Daily Archive: 07/18/2015

Jul 18 2015

Punting the Pundits

“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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Joe Conason: Iran Deal: Why Should We Heed the Same Voices That Are Always Wrong?

Nobody was surprised by Benjamin Netanyahu’s immediate denunciation of the Iran nuclear agreement as “a historic mistake for the world.” Echoing the Israeli prime minister’s opposition throughout the negotiations were all the usual suspects in this country-a panoply of pundits and politicians from Weekly Standard editor William Kristol and Fox News Channel analyst Charles Krauthammer to MSNBC host Joe Scarborough. Now this same crew will urge its rejection by the United States Senate.

Focusing on the alleged pitfalls of the deal between Iran and the world powers, these critics downplay provisions that would allow economic sanctions to “snap back” quickly if Iran violates its promises, and greatly increase the Islamic Republic’s difficulty in building an undetected bomb. They don’t explain that if the United States had walked away, the result would have been the disintegration of international sanctions, the rapid buildup of Iran’s nuclear capability, and the likelihood of war-not just bombs, but “boots on the ground.”

What everyone should remember about the agreement’s most prominent foes is something they will never mention: their own shameful record in promoting our very worst foreign policy mistake since Vietnam.

Robert Reich: How Goldman Sachs Profited From the Greek Debt Crisis

The investment bank made millions by helping to hide the true extent of the debt, and in the process almost doubled it.

 The Greek debt crisis offers another illustration of Wall Street’s powers of persuasion and predation, although the Street is missing from most accounts.

The crisis was exacerbated years ago by a deal with Goldman Sachs, engineered by Goldman’s current CEO, Lloyd Blankfein. Blankfein and his Goldman team helped Greece hide the true extent of its debt, and in the process almost doubled it. And just as with the American subprime crisis, and the current plight of many American cities, Wall Street’s predatory lending played an important although little-recognized role.

In 2001, Greece was looking for ways to disguise its mounting financial troubles. The Maastricht Treaty required all eurozone member states to show improvement in their public finances, but Greece was heading in the wrong direction. Then Goldman Sachs came to the rescue, arranging a secret loan of 2.8 billion euros for Greece, disguised as an off-the-books “cross-currency swap”-a complicated transaction in which Greece’s foreign-currency debt was converted into a domestic-currency obligation using a fictitious market exchange rate.

George Zornick: Elizabeth Warren Just Issued a Major Challenge to All Presidential Contenders

Warren urges the candidates (read: Hillary Clinton) to push for legislation that would curb Wall Street’s influence in politics.

 When Senator Elizabeth Warren took the stage at Netroots Nation in Phoenix on Friday, many of the assembled activists hoped she would be coming to them as a presidential candidate-in fact, more than a few of them operated campaigns to convince her to run.

It didn’t work, but the various Draft Warren campaigns, in concert with the Massachusetts senator’s rapid rise in the party, leave her in a unique position to influence the direction of the presidential primary debate. Warren cashed in some of those chips during her speech Friday, issuing a direct challenge to presidential candidates (read: Hillary Clinton) to support specific legislation that would curb some of the financial sector’s influence at federal regulatory agencies.

Amy Goodman: Torture, Impunity and the American Psychological Association

It has been almost a year since President Barack Obama admitted, “in the immediate aftermath of 9/11, we did some things that were wrong. … we tortured some folks.” The administration of Obama’s predecessor, President George W. Bush, carefully crafted a legal rationale enabling what it called “enhanced interrogation techniques,” which is no more than a euphemism for torture. From the U.S. prison camp in Guantanamo Bay to the dungeons of Abu Ghraib in Iraq and Bagram air base in Afghanistan, countless hundreds, if not thousands, of people were subjected to torture, all in the name of the “Global War on Terror.” With the exception of a few low-level soldiers at Abu Ghraib, not one person has been held accountable. The only high-level person sent to prison over torture was John Kiriakou-not for conducting torture, but for exposing it, as a whistleblower.

The legal facade behind which these heinous acts were conducted relied heavily on the cooperation of professional psychologists, who trained and advised the interrogators and supervised the progress of the “breaking” of prisoners. This cooperation, in turn, was dependent on an official seal of approval from the American Psychological Association, the largest professional organization of psychologists in the world. In 2006, the American Psychiatric Association and the American Medical Association both barred their members from taking part in military interrogations.

Eugene Robinson: The Iran Deal May Not Be Perfect, but It’s Better Than the Alternative

To understand why the Iran nuclear deal is such a triumph, consider the most likely alternative: war.

