Gaius Publius: The Elephant in the Room Is a Donkey (Reflections on Kamala Harris)

Yves here. An additional comment on Kamala Harris’ failure to go after One West, which even by the low standards of subprime servicers, was a particularly bad actor. Admittedly, courage was notably wanting among attorneys general even in states with a high rate of foreclosures, like California; the one who took the biggest steps was Catherine Cortez Masto, but she went quickly into reverse once the get out of liability almost free 49 state National Mortgage Settlement was signed in early 2012.

But why did Kamala Harris, who had a reputation in California for being an unusually political attorney general, not go after a servicer with such a terrible track record, when she could presumably keep feeding the press horror stories about its misdeeds?

Let us not forget that Harris’ former boyfriend and mentor was the California Democratic party icon Willie Brown. A former California elected official told me that it would be a classic Willie Brown move not to pursue One West, and he would have advised Harris to stand pat if asked. The Willie Brown logic would be that Harris would have far more to gain by having a group of such powerful people owe her that she would scoring a win for California homeowners.

By Gaius Publius, a professional writer living on the West Coast of the United States and frequent contributor to DownWithTyranny, digby, Truthout, and Naked Capitalism. Follow him on Twitter @Gaius_Publius, Tumblr and Facebook. GP article archive  here. Originally published at DownWithTyranny

Sam Seder once wisely said that during the Bush era, almost every Democrat and Democratic supporter looked like a solid progressive. It’s only when Obama becomes president that you can see the difference between the Ezra Kleins of the world and the Elizabeth Warrens (my paraphrase).

But the recent Democratic primary widened those rifts — between the austerity-loving corporate enablers and the actual populists — and they may not close this time under the next Republican president. After all, in the face of real defeat — yes, I know, “she won the popular vote,” but still, defeat pretty much up and down the line — the battle still rages in the Democratic Party. And it should.

What’s this battle about? The same thing the primary battle was about — Will corporate-funded and corporate-loyal Democrats continue to lead the Party as they have since Clinton and the DLC took it over? Or will anti-corporate populists be in control? By “populists” I don’t mean just “progressives” in that vague, feel-good sense. I mean true anti-corporatists, FDR Democrats, true and aggressive enemies of “rule by the rich.”

In the primary, Sanders and the candidates he backed (and several he didn’t) opposed corporate rule of the country, and were prepared to implement policies that removed Big Money’s hand from the wheel of government. It’s that simple. Does what people want rule government policy, or does Money stay in charge?

Their marriage to Big Money did institutional Democratic Party no favors — as a party. But it kept its pro-corporate leaders in power within the Party, which I strongly suspect was the primary goal. After all, how many of the Chuck Schumers and, yes, Nancy Pelosis of the world would ever back a person as much an enemy of their donors and the donor class as Bernie Sanders is? How many of them would prefer instead to “roll the dice with Clinton” ten times out of ten … starting once more even tomorrow … and risk losing electoral power once more even tomorrow … just to maintain party power?

In other words, how many Democratic leaders wish they had run the general election with Sanders in the lead? Not one. Just listen; you won’t hear a single regret. There’s no point in controlling the country, as they see it, if they don’t control the party as well. Without control of the party, which of their donors would back them? With Sanders jailing Wall Street bankers, where who would pay Chuck Schumer to stay in office? With Sanders in the White House, the current class of Democratic leadership would have to find new donors — actual humans perhaps, as Sanders did — or retire from public life on their previous gains and lobby for a living.

Kamala Harris, a Rising “Star in the Party”

Which brings us back to my central point. This time around, with Trump in office instead of Bush, will Seder be proven right again, or will the left-leaning public still distinguish the corporate-beholden from the populists? We’re about to find out.

Democrats just elected former California Attorney General Kamala Harris to the U.S. Senate, and praise for her as a “progressive” has been voluminous.

For example, The Guardian months before the election, wrote, “The attorney general is the odds-on favourite to become the next senator from California – and perhaps the nation’s next progressive star in the making.” On her swearing-in day, the San Jose Mercury News was happy to quote Barbara Boxer saying that Harris “will continue the tradition of having a strong, progressive woman in this seat.”

And the blurb for a recent CNN interview between Jake Tapper and Van Jones makes just two points: “Jones says the Democratic Party needs more progressive leaders” and “He adds that incoming Sen. Kamala Harris will be a star in the party.”

It couldn’t be more plain — Kamala Harris has been tapped (sorry) as one of the next progressive Democratic great ones. The Guardianeven tabbed her “the ‘female Obama’.”

