naked Capitalism, Lanny Breuer, head of the DOJ’s Criminal Division, practically brags about the absence of criminal convictions for all the fraud perpetrated over the past decade. He freely admits that when his department suspects a big bank of fraud, he calls in the bank’s team to provide a flashy presentation showing why it should not be investigated. The banksters make the argument that actually prosecuting fraudsters would be bad for crony capitalism, which of course scares the bejeebers out of Washington. So Breuer’s office then makes nice with the banksters, and they all go back to doing what they’ve been doing-moving all wealth to the cronies in the top 1%.

The Wall Street bank’s business model is fraud.

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You all already understand that mortgage brokers and property appraisers were in cahoots-overvaluing property to justify out-sized mortgages. You know that brokers pushed “don’t ask, don’t tell” “Liar’s loans” to put borrowers into loans they could not afford, and that they doctored loan documents after borrowers had signed them to cover up the lender’s fraud. And you know that the Wall Street banks created MERS to evade proper recording of property records, effectively wiping out half a millennium of record keeping so that no one any longer knows who owns what.

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(I)n fact, in many cases mortgages were never bundled into the securities. So it is not just a problem with the quality of the mortgages backing the securities. And it is not just a problem with the fact that the trustees lied about what was behind the securities. And it is not just a problem of splitting off the notes from the deeds. There is accumulating evidence that the only thing backing securities is an empty “paper bag“: mortgages were never actually securitized. The securities your pension fund might be holding were never worth a dime because they securitized air.

And many of these securitizations were supposed to be REMICs, which offer tax advantages but only if done properly. Guess what. One of the rules is that the mortgages must be put in the REMIC almost immediately. That rule was probably rarely followed; and of course if the mortgages were never put there at all, REMIC rules were certainly violated so the investors owe huge backtaxes. Wall Street’s response is to make a new “Wall Street Rule”: hey we all did it, and if the IRS pursues taxes and if we are pursued for fraud, then the whole system blows up. This is precisely the kind of line Breuer finds irresistibly logical, so you can bet his office won’t be going after the securitizers.

What I think is shocking is that a President of the United States would go behind closed doors and declare to a group of wealthy donors that they are ‘victims’, entitled to handouts, and don’t have to take ‘personal responsibility’ for their thefts and fraud.

Bruce Hornsby and The Range- That’s just the way it is

The do nothing Congress will slither out of town seven weeks before the election to hit the campaign trail and leaving a pile of work for November when they return for the lame duck session. Not that most of them aren’t lame now. They had originally been scheduled to work through to the first week of October.

The one bill that will be passed is the bill to keep the government funded once the new fiscal year begins Oct.1. It has already passed the House and is set for a vote in the Senate later this week. it will find the government through to March 27, 2013. The other legislation that will pass at least the House is a resolution expressing disapproval of President Obama’s handling of welfare reform. The administration agreed to to waive existing work requirements for those who receive welfare benefits if states can demonstrate better programs for employing and retaining workers. This waiver was requested by Republican governors, as well as, Democrats and the plans must be approved by the administration. In other words the House Republicans are disapproving something they requested.  

Bur much of what won’t be accomplished could drastically hurt the middle class and the economy.

What’s next for farm bill?

Greatest fallout from deadline miss: uncertainty

The 2008 farm bill, a law including crop insurance, disaster programs and other aid for farmers, along with conservation and food stamp programs, is set to expire Sept. 30, the end of the federal fiscal year. Some key programs could cease or run out of money without a new farm bill.

But farmers and ag policy experts say the most dramatic effects won’t happen until 2013. That’s when farmers will start to plant next year’s crop. Many farm programs operate onthe crop year, not the fiscal or calendar years. [..]

If Congress doesn’t do anything, food prices could soar. That’s because without a new farm bill, the law reverts back to a 1949 farm bill that essentially committed the federal government to purchase crops at fixed prices. But with more than 60 years since those prices were set, in most cases the government would be paying far more than what those crops receive today.

There is the legislation that would provide reforms for the Postal Service, which is plagued by financial shortfalls, and an extension of the Violence Against Women Act, a normally bipartisan bill that authorizes program funding for victims of domestic and sexual abuse.

