Monday, February 28, 2011

Guest Post: “The Financial Industry Has Become So Politically Powerful That It Is Able To Inhibit the Normal Process of Justice And Law Enforcement”

→ Washington’s Blog

In his acceptance speech for winner for best documentary at the Oscars, director Craig Ferguson said:

Three years after our horrific financial crisis caused by financial fraud, not a single financial executive has gone to jail, and that’s wrong.

But none of the mainstream, corporate networks covered it. Not CBS, ABC, NBC or MSNBC.

Ferguson told Reuters:

“The biggest surprise to me personally and biggest disappointment was that nobody in the Obama administration would speak with me even off the record — including people that I’ve known for many, many years,” Ferguson said backstage.

He believes Americans, who lost homes and jobs in the millions because of shady mortgage lending and bank collapses, are disappointed that “nothing has been done.”

“Unfortunately, I think that the reason is predominantly that the financial industry has become so politically powerful that it is able to inhibit the normal process of justice and law enforcement,” said Ferguson.

For background on the subversion of justice to the powers that be, see this.

Indeed, as I have repeatedly pointed out, fraud is one of the main causes of the financial crisis. See this and this.

Even Bernie Madoff tells New York Magazine:

“I realized from a very early stage that the market is a whole rigged job. There’s no chance that investors have in this market.”

***

“The SEC,” he says, “looks terrible in this thing.” And he doesn’t see himself as the only guilty party on Wall Street. “It’s unbelievable, Goldman … no one has any criminal convictions. The whole new regulatory reform is a joke. The whole government is a Ponzi scheme.”

The economy cannot stabilize unless fraud is prosecuted. But the folks in D.C. seem determined to turn a blind eye to Wall Street shenanigans, and is now moving to defund the enforcement agencies like the SEC and CFTC.

And yet the large corporate media never covers this issue. An October 2009 Pew Research Center study on the coverage of the financial crisis found that the media has largely parroted what the White House and Wall Street were saying. (The mainstream media is also pro-war.)

In fact, the financial industry has become so politically powerful that it is able to inhibit the normal process of justice and law enforcement, and the American press.

Topics: Guest Post

Email This Post Email This Post Posted by George Washington at 2:55 pm

43 Comments » Links to this post

43 Comments:

  • badger says:
    February 28, 2011 at 3:09 pm

    As Milwaukee County Executive, Walker promised that he could save the county more than $750,000 a year by firing the union employees and hiring the private contractor Wackenhut, a firm that was caught up in a sexual deviancy scandal in Afghanistan that same year.

    After his plan was blocked by the county board, Walker unilaterally insisted that he had the power to do it anyway, thanks to what he called a “budget emergency.”

    Thus, the union guards were replaced with non-union Wackenhut guards.

    Arbitrator Amedeo Greco later ruled that Walker had misused his “budget emergency” authority. Greco said that the union guards had to be reinstated with back pay.

    “Scott Walker’s last big cost-saving bust-the-union stunt could ultimately end up costing his former employer, Milwaukee County, close to a half million after all is said and done,”

  • AR says:
    February 28, 2011 at 3:29 pm

    And see this:

    The “National Security” Apparatus Has Been Hijacked to Serve the Needs of Big Business
    Washington’s Blog 9/16/10
    ….
    • And Business Week wrote on May 23, 2006:

    President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations.*
    ….
    Indeed, the interests of the government and big business are so closely aligned* that some high-level government officials may consider any threat to the bottom line of the big banks and other corporate giants as an existential threat to the nation’s security.
    http://www.washingtonsblog.com/2010/09/national-security-apparatus-has-been.html

    Glenn Greenwald has explained numerous times the government’s excuses for covering up its crimes, claiming ‘State Secrets’ and ‘National Security’ as the universal get-out-of-jail-free card. We live in a state of exception which includes suspension of rule of law for the exceptional, malicious prosecution to keep the rest of us cowering in fear.

    • Francois T says:
      February 28, 2011 at 9:29 pm

      I shall repeat my question over and over and over again until I get a cogent answer:

      Why would any non-US big investor take a chance to invest in a country like the US, given that the rule of law and enforcement do not apply to those said investor could do business with?

      -Is the US still safer than anywhere else (including Europe) in the world?
      -Is the whole investing/financial world turning as lawless as the US?
      -Is the US the only ship on the horizon?
      -Do BIG non-US investors get a kind of “privilege” or guarantee that they’re protected from predatory business practices reserved for the “Little People”?

      What’s the deal here?

