Matt Stoller: Nevada Attorney General Catherine Cortez Masto Cracks Open the Financial Crisis

By Matt Stoller, the former Senior Policy Advisor to Rep. Alan Grayson and a fellow at the Roosevelt Institute. You can reach him at stoller (at) or follow him on Twitter at @matthewstoller.

Learn the name Catherine Cortez Masto, because she just took a big leap in front of every public servant in the country in terms of restoring faith in government. As Nevada AG, she actually indicted someone for blowing up our housing system. Specifically, she handed down 606 counts of felony or gross misdemeanor indictments on robo-signing against two employees of big bank subcontractor Lender Processing Services.

It’s pretty clear from the indictment that these are mid-level employees, one level up supervisors of fraud rather than top CEOs. And yet, even if this were as far as it goes, it would still be a big deal. These would be the only charges served involving the housing crisis and its link with the structurally corrupt securitization chain so far. By itself, these indictments signify that the fraudulent foreclosure game is over for the big mortgage servicers in Nevada, which is the center of the foreclosure epidemic. It says the rule of law matters, in at least one corner of the country. But you don’t throw 606 counts against someone if all you’re going for is jail time for that person; this is about starting at the bottom, and flipping people. It could be the takedown of the mortgage servicer mafia, and then back to the origination.

The Nevada AG office has said they will follow the trail as far as it goes.

The AG’s office has not made allegations against banks themselves, he said. “We simply don’t know if the major banks were aware of what these individuals were doing,” according to Kelleher.

If banks sanctioned the alleged robo-signers’ activities, Kelleher said, they could be the subject of future actions. “Our charge is to prosecute criminal activity by whomever may be committing it,” he said. “There’s no provision under the law for an industry to collectively decide to circumvent Nevada statutes.”

Masto has been by far the most aggressive AG on the civil side, suing Bank of America for multiple violations of a consent order on mortgage servicing, and even making the dreaded nuclear chain of title claim on foreclosures. It’s no surprise she’s taking the lead on criminal matters. Given that her office basically has no native resources or sector expertise in mortgage backed securities, it does make me wonder just what every other AG in the country and DOJ official is doing now that she’s proved bringing charges for fraud is not in fact impossible.

At this point, Masto has gone further than any other official in terms of restoring some sort of social contract. And that’s saying something. Leadership can come from anywhere, especially when the corruption seems to be everywhere. And with California AG Kamala Harris putting immense pressure on Fannie/Freddie on foreclosures, it suggests the tide is turning on this issue somewhat.

Our essential economic problem is that our economy allocates resources through a mediating system of banks that are broken and/or corrupt. If you look at a chart of the recession, and then the recovery, you’ll notice that business investment perked up, but residential investment did not. The Fed lowered rates, bought Treasury bonds, and bought mortgage backed securities to lower rates for homeowners. But it’s not really working, because the monetary channel is corrupt. This indictment gets to that problem, it alleges tens of thousands of forged documents (or as a friend told me sarcastically, an afternoon’s worth of work for LPS). These documents represent foreclosures, economic loss, and clouded title. The indictments handed down, and the ones to come, show that corrupting our property laws and the basis of our economy is a crime.

First President Bush, and then President Obama, tried to reconstruct an economic system based on a corrupted transmission mechanism from the Fed to the real economy. This was the financial crisis, it’s why abstract derivatives based on subprime mortgages knocked trillions of productive output off of the economy. Corruption is really inefficient.

Let’s bring this back to Attorney General Eric Holder, and President Obama. Right now, the narrative of the Obama administration is being written, just in case he’s a one-term President. Factions want to put pen to paper and make sure they escape blame by showing they understand how things went wrong.

Ezra Klein has an essay in the New York Review of Books on Ron Suskind’s Confidence Men, which is basically such an assessment. Klein asks an important question – could Obama have done better, with different advisors? That is after all the central premise of Suskind’s book, that Obama was taken in by experienced Wall Street charlatans, namely Geithner and Summers. Klein concludes his review by essentially saying, not really. At the margins, he argues, Obama could have appointed a different Fed Chair perhaps, and filled empty seats on the Fed. But Obama had to deal with a Congress that was unlikely to deliver a bigger stimulus, or any other meaningful policy change.

Klein furthered his critique in the Washington Post with an explanation that the Presidency just, well, isn’t that powerful.

If you believe that the state of the economy drives the electorate’s evaluations of our political leaders — and you should believe that — then you have to grapple with the fact that the president is primarily responsible for economic conditions and needs either Congress or the Federal Reserve to join him in making economic policy.

To some, this reads like a subtler defense of Barack Obama. An attempt not so much to defend his record but to distract from it, to offer an explanation for low approval numbers and high unemployment that doesn’t impinge on the president’s decision making. So perhaps it would help to start by stating my opinion on Obama’s presidency more clearly.

I think, from 2009 to 2010, the Obama administration operated on the frontier of the policy possible. They did about as much, and perhaps a bit more, than they could reasonably have been expected to do. The stimulus, health-care reform, financial regulation, the end of “don’t ask, don’t tell,” the passage of the START treaty, the expansion of the Children’s Health Insurance Program, the imposition of new regulations on tobacco, the stress tests, the SERVE America Act … that’s quite a lot for a two-year period. That’s not to say there weren’t mistakes, of course. Their housing policies were insufficient, and they were absurdly slow with nominations. But I would grade their first two years fairly highly given my estimation of what was achievable.

Mike Konczal has a gentle rebuttal premised on certain fiscal arguments by the Obama administration showing that it wasn’t political constraints preventing more aggressive fiscal actions, but intrinsic belief. And the argument, no doubt, will go on.

But I think it’s important to begin considering criminal justice as a core element of economic policy. I’d like to hear from Suskind, Klein, Krugman, and others just where they think allowing massive systemic fraud fits into the analysis of what went wrong. After all, Eric Holder had ample prosecutorial discretion, so none of the usual arguments about political constraints apply. Allowing the corrupt monetary channel to continue was simply a policy choice. If the under-resourced Nevada Attorney General could make such a different policy choice, then a powerful by comparison White House and Justice Department could make it as well. And this sort of show of power does not operate in a vacuum. Taking on, and taking down, corrupt members of the elite would also have exposed all sorts of fracture lines, and would likely have change the Congressional dynamics that people argue is immutable. Bank executives would have had a strong personal incentive to fix housing problems and excessive debt loads, and politicians react differently when an act is officially deemed a crime.

The demand for justice, for a society to place certain activities outside of the bounds of socially acceptable, is not just about satisfaction of the public for wrongs committed. I get the sense that fraud for most economists is considered something of a side issue, a kind of aesthetic political problem to be ignored in favor of more significant questions of stimulus and regulatory policies. This is a baffling attitude. One of my favorite financial legal bloggers, Carolyn Sissiko, has pointed out that fraud actually can have significant macro-economic impacts by distorting bank balance sheets.

A more significant attempt to look at this problem comes from a paper by Claudio Borio and Piti Disyatat of the Bank of International Settlements. They attempt to fill in some of the gap between how financial systems work in practice, with bankruptcy, lending, and different institutional arrangements, and the macro-economic models that assume no friction and a natural interest rate.

The felony indictments from the Nevada AG’s office are the first sign that the law enforcement community can take financial crimes seriously, that blowing up the economy through financial mismanagement can carry costs. There’s a lot of research to be done on the costs of fraud, and the costs of foreclosures. We don’t know that much about these costs, because there haven’t been investigations and there isn’t a lot of good public data. After all, we mostly just take our property rights system for granted, the notion that clouded titles or a broken $10 trillion mortgage market could inhibit growth simply was not imaginable a few years ago. What is clear is that there is a deep public hunger for justice. And I suspect, that if that hunger had been satiated a few years ago and if Holder had begun handing down indictments, mortgage servicer executives would have begun a serious loan workout program.

And our economy would probably be in much better shape. When you throw your capital into the hands of people who have no incentive to use it wisely, the economy suffers. When you enforce the rule of law, sound business models prevail and ordinary citizens have more confidence in the system and spend and invest accordingly. As an economic policy, justice works.

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    1. Lambert Strether

      The greatest orator of our time becomes President by stomping the opposition on “hope and change,” controls the House and the Senate, and we end up with 10% nominal (20% real) DISemployment as far as the eye can see, a foreclosure crisis that’s never going to end, and not a single bankster (“savvy businessmen!”) prosecuted, and Obama operated “on the frontiers of the possible”?!

      Pull the other one, Ezra; it’s got bells on. A “transformational” President — remember that one? — is supposed to, er, change the frontiers of the possible. Ya know, I’m so old I remember when the NYRB was actually cutting edge, instead of flaccid #FAIL…

          1. required

            i’m of the opinion nothing is necessarily lost by coarseness – a single well put crude word can speak volumes

          2. YankeeFrank

            I think Ezra is gay for Obama. And he is also gay for the necrotic tissue of David Broder. How’s that for coarse Lambert?

            Seriously though, what’s with these milquetoast little weenie Jewish boys like Ezra Klein and Andrew Ross Sorkin who just love sucking up to power? I mean come on, where are the strong Jewish men — ya know, like the characters in a romantic Leon Uris novel, or the IDF, or Murder Inc., who just love to kick some ass and take the money? No bootlickers need apply. As a Jewish male, I need stronger role models than these two! They can screw off, I’m going to say kaddish for Bugsy.

