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Moral hazard: Hillary Clinton & Co.

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Pam Martens and Russ Martens:

“Wall Street Democrats” is a political phrase gaining traction. It encapsulates a growing realization that Bill Clinton’s two terms as President and Barack Obama’s eight years in office have been a great boon to enriching the one percent on Wall Street and an economic disaster for mostly everyone else.

It was the Bill Clinton administration that deregulated the financial markets through the repeal of the Depression era Glass-Steagall Act and it was the Obama administration that created the masquerade that strict regulation of Wall Street was put back into place under the Dodd-Frank Wall Street Reform and Consumer Protection Act. Instead of reform, Wall Street banks have become larger, more dangerous and an increasing threat to the economic stability of the U.S., if not the globe.

There is a serious and growing chorus calling for an expulsion of the Wall Street Democrats from the party and a formal break with its anointed brand – the “Clinton” name. Every time Bill Clinton’s former Treasury Secretary, Robert Rubin, opens his mouth, this message gains more substance.

Rubin, despite his hubristic past, is seen as a close adviser to Hillary Clinton. In a New York Times piece last November, William D. Cohen wrote that “At 76, from his twin perches at the Council on Foreign Relations, of which he is co-chairman, and at the Brookings Institution, where he founded the Hamilton Project, he remains a crucial kingmaker in Democratic policy circles and, as an adviser to the Clintons, Mr. Rubin will play an essential role in Hillary Rodham Clinton’s campaign for president in 2016, should she decide to run.”

Rubin helped push through the repeal of the Glass-Steagall Act in 1999 while U.S. Treasury Secretary. By October of that year, he had taken a job at Citigroup, the Wall Street bank that pushed for the repeal and its primary beneficiary. Rubin accepted a position on the Board of Directors at Citigroup – a position that would pay him $126 million over the next ten years.

During Rubin’s tenure on the Board of Citigroup, the company imploded and received the largest taxpayer bailout in the history of U.S. finance, receiving $45 billion in equity infusions, over $300 billion in asset guarantees, and an unfathomable, initially secret bailout of over $2 trillion in below-market-rate loans from the Federal Reserve.

Propping up this insolvent bank with taxpayer funds is the quintessential definition of moral hazard. That hasn’t stopped Robert Rubin from lecturing the rest of us on moral hazard in the opinion pages of the Wall Street Journal – as recently as six weeks ago.

On February 23, 2015, Rubin penned an OpEd for the Wall Street Journal on the over reliance on central bankers. In that opinion piece, Rubin uses the phrase “moral hazard” three separate times as well as in the headline.

Rubin writes in these excerpts: . . .

Continue reading.

Written by LeisureGuy

6 April 2015 at 5:40 pm

Posted in Business, Democrats

Differences in economic performance between Blue and Red states

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Paul Krugman in the NY Times today:

Two impossible things happened to the U.S. economy over the course of the past year — or at least they were supposed to be impossible, according to the ideology that dominates half our political spectrum. First, remember how Obamacare was supposed to be a gigantic job killer? Well, in the first year of the Affordable Care Act’s full implementation, the U.S. economy as a whole added 3.3 million jobs — the biggest gain since the 1990s. Second, half a million of those jobs were added in California, which has taken the lead in job creation away from Texas.

Were President Obama’s policies the cause of national job growth? Did Jerry Brown — the tax-raising, Obamacare-embracing governor of California — engineer his state’s boom? No, and few liberals would claim otherwise. What we’ve been seeing at both the national and the state level is mainly a natural process of recovery as the economy finally starts to heal from the housing and debt bubbles of the Bush years.

But recent job growth, nonetheless, has big political implications — implications so disturbing to many on the right that they are in frantic denial, claiming that the recovery is somehow bogus. Why can’t they handle the good news? The answer actually comes on three levels: Obama Derangement Syndrome, or O.D.S.; Reaganolatry; and the confidence con.

