Corrupt Obama Administration Pressuring New York Attorney General to Support Mortgage Whitewash

It is high time to describe the Obama Administration by its proper name: corrupt.

Admittedly, corruption among our elites generally and in Washington in particular has become so widespread and blatant as to fall into the “dog bites man” category. But the nauseating gap between the Administration’s propaganda and the many and varied ways it sells out average Americans on behalf of its favored backers, in this case the too big to fail banks, has become so noisome that it has become impossible to ignore the fetid smell.

The Administration has now taken to pressuring parties that are not part of the machinery reporting to the President to fall in and do his bidding. We’ve gotten so used to the US attorney general being conveniently missing in action that we have forgotten that regulators and the AG are supposed to be independent. As one correspondent noted by e-mail, “When officials allegiances are to El Supremo rather than the Constitution, you walk the path to fascism.”

Revealingly, one of the Administration’s allies said: “Wall Street is our Main Street.” And the worst is that this remark may not be a cynical Ministry of Truth pronouncement. Team Obama bears all the hallmarks of being so close to banks and big corporations that it has lost all contact with and understanding of mainstream America.

The latest example is its heavy-handed campaign to convert New York state attorney general Eric Schneiderman to a card carrying member of the “be nice to our lords and masters the banksters” club. Schneiderman was the first to take issue with the sham of the so-called 50 state attorney general mortgage settlement. As far as the Administration is concerned, its goal is to give banks a talking point and prove to them that Team Obama is protecting their backs in a way that the chump public hopefully won’t notice.

The Administration joined this effort to hurry it forward and assure it resulted in a suitably financier-friendly outcome. And it has done so despite recent HUD inspector general’s audits finding that the five biggest servicers were defrauding taxpayers. We’ve heard not a peep of follow up on that front; instead, the Administration keeps leaking its tired “A settlement is just around the corner” story.

Schneiderman is far from the only person to see what a sellout this “settlement” is. The basic premise of a settlement is to obtain some sort of restitution to induce a prosecutor/plaintiff to drop a current or likely lawsuit. For the aggrieved party to get a good settlement, it needs to have a credible case, as in facts (a smoking gun or two) and a legal theory as to why those facts mean the perp is in hot water.

Aside from robosigning, which was all over the funny papers last year, the Administration and the AGs have made sure they have no facts. A member of the Administration who was involved in the settlement talks confirmed what we have long said on this blog: there was no investigation of any kind, despite Iowa attorney general Tom MIller’s lies claims to the contrary. They didn’t even bother getting to first base, namely making document requests.

And that is why at least some of the AGs are so uncomfortable with what is going on. Even though Gretchen Morgenson of the New York Times focuses tonight on the Administration’s efforts to leash and collar Schneiderman, he isn’t alone in having significant reservations. Beau Biden of Delaware is also making a broad-ranging investigation, which is inconsistent with entering into a settlement. Martha Coakley of Massachusetts and Catherine Masto of Nevada also have initiatives underway that are at odds with a settlement, and neither one looks interested in reversing course. We’ve also been told the Colorado AG may opt out of the deal.

And a story in the Wall Street Journal tonight suggests that this horse has already left the barn and is in the next county. Tellingly, Lisa Madigan, the Illinois AG, who is a political weathervane and was working closely with Tom Miller, has come forward and indicated she’ll at most support only a qualified release from liability, when the banks want a broad release. The article indicates that her view is shared by a fair number of the AGs. Per the Journal (hat tip reader Deontos):

“They wanted to be released from everything, including original sin,” said a U.S. official involved in the discussions. The legal protection sought by the banks included loan origination; securitization and servicing practices; fair-lending procedures; and their use of the Mortgage Electronic Registration Systems, an industry-owned loan registry that often acts as an agent for owners of mortgage loans…

“Those of us at the table…have maintained this investigation is about robo-signing and loss-mitigation problems,” Illinois Attorney General Lisa Madigan said in an interview. “The release should be narrowly drafted to cover those issues.”

If the AGs stick to this stance, there is no deal. The article maintains the AGs still want damages of $20 to $25 billion. The banks aren’t going to pay much if anything to settle on robosigning, and the AGs haven’t done the legwork to make a case on loss mitigation.

So the bullying of Schneiderman looks to be misguided, since the settlement is likely to fall apart. But it is nevertheless germane because it reveals the Administration’s warped thinking and sense of priorities. As we’ve said, the Administration’s decision to cast its lot with the banks in early 2009 dictated its course of action:

Obama’s incentives are to come up with “solutions” that paper over problems, avoid meaningful conflict with the industry, minimize complaints, and restore the old practice of using leverage and investment gains to cover up stagnation in worker incomes. Potemkin reforms dovetail with the financial service industry’s goal of forestalling any measures that would interfere with its looting. So the only problem with this picture was how to fool the now-impoverished public into thinking a program of Mussolini-style corporatism represented progress.

Morgenson shows how this plays out:

In recent weeks, Shaun Donovan, the secretary of Housing and Urban Development, and high-level Justice Department officials have been waging an intensifying campaign to try to persuade the attorney general to support the settlement…

But Mr. Donovan and others in the administration have been contacting not only Mr. Schneiderman but his allies, including consumer groups and advocates for borrowers, seeking help to secure the attorney general’s participation in the deal, these people said. One recipient described the calls from Mr. Donovan, but asked not to be identified for fear of retaliation.

Yves here. So get this: we have unemployment at roughly 16% if you include discouraged workers, and many “employed” workers are underemployed. The housing market hasn’t bottomed; experts have pushed their hopes estimates from 2011 to 2012. And continued concerns about unaddressed chain of title issues may well impede any housing recovery.

Yet rather than address real, serious problems, senior administration officials are instead devoting time and effort to orchestrating a faux grass roots campaign to con a state AG into thinking his supporters are deserting him because he has dared challenge the supremacy of the banks.

So how does the Administration rationalize its failure to do anything effective? It goes deeper into its propaganda hall of mirrors:

Mr. Donovan said…“our view is we have the immediate opportunity to help a huge number of borrowers to stay in their homes, to help their neighborhoods and the housing market.”

This doesn’t even qualify as competent three card monte. “No, don’t look at what we are trying to do for the banks. Really, all we care about is homeowners!”

Marcy Wheeler, who has more patience for this vomititious tripe than I do, explains why Donovan’s assertion does not pass the credibility test:

You see, the Administration has an “immediate opportunity to help a huge number of borrowers stay in their homes,” without any action from Eric Schneiderman. They have a way to do so more swiftly, in such a way the servicers actually would be held accountable It would involve offering refis with principal reductions to all the underwater homeowners whose loans are owned by Fannie and Freddie. That would not only help a huge number of borrowers stay in their home, but it would be massive stimulus.

But instead they’re sending Donovan to pressure Schneiderman to pursue a measure that would benefit far fewer homeowners and probably take more time, while putting the last nail in the coffin of the rule of law in this country.

Finally, to the toad-hopping-out-of-mouth utterance, “Wall Street is our Main Street.” That came from finance’s favorite camp follower, Kathryn S. Wylde. As we described in an earlier post, she’s wiling to throw the rule of law under the bus to serve the interests of the banks who happen to be major funders of the business-promoting not for profit she heads. And she is also a director of the New York Fed. So it should not be surprising that she got in a “contentious conversation” with Schneiderman when they crossed paths in public.

Her argument, as she recounted it to the Times, is intellectually and morally bankrupt:

[I]it is of concern to the industry that instead of trying to facilitate resolving these issues, you seem to be throwing a wrench into it. Wall Street is our Main Street — love ’em or hate ’em. They are important and we have to make sure we are doing everything we can to support them unless they are doing something indefensible.


In this state, banks count for a lot, and therefore your job it to make their problems go away. You don’t seem to understand that you are supposed to act like a proper bought and paid for public official. Your role is to support big companies. You are to go after them only when the things they do make the public so angry that you have to help us make a credible show that the elites care about the little people.

If you think that is an unfair rendition of Wylde’s remark, consider the damage the major banks have done. They have failed so badly at being competent lenders and record keepers that when judges in New York demand that bank attorneys certify that they have taken reasonable steps to verify documents submitted to the courts, foreclosures grind to a near halt. Two separate investigations, one by Fortune, the other by the New York Post, ascertained that an overwhelming majority of foreclosures took place when the banks failed to demonstrate that they had the right to do so. Banks have foreclosed illegally on servicemen, and have also foreclosed on people who didn’t have mortgages. Their is ample evidence that they have systematically violated their own contracts, the agreements that govern mortgage securitizations, and have on a widespread basis charged impermissible fees to borrowers. And when these junk and pyramiding fees precipitate foreclosures, the servicers have effectively ripped off investors too. They have tooth and nail fought every effort that would help borrowers if it in any way impinged on their profits, even though their very survival is the result of taxpayer munificence. Finally, they’ve made a mess of property records in this country.

But apparently none of this, in the eyes of Ms. Wylde, rises to the level of being worth remedying, much the less “indefensible”. Given the ample of evidence of malfeasance, we must reach one of two conclusions. One is that she has no idea what is going on and therefore can be ignored as being not competent to opine. The other is that no amount of economic harm to individuals rates as being worth pursuing in her eyes. It appears that the only thing that might rise to the level of being “indefensible” is damage to life and limb, so all white collar crimes are exempt. This is a classic totalitarian, “might makes right,” argument.

And mind you, Wylde allegedly represents “the public” on the New York Fed’s board. With friends like this, who needs enemies?

Felix Salmon wrote today of a global crisis of institutional legitimacy, and although his tour started with Libya, it focused mainly on Europe and the US. If you want to know why the governed are withdrawing their consent in advanced economies, you need look no further than toadies like Donovan and Wylde who defend institutionalized profiteering and seek to undermine the few like Schneiderman who’ve managed, despite the odds, to get in a position where they might be able to do something to reverse it.

If you are a New York resident, I hope you’ll call (800 771-7755 or 212 416-8000) or e-mail Schneiderman and thank him for standing up to the corruption of the banks and their enablers in the Administration. I think he will appreciate the show of support.