        1. MontanaMaven

          I noticed how bad the NYRB had become and did not renew my subscription. My last issue arrived and I saw that…ugh…it had an article by…ugh…Ezra Klein. I knew ahead of time that this piece would be out to put perfume on a hog. So thank you, Matt, for adding the critique of Klein’s post to your article. Ah, shucks, the president is just “folks” and caint do much. about nuthin. But a great Attorney General can do a lot. But we have in Eric Holder one of the most corrupt and incompetent AGs in American history including John Mitchell. It is too bad that our attorneys did not take to the streets aftr Bush v. Gore like they did in Pakistan after their upper court made a terrible illegal ruling. In fact, the lawyers need to march with the Occupiers in full uniform i.e. nice suits and briefcases. It would make a great statement much like the marching airline pilots. Thanks to Nevada’s Masto. I’ve told my AG that I will not support his bid for Governor until he joins the fight for the rule of law. Also told those calling me running for AG not to bother unless they will fight with Masto.

      1. Ian Ollmann

        Bush II campaigned on compassionate conservatism. Then 9/11 happened and that went out the window. Perhaps the problem is at the muppeteers did not also believe in compassionate conservatism, and it’s demise was pre-ordained from the start. In any case, what the prez wants to do when he campaigns and what he can do when he holds the reins are two different things.

        I think Obama chose poorly about where to spend his capital in the first two years, and has been hamstrings by the freshmen republicans ever since. He is now limp buscuit. If he had spent 2009-10 crusading after finance, and did a large broadband and highway infrastructure project, we would all be better off.

      2. Middle Seaman

        “Klein asks an important question – could Obama have done better, with different advisors?”

        That is a stupid question that totally missed the lessons of politics, our times and Obama’s lack of values. First and foremost, every boss selects the help she wants. If she selected wrongly, it’s her responsibility. Second, Obama selected Geithner because he was from WS, not because he is a great economist (which he isn’t). Third, the president is THE leader who is supposed to force the opposition to follow him. W made the Democrats vote for their own suicide. Obama is a tail and not a head. He also lacks values, intelligence, decency, integrity, initiative and ability to negotiate.

        Obama would run Walmart into the ground.

        1. Carla

          “Obama would run Walmart into the ground.”

          If he would actually do that, it could redeem his presidency.

          Think about it: we could manufacture goods right here in the USA, revive local retailers, bring back local grocery stores, restore millions of acres of Big Box stores and their associated seas of parking lots with native plants and wildlife habitat, save Americans from accumulating mountains of cheap plastic junk…

          Talk about the audacity of hope!

          Yes, this is worthy objective for our President, who finds himself at such a loss to accomplish anything. Bring down one of the most monopolistic, anti-competitive businesses in history.

          Just one catch: I believe Barack and Michelle are already on the take from the Waltons and Walmart corporate.

        2. Gil Gamesh

          Obama was “hired” because he’s a fixer. The Daleys taught him how. So, he’s done his job very well. Indeed, considering that 2008 presented a once in a life-time opportunity for fundamental reform of American “high” finance, Obama’s inaction is nothing less than stunning.

    2. Paul Tioxon

      Dear Abigail,
      What is offensive is the completely unsubstantiated attacks on Obama. I first saw this within days of his election by some hick bible cult on his TV network, claiming Obama was part of the Bilderbergs. Here, Obama’s name is Mudd, no more so than with Yves. But what is really offensive are the 2 bit hatchet man jobs against him, using him as a literary trope of mentonymy. Obama has 2 important faces for political purposes. His primary meaning as the improbable winner of the presidential primary, first against Hillary, then against McCain in the general election, was a fundamental change in American history by virtue of his racial appearance, his bi-racial heritage, his politics that are absolutely to the left of the previous administration and the probable winner in Hillary. The country has moved so far to the right, the administrative capacity of the federal government has been so gutted that almost every comment here attacking Obama as an individual for failed courage, poor strategy, misallocated resources, missed opportunity, total corruption and cooption and outright bought by Wall St. is true of the system he operates in, before he got into the office of the president, or even the US Senate. It would be true of anyone getting into office.

      But that is not the worst of the mindless hatchet comments. To not see any opportunity with any party or any candidate out some idealistic or strategic understanding of history and morality is not good enough. To attack Obama because all options have been exhausted is a lie. They have not been exhausted. Trade unions and The Green Party are the only organized political opposition on the horizon, and the Greens are weak and thinly spread and have a long way to go to even be as strong as the unions. The unions are stronger in the major cities in the NE and West Coast and are not strong enough to protect the interests of the middle class against the organized assault of business.

      If you look at what is supposed to be the gold standard of political attacks against the wealthy and privileged by FDR, you will see, that he was not elected until 3 years after the market crashed. His first 100 days were more devoted to keeping the French Revolution from being re-enacted more so than repairing the economy. People were starving by that point. And the best organizers were not amorphous consensus builders, but the Communist Party, because they were run with an iron fist and were directed from the top down in the most hierarchical manner. The trade unions were no match for their devotion and skill level and experience in organizing, so much so, that they were hired by them after permission was granted from Moscow.

      Social Security took 3 years to pass and sign, and that was after it was pre-digested and formulated by privately funded social scientists with fully paid for blessing of John D Rockefeller himself. (CLASS AND POWER IN THE NEW DEAL BY DOMHOFF AND WEBBER. Many New Deal laws were struck down by the Supreme Court resulting in FDRs 1937 court packing fight. All of the progress made by this gold standard were not accomplished solely or primarily due to street actions, not matter how numbered or violent. The big corportations were stock piling guns and thugs to beat back union organizing attempt during the depression. It was the more moderating influences of conservatives, allied with liberals, labor and even Southern Democrats whose interests were given a free pass, as in no minimum wages for agricultural workers, domestics, little or no relief for tenant farmers and more money poured into agricultural subsidies controlled by larger, white land holders.

      If there is no one with real power that you can work with, you will have nothing to show for all of your brilliant analysis. Understanding is the preliminary to action. All of the knowing sophistication of debunking economics, seeing through the bought out two party system, identification of fascism, kleptocracy, and trojan horse machiavellianism of Obama, will get you nowhere. If you are unwilling to ally yourself with people who have power, you will have nothing. The stress on the structure of capitalism is so great that the opportunity for wholesale political change is there, but not without taken the next step, and next steps after that. Forming organizations. Networking with other organizations. Building alliances with some responsive politicians, trade unions, progressive groups in feminist and environmental and civil rights areas.

      Much of the discussion here on NC seems to oblivious to left wing politics, such as DSOC, The Democratic Socialist Organizing Committee, which worked inside of the Democratic party for years and numbered in the thousands nationally. You can look up DSOC on Wiki and elsewhere. The point is, much of the political dredging that goes on here seems to create more aimlessness that Occupy Wall St is accused of on a daily basis by CNBC and FOX combined.

      You do not have to swear allegiance to Das Kapital, and know every commie pinko from Italy to France and songs of the 2nd International to know that people should not be starving in America or many other places in the world that is minting billionaires by the dozens at the same time.

      The Democratic Party is ripe for entry by energized and organized Occupy Wall Street motivated left wing politics that want to see banks run as utilities, like credit unions, that want Universal health care and want to defend the consolidated gains of Social Security and Medicare. But not much will happen if you are too good and pure and holy to be seen with Obama, or Barney Frank, or whoever you have a stick up your ass about. The Republican Party is completely controlled by right wing fanatics who will not let go of it any time soon, unless you are into prying things out of cold dead hands. A reasonable alternative is to take the Democratic Party by storm. You need 250 signatures to run for the convention as delegate. Get cracking all of you arm chair generals, you bourgeoisie adventurers, you fading commie pinko fags and yes, even you MBA types who actually know what a naked put is, what an inverse yield curve portends and you passed calculus and stat with As, in real Ivy League schools, yes, even you too can sit side by side with delegates at a convention, building a platform to shake the world. And you don’t have to wear a tri-corner hat.


        1. ECON

          Well said ! Was it not FDR in 1935 at Madison Square Garden in reply to the opinion expressed by Wall St and bankers and other corporates at the low public polling the president was receiving ? It was surely FDR who saved capitalism from itself in the USA.

      1. LeonovaBalletRusse

        And who feathers your nest, Mr. Tioxin? “We are all to blame”? You are High and Mighty close to a troll here, with your vociferous *Apologia* for Master Class culpability because “everybody’s doing it” or “taking orders.”


      2. Coldtype

        When will you stalking horses for the Democratic Party give up? Obomba (a man who gave a war speech while accepting the Nobel “Peace” prize) has had three years to show us his true colors and what constituency he actually serves [Wall Street, Big Pharma, the insurance cartels, and the Lords of War]. Are you so contemptuous of us that you really thought we hadn’t noticed?

        1. LucyLulu

          Granted, people on this blog, and certainly many others as well, have “seen the light”. But….there are still many Democrats who remain convinced that Obama is fighting for the peasantry but has faced insurmountable hurdles.

          So yes, I believe they haven’t noticed. I don’t think I’m being contemptuous. Arrogant, perhaps. Is that any better? :)

      3. Abigail Caplovitz Field

        Dear Paul:

        Did you read my piece? I will be voting for Obama again, at this point, because I see no better alternative. And I think Obama has the capacity to really lead and be transformational. But he hasn’t tried to do that. I’ll give you an example unrelated to finance: healthcare reform.

        Obama had two strategic choices, one potentially transformational, and one whose only ambition was to be acceptable to enough people to pass given the political realities of the time.

