Tag: Economy

The auto industry Big Three were loyal only to shareholders, not the people of Detroit. The city was gutted by that social choice

Capitalism as a system ought to be judged by its failures as well as its successes.

The automobile-driven economic growth of the 1950s and 1960s made Detroit a globally recognized symbol of successful capitalist renewal after the great depression and the war (1929-1945). High-wage auto industry jobs with real security and exemplary benefits were said to prove capitalism’s ability to generate and sustain a large “middle class”, one that could include African Americans, too. Auto-industry jobs became inspirations and models for what workers across America might seek and acquire – those middle-class components of a modern “American Dream”.

True, quality jobs in Detroit were forced from the automobile capitalists by long and hard union struggles, especially across the 1930s. Once defeated in those struggles, auto capitalists quickly arranged to rewrite the history so that good wages and working conditions became something they “gave” to their workers. In any case, Detroit became a vibrant, world-class city in the 1950s and 1960s; its distinctive culture and sound shaped the world’s music much as its cars shaped the world’s industries.

Over the past 40 years, capitalism turned that success into the abject failure culminating now in the largest municipal bankruptcy in US history.

Kicking off a series of speeches about the economy, President Obama told a crowd in Illinois on Wednesday that reversing growing inequality and rejuvenating the middle class “has to be Washington’s highest priority.” During his remarks, Obama failed to mention the bankruptcy filing by Detroit, where thousands of public workers are now fighting to protect their pensions and medical benefits as the city threatens massive cuts to overcome an estimated $18 billion in debt. Detroit’s bankruptcy “is an example of a failed economic system,” says economist Richard Wolff, professor emeritus of economics at University of Massachusetts

Conservatives want you to think high taxes drove people away. The real truth is much worse for their radical agenda

In the wake of Detroit’s bankruptcy, you may be wondering: How could anyone be surprised that a city so tied to manufacturing faces crippling problems in an era that has seen such an intense public policy assault on domestic American manufacturing? You may also be wondering: How could Michigan officials possibly talk about cutting the average $19,000-a-year pension benefit for municipal workers while reaffirming their pledge of $283 million in taxpayer money to a professional hockey stadium?

These are fair questions – and the answers to them can be found in the political mythology that distorts America’s economic policymaking.

As mythology goes, the specific story being crafted about Detroit’s bankruptcy is truly biblical – more specifically, just like the fact-free mythology around the Greek financial collapse, it is copied right from the chapter in the conservative movement’s bible about how to distort crises for maximum political effect.

In the New York Times late last week there was a report how Goldman Sachs is manipulating aluminum commodities that is costing American consumer billions of dollars. This is how it works:

The story of how this works begins in 27 industrial warehouses in the Detroit area where a Goldman subsidiary stores customers’ aluminum. Each day, a fleet of trucks shuffles 1,500-pound bars of the metal among the warehouses. Two or three times a day, sometimes more, the drivers make the same circuits. They load in one warehouse. They unload in another. And then they do it again.

This industrial dance has been choreographed by Goldman to exploit pricing regulations set up by an overseas commodities exchange, an investigation by The New York Times has found. The back-and-forth lengthens the storage time. And that adds many millions a year to the coffers of Goldman, which owns the warehouses and charges rent to store the metal. It also increases prices paid by manufacturers and consumers across the country. [..]

Only a tenth of a cent or so of an aluminum can’s purchase price can be traced back to the strategy. But multiply that amount by the 90 billion aluminum cans consumed in the United States each year – and add the tons of aluminum used in things like cars, electronics and house siding – and the efforts by Goldman and other financial players has cost American consumers more than $5 billion over the last three years, say former industry executives, analysts and consultants.

All In host Chris Hayes spoke with Sen. Sherrod Brown (D-OH) about the newly revealed practice by Goldman Sachs to skirt price regulations on a product we use every day-aluminum-costing American consumers billions of dollars and it ain’t just aluminum.

U.S. Weighs Inquiry Into Big Banks’ Storage of Commodities

by Gretchen Morgenson and David Kocieniewski, New York Times

The overarching question is whether banks should control the storage and shipment of commodities, and whether such activities could pose a risk to the nation’s financial system.

But other crucial issues are expected to arise as well. Among them is how Wall Street’s push into these markets has affected the prices paid by manufacturers and ultimately consumers. Another is whether Goldman and Morgan Stanley have operated their storage facilities at arms’ length from their banking business, as required by regulators.