      • Paul Repstock says:
        February 28, 2011 at 11:11 pm

        Well..one would suppose that serious money investment would get serious perks..kind of like institutions and big investors getting inside information. Why would these folks risk their ‘hard earned dollars’..lol

      • psychohistorian says:
        March 1, 2011 at 1:56 am

        The US is The Reserve Currency which is HUGE and we have all those unused nukes….

  • John says:
    February 28, 2011 at 3:44 pm

    Isn’t what you just desribed = fascism ?

  • fladem says:
    February 28, 2011 at 4:04 pm

    What I find interesting about this post is how frequently those who are supposed to be left of center are in bed with the far right. This post was also posted on Zero hedge – a blog that lionizes the Tea Party and claims that inflation will ravage the world because the money supply is increasing.

    The current crisis has given an enourmous leg up to the far right in this country, in part because the left itself can’t understand the source of many of the ideas at play today.

    All of this immediately becomes apparent when you bring up a subject like globalization – which of course is the real cause of the explosion in inequality. The right wants to keep the focus on the banks and the Fed: it is a great diversonary tactic. And of course the corruption is certainly real enough.

    But the simple truth is that labor’s share of income all across the industrialized world has been falling for 30 years. When you begin with this simple fact, the idea that cause of all of our problems is that the Fed is debasing our currency becomes silly in the extreme.

    What is shocking is how much those who consider themselves on the left fall for it.

    • Tao Jonesing says:
      February 28, 2011 at 4:29 pm

      You seem to assume that there’s no connection between the banks, the Fed and globalization. To me, they’re one and the same. The Fed works for the banks who are driving globalization to take their ponzi scheme worldwide.

    • ZachPruckowski says:
      February 28, 2011 at 5:27 pm

      It’s not really that surprising. The left and the far right are in bed on a lot of issues, they’re just usually the issues you think of as baseline – nobody’s advocating legalizing mugging, for instance. This is a basic rule of law issue, so it’s not surprising to see wide cross-spectrum support.

    • Walter Wit Man says:
      February 28, 2011 at 5:59 pm

      The Zero Hedge right is about the only potential allies the left have. For instance, the Zero Hedge people seem to want prosecutions for fraud, unlike others on the right, and they oppose most of our wars, as far as I can tell.

      You’re correct though that their interests diverge sharply from those on the left on such issues as the safety net, Social Security, and privatization, etc.

      But even though there are huge disagreements it’s important to keep the lines of communication open and to remember that they do indeed share some big policy goals. It’s heartening for me to see Ron Paul and Ralph Nader joining forces, for instance: http://www.rawstory.com/rs/2011/01/22/ron-paul-ralph-nader-agree-on-progressive-libertarian-alliance/.

      As a leftist myself, I would rather work with Ron Paul and the Zero Hedge right, than with the Democrats. At least Ron Paul and Zero Hedge aren’t lying about their intentions and any alliance can be analyzed on those terms. Plus, it simply may be more practical to form a coalition with some on the right than trying to form a coalition from within the Democratic party. The left has failed miserably these past few decades, despite some very popular ideas, precisely because they are stuck within the Democratic party.

      But on the other hand they do piss me off with their free market fairy tales and goldbuggery.*

      *I would like to see an exchange of ideas re inflation and money from these groups (say between MMT proponents and Zero Hedge). For e.g., I do think both sides have something to offer and both could stand an honest debate.

    • Kiste says:
      February 28, 2011 at 7:33 pm

      One thing I think you’re underestimating is the role of Big Finance in the globalization game. The finance sector, in pursuit of ever increasing returns, in driving manufacturing before it – there is pressure to outsource, even if the business case for it isn’t strong.

      It’s financial capital vs. industrial capital – and financial capital has won. So here we are.

    • nonclassical says:
      February 28, 2011 at 7:48 pm

      “Fladem”,

      perhaps should read “ECONNED”, before attempt at fundamentalist blame-game..

      Not that Obama doesn’t (as in this very subject) deserve critical analysis regarding complete lack of transparency, oversight, accountability..

      Obama is as guilty as Governor Walker-pulled the same game,
      continuing Bushit tax-breaks and raise in military budgets..
      THEN turns around and freezes federal employee wages for 5 years..wait till we see his next budget, which will include
      devolution of Social Security after extending Bushit tax-cuts…

    • Francois T says:
      February 28, 2011 at 9:31 pm

      “All of this immediately becomes apparent when you bring up a subject like globalization – which of course is the real cause of the explosion in inequality.”

      Nice try, but facts say otherwise: Pray tell how is it that South America is becoming LESS unequal while globalization hit them too?

      Good luck explaining that one away.