        The transformational approach was to run hard on Medicare for All. The logic of the idea is overwhelming, and if anybody could have sold it, Candidate Obama could have. At that point he still walked on water and he had both houses of Congress with a gettable filibuster-proof block in the Senate. Had he taken it to the People, America would’ve had a real shot at Medicare for all. And if the many deep-pocketed forces arrayed against such a fight blocked that outcome, a public option would have been a viable compromise.

        Think he wouldn’t have had a real shot at Medicare for all? He got himself elected! That was a massive transformation of the politically possible. I’d believe he couldn’t do it only if he’d sold it to us as effectively as he sold himself to us.

        Instead of selling the idea of Medicare for All as the just and cost-effective program it is, President Obama proposed a bill that was filled with Republican conventional wisdom and pushed for the Public Option as his best case scenario. He negotiated against himself in deference to the political realities.

        Actually there’s a third possibility. He may not think Medicare for All is a good idea. But that’s not in sync with the tenor of his candidacy.

        And I’m not a political nihilist, and I do say in my work that the Democrats of today are better than the elected Republicans of today, though I’d love to primary most sitting Dems. I do believe we need a campaign finance constitutional amendment, and perhaps some others too.

        You sound like someone who is deeply active and that’s great. Thanks

        1. Antipodeus

          I read it as ally yourself with like-minded people, and other like-minded alliances ==>> ‘power FROM the people’ (with watchfulness against being subverted, as the TP was, from a very early stage). But that’s just me.

        2. R Foreman

          I have another explanation. Obama heard the stories about martial law, tanks in the streets, massive upheaval, and HE BELIEVED IT. Everyone around him was telling the same story, so this is the only perspective he got.

          We know of course that a monetary contraction such as this would cause a brief and dramatic shock to the system, massive wealth loss to the elite, followed by a return to growth and normalcy.

          The big joke (on Obama and everyone else) is that now we will still get that monetary contraction, and if we don’t will rapidly devolve into a police state enforcing the rights of the elite (which looks very much like martial law).

          1. reslez

            [I]f we don’t will rapidly devolve into a police state enforcing the rights of the elite (which looks very much like martial law)

            I honestly don’t see how that differs from what we have now. After the 2008 RNC my father told me people still had freedom of assembly… but they had to be willing to pay to exercise that right. Which I guess means getting thrown in jail, tear gassed, beaten up by police and/or preventively detained. I honestly don’t see the difference between that and not having the right to assembly. It sure isn’t peaceable, on their side anyway.

            What exactly is the functional difference between what we have now and a police state? And if you say it’s that people don’t worry about getting murdered/disappeared, you should check what neighborhood you live in first, and then ponder whether “not getting murdered/disappeared” is an awesome criteria of freedom.

          2. Nathanael

            Oh, we already have a police state, don’t fool yourself.

            The thing is, this police state is failing to provide the basic needs of 20% of its population. And rising. While doing its best to reduce the living standards of the upper middle class.

            *That* is not sustainable. And this is why movements like Occupy are simply going to get larger.

            People will tolerate material privation if they know that there is *fairness* (justice) and that they have civil liberties. Without civil liberties, justice, *or* material comforts, people have *nothing to lose*, and the rest is history.

        3. Paul Tioxon

          I have now read your piece in its entirety. Obama needs criticism for no other reason than lack of results. Political opposition is the reason for anyone not snapping their fingers and getting what they want or what we, the 67 millions who voted him into office want. That is my main complaint of people who dissect all of the failures and attribute them to everything else but massive push back, his political opposition. That needs to be acknowledged first. But it is never an excuse for failing to get more results.

          OWS is the first push back against the reactionary politics of the right and their popular front, the tea party. It is an indictment of Obama for not getting more results. Now that he knows, it is up to him to produce. We all are faced with systemic conditions, meaning there is no where to hide and no where to go, we are all caught up having to get jobs if we can find one, having to pay the bills, we all need money to survive and there is no Never Never Land to retreat to. Capitalism having made us dependent upon it for money to survive must produce jobs or face the revolutionary consequences of desperate people. Desperate people and those not so have to exhaust the possibilities to bring about change before resorting to violence. Obama has to sweep aside considerations of magnanimous leadership and crush his political opposition to get people back to work. There is no alternative.

          I hope you like Shepard Fairey’s new HOPE poster.

      4. Billy Bob

        Before TARP II, Obama had the people who matter by the short hairs, and he foolishly let them go with a promise to be nice. Transformation through post-partisanship is nice as campaign rhetoric, but respect born of fear is much more likely to yield substantive results. Giving a little at a time and forcing the MOTU’s to make concrete concessions would have demobilized a great deal of the opposition. Pre-Tea Party, some Republicans talked an anti-bailout game, but they always return to their dark masters. Rather than establish control, Obama immediately showed that he could be rolled, indeed would roll over himself nearly unbidden. The country needed – and still needs leadership. I question whether Obama, no matter how capable he may be of learning would ever be able to establish that control, even assuming he wished to.

      5. orionATL

        “completely unsubstantiated attacks”?

        that’s just utterly foolish personal bias speaking.

        there are numerous substantiated criticisms of obama as president, from foreign policy decisions to domestic economic decisions.

        what no one, yourself in particular, can counter is that obama has avoided ordering his “dept of justice” to prosecute any form of bank fraud, especially fraud arising from lending to purchase houses (the issue of the missing underwriter), the issue of MERS, and the issue of foreclosing on houses.

        1. Paul Tioxon

          Some of the most ridiculous and unsubstantiated attacks are those that used to be made by regular contributors, but I hope that they are not only reading what I have to say but others on this and other sites that contribute to their political acumen. The Hitler is the most over the top that is used by every dimwit with no discernible analysis behind their political labeling mechanism. I have said in the past that people have to pick a side. Since the outbreak of street protests, it is becoming clearer that you will be put on a side if you decide not to choose. Plan or be planned for. To pick a side, you need to have a firm place to stand. Rejection of any and all parties is a boon for the republicans because they really want to have as little voting as possible. That is not say that the democrats are completely democratic, they are intellectual elitists and have a harder and harder time with blue collar, row house and union types.

          see this for analysis of Obama as a bummer for the left:

          1. Foppe

            So one last question, Paul: what happened to the rule of law under your “slightly elitist and disconnected, but well-meaning” Democrats? Do they need a supermajority of 72 to enforce that as well? Or should we blame that one on bribery wholly made possible by the republicans as well?

            Apropos of nothing, but back when I was a kid, I had to clean out horse stables a lot.. I lifted quite a bit of horse shit that way.

          2. Jeff

            Nice analogy, the political meme seen here, apologies for not remembering the author is

            “Two Teams, Same Owner”

            Of course I’ll vote for Obama in the general election
            along with the most progressive and real American
            populist candidates that are on the same ballot.

            However, this man is going to vote for Ron Paul in the primary to help put the spotlight on the sellout of the
            GOP and the Democrats to Wall Street. I urge all progressive Americans to do the same thing.

            Watch them squirm when the results of Iowa are announced.

      6. LucyLulu

        Thanks for the post, Paul. Some good things to think about.

        Really interesting read at link you provided on the sociology of right and left politics. Here is an excerpt that sounded much like OWS NYC, on patterns found in self-described leftists, but hopefully with a different ending:

        “In particular, there are various Marxist-Leninist parties that say they practice “democratic centralism,” meaning that everyone has an equal chance to speak and participate, but they then agree to follow what the majority decides. What invariably happens in these groups is that they come to be run by an inner circle, the “central committee,” which is in turn usually dominated by one strong leader. Some of the accounts of these groups are harrowing; there is evidence of self-righteous manipulation of the members and a willingness to use violence (Ellis, 1998; Lalich, 2004).”

          1. Paul Tioxon

            One example of organizations from the 1970’s coop movement, was the idea of worker management, and consumer control of businesses, not for profit but for the benefit of the people who use them. Coops are businesses, but with limited equity and not with the purposes of endlessly pursuing profits but providing goods and services. At a national conference I attended in 1979 in Austin, TX Ralph Nader spoke to us in a packed auditorium of young food, housing and trucking cooperatives from across the nation.

            He said that the White House was held captive by interlocking corporate interests, who spent huge amounts of money lobbying for favorable treatment, taxation, etc. His idea was for us to each put up $1, for the 225 million or so citizens at the time, give it to Congress, and buy them back for all of America. We all roared with laughter, we thought he was one of the funniest comedians around, in addition to be a political force and strategist on the how to legislatively change the lives of the average American for the better. Buy back congress!!! Of course back then, 1/4 of a billion was so much money that it was almost inconceivable. But the main point taken was that there was not much the White House could do with Congress taken hostage by corporate interests. His reaction was not to throw his hands up in the air and say a pox on both your houses. His idea was to outbid the corporate influence peddlers. Money talks and bullshit walks.

            And in many non-hierarchical groups, like the food coops of the 70s and other non profits, there was always a sense of not having any bosses here. We were self managed, using consensus not just as a vote taking mechanism for decision making. It was also primarily a process of community building by a demand for participation, actively listening and working through understanding each other, until we could all get a sense that we in agreement over this or that matter. However, there is always someone in charge, if not formally by job description, group dynamics always seemed to see some people develop as the leader, even if not directly and explicitly acknowledged as such. You knew who had he power when someone new came in with new ideas and did not know they were supposed to take cues from a leader who was not suppose to be a leader/decision maker. Invariable there were conflicts and the big blow up would usually come about when someone just laid out the unspoken organizational truth of who was really in charge.