Goldman has exploited industry pricing regulations set by the London Metal Exchange by shuffling tons of aluminum each day among the 27 warehouses it controls in the Detroit area, The Times reported on Sunday. The maneuver lengthens the storage time and generates millions a year in profit for Goldman, which charges rent to store the metal for customers, the investigation found. The C.F.T.C. issued the notices late last week, and it was unclear on Monday whether the agency or other authorities would open a full-fledged investigation into banks’ activities.

Senate Scrutiny of Potential Risk in Markets for Commodities

by Edward Wyat, New York Times

The hearing, convened by the Senate Financial Institutions and Consumer Protection subcommittee, came as Goldman Sachs, JPMorgan Chase and others face growing scrutiny over their role in the commodities markets and the extent to which their activities can inflate prices paid by manufacturers and consumers. The Federal Reserve is reviewing the potential risks posed by the operations, which have generated many billions of dollars in profits for the banks. [..]

Several witnesses at Tuesday’s hearings warned that letting the country’s largest financial institutions own commodities units that store and ship vast quantities of metals, oil and the other basic building blocks of the economy could pose grave risks to the financial system. The ability of those bank subsidiaries to gather nonpublic information on commodities stores and shipping also could give the banks an unfair advantage in the markets and cost consumers billions of dollars, the witnesses said.

Goldman Sachs isn’t alone in this game.

Not Just Goldman Sachs: Koch Industries Hoards Commodities as a Trading Strategy

by Lee Fang, The Nation

Worth noting: Koch Industries, a company often inaccurately described as simply an oil or manufacturing concern, is highly active in the commodity speculation business akin to the big hedge funds and banks like Goldman Sachs.

As Fortune magazine reported, when oil prices dropped from a record high in July of 2008 to record lows in December of that year, Koch bought up the cheap oil to take it off of the market. Koch leased a number of giant oil tankers, including the 2-million-barrel-capacity Dubai Titan, to store the oil offshore. The decrease in supply increased the price for consumers that year, while Koch took advantage of selling the oil off later at higher prices.

Koch Industries’ executive David Chang later boasted, “The drop in crude oil prices from more than US$145 per barrel in July 2008 to less than US$35 per barrel in December 2008 has presented opportunities for companies such as ours. In the physical business, purchases of crude oil from producers and storing offshore in tankers allow us to benefit from the contango market where crude prices are higher for future delivery than for prompt delivery.”

The company took advantage when the prices were low, but they also gained when the prices were high. A leaked document I obtained shows Koch among the largest traders (including Goldman Sachs and Morgan Stanley) speculating on the price of oil in the summer of 2008.

Elizabeth Warren Wants To Take This Goldman Sachs Aluminum Story And Run Right Over Wall Street With It

by Linette Lopez, Business Insider

Back in 2003 the Federal Reserve decided to temporarily allow banks to purchase commodities directly. That means oil, power, copper, aluminium etc. This September, that temporary regulatory relaxation is set to expire, and if it does, a big chunk of Wall Street’s business will expire with it.

And now that the ruling is up for discussion, Congress gets to weigh in. Wall Street be warned, if this hearing was any indication, the Senate is coming down on the side of culling the commodities business.

Warren decried the idea that banks would use “other people’s money” in pension and retirement savings “to pave the way for big banks to be able to control an electric plant or an oil refinery.” [..]

The witnesses didn’t just talk about prices either, they talked monopolies. Since her rise to prominence as a regulator and then a Senator, Warren has been saying that banks are getting too big, too interconnected, and too complicated. (Joshua) Rosner’s testimony corroborated that idea, and added to it the specter of  commodities controlling, allencompassing banking behemoths backstopped by the government (too big too fail).

It is more than past time to break up these banks and for the Federal Reserve to be more transparent in how it regulates the banks.

In Part 5 of a series of interviews by Paul Jay of Real News Network, journalist and author, Chris Hedges discusses how the Democratic Party and the so-called Liberal Elite betrayed the people they said they would protect. He talks about how that changed with Bill Clinton and has gotten worse with Barack Obama.

“Barack Obama can get up and say all the right things, but in the end, you know, it’s Wall Street and the corporations that are pulling the strings on the puppets,” he says.  [..]