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  1. sleeper

    Well, really this sort of “advise” from the DOJ is quite common – Does anyone remember the pressure that the attorneys in the Oxycodon (sp) trial in southwest Virginia got from the feds under the Bush admin ?

    Look this is simple – politicians are always running for reelection which takes lots of money so the pols sell tax breaks, special tax breaks, and run interference for large contributors. And some pols at the national level will buy chairmanships then using their position to protect their sponsors for favorable legislation.

    This is pay to play.

    The real problem is that sooner or later this house of cards will fall and the pols want to keep the house standing till after the next election.

  2. Middle Seaman

    Obama works for Wall Street, corruption isn’t the term I would use for Obama. He don’t work for the people, they work for the enemy.

    The pressure applied to NY AG is pathetic, brutal and eventually stupid. It brings in tons of campaign contributions, but it decreases voter support. Obama’s fight for reelection becomes harder by the day and his stature as president closes in on microscopic.

    1. sgt_doom

      Holy Cow!!! You can’t mean the dood who, when senator, voted in favor of tort reform, war spending, usurious rates for credit card charges (being he was in the pocket of the Bond Market Association), a national ID card, the extension of the full USA PATRIOT Act, and a whole bunch of other neocon stuff.

  3. PaulArt

    Yves, Thanks for this hard hitting piece. Its time the Obama Junta is called out for what it is. It appears that the man has now passed beyond the pale into megalomania and the self-denial it fosters. It would be curious to know whether he thinks people still regard him the way they did in 2008. Knowing his supreme and misplaced hubris and self-confidence one would conclude that yes the fellow still thinks he is the cats whiskers.

    1. Dave of Maryland

      You can see what people think of Obama from his recent bus tour. This man once filled the biggest stadiums in the country. Now he travels by bus and all the camera angles are up close and personal to hide the fact that barely 20 people turned up. There’s probably 3x as many security lurking off camera.

      1. dejavuagain

        All political rally video broadcast video should include a 360 degree shot so that the context is apparent.

        If the event is indoors, then the video should include the entrance to the facility to show any protestors.

        Most political rallies are nothing more than staged photo shoots.

  4. vlade

    “survival is the result of taxpayer munificence”
    I’d dispute that, as it’s about the same as describing money taken in armed robbery as “a generous gift from a willing giver”.

    I’d bet that if the taxpayers had a say, they would say “screw the banks – we’re not going to give them any money” as a starting position.

    But, as usual, the starting position of this adminisrtation is “did we bend over far enough or would you prefer a bit more?”

    At it’s most generous it could be called criminal incompetence and negligence.

    Obama needs to be primaried, and hopefully beaten (hope springs eternal). Yes we CAN (screw you up).

    1. Herb

      Read the document on this site, that shows the exact same scheme that is being laid down today, that has showed up back in ths 1980’s. Go here and read the silent weapons article, you will see why we have to do our own fighting, and get rid of the corrupt system before it’s too late.

  5. Michael Olenick

    Great article. Interesting that the primary AG holding out happens to be the one both geographically closest to the banks, and also surrounded by people most likely to understand what they’ve done.

    Obama is trying to behave like Clinton but he’s stupid enough to overlook one small point: Clinton was elected by Democrats who wanted to move the party to the center; Obama was elected by Democrats who wanted to move the party to the left. Remember those “Hope” and “Change” placards? Remember Hilary, a viable more centrist candidate? I do, and Obama’s lost my vote.

    Obama should have said, during those Democratic primaries, “I, Barack Obama, support George Bush’s economic policies, and I’ll leave them in place. I support Bush’s people, and I’ll leave them in place. I support trickle-down economics, to the point where I believe we should tax the great many and give the money to the few at the top.” His campaign wouldn’t have lasted to the next day, though that’s apparently exactly what he believed and what he wanted.

    1. Middle Seaman

      There are huge differences between Obama and Clinton. Clinton started with a storm: he tried some form of universal plan, allow gay to be what they are and raise taxes on higher earners. The health care plan and the opening to gays were squarely opposed by Republicans and many Democrats. Democrats did support the tax increase.

      Obama came out of the gates talking. His version of health care is weak and the way he fought for it is scared and inactive. On gay rights (gays have no and ask for no special rights, they want and deserve equality with everybody else) Obama waited and finally reacted to urges by Admiral Mullen. What tax raising?

      Clinton intelligence is way above average; Obama is hardly average.

      There is tons more.

    2. Eric Titus

      For anyone who was paying attention during the campaign/debates, Hillary was the more liberal candidate, although she was also the “establishment” candidate. The far left was generally more ambivalent about Obama, but many supported him because they believed he could deliver on “change” in a way Clinton wouldn’t. Obama went into office talking a liberal agenda (obviously, being a democrat), but also far more oriented towards bipartisanship and compromise. Hillary was seen as liberal, but too jaded and tied to “special interests” (the very interests, like unions and minorities, that have come under attack in the conservative resurgence).

      I think that under better circumstances Obama would have been a good president, though not a great one. But his particular style doesn’t seem to have worked in the face of intense Republican opposition. While Obama’s current actions are not progressive, they make sense from a certain perspectives. Many critics of the banks, such as Yves, seem to think that prosecuting the banks, despite potential short-term negatives, will cause changes in the banking industry that will make it an effective agent of future growth. Obama’s pragmatic advisors seem to be telling him that getting the banks to change their ways is something that should wait for better economic times. Punishing banks right now could lead to bankruptcies and/or layoffs if things are as bad as Yves makes it sound in other posts.
      I think I share the first perspective, but I wonder if the economy would be able to offset layoffs in the financial sector in other areas. And while I don’t have much sympathy for all bankers, I’m guessing that a large number of the people the banks have been laying off have been tellers and other branch employees, who might have trouble finding another stable, middle-class job in this economy.

      1. PQS

        You are correct to assume that it will be mostly lower level employees at the banks that would/will suffer at the hands of any negative impacts to the TBTF institutions….and if I thought that the Obama Admin strategy involved even the slightest concern for these people, I would agree that it might be a viable and laudable strategy on their part to “look forward, not backward…” However, actions have spoken far louder than words over the past couple of years.

      2. Neo-Realist

        Joe Stiglitz recently said that we have to throw the bankers in jail or the economy won’t get better. If we continue to allow them to loot, we’ll never see those better economic times that the advisors supposedly preach and we’ll remain in the dark ages of recession indefinitely.

        Lower level employees have still lost their jobs with the administration’s kid gloves approach toward the banks, so lets give ourselves a shot at a rising tide that lifts all boats rather than all yachts.

    3. JD

      My (Stony Creek, NY) message to my AG today:

      Reading the New York Times article today I fear that you may have been threatened by the larger financial institutions who have by their actions have recently brought the People and Nation so low.

      These are exceptional times tending somewhat toward actual Civil War. I believe that should you choose not to stand for the true Law of the Land at this moment that it will have a terrible effect on the Moral of The People.

      Please keep The People informed how dangerous threat really is by appearing on Albany Public Radio for instance and going into detail. Announce the actual threats in a public way identifying the source of those threats and asking for our support.

      Don’t let them change the subject, like in the Spitzer sting…I don’t give a damn about your sexual life. I do care if you are standing to protect The People of our beloved State.

      As for myself, having defeated BofA this Spring in a mere Small Claims action in Glens Falls, I would stand by your side no fear in a show of support should you send out a call for mass support. We do not want the financial/corporate/secret forces do to you what they did to Governor Spitzer. Are you facing such a threat?

    4. Maximilien


      Obama’s lost your vote, mine, and probably those of the 15 million new voters who were also duped by him.

      The man has done incalculable harm to the nation, betraying the trust of those millions of first-time participants in democracy. He turned their hope into despair, and instilled in them the cynical conviction that all public officials lie all the time.

      Decades of damage to a large part of the American people, many of them presumably young, accomplished in a few short years: That will be Obama’s sad legacy.

  6. Walt

    One correction (in a typically fabulous article:
    Re: Team Obama bears all the hallmarks of being so close to banks and big corporations that it has lost all contact with and understanding of mainstream America.

    This assumes he ever had such a connection to mainstream America. Never did. Never could. He is now, and always has been, a sock puppet of those who sponsor him. Just listening to his lectures – poorly delivered at that (no crowd, no charisma)- illuminates that. He is not a traitor to his cause ’cause he never had any – cause that is – beyond his own advancement into the privileged country-club class.
    Golf, anyone?

  7. rd

    If you live in NYS, send Schneiderman an e-mail supporting his position. IMO, he is one of the few elected public officials at the state and federal level actually doing his job. Their office contact info is here:

    It would not surprise me if we see a “Draft Hilary” movement over the next year before the Democratic concvention. A major market crash may even force Obama to do an LBJ and announce that he will be a really good 1 term president (although I think he likes power too much to do that).

    The average person does not understand the nuances of what is going on with the financial sector. The media talking heads are just screaming at each other and not providing actual information with the exception of the Comedy Channel (very sad state of affairs).

    However, if this summer is a precursor of a nasty Fall, expect to see a lot more attention paid by people in the street as they watch their house prices and retirement savings plunge once again while hearing about high Wall Street compensation and near record gas prices.

  8. Norman

    As one of the little people, I say it’s time to bring forth the pitch forks, the tar & feathers, and start cleaning up this mess using the old fashioned methods.

  9. appointmetotheboard

    I do find the basis of this story extraordinary. Not only is US law enforcement (or not enforcement) for sale, but the guilty can even haggle over the price. Maybe a good chunk of the deficit could be wiped out if the principle is extended so that drug lords could hand over $1m per murder…

    1. beowulf

      That sounds little too much like big government price fixing. Either a cap and trade homicide credit market or some kind of Vickrey auction mechanism would most efficiently distribute death and destruction (I suppose William Vickrey, bless his Quaker soul, would have frowned on the idea).

  10. Tell It Like it IS

    “It is high time to describe the Obama Administration by its proper name: corrupt.”

    1. alex

      I was going to write that the headline “Corrupt Obama Administration …” is redundant. It is, but you’re right that repetition is necessary to get a point across.