Not much need be said about O.D.S. It is, by now, a fixed idea on the right that this president is both evil and incompetent, that everything touched by the atheist Islamic Marxist Kenyan Democrat — mostly that last item — must go terribly wrong. When good news arrives about the budget, or the economy, or Obamacare — which is, by the way, rapidly reducing the number of uninsured while costing much less than expected — it must be denied.

At a deeper level, modern conservative ideology utterly depends on the proposition that conservatives, and only they, possess the secret key to prosperity. As a result, you often have politicians on the right making claims like this one, from Senator Rand Paul: “When is the last time in our country we created millions of jobs? It was under Ronald Reagan.”

Actually, if creating “millions of jobs” means adding two million or more jobs in a given year, we’ve done that 13 times since Reagan left office: eight times under Bill Clinton, twice under George W. Bush, and three times, so far, under Barack Obama. But who’s counting?

Still, don’t liberals have similar delusions? Not really. The economy added 23 million jobs under Clinton, compared with 16 million under Reagan, but there’s nothing on the left comparable to the cult of the Blessed Ronald. That’s because liberals don’t need to claim that their policies will produce spectacular growth. All they need to claim is feasibility: that we can do things like, say, guaranteeing health insurance to everyone without killing the economy. Conservatives, on the other hand, want to block such things and, instead, to cut taxes on the rich and slash aid to the less fortunate. So they must claim both that liberal policies are job killers and that being nice to the rich is a magic elixir.

Which brings us to the last point: the confidence con. . .

Continue reading.

Written by LeisureGuy

27 March 2015 at 3:08 pm

Why do politicians not want the public to know what they are doing or have done?

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One can think of a variety of reasons, most not very complimentary to the politician. Taking pains to hide or destroy the record of what s/he has done in office makes a prima facie case that the actions are reprehensible and would not withstand public scrutiny. That concealing or destroying records is so common speaks volumes about the state of political corruption in the US.

Here’s a ProPublica Muck Reads email:

Former Secretary of State Hillary Clinton has been on the defensive ever since the New York Times first reported that she used a private email account for government business. In light of the imbroglio, we decided to look at the email escapades of other politicos for this week’s MuckReads.

Colin Powell relied on personal emails while secretary of state, Politico, March 2015

Since news of Clinton’s use of private email for White House business broke, an aide to Colin Powell says he “might have occasionally used personal email addresses” to correspond with staff and officials during his tenure as Secretary of State.

Bush Advisers’ Approach on E-Mail Draws Fire, The New York Times, April 2007

The Bush Administration admits that as many as 22 political advisers to the president, including Karl Rove, used their Republican National Committee email accounts for White House related business. At the time, the RNC automatically purged emails after 30 days. Later, a White House spokesperson reported that as many as 5 million emails could have been lost from the White House’s official server.

Jeb Bush Owned Personal Email Server He Used as Governor, NBC News, March 2015

A Mar. 4, 2015 report from NBC News finds that between 1999 until early 2007 Jeb Bush used his own private email server for official business as Florida Governor.

Two ex-Walker aides charged with illegal campaigning, The Milwaukee Journal-Sentinel, January 2012

Two former aides to Gov. Scott Walker, while he was Executive of Milwaukee County, used a private Internet network to conduct campaign work. They are later charged with illegally campaigning on government time.

Trove of Palin E-Mails Draws Press to Alaska, The New York Times, June 2011

In 2011, Sarah Palin releases more than 24,000 pages of emails sent from a private account while she was Alaska governor, responding to public records requests made in 2008. The emails reveal less-than scandalous details of her life including her early attempts to meet John McCain, a draft ghostwritten letter-to-the-editor in response to criticism against her and plans to see a controversial Christian pastor in Juno, Alaska.

U.S. Ambassador to Kenya J. Scott Gration resigns over ‘differences’ with Washington, The Washington Post, June 2012

Scott Gration, US Ambassador to Kenya, resigns in Jun. 2012 just before the publication of an Office of Inspector General report that found he had “repeatedly violated diplomatic security protocols at the embassy” by using a private email account for official business, according to the Washington Post.