    • Paul Repstock says:
      February 28, 2011 at 11:14 pm

      Fladem: there is only ‘one’ bed. Should we be surpised if much of what happens there appears incestuous. I’m just supposing, because I’ve never been invited..:)

  • Masonboro says:
    February 28, 2011 at 5:04 pm

    @John: Let’s agree to retire the term Fascism because it mostly creates unhelpful references to Hitler and the Nazis. I suggest the new term “State Capitalism” mainly applied to the current Chinese model. My uneducated world view sees the US and China converging (from different directions) on this model. Russia too in a thuggish,mafia version.

    2012 could ,on current trends, consolidate all meaningful forms of power in one party for the foreseeable future.

    We shall see.
    Jim

  • sdemetri says:
    February 28, 2011 at 5:20 pm

    One of the biggest disappointments for me, and I’m sure many, many others is contained in a line from Robert Reich’s interview in the second episode in Adam Curtis’s The Trap. Reich was explaining the ostensible relative superiority of “market democracy” over the ballot box. Elected officials may or may not represent an individual’s preferences, while voting with one’s dollars is a more direct form of expressing one’s preference. The trouble comes however when the market fails to express your interest, and then the government has been weakened so as to also be unable to provide relief. The individual is left with nothing. With safety nets being threatened and in some cases torn to shreds, this failure of both the market and government is especially acute for an increasing segment of the public.

  • RBHoughton says:
    February 28, 2011 at 6:11 pm

    Concerning the global economy, there are a few things we should talk about.

    Trade in money destabilises countries. It is nothing like trade in goods. We should legislate against all international currency moves. Those countries that print vast amounts of money far above their national requirements (US and UK come to mind) merely use part of the surplus issue to destabilise other economies.

    We should encourage self-sufficiency in national economies and endorse a system for international trade that exchanges only surplus production, yours for mine.

    We should repudiate government debt and cut our politicians’ dependence on the banks. We elect them; we pay them, and they look after us within the constraint of available domestic revenue. Its not difficult.

    Our present crop of politicians are often saying they are surprised by events – “who would have thought it?” they say – well, it seems anyone can do politics so lets turn it into a national effort.

    Create Primary Assemblies of a few hundred people to form the basis to a real democracy and build the state and national institutions from that. People elected to every level do a year in office and revert to their former occupation. That should introduce sufficient transparency to make political management an honourable business.

    And of course, educate, educate, educate.

    • Tertium Squid says:
      February 28, 2011 at 6:46 pm

      Would it be good if the House of Representatives had thousands of members?

      • Paul Repstock says:
        February 28, 2011 at 11:34 pm

        I suspect it might Squid, and if they were rotated on a populist basis, it would be much harder to suborn them.

    • Rex says:
      March 1, 2011 at 4:51 am

      RB said, “Concerning the global economy, there are a few things we should talk about.”

      Lots of stuff in the posting that may be heart-felt, but seems to be buying into the big memes that we are being sold. You mention govt debt, which I think is more a symptom than a primary problem. Then there’s all those politicians pointing fingers at each other. True enough.

      A plea for some grass-routes people solution. OK, maybe it won’t hurt. Look how much tea-isity has helped so far.

      What about the subject of the post you are replying to? How about taking down a few of the puppet masters that have been pulling the extortionist strings in this show?

      Seems we can’t get that to happen, so I think the rest is probably just plastering over cracks in an unstable foundation.

  • KFritz says:
    February 28, 2011 at 6:57 pm

    Here’s an insider’s guide to co-opting the press

    http://www.rawstory.com/rs/2010/12/13/exclusive-wined-dined-nyt-wsj-favorable-coverage-health-insurance-whistleblower/

  • MaryB says:
    February 28, 2011 at 8:30 pm

    Whether the American Press, the Political Establishment, the lobbyists, the Corporate entities that is inhibiting discussion, I suggest that everyone find a copy of TREASURE ISLANDS, a new book about offshore accounting, offshore accounts, the co-opting of nations and the network of islands and dominions who have annexed themselves from the mainstream of taxation.

    As many noted, gains are privatized and losses are left to the public. The bigger story, above what “Wall Street” did, concerns a global conspiracy that has evolved over time. This conspiracy is what has bought off all power. These structures, which are enshrouded in silence, obfuscation and untouchable reach, drains off the lifeblood of taxation that is owed by corporations and the rich.

    That silence we all hear has to do with the fact that it’s easier to now let the public fight over the crumbs, cannibalizing each other within our system, whilst corporations (including the media) and the wealthy make off with the banquet.

    Don’t be distracted by the arguments of where the problems lie: unions, Wall Street, politics, or moral issues such as gay rights and abortion.

