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Oct 26 2011
Obama Still Bailing Out the Banks
President Obama announced that millions more underwater homeowners can take advantage of a refinancing program if their loan is owned or guaranteed by Fannie Mae or Freddie Mac. But, there are shortcomings, helpings banks more than homeowners by eliminating liability associated with the origination of the mortgage, including putback liability. From Yves Smith who asks why Obama is bothering to do this:
First, Obama is addicted to the appearance of Doing Something, regardless of whether it is productive. A clear sign is the apparent failure to investigate why HARP was a dud.
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Second, this is a sop to the banks, because a refi ends any liability associated with the origination of the mortgage, including putback liability. Now that would seem to be a big “get out of jail free” card for banks engaged in putback litigation. But the reason this is not as nefarious as it might seem is that current mortgages aren’t the big bone of contention in putbacks (even if the originator lied, the borrower is paying, so there are no damages). But it would also end any chain of title issue on that mortgage
At Huffington Post, Zack Carter gives a more detailed explanation:
The newly expanded program would expunge legal liabilities associated with mortgages refinanced through the program for the original lenders of the mortgages. Each time a bank sent a loan to Fannie and Freddie, it certified that the loan met Fannie and Freddie’s safe lending criteria. But many loans sent to the mortgage giants did not, in fact, meet those criteria. Currently, when borrowers default on those ineligible loans, the mortgage giants can “put back” the resulting losses onto the banks that pushed the loans.
Under the modified plan, “put back” liability at banks will be erased for any underwater mortgage that is refinanced through HARP, eliminating Fannie and Freddie’s ability to sack lenders with losses in the event that the mortgage does not pan out.
If borrowers go through HARP, but decide after several months that the modest monthly savings do not outweigh owing tens of thousands of dollars more than their home is worth, taxpayer-owned Fannie and Freddie will have to take the full loss. Even if the original loan was sent to Fannie and Freddie with false or fraudulent guarantees from the bank – promises that may directly be tied to the borrower’s current financial problems – banks will be immune from liability. Fannie and Freddie plan to charge banks “a modest fee” to extinguish this liability, but the administration has yet to determine what that fee will be.
Partial transcript below the fold
Professor William Black of the University of Missouri, Kansas City and Zack Carter of the Huffington Post join Dylan Ratigan to discuss the problems of Obama’s mortgage program
Oct 26 2011
Countdown with Keith Olbermann: Worst Persons 10.24.2011
Find out why Mayor Chris Myers, Medford, N.J., is WORSE; Dave Briggs, Alisyn Camerota and Clayton Morris, hosts of the weekend edition of Fox & Friends on “Fixed” News, are WORSER; and Herman Cain is the WORST PERSON IN THE WORLD for Oct. 24, 2011.
Oct 25 2011
Flat Tax, VAT Tax
Perry: Tax Cuts For All, Protect Social Security – And Privatize It
Rick Perry gave a major speech in South Carolina on Tuesday, laying out his “Cut, Balance and Grow” economic plan – the centerpiece of which is a tax reform proposal that would give people the choice of filing their taxes under the current code, or a 20% flat tax.
The political benefit of such a plan should be obvious: Allowing wealthier individuals to take a huge tax cut, while in theory not necessarily raising taxes on lower-income people who would not do as well under a flat tax, by at least giving them the legal option of paying a lower rate with more paperwork.
Perry also called for a drop in the corporate tax rate to 20%, while also eliminating loopholes. He would also not tax repatriated profits, if the taxes were already paid in the countries where the profits were earned. And, for a limited time, he would offer a reduced tax rate of 5.25% on repatriated earnings.
On Social Security, Perry appeared to give two contrary messages: To uphold the solvency of the program – and to allow young workers to divert funds away from it.
From the prepared remarks:
Second, we will end the current pillaging of the Social Security Trust Fund by Washington politicians. Here is the hard truth: the trust fund is full of IOU’s, without a single dime of money left over from what workers have paid in. The politicians have borrowed against it for years. And in order to redeem the IOU’s in the fund, they will have to either raise taxes or cut spending on other programs to replenish it.