The biggie is the expiring tax measures, the Bush/Obama and the Payroll tax holiday, and unemployment benefits, that will end December 31. As reported in Politico the House Ways and means Committee, which generates tax bills will meet in a rare closed session on Thursday. They will also meet with the Democratic-led Senate Finance Committee to discuss capital gains taxes.

David Dayen at FDL News Desk isn’t confident that the talks will include an extension of the Payroll Tax Holiday but thinks that this whole sequester mess will kicked down the road:

There’s no guarantee that the payroll tax cut will factor into these negotiations, but they should – or at least something that brings a commensurate level of fiscal accommodation, which preferably doesn’t put the Social Security Trust Fund at risk. The expiration of the payroll tax cut will take $125 billion out of the economy. That’s less than the Bush tax cuts, although since most of those accrue to the rich, the payroll tax cut could have a higher fiscal multiplier. And it’s a larger pullback in fiscal policy than the first year of the sequester, which would take roughly $110 billion out of the economy. [..]

I would like to find the economist who believes that the US can handle taking $125 billion out of the economy without an effect, especially $125 billion targeted loosely (though not as well as Making Work Pay) at those with a high propensity to spend. [..]

It’s entirely possible that everything gets punted for a period of time while opening up some breathing space for Congress to figure the mess out. But I doubt that includes the payroll tax cut. That’s decent enough news for Social Security, but it’s not really good news for the economy.

As a postscript, you gotta love this from a defense lobbyist:

   “Regardless of who wins, the big deal will have tax increases and spending cuts,” said one defense lobbyist, who asked not to be identified. “The ratio will just be different. With taxes playing a smaller role in a Republican plan, entitlement programs like Medicare will have to play a bigger one to protect defense.”

Surely we can all agree that Lockheed Martin needs the money more than an 85 year-old on a fixed income.

Lets see if Obama sticks to his promise to veto any bill that extends the Bush/Obama tax cuts for those who make over $250,000.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

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Rebecca Solnit: Occupy Your Victories: Occupy Wall Street’s First Anniversary

Occupy is now a year old. A year is an almost ridiculous measure of time for much of what matters: at one year old, Georgia O’Keeffe was not a great painter, and Bessie Smith wasn’t much of a singer. One year into the Civil Rights Movement, the Montgomery Bus Boycott was still in progress, catalyzed by the unknown secretary of the local NAACP chapter and a preacher from Atlanta — by, that is, Rosa Parks and Martin Luther King, Jr. Occupy, our bouncing baby, was born with such struggle and joy a year ago, and here we are, 12 long months later.

Occupy didn’t seem remarkable on September 17, 2011, and not a lot of people were looking at it when it was mostly young people heading for Manhattan’s Zuccotti Park. But its most remarkable aspect turned out to be its staying power: it didn’t declare victory or defeat and go home. It decided it was home and settled in for two catalytic months. [..]

With Occupy, remarkable things have already happened, and more remarkable systemic change could be ahead. Don’t forget that this was a movement that spread to thousands of cities, towns, and even rural outposts across the country and overseas, from Occupy Tucson to Occupy Bangor. Remember that many of the effects of what has already happened are incalculable, and more of what is being accomplished will only be clear further down the road.

Go out into the streets and celebrate the one-year anniversary and start dreaming and planning for 2021, when we could — if we are steadfast, if we are inclusive, if we keep our eyes on the prize, if we define that prize and recognize progress toward it and remember where we started — be celebrating something much bigger. It’s a long road to travel, but we can get there from here.

Dean Baker: Does President Obama Want to Cut Social Security by 3 Percent?

That is a pretty simple and important question. Unfortunately most voters are likely to go to the polls this fall without knowing the answer.

If the backdrop to this question is not immediately clear, then you should be very angry at the reporters who cover the campaign. One of the items that continuously comes up in reference to the budget deficit is President Obama’s support for the plan put forward by the co-chairs of his deficit commission, Morgan Stanley director Erskine Bowles and former Senator Alan Simpson. On numerous occasions President Obama has indicated his support for this plan.