            There is a capacity for the left to believe that things will just fall out of the sky like rain just when we need watering. But that is unreal

            We need real tactics and strategies to get power and they all involve politics and politicians. Either influencing them with money and votes or becoming them ourselves. Really good arguments and research based on the truth and valid reasoning do not make wins in political battles. It took OWS going to the streets and getting in the face of Jim Cramer and all of the other people stuffed inside the NYSE to see people showing up outside their door to change their perspective from fascination with stock picking to wondering if they will have any capitalism left to loot. We still will have to vote and we still will have to bend the politicians will to the policies that are based on good research, reason and so forth. But it will not come without struggle of some sort.

      7. Foppe

        If you’d written a more honest first two paragraphs, I might’ve taken your diatribe more seriously. But as it stands, I cannot. All you’re doing is looking at Obama’s campaign “promises” and taking those at face value, while ignoring the actions he has taken, in order to push a straw man world in which all critiques (“attacks”) of Obama are unsubstantiated, which you disagree with only because you ‘are certain’ that that Obama desperately wants to be left but can’t be.
        It’s fine to want to work with existing structures, Paul, but if you want to actually effect change, you can only do so if you’re acutely aware of what’s wrong with those structures. And what you are doing here is exspending a lot of energy to do the exact opposite: obscuring what’s wrong with the party because of a felt need for organization. Which you are willing to do mostly on their terms.

        1. Paul Tioxon

          Try this perspective on for size:

          Kabuki Politics is not a derisive Obama attack, but an understand of the need for going through the motions when there is not much else to do. Almost nothing progressive ever was done in this country that came up from the working class. All of the landmark New Deal ideas came from corporate moderates who sought to have a more profitable and well managed macro economy with less civil bloodshed. FDR just carried out the will of the more willing to share conservatives based on their own ideas. There were absolutely no social scientist in government in Washington DC when FDR got there to come up with any ideas worth mentioning. They were are imported from corporate sponsored or corporate administrators who knew how to run social welfare benefits for their employees. DC had no social agencies, welfare programs or anything much else than a War Department, the pensions of which were the largest items in the federal budget. Whatever hope anyone has for Obama to do anything will have to wait for more people in Congress who will vote for it and a Supreme court that will not kill it when republicans sue for liberty from health care.

          1. Foppe

            What am I “trying on for size” exactly? A book that places all the blame for Obama’s inaction at the feet of the republicans? I don’t see the connection to my reply.

            Anyway, skimming the review a bit, I’ll pose a few more questions to you, that Altermann seems to be ignoring.
            1. Given that Obama was a senator already, and that he already knew that “the game was rigged”, and that he made lots of promises about “no more politics as usual”, the fact that the game was rigged could not have been a surprise to him. Furthermore, as I understand it, he could have addressed a large part of this problem by pushing for immediate changes to the senate rules that would’ve ended the whole “supermajority” nonsense (afaik it is possible to vote through Senate procedural changes at the start of legislative sessions with only 51 rather than 60 votes needed). And even if that wouldn’t have worked, he could’ve simply taken this to the media, and use his grassroots network to force the senate’s hand (a fact the review you refer to “explains away” by saying “it would’ve diminished him”. Give me a break.) In any case, he did no such thing, and instead spent his time distancing himself from people like Stiglitz, and reappointing Larry and Timmy and Bernanke.
            Which leads to the next line of defense: “But the democratic party is really fractured”, and the blue dogs (of which Obama is one) did not want to play ball. Aww, shucks. So now we’re being told to buy the line that the most mediagenic president since JFK was incapable of getting his message out there, and that he was similarly incapable of getting his own people in line. Am I really to believe that, being familiar with Ferguson’s description of how you have to buy committee access from the party leadership?

            And then there’s a third issue, which is not mentioned in the review: the fact that the Democratic Party is extremely successfully defunding any progressive organizations that are more progressive than it is (as described by Yves). How do you “explain” that?

          2. Susan the other

            That raises a very good question Paul. Where are they? Corporations know this country is in deep trouble. Businessmen/women large and small know it too. All American business would benefit and be more competitive if we had Medicare for All. It’s crazy the way they fight it.

            I think there is plenty of evidence from the housing debacle that banks know they made a mess of things and would like to see an equitable solution. It has been amusing me that state appeals courts have given MERS the green light when the banks look like they are maneuvering behind their fastidious silence to shuffle MERS off. Very nutty situation.

            So the question of the day for me is, Why don’t reasonable people find reasonable solutions? Look at unemployment: You can’t tell me that unemployment isn’t being used to wring inflation out of our bloated economy. It has always been the Fed’s favorite tool. It’s just that now it feels like we are facing the perfect storm, a gathering of all the ills at once. Congress is little better than a zoo. Democracy isn’t working. It’s almost like nobody wants to be the first person to be honest. Scary.

          3. YankeeFrank

            ” Almost nothing progressive ever was done in this country that came up from the working class. ” – Paul Tioxon

            What a boatload of crap.

          4. Nathanael

            Paul, *as one of the 1%*, I had hoped for an FDR-type candidate, who would force through the reforms necessary to stabilize the system, to give the proles their bread as well as their circuses….

            …instead we got none of that, and we are still heading on the path of unsustainable incompetence from government, which leads directly to revolution. Oh well. It may be inevitable now. The current system is blatantly unsustainable, and apparently the political system is so corrupted that we can’t get an decent President or Congress.

      8. Out of the Frying Pan

        All Obama had to do to show he had a bit of courage and was on our side was direct Holder to immediately start investigating and prosecuting the criminals who caused the financial crisis. Never happened. The last two sentences of this article are very perceptive.

        The investigating committees like the one led by Angelides just became hot air with no follow up.

        No one was asking Obama to cure the economy overnight or develop entirely new systems like Social Security (although a fight for single payer health care would have been nice).

        Just to take a stab at reforming the stink. Epic Fail.

      9. perpwalker

        Congratulations, in defending your puppet ruler you just proved there’s no point voting. So, Obama was a war criminal only because the CIA and JSOC gave him orders with a gun to his head? At Nuremberg they’d hang him anyway. So Obama forfeited US Government sovereignty under Responsibility to Protect only because BP made him revoke human rights, destroy environmental hygiene, and repress the population in the Gulf? J.P. Morgan made him collude in illegal mass evictions in contempt of the human right to housing? Too bad, Obama still deserves to ouster in disgrace. Nobody cares whether he’s a failure or a criminal. It comes to the same thing. He needs to be purged, along with most of our terminally corrupt legislature and judiciary.

      10. Cindy Elmwood

        Shouldn’t this diatribe have been directed at Matt Stoller and not Abigail? They were basically making the same point, which I agree with.

        You make a good point in the latter part of your comment — I think it’s entirely possible (even likely) that the spirit of the #OWS movement will eventually work its way into the Democratic party and effect real change, but *without* having much to do with Obama.

      11. JTFaraday

        You’re shoveling so much sh** today– which is to say, more than usual– that you’re actually making me nauseous. Nevertheless, I think I can recover enough to make this one point.

        “The Republican Party is completely controlled by right wing fanatics who will not let go of it any time soon, unless you are into prying things out of cold dead hands.”

        That’s probably what will happen. The rightward drift is already well up on the wall here, you’re right about that, but I think you’re wrong about how the two parties relate to that rightward drift.

        The current Republican Party clown car posse probably won’t outlast the baby boom in its current form, rather it will gradually reduce itself to a radical right wing rump, populated by dead ender dummies like Andrew Breitbart, who will probably never manage to join the real world.

        The current Capital F D-Party will continue on as the technocratic party and center-right mouthpiece of the upper middle class, the 1% financial and business interests, and a neo-conservative foreign policy cloaked in the rhetoric of “liberal-humanitarian interventionism” by drone attack.

        The D-Party is NOT GOING BACK TOWARD THE LEFT, EVER because its primary technocratic and punditocratic and upper middle class and cultural “liberal” constituency LIKES it that way.

        At some point the current Progressive Caucus types, the Congressional Black Caucus types, and sincere public servants and intellectuals are going to have to decide whether or not they should stay in THAT particular veal pen.

        Given that, at the moment, the Capital F D-Party is flirting with corporatist and militarist fascism every bit as much as the current R-Party—only maybe “selling it” a little bit better– I don’t recommend the progressive caucuses or sincere public servants and intellectuals stay in the veal pen.

        YOU DO, and that’s why you make me sick. :)

        Down the road, there needs to be a true multicultural (as opposed to lip service), working middle class party (with the emphasis on the second constellation of ideas so it can actually COHERE), to “the left” of the current D-Party. Yes, obviously, it needs to be organized and not anarchistic, as are the OWS *protests.*

        It could and should probably use some of the already existing Green Party and labor infrastructure. It needs to be funded by the public–and it needs to gain the public trust, because it will never be funded as well as the Capital F D-Party of the upper middle class and 1% interests. That’s not that far from where the old Democratic Party USED to be.

        This is not going to unfold in time for the 2012 election, however, and you seem intent on forcing everyone into legitimizing an incipient fascist party—that has demonstrated NO RESPECT for the Republic or the rule of law– that we may not want to legitimize even one more day.

        We should send a message to the Duopoly Party government AND the D-Party that they no longer have political legitimacy in the US.

        I see that as the real electoral mission for 2012—because that’s the ONLY time ANYONE who isn’t a political junkie pays any attention, including smirking political scumbags like Obama themselves. With no Primary challenge within the Party, from Elizabeth Warren or anyone else, that challenge needs to come from without.