      I do wish that the birthers, those yelling “socialist”, and assorted other whack jobs would take a long walk off a short pier. That way we could get to the essential problem with the Obama administration, which transcends the (often fake) left/right split, which is simply that it’s CORRUPT.

      Not that that’s unique to Obama, but the presidency is the most visible office and hence the best place to start.

  11. Eugene Villarreal

    In similar way, the Special Master in New Jersey’s Order to Show Cause has approved the bank’s prima facie showing and is allowing them to go forward in the foreclosures for the sake of EXPEDIENCY.Because there are soooooooooooo many foreclosures, he states “it is not practical to hear testimony on each and every case”. Between the banks and judges, who in the hell does he think created this crisis. Screw DUE PROCESS and the RULE of LAW.

    1. JD

      An offensive Quite Title Suit is the only way to expose the fact that all of these banks have been paid one or more times for all these properties. Investors were not protected by receiving Note/Mortgage paper. Banks have no protection against a forensic audit into their claims.

      A cross filed Quite Title Suit can raise these issues far far better than just a defensive response to a foreclosure action. Most judges don’t want to give a “free house” to anybody. But, especially not to the BANKS! This leaves the lender as the last one standing…savvy?

  12. Deontos

    Has anybody here seen my ex-friend Obama?
    Well he’s made a lot speeches

    And now he’s crashed a lot of HOPE.

    Has anybody here seen Barack?
    Last I heard he’d joined Bush, Palin
    And all the other laughingstock.

  13. Matthew G. Saroff

    Barack Obama’s career was largely the product of the support of Penny “Queen of Subprime Loans” Pritzker. (Superior Bank)

    It is no surprise that he is in the pocket of the banksters, after all, they created him.

    1. GuyFawkes

      We need to start demanding this of our Democratic leadership in the local districts!!! We demand a new Dem in office!

      OR, I will vote third party.

      1. JD

        The “Democratic Party” LEADERS are also corrupt. The Democratic voter is not corrupt, neither are many elected Democratic office holders.

        As a Democratic Voter, I will not vote for a Republican. But, I will not walk across the street to vote for Obama…just like I DID NOT VOTE AGAIN for Carter or Clinton but supported 3rd party candidates.

        I would support Elizabeth Warren. I would reluctantly support Hillary Clinton.

  14. doom

    It’s huge that you point out the totalitarian logic along with the corruption. “President Fuck You” has a two-pronged approach: take away the state’s protective capacity, and bolster the state’s repressive capacity. Repression lets the state scrimp on protection – the regime can pull the rug out from under the populace, compromising their economic security without civil disturbances. Reduced protective capacity frees up resources to prop up dead banks. So corruption requires withdrawal of economic rights, which requires repression. This is a self-reinforcing pathology of Soviet scope, and not amenable to democratic control.

    1. JasonRines

      Doom, I came to the same conclusion in 2008. The production went East and in 2013-2014 you all will see the new Chinese currency peg. Make no mistake, this is a FEATURE not a bug. That is why inside Sr. political leadership like Bush and Obama finish the looting job.

      Work at the local level where you can have fun. And oh yeah, if the TPTB wish us to become Russian, act like it! You don’t know what I mean yet but no worries, you will. In this era, the barbarian wins. Being nice and civil gets you building widgits for free for ‘favored’ interests. Best of luck and dont be so grieved the Vikings won round one. Round two is redribution.

  15. attempter

    It’s really something how the Hillary cultists are just as demented as the Obama cultists.

    Never mind that Hillary Ribbentrop willingly joined the Obama administration and has willingly followed the Obama line every step of the way so slavishly that anyone who reasons from the evidence might actually suspect that the Obama and Hillary lines are identical, and that they’re the same pro-bankster, pro-corporatist, war criminal, Monsanto-fellating filth.

    None of that matters. No amount of such evidence will ever convince the Ribbentrop cultists that Hillary=Obama, rather than
    “Obama bad, but we need better elites, and Hillary would be that better elite!”

    At least with the Warren cult there’s some pseudo-evidence that she cares about the people and democracy. But Ribbentrop’s hatred for these is confirmed by her every action.

    1. Danb

      I attended one of Warren’s “should I run” meetings last week. She’s sincere; but in my view there are two outcomes if she runs for senate: 1) failure to make any genuine difference, 2) co-optation by the Dems. For all her courage and brilliance she still believes this system can be reformed. Finally, she does not seem to grasp the significance of reaching the limits to growth. Half in jest, she’d have more of an impact raising consciousness and building a movement running with Ron Paul, her for Pres, him for VP.

  16. TC

    What’s really sad is that, the nation’s elite are so oblivious to the fact theirs is the only wealth remaining to be grabbed, that the bottomless pit by whose digging they disproportionately benefited might be further filled with even greater sums of good money thrown after bad, and this notwithstanding the entire exercise being all for naught, as the banking system’s implosion is guaranteed by a physical economy operating far below breakeven.

    I will be sure to contact Schneiderman’s office. Thanks for the info. Great job of reporting and language chosen to describe what’s going on. I am inspired to quote FDR’s 1944 State of the Union Address:

    “One of the great American industrialists of our day—a man who has rendered yeoman service to his country in this crisis-recently emphasized the grave dangers of “rightist reaction” in this Nation. All clear-thinking businessmen share his concern. Indeed, if such reaction should develop—if history were to repeat itself and we were to return to the so-called “normalcy” of the 1920’s—then it is certain that even though we shall have conquered our enemies on the battlefields abroad, we shall have yielded to the spirit of Fascism here at home. “

    1. JD

      Truman was that Fascist. Truman’s administration began the reversal of FDR’s work. The Democratic LEADERSHIP, the Party Leadership, was corrupted by Truman. Therein is the explanation for Carter, Clinton & Obama.

      However, Clinton’s gutsy and true 14th Amendment remarks have caused a reappraisal in mind. So, I might look at a Hillary Clinton run. Remember, she supported a foreclosure moratorium in January, ’09 and Wall Street turned on her over it. She had to continue her campaign with her own money. Believe it!

  17. petridish

    How long will it be until some hooker skeleton emerges from Schneiderman’s closet?

    Obama should be primaried by Dennis Kucinich. We need to start a campaign to “WRITE IN DENNIS KUCINICH” so everyone knows how to spell his name.

    1. kravitz

      kucinich is not a viable alternative. needs to be closer to Warren or even Schneiderman in appearance, style and FIGHT.

      1. JD

        Yes. Why not draft the New York AG? That would also give him the necessary cover for his fight! Yes. Wonderful idea.

        Warren for VP. New York AG for Pres.

  18. Sticks

    I understand that the DOD is considering drone strikes against recalcitrant state officials. Such deaths will be deeply and publicly mourned by Mr. Obama, who will ascribe them to Iranian terrorists.
    Never in history have so few owed so much to so many.

    1. Externality

      Don’t joke about that. The Obama Administration has the Pentagon working on “economic warfare” — taking action against countries and non-state actors that engage in actions such as dumping Treasury bonds or trading oil in Euros.

      “Pentagon prepares for economic warfare”


      Economic war? It sounds preposterous. Except it gets less so with every dollar of debt run up by the US.

      Behind the scenes, the military are worried about the market. For who owns much of this debt? China, the US’s most powerful rival and threat. And that makes America vulnerable to a new kind of bloodless but ruthless war.


      What the economic war game showed [DoD consultant and advisory board member] Professor Bracken was that military and economic decision-making has to be more unified. Banks and bonds are now weapons, just as much as bombs. “That makes the military nervous, as they had always been in charge of operations. That’s why they know they need to understand this,” Professor Bracken says.

      Once military and economic policy become “more unified,” every administration and major Wall Street executive will be tempted to make problematic investors and whistle-blowers disappear.

      1. Sticks

        You’re right…I meant CIA. Humor (even of the darkest kind) is the last redoubt of the democracy-minded in this failed country. I fully expect the state to apply even more –far more– coercion against us as things go deeper south around here. Good luck.

  19. CS

    Obama’s probably bargaining with Wall Street for Dodd-Frank. When the cost of the bargain outweighs the benefit to the people – rule of law and systemic credibility in this case of mortgage management – the result is political entropy.

  20. HDV

    Hmmm, I see an opportunity here (steepling my fingers a la Mr. Burns)… Let the pesky AGs have their way and let the settlement fail. Wait and see if one of our banking members crumbles in the mean time and then blame the AGs for obstructing economic recovery. See, they should have taken our settlement! Lay the blame of the resultant economic fallout on the AGs. Meanwhile, we’ll gobble up the pieces of our fallen brother. We eat our own, you know, at least after we rehire the execs on our own teams.

  21. kravitz

    Meanwhile, also in NY…

    A lawsuit against one of the larger foreclosure law firms notes the ‘affadavit’ requirement is being used to charge fees to homeowners.

    Suit: Baum firm botched foreclosures

    “The suit alleges that Baum and other law firms are initiating foreclosures against thousands of New York City homeowners but deliberately delaying two other documents: an affidavit attesting to the accuracy of the foreclosure summons and complaint, and a request to begin a settlement conference that could lead to a loan modification.”

    “Late fees and charges continue piling up, and borrowers can’t connect with free housing-counseling and legal services.”

  22. F. Graeber

    “Revealingly, one of the Administration’s allies said: “Wall Street is our Main Street.” And the worst is that this remark may not be a cynical Ministry of Truth pronouncement. ”

    This is totally deceptive. When Wylde said, “Wall Street is our Main Street,” the “our” in the sentence referred to New York City, not the US, let alone the Obama administration. And since Wall Street is, in fact, one of the biggest providers of jobs and economic activity in NYC, Wylde’s statement was actually accurate, rather than being some illustration of the perfidy of the Obama administration (which she, of course, isn’t even a part of.) You should make a correction.

      1. F. Graeber

        “Work for Wylde, do you?”

        No, I don’t work for Wylde. But I do live in New York, and she’s right — Wall Street is our biggest and most important industry. That’s just factually true. Yves is making it sound as if Wylde was making some broad statement about the Obama administration’s attitude toward the banks, when she was doing nothing of the sort. Are you okay with lies as long as they’re ideologically acceptable to you?

        1. attempter

          So you’re saying New York serves no purpose and is worthless, and we should just wall it in? OK.