Here is the other hard truth: if we don’t act, in 25 years benefits will be slashed 23 percent overnight. Protecting Social Security benefits begins with protecting the solvency of the fund, and stopping all current borrowing from the fund, just as we have done with the highway trust fund.
But this is then immediately followed by:
The third principle of reform is to allow young workers to invest a portion of their payroll taxes into private accounts if they so choose.
I am not naïve. I know this idea will be attacked. But a couple of facts are worth stating: one, the return on investment in Social Security is so small it is like an interest bearing savings account. Over the long-term, the markets generate a much higher yield.
Second, opposition to this simple measure is based on a simple supposition: that the people are not smart enough to look out for themselves. The liberals think the American people cannot be trusted to safeguard even a portion of their own retirement dollars. It is time to end the nanny state and empower our people to exercise greater control over their money.
Oct 25 2011
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”.
Bill Black: The Anti-Regulators are the “Job Killers”
The new mantra of the Republican Party is the old mantra – regulation is a “job killer.” It is certainly possible to have regulations kill jobs, and when I was a financial regulator I was a leader in cutting away many dumb requirements. We have just experienced the epic ability of the anti-regulators to kill well over ten million jobs. Why then is there not a single word from the new House leadership about investigations to determine how the anti-regulators did their damage? Why is there no plan to investigate the fields in which inadequate regulation most endangers jobs? While we’re at it, why not investigate the areas in which inadequate regulation allows firms to maim and kill. This column addresses only financial regulation.
Deregulation, desupervision, and de facto decriminalization (the three “des”) created the criminogenic environment that drove the modern U.S. financial crises. The three “des” were essential to create the epidemics of accounting control fraud that hyper-inflated the bubble that triggered the Great Recession. “Job killing” is a combination of two factors – increased job losses and decreased job creation. I’ll focus solely on private sector jobs – but the recession has also been devastating in terms of the loss of state and local governmental jobs.
Paul Krugman: The Hole in Europe’s Bucket
If it weren’t so tragic, the current European crisis would be funny, in a gallows-humor sort of way. For as one rescue plan after another falls flat, Europe’s Very Serious People – who are, if such a thing is possible, even more pompous and self-regarding than their American counterparts – just keep looking more and more ridiculous.
I’ll get to the tragedy in a minute. First, let’s talk about the pratfalls, which have lately had me humming the old children’s song “There’s a Hole in My Bucket.”
For those not familiar with the song, it concerns a lazy farmer who complains about said hole and is told by his wife to fix it. Each action she suggests, however, turns out to require a prior action, and, eventually, she tells him to draw some water from the well. “But there’s a hole in my bucket, dear Liza, dear Liza.”
What does this have to do with Europe? Well, at this point, Greece, where the crisis began, is no more than a grim sideshow. The clear and present danger comes instead from a sort of bank run on Italy, the euro area’s third-largest economy. Investors, fearing a possible default, are demanding high interest rates on Italian debt. And these high interest rates, by raising the burden of debt service, make default more likely.
t’s one of the strangest things in our politics: The only “big” ideas Republicans and conservatives seem to offer these days revolve around novel and sometimes bizarre ways of cutting taxes on rich people.
Given all the attention that Herman Cain’s nonsensical and regressive 9-9-9 tax plan has received, the Republican debates should have as their soundtrack that old Beatles song that droned on about the number nine.
Now, Texas Gov. Rick Perry hopes to pump up his campaign with a supposedly bold proposal to institute a flat tax, which would also deliver more money to the well-off. Perry plans to outline his proposal this week, but he has already touted it as a sure-fire way of “scrapping the 3 million words of the current tax code.”
Robert Kuttner: Europe on the Brink
The deepening European financial crisis is the direct result of the failure of Western leaders to fix the banking system during the first crisis that began in 2007. Barring a miracle of statesmanship, we are in for Financial Crisis II, and it will look more like a depression than a recession.