Christie administration may have violated public records law, The Record, January 2014

The Record releases a cache of emails sent from personal accounts between top Chris Christie aides that reveals their plan to create a traffic jam over the George Washington Bridge possibly as retribution against the mayor of Fort Lee who refused to endorse Christie in the 2013 New Jersey gubernatorial election.

After Pledge of Sunlight, Gov. Cuomo Officials Keep Their Email in the Shadows, ProPublica, May 2014

ProPublica finds that top advisers to New York Gov. Andrew Cuomo conduct government business through personal email accounts including Howard Glaser. ProPublica recently obtained emails from Glaser in which he touted his ” significant, critical, and current input” on a deal that weakened rules to prevent misdeeds in the mortgage market.

Written by LeisureGuy

15 March 2015 at 9:52 am

Andrew Cuomo seems hopelessly corrupt

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First he established a commission to investigate corruption, and then, when it looked as though the investigation might lead to him, he quickly shut it down. And now we see his corruption has early roots, prior to his governorship. Justin Elliott reports for ProPublica:

Previously undisclosed emails by a mortgage industry lobbyist doubling as a consultant for then Attorney General Andrew Cuomo show the lobbyist played a self-described “critical role” in one of Cuomo’s signature financial crisis investigations.

The emails from 2007 and 2008 detail how the lobbyist, longtime Cuomo confidantHoward Glaser, was involved in an investigation of mortgage industry players that included Glaser’s own clients.

In one email, Glaser touted his influence over a Cuomo deal that weakened rules to prevent misdeeds in the mortgage market. That deal, with mortgage giants Fannie Mae and Freddie Mac, reflected Glaser’s “significant, critical, and current input,” he wrote in an email, “a fact to which current [Fannie and Freddie] employees and the NYAG’s office are prepared to attest.” Fannie and Freddie were both Glaser’s clients.

The emails contradict Glaser’s previous account of his involvement in Cuomo’s investigations.

ProPublica and the Albany Times Union reported last year that Glaser was working simultaneously as a consultant for the attorney general’s office and for a bevy of mortgage industry firms. Glaser said at the time that he only gave general advice to Cuomo’s office, that he did not represent clients with the attorney general, and that he was “not involved” in specific mortgage industry cases.

According to the emails, however, Glaser was involved in mortgage industry cases and traveled to Cuomo’s office repeatedly over the course of nearly two years while investigations related to Glaser’s clients unfolded.

“Oy. I Spent the last 48 hrs at the NY AG’s office and am glad to give you an off the record briefing and my observations,” Glaser wrote in a Nov. 7, 2007, email to the federal regulator of Fannie and Freddie. That same day, Cuomo announced subpoenas of the two mortgage giants as part of an investigation into fraudulently inflated home appraisals.

“These emails on their face indicate a serious conflict of interest, a conflict that could very well have influenced enforcement actions by Cuomo, much to the benefit of Glaser’s clients,” said Craig Holman of the government watchdog group Public Citizen.

The new emails also show how Glaser briefed industry players about Cuomo’s investigation while Glaser was involved in it.

In early November 2007, . . .

Continue reading.

Note how Cuomo has changed government policy to ensure that emails don’t stick around to embarrass or implicate public servants. Totally corrupt outlook.

Written by LeisureGuy

11 March 2015 at 10:03 am

Uh-oh: Some revealing details of Clinton finances

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This at the very least looks bad, particularly the money “donated” by Marc Rich’s wife (pretty clearly in exchange for Marc Rich’s pardon by Clinton hours before he left office). Pam Martens and Russ Martens report:

Hillary Clinton, who has yet to be named the Democratic candidate for President in 2016, finds herself enmeshed in a transatlantic scandal that is an untimely reminder of the scandal fatigue that Americans were forced to endure during the Presidency of her husband, Bill Clinton.