Kamala Harris, Steve Mnuchin & the California Mortgage Crisis

Thus it continued on the “praising Kamala Harris” front until recently. Then David Dayen, author of the well regarded book about fraud and the mortgage crisis Chain of Title, released this story at The Intercept:

Treasury Nominee Steve Mnuchin’s Bank Accused of “Widespread Misconduct” in Leaked Memo

OneWest Bank, which Donald Trump’s nominee for treasury secretary, Steven Mnuchin, ran from 2009 to 2015, repeatedly broke California’s foreclosure laws during that period, according to a previously undisclosed 2013 memo from top prosecutors in the state attorney general’s office.

The memo obtained by The Intercept alleges that OneWest rushed delinquent homeowners out of their homes by violating notice and waiting period statutes, illegally backdated key documents, and effectively gamed foreclosure auctions.

In the memo, the leaders of the state attorney general’s Consumer Law Section said they had “uncovered evidence suggestive of widespread misconduct” in a yearlong investigation. In a detailed 22-page request, they identified over a thousand legal violations in the small subsection of OneWest loans they were able to examine, and they recommended that Attorney General Kamala Harris file a civil enforcement action against the Pasadena-based bank. They even wrote up a sample legal complaint, seeking injunctive relief and millions of dollars in penalties.

Note that his piece is primarily about Steve Mnuchin, as a Trump nominee a safe target of progressive ire. Of course, his company, OneWest, was also caught committing what looked to investigators like “over a thousand legal violation” in just one small subsection of OneWest’s loans, so that ire was well deserved.

So a piece punching a Trump nominee, and thus a safe (uncontentious) story in this anti-Trump (“resist”) environment. What institutional Democrat could object?

But Dayen, true to his calling, reported the whole Mnuchin-OneWest story. Notice the name Kamala Harris above? Here’s how Dayen’s piece continues:

But Harris’s office, without any explanation, declined to prosecute the case.

Is this still a “safe” story for the rest of the left-leaning media to follow? More from Dayen (my emphasis):

The consistent violations of California foreclosure processes outlined in the memo would indicate that Mnuchin’s bank didn’t merely act callously, but did so with blatant disregard for the law.

According to the memo, OneWest also obstructed the investigation by ordering third parties to refuse to comply with state subpoenas.

Whether Mnuchin directed efforts to prevent scrutiny of his bank’s practices could be a focus of the confirmation hearings.

The memo also raises questions about then-California Attorney General Kamala Harris, who was sworn in as a U.S. senator on Tuesday, and who will soon have to vote on Mnuchin’s appointment.

Why did her office close the case, deciding not to “conduct a full investigation of a national bank’s misconduct and provide a public accounting of what happened,” as her own investigators had urged?

State and federal law enforcement have been severely criticized for failing to hold accountable those responsible for the financial crisis and its aftermath. The OneWest case provides another example, and this time, the failure to prosecute could help the nation’s next treasury secretary get confirmed.

To give you a sense of the full extent of OneWest’s, and possible Mnuchin’s, crimes, consider this:

Though the state investigators could not subpoena OneWest and were obstructed from obtaining more documents, they extrapolated that a full and unencumbered inquiry would yield at least 5,600 violations of foreclosure sale auctions, and turn up instances of backdating in nearly all of the 35,000 foreclosures OneWest had completed in California from 2009 to 2012.

That a ton of criminal activity, if true. And based on the small percentage of documents investigators were not obstructed from obtaining, they considered this estimate of the extent of OneWest’s total criminal activity in California between 2009 and 2012 a fair one.

And yet, as Dayen also notes, the Kamala Harris’s failure to prosecute could help Mnuchin get confirmed as the next Treasury Secretary.

Why didn’t Harris prosecute OneWest? The piece offers a number of admittedly speculative explanations, which you should read. Among them, though, is this:

Harris’s prodigious fundraising also raises questions about how attentive she is to the needs of campaign contributors. Prior to signing on with Trump, Mnuchin donated to members of both parties. He gave $2,000 to Harris’ Senate campaign in February 2016. Among the investors in OneWest Bank was major Democratic donor George Soros, who maxed out to Harris’ campaign in 2015.


The Elephant in the Room Is a Donkey

So who is Kamala Harris going to be in the Age of Trump, a “people’s champion” in the Bernie Sanders mold, or someone just praised as one?

And more importantly, will that praise continue in light of Dayen’s revelations? I suggest that a look at the treatment of Kamala Harris’s history with OneWest and Mnuchin, especially in the lead-up to his confirmation, will provide an important and instructive test of who the mainstream Democrats and their supporting ecosystem plan to be.

Will “left”-leaning media, especially broadcast media, pick up on the Harris-Mnuchin backstory, thus calling into question her “progressive” credibility? Or will they stay silent on that part? (Looking at you, MSNBC and CNN.)