The Greek crisis, and the inadequate official response to it, is only a symptom. The flight of banks and other private creditors from Greek government bonds has left European leaders and the IMF to fashion a series of piecemeal rescue plans lest a Greek default trigger a broader global financial collapse.
But each rescue has been behind the curve. Over the weekend, European leaders fashioned yet another patch, in the hope of buying more time. The details are still to be worked out at a follow-up meeting later this week. But the problem with the tactic of “kicking the can down the road,” as the dean of financial writers, Martin Wolf, noted at a recent Financial Times conference, is that “the can is filled with gasoline.”
Richard (RJ) Eskow: A Fire Sale for Arsonists: The “Revised” Bank Mortgage Settlement Still Stinks
Imagine that a group of arsonists was terrorizing your town. First they’d buy insurance on a stranger’s home, then they’d show up with a blowtorch and a tanker truck filled with gasoline and burn the place down. Imagine that they’ve burned down a thousand homes this way, ruining the lives of the homeowners — and everyone else’s, too, as real estate values plunged and the local economy collapsed.
Now let’s imagine that the Mayor, the DA, and the Chief of Police said they’ve come up with a great “settlement”: The arsonists will pay a small fine, and they’ll never be prosecuted for arson. Plus, if they’re asked very nicely, they’ll also agree to provide a little help to 27 out of the 1,000 families they made homeless — although they’d control the ‘help’ process and the town might wind up footing the bill anyway.
And one more thing: They get to keep the gasoline truck and the blowtorch.
Substitute “country” for “town” and “banker” for “arsonist,” and that pretty much sums up the mortgage fraud settlement that the administration and some attorneys general keep trying to impose on the nation
Robert Reich: Why We Shouldn’t be Selling the Right to Live in America
America is having a fire sale. Why not sell wealthy foreigners the right to live here, too?
That’s the notion behind a bill introduced last week by Republican Senator Mike Lee of Utah and Democrat Senator Charles Schumer of New York: Stoke demand for American homes by allowing foreign nationals to buy them. In return, give foreigners the right to live here (although not work here).
The price? At least $500,000 cash. It could be one piece of real estate costing $500,000 or more, or several, of one would have to be worth at least $250,000.
Presumably, this would help homeowners by boosting demand. “This is a way to create more demand without costing the federal government a nickel,” Schumer told the Wall Street Journal.
And it would help the Street. Rather than have the big banks carry all those non-performing mortgage loans on their books or be forced to write them down, we’ll just goose the housing market by selling off the right to live in America.
Oct 25 2011
Occupy Wall St. Livestream: Day 39
The resistance continues at Liberty Square, with free pizza 😉
“I don’t know how to fix this but I know it’s wrong.” ~ Unknown Author
Occupy Wall Street NYC now has a web site for its General Assembly with up dates and information. Very informative and user friendly. It has information about events, a bulletin board, groups and minutes of the GA meetings.
New York Governor, Andrew Cuomo, got told “No, we won’t do that” by Albany’s police and New York State troopers when ordered to clear Occupy Wall Street protesters from a park across the street from the state Capitol and Albany ‘s City Hall:
ALBANY — In a tense battle of wills, state troopers and Albany police held off making arrests of dozens of protesters near the Capitol over the weekend even as Albany’s mayor, under pressure from Gov. Andrew Cuomo’s administration, had urged his police chief to enforce a city curfew.
The situation intensified late Friday evening when Jennings, who has cultivated a strong relationship with Cuomo, directed his department to arrest protesters who refused to leave the city-owned portion of a large park that’s across Washington Avenue from the Capitol and City Hall.
At the Capitol, in anticipation of possibly dozens of arrests, a State Police civil disturbance unit was quietly activated, according to officials briefed on the matter but not authorized to comment publicly. But as the curfew neared, the group of protesters estimated at several hundred moved across an invisible line in the park from state land onto city property.
“We were ready to make arrests if needed, but these people complied with our orders,” a State Police official said. However, he added that State Police supported the defiant posture of Albany police leaders to hold off making arrests for the low-level offense of trespassing, in part because of concern it could incite a riot or draw thousands of protesters in a backlash that could endanger police and the public.