        Beyond 2012, there should be political and party organization outside the Capital F D-Party, which is STILL structurally not going to be reformable as a viable political vehicle for the working middle classes–even should the D-Party manage to steer itself off the road to fascism before it suicides itself on the march alongside the Repugnants, (along with everyone else in their wake).

        Given its economic and foreign policy advisors, I think the D-Party will continue to be “Repugnant with spin doctoring” (by people like Ezra Klein) for some time to come.

        Granted, no one can really predict the future, but it seems to me that most of the time, people with too much power simply can’t recognize when they’ve stepped well over the line of what is tolerable. Meanwhile, they do more damage.

        It’s the Paterno-Spanier syndrome. THAT is the case here, with national D-Party insiders and Obama, not that they have too little power.

        1. Nathanael

          JT, it’s worse than you think!

          The upper class capitalist “reasonable 1%” faction of the Democratic Party — its “primary technocratic and punditocratic and upper middle class and cultural “liberal” constituency” — does NOT like it the way it is and is NOT getting what they want out of it. Just ask Warren Buffett.

          Instead, the doctrinaire bipartisanship-worshippers and the Republicans in Democrats’ clothing have taken over control of the Democratic Party and won’t give it back — not even to the group you describe.

          At this point the cultural liberals and upper middle class and technocrats are casting about for alternatives!

          Most likely scenario? The Republican Party self-destructs and turns into a violent death cult, finishing themselves off with some kind of Jim Jones event. The Democratic Party becomes the new Republican Party, supplying all the fascism and authoritarianism the right-wingers want, as well as the terrible economic policy.

          Some third party arises which is dominated by the heirs of FDR — 1%-ers who realize that you need to keep the proles happy — and after a great struggle, it manages to take over the government. Perhaps with a bloody revolution involved. The true socialist parties never have a chance….

          Well, anyway….

          At some point, the

        2. Nathanael

          This is a really great point you make:

          “Granted, no one can really predict the future, but it seems to me that most of the time, people with too much power simply can’t recognize when they’ve stepped well over the line of what is tolerable. Meanwhile, they do more damage.”

          Applies to political leaders, central bankers, private bankers, corporate CEOs, oil company executives, etc. etc. etc. etc. etc. etc. etc……

    3. Parvaneh Ferhadi

      I agree. The “Obama did the best that was politically possible” line is surreal.
      Obama didn’t even come close to even trying to do what was politically possible. He folded to demands that hadn’t even been made by the opposition and this even before negotiations began as his going-in position.

      This was when he had 60 votes in the Senate and the majority in the House.

      1. Paul Tioxon

        Dear Parvaneh,
        You need to understand that Obama did not have 60 votes in the Senate. There were 59 D Senators and 1 Socialist from Vermont. They are not the chattel of Obama. This is lazy Time magazine civics. Furthermore, Sen Al Franken was held up from taking his seat until July of 2009. But the real point is, being a Democrat does make you someone who will vote for anything progressive because you have to. Joe Lieberman is a prime example and he is not even a stereo typical blue dog or dixie crat, he is just indistinguishable from a republican. And now, an independent.

        see this website on political intel:

        1. Jason Boxman

          It’s always been possible for the Senate rules to be changed at the beginning of a session. The Democrats certainly could have in 2009 and flatly refused to change the filibuster rule this past January, after Republicans abused the filibuster more than at any other time in history.

          That certainly doesn’t smell to me like Democrats especially care about getting anything done.

          1. Nathanael

            There are at most 49 genuine care-about-good-government Democrats in the Senate…. because if there were 50, the filibuster would have been abolished.

            Unfortunately, because of the scummy bullshit Senate rules, we don’t even know *which* Democrats actually supported eliminating the filibuster, apart from the honorable few (like Tom Harkin) who were personally pushing its elimination.

            I have sworn to oppose any Senator who does not openly promise to eliminate the filibuster. I think that leaves fewer than 10 decent Senators out of 100, though I haven’t counted lately. :-P

      2. ambrit

        dear Friends;
        After reading this thread, I had to go back and re-read Lyndon Johnsons’ 1969 State of the Union Address, [The Farewell Speech.] The entire thing is worthwhile as an education about how a real politician thinks. The present crop doesn’t even come close.
        My favourite: “I hope every Member [of Congress] will remember that the burdens he [Richard Nixon] will bear as our President, will be borne for all of us. Each of us should try not to increase these burdens for the sake of narrow personal or partisan advantage.”
        Look the entire speech up and read. Then mentally compare then with now. Then try mightily not to break something out of anger and frustration.

          1. ambrit

            Mr Tioxon;
            Wonderful poster, I’ll have to put this site on my regular roam list.
            I don’t know about the X’s and O’s, but if the standard of living is your guide, the fifties through the early seventies were the ‘Golden Age’ par excellance. Even with the big troubles, life improved generally for nearly everyone. Progress was real, not just a catch phrase. So, in this case, looking backward is not to be belittled, but to be studied for what it can teach us. Things were better for definite reasons, many of them resulting from the New Deal policies of FDR and the ‘Real Original True Democratic Party.’
            Human nature doesn’t change over short time spans. What worked then will work now. Right now we are seeing the Historical Dialectic at work. The elite Thesis is meeting the 99ers Antithesis. Here’s to the Synthesis, whatever it will be.

    1. CaitlinO

      That was my first thought, too. I take the ruthlessness of the official response to OWS as an indicator of the nervousness of the puppet masters. AG Masto’s actions are an even bigger threat and have as much potential to spread. I would expect her to face every obstacle officialdom and TPTB can possible construct in her way.

      Of all the groups that have engaged in robosigning, her selection of two employees from LPS is brilliant. She’s aimed her wooden stake right at the heart of the beast.

  1. ScottS

    But you don’t throw 606 counts against someone if all you’re going for is jail time for that person; this is about starting at the bottom, and flipping people. It could be the takedown of the mortgage servicer mafia, and then back to the origination.

    I personally am a fan of putting away the small and medium fish. We know CEOs are big fans of the personal fable, and don’t think it’ll happen to them.

    It’s not like getting Nixon to resign put an end to political corruption. Bugging phones is child’s play now-a-days.

    Throw the metaphorical grenades where they’ll do the most damage — in the crowd, not at the guy who is best-protected.

    1. Spacecabooie

      Like bank robbers, banksters weigh the (compared to bank robbers, slight) risk of jail against the (for banksters, certain fraud-enabled ) instantaneous and relatively effortless acquisition of large amounts of money.

      Excellent post Mr Stoller.

      “As an economic policy, justice works.”

      This, too, bears repeating:

      “But I think it’s important to begin considering criminal justice as a core element of economic policy. I’d like to hear from Suskind, Klein, Krugman, and others just where they think allowing massive systemic fraud fits into the analysis of what went wrong.”

      And I would then like to hear cogent views on justice as an economic policy from the countervailing Ayn Randyites. No obfuscating denials of bankster crime precipitating this collapse. And nothing about how the Nevada crimes were surely limited to the one-rung-up Supers. Just the Rand croud’s perceptions on the wider role, if any, of justice in economic policy. On making justice a central player in the making of that policy. John Gaults are not fully ennobled when their affairs are conducted in a justice vacuum.

      1. F. Beard

        “As an economic policy, justice works.”

        Banking is unjust from the get-go and many have said so. Just Google “famous banking quotes” for confirmation.

    2. The Heretic

      You’re onto something ScottS. The problem with indictments of the CEO Enron, Worldcom, Bernie madoff, is that although the figurehead is caught and tried in a law-and-order bread circus, the culture of corruption continues, since the dozens of ‘bad lietenants’ who did the actual crimes, and the hundreds of passive bystanders who were ‘in the know’, had profited handsomely and escaped punishment. I believe your analogy for how to handle the situation is partiAlly correct, attack the little fish that can be more directly linked to the crime and decimate those guys. But This then leads to Yves solution, put lots of pressure on the little fish to encourage them to ‘rat’ on the big ones.

  2. Sharon

    Our system was so corrupted before Obama took office that I doubt that had he come out with a sledge hammer and prosecuted everyone that deserved prosecuting the uninformed and uneducated citizens would have continued their compliancy and indolence and persisted with the adoration of the 1% at the expense of the 99%. Even now you still have many that are sticking their heads in the sand and don’t quite get what is going on. And a very high percentage of the population needs to understand and get infuriated in order for profound change to take place. I am not defending Obama and as a lifelong Democrat I’m not going to defend the spineless Democrats or the ruthless Republicans but come on didn’t we elect these morons? Please take your head out of the sand and demand change. With that said for the first time in 25 years I have hope and I have hope because they are occupying Wall Street and demanding change.

    And next up is the medical industrial complex’s Ponzi scheme ready to collapse. How long our society can sustain the mass poisoning of the population so that a few company executives can make billions will be the next multiple-trillion dollar question. One in one-hundred-and-ten children have autism. And they keep adding to the vaccination schedule. I’m not even sure it’s vaccinations but we should know the causes but don’t. And then you have the gadolinium based contrasting agents causing considerable disease because when you inject 300M doses of a toxic heavy metal into people that is what you get – poisoning on a colossal scale. Drugs like Vioxx and Avandia and the surgical mesh and on and on contribute and persist while the FDA drags its feet in getting it off the market so that the poor pharmaceutical companies can find another toxic drug to replace the revenue from their faulty products. And now if the FDA approves a medical device the Supreme Court says you can’t sue if you are harmed. So either the government (that’s us) or health insurance companies pick up the tab for these negative health externalities while most Americans remain asleep at the wheel, most don’t even know why they are sick. Yep we’re doomed unless the masses start to demand answers and change. Obama is an ineffective and dangerous president for sure. I truly hope he gives up his spot on the Democratic ticket. Pipe dream, maybe, but I have no confidence in his ability to run the country. He has squandered all his political capital as far as I’m concerned.

