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On Pelosi’s Duplicity and Apparent Sandbagging of Elizabeth Warren

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Despite her longevity as a California pol, house speaker Nancy Pelosi is looking like every bit as much of a dyed-in-the-wool financial services industry backer as the Congressmen on the New York-Boston corridor.

As readers will know, this blog does not dwell much on the inside baseball of politics. But once in a while things become so obvious as to merit comment.

Recall how instrumental Pelosi was in getting the TARP passed. The widely mentioned gambit of Paulson getting on bended knee to plead for her support was a nice bit of theater to cover how readily she fell into line. The other justification for the Democratic leadership support was the claim that Treasury had given a closed door briefing to Senate and House leadership telling them the world would end if the TARP was not passed yesterday.

Some have suggested that Treasury provided data on the potentially disastrous money market fund withdrawals around the time of the Lehman failure (recall the death of Lehman led Reserve to break the buck). but that problem had already been addressed in September in part via the Fed providing non-recourse loans to purchase asset backed commercial paper, and more fully in October via yet another Fed facility. In other words, if the money market fund panic was indeed the scare tactic, the TARP was not the remedy.

But even if we give the devil its due, the performance of the Democratic leadership was pathetic. The most heinous aspect of the bill, putting the Treasury secretary outside the reach of law, was never cut back. The first draft, a doodle on a napkin, was offensive to democratic processes, the second draft added a lot more words but was still way too thin on basics, like objectives, criteria, procedures, and the final draft loaded tons of pork in to assure passage. And the ironies kept multiplying. The bill was wildly unpopular even with the media falling into line (and in the later stages, a clearly orchestrated campaign to have financial services industry employees contact legislators to counter the groundswell of opposition). And it was Senate Republicans who were the last holdouts.

Let us not put too fine a point on how brazen the TARP was on another axis. As a reader wrote at the time:

Finally, it is hard to escape the political implications of all this. Basically the President is trying almost to nullify the coming election by getting far reaching legislation in place that should have been left to the next Administration. He creates crises and then calls for comprehensive and badly drafted legislation under panic conditions, and the Democrats in Congress give the President what he wants. With both parties on board now these things will be difficult to reverse. The FISA bill was an important example of this, and TARP would be another. With important pieces of very bad policy almost fixed in stone, what will voters have left to decide in November? Other than the very crucial question of Supreme Court nominees, I am drawing a bit of a blank.

So why are we pointing a finger at Pelosi in particular? The next chapter is her appointment of one Richard Nieman to the Congressional Oversight Panel. Under the TARP rules, the House Majority leader selects one of the oversight panel members, so this choice was completely under her control.

Nieman is the New York Superintendant of Banks. He helped Goldman set up its bank holding company.

Nieman fell out with the other Democrats and wrote a joint opinion with John Sununu (see page 88 of the document). If you were somehow ignorant of the fact that the Summers/Geithner programs embody massive hidden and inefficient subsidies to banks (the Public Private Investment Partnership), questionable uses of the FDIC, and the employment of the Fed as quasi-fiscal agent, the critique might sound reasaonable. But to anyone with a passing acquaintance with the facts, the dissenting views are absurd. To give you an idea of how far they have to stretch to make their arguments sound plausible, they grasp at the straw of “oh yeah, that over 50 point spread between market price and bank valuation for toxic assets is due to a liquidity discount.”

There is also sophisticated mud-slinging, for instance, suggesting that the panel’s recommendations run against the

…preference for maintaining a private banking system via temporary public support or partnership, which is consistent with this country’s tradition of private rather than government control of business

That’s code for “Warren is a commie”. Didn’t anyone tell these clowns that no private investor with an operating brain cell would give so much money to a private enterprise without demanding a good deal of oversight and control? And at a time like this, the public versus private polarity that they invoke has been blunted. Pretending that wards of the state are entitled to the rights of normal private concerns is absurd, yet that’s the fiction that Nieman and Sununu present.

Maybe I’m too cynical, but this sure looks like the behavior of someone looking for his next, bigger meal ticket.

But then we come back to Pelosi. I can’t imagine that Nieman would have fallen in with the Republicans without at least as a courtesy informing Pelosi in advance. And if she had a big problem, she would have gotten him to back down (either not siding with the opposition or issuing a separate view that was more ambivalent). So Pelosi is at a minimum sitting this one out (which I deem unlikely) or on board with the program to undermine Warren.