          Meanwhile Wylde clearly reflects Obama’s attitude toward the banks, as his actions have unanimously proven. As you’d be saying yourself if you weren’t here to tell ideological lies.

        2. beowulf

          Al Capone was take down by federal revenue agents instead of the Chicago Police Department for similar reasons.

        3. Jake

          F. Graeber

          It makes no difference which “Main Street” Wylde was referring to in her comment. The point is she was attempting to influence a judicial process she has no business doing. She was also clearly reflecting an Obama point of view that BAC’s welfare is more important than the rule of law and the overall welfare of the population of the US, the real “Main Street”. Also, I find it comical that you refer to Wall Street as an “industry”.

        4. Yves Smith Post author

          She said this to Schneiderman in public, she basically picked a fight with him after a funeral, which is incredibly crass. And you defend this bitch?

          Schneiderman represents the state, not just New York city.

          And Wylde conflates, as you do, mortgage players with “Wall Street”. Are Bank of America or Wells Fargo, two of the four biggest mortgage players, major NYC employers? How about Ally, the number 5 servicer? Or US Bank, one of the four biggest trustees? How about Deustche Bank? Its trustee ops are also not in NYC.

          Get your facts straight before trying to make an argument. You are relying on cheap soundbites in lieu of a real case. That seems to be all the industry touts can use to defend its corrupt practices, it appears.

    1. JD

      Yes, Sanders shouldn’t be left out. He is about the only one other than Kucinich that is doing his job in a huge way. But then, Levin and Boxer and others can come into the equation. Pretty soon, we might all see LOTS of better people than the spineless Obama. Why shouldn’t Democratic voters choose to “do better”?

  23. Bravo

    May the rise of Ron Paul begin…the independents are bailing from the Obama bankster ship fast and this is perhaps the final straw. With his anti-Fed fervor and sensible call to dramatically reduce expenditures for the military/industrial complex, Ron Paul seems to have the cross over appeal to become the little people’s candidate, whether or not main stream media and the establishment like it or not. Bush/Obama, main stream Republicans/Democrats…..hard to distinguish between the two when it comes to taking care of their bankster overlords and driving the country into a Japan style lost decade.

    1. Tom g

      Bravo indeed!

      When will all the think tank thumb suckers on this site realize they’re complaining about the same stuff that the libertarian nut jobs are complaining about on the other sites?

      It all comes down to a drastic need for a decentralization of power. Ron Paul is the man with the plan in this regard.

      1. Kevin de Bruxelles

        Yes there is a serious contradiction on the Left. On the one hand they seem to recognize that an oligarchy of wealth has captured the Federal Government. On the other hand, they tend to blindly call for even more power and spending on the Federal level. For example look at the position of most Lefties on the faux budget crisis; they were practically begging the oligarchs to loot more money from their pockets (since after all, that bill will come due someday and it will not be the rich reaching across the table to grab it).

        Due to the current captured status of the federal government, the two political persuasions are basically schizophrenic. The Left is supposed to represent the Many and yet they still want to further centralize power into the hands of the oligarchs. The Right is for the Few but their rhetoric is anti-federal government, in other words on paper they want to take power from the wealthy. In a healthy democracy these two positions could make sense since the federal government represents the One in classic political theory and traditionally the One is the enemy of the Few. But today no one could seriously argue against the notion that the One in America is totally captured by the Few.

        This schizophrenic situation serves the wealthy well since the Left no longer thinks but mostly just reacts against with the Right are saying.

        There are two logical solutions to this oligarchic situation for the Left. The first is tyranny. This may shock some people but as De Ste. Croix points out in “The Class Struggle in the Ancient Greek World” the Many quite often used tyranny against the Few in order to break down the existing rule of the oligarchs. The move was always dangerous as while the tyrant may profess love of the people, his true love was only for power. He quotes Gustave Glotz regarding the ancient Greeks:

        The people regarded tyranny only as an expedient. They used it as a battering-ram with which to demolish the citadel of the oligarchs, and when their end had been achieved they hastily abandoned the weapon which wounded their hands.

        America has always been ruled by oligarchs, it was expressly designed that way from the beginning. Due to an abundance of resources and a vibrant capitalism, many people enjoyed a very high standard of living despite this fact. But from time to time things went wrong and the Few got too greedy. Most often though, the people didn’t win anything back directly, they victories were achieved by indirect threats. I would state for example that the reforms of FDR were motivated by fear of tyranny (either Communism or Fascism) rising among the Many. Just enough was given to the Many to manage this risk. This continued during the Cold War, in fact some of the worst injustices of American society became an embarrassment during the struggle for supremacy of the Third World against the USSR. The treat of tyranny died with the fall of the Berlin Wall and so the oligarchs have been freer to wage class warfare since then against the Many.

        Most on the Left (for understandable reasons I must admit) reject tyranny. This is unfortunate in my opinion as it can be a very effective, but highly dangerous tool against the Few. For example the fear of charismatic leaders urging hordes of angry people to go rampaging through the wealthy areas bankers live in could in the end result in actual reforms.

        The other approach is decentralization. Since the One on the federal level is so very obviously captured by oligarchs, the next best bet is shift they battle and try then to create non-captured One’s on the state level. The oligarchs will certainly fight (and quite often win) on this level of government as well but they will have fifty governors and legislatures to capture instead of just one President and Congress. But a realistic threat of losing power at the Federal level could be enough to convince the oligarchs to reign in the class war as they did during the FDR days.

        But in order for the mostly highly educated Left to accept this strategy they would have swallow some Tea with their pride and admit that many less educated working and middle class people were right all along. So for the time being I expect the Left to continue their schizophrenic policy of railing against the oligarchs but supporting each and every policy demand the wealthy make as long as the Tea Party is against it.

        1. attempter

          continue their schizophrenic policy of railing against the oligarchs but supporting each and every policy demand the wealthy make

          You mean like the oddity of those who rail against the oligarchs but still go along with the “left-right” scam?

          1. Whatever validity the left-right spectrum ever had has been completely obliterated by the corporatist phenomenon and by the growing realization that those who work can run the economy themselves far better than economic elites, and the people can rule themselves far better than political elites.

          Therefore the true spectrum is:

          Democracy vs. elitism.

          Civil society vs. neoliberalism.

          Citizen vs. criminal.

          Humanity vs. corporations.

          2. Just out of curiosity, by what historical standard do you find any of what you describe in your comment to be “Left”? You’re talking about liberals, who have always been economically right-of-center according to the old spectrum, and today are simply corporatist.

          1. Doug Terpstra

            Thanks for this. I would also ask Kevin “what Left?” Apart from a handful of ineffective legislators, there is no Left remaining in Washington at all, only a ghastly post-modern façade — false, artless, impractical, and unsafe, something like the Potemkin town in Blazing Saddles, but uglier. KDB also wrote this head-scratcher:

            The Right is for the Few but their rhetoric is anti-federal government, in other words on paper they want to take power from the wealthy.

        2. Maximilien

          Nice comment Kevin. It neatly explains why the Wall Street/New York Times and its Mad Inflationist (nom-de-plume Paul Krugman) pander to the Left (Hey, we support gay marriage!) while supporting the Fed’s relentless debasement of the dollar that only enriches the rich while it crushes the poor.

      2. JD

        Right here, on this point, you get off track.

        You do not have, I do not have, any other protection from big money EXCEPT the federal government. Weaken the federal government and you weaken the only power big enough to defeat big money.

        This is the contradiction of Ron Paul’s, not the Left.

        1. Tom g

          I hear a lot of talk railing against “big money” on this site and I don’t quite understand it unless it is qualified. There are two different types of big money.

          1. Money that was made because someone came up with a product/service in a market environment that was groundbreaking and useful for people.

          2. Money that was made not due to any market need but because it was centrally allocated somewhere without on the ground knowledge or scraped away by some process of usury invented to do nothing else but that.

          The latter big money comes about because of centralized control, it’s as simple as that. Most people in this country are not playing with their own money. That is extremely dangerous and has led us to having almost no degree of fundamentals in any of our capital markets.

          I would argue that Ron Paul’s platform is the strongest on monetary policy (even though he’s wrong about gold) and that he would certainly exert some pressure to get some fundamentals back into our financial system.

    2. Cindy Elmwood

      Yep. I consider myself slightly left of center, but if it came down to a 3-way November race between Obama, Romney and Ron Paul, I’d vote for Ron Paul no contest. I would somewhat prefer someone like Elizabeth Warren to primay Obama, though.

  24. craazyman

    I called Mr. Schneiderman’s office this morning.

    Got some young woman on the line and said I wanted to express my appreciation for Mr. Schneiderman’s efforts to uncover the facts behind the corrupt and probably criminal activities of the banks and financial institutions. I said don’t let up.

    It wasn’t a long conversation. She said they were tallying up callers’ points of view and thanked me for the call.

    Thank you Yves for posting this with the phone number. It makes it easy.

  25. Deloss

    The number to call for AG Schneiderman’s office is (212) 416-8050, as I know, because I just called it. Thank you, Yves.

  26. timotheus

    If you want to call the AG’s office, the voicemail is tedious, but press 1 (English), then 3 (other issues) then 5 (other issues) to get through to a person quickly. They are enjoying all the supportive calls.

    1. craazyman

      I called the 212 number in Yves post up top and got a live person on the third ring. I don’t think I got a recording at all.

  27. Michael Kent

    I just e-mailed AG Schneiderman’s office to give my support, as well as my AG here in Illinois, Lisa Madigan. I implored her to ditch the 50 state Tom Miller whitewash, and join up with the REAL investigation led by Schneiderman. Everyone should call or e-mail their state’s AG and tell them to get on board. Also, inform others who are not aware of this massive fraud being perpetuated on us. The MSM is, of course, silent on this issue. The more individuals that are made aware, the better the chance that “We the People” can prevent this cover up.

    1. Maximilien

      Yeah, the MSM’s silence on issues like these is just incredible! Could it be a conspiracy or sump’n? Nah!!