Last Monday, the Guardian newspaper, the BBC, the French newspaper, Le Monde and dozens of other news outlets disclosed that the Swiss banking unit of the global behemoth bank, HSBC, had assisted the ultra rich in hiding assets and providing advice on how to evade domestic tax authorities.

The documentation for the revelations were provided by a former HSBC employee, Hervé Falciani, to the International Consortium of Investigative Journalists.

That news broke on Monday, February 9. The Clinton bombshell came the next day, Tuesday, February 10, when the Guardian reported that seven clients of the Swiss HSBC bank had cumulatively donated $81 million to the Bill, Hillary and Chelsea Clinton Foundation – a nonprofit that runs the Clinton Global Initiative, the Clinton Presidential Library and numerous other programs.

The Guardian report was quick to point out that there was no evidence that any of the seven donors had evaded taxes and that it “is not unlawful for US or other non-Swiss citizens to hold accounts in Geneva.”

Two of the donors listed in the leaked files are raising eyebrows. According to the Guardian report, one of the donors who had a Swiss HSBC account is Jeffrey Epstein, “the wealthy financier who was jailed for 13 months in 2008 for soliciting sex with underage girls.”  Another, reports the Guardian, was Denise Rich, the ex-wife of the now deceased Marc Rich, who fled the U.S. after being indicted for tax evasion, fraud and racketeering and then received a highly controversial pardon by President Clinton just hours before he left office.

On the heels of the Guardian’s report last week comes news in the Wall Street Journal this morning that the Clinton Foundation is also accepting donations from foreign governments. One of those countries is Saudi Arabia, the country that has played an outsized role in collapsing the price of oil and putting many U.S. shale producers in financial jeopardy. According to the Journal, Saudi Arabia had donated between $10 and $25 million since 1999 to the Clinton Foundation with a portion of that coming in 2014. The Foundation’s database lists only a dollar range for donations.

Other recent foreign government donors include the United Arab Emirates, Oman, Australia, Germany and the Foreign Affairs, Trade and Development agency of Canada, a government agency promoting the Keystone XL pipeline, according to the Journal report. The paper notes that the Clinton Foundation had stopped raising money from foreign governments in 2009 while Hillary Clinton served as Secretary of State.

Adding further political intrigue, the New York Times is out with a report this morning indicating that the Geneva prosecutor’s office has released a statement acknowledging that it has opened a criminal inquiry into potential aggravated money laundering at the HSBC Swiss banking unit and is engaged in a search of its offices today.

Related Article:

Hillary and Bill: Their Rugged Journey from Paupers to One-Percenters in 365 Days

The Marc Rich pardon was already quite ugly and suspicious, and to find that it apparently was purchased is very unpleasant.

Written by LeisureGuy

18 February 2015 at 3:46 pm

How White Liberals Used Civil Rights to Create More Prisons

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Radley Balko in his morning links points out this interesting article by Willie Osterweil in The Nation:

Neither liberals nor conservatives are chomping at the bit to discuss the historical roots of the modern gun-rights movement. If asked to describe it, liberals will gesture vaguely at the eighties and nineties, blaming survivalists, school shootings, “cold, dead hands” and the National Rifle Association. Conservatives, on the other hand, will jump the historical mark by some distance, talking about the founding fathers, the Second Amendment and the right to an armed militia. Neither side wants to admit that the first modern anti-carry law was passed by California Governor Ronald Reagan in 1967. Nor would they want to mention that Reagan passed the law to disarm the twentieth century’s greatest gun-rights militia: the Black Panther Party. Political genealogies in America are more mixed than the 24/7 news cycle will allow.

In her first book, The First Civil Right: How Liberals Built Prison in America, historian Naomi Murakawa demonstrates how the American prison state emerged not out of race-baiting states’-rights advocates nor tough-on-crime drug warriors but rather from federal legislation written by liberals working to guarantee racial equality under the law. The prison industry, and its associated police forces, spy agencies and kangaroo courts, is perhaps the most horrific piece of a fundamentally racist and unequal American civil society. More people are under correctional supervision in the United States than were in the Gulag archipelago at the height of the Great Terror; there are more black men in prison, jail or parole than were enslaved in 1850. How did this happen?