Will “left”-leaning opinion makers in the pundit-sphere fold what they learn from The Intercept‘s investigation into their public treatment of Harris? Or will they too stay silent, in effect confirming what Van Jones earlier proclaimed, that Harris is a rising “star” in the Party?

The elephant in the room is a donkey. What you’re reading is not an piece about Kamala Harris. It’s a piece about the Democratic Party and the so-called “left-leaning” media ecosystem. Observing their treatment of Kamala Harris going forward is one more way you, the reader, will know who and what the Party itself wants to be in the Age of Trump.

What is the Democratic Party and its ecosystem going to be, a “people’s champion” in the Bernie Sanders mold, or something just praised as one?

If the latter, especially if Harris’s failure to prosecute OneWest gets Steve Mnuchin confirmed, and they treat her as a star nonetheless (consider the consequences of that!), the Party will likely be out of power for a generation — or, as I always add, until climate chaosmakes every other conversation moot.

The elephant in the room is a donkey. And out in the electorate, even if the pundits ignore it, people are watching. After all, that’s how Trump got elected in the first place.

Stay tuned.

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  1. wnk

    This is explained by the Iron Law of Institutions, that people who control institutions care first and foremost about their power within the institution rather than the power of the institution itself. Thus, they would rather the institution “fail” while they remain in power within the institution than for the institution to “succeed” if that requires them to lose power within the institution.

    1. ex-PFC Chuck

      Yes! And the likelihood that the Democratic Party will ever again become a genuinely progressive advocate for the lower 90 percent are slim at best.

    2. PJMax

      That’s true.. Those who are in control of institutions have a vested interest in the status quo.

      1. madame de farge

        not just the status quo. They are interested in the Great Asset Grab…. Look to the savings and loan mess, Enron, etc… They do not care one iota about the institutions, they will move on to another for another Asset Grab… just like the colonials and slave holders….

        1. QuarterBack

          If you want to see the Great Asset Grab in progress, take a trip to D.C. and play a game I call ‘count the construction cranes’. There are many billions of dollars of commercial office buildings going up – everywhere. The banks that fronted the money for these projects are not stupid. They are for the hoards of outsourced Government services. The bonus of outsourcing is that transparency (and therefore accountability) go out the window to protect ‘proprietary business infomation’.

  2. fresno dan

    “Their marriage to Big Money did institutional Democratic Party no favors — as a party. But it kept its pro-corporate leaders in power within the Party, which I strongly suspect was the primary goal. After all, how many of the Chuck Schumers and, yes, Nancy Pelosis of the world would ever back a person as much an enemy of their donors and the donor class as Bernie Sanders is? How many of them would prefer instead to “roll the dice with Clinton” ten times out of ten … starting once more even tomorrow … and risk losing electoral power once more even tomorrow … just to maintain party power?”
    Gives me a new perspective. Ruling in the party and ruling in the nation are two things…What is the saying?
    Better to rule in hell than serve in heaven?

    Though I have said that the only competition in the parties is first and only the grift….

  3. andyb

    The truth will be known at the 2018 Democratic get together. Will Harris be the keynote speaker signalling a possible Presidential run? Just continuing a meme for the “chosen” of the NWO?

  4. PlutoniumKun

    He gave $2,000 to Harris’ Senate campaign in February 2016.

    Jeez, if you are going to be bought, at least have a high price. It doesn’t seem too much to expect politicians to at least attach a six figure sum to their decency and integrity.

    1. jsn

      I had a Columbian liquor importer tell me his biggest surprise doing business in the US was how cheap it was to buy the Pols. That was about twelve years ago, he as done great: apparently inflation hasn’t hit the Pols much either.

      1. Buttinsky

        I had a friend who worked for… well, let’s call it a large real estate concern, and his job had taken him to Washington D.C., where he learned that everybody in Congress was for sale — but that Southerners came especially cheap. That could be explained by the lower cost of living in the South, I suppose, but that certainly can’t account for the bargain-basement price on California’s Kamala Harris. Maybe it was one of those situations (what’s it called, “price leader”?) where you sell one item at a great price just to get the customers in the door.

      2. John Wright

        One remembers Nixon’s VP, Spiro Agnew.

        He was pushed out of his office by his own bribery scandal, and was not felled by any connection with Nixon’s Watergate.

        Agnew was referred to as “The only politician you could bribe with a bag of groceries”, so maybe he holds the record for least costly, at least when he was a small time pol in Maryland.

        I suspect the minimum “campaign contribution” price is generally higher, now, as politicians hold out for the best offer.

        $2000 in 2016 should be viewed as an insult by Kamala Harris’s people, but it was well after the 2013 failure to prosecute by Harris, so it was hardly a progress payment.