  28. PQS

    “…unless they are doing something indefensible”

    Yves, your takedown of this is brilliantly spot-on, but I cannot resist the urge to pile on this tool:

    What, pray tell, ma’am, is more indefensible that the big banks could do that they haven’t done already? Would it be OK for them to break the world economy again?

    Good God.

    And to all the Ron Paul cheerleaders: except for the racism and the sexism, yeah, he’s perfect.

  29. indio007

    Some unresolved issues….

    Sadly, there is another fraud against the taxpayer that is not being lumped into the already innumerable frauds. Namely,FHA insurance. FHA default claims are covered by FOIA. Some lawyer could probably make a small fortune using the False Claims Act and FOIA.

    I would also like to know where the IRS has gone in all this mess.

    Next issue. We are nearly 3 years in now. Has anyone considered they are just playing for the statute of limitations clock to run? Are we seeing the four corners offense of finance?

    Last but not least . Like I said nearly 3 years in, banks with armies of employees, still haven’t found enough evidence of foreclose consistently. Lost paper work is BS. Maybe there were no true loans. Maybe these originators where just kiting checks till the could secure funds from the sale of the alleged loan on the secondary market. The last thing they want is for all these notes to instantaneously become non-negotiable. Where is the evidence of any actual funds transfer. Courts operate on the best evidence rule. even if these note’s where destroyed they could show the transaction via bank statements, canceled checks, wire transmittals etc… Why can’t they find this evidence? It’s very hard to believe that it exists at all.

    It takes the simple process of deduction and asking the simple question of ‘Why is this the best the Banks can do for “evidence?”‘ to see here is something a lot deeper here.

    1. beowulf

      “Has anyone considered they are just playing for the statute of limitations clock to run? Are we seeing the four corners offense of finance?”

      For conspiracy against the United States, the SoL clock doesn’t start ticking until the last action related to the conspiracy occurs. That clock won’t start clicking for a while.

  30. sleeper

    Really folks !!!!

    This “rule of law” stuff.

    Please forget it. It is only invoked as a red herring. There is no rule of law, no equal justice for all.

    While it sounds good it is nonexistant sort of like a unicorn but without the dreamy aspect.

    And pitchforks please, let’s petition the government for some heavy weapons so we can really make a difference.

  31. Linus Huber

    Great information. It shows that once you leave the rule of law, there is no turning back. The question remains, how long it will take for the general public to recognize the game being played.

  32. Peter Pan

    I just tried to email my sipport to the NYAG’s office. Unfortunately, in the midst of writing my comment an error screen appeared: “509 Bandwidth Limit Exceeded”.

    I don’t know if that was me (wordy commentary) or if the server is being overloaded by supporters.

    1. Peter Pan

      On the other hand, the server could be under attack by the right wing corporate facist whores at the White House.

  33. Conscience of a conservative

    Kathryn Wylde represents the public at the Fed…

    Of course Tim Geithner would say it’s not practical to fully go after BAC since the tax payer would then be responsible for bailing them out again…

  34. Conscience of a conservative

    It’s clear that our Economic policy is being directed by Robert Rubin and what’s left of his accolytes. How can we expect these guys to fix a problem, when they’d first have to admit they caused the problem. Obama is worse than Bush not only because he is he following the same policy , but because he said he represented change.

  35. jOHN

    Harold Ford was just heard uttering the same phrase “WallSt is main St” tripe on a weekend talk show

  36. kravitz

    Oct 20, 2010
    HUD’s Donovan Says No `Systemic Issue’ in Foreclosures: Video

    “Donovan says federal regulators haven’t found evidence of “systemic issues” in legal documents at the center of the turmoil over foreclosure processing.”


    October 17, 2010
    How We Can Really Help Families

    “No one should lose their home as a result of a bank mistake. No one. That is why the Obama Administration has a comprehensive review of the situation underway and will respond with the full force of the law where problems are found. “

    1. Conscience of a conservative

      How can one find evidence of systemic abuse, if one doesn’t look for it in the first place.

    2. Bum Rush

      Families can help themselves. Everyone stop paying your mortgage. Then we don’t have to listen to some elitist snip at an Incorporated Gubbmint agency, a lame progressive site like Huff n’ Blow Post and everyone who needs a job and a house gets it. War loving liberals can go be civil some where else. ‘Murica Baby!

  37. NOTaREALmerican

    Re: It is high time to describe the Obama Administration by its proper name: corrupt.

    It’s only as corrupt as the society that elected it.

    It’s high time to describe American Society by its proper name: corrupt.

    That the magic of Democracy. The people get exactly what they deserve.

    1. JD

      Would you please shut up? THE LAST people to blame is The People. Good God shut up and dig deeper before you open your mouth again.

      The People are just like you, stupid. But, they are not criminals!

    2. nick

      i actually think you have a point. anybody listening, check out buddy roehmer, a 2012 candidate for president. he accepts no donations over one hundred dollars from citizens or corporations. we all know these big name republicans and democrats are corrupt from some angle, yet we continue to elect them. buddy roehmer wont get elected, because we don’t know him. hence, if we really wanted to, we could elect better politicians, we just choose not to.

  38. barrisj

    AG Holder, early in Obama’s term, was clearly on the wrong side of Obama and his political advisors’ concept of “justice”, and had to do some heavy-duty backpedaling to get back on the team. Since getting his bum paddled, Holder has never ventured off-piste, and dutifully carries out the orders of his masters. Even during the Bush years, DOJ employees would bail rather than carry out morally reprehensible or plainy illegal diktats from Cheney/Bush operatives. So, why is Holder still drawing a paycheck? Is he not familiar with “resignation for reasons of conscience”?
    Corrupt doesn’t even begin to describe this crowd, who really are threatening to surpass the gold-standard set by the Cheney gang.

      1. barrisj

        However, when asked at a roundtable with Spanish-language print media on Monday whether Holder should quit, Obama flatly said, “No.”

        “He was kind of uncomfortable with the question, I’d say,” one of the journalists on hand, Antonieta Cadiz of La Opinion, said. (Read her story here, or the Google Translation into English here.)

        A one-word answer can hardly be described as “forceful”…anyway better a useful idiot as AG rather than someone who thinks independently. BTW, “Fast&Furious” was an Obama Administration operation, and if anyone is to be hung out to “slowly, slowly twist in the wind”, it would be senior ATF types.

  39. F. Graeber

    “Meanwhile Wylde clearly reflects Obama’s attitude toward the banks, as his actions have unanimously proven.”

    “It makes no difference which “Main Street” Wylde was referring to in her comment.”

    Okay, I get it. People’s actual words don’t matter — if they’re ideologically off-base it’s okay to misrepresent them. Politics trumps truth. Glad you’ve made that clear.

    1. Yves Smith Post author

      The mortgage business is NOT “Main Street” to New York City. I don’t have any tolerance for people who offer bank PR and then get righteous about it too.

      Wylde is intellectually dishonest and politically tone deaf. And she has no business being a Class C director of the Fed, I guarantee her appointment in in violation of the statutory provisions of the Federal Reserve Act regarding Class C directors.

    2. JTFaraday

      So, if something indefensible is going down on Main Street in your local neighborhood, then that’s okay then? Or is it okay because they’re not doing it to you?

  40. Andrea Guice

    Wrote my Congresswoman about mortgage fraud. Was on CNN news about the ‘bank fraud’; Got Attorneys to represent the ‘fraud; Court gets ‘mortgage fraud complaint; Banks deny & ‘lie about ‘their fraudulent paperwork; Judge ‘vacates my case'(no explanation); Have ‘Smoking gun evidence’ to ‘blow hair back’, but Attorneys aren’t telling the Court; my case is in ‘hidden hands’; yeah! “Corrupt”! Andrea Guice

  41. JOE MALO


  42. LAS

    Thank you, Yves, for alerting us to opportunities to write to public officials in ways that may influence them positively, we hope. I just did write to Eric Schneiderman to let he and his team know he had my support.

  43. dugsdale

    Here’s the direct e-mail address for Donovan:

    I’m sure he’d appreciate hearing from everyone here how much we all appreciate his hard work delivering all those pizzas for Jaime Dimon.

    Will be calling Schneiderman’s office shortly. I LOVE that everyone’s writing and calling–giving thanks to people supporting the rule of law, and giving the full “Brent Bozell” to those who don’t.

    1. leapfrog

      Thank you, dugsdale, for the info. Not only did I send a letter of support to Schneiderman, but I sent this one to toadie Donovan:

      I recently read, with great anger, that you are pushing for a white-washed, slap-on-the-wrist settlement for the banksters who have committed massive fraud. You are harrassing one of the few AGs to stand up for the common people, Mr. Schneiderman. Yet, my taxpayer dollars pay for YOUR salary. You need to resign. You do not represent the interests of everyday Americans. Instead, you are captured and corrupt and pander to the big bankster’s interests. You are a disgrace to your position. Please resign SOON. Shame on you, you corrupt toadie.

  44. Hugh

    It is interesting that Yves mentions the totalitarian aspect of this. In the tradition of DownSouth, I am reminded of something Hannah Arendt wrote in her Origins of Totalitarianism:

    The trouble with totalitarian regimes is not that they play power politics in an especially ruthless way, but that behind their politics is hidden an entirely new and unprecedented concept of power, just as behind their Realpolitik lies an entirely new and unprecedented concept of reality. Supreme disregard for immediate consequences rather than ruthlessness; rootlessness and neglect of national interests rather than nationalism; contempt for utilitarian motives rather than unconsidered pursuit of self-interest; “idealism,” i.e., their unwavering faith in an ideological fictitious world, rather than lust for power—these have all introduced into international politics a new and more disturbing factor than mere aggressiveness would have been able to do.

    You see when we look at today’s totalitarian kleptocrats, one of the main questions that comes up is why they act in ways that appear ultimately to be self-destructive, even suicidal. I have tried in the past to answer this by pointing out that the looters themselves are not self-destructive. We might expect that individual kleptocrats seeking to maximize their looting might produce, collectively, an analogue to the paradox of thrift, that in the aggregate their behavior is self-destructive. But even this is not true. As we saw in 2008-2009, kleptocrats looted to a meltdown and then successively looted its aftermath. Their actions can only be termed self-destructive if they spark a revolution, which so far they have not.