The common-sense answer is that launching the war on drugs during the backlash against civil-rights struggles encouraged agents of the criminal-justice system to lock up black people for minor infractions. This isn’t wrong, or not exactly. Ronald Reagan’s infamous Sentencing Reform Act of 1984, which established federal minimums (a k a sentencing “guidelines”) and abolished parole in the federal prison systems, did lead to an explosion in the number of federal prisoners, particularly drug offenders. It was one of the pivotal moments in the production of the prison-industrial complex (PIC)—the overlapping sphere of government and industrial activity that employs hundreds of thousands of guards, cops, judges, lawyers, bail-bondsmen, administrators and service employees and which sees millions of prisoners performing barely paid production labor to generate profit. But, as Murakawa painstakingly demonstrates, the Sentencing Reform Act has a “liberal core,” and is built on the technical and administrative logic of racial fairness that structures all federal civil-rights legislation.

This is the fundamental thesis of Murakawa’s book: legal civil rights and the American carceral state are built on the same conceptions of race, the state and their relationship. As liberals believe that racism is first and foremost a question of individual bias, they imagine racism can be overcome by removing the discretion of (potentially racist) individuals within government through a set of well-crafted laws and rules. If obviously discriminatory laws can be struck down, and judges, statesmen or administrators aren’t allowed to give reign to their racism, then the system should achieve racially just outcomes. But even putting aside the fact that a removal of individual discretion is impossible, such a conception of “fairness” applies just as easily to producing sentencing minimums as school desegregation.

Murakawa’s method is to apply deconstruction to the congressional record, reading government documents in search of their guiding political and ideological assumptions. “Implicitly,” she argues, “this perspective discounts intentions, recognizing that racial power is not necessarily exerted by will.” Why wade through rancorous debate between liberals and conservatives if all the hubbub resulted in a massively bipartisan project of racist imprisonment?

But Murakawa does not simply collapse liberal and conservative into each other. She makes an important distinction between postwar racial-liberalism and postwar racial-conservatism. Race conservatives are those who don’t believe that racism is real, but that race is: they believe that black people are innately inferior to whites, and attribute their place in society to a failure of black culture. This race-conservatism is what is broadly considered “real racism.”

Race-liberalism, on the other hand, remains the dominant—and usually unspoken—American framework for understanding race. Built on the premise that racism is real but manifests as the prejudice of white people, race-liberals argue that individuals’ racism can corrupt institutions and bias them against black people. That bias damages black psyches as well as black people’s economic and social prospects. Race-liberals believe that training, laws, stricter rules and oversight can eliminate prejudice and render institutions “colorblind.” Since it is biased treatment that damages black prospects, then this fix—civil rights—applied to all of society’s institutions, would eventually end racial disparity.

Both race-liberals and race-conservatives base their theories on one disastrous assumption: . . .

Continue reading.

Written by LeisureGuy

12 January 2015 at 11:45 am

Diane Feinstein tailors the law depending on the individual who broke it

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Glenn Greenwald writes in The Intercept:

When WikiLeaks founder Julian Assange released his latest document trove—more than 250,000 secret State Department cables—he intentionally harmed the U.S. government. The release of these documents damages our national interests and puts innocent lives at risk. He should be vigorously prosecuted for espionage.

The law Mr. Assange continues to violate is the Espionage Act of 1917. That law makes it a felony for an unauthorized person to possess or transmit “information relating to the national defense which information the possessor has reason to believe could be used to the injury of the United States or to the advantage of any foreign nation.”

The Espionage Act also makes it a felony to fail to return such materials to the U.S. government. Importantly, the courts have held that “information relating to the national defense” applies to both classified and unclassified material. Each violation is punishable by up to 10 years in prison.