“When you have the figures like Obama who continue to speak in that traditional language of liberalism and yet cannot respond to chronic unemployment, underemployment, you know, foreclosures, bank repossessions, and everything else, and in fact are running a system where the assaults against the underclass are only getting worse, then what happens is there becomes a deep disdain for not only liberal ideology but traditional liberal institutions-you saw the same thing in Weimar-so that when there is an uprising, oftentimes people want nothing to do with not only liberal elites, but the supposed liberal values, quote unquote, that these elites were purportedly espousing,” Hedges says.

“And that is a very real danger,” he continues, “because when you have figures like Obama that present themselves as traditional liberals and yet are unable to be effective in terms of dealing with the suffering and the misery of the underclass, that-and this is what happened in Yugoslavia-that when things exploded, you vomited up these very frightening figures-Radovan Karadzic, Slobodan Milosevic, Franjo Tudman-in the same way that the breakdown in Weimar vomited up the Nazi Party. And that’s what frightens me, because we don’t have the movements, the populist movements on the left, and because we live in a system of political paralysis.”

On July 1, student loan rated double to to 6.8% when Congress failed to take action. This placed an enormous debt on students who start off in deep debt in an seriously depressed labor market.

In the Senate, a vote to restore low interest rates temporarily on some new federal student loans failed to advance sparking a clash among Democrats.

Liberal firebrand Sen. Elizabeth Warren (Mass.) blasted a fellow Democratic senator Tuesday as a dispute over student loan rates escalated divisions within the party.

“Elizabeth came out very strong against Manchin,” said a Democratic senator who requested anonymity to discuss the exchange. “She said, ‘They’re already making money off the backs of students, and this adds another $1 billion.‘”

Warren was referring to a deal Sen. Joe Manchin (D-W.Va.) and two other members of the caucus, Sens. Tom Carper (D-Del.) and Angus King (I-Maine), struck with Republicans to peg student-lending rates to the 10-year Treasury notes.

It appears that Manchin, Carper and King have prevailed with a deal that will possibly be even more costly for future college students:

Rates on new student loans from the Department of Education, the dominant source of college loans, would be pegged to the yield on the 10-year Treasury note. Undergraduates would pay 1.8 percentage points above the government’s cost to borrow for 10 years. Graduate students would pay 3.8 percentage points above the rate. Parents would pay 4.5 percentage points above the benchmark, officials said.

The yield on the 10-year note was 2.57 percent late Wednesday, according to Bloomberg. Assuming the measure is signed into law as is, most students starting school this fall and their parents would enjoy lower borrowing costs than the rates that prevailed during the last school year.

But their savings would effectively be subsidized by future borrowers, who would pay more relative to current law as the economy improves and interest rates rise. [..]

Many Senate Democrats have been reluctant to support the measures, in part because of the possibility that future students would pay much higher rates than they do under current law.

Before Wednesday’s failed vote, Sen. Bernie Sanders (I-VT) called for student loan rates to be returned to 3.4%.

“We have a major crisis in our country today in terms of the high cost of college and the incredible debt burden that college students and their families are facing,” Sanders said in a Senate floor speech. “Our job is to improve that situation, to lessen the burden on students and their families — not to make it worse.”

The deficit hawks have prevailed to once again put the burden of the non-existent debt/deficit crisis on the backs of those who can least afford it.  

Where the hell is the outrage? That is the question that senior fellow at Campaign for America’s Future and former executive at AIG, Richard (RJ) Eskow asks about the current state of the US econoomy:

From the first breath of life to the last, our lives are being stolen out from under us. From infant care and early education to Social Security and Medicare, the dominant economic ideology is demanding more lifelong sacrifices from the vulnerable to appease the gods of wealth.

Middle-class wages are stagnant. Unemployment is stalled at record levels. College education is leading to debt servitude and job insecurity. Millions of unemployed Americans have essentially been abandoned by their government.  Poverty is soaring. Bankers break the law with impunity, are bailed out, and go on breaking the law, richer than they were before.

And yet, bizarrely, the only Americans who seem to be seething with anger are the beneficiaries of this economic injustice — the wealthiest and most privileged among us.  But those who are suffering seem strangely passive.

As long as they stay that way, there will be no movement to repair these injustices. And the more these injustices are allowed to persist, the harder it will be to end them.

Where the hell is the outrage? And how can we start some?