    1. LeonovaBalletRusse

      Well said. Dead right: “He has squandered all his political capital” – and that’s a polite way to say it.

      Who will challenge Obama as a Democrat in 2012? This is serious. It’s a big fracking deal. Who does William K. Black recommend?

    2. Anon

      Sharon – You speak with such disdain and mistrust of vaccines. Vaccination has proven to be one of the most effective ways to prevent diseases from afflicting kids and adults for decades. It’s more effective than any treatment if you think about it. And in fact because it is so effective, that’s why pharma never bothers wanting to develop a vaccine. One use, and its done. After all that hard R&D work, then the FDA submission, the patient gets it and forget about it. Contrast this with statins, where the patients have to take them on a consistent basis = more money to be made! Pharma is finally realizing now that vaccines are probably worth their time but don’t count on them to pull a Jonas Salk.

      If anything, you should read the works of Marcia Angell – she’s a member of Harvard Medical School. Here’s what she’s said about the US health care system:
      “Our health care system is based on the premise that health care is a commodity like VCRs or computers and that it should be distributed according to the ability to pay in the same way that consumer goods are. That’s not what health care should be. Health care is a need; it’s not a commodity, and it should be distributed according to need. If you’re very sick, you should have a lot of it. If you’re not sick, you shouldn’t have a lot of it. But this should be seen as a personal, individual need, not as a commodity to be distributed like other marketplace commodities. That is a fundamental mistake in the way this country, and only this country, looks at health care. And that market ideology is what has made the health care system so dreadful, so bad at what it does.”

      1. Ian Ollmann

        As a small dose of reality, endogenous cholesterol biosynthesis is a very unlikely target for vaccines. Even if you are successful, you’d be in effect provoking an autoimmune disorder!

        Vaccines are good for treating infection by exogenous agents. If you want to change the function of the body’s own enzymes, then you need small molecules — like statins. Those are cleared by the liver and kidneys, and hence you need to keep taking more.

        1. Anon

          I was only using the example of statins to illustrate how pharma prefers those drugs over vaccines from a commercial point of view. With most drugs that pharma promotes, there’s a pretty strong economic incentive behind it. Since statins are cleared by the liver you need to maintain a consistent dosing regimen to maintain the therapeutic effect. This means providing a 30 day supply of the drug, having the patient comply, which in turn leads to pharmacy and medical visits, etc all of which in turn keep the business cycle flowing in the medical world.

          With vaccines you get it once, and that’s it. There’s no return visit, evaluation, etc unless for some reason the vaccine doesn’t work. And pharma wants no part of that because it’s a one and done product.

      2. Sharon

        Let’s assume for a moment that the accumulation of mercury in the vaccinations given to children have absolutely no impact on the autism rate. For the sake of argument let’s take a look at two issues that are causing a lot of injury these days that is being covered up and costs are being externalized onto the health insurers or those that pay premiums.

        I started to play with the numbers and I am disclosing how I came up with them so if you have issue with a metric change the metric. But who pays for the healthcare costs of these toxic and harmful products? You? Me? The health insurers? They won’t survive with numbers like these. We must put the negative externalities of these cost back on the manufacturer. That is the point I wish to make.

        US Population 308,745,538
        % Under 18 24%
        Total Population under 18 74,098,929
        Injury Rate 10%
        Gardasil Injuries 7,409,893
        Total Healthcare costs $250,000
        $1.9T $1,852,473,228,000

        Gadolinium Based Contrasting Agents
        GE’s Omniscan doses administered 100,000,000
        Injury rate 10%
        Injured 10,000,000
        Total Healthcare Costs $500,000
        $5T $5,000,000,000,000

      3. Calgacus

        Yup, Angell is great. Also: “If we had set out to design the worst system that we could imagine, we couldn’t have imagined one as bad as we have.”

        Business & medicine don’t mix. The private sector & privatization provide inferior care, far more inefficiently than the public sector and slows down medical research & progress. Only the US is rich enough to afford the insane system we have.

  3. bob

    What’s really amazing is how much work went into those 606 counts. How many man hours? Real attorneys have to do the leg work here.

    It probably adds up to less than a week of LPS’s “output”.

    How about an automated ALPS (Anti Lender Processing Service), a central clearing house for known robo-signers. Instead of holding title, they hold criminal records.

    1. LeonovaBalletRusse

      bob, that’s the sound of justice with the ring of truth. I second the motion: “Oh, yeah.” This is *OccupyWhiteHouse* material. Dems must mount a challenge to Obama at the Democratic National Convention 2012. Why stick with a loser?

      It’s gettin so that We the People are on a roll. Let’s keep moving forward like “the little train that could.” Benjamin Franklin would be proud to see how the handiwork of the Founders got it right.

  4. scraping_by

    Given that her office basically has no native resources or sector expertise in mortgage backed securities…

    That might be her advantage. And through her, ours. Real estate lawyers want to stay in good stead with the real estate industry, building to banking.

    Also, much of what’s called ‘education” these days is nothing more than installing attitudes. “Right thinking” as narrow as any Bible college or reeducation camp is part of American education from K through grad school. It probably gets worse the narrower the field. Perhaps the lackeys have no idea they’re lackeys.

    However, Barry’s defenders claim he’s too stupid to grasp he’s the tool of the elite. Watching his nauseating daily grovel shows he well and truly identifies with his masters. So it’s probably not capture of otherwise well-meaning citizens.

    It will probably take outsiders to end the mess. Goodness knows the insiders and well and truly bought.

    1. LucyLulu

      Quote: However, Barry’s defenders claim he’s too stupid to grasp he’s the tool of the elite.

      Initially that was I thought, he’d been suckered, and in the beginning, I think it’s still plausible. High finance wasn’t his expertise and we faced a calamity of great magnitude. It only makes sense he would look to experts for guidance. However he then decided to give Volcker the boot, and install Geithner, Summers, and friends, followed by intensive Congressional investigations and hearings into the causes of the crisis. He’s smart, it’s hard to believe he didn’t get it by then. And when Holder never pursued a single prosecution for financial crimes, and the bailouts continued, the excuses didn’t hold water anymore.

      I’ve been so disappointed in him, and myself for buying his “hope and change” song and dance. He is such a phoney. He’s trying to push through liability waivers for the banks on fraudclosure. He gave us health care reform that was a gift to Big Insurance and Big Pharma. He has been the first to volunteer to cut SS benefits, despite it being projected to remain solvent for another 25+ years, and then 80% funded after that (how many private companies can make that claim?). He escalated the war effort. The Patriot Act is stronger than ever and he uses drones to kill US citizens without a trial. He’s pushed through three more free trade agreements. I don’t know why the unions are still backing him, after his lack of support in Wisconsin. You can guarantee he knows about the DHS and Fed involvement and gave his approval for the recent coordination of militant police state actions against OWS. And yet Democrats still support him. It boggles my mind. They would be screaming bloody murder if a Republican were in office and had a record like his. I’d be willing to vote for an honest, sane Republican I had ideological differences with (e.g. Roemer), but given the likely candidates to choose from, I think I’ll be voting “conscientious objector” in 2012.

      1. Lambert Strether

        Yes. For me, the tell was FISA, and if not that, whipping the CBC for TARP (which never would have passed without Obama) and getting nothing from the banks in return for a rescue. So I’m disappointed that Obama turned out far worse than even I imagined it.

        I mean, signing off on a nationwide blitz against civilians, and then not manning up to it… Boggles the mind. I mean, even Nixon would have owned up to it.

      2. required

        ss is a ponzi scam – always has been – always will be

        ponzis always fail – it is mathematically impossible for them not to fail over time

        1. scraping_by

          Social Security was an institutionalization of family finance. In every family, there was a little of the family budget put by to support the old folks, the retired and those past working. FDR just beuracratized it and made sure everyone participated. There were and are horror stories of the old and infirm thrown out on the street or sent to the county poor house by their children. Or what goes for the county poorhouse now.

          The idea that it is or should be a commercial insurance product is rubbish. Nasty reframing designed to center the discussion in la la land. From the extra FICA put by from the 1980’s on, there’s more than enough to look after those older. Unless we pretend it was used for TARP, etc.

          If you’re going to do the work of the catfood commission, please tell me you’re being paid by Pete Peterson. It offends me to see people working for billionaires for free.

          1. F. Beard

            It offends me to see people working for billionaires for free. scraping_by

            It’s financially dangerous too:

            He who oppresses the poor to make more for himself or who gives to the rich, will only come to poverty. Proverbs 22:16 [bold added]

        2. F. Beard

          Wrong. SS is not a Ponzi scheme unless life is a Ponzi scheme. Or should the old be set adrift on a icebergs?

          ‘Honor your father and your mother, as the LORD your God has commanded you, that your days may be prolonged and that it may go well with you on the land which the LORD your God gives you.’ Deuteronomy 5:16

          Furthermore, the US Government can spend without borrowing and without taxation so long as price inflation is not serious.

          1. Anonymous Comment

            Re: “Furthermore, the US Government can spend without borrowing and without taxation so long as price inflation is not serious.”