    Well that’s it for the economic side of kleptocracy, but what about the political side and the politicians who abet and promote it. Are they suicidal? This question is applicable to all our national politicians, Democrats and Republicans alike, but in particular to Obama. Is he engaging in political suicide to further the kleptocratic project of his class? He would certainly appear to be. His main, indeed sole campaign strategy seems to be to portray himself as slightly less crazy than whoever the Republican nominee will be. Of course, the choice between two extreme corporatists is really, for the electorate, no choice at all. It is what Hannah Arendt calls the “pose of normality” which totalitarianism presents to the non-totalitarian world.

    I suppose the deeper question is why are our kleptocratic elites so extreme? Americans have endured a certain level of looting by their elites from the birth of the nation. In some periods, this has been more marked than others, but we have never seen such systemic and unrelenting looting as we suffer from now. And this brings me around to the totalitarian mindset and the Hannah Arendt citation above. Supreme disregard for immediate consequences: TARP, the bailouts, the debt ceiling limit debate. Rootlessness and neglect of national interests: the pointless, endless wars. Contempt for utilitarian motives: tax cuts for the rich, budget cuts for everyone else. The unwavering faith in an ideological fictitious world: a grand description of our political process and the politicians who populate it.

    To paraphrase Arendt, totalitarianism only assumes the attributes of normality in order to lull the non-totalitarian public, that is to placate the rubes. But they don’t mean it, hence the “discrepancy between reassuring words and the reality of rule, by consciously developing a method of always doing the opposite of what they say.” Obama has made this his hallmark. The true goal is to wage war against normality, that is the real world. And that is why an ideological fiction is absolutely necessary to totalitarianism. The real world inherently poses a challenge to the totalitarian one. The only way totalitarianism can be truly ascendant is if the real world is replaced by the fictitious one. It is why Obama, or the Democrats, or the Republicans continually choose the fictitious world of their partisan kabuki pseudo-fights over the real one where we live.

    Sounds crazy, right? Except that virtually everything that we have been taught and think we know about the last 35 years of our political and economic history, the period of the current kleptocracy’s construction, is false. Yes, some of us are beginning to question that history, but ask yourselves how did that false history get entrenched as it has and whose interests does it serve? Why do our media and most of academia still repeat and affirm it?

    The answer is that kleptocracy stripped down to its bones is totalitarian in its nature. It just wears better suits than its spiritual ancestors.

    1. Doug Terpstra

      An illuminating diagnosis of totalitarian delusional madness that complements Yves’ superb post very well. It helps to understand the disease.

    2. reslez

      [W]hen we look at today’s totalitarian kleptocrats, one of the main questions that comes up is why they act in ways that appear ultimately to be self-destructive, even suicidal. … Their actions can only be termed self-destructive if they spark a revolution, which so far they have not.

      The looters aren’t self-destructive, as you point out. They’re other-destructive, nation-destructive, ultimately human civilization-destructive. Their behavior appears reckless only to those of us who suffer the consequences. They profit every step of the way. If a wealthy aristocrat spurs his carriage into the road thereby slaughtering a peasant, and the only consequence is the aristocrat collects a bounty on the peasant’s life, it should be no mystery why we have a large number of wealthy aristocrats running down pedestrians.

      There are no personal consequences to elite mayhem other than personal enrichment. So maybe the endgame is disruption of the biosphere, but those consequences won’t be endured by today’s scientifically illiterate looter elite. Why should they care?

  45. Stupendous Man - Defender of Liberty, Foe of Tyranny

    This is business as usual for the white house, and not just this administration.

    It became clear banks were literally fabricating false evidence for use in court proceedings, state and federal, in 2007. One case was in PA BK court, In Re Hill. This was the case in which Countrywide was caught “recreating” letters (a nice euphemism).

    When the transcript of the hearing got to Gretchen Morgenson (NYT) and Katherine Porter (U of Iowa Law) and received some coverage CW stock began a downward slide from which it never recovered. Within about 6 months CW had declared BK itself and was acquired by BoA for pennies on the dollar.

    The hearing in the In Re Hill case occurred in late 2007. Mukasey was our AG at the time. If he didn’t know about the fabricated false evidence used in Federal BK courts he needed to be fired. If he did know, and did nothing, he needed to be fired. If he knew and didn’t tell President Bush he needed to be fired. If he told Bush and neither of them did anything he needed to be fired and Bush needed to be impeached.

    Today we have another case, in Louisiana BK court, In Re Wilson. Again we have banks, their agents and attorneys telling lies and fabricating false evidence in order to literally steal homes of millions of citizens.

    We are under a different administration, however the same statements above apply equally today.

    If Holder doesn’t know about the fabricated false evidence used in Federal BK courts he needs to be fired. If he does know, and is doing nothing, he needs to be fired. If he does know and isn’t telling President Obama he needs to be fired. If he has told Obama and neither of them are doing anything he needs to be fired and Obama needs to be impeached.

    All hail Schneiderman, and the several other state AGs that are insisting on the rule of law being followed. I know the AG in my state (whose initials are JACK CONWAY) isn’t worth a bucket of warm spit when it comes to the rule of law, or actually working on behalf of the citizens of the Commonwealth of Kentucky.

  46. Conscience of a conservative

    Could it be that since the Obama administration acted as a marriage suiter (so to speak) between BAC & Countrywide/Merrill they feel some obigation to protect it at all costs? I have to believe there are conversations going on behind closed doors discussing what assurances were given and by whom.

    1. Yves Smith Post author

      No, BAC bought Countrywide, eagerly in a two-step deal. We criticized it at the time. No one twisted their arm. Ken Lewis was peeing in his pants to consummate the acquisition and deliberately overpaid (he did the same with Merrill, which was also not brokered by the officialdom).

      1. tawal

        Correct me if I am wrong, but I recall Hanky pushing Merrill down Ken Lewis’ throat with promises of interest free, no repayment term loans from Timmay at NYFED of $25B to BAC w/ an additional $20B to BAC for ML.

        1. Yves Smith Post author


          John Thain called Ken Lewis when Lehman was going down. There was a thought that BofA might at least buy the US broker dealer out of Lehman, which would have limited the carnage. Lewis eagerly did the deal with Merrill instead. That was announced mid-Sept. No subsidy, indeed, Lewis made an offer above Merrill’s market price, markedly above.

          The subsidy came later, in January 2009, when Lewis found out Merrill was in worse shape than he realized and threatened to walk from the deal.

          1. skippy

            was the subsidy an “baked in affair”[???] proffered or not[??????].

            Skippy…ppl seem to wish to attach themselves to the teat thingy.

  47. TrueBeliever


    This mythical being made of only pure concentrated light will place his bootheel on the neck of the Military-Industrial Complex and demand that our wars be ended!

    Why? Because he said so, dummy!


    1. JTFaraday

      Well, that must make him the last holdout then. No one else is saying it anymore.

      More interesting is that he’s been getting Republican votes while saying it.

      1. JD

        Yes, he has been getting some “Republican” votes. And, he has been getting some Democratic votes also. And, some Independent votes.

        Ummm…just what a candidate needs to win the Presidency.

        1. JTFaraday

          Ummm…I didn’t knock the sainted RON PAUL.

          (Are the capitalizers out this year? I got a big kick out of them the last time around).

  48. Sam

    The banks, bankers, hedge fund managers, traders, and bank personnel are corrupt. Ask any person in the Jefferson County, Alabama, mess.

    By association, any US President who has to interface with the corrupt banks and bankers takes on the taint. The banks didn’t want regulation. They’re now getting regulated with an R.

    Surgical strike: load all private bank cartel families pictures into drones. Starting at 12:01 am Saturday morning, start taking them out, them and their spawn. Take out the first 1 million people in the private bank cartel and in New York, New Jersey, and By Monday morning, crap will be running down both sides of bankers’s legs and they’ll be esh8tless to show up at work. Once and for all.

    The other way is to reinstate Glass-Steagall and aregulate the bank industry. Assign watchdogs to look over their shoulders every week. Fine the h3ll out of the banks for past transgressions, and use the fines to extend unemployment benefits for Americans out of work through no fault of their own.

  49. WakeUpAmerica!

    Sung to the tune of Neil Diamond’s “America”…………..

    The Bank of America

    Received billions in TARP
    We take your homes
    You sleep in your cars

    We’ll get off scot-free
    Lawyers huddle close
    Then pay off the AG’s

    Own the Prez and now your place
    We’re Bank of America
    Stealing homes at record pace
    We’re Bank of America

    Homes, dump them back on Fannie Mae
    We robo-sign and that’s okay
    In the eyes of the courts
    In the eyes of the courts

    Loans, what we hold is toxic waste
    But mark-to-model is our case
    Makes shareholders feel warm
    Makes shareholders feel warm

    Accounting from the netherworld
    We’re Bank of America
    Our real books would make you hurl
    We’re Bank of America

    Gotta scheme not fair or square
    We’re Bank of America
    Turn your dreams into nightmares
    We’re Bank of America

    We’re Bank of America!
    We’re Bank of America!
    We’re Bank of America!
    We’re Bank of America!
    You pay! But can’t stay!

    My country disses me
    Where’s justice and liberty?
    To freedom we do cling
    A pitchfork I will bring!

  50. cadam

    Thought I’d send you all a snap shot of one of your alternative viewers, this time a conservative Mormon from Utah. I assure you there’s a TON of conservative and libertarian viewers who visit this website. Sometimes we have to plug our noses and tip toe around some of the articles and comments on this website. But such articles as this prove that Yves is one of the smartest, most courageous eCON-bloggers on the net today. She and Denninger at Market Ticker (possibly the most palatable non-leftist for leftists) are my favorites.

    I know a lot of people are discouraged nowadays about the right/left thing, but not all is lost. Some of the divide is semantic and cultural: urban/rural, black/white, sophisticated/secular vs. conservative-thinking, etc.

    I find I have a lot of agreement with the Left when I hear what they DON’T like about the Right; as also I am usually in agreement when I hear vice versa. I also find more agreement with the Left when I hear what their end-goals are…no more poverty, energy efficiency, etc.; and likewise vice versa…freedom, etc.