And let us not kid ourselves, the knives are coming out. Here’s a mix of some stories and parsing of commentary, a random selection from Google News:

McArdle distracted by Warren’s efforts

TARP Watchdog Elizabeth Warren Blowing Her Credibility, Overstepping Her Bounds

Elizabeth Warren’s Holy Crusade

I hate to say it, but I think Warren’s days as COP head are numbered. She is clearly now boxed in by being in the weird position of being in the minority. The opposition reports took issue with the very premise of her approach. If, as I suspect, the behind the scenes fight is worse than what can be seen at a remove, the longer she stays on, the greater the risk of being tainted.

And what do we make of Pelosi’s recent sponsorship of a new version of a Pecora Commission? Her sudden interest, after the COP report came out, seems very oddly timed and inconsistent with her choice of and failure to rein in Nieman.

My reading is if any panel results, it will be a sham effort, designed to make only a superficial inquiry and shake a finger at a few extreme practices.

If Team Obama will give torturers a free pass (a very small group that has nevertheless done tremendous damage to America’s standing in the world), there is absolutely no way it has any appetite for exposing the massive fraud in the financial system. Obama does not do conflict, and his “Let’s not dwell on the past” is tantamount to appeasement of the oligarchs and coddling of the worst practices of the Bush regime.

But if we are lucky (and we’d need to be very lucky) history might repeat itself. The original Depression investigation was also a sham exercise, but Pecora, brought in to write the final report after three previous investigators were fired or quit, asked to reopen the hearings, and some initial successes, plus the arrival of the Roosevelt administration, gave the probe a new leash on life.

But with the both the Democrats and the Republicans firmly in the hold of the banking classes, it will take something more on the order of a miracle to get a serious inquiry underway.

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26 comments

  1. grammar commenter

    Good post, as usual. I don’t always agree with your conclusions but you’re a reliably good source of facts and insights.

    And in the last sentence of the 2nd to last paragraph, you meant “lease on life.

  2. Dikaios Logos

    Seriously distressing stuff, but utterly unsurprising. Pelosi is a classic machine politician (from the D’Alesandro family of Baltimore) with a net worth that exceeds most Republican politicians’. She is for those reasons unlikely to fight the status quo. I don’t imagine that Warren has many allies in obvious positions of power, one can only hope that a ground swell of support will save her.

  3. kackermann

    I wonder what made Reid pick Warren to begin with?

    He had to know her background would make her hated by the criminally inclined group that pays for congress’ reelection.

    California has a serious problem with their elected woman representatives. They are slippery eels.

    Hell, Harman was dealing with an Israeli spy associated with threats to Pelosi that AIPAC would cut off her funding if Harman didn’t get a commitee chair.

    Feinstein stays above all that and just sells out on constitutional issues. She can’t wait to securitize our privacy.

    Don’t even get me started on the republicans.

    What a bunch of slimey eels we have representing our interests.

    I think I might have to send Pelosi yet another box of garbage.

  4. Bill

    Thanks for another illuminating analysis of the current situation.

    As a life long Democrat, who thought the past 8 years permanently eliminated any remote possibility of my voting for any Republican, for anything, I now find myself thinking that I will not vote for any incumbents in the coming election.

    I am completely disgusted with my party’s performance in this whole debacle. Career politicians are looting our country.

    I only wish I could vote against Pelosi, Frank, Reid and Schumer in the next election (although it’s not that I think the Republicans are any better……au contraire).

    As it stands, Jim Webb’s opponent will get my vote.

    God help us all……

  5. Bill

    BTW, thanks for not making us older readers use that tiny box for reading comments.

    It’s much easier when they’re listed under the original piece.

  6. Entirely

    Yves… I don’t comment very often, but have been a reader of every post for quite some time. As usual, another thoughtful recap and I believe spot-on in connecting the many moving dots.