“We don’t have those resources, and these people were not causing trouble,” the official said. “The bottom line is the police know policing, not the governor and not the mayor.”
And to add to the ego deflation for Gov. Cuomo, Albany County District Attorney David Soares has stated:
“Our official policy with peaceful protesters is that unless there is property damage or injuries to law enforcement, we don’t prosecute people protesting,” Soares said. “If law enforcement engaged in a pre-emptive strike and started arresting people I believe it would lead to calamitous results, and the people protesting so far are peaceful.”
The camp has been named “Cuomoville”
Some protesters Monday were angry with the governor.
“Gov. Cuomo’s new name is Gov. 1 Percent because that’s who he chooses to represent – the more wealthy residents of New York state, those on Wall Street, his backers and supporters,” said Victorio Reyes, 37, a community organizer with the Social Justice Center of Albany who was making video reports from the park. “We’re not going to stand for it.”
Cuomo insists the temporary surcharge on incomes over $200,000 should expire Dec. 31, as planned when it was created under Gov. David Paterson to address a fiscal crisis. Cuomo and other opponents of the tax say it and a new proposal to tax earnings over $1 million would drive tax revenue and jobs out of state.
by Barbars Ehrenreich
As anyone knows who has ever had to set up a military encampment or build a village from the ground up, occupations pose staggering logistical problems. Large numbers of people must be fed and kept reasonably warm and dry. Trash has to be removed; medical care and rudimentary security provided — to which ends a dozen or more committees may toil night and day. But for the individual occupier, one problem often overshadows everything else, including job loss, the destruction of the middle class, and the reign of the 1%. And that is the single question: Where am I going to pee?
Some of the Occupy Wall Street encampments now spreading across the U.S. have access to Port-o-Potties (Freedom Plaza in Washington, D.C.) or, better yet, restrooms with sinks and running water (Fort Wayne, Indiana). Others require their residents to forage on their own. At Zuccotti Park, just blocks from Wall Street, this means long waits for the restroom at a nearby Burger King or somewhat shorter ones at a Starbucks a block away. At McPherson Square in D.C., a twenty-something occupier showed me the pizza parlor where she can cop a pee during the hours it’s open, as well as the alley where she crouches late at night. Anyone with restroom-related issues — arising from age, pregnancy, prostate problems, or irritable bowel syndrome — should prepare to join the revolution in diapers.
Of course, political protesters do not face the challenges of urban camping alone. Homeless people confront the same issues every day: how to scrape together meals, keep warm at night by covering themselves with cardboard or tarp, and relieve themselves without committing a crime. Public restrooms are sparse in American cities — “as if the need to go to the bathroom does not exist,” travel expert Arthur Frommer once observed. And yet to yield to bladder pressure is to risk arrest.
Oct 25 2011
On This Day In History October 25
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.
October 25 is the 298th day of the year (299th in leap years) in the Gregorian calendar. There are 67 days remaining until the end of the year.
On this day in 1774, the First Continental Congress sends a respectful petition to King George III to inform his majesty that if it had not been for the acts of oppression forced upon the colonies by the British Parliament, the American people would be standing behind British rule.
Despite the anger that the American public felt towards the United Kingdom after the British Parliament established the Coercive Acts, called the Intolerable Acts by the colonists, Congress was still willing to assert its loyalty to the king. In return for this loyalty, Congress asked the king to address and resolve the specific grievances of the colonies. The petition, written by Continental Congressman John Dickinson, laid out what Congress felt was undo oppression of the colonies by the British Parliament. Their grievances mainly had to do with the Coercive Acts, a series of four acts that were established to punish colonists and to restore order in Massachusetts following the Boston Tea Party..
In Boston, Massachusetts, the Sons of Liberty protested against Parliament’s passage of the Tea Act in 1773 by throwing tons of taxed tea into Boston Harbor, an act that came to be known as the Boston Tea Party. News of the event reached England in January 1774. Parliament responded with a series of acts that were intended to punish Boston for this illegal destruction of private property, restore British authority in Massachusetts, and otherwise reform colonial government in America.