    My view is the congressional debate is largely irrelevant. If some people want more gay rights or less govt regulation, or more or less taxes, etc…why do we have to fight about it? Could we consider the libertarian argument that states or a group of states could get together and do things as they see fit, and fund it by themselves? If people don’t like it they can go live where they want.

    Then we could let the Fed focus on macro issues it’s best fit to deal with: fighting our enemies, ensuring our weights and standards, and preserving our civil rights. I think signing off on a 2,000 page document of rules of rules of rules is just too much.

    I also agree this admin is corrupt, but not even as a conservative do I think it’s all bad. I think he did a hell of a job getting Bin Ladin knocked off; and I like his Libya strategy much better than the Iraq method.

    I agree with leftists that getting rid of poverty is society’s major goals (along with civil rights and freedom). I just think some of the things we consider most critical should be solved from the ground up (from the individual, family, neighborhood, town, state, on up…grassroots style), and not top-down.

    I don’t think this has to devolve into 1960s race riots. As a conservative I’ve had many black friends; I speak Spanish with many Mexican friends; I love the Enlightenment, critical thinking, science; etc.

    As they say…good neighbors make good fences. One of my best trips was to Manhattan several years ago. People were so nice to us. I knew they thought different from me, but it didn’t bother me at all.

    I really enjoy this website. Yves has even given me pause for thinking about deficit spending (something Krugman could never appeal me about)…as long as corrupt banks are fixed or removed.

    I also find argument pointless, finally, because I think that whatever’s going to happen is going to happen…soon. Whether we like it or not, that reset button will soon be pushed to zero, irregardless of political party. We ought to prepare for the new reality.

    1. reslez

      If some people want more gay rights or less govt regulation, or more or less taxes, etc…why do we have to fight about it? Could we consider the libertarian argument that states or a group of states could get together and do things as they see fit, and fund it by themselves? If people don’t like it they can go live where they want.

      Last time we let the South make decisions about civil rights we got a hundred years of Jim Crow. And conservative rage over its ending has stalked the Democrats ever since.

      I’m all for letting states fund things “by themselves”. And by that I mean let’s go our separate ways. Conservative states are doing their best to recreate hell in America, ranking lowest in the nation on every measure of health and education. They also rake in federal money far beyond what they put in thanks to the imperial military dole and their policy of impoverishing their own people. If this is America as a continental empire I think we’re better off on our own. But we can still be friends.

      Then we could let the Fed focus on macro issues it’s best fit to deal with: fighting our enemies, ensuring our weights and standards, and preserving our civil rights.

      Wait, you just said you wanted the states to “do things as they see fit” on civil rights, now you want the Federal Government to interfere?

      I think he did a hell of a job getting Bin Ladin knocked off; and I like his Libya strategy much better than the Iraq method.

      I see you approve Obama’s explicit policy of lawless assassination. Hey, what nation should we invade next?

      1. cadam

        reslez says:
        August 22, 2011 at 10:43 pm

        “Last time we let the South make decisions about civil rights we got a hundred years of Jim Crow. And conservative rage over its ending has stalked the Democrats ever since.”

        Maybe I didn’t make myself clear…I support enforcing our First Amendment rights, and all our clearly spelled out constitutional rights…by force, by all means. Unfortunately the founding fathers didn’t explain how to enforce these rights, so it took 200 years of slavery and segregation to get it right.

        Joseph Smith, our first prophet and the leader of a people most persecuted (probably) in this nation’s history after blacks and Native Americans (the Mormons were wholly ejected from Missouri in 1839), lamented that there were no means in the Constitution to enforce these rights. It took M.L. King, the greatest defender of the Constitution since Lincoln, and others to make that happen.

        “I’m all for letting states fund things “by themselves”. And by that I mean let’s go our separate ways. Conservative states are doing their best to recreate hell in America, ranking lowest in the nation on every measure of health and education.”

        By all means, I’m agreed about letting each of us fund our own. I think that left and right use different metrics to measure our own performance. Some will look at Utah and say, Pathetic, your per pupil spending for education is worst of nation; others will say, Yeah, but they ranked 20th in SAT scores (2009), while the highest per pupil spending is Vermont, which ranked 30th, also in 2009 ( No need to argue about it though…if we really were libertarian about it, we’d let each state or group of states be their own test laboratory…for their own most cherished values. Let each state learn from each other and do as they please.

        “They [conservative states] also rake in federal money far beyond what they put in thanks to the imperial military dole and their policy of impoverishing their own people. If this is America as a continental empire I think we’re better off on our own. But we can still be friends.”

        Also agreed, thrice ways…we can still be friends. For conservative states that aren’t pulling their own weight, let them cowboy up and take care of their own. But the laws are such that we have to pay, even if we don’t want such help. It’s a vicious cycle; it makes our leaders look like hypocrites. So let’s get untangled, I say.

        “I see you approve Obama’s explicit policy of lawless assassination. Hey, what nation should we invade next?”

        Well, can’t we agree to disagree? And yes, maybe you’re right about Obama’s lawlessness…it’s not (But yes…hopefully no new nation.) No need to squabble about these things; as citizens we can quietly take care of business at the ballot box. Don’t you think that if we argued only about the Constitution’s narrowly prescribed rights, mainly civil rights and national defense, that our disagreements would be fewer and far between? When the one side or the other has overreached, it creates problems that in the end overwhelm their individual intention. For example, I believe I recall Ruth Ginsburg lamenting the Roe vs. Wade decision, saying it would have been best to leave it up the people’s vote. The same goes for Bush’s overreach and attitude about the war on terror. I also think the Butler case of 1936, which expanded Federal spending and the original intent of the Commerce Clause, has increasingly, and will continue to be a thorn in the side of liberals…who wanted more funds for this or that cause…but now the right wing has gone toe to toe with them in its denial…thus making it impossible for each side to either fund or defund various projects (who are now joined inflexibly at the hip). Let each state or group of states decide their own.

        We’re like Quakers, Amish, prostitutes, libertines and dealers trying to get along in an inner city crack house. We’re angry like former spouses or rejected lovers…but the Constitution should be a (social) contract…not ‘till death do us part.’

    2. ScottA

      Wow. You seem like a well-meaning kind of guy but just… wow.

      I really do appreciate the fact that as a self-identified conservative you still come to this site, and I do appreciate your attempts at sounding reasonable, and I expect you believe you’re a fairly bright person, and you probably actually even are in many ways.

      But still… just… wow. You are a major f*cking idiot without even realizing it.

      Here’s just one glaring passage in your writing which shows what kind of an idiot you are: in the midst of your supposedly intelligent and reasonable post, you write the following two things:

      If some people want more gay rights or less govt regulation, or more or less taxes, etc…why do we have to fight about it? Could we consider the libertarian argument that states or a group of states could get together and do things as they see fit, and fund it by themselves? If people don’t like it they can go live where they want.

      followed immediately by:

      Then we could let the Fed focus on macro issues it’s best fit to deal with: fighting our enemies, ensuring our weights and standards, and preserving our civil rights.

      Go back and re-read those two paragraphs of yours until it sinks in that you are a total f*cking idiot, man.

      PS – I’m glad people were nice to you when you went to Manhattan, even though, as you put it, they “thought different” from you. Maybe someday, if you try hard enough, you will realize that that were probably mostly simply smarter than you – and were being kind to you in your simplemindedness.

      Good luck on your continuing quest to be enlightened. It’s going to be a long and difficult process for you, as you have probably been brainwashed in your youth by a bunch of people wearing magical underwear.

      1. skippy

        The linin fetish started with candles and readings from the NEW book…eh.

        Skippy…mythology’s evolution…sigh.

        1. cadam

          “ScottA says:
          August 23, 2011 at 12:57 am
          Wow. You seem like a well-meaning kind of guy but just… wow.
          I really do appreciate the fact that as a self-identified conservative you still come to this site, and I do appreciate your attempts at sounding reasonable, and I expect you believe you’re a fairly bright person, and you probably actually even are in many ways.
          But still… just… wow. You are a major f*cking idiot without even realizing it.”
          “skippy says:
          August 23, 2011 at 1:03 am
          The linin fetish started with candles and readings from the NEW book…eh.
          Skippy…mythology’s evolution…sigh.”

          Thanks for calling me a well-meaning guy Scott, but being called a ‘fucking idiot’ may not help win converts to your cause. If we weren’t so joined to the hip (as a nation) politically, you could just march to your state’s ballot box and say President (or referendum or initiative) ‘Fuck You’ in your own private way. Shouting at your apparently well meant but misguided neighbors suggests to me you don’t really want to win, but only to express your frustration; but there are others of your cause who are more tactful.
          We may have our differences about what ‘civil rights’ mean. Believe me, though, when I say we really do have more in common than you think. We (myself and our Church) support contractual rights for adult, consenting gays…and have supported an equal rights law in Salt Lake City. And though the Church speaks little about polygamists on a legal basis (except to follow the law), no doubt our views on them will conform equally with our views on gays when their freedom to choose as consenting adults inevitably arrives.
          You may be referencing Proposition 8 in California a few years ago, when our Church came out in strong opposition against gay marriage (but voted for most strongly by black religious women in the state). It was a nasty confrontation…probably neither side articulated our positions to each other well enough. Our view then was, and remains essentially, libertarian. Again, we support a legal, private contractual relationship between people however they please. We just didn’t want our children indoctrinated in gay issues at school; and we were also concerned about our civil rights being removed under the ruse of others’ ‘civil rights’. You may have heard about the Catholic charity in Boston who terminated its adoption agency…because of Massachusetts’ recent gay legislation, as it would have been forced to service orphan children to gay parents. (I think the same legislation was passed recently in Illinois.) As I understand (since Proposition 8 was recently overturned in court), children in California are now required to be taught gay issues in public school. You might say, Well, just take your kid out of school. My response is, Do we have to pay for it? Would you say the same thing to a black family whose child was called ‘nigger’ in school? One man’s insult is another’s turn of phrase; so also it is with what one thinks is useful information and another to be harmful. I believe liberals will eventually regret having forced this issue in court; they were better off to wait for public opinion to change; better yet, to let each family do as they see fit to refuse or accept (without having to pay for it if refused).
          I realize this won’t cause you to change your mind about us being “fucking idiots.” You might try to win your cause with a little more kindness; better yet, to support more freedom. I feel your pain, though, when you think people just don’t ‘get it’; I feel the same about you. We can work through this though.