        The token $2000 might cause an aggrieved Harris to vote against Mnunchin as a lesson to other future donors.

        1. dcgadfly

          If Munchkin was able to have a corporate investor sponsor like Soros max out the contribution to Harris, there was no need for him to do more than a token investment in Harris.

  5. jo6pac

    I can’t find the right way back machine but didn’t harris and other state ags go to the obomber white house and then dropped all case against wall street?

    1. Yves Smith Post author

      It was a little more complicated.

      Basically, the Administration had a scheme for getting the banks out of mortgage securitization liability that looked like it was going nowhere. Yours truly and others made fun of how it didn’t look serious.

      But there were a lot of mortgage cases happening, including some involving big players going after other big players. The New York attorney general, Eric Schneiderman, became the de facto leader of a group of 14is Democratic AGs who were crafting a much tougher proposal. IIRC, Harris joined pretty late in the game, as befits her Willie-Brown-schooled unwillingness to take any political risk.

      Schneiderman was flipped by Obama. He got a seat next to Michelle at the 2012 State of the Union address and was made a co-chairman of a mortgage task force. Turns out that group had been around since 2009 and had done nothing. And there were something like 5 other co-chairmen, including again IIRC Lanny Breuer. The Administration really rubbed Schneiderman’s nose in it. Didn’t give him an office or a phone for months. Claimed the effort had 55 people but that was by classifying people who already had full time jobs as part of the team.

      Getting Schneiderman killed the dissident AG effort. The rest quickly fell in with the Administration and agreed to the National Mortgage Settlement.

      1. Republic, If You Can Keep It

        This type of article, its insights, Yves Smith and Gaius Publicus are major reasons I read this blog. My thanks to everyone.

        As to the article. These are serious times. The balance goes against Kamela Harris being the leader we need in The Age of Trump (a Central Asian-type oligarch who may not leave the White House if he loses the next election, preferring Lt. Gen. Michael Flynn fly in a brigade from Afghanistan to surround and hold it, declaring, again, he “won a landslide” after the illegal immigrant vote is excluded).

        As to RepubAnon’s put down comment,
        “The prosecutors made clear to their superiors that the case would be a tough one, with no guarantee of success. They said they expected litigation to chew up substantial resources and last three to five years (which would have been about now).
        Source: Treasury Nominee Steve Mnuchins Bank Accused of Widespread Misconduct in Leaked Memo”

        This judgment-laced description is no critique, only rhetoric for the unsophisticated and unknowledgeable. ALL worthwhile white collar litigation lacks a guarantee of success. This is why it is “litigation” and “tough”. If civil prosecutors only sued when they had a guarantee of success, they would sue only fools, wasting taxpayer money for little return.

        Equally unpersuasive is RepubAnon’s criticism that had Harris, acting for the State of California’s 40 million citizens, sued, the litigation would have taken “three to five years” and “significant resources”. Again, that’s true of any worthy while-collar lawsuit against a determined, well-financed defendant. Most things worth doing take this long and require, as opposed to the pejorative “chew up”, significant resources.

        What RepubAnon could have, but didn’t, quote from was the important leaked California Department of Justice Memo, which RepubAnon alluded to. The Memo recommended filing the lawsuit — even considering the difficulties cited by RepubAnon. Moreover, the Memo recommended filing the lawsuit on the basis of evidence obtained even without the State having the ability to issue an investigative subpoena. (See Memo footnote 5.) In other words, based on evidence in plain sight there was reason to sue. The California Department of Justice was blocked from issuing a subpoena because of a recent US Supreme Court decision, (see again footnote 5) shielding nationally-banks from State-issued subpoenas. RepubAnon might have alerted the readers to this: how nationally regulated and chartered financial institutions (likely with the support of the reactionary Federalist Society lawyers group, which doesn’t waste time on unimportant things) use “federal “preemption” (i.e. the exclusive authority to investigate and regulate) to shield wrongdoing from State corrective efforts. In the Age of Trump and of the U.S. West being the last major Redoubt of Non-Oligarchs, it is important to point out this political legal policy — as it is a significant chink in the weak Non-Oligarch armour.

        Likewise, it would have been good to see who filed friend-of-the-court briefs in that Supreme Court case, Kamala Harris? Cloaked Federalist Society lawyers in the lucrative pay of financial institutions and their myriad trade associations a/k/a lobbies? In these times it is important to know who friends and foes really are in these nether realms. Did a OneWest Bank trade association and/or Federalist Society members “chew up substantial resources” of allies on a wasteful friend-of-the-court brief? Or did they “drain the swamp” of depositors money, funneling it upward to the trade association lobby and possible paymasters?