    I work on Wall Street… very close to the epicenter of how, where, and why things broke down. I suppose based on economic livelihood I should welcome the cover up and return to the “good old days”. But the simple fact is I don’t. I’m a citizen and a brother and a son long before I’m an employee of a bank and I simply can’t get over the corruption, fraud, greed, and graft that the government’s response thus far has already allowed and will certainly engender going forward. The TALF, the PPIP… the looting is going to be *MASSIVE* and measured in the trillions of dollars and every day that it appears more certain that it will indeed occur. It intermittently makes me furious, sad, and depressed. Whatever the feeling, I’m certain of one thing – this isn’t the America I thought my grandparents had built.

    I had placed a lot of hope in Elizabeth Warren and your post today brings the sobering realization that they’ll likely undermine her as well. Your post is great, but early on a Sunday morning it makes me want to simply give up.

    I’ll ask the same thing I asked the last time I offered a comment: is active protest up to and including armed revolt the only thing left that *might* bring the changes our system so desperately needs? Being smart and trying to restore the Rule of Law via commentary simply isn’t working… we’re losing more ground each day as we slowly march to irrelevancy. Do we now face the final choice… stand up or shut up?

  7. redst8r

    Yves: Another perspicacious post with one niggle (below). It is unsurprising that Pelosi, et. al., will undermine Elizabeth Warren. How dare she, Warren, threaten their applecart?

    As a lifelong Republican, who periodically reviews said association in hopes of finding something, anything, better I may follow that lifelong Democrat and simply vote anti-incumbent.

    My “niggle”. IMAO your swipe at Bush 43 and “torture” diminished the post. I was a combat medic in Vietnam. I witnessed water boarding on a captured enemy. My reaction was to hope (a) they got good info and (b) the little b**d died. When you’ve had bullets whistle by your ear (and they do!) it tends to diminish the polite aspects of combat enjoyed by the protected class.

    And please don’t reach for Senator John McCain for cover. I have the utmost respect (awe actually) for his personal courage, valor and patriotism. Fat lot of good the Geneva Conventions did him. But I am constantly disappointed that Senator McCain’s political courage is no match for his personal valor.

    My regrets if this comment is deemed out of line.

  8. Hank Roberts

    Thanks for reminding people who don't remember Pecora (or who don't remember their parents talking about those hearings, in my case).

    Brief quote from a longer excerpt cited below:

    ——

    Douglas (December 8, 1933) wrote that the monied interest "suffered more actual damage by the Pecora investigation that they ever would under the Securities Act." The Pecora hearings showed that the nation could no longer rely on the noblesse oblige of financial capitalists.

    ——

    Read on if you're interested in history.

    People who don't feel their hair standing up on reading the words "Pecora Hearings" ought to go learn about those hearings. Seriously. We're repeating that history now.

    Looks like the money people needed someone to give the appearance of disclosure whose career could be sacrificed, and Warren was chosen.

    She was the only hope I saw of honesty in this mess. Yeah, they fooled me too. And she was awfully naive, if she believed they wanted her to actually do the job she was hired for, instead of help provide an illusion of reassurance to the public, a.k.a. cover up.

    Add to that bit of history these:

    http://www.irs.ustreas.gov/pub/irs-utl/tax_gap_facts-figures.pdf

    Income tax crime and government responses in the United States…

    Purpose – The most recent IRS estimate puts the individual tax gap at $245 billion per year.
    http://www.emeraldinsight.com/10.1108/13590790910925000

    ———
    This from 2005:

    Corporate Resistance to Government-Imposed Internal ControlRegulation
    Diane Matson
    Brian Shapiro
    *
    University of St. Thomas
    May 11, 2005

    Abstract

    This paper presents an institutional critique of corporate resistance to government-imposed internal control reporting in the U.S. The analysis begins with the legislative history of the Foreign Corrupt Practices Act of 1977 and concludes with the Sarbanes-Oxley (SOX) Act of 2002 and related SEC regulations. The legislative and regulatory history of this period documents how the American Institute of Certified Public Accountants, American Bar Association, Financial Executives International, and other industry groups defeated proposals for mandatory management and auditor reports on internal control. In response to intense lobbying pressure from industry and the White House during the pre-SOX period, the SEC delegated most internal control initiatives to the private sector. The resulting industry self-regulation failed to effectively curb mana gement’s head-in-the-sand attitude toward internal control. Moreover, the absence of mandatory internal control reporting made it difficult for prosecutors to establish management’s involvement in the accounting and internal control violations at their companies. The paper concludes by considering whether the SOX-related internal control regulations entail a fundamental change in institutional values, or whether the ongoing corporate resistance to government-imposed internal control regulation will render the investor protection measures largely ineffective.