One of the items in the Bowles-Simpson plan is a reduction in the annual cost-of-living adjustment of roughly 0.3 percentage points. This would be accomplished by using a different index that, by design, would show a lower measured rate of inflation. It is important to recognize that this is an annual cut that would accumulate over time. After a retiree has been receiving benefits for 10 years the cut would be 3.0 percent, after 20 years it would be 6 percent. If a typical retiree lives long enough to get benefits for 20 years the average benefit cut over their years of retirement would be 3 percent.

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

September 18 is the 261st day of the year (262nd in leap years) in the Gregorian calendar. There are 104 days remaining until the end of the year.

On this day in 1793, George Washington lays the cornerstone to the United States Capitol building, the home of the legislative branch of American government. The building would take nearly a century to complete, as architects came and went, the British set fire to it and it was called into use during the Civil War. Today, the Capitol building, with its famous cast-iron dome and important collection of American art, is part of the Capitol Complex, which includes six Congressional office buildings and three Library of Congress buildings, all developed in the 19th and 20th centuries.

As a young nation, the United States had no permanent capital, and Congress met in eight different cities, including Baltimore, New York and Philadelphia, before 1791. In 1790, Congress passed the Residence Act, which gave President Washington the power to select a permanent home for the federal government. The following year, he chose what would become the District of Columbia from land provided by Maryland. Washington picked three commissioners to oversee the capital city’s development and they in turn chose French engineer Pierre Charles L’Enfant to come up with the design. However, L’Enfant clashed with the commissioners and was fired in 1792. A design competition was then held, with a Scotsman named William Thornton submitting the winning entry for the Capitol building. In September 1793, Washington laid the Capitol’s cornerstone and the lengthy construction process, which would involve a line of project managers and architects, got under way.

The Romney/Ryan campaign continues to implode. A video has emerged from a private fund raiser in Boca Raton, Florida where GOP Presidential candidate Mitt Romney let his benefactors know how he really feels about half the country. At first the videos were dismissed as bogus, doctored works that appeared on a bogus You Tube account by someone claiming to be MSNBC host Rachel Maddow. But after the “owner” of the video contacted David Corn at Mother Jones the authenticity of the hour long diatribe against the 47% of voters was confirmed as very real. The Romney campaign is not denying the accuracy of the video. Here is the unedited full speech with transcript. Please read David Corn’s commentary about each segment,

The home where this fund raiser was held is owned by private equity manager Marc Leder who likes sex parties. So much for those family values.

And this is where the 47% live:

h/t watertiger @ Dependable Renegade

After Mr. Romney comments chastising President Obama while our embassies were under attack and four of our foreign service personnel were killed, he and his vice presidential nominee Paul Ryan continue on the low road. The debates should be very interesting. The first debate is October 3.

Despite Israeli Prime Minister Benjamin Netanyahu’s bleating  on Sunday’s talk shows about Iran being months away from having a nuclear weapon, there is no hard evidence that Iran is even seeking to build one. I’ve written three articles since January dispelling this myth, yet here we are again. The right wing war hawks and Bibi are at it propagate this fairy tail. Even Israel’s own intelligence community has agreed with the International Atomic Energy Agency and U.S. defense and intelligence officials who have said that they believe that Iran has not made a decision on whether to acquire nuclear weapons. So once more here are the facts from historian of the modern Middle East and South Asia Juan Cole:

1. {..} Netanyahu’s own Defense Minister, Ehud Barak, who admitted that Iran has not decided to initiate a nuclear weapons program. Israel’s chief of staff, Benny Gantz, has also admitted that Iran has not decided to build a bomb.

2.  It is often argued that Iran does not need nuclear power. But it uses some petroleum for power generation, and Iranians are driving more and more. [..] Iran’s energy exports provide a crucial financial cushion, allowing the country to remain independent. Other oil giants, such as Saudi Arabia and the United Arab Emirates, are also building nuclear power plants. There is nothing illogical or unusual about Iran going in this direction.