        Lastly, and not unimportantly, the Memo was leaked. Few State or U.S. Justice Department lawyers leak. Firstly, because they believe in due process and The Rules, which incline strongly toward letting Justice make its way under and not outside of The Rules. Secondly, they don’t leak because there are serious risks if one does. The point is someone, likely in the Calif. Department of Justice, leaked. They likely thought the Public needed to know what happened. Good leaks are the Canary in the Coal Mine. RepubAnon’s discussion did not touch on this.

  6. Persona au gratin

    Ho hum. Another left coast cult of personality type wannabe pol in the mold of a more accomplished Huma Abedin. Young(ish), photogenic, multi-ethnic, accomplished, and of course ambitious. All her Google images come across as staged, insincere, and fawning. Another perhaps better looking Barry O who scratches all the demographic itches. And married to a white guy too! What’s not to love/hate?

    1. Elizabeth

      Exactly. Cali loves it rising “stars” and “starlets.” She’s part of the dem machine here – counseled by Willie Brown and pumped up by the “progressive Obots.” She doesn’t have any core principles – just sticks her finger in the air to see which way the wind is blowing. I must say, a $2,000 campaign contribution from Mnuchin is a paltry sum. I wonder if she’ll offer us “bipartisanship” as the excuse to confirm his appointment.

    2. Dave

      What a marriage, watched the video, she put a flowered garland around her husband’s neck following her family’s tradition…
      Which side?, she’s half Indian [red dot] and half Jamaican black.
      Following his family’s traditions, she stomped on a glass”

      Oh man, a threefer, so much better than a twofer in California.

    3. Crazy Horse

      Kinda reminds one of another multi-ethnic “leader” manufactured and nurtured as a perfect tool for his owners. From the standpoint of his investors, Obama was the most successful president in history. He managed to keep a sufficient number of voters bamboozled sufficiently to elect him to a second term of office, while completely blocking any responsibility under the rule of law for individuals like Mnuchin & Corizine. The Nobel Peace Prize winner became Obomber the Assassin, reining death down from Preadator drones upon wedding parties and individuals who had too many connected phone conversations in complete defiance of international laws.

      When I encounter intelligent people like the readers of NC seriously discussing whether the Democrat party can be a force for reversing the dominant power of the Malignant Overlords of Capital & War, I can only shake my head. The USA has a one party political system, and that party is the Property Party. Electoral circuses are held for the amusement and distraction of the rabble, populated by tools like Clinton, Obama and Harris. Within the One Party factions contest which of the .001% will receive the biggest rewards, but that is the limit of “Hope and Change.”

      Trump may have been elected by tweeting about how he is going to make America Great for the Little People and build a Wall to keep everybody else out, but when it came time to staff his administration the non-negotiable requirements were that the appointee be a billionaire, deny that science has any connection to reality, and have committed financial crimes that stole property from the Little People. And as to the other “outsider” who was torpedoed by the Clinton machine and fell into line as a supporter, in what world do you think Sanders has the power or inclination to challenge the Warfare State even if he had become president?

      1. Adams


        “What is the Democratic Party and its ecosystem going to be, a “people’s champion” in the Bernie Sanders mold, or something just praised as one?.”

        Reading the article I kept thinking, “You’re kidding, right?” We already know the Dem party will sell us out. Chuck (carried interest loophole, Israel uber alles) Schumer is Senate minority leader. Unopposed. Nancy (rally the votes for Homeland Security) Pelosi is still there. The White House is furiously working against Ellison. And, as you point out, the “progressives” are led by Sanders and Warren, neither of whom has shown any inclination to take a strong and forthright stand against the obscene, bloated and self destructive military budget.

        The article is a dumbed-down rehash of questions to which we know the answers. The only thing I learned was that I should have read the original DDay piece in the first place.


    4. Jazz Paw

      Kamala Harris is being sold to Democrats like soap. Yes, she will get a prominent speaking role whenever possible and be groomed to be a presidential candidate. I doubt 2020 is going to be enough time to make this happen.

      It really doesn’t matter what she believes anyway. The problem with the Democrats is that their legislative actors are not in possession of any plan forward. My personal goal is now aligned with Grover Norquist: shrink the Federal government and drown it in a bathtub. My state can’t secede, but perhaps fiscal secession is doable.

      Democrats will not be able to stop much of the Republican agenda because enough of them will be bought off to get 60 votes. It really won’t matter what Shumer says. The likes of Manchin and others will gladly trade with the Republicans.

  7. polecat

    “a people’s champion’ ???

    … more like a perpetrating chameleon in my estimation …..

    and …’the ‘female’ Obama’ ……. something for the O & Hill Bots to latch onto … like fleas to a rat … a Demorat !

    Heyzeuz help us !