    http://www.management.ac.nz/ejrot/cmsconference/2005/proceedings/criticalaccounting/shapiro.pdf

    ———-

    And try to find a copy of these invaluable papers as cited by the one linked above:

    "Repeated violations of the financial fraud and insider trading provisions of the U.S. Securities Acts of 1933 and 1934 led some accounting historians to conclude that the investor protection Acts were largely symbolic (e.g., see Merino & Mayper, 2001; Merino & Neimark, 1982)."

    Merino. B. D, & Mayper, A.G. (2001). Securities legislation and the accounting profession in
    the 1930s: The rhetoric and reality of the American dream. Critical Perspectives on
    Accounting, 12, pp. 501-525.

    Merino, B. D., & Neimark, M. D. (1982). Disclosure regulation and public policy. Journal of
    Accounting and Public Policy, 1(Fall), pp. 33-57.

    Those used to be free online but are now paywalled and very expensive as far as I can tell.

    They are good documenting the same routine we're seeing now — and that was documented by the Pekora hearings after the First Great Depression.

    Same routine, "disclosure" as an alternative to actual regulation, "generally accepted accounting" as an alternative to actual principles and licensing and standards, that was fobbed off on the public in the 1800s, the 1930s, and the 1980s, and it's back again now.

    Look at this one too, if you can find the paper online nowadays. It hits hard:

    Prophets or Puppets of Profit: The Securities Legislation and the Accounting Profession in the 1930s
    Prepared for the 1997 IPA Conference, Manchester, England

    —–excerpt follows——

    … Securities legislation was a means to rekindle the American Dream. Symbolic legislation can be
    effective as a rhetorical device if it silences public outrage. Free land no longer existed as a refuge for the wage earner; but if the opportunity existed for all wage earners to become owners through widespread stock ownership, then the American Dream remained viable. But, the investment arena had to be perceived as a "fair game." The power trust hearings in 1928, followed by the revelations at the Pecora hearings, generated public outrage and required a response. Douglas (December 8, 1933) wrote that the monied interest "suffered more actual damage by the Pecora investigation that they ever would under the Securities Act." The Pecora hearings showed that the nation could no longer rely on the noblesse oblige of financial capitalists. The disclosure that Morgan maintained a preferred list, offering stock of new flotations to powerful politicians and businessmen at a significant discount from its initial public issue price, generated public outrage. Disclosure of insider trading, underwriters' interests, etc., was viewed as a mechanism that would deter outright fraud, were important regulatory measures that would enhance public confidence and restore the public trust in the market as a "fair game."

    The accounting provisions also were depicted as mechanisms that would limit managers insiders ability to manipulate financial data in order to mislead the public. The stated objectives–to curb managerial power, to promulgate uniform accounting rules and to provide useful information to investors–conveyed the message that the public could rely on financial data….

    —-end excerpt—-

  9. DownSouth

    There is no doubt that democracy in the U.S. is now under full bore assault, perhaps those like Pelosi and Obama being its greatest enemies.

    The role of Pelosi and Obama in all this very much reminds me of this quote by Martin Luther King:
    ~
    It may well be that the greatest tragedy of this period of social transition is not the glaring noisiness of the so-called bad people, but the appalling silence of the so-called good people. It may be that our generation will have to repent not only for the diabolical actions and vitriolic words of the children of darkness, but also for the crippling fears and tragic apathy of the children of light.~

    King believed that “it is as much a moral obligation to refuse to cooperate with evil as it is to cooperate with good.” “The way of acquiescence leads to moral and spiritual suicide,” he intoned, and concluded that “there are some things within our social order to which I am proud to be maladjusted and to which I call upon you to be maladjusted.”

    Pelosi and Obama are certainly not “maladjusted,” acquiescense being the quality they seem to value above all else.

