Elizabeth Warren on Bank Bonuses, Power of Bank Lobbies

Two good segments from an interview with Elizabeth Warren of the Congressional Oversight Panel (hat tip reader Scott) at Tech Ticker:

Warren discusses how banks are winning, hands down, in getting the rules they want:

Picture 20

Watch the video here.

Key quote from her discussion of bonuses: “I do not understand how financial institutions could think they could take taxpayer money and turn around and act like it’s business as usual….but they seem to be winning this argument.”

Picture 21

View this video here.

Tech Ticker has a third segment in which Warren says she is skeptical of the idea that housing is recovering.

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  1. patb

    how is it legal that banks can take TARP money or Fed Money and then
    lobby congress?

    It’s illegal to use appropriated funds to lobby congress, how is this different?

  2. mannfm11

    I get the red ass every time I hear about this stuff. I would grant someone all the money they could make if they had their own money on the line. But, Wall Street, once they went public, has become the moral equivalent of a pig. Shooting craps with other people’s money and I don’t merely mean those that put money with a company is not much different than planning an extortion. Everyone of these guys save maybe JPM should have been closed and liquidated. The government could keep the deposits flowing either way and would have made a lot of money back reissuing these outfits as new companies. EVen so, JPM should have been audited. AIG should have been split up with the division that sold all that protection thrown in the street with all involved taking the losses. Its normal insurers should have been left untouched. The people that ran that branch should have all been arrested the the paper trail run down to the maximum. The idea this outfit was insuring with no reinsurance flat blows my mind and in fact brings to mind the great possibility of collusion of traders. I understand the man that ran that operation was with Milken when that mess went down.

    I don’t particularly like government in business, but when it involves moral hazard at the expense of those that have absolutely nothing to do with the operation of these institutions, they should have sent in the FBI, CIA and USMC. There isnt a single man in Goldman Sachs that is any more important to the operation of the US in general than a man driving a trash truck. Many of them need a few years of prison food, instead of multimillion dollar bonuses. There aren’t that many people in the world worth what the average GS employee is being paid this year, all because the good old USA provided a nice pile of money and a racket to play.

  3. Lavrenti Beria

    Everyone’s big sister, Elizabeth Warren, is doing for outraged “progressives” precisely what Obama did for an outraged electorate at this time last year: Creating the illusion that they actually have a voice in an important place that will act on their behalf. Despite all of Ms. Warren’s League Of Women Voters earnestness, the PBS interviews and the oowing and aahing of her starstruck fans, Ms. Warren has all the basso profundo of a 21st century castrato, her role as a watchdog about as effectual as the Baltimore Orioles bullpen. It can hardly be news at this juncture that the financial interests “have all the money, all the lobbyists”, or that “we have to get foreclosures under control”. If well intentioned people are going to persist in the fantasy that the system truly is remediable, they’re going to insist on being shown the beef. And I just don’t think you’re ever going to be able to do that, Elizabeth.

    1. Skippy

      Bingo, with you a 100% percent on that one. Used to think other wise like with Krugman, but could care less what either one says now.

      Skippy….he…he…he Ive got two jobs already now. How could I every run an consumer agency…really…silly man.

      1. Skippy

        Lavrenti Beria says: Everyone’s big sister, Elizabeth Warren, is doing for outraged “progressives”…and if I can add knit-ware crowd too.

        If you march to bring back the glory days its OK, want accountability, see you at the bail hearing and on the terrorist list or FEMA camp.

        Skippy…all the bases are covered…all thanks to endowments and studies conducted by…the legacy boys and gals. Its cool they go to church and gave to the poor.

      2. Lavrenti Beria

        Krugman is the simply the worst sort of toad, narcissistic, attention seeking, with all of the instincts typical of an elitist academician. Rumor has it that he forecast all seven of the recessions that have occured since 2002. :-)

    2. jimmy james

      What the heck kind of hack job slam is that? Warren’s doing as best she can in her position.

      You know what her position is, right?

      1. Lavrenti Beria

        I know, jimmy. Sometimes it hurts when our champions are shown to be made of paper mache. What’s particularly wrenching about big sis’s situation, of course, is that she soldiers on so earnestly when the final score already has been tabulated. Why it hasn’t even dawned on her as yet that her appointment was a contrivance designed to funnel left side rage into a black hole yet simultaneously lending to a lying administration the appearance of probity. But if you’re still expecting ferocity from Liz, you’ll want to avoid reviewing the videos of the TARP hearings earlier in the year. I’d guess they’d embarrass even her mother.

        1. energyecon

          ah yes, here we have the received wisdom of the cynical little voice that tells you not to try, you don’t matter and you will just fail…

          go f*ck yourself, little voice – Sancho, my armor!

  4. rosethorn

    There is a paper recently released “Lessons from the
    Great American Real Estate Boom and Bust
    of the 1920s” at this link http://www.econ.barnard.columbia.edu/~econhist/papers/White%20_1920s_Real_Estate_September_2009.pdf

    with the thesis that

    “Similar in magnitude to the recent real estate boom and bust, the first nationwide twentieth century “bubble” appeared in the early 1920s and burst in 1926…the boom developed its own momentum, particularly in hot regional markets, notably Florida. Financial innovation and lax supervision contributed to the upswing. Alternative monetary policies would have dampened but not eliminated the boom. Its collapse caused foreclosures to rise and weakened some firms’ balance sheets. Yet, unlike the events of 2008, the drop in real estate prices did not induce a collapse of the banking system. The crucial elements absent in the 1920s were federal policies that increased homeownership and risk-taking in the banking sector, suggesting that these were crucial to the eruption the recent and worst financial crisis since the Great Depression.”

    That is a rather provocative conclusion.

  5. john newman

    If you don’t have stupendous amounts of cash behind you, you have no media voice except for blogs like this. The myriad of opinions of the millions of non bankers who are aware that we are paying Wall Street’s bonuses prevent us for cohering into a voice that can be heard over the din of money.

  6. Vinny G.

    Indeed, indeed, it looks like the banks are going to prevent any real regulatory changes. They will be back to their dirty tricks in no time at all… say, 2 years. But that’s OK. However, the next inevitable bust will be utterly catastrophic.

    However, it is imperative to start preparing now. Here’s what Dr. Vinny recommends for your continued health and well being:

    A.) A residence outside of the US and Western Europe

    B.) 2+ passports

    C.) Enough physical gold and silver to survive for at least 20 years

    D.) A high quality blue-ray recorder and digital cable service, so you can record in high definition the collapse of the evil western world as we know it

    E.) A stockpile of high quality coffee and a decent cappuccino machine, so you can maximize your viewing pleasure of the recordings made in point (D) above.

    Vinny G.

  7. koshem bos

    It amazes me that we skip the culpability of congress in everything financial. We vote for them and not Goldman sucks or citihole, etc.

    May be the real Lavrenti Beria should be in treasury and send CEOs to Lubyanka.

  8. eh

    The lobbies would be ineffectual were it not for the stupidity and corruption of the executive and legislative branches. And maybe throw in the judicial branch and the SEC in there as well.

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