The Hill, June 10, 2013 (“Feinstein Calls Snowden’s NSA Leaks an “Act of Treason”):

Sen. Dianne Feinstein (D-Calif.) on Monday said the 29-year-old man who leaked information about two national security programs is guilty of treason. . . . “I don’t look at this as being a whistleblower. I think it’s an act of treason,” the chairwoman of the Senate Intelligence Committee told reporters.

The California lawmaker went on to say that Snowden had violated his oath to defend the Constitution. “He violated the oath, he violated the law. It’s treason.”

Ars Technica, November 3, 2013:

If it wasn’t already clear that the US government was unhappy with National Security Agency leaker Edward Snowden—and the feds want him extradited, President Obama denounced him—it is now. Today, the chairwoman of the Senate Intelligence Committee, Dianne Feinstein (D-CA), and her House counterpart, Mike Rogers (R-MI), both emphasized there would be no mercy coming from Washington.

“He was trusted; he stripped our system; he had an opportunity—if what he was, was a whistle-blower—to pick up the phone and call the House Intelligence Committee, the Senate Intelligence Committee, and say I have some information,” Feinstein told CBS’ Face The Nation. “But that didn’t happen. He’s done this enormous disservice to our country, and I think the answer is no clemency.”

The New York Times, 3 days ago:

The F.B.I. and Justice Department prosecutors have recommended bringing felony charges against David H. Petraeus, contending that he provided classified information to a lover while he was director of the C.I.A., officials said, and leaving Attorney General Eric H. Holder Jr. to decide whether to seek an indictment that could send the pre-eminent military officer of his generation to prison.

The Huffington Post, yesterday (“Dianne Feinstein Urges Government Not To Seek David Petraeus Indictment”):

Sen. Dianne Feinstein (D-Calif.) urged the Department of Justice not to bring criminal charges against former CIA Director David Petraeus over his handling of classified information.

This man has suffered enough in my view,” Feinstein said on CNN’s “State of the Union” on Sunday, explaining why she doesn’t think Attorney General Eric Holder should seek an indictment.

Petraeus “made a mistake,” added the senator, who is vice chairwoman of the Senate Intelligence Committee. “But … it’s done, it’s over. He’s retired. He’s lost his job. How much does the government want?”

David Petraeus, the person whom Feinstein said has “suffered enough,” washired last year by the $73 billion investment fund KKR to be Chairman of its newly created KKR Global Institute, on top of the $220,000/year pension he receives from the U.S. Army and the teaching position he holds at Harvard’s John F. Kennedy School of Government. Let us all pause for a moment to lament the deep suffering of this man, and the grave injustice of inflicting any further deprivation upon him.

In 2011, I wrote a book, With Liberty and Justice for Some, that examined the two-tiered justice system prevailing in the U.S.: how the U.S. imprisons more of its citizens than any other country in the world (both in absolute numbers and proportionally) often for trivial transgressions, while immunizing its political and economic elites from even the most egregious crimes. Matt Taibbi’s book, The Divide, examines the same dynamic with a focus on the protection of economic elites and legal repression of ordinary citizens in the wake of the 2008 financial crisis.

This latest example from Feinstein is one of the most vivid yet. She wanted Julian Assange – who isn’t even a U.S. citizen and never served in the U.S. Government – prosecuted for espionage for exposing war crimes, and demanded that Edward Snowden be charged with “treason” for exposing illegal eavesdropping which shocked the world. But a four-star general who leaked classified information not for any noble purpose but to his mistress for personal reasons should be protected from any legal consequences. . .

Continue reading.

Diane Feinstein simply does not believe that we are all equal in the eyes of the law. She will make exceptions depending on how well she likes a person, offering them de facto legal immunity. Fortunately, this is her last Senate term. She is occasionally right on the issues (as in releasing the summary of the Senate torture investigation), but quite often wrong (as in allowing the intelligence services, including the CIA, to run amok).

Written by LeisureGuy

12 January 2015 at 11:09 am

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