  8. casino implosion

    “I mean true anti-corporatists, FDR Democrats, true and aggressive enemies of “rule by the rich.”

    Anyone who accepts this sentence at face value needs to read the main works of the New Left historians like Kolko, Livingston and Sklar.

    1. Phil

      Yes. I remember when I was a young pup and encountered Kolko in a course on American business history. It so attacked my assumptions that it took me five years to really come to grips with it.

      Wealth of Nations, Great Transformation, and Triumph of Conservatism should be required reading before voting. I know, a new Crosscheck!

    1. Dave

      He’s moved on to another arm candy. A Russian ballerina, or something like that. More like his nursemaid than girlfriend. She’ll be changing his diapers pretty soon.

  9. Katharine

    One ally the less. Maybe she can still be pushed to vote appropriately on occasion, but certainly not counted on for good legislation or organizing her colleagues.

  10. Paul Tioxon

    Here is the political reality of Kamala Harris and the necessary connection to explain why she is by passing for prosecution, the proposed Treasury Secretary, Steven Mnuchin. Aside from being a standard issue Ivy League Goldman Sachs financier, Mr Mnuchin’s name can be prominently seen in the bright lights of the Hollywood silver screen on a frequent basis. I know, because I just saw the Batman vs Superman epic on HBO and in the rolling credits, Mr Mnuchin is a credited producer. And it does not stop there. A handful of x-Men movies, Avatar, and unending stream sci-fi franchise money makers, Aliens-Predator, the Aliens pre-quel, Prometheus, the list is extensive partnering with Fox and Time Warner to help finance the biggest of the big name stars, the biggest of the big blockbuster directors. Well, I hope you get the idea. Hollywood financing is a jumble of money from several sources at this blockbuster level, no doubt to spread the risk. No one wants to be on the hook for a “Cleopatra” money pit that can take down your whole studio.

    Los Angeles and the entire state of Cali owes Hollywood a lot of leeway due to its major economic impact for jobs and all of the cash coursing through the streets of Rodeo Dr, Beverly Hills and other global landmarks, all part of the tinsel town lore. Here is a brief overview:

    “Without a doubt, the entertainment industry is a fundamental and indispensable pillar of the economy. That’s true not only in greater Los Angeles, but also the State of California and the entire United States. Whether measured in terms of employment, the number of business establishments, positive balance of international trade or as a source of tax revenue, the importance and impact of the industry at the local, national and international level is simply staggering.

    Consider: there are more than 6,600 business establishments in California that service the film and television industry, which is triple the roughly 2,000 Starbucks locations in the state. Combined, these entertainment businesses employ over 212,000 Californians. Moreover, many of these establishments are small businesses with fewer than 10 employees each. In 2008, California industry workers earned a whopping and critical $16.7 billion in wages, much of which went on to find its way into California’s cash-strapped economy.”

    If you are going to crucify Mr Mnunchin on a cross of mortgage back securities, you may well hear from his partners at Fox and Time-Warner explaining to you why they need him to keep movie production on schedule, meeting payrolls and satisfying voters in the state that feed off the Hollywood gravy train. From caterers, to dog walkers, carpenters and electricians on site and movie lots etc etc. Mr Mnunchin may have very Democratic friends as studio heads and directors who need him and his financing skill set to make some the biggest movies that are coming out of Hollywood. Losing his entertainment company, Rat-Pac DuneEnterntainment may not be prudent for a pol who will find jobs lost worse than not sending one man to jail. If you thought 48,000 pissed off coal miners and steel workers in Western and Central PA handed Trump the presidency, imagine pissing off all of the people in CA who may be out of work because hedge fund money stops coming to Hollywood because the Wall St hands are dirty from the Great Financial Collapse of 2009.

    1. roadrider

      All you’re doing is providing a not-so convincing rationalization for why the wealthy and well-connected are not subject to the rule of law. Are you seriously saying that if Mnuchin were packed off to a Club Fed his company would disappear? That no other bored squillionaire would step in and fill the void?

      Harris’ failure to prosecute smacks of favoritism, not of a reluctant decision to let Mnuchin slide because of the collateral damage to the film industry or the many workers it employs and those whose jobs are indirectly linked to that industry.

      Its not a “political reality” – its corruption and cronyism.

      Commit a crime – go to jail and forfeit your ill-gotten gains. Its really that simple, no matter how big your name or your pile of assets may be.

      1. RepubAnon

        Actually, the Intercept article gives a much clearer reason why a reasonable, non-corrupt attorney general could decide not to pursue a case against OneWest:

        The prosecutors made clear to their superiors that the case would be a tough one, with no guarantee of success. They said they expected litigation to chew up substantial resources and last three to five years (which would have been about now).
        Source: Treasury Nominee Steve Mnuchins Bank Accused of Widespread Misconduct in Leaked Memo (Emphasis added)

        Deciding not to pursue a tough case with no guarantee of success, which would chew up substantial amounts of limited resources, sounds like a reasonable decision. Joining the multi-state settlement instead and getting a $14 billion dollar win seems a less resource-draining alternative.