He notes that Paul Krugman, too, is feeling grim about the possibility that high unemployment has become acceptable and that the “political and policy elite” see no need to find a solution, one that is staring them right in the face:

First of all, I think many of us used to believe that sustained high unemployment would lead to substantial, perhaps accelerating deflation – and that this would push policymakers into doing something forceful. It’s now clear, however, that the relationship between inflation and unemployment flattens out at low inflation rates. We can probably have high unemployment and stable prices in Europe and America for a very long time – and all the wise heads will insist that it’s all structural, and nothing can be done until the public accepts drastic cuts in the safety net.

But won’t there be an ever-growing demand from the public for action? Actually, that’s not at all clear. While there is growing “austerity fatigue” in Europe, and this might provoke a crisis, the overwhelming result from U.S. political studies is that the level of unemployment matters hardly at all for elections; all that matters is the rate of change in the months leading up to the election. In other words, high unemployment could become accepted as the new normal, politically as well as in economic analysis.

Eskow points to the factors why Americans have learned to live in a “quiet state of desperation” and offers a Action Plan for the solution:

1. Expand our avenues of political expression: First, we need to remind ourselves that electoral politics is not the only productive avenue for political activism -that we need strong and independent voices and movements.

2. Refuse to let politicians use social issues to exploit us economically: We also need to reject the exploitation and manipulation of progressive values by corporatist politicians who use social issues like gay marriage and reproductive rights exactly the way Republicans do — to manipulate their own base into ignoring their own economic interests. Politicians who don’t take a stand on economic issues should be rejected, up and down the ticket.

3. Explain what is changing — and contrast what is with what should be:We need to do a better job of explaining what’s happening, so that we can make people aware of the harmful changes taking place all around them.And it’s not just about “change”: It’s also about contrast – between economic conditions as they are, and conditions as they should be and could be, if we can find the political will.

4. Expand the vocabulary of the possible: The “learned helplessness” outlook says “the rich and powerful always win; we don’t stand a chance.” History tells us otherwise. From the American Revolution to the breaking up of the railroads, from Teddy Roosevelt’s trust-busting to FDR’s New Deal, from Ike’s Social Security and labor union expansion to LBJ’s Great Society victories, we need to remind ourselves of what we’ve accomplished under similar conditions.

5. Tell stories: And we need to tell stories — human stories.

Some of those human stories started 22 years ago when Bill Moyers began documenting the stories of two families ordinary families in Milwaukee, Wisconsin who had lost good paying factory jobs and how they have managed over the years. In a 90 minute special on PBS’ Frontline, Moyers revisits the the Stanleys and Neumanns anf their struggles to finding other jobs, getting retrained yet still finding themselves on a “downward slope, working harder and longer for less pay and fewer benefits, facing devastating challenges and difficult choices.”

Over at AMERICAblog, our friend Gaius Publius has posted his interview with RJ Eskow that was taped at this year’s Netroots NAtion in San Jose, CA. It’s an excellent conversation.

This piece is a summary of a paper that I presented at the Left Forum in a panel organised by Geminijen. If you want to see a copy of the longer paper (which is being edited for English and clarity), send me a personal message here with your email and I will send it to you. Fran Luck who is the producer of the radio series “Joy of Resistance: Largest Minority” on WBAI was in the audience and asked us to appear on her show. If you would like to listen to Geminijen, Diana Zevala (who has written for the ACM on education), Barbara Garson and me, please click here: http://archive.wbai.org/files/mp3/wbai_130703_210001wed9pm10pm.mp3).

While in no way denying the impact of the introduction of austerity upon the working class, the disabled and the poor as a whole, there is no question that the impact of austerity on women is far greater. This is due to the job losses in the state sector where women’s labour is predominant, our historically lower wages due to the undervaluation of traditional women’s labour in a capitalist labour market leading to greater dependence upon the social welfare state, and our overwhelming responsibility for reproduction of the working class and how that impacts on our working lives.  The failure of the state to provide completely for social reproduction especially in childcare and care for the infirm and disabled has resulted in women having: 1) discontinuous working lives; 2) and the predominance of our labour in part-time employment.

With incomes falling in the advanced capitalist world as part of general economic policy, women face greater threats than men due to our responsibility as primary caretakers of children, the disabled and the elderly. Women are facing lower incomes, lower pensions, and an increasing reluctance for the state to support women in the workplace through provision of child-care and after-school programmes and shouldering carer responsibilities for the elderly and infirm. Given the transformations in general employment possibilities towards increasingly underemployed and part-time labour, we will begin to face competition from men for the jobs we have normally held while benefits are increasingly run down.



