Blog entry Sun 2010-10-10 09:51 EDT

Crony Capitalism: Wall Street's Favorite Politicians

Zach Carter

A full 90 members of Congress who voted to bailout Wall Street in 2008 failed to support financial reform reining in the banks who drove our economy off a cliff. But when you examine campaign contribution data, it's really no surprise that these particular lawmakers voted to mortgage our economic future to Big Finance: This election cycle, they've raked in over $48.8 million from the financial establishment. Over the course of their Congressional careers, the figure swells to a massive $176.9 million. The full list of these Crony Capitalists is below, along with the money they pulled in from Big Finance, according to data compiled by the Center for Responsive Politics (opensecrets.org)...

blog entry; Crony Capitalism; Wall Street's Favorite Politicians.

Mish's Global Economic Trend Analysis Thu 2010-08-26 15:11 EDT

"Contained Depression"

Michael Shedlock

Kevin Feltes, an economist for the Jerome Levy Forecasting Center, solicited my opinion on a couple of their recent articles. Levy comes down on the side of deflation, as do I. However, the devil is in the details...That Levy managed to come to what I believe is the proper overall conclusion stems from Levy's rock-solid case presented in section 2: Why Aggressive Monetary Policy Isn't Causing and Won't Cause Inflation...

contained Depression; Mish's Global Economic Trend Analysis.

Thu 2010-08-26 09:03 EDT

Why Doesn't the United States Have a European-Style Welfare State? | The Weatherhead Center for International Affairs

Alesina, Alberto, Edward L. Glaeser, and Bruce Sacerdote

European countries are much more generous to the poor relative to the US level of generosity. Economic models suggest that redistribution is a function of the variance and skewness of the pre--tax income distribution, the volatility of income (perhaps because of trade shocks), the social costs of taxation and the expected income mobility of the median voter. None of these factors appear to explain the differences between the US and Europe. Instead, the differences appear to be the result of racial heterogeneity in the US and American political institutions. Racial animosity in the US makes redistribution to the poor, who are disproportionately black, unappealing to many voters. American political institutions limited the growth of a socialist party, and more generally limited the political power of the poor. [2001 Brookings Papers on Economic Activity; pdf downloaded]

European-Style Welfare State; internal affairs; United States; Weatherhead Center.

Jesse's Café Américain Mon 2010-08-16 16:09 EDT

Chris Whalen: Nothing Has Changed Because It's The Fraud and Corruption, Stupid

Jesse

...The dirty little secret of the Dodd-Frank legislation is that by failing to curtail the worst abuses of the OTC market in structured assets and derivatives, a financial ghetto that even today remains virtually unregulated, the Congress and the Fed are effectively even encouraging securities firms to act as de facto exchanges and thereby commit financial fraud. Allowing securities firms to originate complex structured securities without requiring SEC registration is a vast loophole that Senator Christopher Dodd (D-CT) and Rep. Barney Frank (D-MA) deliberately left open for their campaign contributors on Wall Street. But it must be noted these same firms have a captive, client relationship with the Fed and other regulators as well, thus a love triangle may be the most apt metaphor...a recent key supervisory officer appointment by the Federal Reserve Bank of New York (FRBNY)...choice of Sarah Dahlgren as Head of Supervision...Ms Dahlgren has been at the center of many of the Federal Reserve's most embarrassing failures in the area of bank supervision and in particular with respect to the failure of American International Group (AIG)...

change because; Chris Whalen; corruption; fraud; Jesse's Café Américain; Stupid.

Sat 2010-08-07 20:18 EDT

Wall Street's Big Win | Rolling Stone Politics

Matt Taibbi

...Obama and the Democrats boasted that the bill is the "toughest financial reform since the ones we created in the aftermath of the Great Depression" -- a claim that would maybe be more impressive if Congress had passed any financial reforms since the Great Depression, or at least any that didn't specifically involve radically undoing the Depression-era laws...What it was, ultimately, was a cop-out, a Band-Aid on a severed artery. If it marks the end of anything at all, it represents the end of the best opportunity we had to do something real about the criminal hijacking of America's financial-services industry. During the yearlong legislative battle that forged this bill, Congress took a long, hard look at the shape of the modern American economy -- and then decided that it didn't have the stones to wipe out our country's one --dependably thriving profit center: theft...Dodd-Frank was never going to be a meaningful reform unless these two fateful Clinton-era laws -- commercial banks gambling with taxpayer money, and unregulated derivatives being traded in the dark -- were reversed...Republican and Democratic leaders were working together with industry insiders and deep-pocketed lobbyists to prevent rogue members like Merkley and Levin from effecting real change...Geithner acted almost like a liaison to the financial industry, pushing for Wall Street-friendly changes on everything...Without the Volcker rule and the --Lincoln rule, the final version of finance reform is like treating the opportunistic symptoms of AIDS without taking on the virus itself. In a sense, the failure of Congress to treat the disease is a tacit admission that it has no strategy for our economy going forward that doesn't involve continually inflating and reinflating speculative bubbles...