    THE REAL ISSUE IS THE OFFSHORING OF PROFITS AND THE RIGHTFUL TAXATION DUE, draining the LIFEBLOOD of civilized society (EVEN WITHIN DELAWARE, ETC), leaving everybody else to pay for everything else. Now they are selling off our INFRASTRUCTURE to pay for their implosion. As DEEP THROAT SAID: FOLLOW THE MONEY.

    Again: TREASURE ISLANDS: Nicholas Shaxon. Due out in the US in April, 2011

    • MaryB says:
      February 28, 2011 at 8:42 pm

      PS: And lest you believe this is a right or left issue, it’s both. Everyone wants to keep their money and pay as little in taxes as possible. It’s about each country allowing loopholes to accept tax manipulated constructs from money from other countries.

      It’s not the outflow: It’s the inflow.

      Every country is afraid their biggest industries will go elsewhere if their taxation is too stringent. So under threat of losing the “investment”, they kowtow to the demands to “LOWER TAXES”. So we get the money from the rest of the world, and they get ours. That fictitious place called “everywhere, and nowhere”. Allows money to flee, legal constructs shrouded in secrecy are structured so that even an inquiry triggers the money and the accounts to flee to the next haven, and the money moves. NEVER TO BE TAXED

      Those who fail to contribute to the US, the country they claim is the greatest, should be stripped of citizenship and live in exile if there is a place on this planet they can safely hide. Good riddance. We’ll manage.

      • Francois T says:
        February 28, 2011 at 9:46 pm

        “And lest you believe this is a right or left issue, it’s both.”

        Not anymore: Read this truly excellent post by Barry Ritholz on the new political paradigm.

        http://www.ritholtz.com/blog/2010/09/you-vs-corporations/

        • MaryB says:
          March 1, 2011 at 11:26 am

          Thank you for the link, Francois T ~ I suppose I made the not left or right comment as in people’s minds, that paradigm still exists.

          Yes, the CORPORATION, born into the world not so long ago, baptized during the last lifetime or two, fed and strengthened over time by the genius of evasion and now, living in perpetuity, ruling us all, arms outstretched, wrapped around the entire political, legal and trade systems of the world. No left. No right. No taxes. No rules. No laws. It is now GOD, right?

          We, THE CORPORATION. In order to form a more perfect union, establish justice, ensure domestic tranquility, provide for the common defense and PROMOTE THE GENERAL WELFARE

          (that last part was left off of the Republican rebuttal to the State of the Union this year, BTW).

          Thank you Supreme Court. Justice Scalia, you are the best.

  • Disgusted, depressed & discouraged says:
    February 28, 2011 at 9:35 pm

    It’s NOT the left/right, blue/red. liberal/conservative but but CORPORATOCRACY running America via K-street.

    They support both Dems /Repubs ( REPOCRATS) but influence the bills/laws favoring them even under the Democrats. 90% of MSM is controlled by 5-6 mega Corporations!

  • Deus-DJ says:
    February 28, 2011 at 11:26 pm

    The authority regarding this subject is Bill Black. I have been sitting in on his Law and Economics class and he’s shown how much of economics as we know it was originally developed to be pro-business, even by the founding fathers themselves. Lets take our common law system. Business actually doesn’t function under a common law system…actions for or against them are defined instead by Code. Heard of the Uniform Commercial Code? We have to face the facts: our system, from the outset, was not developed to be fair. It was developed for the express purpose of making commerce flow much more freely, and giving them inherent protections against our common law system.

    In fact, what code does in our court system is it creates a “default rule”. This is the rule if you don’t have a contrary rule…but you can write your own contrary rule in the form of a contract. The UCC actually developed as a when America was at its most dominant. In the commercial realm you try to make commerce work better. What drives the code? Federalism. Make standards nationwide. These same businesses later try to make it international-wide. In all commerce seeks clarity, prediction, logic, and a contempt for common law. This is why we have a separate system of law, in the code(UCC), that has helped lead to the environment we have today.

    So if one is to say that commerce has become so powerful that it inhibits justice…I would say that it happened a long time ago.

    • RBHoughton says:
      March 1, 2011 at 12:13 am

      Those statutory concessions that business extorted from weak governments are the foundation of our perverted form of capitalism. There are principally two:

      Limited Liability appeared when the British Government became bankrupt but wished to continue printing money to fund George III’s war on democracy. That relieved companies from paying debts from corporate capital;

      Secondly, the thing about a company having an existence like an individual person, separate from the shareholders and Directors, first appeared in the British 1862 Companies Act and so astonished the world it was not actually used in corporate structures until 20th century. That allowed assets to be hidden. Anyone with a valid claim who has attempted to ‘lift the corporate veil’ in our numerous tax havens will know how effective it is.