        1. madame de farge

          We’ve heard that song and dance before about it being a rough job….. Just think about Little Chrissy Lagarde, convicted of CRIMINAL Negligence and not one single day in jail, not fines and still IN CHARGE at the IMF…..

      2. Paul Tioxon

        Thank You Father Flotsky for your excellent sermon on the wages of sin. Please everyone, come on down to the nakedcapitalism 7th Grade Civics Class Model UN, Pie in the sky is being served.

    2. John Wright

      This seems to argue for Harris voting against Mnunchin’s confirmation as his services, assuming he pursues his new government job with due diligence, will be lost to the California economy.

      What has changed, does he have better help now than when he could run both a bank and an entertainment company?

      He definitely had a fragile entertainment company if his detention/possible fine related to a different (banking) business would cause his entertainment company to suffer economically.

  11. pat b

    ““Jones says the Democratic Party needs more progressive leaders” and “He adds that incoming Sen. Kamala Harris will be a star in the party.””..

    Both statements are true but not not commutative….

    There is no reason Sen Harris will be any more a progressive leader then Obama or Hillary was.

  12. susan the other

    Most of the state AGs dropped the ball. Obama himself was busy threatening them, cajoling them. Kamala was just another disappointment in a long list. It’s a picture of a country owned by banks and corporations whether those parties are democrat or republican. It doesn’t matter anymore. The only thing that matters is equity. Inequality has spun out of control, forget politics spinning out. Politics always follows economics. Like form follows function. Except in this case it is form following disfunction. Why is it so difficult to straighten out equality issues? Let’s do something about those obstacles. Not piecemeal patchwork nonsense. Real equality is what we need especially now that the whole labor-capital paradigm is rapidly falling apart. We need a new branch of government that establishes equity. Because inequality of this magnitude is an entirely new phenomenon.

  13. johnnygl

    If jake tapper and van jones heap praise on her, that’s a tell that she’s terrible. If a candidate gets treated how tulsi gabbard got treated by someone like howard dean…’not sure of progressive cred’ and ‘reservations’ are expressed, then you know you have someone worth backing.

    You want to see corp media squirming when the candidate looks to be winning. That was a big part of trump’s appeal. I worry that dems and lefties don’t yet hate the party and the media like repubs clearly do.

    Dems still seem like repubs were around 2012, where there is discord, but not yet open revolt. I hope the base gets angrier and soon!!!

    1. Marco

      Excellent point! Looking back at this election it’s startling to realize how a large enough bloc of conservative voters were able to catapult over the republican establishment blockade. Bush family…Religious Right…Fox News. All certainly not dead but greatly diminished in stature. How long until Democratic voters come to a similar realization? The unpopularity of GW helped aide the shift and loss of respect. But Obama’s undeserved popularity is a HUGE obstacle. His legacy as a transformative political figure was never challenged. ID politics is a teflon-coat for repelling any kind of leftist assault.

  14. Nakatomi Plaza

    Kamala Harris was instrumental is running Corinthian Colleges out of business. Corinthian -if anybody is unaware – was one of the worst predatory, for-profit college corporations in the country until they were shut down almost two years ago. They were absolute pieces-of-shit. Yes, this was part of Obama’s push-back against the for-profit college movement that exploded under Bush, so it certainly would have ingratiated Harris to DC. However conflicted her motives may have been, the death of Corinthian was a genuinely good thing. She fought the good fight in that instance.

  15. Ralph Johansen

    This is a left-liberal blog among people for the most part with lotsa money, so this may fall flat:

    Why is the Democratic Party in a tailspin? Have we not seen that coming?

    Anecdote: There’s this guy Gary from Gary, IN. He’s 53. He spent his working life with an automotive parts supplier, after years becoming a line supervisor at $30 an hour. Then suddenly the company moved to Texas (then on to Mexico). Gary went to work as a call service worker at $15 an hour. Then his job moved to India. Now he works in the warehouse at WalMart at $11 an hour. Guess who he voted for? Did you hear Hillary offer word one in his defense? (Thanks to Mark Blyth for the anecdote).