Rolling Stone political; Wall Street's Big Win.

Sat 2010-07-24 16:01 EDT

The Center of the Universe >> Blog Archive >> We need YOU!

MISSION: To deploy an army of MMT proponents to respond to deficit terrorism on the web. Go to offending articles. Neutralize flaws. Report back to home base...

blogs Archive; center; needed; universities.

Sat 2010-07-24 15:55 EDT

The Path of Unemployment

Dean Baker

...The US, unlike most western European countries, is not set up to sustain long periods of high unemployment. Its system of social welfare is very much centered on work. This is most evident with health care. The vast majority of non-elderly people get their health care through employer provided health insurance. Individual policies tend to be very expensive, especially for people with any history of medical problems. When people lose their jobs, they generally lose their health care coverage as well...While the downturn has led to high and prolonged unemployment in the US, it has not had quite the same effect in Europe...several European countries, most notably Germany and the Netherlands, have adopted a policy of work sharing to limit unemployment...Under work-sharing schemes, instead of just paying workers for being completely unemployed, the government pays workers for being partly unemployed...Germany has been able to use this system to keep its unemployment rate from rising at all in the recession...In the US workers are seeing near double-digit unemployment with the implied loss of income and benefits, as well as the loss of self-esteem and social status that is associated with long-term unemployment. By contrast, workers in Germany and the Netherlands are adjusting to the falloff in demand with shorter workweeks and longer vacations...

path; unemployment.

Sat 2010-05-22 21:16 EDT

CFEPS Research - L. Randall Wray

L. Randall Wray is a Professor of Economics at the University of Missouri-Kansas City, a Senior Research Associate at the Center for Full Employment and Price Stability [CFEPS]...A student of Hyman P. Minsky while at Washington University in St. Louis where he earned his Ph.D. in economics (1988)...Professor Wray has focused on monetary theory and policy, macroeconomics, and employment policy. He is currently writing on modern money, the monetary theory of production, social security, and rising incarceration rates (Penal Keynesianism). He is developing policies to promote true full employment, focusing on Hyman P. Minsky's "employer of last resort" proposal as a way to bring low-skilled, prime-age males back into the labor force. Wray"s research has appeared in numerous books and journals...

CFEPS Research; L. Randall Wray.

The Wall Street Examiner Sat 2010-05-22 19:50 EDT

Merkel Does Mahathir and Martin Luther: Tilting the Market Table

...I'm very interested in Germany's policy shift because it's the first time in decades a mature industrialized nation has protested the allocation of profits decreed by financial orthodoxy. At core, German bans of "naked" (held by those who don't own the securities) shorts, paraphrasing Ms. Merkel- perhaps unsurprisingly the daughter of a Lutheran Minister- stops people profiting from the destruction of their neighbor's house at cost of less liquidity in the restricted markets...500 years ago, the Germans defied orthodoxy and ushered in a revolution which moved the center of Europe from South to North. They are defying orthodoxy again, and I can't wait to see what happens next.

Mahathir; Market Table; Martin Luther; Merkel; tilting; Wall Street Examiner.

Jesse's Café Américain Tue 2010-05-18 15:10 EDT

The US Intelligentsia and Middle Class Are In the Firm Grip of Fear, Fraud and Denial

Jesse

The lie is comfortable, an illusion easy to live with, familiar, and safe. Writing from the 'disgraced profession' of economics, James K. Galbraith speaks of the unspoken, the many frauds and deceptions underlying the recent financial crisis centered in the US...``the country faces an existential threat. Either the legal system must do its work. Or the market system cannot be restored. There must be a thorough, transparent, effective, radical cleaning of the financial sector and also of those public officials who failed the public trust. The financiers must be made to feel, in their bones, the power of the law. And the public, which lives by the law, must see very clearly and unambiguously that this is the case...''

denial; fears; firm grip; fraud; intelligentsia; Jesse's Café Américain; middle class.