      These are concessions that should be withdrawn.

  • CaitlinO says:
    February 28, 2011 at 11:46 pm

    In fact, the financial industry has become so politically powerful that it is able to inhibit the normal process of justice and law enforcement, and the American press.

    Anyone want to place bets on how long it will take for the financial industry/government to get around to inhibiting the non-traditional press, AKA the internet?

  • gepay1 says:
    March 1, 2011 at 2:36 am

    Rule of law in the US – compare Clarence Thomas with Thurgood Marshall. Notice the supreme courts election of George the Younger and Dumber. Notice the legalizing of the corporations ability to buy elections.
    the military industrial intelligence complex work with the other multinational corporations to dominate America. Add big Agro, Big Pharma, health insurance companies, the police prison judicial complex. As above the ascendency of FIRE. We’re screwed.
    But somehow Bolivians in Cochabamba were able to take back their water supply system from Bechtal. Somehow the Bolivians were able to elect Evo Morales. Chavez was able to withstand the coup mounted by the US, Now the Middle East has chased out 2 dictators and more are leaving. What is wrong with us Americans?
    Alice Walker said, “the most common way people have of giving up their power is to think they don’t have any.”

  • mmckinl says:
    March 1, 2011 at 2:39 am

    Thank You George Washington …

    Yet another great piece …

  • LeeAnne says:
    March 1, 2011 at 8:07 am

    Concentration of capital has eliminated timely “news.” Books and magazine articles may be written, even commentary and newspapers columns, but there is no ‘news’ when it isn’t timely. News, by that definition, has been eliminated by the criminal corporatocracy.

    So-called “lawlessness” practiced by bankers, finance and the corporatocracy is a semantic diversion. The people extorting money from every piece of lint in your pocket openly practice contempt for ‘the law.’ Its open to assure everyone who cooperates that they will be protected.

    ‘The law’ only applies to the people under their heel who have nothing more than mortgages and debts; who are underpaid, fearful for their jobs, are unemployed, retired on a fearful pittance, disabled or young.

    The issue of ‘lawlessness’ covers up the intention to preserve securitization; to keep it going. That’s the holy grail of our political finance zeitgeist.

    The purpose is to maintain unemployment, the absence of knowledge workers in banking, investing and mortgages. Hundreds of thousands of professional jobs needed to advise and serve the public in personal investing and mortgages have been eliminated since the 1980s and replaced with the white collar version of ‘goons’ who just do what they’re told to do. Finance employees reduced to ‘bucket shop’ standards. Bankers and local politicians are committed to keeping it that way.

    Add to ‘shock doctrine,’ ‘gang rape.’ One country after another; one sector after another; perpetrated by one official group after another.

    Today its the Governors who terrorize while their Attorney’s Generals are idle against white collar crime; tomorrow it will be the TSA on the streets …

    • Michael H says:
      March 1, 2011 at 8:54 am

      Nice post, that pretty well sums it up.

      At times I find myself envying those who are ignorant and uninformed; I find myself envying those people who are either in denial of kleptocracy, despite the overwhelming evidence of massive fraud. Or the ones who are so naive, ignorant, credible, trusting, etc, that they either don’t see or refuse to believe our country is now in the hands of utterly corrupt, morally depraved lying thieving scum.

      Perhaps this is why many Germans denied the existence of extermination camps, gas chambers and mass murder, right up until the end. Because the truth was simply too painful for them to bear.

      Maybe ignorance really is bliss, after all.

      • anon2 says:
        March 1, 2011 at 4:48 pm

        “For to know nothing is nothing, not to want to know anything likewise, but to be beyond knowing anything, to know you are beyond knowing anything, that is when peace enters in, to the soul of the incurious seeker.”
        — Samuel Beckett

  • mark says:
    March 1, 2011 at 1:35 pm

    Ferguson is an idiot. Like Michael Moore. He has no idea of what it takes to prosecute someone lawfully. You can’t prosecute everyone in a group for their status. They were financial executives – send them to jail – that is his argument? Please. Gasparino has a good column in the Post about this and Nocera did one in the Times last weekend,. but this is just basic stuff to understand: you have to have probable cause to indict and that means an email or a witness. Just being at the scene of a financial collapse is not a crime. Nor is being the ceo of a company that collapsed. And quoting Bernie Madoff? Are you kidding me? The man is one of the most despicable people on earth. He should make everyone rethink their position on capital punishment. And like Ferguson he does not say, prosecute X because X committed the following crimes. He too only talks in generalities like you could hear in a bar from anyone. At the end of that article, he says “I am a good person”. Do you believe that? If not, why do you believe anything else he says?


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