          Skippy, I realize you are probably frustrated with religions and religious people generally, and with Mormons specifically. I realize you have a point of view with its own proof system and internal logic. I know you think believers believe in a ‘sky daddy’. I won’t argue with you about my own proof system and internal logic. I know it can’t be proven with physical, tangible proofs and trials; but neither can yours. We have to go on faith in either direction eventually. I’ve yet to hear of any proof there’s no God; nor yet of the opposite…there are evidences for both…though they are mutually exclusive beliefs and only one of them can be true.
          Enough of that. To bring the matter closer to home (for me), instead of being frustrated with our “NEW book” (and maybe you too Scott), why don’t you both go see The Book of Mormon musical, or download it to your iPod? It’s been called the funniest musical in years; one magazine called it the best musical, period, in many years. The creators Parker and Stone called it their “atheist’s love letter to religion.” These guys (in South Park, etc.) to me are the Marx Brothers of our time, the funniest humorists around. Their show has drawn up the biggest ticket prices and customer lines of all time for a Broadway show. Crowds to the show have reportedly stood up in amazed, crying laughter, and melted to tears at show’s end. For a show supposedly so mocking of Mormons, it’s been called “sweet.” Shortly after the show won awards in the Tony Awards, it began to sell in record levels at iTunes.
          It’s been a win/win for us too. We’re not so dumb as some may think. The humor duo proved to everyone that Mormons wouldn’t take offense (generally), but take it in stride. Shortly after the show started, we put up an “I am a Mormon” ad in Time’s Square. All the numerous hotels in the area have bombarded the Mormon mission in New York City with requests for actual Books of Mormon. Some people watching the show have been young men preparing to go on a real mission (not the caricature presented on stage)…and thought it made them even more motivated than ever to go. The musical will be a gift to the Church wherever it goes; thousands will join the Church because of it (in a roundabout way); funnier yet, because of Parker’s and Stone’s long association with us (as outsiders), they probably already knew this would happen if they made a great show. It really seems to mock everyone: not just Mormons, but Africans, politically correct culture, even those viewing the show…and the creators of the musical themselves.
          Can’t atheists and religious people find some common ground…such as through humor in a show like this?

          Sorry for all those thinking I’ve hijacked this thread…really enjoyed all comments. It’s been part of my argument for a more libertarian view…which in my opinion will limit the ability of elitists (of either stripe) to control us through corruptions of money and power. If and when the system collapses, it could be us (non-elitists) that really get the last laugh.

          1. skippy

            Stop banking for casinos and then we will talk about values.

            Skippy…give it all back, all the stolen loot, BTW anti depressants are a poor 2’nd choice too self medication but it does give an air of respectability…cough Utah is number one consumer of it.

          2. skippy

            See “The Book of Mormon musical”, nope my family friends the Bashas (Az, back in the day (+ other highly respectable sorts…in faith) informed me quite well.

            Skippy…that little coded hand book to prospective entrants is a crypto fail, my step fathers need to secure his financial future was his ultimate undoing. Like most…what is panhandled to the uniformed…is not the same as the history…eh.

      2. shekissesfrogs

        You could make your points without calling someone a “total f*cking idiot, man.” telling him that “that that were probably mostly simply smarter than you – and were being kind to you in your simplemindedness.’ and then make a nasty jab at his religion.

        This method of engaging someone while talking down to them is one reason the right cant stand liberals/left/progressives. It doesn’t help one bit to bridge the right-left divide, a polarization that is killing our country. The enemies are class based.

        He’s not suffering from epistemic closure and is trying to understand things from multiple perspectives. He makes a comment in an attempt to reach out and exchange ideas and gets attacked.

        You get the worlds biggest dick award from me, jerk.

        Do you like it when an Obama cultist tells you that Obama is the only adult in the room, or that wanting economic justice is like asking for a pony?

        Good luck on your continuing quest to be decent person.. It’s going to be a long and difficult process for you as you seem to be in a deep delusion about your own self importance and superior intellect.

        sorry yves, I read your site a lot- love it.

        1. cadam

          Thanks for defending those of my stripe (politically and religiously)…but there’s got to be a better way to communicate with each other than with words like dicks, jerks and fucking idiots.

  51. kravitz

    So… in tomorrow’s NYT… ES gets yet another win. Which suggests Obama and Company need to go back to supporting the rule of law.

    Judge Allows Intervention in BofA $8.5 Billion Pact

    “A New York state judge granted the request of dozens of investors including pension funds, insurers and several Federal Home Loan Banks to intervene in Bank of America Corp’s proposed $8.5 billion settlement with investors who lost money on mortgage-backed securities.”

  52. ARH

    Thank you Yves and all commenters. I’ve sent a letter of support to AG Schneiderman. The brazenness with which the DOJ, Donovan and Wylde are pressuring Schneiderman and the few others who are taking their jobs as public servants and lawyers seriously is somewhat breathtaking. Is it worrisome that at such high levels there is no concern anymore for even the the pretense of fairness?

    Delighted to land on this site (via link from Simon Johnson’s). Just wish it were as easy to find as a G. Morgenson article! Maybe on day . . .


  53. Liah

    Thanks for the tragic but necessary article, Yves. What a dreadful mess… I have come to the conclusion that, very shortly, cleaning it up will literally be impossible.

    As Denninger says (whether one otherwise agrees with him or not): Stop the Looting and Start Prosecuting!

    And, we are running out of time…

  54. free_houses_for_all

    These pinhead state AGs have only political gain on their minds and are too seduced to realize that anything close to $20b to ‘settle’ dubious accusations of so-called rampant fraud is a massive windfall beyond the wildest imaginations of wannabe lawyers all across the land. instead of harassing some of our nation’s largest employers they should man-up and chase down crack dealers, murderers, rapists, and others. the AGs from NY (recall elliott client 7 spitzer that fraudulently impaired marsh) and the newest flunkie eric shcinerham.

    1. leapfrog

      Dubious accusations? What makes you think that the banksters are more entitled to a “free house” than the homebuyers?

  55. Herman Sniffles

    It’s hard to avoid the conclusion that the Obamanation is a Machiavellian sociopath, a self-sanctified narcissist, and a scoundrel. We’ll know if he’s a guttersnipe pretty soon.

  56. nick

    in the late 60s early 70s a attorney graduate from the chicago school of economics named henry mann began teaching monetarist economics classes to federal judges, district and circuit. hundreds of judges attended these classes, more than fifty attending extra advanced courses in the art of making rulings in favor of free markets i.e. deregulation in the banking sector. eventually these rulings and the penetration of policy by monetarist views created the monster that is the radically pro banks and big business government we have today. good piece yves.

  57. Chris of Stumptown

    I’ve begun to believe that it is important to reform the governance of the Federal Reserve banks. Each bank has nine directors, six of which are appointed by the private sector banks in region the Fed serves. Three of the six that get appointed by the private sector ostensibly represent the public, but it is clear to see this is a farce. The public deserves a say in the Federal Reserve banks, but they don’t have it.

    Fun trivia question: who chaired the NY Fed and led the search which landed Geithner the Presidency? Answer: Peter Peterson, co-founder of Blackstone and advocate of cutting Social Security. Birds of a feather, eh?

  58. undrgrndgirl

    seems to me that just about everyone in dee cee should be rounded up and tried for treason…for failure to uphold their oath of office.

    possible exceptions (and i’m not even sure they are exceptions) include, dennis kucinich, marcy kaptor (if she’s even still in dee cee), bernie sanders and ron paul (but not his bagger son)…

    1. shekissesfrogs

      I don’t understand the fixation some people have with Marcy Kaptur. She’s a blue dog and doesn’t have a great voting record, especially if you consider that she gives away clotures votes when it really counts.

  59. mannfm11

    I didn’t read this article, but I read the other one. Corrupt isn’t strong enough. I was banned from a venue early in his term after seeing the actions of the people backing him on CNBC and other news stations. These people were NAZI’s. I’m not even sure that is strong enough word, but it fits. The NAZI’s were a socialist business cartel. The big business of Germany supported the Reich from behind the scenes. The corporate state. I am glad to see what I have read between the lines to be a liberal call this outfit corrupt. They should be sent over to Libya to hide with Kadafi (50 ways to spell and none right).

    1. Eric

      I loved that line too! I guess I’m a bit late in responding but I did like this article. I do have one question though. What happens if there is a meaningful settlement?

      Imagine if there was a 700 billion dollar settlement which more realistically should be closer to 1.2 trillion. If all of this money is extracted then we’ll just have to bail them out again. All of these banks are still to big to fail so all of this money would just be funneled back in, executives will still get their bonuses, homeowners will still be underwater, and bankers will continue to cry about being picked on while their teardrops stain their Armani suits.

  60. Rajish Kumar

    India has great potential to rise up from where it currently is. While this development is shaping up, what would give it a boost to a brighter future is originality, says Rajni. Click here to find out more

  61. senorita doroda

    I think that you people are judging obama too harshly.which is right.but I think for Obama to have made it as a black man .He had to offer whate any other candindate was not offering and in doing this he probably pledged more than he could fulfill.I still think that Obama has what it takes to improve the declining economic state of America.However Obama is not alone in my country we are in a similar state all promises and no action and we are tired for more on this click on

  62. senorita doroda

    I think that you people are judging Obama too harshly.which is right.but I think for Obama to have made it as a black man .He had to offer what any other candidates was not offering and in doing this he probably pledged more than he could fulfill.I still think that Obama has what it takes to improve the declining economic state of America.However Obama is not alone in my country we are in a similar state all promises and no action and we are tired for more on this click on

  63. Kim Weinberg

    Who can name which of the current presidential candidates’ campaigns are being funded by the BIG (corrupt) banks who oppose stronger banking regulations? I think we should keep a close eye on that if we really want seriously GOOD CHANGE in this country of ours!

Comments are closed.