We face increasing economic insecurity without sufficient state assistance to ensure that our children and families can have a decent standard of living provided through employment. Women can no longer depend upon the fact that our labour is of sufficient value to capitalists as men also face increasing precariousness in their employment, and in the absence of a strong labour movement or left-wing movements, can serve the same role of an easily intimidated low-paid work force.

The destruction of the public sector enabling the weakening of the last bastion of trade union organisation to force through even lower wages and a reduction in social subsistence levels of wages along with a further deterioration in working conditions on the basis of non-competition with emerging and peripheral economies is nothing less than a race to the bottom and women will be the first, but not the last, victims of neoliberal economics in the advanced capitalist world.

This piece will be divided into 3 parts. The first is composed of some general statements on austerity. The second part will discuss the women’s labour market in Britain and the impact of austerity. The third part addresses the attack on the universal social welfare state in Britain and its impact upon women.

The June employment report from the Bureau of Labor Statistics reported that the US added 195,000 jobs but the unemployment rate remained at 7.6%. This better than expected number, along with upward revisions of the April and May jobs numbers led to some speculation by Wall Street analysts to speculate that the Federal Reserve would start to back away from part of its stimulus program.

But hold your horses on the optimism. The reality is that this an anaemic recovery with flat growth and low productivity, as Dean Baker points out in his article:

First, it is important to remember the size of the hole the economy is in. We are down roughly 8.5 million jobs from our trend growth path. We also need close to 100,000 jobs a month to keep pace with the underlying growth rate of the labor market. This means that even with the relatively good growth of the last few months, we were only closing the gap at the rate of 96,000 a month. At this pace, it will take up more than seven years to fill the jobs gap.

It is easy to miss the size of the jobs gap since the current 7.6% unemployment rate doesn’t seem that high. However, the main reason that the unemployment rate has fallen from its peak of 10% in the fall of 2009 is that millions of people have dropped out of the labor force and stopped looking for jobs. These people are no longer counted as being unemployed. [..]

This gets to the type of jobs that have been created in the upturn. Over the last three months, three sectors – restaurants, retail trade, and temporary help – have accounted for more than half of the jobs created. These sectors offer the lowest-paying jobs, with few benefits and little job security. [..]

Workers take these jobs when there are no better alternatives available.

There is also the impact of sequestration that has yet to have its full impact on the economy and Congress seems content to leave in place with one side blaming the other. There is little chance that a budget or any significant legislation will get through this Congress:

Do you see the problem here? The president’s adversaries lament his lack of warmth and his remote intellectualism; his supporters see the same quality as an analytical and cool-headed virtue. This could be a cute “the president is from Mars, Republicans are from Venus” thing – if it weren’t for the fact that several important issues this summer, including the budget and food-stamp funding, hinge on whether these two crazy kids will ever figure it out. At the base of their problem is an absence of mutual respect and a lack of legislative sportsmanship.

Until the players figure this out – and there’s no sign they ever will – we’re going to be stuck in an endless loop of revisiting these unhelpful battles that drag on for years. This summer is the last chance for any legislation to get through. Starting in the fall, the campaigns for the 2014 midterm elections are going to start, and the window for serious legislative action will have closed – at which point you can kiss any progress on major bills goodbye. [..]

the sequestration cuts are not a question of “one side” winning or losing. They’re a question of the nation, the economy and the American people losing. They’re a question of poor people losing: Meals on Wheels will suffer, as will those living in federal housing.

No one, so far, is winning at all. Even more concerning, it’s not abundantly clear that anyone in Washington knows how to play the game anymore.

Voters need to start making greater demands on their congress critters and start threatening to throw them out for ones who will represent the people and not Wall Street and their own self-interests.

