Fight Crime: Prosecute Obvious Criminals

The attached CNN article describes in some detail the legal actions that Federal financial enforcement agencies are now pursuing against 17 of the largest banks on Wall Street for crimes and violations that contributed to the financial meltdown of 2008. I won't bother describing the allegations in detail - you can read the article if you're interested - but they boil down to misrepresentation and insider-trading. Although most Americans aren't this familiar with finance policies, insider trading isn't just some "evil thing monster banks do," it is a Federal crime - the same Federal crime Bernie Madoff, Martha Stewart, and the various EnRon executives went to prison for. Essentially, sellers of stocks and other financial assets are required to disclose the accurate worth of said assets the same way someone selling a house is required to disclose known structural integrity failures, but the penalties for misrepresenting the value of financial assets are far greater because sellers often hold dual roles - executive AND large stockholder in same corporation - and are prone to significant conflict of interest. The enforcement agencies are alleging the banks knew that the mortgages that the (now long-gone) mortgage brokers like Countrywide sold them were not worth what they were advertised as, yet they turned around and sold these mortgages to various investors claiming they are worth what the brokers said. There are also some allegations of not giving property owners the variety of options they were legally entitled to in 2010 during the foreclosure craze - known as "robo-signing" - but these will be a drop in the bucket compared to the insider trading allegations.

The obvious first reaction is "it's about damn time these banks faced some sort of accountability", but the political implications of this are far greater, and in my opinion this development does not go remotely far enough. The enforcement agencies answer directly to the President of the United States, often bypassing even the Department of the Treasury, so their sudden decision to actually do their jobs and enforce the law by prosecuting the fraudulent banks on Wall Street is a colossal change of policy for the White House. 3 years ago, the current President - then a Senator - took a day off from his own electoral campaign to vote in favor of a massive bailout bill that gave $1.4 Trillion to these same banks over a crisis brought about by the same crimes they are now being prosecuted for. As President, he then followed this up with some halfass attempts at new, more restrictive banking policies, citing the age-old myth that "free market failure" caused the crisis. Now, after 3 years and 2 elections that saw scores of politicians aligned with the interests of megabanks unceremoniously fired by voters and those proposing to audit and censure the Federal agencies swell in numbers, the Federal agencies and their boss the President have suddenly discovered that the banks committed a string of felonies to bring about this mess and can be prosecuted for it? This is a sick joke. The idea that the enforcement agencies didn't know what the banks were up to in 2008 should not seem credible to anyone over the age of 12, and in all honesty it would not excuse the agencies even if it were credible. If a bureaucracy charged with monitoring banks honestly did not understand what the banks were doing in 2008 - every member of said bureaucracy ought to be stripped of any professional licensure, handed a broom or shovel, and sent to contribute to the recovery by cleaning freeways; they've demonstrated that is all they are qualified for. This is a moot point in any case, because significant probes into the work of the Federal Reserve and other agencies launched by unlikely political allies Bernie Sanders and Ron Paul have already revealed that the agencies were well aware of the banks' misconduct and at best turned a blind eye to it; although I would not be surprised to find out that high-ranking officials were in collusion with the banks and profitted off their endeavors.

So, let's try to sum up what really happened. A sleazy pack of Wall Street CEOs committed strings of felonies openly in front of the Federal agencies charged with enforcing the policies that made their actions illegal and plausibly with said agencies' collusion, and when this string of felonies brought about a global economic meltdown, the politicians charged with overseeing the regulatory agencies gave these felons $1.4 Trillion in public money, and tried to pretend to fix the problem with new "preventive" laws - new laws for the banks to break and the agencies not to enforce. Why is any American surprised that these Wall Street tycoons walk around waving their dicks and feeling invincible while the world burns as a result of their antics?

The agencies have just admitted that all we had to do was prosecute the banks back in 2008 as they'd already committed felonies - and the deterrence effect of sending a few dozen more finance executives to join Madoff and Skilling in the Federal penetentiary for 2 or 3 decades would be all the prevention of another crisis we'd ever need. No need for any new laws, and certainly no need to reward these felons with a bailout - but don't get me started on that. Now, however, after 3 years of the worst economic swamp in almost a century, this alone is necessary but not sufficient. Congress must launch an independent investigation into the work of the Federal agencies and the Bush Jr. Administration to determine how much they knew of (and colluded with) the criminal activities of these banks, and pursue grand jury indictments against anyone that took bribes or just plain neglected to enforce the law. Otherwise, feeling threatened by the political climate, the agencies will simply use their old friends on Wall Street as scapegoats for the endeavors they undertook together, and in another decade when things calm down embark on a similar escapade with new banks knowing that they - the bureaucrats - will not be held accountable. The first people that have to be effectively deterred from breaking the law are those charged with enforcing it, otherwise they become nothing more than thugs for the highest-paying criminals they are supposed to bring to justice. This has already happened as I've described here, and in 2012, I urge Americans to strongly consider in their electoral behavior the stances of politicians on holding these bureaucrats accountable to avoid it happening again.

Black November Continues: Falling stocks and marching fringes.

You all remember the Time Magazine cover with Glen Beck's face with his tongue stuck out and the caption 'Mad Man', double-punning in reference to an article about his looney nature and the anger he represents that Americans harbor against their government, particularly the Democrats? Well, the cheerleaders of Totalitarianism at Time Magazine - the same publication that named George W. Bush and Joseph Stalin man of the year TWICE EACH - can make fun of Glen Beck all they want, I agree he's a clown; but as my predictions in this post-electoral world continue to be verified, it becomes obvious Republicans weren't the only angry Americans in the last 2 years, and it wasn't just the Democrats people were angry at.