3. It is alleged that Iran has threatened to annihilate Israel. It has done no such thing. Iran has a ‘no first strike’ policy, repeatedly enunciated by Supreme Leader Ali Khamenei. Iran’s president, Mahmoud Ahmadinejad, has expressed the hope that the ‘Zionist regime over Jerusalem” would ‘vanish from the page of time.’ But he didn’t threaten to roll tanks or missiles against Israel, and compared his hopes for the collapse of Zionism to the collapse of Communism in Russia. [..]

4. Supreme Leader Ali Khamenei has given a formal ruling or fatwa against nuclear weapons.

I skipped to 6

6. No, the International Atomic Energy Agency, on inspecting Iran, did not alleged evidence for bomb-making. It certified that no uranium has been diverted to a weapons program.

The last time that Iran launched a war of aggression was in 1826 when it attacked Russia over disputed territory. Iran, like the United States is a signatory of the Treaty on Non-Proliferation of Nuclear Weapons. Israel is not.

Mr. Netanyahu has been beating this drum since 1992. Iran is no closer now than it was then to having, or wanting, nuclear weapons. Yet, he and the right wing war hawks who took us into the Iraq misadventure, would have the world believe this fantasy. Pushing for another war in the Middle East would have very seriously negative consequences for the entire world.

Danielle Dax- Tomorrow Never Knows

Even being a big dance club star remaking a Beatles hit won’t park feet on the parquet unless it’s Twist and Shout (this particular arrangement from Blast The Human Flower (1990)).

Cokie’s Law

At this point, it doesn’t much matter whether she said it or not because it’s become part of the culture. I was at the beauty parlor yesterday and this was all anyone was talking about.

As you know I only report the most scurrilous rumors and I ran across one today that even Yves Smith hesitated to talk about-

Condom used as evidence in Assange sex case ‘does not contain his DNA’ Daily Mail. Remember, this IS the Daily Mail!

Well, like most journalisticy ‘institutions’ The Daily Mail is a fine training ground for stenography OR fiction and in this case they have the benefit of being backed up by Wiki Leaks Central as reported by TheMomCat (The Tangled Web That Nations Weave: Part 2 Tue Aug 21, 2012).

Kevin has a Live Blog up at FDL with regular up dates from the scene in NYC.

Yesterday Code Pink co-director Rae Abileah was singled out by NYPD during a demonstration in front of Bank of America. She was waving a pink bra and was charged with “blocking a sidewalk”, although she was never told to move.

Occupy Wall Street has a new organizing campaign. David Dayen at FDL News Desk has the details:

Now, Occupy has another action-based offshoot that starts with the Debt Resistor’s Operations Manual. Over the weekend, activists handed out 5,000 free copies of the manual in the events prior to today’s anniversary. The group leading the way is known as Strike Debt. The idea is to give practical tips to people who have navigated a default event, either through housing, student loan, credit card or medical debt. The idea is to provide advice to people drowning in debt, some of it from insiders in the lending industry, to help navigate and resist. The ultimate goal is to help people renegotiate and restructure their debt, which is related to Occupy Our Homes, but with a much broader focus. This is from Strike Debt’s initial press release:

   Everyone is affected by debt, from recent graduates paying several hundreds of dollars in interest on their students loans every month, to working families bankrupted by medical bills, to the teachers and firefighters forced to take pay cuts because their cities are broke. 76% of Americans are serious debtors. At least 1 in 7 are being pursued by debt collectors. Debt is the tie that binds the 99%.

   Whistleblowers have revealed a widespread pattern of immoral and illegal activity on the part of lenders and collection agencies. Yet our elected officials have proved that they are unwilling to rein in the finance industry or provide debt relief to the citizenry. The Debt Resistor’s Operations Manual is the first of several Strike Debt projects aimed at helping debtors evict Wall Street from their lives and take the first step towards creating a credit system that serves the people and not the profit margins of the 1%.

The manual, available here, offers practical tips on how to challenge debt collectors, errors on credit ratings, and bankruptcy laws. This goes well beyond a simple helpful hints manual, however, moving more into a history and ethnography of debt in the 21st century, a peek behind the curtain at how the lending industry targets and bleeds dry those in need of short-term funds. It looks at the institutional forces behind services for the unbanked like check cashing outlets and payday lenders, noting that these cost much more than traditional banking for the same services.