    And because of automation and shipping jobs off to Mexico, India, China, Bangladesh and points south, those jobs are not coming back. Even the few that might, tending robots, won’t pay squat. And labor is immobilized and defenseless, restrained from global solidarity by walls, laws, border patrols, anti-immigrant politicians and egregiously disparate, competitive living and working conditions. We’re in the process of a global downward equalization of the wage rate. The rentiers like Apple, Microsoft, Nike and WalMart, oligopsonists who dictate the terms of the contracts with the offshore producers, including the low wage scales and rates of return in poor regions of the planet, will make sure of that. Bernie and Trump were either ignorant or disingenuous populists in saying that they could ensure the return of those jobs – one of the two, you pick. I think I know. Hillary at least did not/could not, because of her real constituency, lie (much or enough) on that score.

    And the Democrats have no answer. Aren’t about to. Neither party, as we found after Obama and as we will confirm after Trump. This is a job for a radical socialist movement – no less and regardless of the odds; or what instead? I’ll tell you what, chaos. I mean, a movement this time on the offensive, not in defensive mode as labor and its organizations have been since Taft-Hartley, the McCarthy era and the great share-of-the-profits compromise But don’t try to tell the part about the alternative to almost any liberal Democrat. One must not stir up the sleeping dogs of class struggle, as Paul Samuelsen said.

  16. wmkohler

    Harris’s disappointing record combating mortgage fraud is the reason why I voted against her in the 2014 AG election, in favor of a Republican with few resources and fewer qualifications whose campaign consisted largely of a pledge to legalize weed. I like to imagine that the outcome, 57.5-42.5 in favor of Harris, was closer than expected. During her Senatorial campaign, googling “Kamala Harris mortgage crisis” and similar searches would turn up a variety of articles praising her for playing “hardball” for briefly walking out of settlement talks. Hopefully Harris will feel compelled to more thoroughly address her role in the failure to prosecute OneWest than she has thus far.

  17. Sluggeaux

    Kamala Harris is a shameless self-promoter who would never bite the hand that feeds her. She has spent her career ducking the prosecution of “difficult” cases against the kleptocracy. She will be so callously blind to the needs of working people that Obama will look like Lincoln in comparison. Like Obama, her one and only only calling card is one parent with some African DNA that makes the establishment’s fear of “angry negroes” go away while feeling good about their “post-racial” enlightened views. She is the perfect successor to the carpet-bagger Barbara Boxer, whose only legacy after decades as a U.S. Senator is a chain of “Indian” casinos up and down the state.

    I’ve never met the Senator-elect, but people who I respect who worked with her, loathe her.

  18. gepay

    Gauis Publius gives the intercept paper by David Dayen more deserved exposure. Obviously, a $2000 contribution to a California senate campaign is not going to influence any candidate very much. The backing of George Soros certainly can. One of the commenters pointed out the Hollywood connection to Mnuchin. (although he wrongly tried to make out this had mainly to do with jobs). One should remember Sinclair Lewis would have most likely been elected governor of California in the Depression if not for Hollywood using its considerable influence against him. I had wondered why Willie Brown was one of those warned against flying with airlines shortly before 9/11 but Yves’s comments clarified that. If I believed that man made CO2 is causing a catastrophic climate change in the near future I wonder if I would bother about trying to make modest reforms to a failing system.

  19. Mitch Ritter

    Is there a decoder ring Naked Capitalism uses to vet Ezra Klein’s Progressive-ness?
    Like I say below, I’d never heard of him and would guess I’m not alone…


    PS – More On Ezra Klein forthcoming as Sen. Boxer exists Stage Left? Kamala Harris: Progressive for California If “Downtown” Willie Brown Is Your North Star…

    View from Oregon:
    Kamala Harris: Progressive for California If Willie Brown Is Your North Star….
    Or you want ORACLE-written outcomes for decades like our Democratic Progressives
    controlling the state of Oregon have assured. See under: former Auditor In Chief as Lt. Governor Kate Brown assumed the Governor’s Conflicted-Interest office in our fair one-party Blue State with KORUS, FTA, TPP and Fast-Track Authority trading Democratic Party (exceptions for Jr Senator Merkley and blue collar rural rep DeFazio)
    and current Attorney General Ellen Rosenblum.

    Learning to tell the stripes and spots on Democratic Party “Progressives”

    I had no idea who Ezra Klein was or how Elizabeth Warren’s
    “Political Opportunism” instincts guided her financial regulatory work.
    More grist for the mill as separating wheat from chaff gets tricky…

    No snap decisions on my part, as voters and activists often have to
    make “politically opportunistic” read “expedient” choices every step of the way.
    Just adding this to the hopper since it is not likely to be discussed at your local
    Democratic Party Raoul Wallenberg Club meetings on organizing….

    Lay-Low Studios, Ore-Wa
    Media Discussion Group

    1. Yves Smith Post author

      Huh? Ezra Klein is very well known, sufficiently so that he’s been a special project of ours from time to time


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