Imagine a U.S.-led military strike-not a pinprick but an extended bombing campaign robust enough to eliminate 98 percent of Iran’s enriched uranium, put two-thirds of the Islamic republic’s centrifuges out of action and erase any capability of producing plutonium. Imagine that the attack did so much damage that for the next 10 or 15 years it would be utterly impossible for Iran to build a nuclear bomb. Such an outcome would be hailed as a great success-achieved, however, at a terrible cost. [..]

The historic agreement announced Tuesday in Vienna accomplishes what an attack might, but without the toll in blood and treasure that war inevitably exacts. After the agreement expires, critics note, Iran could decide to race for a bomb. But the military option would still be available-and, after years of intrusive inspections, allied war planners would have a much better idea of where the nuclear facilities are and how best to destroy them.

Laura Flanders: Anti-Social Giving to Harvard and Yale

Not so long ago, Yale University received a $150 million gift. That looked like a lot until Harvard scooped up $400 million a few weeks later. Both gifts came from Wall Street speculators – Blackstone Group Founder and CEO Stephen Schwarzman and hedge fund executive John S Paulson. Paulson’s donation alone was more money than 98 percent of US colleges have in their endowments, critics pointed out. It shows just how far-reaching inequality has become they said. It also reveals a thing or two about what’s become of our democracy.

As economist Richard Wolff’s pointed out, with their charitable contributions Paulson and Schwarzman gave – in the first case to endow an engineering school and in the second to build an arts center (Yale’s third.) But the multi billionaires also took – from us – the general public, because under the law the two can use their gifts to their alma maters to pay less to Uncle Sam.

Jul 18 2015

God’s Work

How Goldman Sachs Profited from the Greek Debt Crisis

Robert Reich

Friday, July 17, 2015

Blankfein and his Goldman team helped Greece hide the true extent of its debt, and in the process almost doubled it. And just as with the American subprime crisis, and the current plight of many American cities, Wall Street’s predatory lending played an important although little-recognized role.



Goldman Sachs came to the rescue, arranging a secret loan of 2.8 billion euros for Greece, disguised as an off-the-books “cross-currency swap”-a complicated transaction in which Greece’s foreign-currency debt was converted into a domestic-currency obligation using a fictitious market exchange rate.

As a result, about 2 percent of Greece’s debt magically disappeared from its national accounts. Christoforos Sardelis, then head of Greece’s Public Debt Management Agency, later described the deal to Bloomberg Business as “a very sexy story between two sinners.”

For its services, Goldman received a whopping 600 million euros ($793 million), according to Spyros Papanicolaou, who took over from Sardelis in 2005. That came to about 12 percent of Goldman’s revenue from its giant trading and principal-investments unit in 2001-which posted record sales that year. The unit was run by Blankfein.

Then the deal turned sour. After the 9/11 attacks, bond yields plunged, resulting in a big loss for Greece because of the formula Goldman had used to compute the country’s debt repayments under the swap. By 2005, Greece owed almost double what it had put into the deal, pushing its off-the-books debt from 2.8 billion euros to 5.1 billion.

In 2005, the deal was restructured and that 5.1 billion euros in debt locked in. Perhaps not incidentally, Mario Draghi, now head of the European Central Bank and a major player in the current Greek drama, was then managing director of Goldman’s international division.



Greece was in the worst shape, and Goldman was the biggest enabler. Undoubtedly, Greece suffers from years of corruption and tax avoidance by its wealthy. But Goldman wasn’t an innocent bystander: It padded its profits by leveraging Greece to the hilt-along with much of the rest of the global economy.



Even with the global economy reeling from Wall Street’s excesses, Goldman offered Greece another gimmick. In early November 2009, three months before the country’s debt crisis became global news, a Goldman team proposed a financial instrument that would push the debt from Greece’s healthcare system far into the future. This time, though, Greece didn’t bite.

As we know, Wall Street got bailed out by American taxpayers. And in subsequent years, the banks became profitable again and repaid their bailout loans. Bank shares have gone through the roof. Goldman’s were trading at $53 a share in November 2008; they’re now worth over $200. Executives at Goldman and other Wall Street banks have enjoyed huge pay packages and promotions. Blankfein, now Goldman’s CEO, raked in $24 million last year alone.

Meanwhile, the people of Greece struggle to buy medicine and food.

Goldman’s Blankfein joins the 3-comma club

By Bill McColl, Yahoo

July 17, 2015 10:28 AM

Bloomberg Billionaire’s Index finds Blankfein’s net worth is at $1.1 billion, thanks to a surge in the company’s stock price, which is up about 9% so far this year. Bloomberg notes Blankfein is the largest individual owner of Goldman shares, with a value of half a billion dollars. The rest of his wealth comes from real estate and an investment portfolio boosted by cash bonuses and payouts from the firm’s private-equity funds.