            I think it would be more accurate to state the condition: “as long as they are not serious about price inflation.’

          2. F. Beard

            “as long as they are not serious about price inflation.’

            The banks are the biggest source of price inflation by far since our money supply is 97% credit. IF the banks were put out of the counterfeiting business then that would allow much more government spending without significant price inflation risk.

        3. LucyLulu

          True, ponzi schemes DO invariably fail. However SS is NOT a ponzi scheme, it is a pay-as-you-go program (current benefits paid out of current revenues), there is a difference. While all ponzi’s are pay-go’s, not all pay-as-you-go’s are ponzi’s. Most importantly, ponzi’s are scams that rely on deception of the nature of the investment scheme. SS is transparent. Furthermore, even if one fails to appreciate the benefit of the significant reduction in poverty and homelessness in the elderly that SS has brought, it is the single significant budget expenditure that approximates being fully funded, as posted else on this thread.


          Pon·zi [pon-zee]
          a swindle in which a quick return, made up of money from new investors, on an initial investment lures the victim into much bigger risks.

          If you intend to make claims that SS is either a “ponzi” or a “fail”, you need to provide evidence to back them up.

          1. Ian Ollmann

            It would be pay-go, were it not for thhe matter of the “social security trust fund” which established the fictional possibility that funds spent long ago can somehow be resurrected now to support the elderly.

            I’d like to see these intergovernmental IOUs written off, and social security become a true pay-go system.

        4. psychohistorian

          Hey required!

          It should be required that you go to some blog like Angry Bear and look through the last months postings where for the upteenth time they shred all the arguments against SS. Please report back that you have shed your ignorance about SS, thanks.

          Angry Bear =

          1. required

            i read denninger, mish, ritholtz, jesse, yves, c.h.smith, and calc risk. NONE of them, that i recall, have ever claimed ss is a ponzi scam – ritholtz even refuted me directly on a similar comment of mine on his blog. yet i still believe what i believe based on my own lyin’ eyes.

            let’s make an agreement shall we? i’ll report back as soon as i see evidence supporting ss as supportable and you report back when ss is cut to the bone, again and again.

            take a wild guess who’ll be reporting back first.

        5. 2laneIA

          This is low-rent trollery, and you should read the explanations in this thread regarding the reasons why it is not a Ponzi scheme (transparent, no deception involved except by people like you, etc). I want to add a further reason from economist Dean Baker:

          The way in which Social Security is ostensibly similar to a Ponzi scheme is that it depends on new workers in the future to meet obligations that it incurs today. This also happens to be true of any debt issued by either the government or the private sector.

          If the size of the working population in the United States collapsed tomorrow, then it would not have the tax revenue to pay off government bonds. Similarly, if the public stopped buying General Electric’s products, it would also be unable to pay off its bondholders. Yet no one in their right mind would describe the bonds issued by the federal government or General Electric as Ponzi schemes.

          The reality is that there is no realistic basis for the comparison between Social Security and a Ponzi scheme. The proper response to Governor Perry’s charge should have been to ask whether he had any understanding at all about the country’s most important social program. He had committed a gaffe of monumental proportions. The media should have focused on exposing the governor’s ignorance, not trying to imply that in some alternative universe he might be right.

    1. F. Beard

      According to Deuteronomy 23:19-20, usury may be collected from foreigners:

      “You shall not charge interest to your countrymen: interest on money, food, or anything that may be loaned at interest. You may charge interest to a foreigner, but to your countrymen you shall not charge interest, so that the LORD your God may bless you in all that you undertake in the land which you are about to enter to possess. Deuteronomy 23:19-20

      Question: Do the bankers consider us foreigners? And if so, should they be considered foreigners in return?

      1. LucyLulu

        Question: Do the bankers consider us foreigners? And if so, should they be considered foreigners in return?

        No. But those who protest against bankers, like foreign terrorists, are not afforded the rights guaranteed by the US Constitution.

          1. F. Beard

            Cheer up! It’s only money and money is just electronic bookkeeping entries (so long as the gold bugs don’t have their way) which can be changed in a flash.

      2. Jim Sterling

        Seriously, the tendency for the property-owning class to think of the workers as just “here for now, until workers we like better come along”, rather than citizens of the nation like them, is scarily ubiquitous: once you start noticing it in their writing, you can’t stop noticing it.

        Paradoxically, they also sometimes seem to think of themselves as not of the nation at all, owing more loyalty to other members of their class in other countries, than their own compatriots in the other classes.

  5. Union Member

    The certain and swift prosecution of white collar crime acts a great deterrent future corruption as well, which, again, provides even more efficiency.

    1. Anonymous Comment

      That is music to my ears. One of the congresscritters should introduce “The Certain and Swift Prosecution of White Collar Crime Act of 2011”. I reckon it would be hard to get co-sponsors.

  6. Union Member

    An important function of #OWS is its ability to mobilize public opinion. Eric Holder needs to be reminded of the important function of his office. Does he want to be remembered as the Attorney General who did nothing, who did not uphold the law, who did not enforce the law, in an era marked by widespread corruption.

      1. Union Member

        I hope you’re wrong. He may get an office with a nice view, but he also has to sit down to dinner with his children. Public opprobrium can be potent. At the height the Vietnam War there were many households of the 1% which divided along these lines.

        1. Anonymous Comment

          Re: “He may get an office with a nice view, but he also has to sit down to dinner with his children.”

          He will be delighted to sit down by his children who will say :”Thank you daddy for my 16th Bday present. I always wanted a Porsche. You are so thoughtful.”

          And he will reply to his loving child: “You’re welcome darling. It was no trouble at all. I would give you the world if I could.”

          To which his conscience will say :”Ahhh… It really was all worth it.”

          1. Nathanael

            Ha. No, his kid will say “Why did you buy me this evil gas-guzzler? I sold it. And why didn’t you do anything to stop global warming?” And he’ll look back on his life and yet again go into denial about how useless it was.

    1. LeonovaBalletRusse

      or “as the Attorney General who protected his masters, who concealed or ignored evidence on their behalf”?

      Is it time for a special investigator to check it out?

      1. Union Member

        I agree. I am more angry at and frightened of Obama and Holder, than Bush and Ashcroft. I never believed Bush; I did think Obama stood for SOMETHING!

        I think Ezra Klein’s analysis is a crock. Every time I think of Obama sitting down with Geithner and Summers, all I can think of is the President as a Community Organizer; he should’ve been telling them how it was going to be – precisely because they don’t teach that stuff in Grad School!

    1. Glenn Condell

      The Greatest Disappointment in History?

      The Most Successful Grifter of All Time?

      Weakness or knavery? No balls, or whacking great steel ones?

      It’s not either/or, he can be both. The Ezra Kleins, still a little blinded by the light, lean to the former while less starry-eyed observers like the latter rationale.

      The truth probably lies somewhere in between but whatever, he is an historic failure.

      He is in my country right now, unless he has already buggered off. Good riddance.

      The imperial vessel’s beautifully finished but hollow figurehead, ploughing straight through the sovereignty of a loyal satrap, declaring that we will host some of his regime’s war machine and become a Chinese target whether we like it or not. And both sides of the aisle of course lapped it up, vying for the kneeling space at his feet, the media likewise, breathlessly relaying hypocrisies like ‘Prosperity without freedom is just another kind of poverty’, at much the same time as co-ordinated ‘law enforcement’ actions across the US officially ushered in the police state that began in the wake of 911.

      He could change the terms of debate on any, even all of the issues that beset us, by the simple expedient of opening his mouth and allowing something other than propaganda or cant come out of it. But he won’t, any more than Tony Blair would. He is who he is, riding the Beltway through the White House and into the 1%.

  7. Barbara

    “I get the sense that fraud for most economists is considered something of a side issue, a kind of aesthetic political problem to be ignored in favor of more significant questions of stimulus and regulatory policies. This is a baffling attitude.”

    Let me put this in the vernacular. Elite economists, many beholden to endowed chairs and other boosts to their personal economic and social well-being, find fraud and “distraction” and perhaps an embarrassment to their economic theories.

    Maybe we need to get away from first and second tier economists, too?

    1. Glenn Condell

      ‘It is difficult to get a man to understand something, when his salary depends upon his not understanding it’

    2. CaitlinO

      I read an article many many years ago, pre-internet, that discussed corruption as a hidden, unlegislated tax on entire economies. All the specific examples in the article were from Africa and the Soviet Bloc, as I recall. The authors were able to show the imact of corruption as a significant drag on growth and productivity.

  8. Abigail Caplovitz Field

    I think Masto will go after the banks next. I mean, did John Kennerty sign any documents in Nevada? Kennerty was a Wells Fargo employee and robosigner. His acts would be as criminal in NV as the people charged. No way can Wells distance itself from Kennerty. Surely other banks had in-house signers too.

    On a different angle, have you ever really thought about how dehumanizing robosinging is?

    1. Anonymous Comment

      Abiagail, Thanks for that link to your discussion on the dehumanizing aspect of ‘robo-signing’. I have thought of that before.

      That is part of why anyone with two braincells to rub together has got to see that these are not people acting alone in their offenses. Nobody is gonna choose these tasks for themselves without being told do so by someone who understands the reason for the process.

  9. rafael bolero

    So, good: is this an ambitious GOOD person? It seems there are only ambitious BAD persons. BAD country, or GOOD country? Where are the ambitious GOOD young people?