On April 22, 1774, Prime Minister Lord North defended the program in the House of Commons, saying:
The Americans have tarred and feathered your subjects, plundered your merchants, burnt your ships, denied all obedience to your laws and authority; yet so clement and so long forbearing has our conduct been that it is incumbent on us now to take a different course. Whatever may be the consequences, we must risk something; if we do not, all is over.
The Boston Port Act, the first of the acts passed in response to the Boston Tea Party, closed the port of Boston until the East India Company had been repaid for the destroyed tea and until the king was satisfied that order had been restored. Colonists objected that the Port Act punished all of Boston rather than just the individuals who had destroyed the tea, and that they were being punished without having been given an opportunity to testify in their own defense.
The Massachusetts Government Act provoked even more outrage than the Port Act because it unilaterally altered the government of Massachusetts to bring it under control of the British government. Under the terms of the Government Act, almost all positions in the colonial government were to be appointed by the governor or the king. The act also severely limited the activities of town meetings in Massachusetts. Colonists outside Massachusetts feared that their governments could now also be changed by the legislative fiat of Parliament.
The Administration of Justice Act allowed the governor to move trials of accused royal officials to another colony or even to Great Britain if he believed the official could not get a fair trial in Massachusetts. Although the act stipulated that witnesses would be paid for their travel expenses, in practice few colonists could afford to leave their work and cross the ocean to testify in a trial. George Washington called this the “Murder Act” because he believed that it allowed British officials to harass Americans and then escape justice. Some colonists believed the act was unnecessary because British soldiers had been given a fair trial following the Boston Massacre in 1770, with future Founding Father John Adams representing the Defense.
The Quartering Act applied to all of the colonies, and sought to create a more effective method of housing British troops in America. In a previous act, the colonies had been required to provide housing for soldiers, but colonial legislatures had been uncooperative in doing so. The new Quartering Act allowed a governor to house soldiers in other buildings if suitable quarters were not provided. While many sources claim that the Quartering Act allowed troops to be billeted in occupied private homes, historian David Ammerman’s 1974 study claimed that this is a myth, and that the act only permitted troops to be quartered in unoccupied buildings. Although many colonists found the Quartering Act objectionable, it generated the least protest of the Coercive Acts.
The Quebec Act was a piece of legislation unrelated to the events in Boston, but the timing of its passage led colonists to believe that it was part of the program to punish them. The act enlarged the boundaries of what was then the colony of “Canada” (roughly consisting of today’s Canadian provinces of Quebec and Ontario as well as the Great Lakes’ American watershed), removed references to the Protestant faith in the oath of allegiance, and guaranteed free practice of the Roman Catholic faith. The Quebec Act offended a variety of interest groups in the British colonies. Land speculators and settlers objected to the transfer of western lands previously claimed by the colonies to a non-representative government. Many feared the establishment of Catholicism in Quebec, and that the French Canadians were being courted to help oppress British Americans.
Oct 24 2011
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”.
New York Times Editorial: No Holiday
Big business has clearly decided that the economic crisis is too important to waste. While Washington debates how to create jobs and cut the budget deficit, major corporations – read major campaign contributors – are pushing Congress for an enormous tax cut on corporate profits. Lawmakers seem all too eager to grant their wish.
snip
These days, corporations are flush with $2 trillion in cash that is not being used for hiring. As long as the economy is weak and consumers aren’t spending, tax cuts will add to the cash pile, not create jobs. A tax holiday also would add to the deficit, in part because companies rush to bring money home, rather than repatriating the earnings over time at the usual rate. According to Congress’s Joint Committee on Taxation, another tax holiday at 5.25 percent would increase the deficit by nearly $80 billion over 10 years; a rate of 10.5 percent would cost $42 billion.
E.J. Dionne, Jr.: Perry, Cain and Flat Earth Government
It’s one of the strangest things in our politics: The only “big” ideas Republicans and conservatives seem to offer these days revolve around novel and sometimes bizarre ways of cutting taxes on rich people.