“Lloyd Blankfein has gotten a lot of criticism in the last couple of years for doing ‘God’s work,’ and Goldman is the ‘vampire squid’ and all that bad stuff,” he notes. “But he’s the son of a postal worker. He did not grow up with a silver spoon in his mouth and he made it to the pinnacle of Wall Street society at Goldman Sachs through will, determination, skill and intelligence. That is a great American story for him as an individual.”



Monica Mehta, Managing Principal at Seventh Capital, tells Yahoo Finance she finds it interesting the Blankfein news comes as we approach the fifth anniversary of the signing of the Dodd-Frank law, which was enacted after the financial crisis specifically to rein in the big banks.

“Aspects of Dodd-Frank in the name of consumer protection are actually making it difficult for people like small-business owners to get mortgages because it’s become tough for banks to lend off of W-2 income,” she adds. “But at the same time banks keep rolling along producing billionaires.”

Jul 18 2015

On This Day In History July 18

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.

Click on images to enlarge

July 18 is the 199th day of the year (200th in leap years) in the Gregorian calendar. There are 166 days remaining until the end of the year.

On this day in 1940, Franklin Delano Roosevelt, who first took office in 1933 as America’s 32nd president, is nominated for an unprecedented third term. Roosevelt, a Democrat, would eventually be elected to a record four terms in office, the only U.S. president to serve more than two terms.

Roosevelt was born January 30, 1882, in Hyde Park, New York, and went on to serve as a New York state senator from 1911 to 1913, assistant secretary of the Navy from 1913 to 1920 and governor of New York from 1929 to 1932. In 1932, he defeated incumbent Herbert Hoover to be elected president for the first time. During his first term, Roosevelt enacted his New Deal social programs, which were aimed at lifting America out of the Great Depression. In 1936, he won his second term in office by defeating Kansas governor Alf Landon in a landslide.

Election of 1940

The two-term tradition had been an unwritten rule (until the 22nd Amendment after his presidency) since George Washington declined to run for a third term in 1796, and both Ulysses S. Grant and Theodore Roosevelt were attacked for trying to obtain a third non-consecutive term. FDR systematically undercut prominent Democrats who were angling for the nomination, including two cabinet members, Secretary of State Cordell Hull and James Farley, Roosevelt’s campaign manager in 1932 and 1936, Postmaster General and Democratic Party chairman. Roosevelt moved the convention to Chicago where he had strong support from the city machine (which controlled the auditorium sound system). At the convention the opposition was poorly organized but Farley had packed the galleries. Roosevelt sent a message saying that he would not run, unless he was drafted, and that the delegates were free to vote for anyone. The delegates were stunned; then the loudspeaker screamed “We want Roosevelt… The world wants Roosevelt!” The delegates went wild and he was nominated by 946 to 147 on the first ballot. The tactic employed by Roosevelt was not entirely successful, as his goal had been to be drafted by acclamation. The new vice presidential nominee was Henry A. Wallace, a liberal intellectual who was Secretary of Agriculture.

In his campaign against Republican Wendell Willkie, Roosevelt stressed both his proven leadership experience and his intention to do everything possible to keep the United States out of war. In one of his speeches he declared to potential recruits that “you boys are not going to be sent into any foreign war.” He won the 1940 election with 55% of the popular vote and 38 of the 48 states. A shift to the left within the Administration was shown by the naming of Henry A. Wallace as Vice President in place of the conservative Texan John Nance Garner, who had become a bitter enemy of Roosevelt after 1937.

Jul 18 2015

The Breakfast Club (Goin Down The Road)

Welcome to The Breakfast Club! We’re a disorganized group of rebel lefties who hang out and chat if and when we’re not too hungover  we’ve been bailed out we’re not too exhausted from last night’s (CENSORED) the caffeine kicks in. Join us every weekday morning at 9am (ET) and weekend morning at 10:30am (ET) to talk about current news and our boring lives and to make fun of LaEscapee! If we are ever running late, it’s PhilJD’s fault.

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Breakfast Tune: Carolina Chocolate Drops “Goin Down The Road” On Canvas Preview – Oct. 24, 2013 Episode

Today in History


The Spanish Civil War begins; Sen. Ted Kennedy’s passenger dies when he drives his car off a bridge on Chappaquiddick Island; South Africa’s Nelson Mandela and musician Ricky Skaggs born.

Breakfast News & Blogs Below