If one can claim that a virtual economy offers increased possibility for revolutionary political change, that change should be measured against more material forms of analysis rather than treating information commodities as epiphenomenal. The tenuous connection between correlation and causation much like the meme of “Voodoo Economics” was treated more lightly and less seriously in a 2010 Bruce Watson piece on zombies and vampires as seasonally or cyclically symptomatic of a national economy:

there appears to be a loose connection between recession cycles and monster movies: zombie films tend to be more popular during boom times, while vampire flicks are ascendant when the economy is bad. As I wrote at the time, this makes a certain sort of symbolic sense: after all, as unthinking consumers, zombies reflect the tone of high-consumption boom times. The more melancholic vampires, on the other hand, suggest buyer’s remorse. While the zombie/vampire recession cycle didn’t always hold true, I found that it had a few interesting connections to the economy. For example, for most of the Reagan spend-till-you-drop 1980’s, zombie films dominated movie theaters. In fact, vampire movies’ only brief moment of ascendence in the decade was in 1987-1988, when a stock market tumble sent the economy into recession. Similarly, in 1991 and 2001, vampire films spiked and zombie films fell behind as recessions struck.

Aside from the doomsday preppers and faux survivalists in Dollywood and Hollywood invoking the fear of a zombie apocalypse as signs of an impending breakdown of urban society double-coded as racism, vampires and zombies can be differentiated by information while serving as cultural commodities in mass media. Vampires are asymmetric information commodities since in media narratives their representations appear conventional at first, whereas zombies are symmetric in that we know them instantly by their appearance. In either case they represent a pathological tipping point where fear trumps rationality and wooden stakes, garlic, holy water and shotguns make their appearance in contemporary film.

In a material context, such contemporary monsters represent the same class fears represented by European revolution in the Nineteenth Century not unlike the colonizers’ fears of the colonized or the contemporary anti-immigrant discourse where Americans ignore the labor history of the bracero and the coolie as invisible, informal Gastarbeiter.

A spectre is haunting Europe – the spectre of communism. All the powers of old Europe have entered into a holy alliance to exorcise this spectre

Marx’s invocation becomes more or less ironic in the post-Soviet period

Spectres de Marx: l’état de la dette, le travail du deuil et la nouvelle Internationale is a 1993 book by French philosopher Jacques Derrida The title Spectres of Marx is an allusion to Karl Marx and Friedrich Engels’ statement at the beginning of The Communist Manifesto that a “spectre [is] haunting Europe.” For Derrida, the spirit of Marx is even more relevant now since the fall of the Berlin Wall in 1989 and the demise of communism. With its death the spectre of communism begins to make visits on the earth. Derrida seeks to do the work of inheriting from Marx, that is, not communism, but of the philosophy of responsibility, and of Marx’s spirit of radical critique.

The philosophy of responsibility may be best represented in the problematic role of information and national security in a virtual surveillance state where Ed Snowden may be a vampire presently in the undead transit lounge of a Russian airport, avoiding the cleansing hot light of sunshine law. The disclosure of information asymmetrically held by a democratic state committed to a public sphere operates in contradiction to its multinational, geopolitical obligations.

Capital is dead labour, that, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks. The time during which the labourer works, is the time during which the capitalist consumes the labour-power he has purchased of him. [4] If the labourer consumes his disposable time for himself, he robs the capitalist Link

Virtuality has conditioned all forms of labour to some degree, creating different classes of worker, set against each other, not conscious of the web of virtuality that links them all into a single multitude. That unity is virtual in one sense – a potential that could be activated by virtuality in another sense, the resources of the net.

Come below the squiggle for more “mysterious forces or powers that govern the world and the lives of those who reside within it, but also a range of artistic forms that function in conjunction with these vodun (sic) energies.”

Earlier this year, the Justice Department brought a $5 billion fraud law suit against the ratings agency Standard and Poors for knowingly giving triple “A” ratings to financial products the agency’s analysts understood to be unworthy. The financial crisis that began in 2007 was mostly caused by those fraudulent ratings. Senators Al Franken (D-MN) and Roger Wicker (R-MI) worked together on an amendment that was included in  Dodd-Frank (pdf) to bring accountability and transparency to the ratings process. The amendment also required that the Securities and Exchange Commission conduct a study, that study has been completed (pdf). It found that there were “inherent” conflicts of interest in the system contributed to the 2008 crisis.

Contributing editor and investigative journalist for Rolling Stone Matt Taibbi published an in depth look at the ratings agencies and how ratings agencies like Moody’s and Standard & Poor’s helped trigger the meltdown with new documents. The documents surfaced from two lawsuits that files against S&P by  a diverse group of institutional plaintiffs with King County, Washington, and the Abu Dhabi Commercial Bank. The plaintiffs claimed that S&P, along with Morgan Stanley, fraudulently induced them to heavily invest in a pair of doomed-to-implode subprime-laden deals. Matt calls these new revelations the “Last Mystery of the Financial Crisis:

What about the ratings agencies?