Given all the attention that Herman Cain’s nonsensical and regressive “9-9-9 tax plan” has received, the Republican debates should have as their soundtrack that old Beatles song that droned on about the number nine.
Now, Texas Gov. Rick Perry hopes to pump up his campaign with a supposedly bold proposal to institute a flat tax, which would also deliver more money to the well-off. Perry plans to outline his proposal this week, but has already touted it as a surefire way of “scrapping the 3 million words of the current tax code.”
The New York Times used an article on Rhode Island’s pension system to denounce “the nation’s profligate ways,” which it warns will catch up with us. Newspapers are supposed to leave such editorializing to the opinion pages.
In fact there is good reason to believe that the nation’s obsession with frugality is now catching up with us. The country lost close to $1.4 trillion in annual demand due to the collapse of the housing bubble. In the short term this can only be replaced by larger government deficits. However, because politicians in Washington do not want larger deficits, the economy is operating at close 6 percent below its potential GDP and millions of workers are needlessly unemployed or underemployed. Since there is very limited support for the unemployed in the United States, this situation is a disaster for the millions of people facing it.
The article also gets some of the facts on state and local pensions wrong.
Ray McGovern: The Military Industrial Complex at 50: Activism
You are herecontent / Ray McGovern on Activism and the Military Industrial Complex
Ray McGovern on Activism and the Military Industrial ComplexBy davidswanson – Posted on 24 October 2011
The Military Industrial Complex at 50: Activism
By Ray McGovern, for MIC50.orgThe past 50 years have shown that President Eisenhower was spot on, as we would say today, about the Military Industrial Complex and what to expect if Americans were not vigilant, which, of course, we have not been – until maybe now.
An endless train of outrages and indignities can be traced to the inordinate influence of the MIC. And a truly formidable challenge awaits those of us determined not to let our democracy be taken away from us by the greed of a small minority.
So here we are, cooped up, by choice, indoors, talking about these dismal matters on a glorious late-summer afternoon. Don’t know about you, but I found myself sorely tempted to channel today’s activism into a brisk swim in that beautiful little lake just outside.
Joe Conason: What Romney’s Religion Reveals About His Politics
Recent expressions of political and religious prejudice against Mormons and the Church of Latter-day Saints have offered Mitt Romney a chance to play the bullied underdog-and to explain, as he did with clarity and dignity during the Vegas debate, the meaning of the constitutional prohibition against any religious test for public office.
That won’t discourage Baptist conservatives or atheist entertainers like Bill Maher from making fun of Mormons and their faith, whose history and tenets certainly sound strange to outsiders.
But is there any real reason to be troubled by Romney’s religion? What does the career of the former Massachusetts governor tell us about the ideology of the LDS church-and what his personal beliefs may portend if he becomes the first Mormon in the Oval Office?
John Nichols: Big Money, Bad Media, Secret Agendas: Welcome to America’s Wildest School Board Race
School board elections are supposed to be quintessential America contests. Moms and Main Street small-business owners and retired teachers campaign by knocking on doors, writing letters to the editor and debating at elementary schools. Then friends and neighbors troop to the polls and make their choices.
But what happens when all the pathologies of national politics-over-the-top spending by wealthy elites and corporate interests, partisan consultants jetting in to shape big-lie messaging, media outlets that cover spin rather than substance-are visited on a local school board contest?
Oct 24 2011
Sarbanes – Oxley Under Attack By Obama
President Obama and Washington still don’t get it. The Obama administration and Congress either don’t understand or are choosing to ignore the message from Occupy Wall St. Matt Taibbi exams two “disgusting developments” that have taken place since the demonstrations started. One was the shifting a huge collection of Merrill Lynch derivatives contracts onto Bank of America’s own federally-insured balance sheet. The second is Obama apparently expressing willingness to junk big chunks of Sarbanes-Oxley in exchange for support for his jobs program
Sarbanes-Oxley is an anti-trust law which was passed by Congress in 2002 in the wake of the accounting scandals of Enron, Tyco International, Adelphia, Peregrine Systems and WorldCom. These scandals, which cost investors billions of dollars when the share prices of affected companies collapsed, shook public confidence in the nation’s securities markets. Now Obama’s Council on Jobs and Competitiveness, which is made up of 27-members, mostly of corporate executives, along with a handful of investors, labor leaders and academics, would like to lift some of these regulations on the pretext that it would create jobs:
Watering down Sarbanes-Oxley has long been a goal of corporate America, despite studies by the Securities and Exchange Commission showing that the law has reduced errors and fraud, and that changes to the law have made it easier for companies to comply.