    In 1932 Reinhold Niebuhr wrote the following:
    ~
    Lenin declared “…Marx splendidly grasped the essence of capitalistic democracy, when, in his analysis of the experience of the commune, he said the oppressed are allowed, once every few years, to decide which particular representatives of the oppressing classes are to represent and repress them in politics.” An unbiased analysis of the power of the owning classes in modern democracy, their dictation of legislation, the almost unvarying interpretation of ambiguous law in their favor, and their evasion of the law when it suits their purposes, will not find it easy to answer this charge of communism.~

    But the next year, in 1933, the Pecora commission did happen. The United States opted for justice, and democracy was preserved.

    Germany on the other hand, in that very same year, opted for fascism when it elevated Hitler to power.

    Why did Germany opt for tyranny and the U.S. for justice? As Niebuhr observed, it wasn’t because Germans lacked intelligence or education:
    ~
    It is a question whether any middle class will ever be intellectually better disciplined and socially more intellignet than that class in England and Germany. In both of these nations the entire middle-class community turned to conservatism rather than radicalism in the momeent of cris; in England in the election of 1931, when it participated in the overwhelming tory defeat of labor, and in Germany, where it expresses itself through the policies of fascism.~

    So what was the difference between Germany and the U.S. in 1933?

    And does the U.S. still have what it had in 1933, the volition to opt for democracy and not tyranny?

  10. skippy

    @redst8r, why were you in Nam, whose backyard was it and what was the out come of that endeavor. Have you watched the McNamara doco, interesting part where he meets his old adversary’s (from the north) and they finally have a face to face over what and why things happened , all at the dinning table, scary stuff.

    As an fellow ex-service man with knowledge in regards to interrogation techniques both on myself and on others, it is the tool of last resort with the understanding that its product is dubious at best. The best Intel comes from turning the individual which does take time, well it seems it still took a lot of time even with advanced techniques of interrogation/torture (months). In my experience it has more to do with revenge as you so honestly admit…(b) the little b**d died…why American soldiers must fight in other peoples back yards is a bigger question as our master are not very forth coming in their plans, save the tried and true propaganda of time immortal.

    Skippy…share your desire for a better mob of masters, oh wait I mean elected officials.

  11. ud1GpNc8quTT36z8rvGOP.7tHLRKxwzh

    Please forgive the obtuseness of this post. I am an unemployed manufacturing guy trying to figure out what happened to get us into this mess. My question is this – Why isn’t anyone investigating who caused the run on the money market accounts in September? It seems that this was the tipping point to cause the crisis to expand past teh housing market and spooked President Bush, who does not seem to be too spookable. This was also the Democratic “October Surprise” which seems to benefit the big O everytime he runs for something. I know that when we resolve problems in manufacturing, we must understand “how we got here”, “what is wrong”, “where do we want to be” and “what is our current state” before we can fix the problem. It seems we are chasing symptoms.

  12. art-eclectic

    I’m using Elizabeth Warren as my litmus test for future Democrat support. If they turf her, I’m done with them because they will have shown themselves to be no better than the other side of the table.

    I never in my lifetime thought I would walk away from my power as a voter, but when my vote is only for which brand of criminal to put in charge, it becomes a wasted vote.

  13. DownSouth

    Entirely said… “I’ll ask the same thing I asked the last time I offered a comment: is active protest up to and including armed revolt the only thing left that *might* bring the changes our system so desperately needs? Being smart and trying to restore the Rule of Law via commentary simply isn’t working… we’re losing more ground each day as we slowly march to irrelevancy. Do we now face the final choice… stand up or shut up?”

    You might find of interest what Niebuhr had to say on the subject:
    ~
    The selfishness of human communities must be regarded as an inevitability. Where it is inordinate it can be checked only by competing assertions of interest; and these can be effective only if coercive methods are added to moral and rational persuasion…

    Insofar as this treatise has a polemic interest it is directed against the moralists, both religious and secular, who imagine that the egoism of individuals is being progressively checked by the development of rationality or the growth of religiously inspired goodwill and that nothing but the continuance of this process is necessary to establish social harmony between all the human societies and collectives. Social analyses and prophecies made by moralists, sociologists and educators upon the basis of these assumptions lead to a very considerable moral and political confusion in our day. They completely disregard the political necessities in the struggle for justice in human society by ailing to recognize those elements in man’s collective behavior which belong to the order of nature and can never be brought completely under the dominion of reason or conscience. They do not recognize that when collective power, whether in the form of imperialism or class domination, exploits weakness, it can never be dislodged unless power is raised against it.~