That’s what “they” always say about the financial crisis and the teeming rat’s nest of corruption it left behind. Everybody else got plenty of blame: the greed-fattened banks, the sleeping regulators, the unscrupulous mortgage hucksters like spray-tanned Countrywide ex-CEO Angelo Mozilo.

But what about the ratings agencies? Isn’t it true that almost none of the fraud that’s swallowed Wall Street in the past decade could have taken place without companies like Moody’s and Standard & Poor’s rubber-stamping it? Aren’t they guilty, too?

Man, are they ever. And a lot more than even the least generous of us suspected.

Thanks to a mountain of evidence gathered for a pair of major lawsuits, documents that for the most part have never been seen by the general public, we now know that the nation’s two top ratings companies, Moody’s and S&P, have for many years been shameless tools for the banks, willing to give just about anything a high rating in exchange for cash.

In incriminating e-mail after incriminating e-mail, executives and analysts from these companies are caught admitting their entire business model is crooked.

Matt joined MSNBC’s All In host Chris Hayes to discuss how these newly-revealed documents are “the smoking gun of the financial crisis” revealing the corruption and dishonesty at the core the industry.

I have to admit, I was surprised to be notified that Historian Rick Perlstein of Nixonland fame, devoted an entire column in the Nation to two tweets replying to him; one from myself and one from another commentator on twitter. It’s also surprising, because I have been a fan of some of what Perlstein has written in the past, and I have cited him before. However, after this, I and certainly a lot of other people surprised at this lack of professionalism from an established writer, won’t do it again.

After all, one doesn’t normally read columns by established historians devoting entire pieces to complaints about tweets they received or people on twitter. Especially, one tweet that was merely a question about a widely cited article at CNET. I certainly don’t know why Rick Perlstein was so offended by that to devote an entire piece in the Nation to mine and one other tweet he received. I have to wonder if he realizes how unprofessional he looks by doing so. The excellent responses to Perlstein’s shoddy piece in the comments section certainly speak to that.

On Glenn Greenwald and His Fans

Read another tweet:

“NSA admits listening to U.S. phone calls without warrants cnet.co/1agOFCy via @CNET What say you, @RickPerlstein ?”

I think we can detect here an accusatory tone, especially given the way the tweeter, “therealpriceman,” fawns over Glenn Greenwald generally. (Though you can never be sure on the Internet, and besides, why do people pursue political arguments on Twitter anyway? I’ll never understand how, for instance, “When u talk gun violence lk in mirror PA here we cling to guns-apologz to PRES O”-another tweet directed my way, apparently somehow meant to respond to this-could possibly contribute anything useful to our common political life.) I detect in this message: even the NSA says you’re wrong about Glenn Greenwald, so when are you going to apologize? And if I’m reading right, that’s some really smelly stupidity. Because the whole point of my original post was that there was plenty Greenwald had “nailed dead to rights” in his reporting. What I had in mind when I wrote that (I should have specified this, I think) was the stuff on Verizon turning over metadata to the NSA. And yet what therealpriceman links to is an article suggesting something that Greenwald has not (yet?) claimed, and which still remains controversial and undetermined: that the NSA has acknowledged that it does not need court authorization to listen to domestic phone calls, a claim sourced to Representative Jerrold Nadler, which Nadler based on a classified briefing he and other Congressmen received, but which it has since been established Nadler probably just misunderstood.

{…..}

And given that perspective, I would love to know why Glenn Greenwald thinks the establishment cannot do to him, a relative flyspeck in the grand scheme of things, what they did to Dan Rather, a towering giant of Washington reporting going back to Watergate. Which is: consign him to the outer darkness, where the only people who care about what he has to say are the likes of my good friends @therealpriceman and @runtodaylight.

He starts out by assuring the audience that he has thick skin, but then goes on to prove just how thin it really is.  By whining for 13 paragraphs or so about criticism, criticism from a couple of tweets he received days ago, it really doesn’t show the maturity he was initially hoping to espouse. So since I apparently hurt his fee fees so bad, in 140 characters or less, I’ll go ahead and put his suppositions to the test.