    1. sleeper

      An Open Letter to Eric Holder

      Dear Eric:

      I haven’t heard from you since our last bit of correspondence.

      It seems as if you’ve been a little busy what with explaining that gun running operation and those pesky Occupy Wall Street folks.

      But we really to need to talk.

      Remember the banks ? Those guys that stole 10 trillion for the economy ? Well here’s the thing, these guys used the wires and the US mail to commit fraud. I know that you are busy but how about having one the legal eagles on your team at DOJ check up on Linda Greene, Brian Kennerty and the rest of the robosigners.

      Here’s the thing Eric –

      The failure of the DOJ to act even though clear evidence of massive fraud exists ( note that this mortgage fraud with all it’s permutations cost some 10 trillion dollars and that episode with the terrorists at World Trade Center cost some where around 3 trillion dollars) gives lie to the American ideal that all of us are governed by the same laws. Point of fact even the Supreme Court has the words “Equal Justice For All” cut in stone on the building facade.

      Failure to act means that equal justice no longer exists and that upon realizing that we find ourselves one step from the abyss of utter lawlessness.

      Thanks for listening Eric.

      Have a nice day.

  10. particle61

    Obama does understand that ‘gettin tough’ wins votes…just look at his DOJ’s recent actions re medical marijuana, And I realize that Mr. Stoller is concerned with enacting programs that will help our economy to be in ‘better shape’ as I am. But, it is difficult to believe that Obama wants actual change that would, for example, require massive haircuts for the banks, if not nationalization of these insolvent beasts, much like it is difficult, to construct a universe that Obama’s actions cannot be understood as simply reflecting his unwavering piety to the god of finance. And me, I don’t like when politicians mess with religion

    1. Anonymous Comment

      Re: “…just look at his DOJ’s recent actions re medical marijuana…”

      Exactly. Have a look at that. Something that while Campaigning, O stated that he would NOT do.

      Taking forceful action in the wrong direction. Seems to sum it all up.

  11. Oy

    With respect to the hallelujahs being directed at the NV AG’s filing of indictments: any prosecutor worthy of his or her title can indict a ham sandwich. Getting convictions, on the other hand, is another matter. I wish her well, but I’ll save my praise for later.

  12. b.

    “I’d like to hear from Suskind, Klein, Krugman, and others just where they think allowing massive systemic fraud fits into the analysis of what went wrong.”

    You just would not want to hear it from Black, I take it.

    Krugman, maybe. Klein and Suskind? Who gives?

    If this milquetoast is supposed to be a “slightly-less-gentle rebuttal”, hit me with a feather. As far as writing goes, this is an inkless, pointless dry-jerk. The short version of the real thing goes like this: Obama had to wait for nobody to appoint an AG – if necessary, fire the one he has, repeat – that would go after systemic fraud and control fraud big time. He had to wait for nobody to tell the ‘ffin Big Idiots to pull their heads out of Hoover’s arse and start investigating mortgage fraud.

    It isn’t called the executive for nothing.

    What did the President do, and when did he do it? Last time I looked, the man couldn’t even bring himself to open his mouth and tell it straight. But I suppose, the presidency isn’t even for stooges and mouthpieces anymore either, really. Why, it is almost as weak as its fiercest critics.

    Then again, the failure to uphold the rule of law was practised and perfected by Obama in broad daylight with distractions such as torture, murder of detainees, and assassination, some crimes of which are actually covered by international treaties mandating investigation. I am really not interested in debating the finer points of obstruction of justice and accessory after the fact where it regards money – after all, running out of money might at least hamper repeat performance in the future, or focus all that creatively destructive energy on domestic targets.

  13. Markar

    If only our feckless, political hack of an AG here in CA had the balls of Masto to take on the banks. In terms of $ damage to the economy, no state has suffered more from this mortgage fraud

  14. Aquifer

    Interesting to see all the “political” talk here. I’m used to it on other sites. For all the sophisticated financial expertise represented here, however, the political analysis seems to be at about the same level as elsewhere.

    I am a 4 time Nader voter – having operated, and continuing to operate, on the extraordinarily “simple” idea that one should use the ballot box to get what one wants or needs instead of the best that the MSM has told us we can get – which is always a D or R.

    The ability to scare progressive voters away from 3rd parties and herd them back in worked quite well for the Dems – the smear on Nader, absurd on its face, as “spoiler” worked well enough to nip in the bud what should have been a growing swell of support: if he had continued to gain support in each subsequent election, you would have had, IMO, a quite different political line-up and much better choices all around.

    Obama was a clear stooge even before he was elected – his excuse for taking single payer off the table during the primaries was laughable and it was a fairly easy click of the mouse to discover that his largest funders were FIRE folk with GS at the top. He touted a relationship with Rubin which was tucked away as Citi was getting in more and more trouble, making Geithner and Summers his predictable choices, etc.,etc.

    We will not get a better politics until we choose one and that, IMO, will not happen until we wash our hands of the hopelessly corrupt Ds and Rs. I was a longtime Dem, supporter of Kucinich in the primaries, with a logical, in my calculus of principle over party, switch to Nader in the general – until, that is, Kucinich’ infamous ride on AF1 and his support for that gawd awful ACA for, as he said it himself,the sake of the Pres and party. When a guy with his progressive bona fides will cave and put party over principle – there is, IMO, no hope for “reform from within”.

    The only thing that has any possibility of changing the Dem party is scaring the bejeebers out of them – making it clear that we do have somewhere else to go and, in fact will go there. (And if they will not change, who cares, they can be replaced – the Reps replaced the Whigs.) I have done that for the last 4 cycles and will do it again. I invite you to join me. I will give a reference to a candidate here, because you will not hear much, if anything, about her in the MSM, but she appears to be a classy lady with lefty bona fides running on a Green line.

    I think if we applied as much analysis and moxie to our politics as we do to our financial affairs, we could have a fairly decent country!

    1. boycott

      Interesting fact that never gets quantified in public discourse: average voter participation in Federal election for the past decade? 45%. Most of the voting-age population has stopped pretending this is a democracy. They’re the smart ones. The rest are giving their “consent of the governed” seal of approval to this out-of-control kleptocracy. Even though they see it changes nothing. People obsess about various ingenious ways to send a message to their rulers, vote this way, vote that way, no, some other way, like pigeons pecking the feeding lever more and more when the pellets stop coming out. Fortunately, as OWS shows, and as Move Your Money shows, and as Wikileaks shows, and as UFPJ shows, there’s more to civil society than electoral politics. As this sinks in people will stop wasting their time at the polls, and do what works.

      1. Aquifer

        Could the lousy turnout be because the populace quite correctly perceives that the choices presented to them by the MSM are no choice at all? If it changes nothing that is because of the levers folks have, or haven’t pulled – that’s our fault. There are better choices, we have just refused to make them …

        Of course there’s more to civil society than electoral politics, but if you don’t show up at the polls, someone else will and pick the government for you. TPTB know elections are important or they wouldn’t be spending so much money and effort in buying votes. They value folks vote more than the folks themselves do.

        It remains to be seen whether OWS is more than a flash in the pan. It is generating a lot of media attention – and folks are all excited about the “possibilities” and potential, but it remains to be seen what the result will be at the end of the day. If TPTB keep control of the levers of government, i think the OWS effect will be transient – heady, exciting, uplifting but passing …

        1. EmilianoZ

          It seems to me that the most reasonable thing to do would be to try to convince OWS to support the Green Party for 2012. There’s little chance of winning but at least that would put the Green Party on the map, prepare the way for 2016. If OWS wants to stay out of politics for ever the mainstream people will lose interest in the end.

  15. Victor Berry

    No one will be able to touch the bank higher-ups! At every management level, the command given to the underling manager “if you can’t get the job done, I’ll find someone who can” is inherently blessed with plausible deniability when the legality of “the means justifies the end” job performance tries to flow up the chain of command.

  16. Patrice

    I liked Owen Paine’s description of Ezra Klein (as well as the photograph) in an article entitled “Poodle Piddle”, posted in June 2011, on the stop me before i vote again blog:

    “Ezra Klein is a worthless hank of dog hair. He belongs on a pet-barbershop floor, not where he is, wherever that is, that gets him quoted like he’s the nuncio from liberal common sense. Why he isn’t even a good chew toy….”

  17. Linus Huber

    “I get the sense that fraud for most economists is considered something of a side issue, a kind of aesthetic political problem to be ignored in favor of more significant questions of stimulus and regulatory policies.

    This is a most important statement. It seems completely unimportant that the RULE OF LAW is adhered to. But this is one of the most serious aspects in actuality. The Western Society has been built on the RULE OF LAW and the spirit of this rule of law has been violated repeatedly over the past few years in favor of the 1% and at the expense of the 99%. The first priority of Government should be to return to the real rule of law as fast as possible and to get out of this MIGHT IS RIGHT situation.

  18. Sarah McKee

    Thanks, Matt! Great catch.

    Today I wrote about this to Mass. AG Martha Coakley; Governor Deval Patrick; Northwestern DA Dave Sullivan; and The Boston Globe. Massachusetts cannot possibly be immune to the robo-signing epidemic.

    If Nevada can start prosecuting its bankster community, so can Massachusetts. And the rest of the states.

    Waiting for Eric Holder’s Department of Justice is waiting for Godot.

  19. ChrisPacific

    Regarding economists considering fraud as an aesthetic political problem and a side issue, which you call baffling:

    One possible explanation for this is that the economics profession is itself corrupted. The Inside Job interviews immediately spring to mind.

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