Eliot Spitzer - Our Rallying Cry Should Be, "We Own Wall Street and We Can Stop Corporate America's Worst Behavior."

By Eliot Spitzer, Slate

Printed on December 22, 2011

http://www.alternet.org/story/153535/eliot_spitzer%3A_our_rallying_cry_should_be%2C_%22we_own_wall_street_and_we_can_stop_corporate_america%27s_worst_behavior.%22

 

As the year ends, American politics remains mired in the agenda of the right. The House is, at least momentarily, refusing to extend the payroll tax cut and unemployment benefits—two policies genuinely beneficial to the middle class. And the presidential campaign heading into the Iowa primaries is dominated by the libertarianism of Ron Paul and the astonishing, appalling ideas—eliminate child labor laws, for instance—of Newt Gingrich.

Yes, Occupy Wall Street changed the debate for a brief spell, and, yes, President Obama harkened back to the glory days of progressivism with his Kansas speech. But in general American politics has lost sight of the most important crisis of our generation: the shrinking middle class.

So let me offer some advice to Democrats and progressives seeking to capture the attention of the American people. It has long been my belief that ownership trumps regulation. What I mean by that is while laws and regulations can create boundaries to behavior, the reality, as we have seen after passing much legislation—Sarbanes-Oxley, Dodd-Frank—is that even good laws leave room for bad decision making that results in cataclysm. Even though prosecutors should have charged many more bad actors on Wall Street, much of what led to the crisis was not blatant illegality: It was horrific judgment exercised by senior executives and regulators.

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Les Leopold - Why Are We Forced to Worship at the Feet of 'Mythical' Financial Markets Controlled by the Elite?

By Les Leopold, AlterNet

Printed on December 22, 2011
http://www.alternet.org/story/153497/why_are_we_forced_to_worship_at_the_feet_of_%27mythical%27_financial_markets_controlled_by_the_elite

The markets are “jittery,” “upset,” “skittish” and “unnerved.” They are “confident” or “unsure.” They are “demanding” that political leaders “put up or shut up.” And they are “reacting unfavorably” to Obama’s newfound populism.

These are just a few of the many ways financial markets are described each and every day by the media, financial players and public officials. At first it seems as if these markets are humanoids onto which we project our feelings. Yet, on closer inspection, it’s more like we have ascribed to them god-like powers. We are told to appease the market gods or face eternal financial damnation. As President Obama warned Europe recently, they must “muster the political will” to “settle markets down.”

Why do we worship these angry market gods?

Trading has been around for as long as humans. We, no doubt, increased our chances of survival through trading what we had more of for what we needed or wanted. The more complex our societies became the more markets grew. At some point during the Renaissance, markets emerged that traded money as well as goods, as city-states and nations sought ways to fund wars. But these markets were far from god-like. Sovereign nations ruled supreme and money-lenders had to do their bidding if they hoped to be repaid or in some cases, if they hoped to avoid execution. Even Adam Smith didn’t suggest that financial markets had god-like powers. In fact, these markets seemed more like petulant children throwing tantrums as they puffed up tulip bubbles, South Sea bubbles, railroad bubbles and periodic financial panics.

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Richard Wolff - Lehman Brothers -- Financially and Morally Bankrupt

Monday 12 December 2011

by: Richard D. Wolff, The Guardian UK 

http://www.guardian.co.uk/commentisfree/cifamerica/2011/dec/12/lehman-brothers-bankrupt

The lesson of Lehman Brothers' failures of fiduciary duty is that large-scale lending should not be entrusted to private banks.

Last week, federal court Judge James M Peck approved the final phase of the Lehman Brothers bankruptcy [5], which began with the investment bank's collapse on 15 September 2008. That bankruptcy, the largest in US history, precipitated the credit markets' disintegration that cascaded into the global economic meltdown that has deepened ever since. With roughly $450bn still owed by the bank, Judge Peck approved that Lehman Brothers [6] has only $65bn left to settle creditors' claims. The latter must thus accept just over 14 cents for every dollar Lehman Brothers owed them. "Thieves," they are probably muttering.

Lehman Brothers' bankruptcy has revealed multiple layers of ramifying corruption and theft among global banks in the US and elsewhere, as well. Many juicy details are covered in thenine-volume court examiner's report of 11 March 2010 [7]. It documents the bank executives' mammoth misjudgments in their investment decisions, including their repeated violations of the basic banking principle not to borrow short-term and lend the proceeds long-term. The bank examiner shows misleading statements made about their activities and how they disguised Lehman's financial health and credit-worthiness. It appears that various legal and semi-legal mechanisms were used to manipulate their accounts, and otherwise violate the spirit and letter of laws and regulations.

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Robert Reich - The Remarkable Political Stupidity of the Street

FRIDAY, DECEMBER 9, 2011

http://robertreich.org/post/13983287902

Wall Street is its own worst enemy. It should have welcomed new financial regulation as a means of restoring public trust. Instead, it’s busily shredding new regulations and making the public more distrustful than ever.

The Street’s biggest lobbying groups have just filed a lawsuit against the Commodities Futures Trading Commission, seeking to overturn its new rule limiting speculative trading.

For years Wall Street has speculated like mad in futures markets – food, oil, other commodities – causing prices to fluctuate wildly. The Street makes bundles from these gyrations, but they have raised costs for consumers.

In other words, a small portion of what you and I pay for food and energy has been going into the pockets of Wall Street. It’s just another hidden redistribution from the middle class and poor to the rich.

The new Dodd-Frank law authorizes the Commodity Futures Trading Commission to limit such speculative trading. The commission considered 15,000 comments, largely from the Street. It did numerous economic and policy analyses, carefully weighing the benefits to the public of the new regulation against its costs to the Street. It even agreed to delay enforcement of the new rule for at least a year.

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Ellen Brown - Pulling Back the Curtain on the Wall Street Money Machine

Huffington Post

Posted: 12/ 7/11 05:00 PM ET

On November 27, Bloomberg News reported the results of its successful case to force the Fed to reveal the lending details of its 2008-09 bank bailout. In 29,000 pages of documents, the Fed revealed that by March 2009, it had committed $7.77 trillion in below-market loans and guarantees to rescuing the financial system; and that these nearly interest-free loans came without strings attached.

The Fed insisted that the loans were repaid and there have been no losses, but the banks reaped a $13 billion windfall in profits; and "details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger."

The revelations provoked shock and outrage among commentators. But in a letter to the leaders of the House and Senate Committees focused on the financial services industry, Fed Chairman Ben Bernanke responded on December 6th that the figures were greatly exaggerated. He said the loans were being double-counted: short-term loans rolled over from day to day were counted as separate cumulative loans rather than as a single extended loan.

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