Although Banking Pope Bernanke continues re-arranging of the deck chairs, the Titanic held together by duct tape that is the stock market is accelerating on its downward path, and this is seemingly no surprise to anyone other than Mr. Bernake himself. The reason is very simple; the economy never recovered from the Fall 2008 crash. The pre-2009 Congress squeezed through the bank bailout, and then Obama came into office and has allowed the same rescued banks to limp along with his stimulus deals. Well, the stocks have gained some ground but unemployment is still in double digits, multiple state governments are still on the verge of insolvency and the housing crash hasn't gone anywhere - the FHA and other stimuli have at best delayed and spread out the onslaught of foreclosures, but they sure as hell haven't stopped it, helping only the same megabanks that caused it in the first place to avoid drowning in worthless foreclosed properties. Call investors "greedy capitalists" all you want for not wanting to buy shithole properties at 1.5 times their market values because the banks are subsidized and have no incentive to sell it for what its worth - it won't convince them to hand their money over to Goldman Sachs. Unlike the boys at Goldman Sachs, these investors are skilled economists if they endured the recession WITHOUT billions in bailouts from the Federal government. Well, this midterm election just severed the corporate stimulus needle, and that includes the Bush Jr. capital gains tax slashes which look like they will only be preserved for the middle class, so now the 2008 crash is being carried out to its logical conclusion - the purging of the assininely irresponsible investments that caused it. Make no mistake about it, THIS Congress isn't going to bail out anyone - not the banks, not the auto industry, not AIG.

AND for all you detractors who think I'm just being a groupy for the Tea Party again, it has more to do with the ensuing Democrat split than the Republican split. Nothing is funnier than all the crusty old Democratic establishment goats that got sent home 2 weeks ago griping in their departure speeches that Pelosi should step down. YOU OLD FARTS DIDN'T GET RE-ELECTED AND SHE DID, that means the American people don't care what YOU think, just pick up your cane and go home. I'm not a fan of Pelosi as many of you can imagine, but Pelosi is very much a Progressive fringe Democrat - she didn't support the Patriot Act or Bush Jr's wars, she endorsed Obamacare in its original form - which was laughable from a practicality perspective but at least not a complete sellout to the medical cartels, - and so forth. The establishment tried to pin the party's unpopularity on this fringe to get rid of it, but it turned out that wasn't who the American people wanted to get rid of, as evidenced by Democrat incumbents dropping like flies in their own primaries, just like Republicans. The stimulus and the bailouts have always been a primarily Democrat endeavor, but the Progressive fringe has always included the minority of liberals that voted against it like Bernie Sanders and Dennis Kucinich; Pelosi's re-election as minority leader today demonstrates the fringe is powerful within the party and the majority of the election's beating was sustained by the establishment. As for Republicans, there have always been some in the establishment that supported bailouts and stimulus - Bush Jr being a prime example - but the 2006 and 2008 elections sent large numbers of them packing, and the Tea Partiers who have taken their place and broken more of them in the primaries this year are vehemently anti-stimulus. McConnell and Boehner making haste to appease the Tea Party fringe is a rather laughable spectacle after how hard they worked against them - but even if some co-optation on that side of the aisle is unavoidable, the Tea Party has shown what a serious threat it can be and continues to encroach on establishment bids for Congressional leadership, so stimulus is not getting any new support from the right.

Where this leaves us is at an interesting political cross-roads. My prediction is that Obama will actually GAIN popularity in the next 2 years, reconciling with some of his liberal base as he goes back to his roots. He WAS a Progressive fringe Democrat until he became President - voting againt the wars and the Patriot Act at least, if not the bailout; but the sickening likes of Harry Reid and John Kerry have forced him to play both sides. If this happens, however, the establishment that is backed by megabanks, medical cartels, and public unions is not likely to support his re-nomination for 2012. Remember the circus of the Obama/Clinton "unity rally" after they spent months dousing each other in shit in 2008? Well, neither of them was the incumbent back then, and if in 2012 the establishment firmly endorses a different candidate, there are likely to be no unity rallies, but two separate Democrat Parties with their own candidates. This has happened multiple times in our history - 1860, 1896, 1912 - people just assume it can't because they have short memories. Of course, if the Democrats do split, it will hand the presidency over to the Republicans - the splitting incumbent parties lost all those elections mentioned above - but THIS is where the Tea Party becomes crucial. You will all recall that in the 2008 Republican primaries, Ron Paul and Mike Huckabee demonstrated considerable support, and these two candidates can be said to represent the libertarian and social conservative wings of the Tea Party, respectively. When neo-con John McCain managed the nomination, Americans showed the GOP establishment just how much we love them, handing them the first landslide defeat in 28 years. If the Tea Party can squeeze out the 2012 Republican nomination for someone who is disliked by the establishment despite co-optation attempts (Ron Paul would be excellent for this purpose), what's left of the old GOP is not likely to endorse a 4th candidate, but they MAY endorse the Democratic establishment candidate, effectively forcing the establishments out of both major parties. This may sound far-fetched, but it HAS happened before as well. It is unlikely that another neo-con will get the Republican nomination, but if some formerly establishment "suddenly-Tea Party" turncoat like Michelle Bachmann or Sarah Palin can manage it, solidifying the Tea Party's fusion into the GOP, the best we can hope for is the Democrat establishment joining the Republicans (a la 1968) or fading away, re-aligning only the Democratic Party, and even that may not necessarily happen. Call me optimistic, but I will not be surprised if the current party system has seen its last election - and if it has, good riddance to it and its rotten New Deal hybridity.