    Positivism led us to believe that the conflict, the struggle between groups and between individuals could be eliminated through greater knowledge and education. This is a utopian fairytale. Conflict is a mainspring of the human condition. As John Gray explains:

    Neo-liberal utopians expected that globalisation would fill the world with liberal republics, linked together in peace and trade. History is responding with a flowering of war, tyranny and empire…

    The dangers arising from the growth of knowledge are not problems that can be solved. They are evils to be staved off from day to day. Science cannot rid us of the conflicts of ethics and politics. Tyranny is bad, but so is anarchy. The state is necessary to protect us against violence, but it easily turns violent itself. We must contain terrorism if we are to have any kind of civilized life, but in doing so we run the risk of compromising the life we are trying to protect. Such conflicts are normal.

  14. Entirely

    “What caused the run on money markets?” isn’t being investigated because: a) the answer is well known; and b) the “reason” is being perpetuated by every level of solution now being pursued.

    Let me explain…

    The Reserve Fund “broke the buck” because the markets had come to rely and believe wholeheartedly in the “Greenspan Put” — i.e., that nothing “too big to fail” would be allowed to fail and that given no other choice the Fed would step in to prevent systemic collapse. What was started with LTCM was absolutely reinforced with the Fed’s action to “resolve” Bear Stearns without any loss taken by Bear’s creditors.

    Even though Lehman Brothers, when judged on its own merits, was nowhere near the type of credit that money market funds should have been invested in, the fools who ran the Reserve Fund relied on the simple notion the Lehman was “too big to fail” so therefore wouldn’t. In a desperate grab for incremental yield, the Reserve Fund took a risk that pure capitalism would have judged as foolishly mispriced… and it blew up in their face. Lehman failed and the subordinated bonds the Reserve Fund needed to be worth $100-00 were all of the sudden worth $10-00. They “broke the buck” in their money market fund and had to make a very public disclosure of that fact. The market freaked out…

    In one moment, the +20 years of Greenspan Put Doctrine went up in smoke and the market realized that left only to their own devices there were a number of “money market credits” that would fail in much the same way Lehman Brothers failed. Absent the implicit sovereign credit of the United States, the American corporate structure… especially the banks… was not fit for the risk profile typically associated with money market funds.

    But here’s the thing… what we “learned” from Lehman was that institutions that are “too big to fail” can’t be allowed to fail. That was the mantra that was adopted in the immediate aftermath of Lehman and what has been the fundamental cornerstone of every program subsequently proposed.

    The point of dissent however is that the banks are so rotten and the losses that need to be taken so large that the American Sovereign simply doesn’t have the money to keep everything propped up. The parasite that originally infected OwnIT has followed the tree upwards, killing every host along the way. To assume the credit of the United States can survive I believe is folly.

    To preserve the “too big to fail” doctrine, the US Taxpayers are going to be throwing money at this problem for a generation. Freddie and Fannie are a sucking chest wound that are going to end up costing the American Taxpayers +$1T. And why? So that Bill Gross, Goldman Sachs, and the communist Chinese don’t lose a single dollar of what they invested in those firms. The end game will be the same for AIG, Citi, and BofA as well. Each quarter they’ll be back at the trough for tens of billions of dollars… and it will never end. All because of what we “learned” from Lehman Brothers failure.

    The alternative is to punish the weak and reward the healthy. Why should a money market fund manager who invested “risk free” money in a firm levered 80:1 be let off the hook for his poor choices? Why should Bill Gross continue to be allowed to make outsized returns by having the American Taxpayer unwittingly subsidize his losers? It makes no sense… and though it might be my own personal interpretation, that question is the fundamental cornerstone of Yves amazing blog.

    Hope that helps…

  15. bobo bobo

    I’m using Elizabeth Warren as my litmus test for future Democrat support. If they turf her, I’m done with them because they will have shown themselves to be no better than the other side of the table.

    I never in my lifetime thought I would walk away from my power as a voter, but when my vote is only for which brand of criminal to put in charge, it becomes a wasted vote.

    ——–

    The litmus test for every politician is whether they will recapitalize banks and insurance companies by converting their bonds, preferred, and if necessary derivative counterparties, into equity holders. Brad Sherman and Bernie Sanders are for converting bondholders to shareholders. Bernie also told Larry Summers to pound sand when Larry wanted $20 billion to bail out the wall street banks bad loans to Mexico.