As for the supposed barriers to investment, history is rife with companies that cooked their books to lure investors and created jobs in the short run, before imploding and causing mass joblessness.
Anything-goes markets are great for investors who get out before the jig is up, or who get bailed out when their bets go bad. They are a raw deal for everyone else.
Specifically, the report calls for compliance with Sarbanes-Oxley to be made voluntary for public companies worth less than $1 billion.
That would relieve some 6,000 companies — or 75 percent of all publicly traded companies — from various requirements, including the rule that corporate boards have independent audit committees, that corporate executives attest to the accuracy of the company’s financial statements, and that bonuses based on fraudulent statements be subject to clawback.
The view of this proposal from Canada:
It has come to this, then: In the all-consuming desire to do something, nearly anything, to promote job creation, Mr. Obama seems willing to gut one of the most significant investor protections of our time. If the anti-Sarbanes Oxley proposal succeeds, it is the Americans – and Canadians – who invest in U.S. stocks who will lose.
Sarbanes-Oxley, among many things, required the chief executive officer and chief financial officer publicly sign off on the accuracy of company financial reports and, with its “404” provisions, forced companies to document the internal controls used to produce accurate financial statements. Separately, the “Spitzer Decree” tried to improve the quality of analyst research by cutting the link between it and deal fees. And the Fair Disclosure Act set up rules to keep companies from whispering material information to favoured investors.
The Jobs Council is taking aim at all of it, suggesting rules be “right-sized” to exempt all but the largest companies. “Well-intentioned regulations aimed at protecting the public from the misrepresentations of a small number of large companies have unintentionally placed significant burdens on the large number of smaller companies,” the Jobs Council said in its interim report.
Unfortunately, the Jobs Council misunderstands or misrepresents the history of Sarbanes-Oxley and proposes a sledgehammer solution that fails to kill the fly, while smashing investors in the chops.
While Enron and WorldCom provided the political impetus to get Sarbanes-Oxley passed, there were sound intellectual underpinnings to the 404 provisions, which required companies to spend significant sums on improving internal controls. U.S. companies, absent regulation, simply weren’t spending the time or money required to do the best possible job of producing accurate financial statements.
Smaller companies, particularly those who recently went public, often were the worst offenders; they are now the companies the Jobs Council most wants to spare from the provisions.
Taibbi:
If the financial crisis proved anything, it’s that Wall Street companies in particular have been serial offenders in the area of dishonest accounting and book-cooking. Sarbanes-Oxley is obviously no panacea, but removing it in exchange for a temporary, election-year job boost is exactly the kind of myopic, absurdly irresponsible shit that got us into this mess in the first place. For Obama to pull this in the middle of these protests is crazy.
If anyone thought OWS has already done its job, and Washington has gotten the message already, think again. They’re not going to change until the protesters force them to change, it seems.
Oct 24 2011
Occupy Wall St. Livestream: Day 38
The resistance continues at Liberty Square, with free pizza 😉
“I don’t know how to fix this but I know it’s wrong.” ~ Unknown Author
Occupy Wall Street NYC now has a web site for its General Assembly with up dates and information. Very informative and user friendly. It has information about events, a bulletin board, groups and minutes of the GA meetings.