Tue 2010-05-11 09:02 EDT

Barofsky Says Criminal Charges Possible in Alleged AIG Coverup - Bloomberg.com

Richard Teitelbaum

...The TARP watchdog [Neil Barofsy] has also criticized Treasury Secretary Timothy F. Geithner in reports and in congressional testimony for his handling of the process by which insurance giant American International Group Inc. was saved from insolvency in 2008, when Geithner was head of the Federal Reserve Bank of New York. The secrecy that enveloped the deal was unwarranted, Barofsky says, adding that his probe of an alleged New York Fed coverup in the AIG case could result in criminal or civil charges. In Senate Finance Committee testimony on April 20, Barofsky said SIGTARP would investigate seven AIG-linked mortgage-related securities similar to Abacus 2007-AC1, the instrument underwritten by Goldman Sachs Group Inc. that is at the center of a U.S. Securities and Exchange Commission lawsuit filed against the investment bank on April 16...

Alleged AIG Coverup; Barofsky Says Criminal Charges Possible; Bloomberg; com.

Culture of Life News Mon 2010-04-26 18:42 EDT

Xenophobia Is Very Destructive

Elaine Supkis

Japan always interests me because it is at the center of the ZIRP system which is, in the Cave of Wealth and Death, the place where economies go to die. Despite a 50 year record of successfully preventing any US penetration of Japan's domestic market while selling higher and higher quality goods to the US, the country finds itself mired in a perpetual depression. The gap between the rich and poor are widening while the country struggles with xenophobia which prevents foreign influences from seeping in...

Culture; DESTRUCTION; Life News; Xenophobia.

Culture of Life News Tue 2010-03-30 16:01 EDT

Empires Must Regulate Trade And Finances

Elaine Supkis

I keep harping on the trade deficit issue since all of the other messes revolve around this misbalance...The `Me, Myself, and I' ethos is self-centered, childish and foolish. It comes out of living inside a major empire. The individual puffs up him or herself and decides, thanks to being fairly free inside of this empire, that the empire is stupid and doesn't need to be coaxed, nurtured or controlled. Instead, various individuals work day and night to evade taxes that support the imperial superstructure. They bribe politicians to allow looting of the purse via inflated war costs, corruption in buying services, tweaking laws so they channel all collective wealth into a few individual pockets, etc...The people are a collective. If they are individuals, they will be eaten by internationalist wolves or other empires that are not individuals. This is a harsh historical lesson: individuals eventually lose to organized groups...Mostly, throughout history, the freest people have been the CITIZENS of an empire (NOT the victims being oppressed by the empire). Free nations exist only in the shadows of an empire...This is why growing and preserving empires is more important than pretending to be an individual who has no ties to anything. Seriously, when major empires fall, the ability to roam the planet at will vanishes pretty fast...

Culture; Empire; finance; Life News; regulate trade.

Fri 2010-03-12 08:51 EST

AlterNet: The Business Roundtable: The Most Powerful Corporate Business Club Most Americans Have Never Heard of

David DeGraw, Amped Status

...At the center of this group is the Business Roundtable, an organization representing Fortune 500 CEOs that is also interlocked with several lead elite organizations. Most Americans have never heard of the Business Roundtable. However, in my analysis, it is the most influential and powerful Economic Elite organization...The Business Roundtable is the most powerful activist organization in the United States. Their leaders regularly lobby members of Congress behind closed doors and often meet privately with the President and his administration. Any legislation that affects Roundtable members has almost zero possibility of passing without their support...look at healthcare and financial reform, along with the military budget. The healthcare reform bill devolved into what amounts to an insurance industry bailout and was drastically altered by Roundtable lobbyists...Almost every aspect of financial reform has been D.O.A. thanks to Roundtable lobbyists...The drastic rise in military spending is also a result of Roundtable lobbyists pushing the interests of large military companies...the Business Roundtable, Chamber of Commerce and the American Bankers Association - along with the Federal Reserve, a secretive quasi-government private institution, form the center of the Economic Elite's power structure...The Economic Elite dominate US intelligence and military operations. Other than the obvious geo-strategic reasons, the never-ending and ever-expanding War on Terror's objective is to drain the US population of more resources and further rob US taxpayers, while using our tax money to create a private military that is more powerful than the US military...