  16. tyaresun

    If Obama listens to the likes of Warren there is a chance he will get relected. If not, the great recession will be in full force come 2012 and he will be kicked out along with the rest of the incumbents.

    There is a slim chance that the US will be able to limp along like Japan.

  17. Doc Holiday

    Warren needs to get off her butt and do endless non-stop road shows and townhall meetings and push her agenda of truth, honesty and justice.

    Her recent interviews are all great and thus she needs to promote herself as if she is U2 and get the message out as loud as possible ASAP — before the plug is pulled.

    Time is wasting (for us all) and the full exposure of the corrupted mafia-like goons like Pelosi, friends of Dodd, Friends of Angelo, and all the long list of corrupt scum entangled in the Obama/Bush distortions is critical, and must occur ASAP!!!!!

    Warren should expand her powers as far as possible, ASAP, just like Ken Starr did with his BJgate investigations! The problem here is that congress is not willing to stand up for honesty!

    Also see: United States Office of the Independent Counsel was an independent prosecutor — distinct from the Attorney General of the United States Department of Justice — that provided reports to the Congress under 28 U.S.C. § 595. The office was terminated in 1999 and replaced by the U.S. Department of Justice Office of Special Counsel.

    >> Isn't that nice, the Republicans shut down that and then essentially shut down DOJ and now we have a bunch of mafia crooks running America — sweet!

    Then see: The current Special Counsel is Patrick Fitzgerald, who was appointed in 2003 by Deputy Attorney General James B. Comey.

    In March 2007, it was revealed that Fitzgerald "was ranked among prosecutors who had 'not distinguished themselves' on a Justice Department chart sent to the White House in March 2005…"[22] This was revealed in light of an investigation of the December 2006 firings of several U.S. Attorneys by Attorney General Alberto Gonzales, perceived as being politically motivated and despite his previous Attorney General's Award for Distinguished Service in 2002.[23] The Washington Post article states that two other prosecutors so ranked were dismissed.
    On July 2, 2007, President Bush provided a statement[24] on his decision to commute Mr. Libby's prison sentence and noted,
    "After the investigation was under way, the Justice Department appointed United States Attorney for the Northern District of Illinois Patrick Fitzgerald as a Special Counsel in charge of the case. Mr. Fitzgerald is a highly qualified, professional prosecutor who carried out his responsibilities as charged."

    Goodby Ms Warren, you will be forced out by mafia bankers…

  18. emca

    Unfortunately the die is cast and no matter what Yves or any of the commentators argue, the effectiveness of the current tack (not the morality) will be answered with any complexion of certainty, only in the months or years to come.

    That finance has and will continue to “invest” in government regardless of political affiliation is a given.
    That the public considers the collusion of finance and government, if not beneficial and appropriate, at least harmless in the resolution of problem for which neither above party is attached blame, is obvious.
    That public, finance and government fear any answer outside the production and accumulation of yet more debt is transparent.

    But to put the matter in perspective, I look into my rear view mirror (reference to a comment linked here) and see one Ben Bernanke stating in 2006 that the evolving sub-prime conflict was a minor misfire in the wider background of mechanization comprising the U.S. (and world) economic engine and that one was not to worry (I am paraphrasing here).
    One would ask, in retrospect:
    a) was Bernanke knowledgeable of the background and extent of the problem and just drawing a smiley face to insure confidence, or in other words, was he just lying for the general good of the greater unwashed?
    b) was Bernanke truly ignorant of the long term consequences of the sub-prime debacle?
    c) both of the above.
    Neither of the choices above give me confidence that the course marked out by Bernanke/Geithner with the collapse of BS is the direction we should be heading.

  19. Bill

    “The litmus test for every politician is whether they will recapitalize banks and insurance companies by converting their bonds, preferred, and if necessary derivative counterparties, into equity holders. Brad Sherman and Bernie Sanders are for converting bondholders to shareholders.”

    Pardon my cynicism, but the real question is, Would Brad Sherman and Bernie Sanders be for that issue, if they thought it could actually be passed ? After all, they can score big political points by coming out for something popular, that they know has no chance of being enacted.