Naomi Wolf, political activist and author of “Give Me Liberty,” calls attention to the enormous power that the federal government can wield to prevent constitutionally guaranteed rights. “History shows they start with the Other and it gets closer and closer and closer and someday they come for you.”
by Naomi Wolf
Mayor Bloomberg is planning Draconian new measures to crack down on what he calls the “disruption” caused by the protesters at Zuccotti Park, and he is citing neighbors’ complaints about noise and mess. This set of talking points, and this strategy, is being geared up as well by administrations of municipalities around the nation in response to the endurance and growing influence of the Occupation protest sites. But the idea that any administration has the unmediated option of “striking a balance,” in Bloomberg’s words, that it likes, and closing down peaceful and lawful disruption of business as usual as it sees fit is a grave misunderstanding — or, more likely, deliberate misrepresentation — of our legal social contract as American citizens.
Some kinds of disruption in a free republic are not “optional extras” if the First Amendment governs the land, as it does ours, and are certainly not subject to the whims of mayors or local police, or even DHS. Just as protesters don’t have a blanket right to do everything they want, there is absolutely no blanket right of mayors or even of other citizens to be free from the effect of certain kinds of disruption resulting from their fellow citizens exercising First Amendment rights. That notion, presented right now by Bloomberg and other vested interests, of a “disruption-free” social contract is pure invention — just like the flat-out fabrication of the nonexistent permit cited in my own detention outside the Huffington Post Game Changers event this last Tuesday, when police told me, without the event organizers’ knowledge and contrary to their intentions, that a private entity had “control of the sidewalks” for several hours. (In fact, the permit in question — a red carpet event permit! — actually guarantees citizens’ rights to walk and even engage in political assembly on the streets if they do not block pedestrian traffic, as the OWS protesters were not.)
Oct 24 2011
On This Day In History October 24
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.
October 24 is the 297th day of the year (298th in leap years) in the Gregorian calendar. There are 68 days remaining until the end of the year.
On this day in 1901, a 63-year-old schoolteacher named Annie Edson Taylor becomes the first person to take the plunge over Niagara Falls in a barrel. After her husband died in the Civil War, the New York-born Taylor moved all over the U. S. before settling in Bay City, Michigan, around 1898. In July 1901, while reading an article about the Pan-American Exposition in Buffalo, she learned of the growing popularity of two enormous waterfalls located on the border of upstate New York and Canada. Strapped for cash and seeking fame, Taylor came up with the perfect attention-getting stunt: She would go over Niagara Falls in a barrel.
Desiring to secure her later years financially, she decided she would be the first person to ride Niagara Falls in a barrel. Taylor used a custom-made barrel for her trip, constructed of oak and iron and padded with a mattress. Several delays occurred in the launching of the barrel, particularly because no one wanted to be part of a potential suicide. Two days before Taylor’s own attempt, a domestic cat was sent over the Horseshoe Falls in her barrel to test its strength. Contrary to rumors at the time, the cat survived the plunge unharmed and later was posed with Taylor in photographs.
On October 24, 1901, her 63rd birthday, the barrel was put over the side of a rowboat, and Taylor climbed in, along with her lucky heart-shaped pillow. After screwing down the lid, friends used a bicycle tire pump to compress the air in the barrel. The hole used for this was plugged with a cork, and Taylor was set adrift near the American shore, south of Goat Island.
The Niagara River currents carried the barrel toward the Canadian Horseshoe Falls, which has since been the site for all daredevil stunting at Niagara Falls. Rescuers reached her barrel shortly after the plunge. Taylor was discovered to be alive and relatively uninjured, save for a small gash on her head. The trip itself took less than twenty minutes, but it was some time before the barrel was actually opened. After the journey, Annie Taylor told the press:
If it was with my dying breath, I would caution anyone against attempting the feat… I would sooner walk up to the mouth of a cannon, knowing it was going to blow me to pieces than make another trip over the Fall.
She briefly earned money speaking about her experience, but was never able to build much wealth. Her manager, Frank M. Russell, decamped with her barrel, and most of her savings were used towards private detectives hired to find it. It was eventually located in Chicago, only to permanently disappear some time later.
Annie Taylor died on April 29, 1921, aged 82, at the Niagara County Infirmary in Lockport, New York. She is interred in the “Stunters Section” of Oakwood Cemetery in Niagara Falls, New York.
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