AlterNet; American; Business Roundtable; Heard; Powerful Corporate Business Club.

Mon 2010-02-01 17:19 EST

Did Larry Langford bet Birmingham's future on Wall Street scheme? / The Christian Science Monitor - CSMonitor.com

The Christian Science Monitor

Now on trial in US District Court in Tuscaloosa, Ala., on 60 counts of money laundering and bribery charges, Mr. Langford is at the center of a spectacular scandal where, prosecutors say, a popular mayor whose motto is ``Do something!'' gambled a city's future on a risky Wall Street scheme, all while taking bribes in the form of cash, Rolex watches, and designer clothes.

Christian science Monitor; com; CSMonitor; Larry Langford bet Birmingham's future; Wall Street schemes.

Tue 2010-01-12 23:32 EST

Dr. Edwin Vieira, Jr. on the Failure of the Public Sector, the Coming Military Crackdown and What Can Be Done to Stop It

...The foremost problem-because it is the source of, or contributes significantly to, almost every economic difficulty now plaguing this country-is the inherent and ineradicable instability of the present monetary and banking systems centered around the Federal Reserve System. The second problem derives from the first. It is the ever-accelerating development of a first-class para-militarized police-state apparatus centered around the United States Department of Homeland Security, with its tentacles reaching down into every police force throughout the States and localities. Fundamentally, this apparatus is not, and never was, designed to deal with international "terrorism". If that were its goal, its first task would be absolutely to secure the southern border of the United States, which it has never seriously attempted to do. Rather, it is being set up to deal with what the political-cum-financial Establishment anticipates (and I believe rightly so) will be massive social and political unrest bordering on chaos throughout America when the monetary and banking systems finally implode in the not-so-distant future-surely in hyperinflation, and probably in hyperinflation coupled with a gut-wrenching depression. Of these two problems, the second is actually the more dangerous...

Coming Military Crackdown; Dr. Edwin Vieira; failure; Jr; public sector; stop.

naked capitalism Tue 2009-12-08 18:26 EST

Guest Post: Woman Who Invented Credit Default Swaps [Blythe Masters] is One of the Key Architects of Carbon Derivatives, Which Would Be at the Very CENTER of Cap and Trade

...If the government allows massive carbon derivatives trading with as little oversight as over the CDS market, taxpayers will end up spending many trillions bailing out the giant banks and propping up the economy when the carbon market bubble bursts...(1) the giant banks will make a killing on carbon trading, (2) while the leading scientist crusading against global warming says it won't work, and (3) there is a very high probability of massive fraud and insider trading in the carbon trading markets.

Blythe Masters; capped; carbon derivatives; center; Guest Post; invented credit default swaps; key architect; naked capitalism; trading; Woman.

zero hedge Sun 2009-11-29 12:33 EST

Fed's Bull Dudley Explains Bank Runs, Discusses Collateral Risks, Suggests Way To Prevent Systemic Collapse

An impressively comprehensive presentation by Bill Dudley before the Center for Economic Policy Studies Symposium earlier, discusses, and ties in, all the key concepts Zero Hedge has been discussing over the past several months, among these the tri-party repo system, bank runs (what and why), collateral, moral hazard, maturity mismatch, unsecured markets, Primary Dealer Credit Facility, Commercial Paper Funding Facility, and liquidity. In fact, at some points in the speech we get the feeling Mr. Dudley is indirectly refuting some of Zero Hedge's recent allegations vis-a-vis the Fed's actions and regulatory oversight. The presentation is largely devoid of bias except for some of the proposals on how to avoid future systemic meltdowns, which of course are moral hazard prevention lite and philosophy heavy.

Discusses Collateral Risks; Fed's Bull Dudley Explains Bank Runs; Prevent Systemic Collapse; suggested way; Zero Hedge.

Jesse's Café Américain Thu 2009-11-19 10:48 EST

Tavakoli on Goldman's Lies of Omission

Jesse

Janet Tavakoli asks, Did Goldman Lie? One is tempted to ask, 'were their lips moving?' But why the bluff? Why did Goldman have to pretend it was not concerned at all about AIG, even as the phone records show they were involved in intense and continuing discussions at the highest levels in the bailouts, with a unique and privileged presence in discussions with the government and the Fed in which their own man was the Chairman of the NY Fed. And as someone asked, Why pick on Goldman? Well, they seem to be at the center of everything.

Goldman's Lies; Jesse's Café Américain; omission; Tavakoli.