    This is a generic question to ask of any politician.

    Not suggesting I know the answer in this specific case, but I have come to see that career politicians are deeply and profoundly dishonest, it is inherent in their line of work, I’ve come to believe.

    All politicians must lie to get elected, and those who get elected most often, are the ones that are best at lying.

  20. bobo bobo

    Bill: Pardon my cynicism, but the real question is, Would Brad Sherman and Bernie Sanders be for that issue, if they thought it could actually be passed ? After all, they can score big political points by coming out for something popular, that they know has no chance of being enacted.

    ——-

    Bernie Sanders walks the walk. In 1995, Bernie Sanders and Steve Stockman prevented Rubin, Summers, and Geithner from getting Congress to give them $25 billion to bail out the Wall Street banks from their bad loans to Mexico. Thanks to Sanders and Stockman, Senate majority leader Bob Dole and Banking committee chair Alfonse D’Amato railed against the bailout.

    Rubin, Summers, and Geithner then arguably illegally used a Treasury Fund called the Exchange Stabilization Fund to that is intended to be used to defend the US dollar. Rubin, Summers, and Geithner used the money to bail out the NY banks.

    Congress ought to investigate whether Rubin, Summers, and Geithner acted illegally in 1995 using the ESF. If so, Congress ought to have the treasury lawyers that said using the ESF was OK, disbarred. Congress should also investigate whether the PPIP’s use of the Fed and FDIC is legal. If not, they ought to have the Treasury, Fed, and FDIC lawyers and accountants that sign off on the plan, disbarred.

  21. Jeremy R. Shown

    As the author of the above linked ‘McArdle distracted by Warren’s efforts’ I would like to make it clear that I support Warren’s efforts.

    Those that click the link will find that to be the case, but that isn’t entirely clear from its mention here.

    Yves – thanks for the traffic, and the now defunct Culture 11 also thanks you, which is where the link takes you (I added my post to the Culture 11 diaries section). If Warren is marginalized or removed though political machinations it will be a travesty and the American people will be worse off.

  22. nowhereman

    It’s Sunday night here on the left coast and I’ve just received an education that you just can’t get ANYWHERE ELSE. Thank you ALL.

  23. sglover

    In November 2006 the Dems benefited from a wide and deep tide of revulsion at what was happening to this country.

    In what was practically her first response to the new mandate, Nancy Pelosi unilaterally declared that the CONSTITUTIONAL remedy of impeachment was “off the table”. The implication was obvious: We are SOLELY interested in the next, bigger win. Niggling details like, oh, the Constitution, are of precisely ZERO interest to us. Holding war criminals to account might offend somebody. So, nix to that.

    Andrew Bacevich has said, quite correctly, that as deranged as the GOP is, it’s the Dems who most completely personify the abandonment of republican (small ‘r’) traditions.

    So why is anyone surprised by Pelosi’s sliminess in this episode?!?! It’s what she does. It’s what she is.

  24. MutantCapitalism

    I’d like to believe that someone’s got Elizabeth’s back and that someone, Special Inspector General for the Troubled Asset Relief Program, Neil M. Barofsky just got added muscle when the President signed Public Law 111-15 aka S.383 [A bill to amend the Emergency Economic Stabilization Act of 2008 (division A of Public Law 110-343) to provide the Special Inspector General with additional authorities and responsibilities, and for other purposes] into law on Friday.
    How’s this for fire power? P.L. 111-115 “Treats the Office of the SIG for TARP as one of those federal Inspector General offices whose agents may carry a firearm, make arrests with or without a warrant, and seek and execute arrest, search, and seizure warrants under the Inspector General Act of 1978 without first receiving an determination of eligibility by the Attorney General.” SIG TARP Barofsky and COP Chair. Warren won’t be needing Nancy Pelosi’s pseudo Pecora Commission show hearings.

  25. Bill

    bobo bobo, thanks for the clarification……..

    MutantCapitalism, Barofsky is indeed reassuring. I’ve seen him twice now on video, and he seems like a squeaky clean Elliot Spitzer…….

  26. MutantCapitalism

    Bill,
    A squeaky clean Elliot Spitzer would normally do just fine but at this point I think the country wants more of an Eliot Ness type federal agent.

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