OBAMA AND HIS CRONY CAPITALISM
Corzine also exemplifies the
seamless ties between Wall Street and the Obama administration. A major
fundraiser for Obama’s reelection campaign, the now-disgraced banker-politician
hosted the president’s first fund-raising event at his Fifth Avenue apartment
overlooking Central Park. He was expected by many to be named treasury
secretary in a second Obama term.
Corzine is but one of many
figures in or around an administration loaded with Wall Street
multi-millionaires. Obama’s former White House chief of staff Rahm Emanuel
joined his administration after taking time out from Democratic Party politics
to earn millions as an investment banker in Chicago. He was replaced by
Clinton-era Commerce Secretary William Daley, who left his post as a top
executive at JPMorgan Chase to head up White House operations.
*
THE REASON OBAMA PUT WILLIAM DAILY
INTO THE WHITES HOUSE WAS BECAUSE OF DALEY’S JP MORGAN CONNECTIONS AND BECAUSE
HE’S AN ADVOCATE FOR OPEN BORDERS TO KEEP WAGES DEPRESSED FOR OBAMA’S
PAYMASTERS!
*
The MF Global collapse, the
Democratic Party and Wall Street
8 November 2011
The
collapse last week of US broker-dealer MF Global has put the spotlight on the
parasitic speculation and outright criminality that are at the heart of the US
financial system. It has also provided a text book example of the corrupt and
incestuous relationship between the American financial aristocracy and both the
political system in general and the Democratic Party in particular.
Facing
a run on its holdings, a collapse in its stock, and credit downgrades of its
debt to junk status, the Wall Street investment firm with $41 billion in assets
filed for Chapter 11 bankruptcy protection on October 31.
A
last ditch bid to find a buyer for MF Global fell through when regulators
discovered that $633 million in clients’ money had gone missing. It is
suspected that the company, headed by former Goldman Sachs CEO and one-time
Democratic senator and governor of New Jersey Jon Corzine, moved money out of
client accounts in an attempt to meet margin calls from its creditors. It is a
crime for a firm to use clients’ money to trade on its own account, let alone
to pay off its debts.
Multiple
investigations have been launched by federal financial regulators, along with
criminal probes by the FBI and the US attorney for Manhattan. Last Friday,
after having hired a prominent criminal lawyer, Corzine resigned his post as
chairman and CEO of MF Global.
The
collapse of the firm, the eighth biggest bankruptcy in US history, was the
first major corporate failure resulting from the European debt crisis. It
demonstrates that nothing has been done since the Wall Street crash three years
ago to rein in the speculative activities of financial firms. The same
practices that led to the global recession continue unabated.
Several
months after taking control of the firm in March of 2010, Corzine began making
enormous bets with borrowed funds that the sovereign debt of countries such as
Spain and Italy would not collapse. He placed a single bet of $6.3 billion—six
times MF Global’s capital—on risky European state bonds, driving his firm’s
leverage (its assets to capital) to a ratio of 40 to 1.
When
MF Global reported a second quarter loss of nearly $190 million due to the
worsening of the European debt crisis, investor confidence in the company
collapsed.
The
disaster has also shown that along with the reckless speculative practices, the
obscene levels of executive compensation are intact. In his 18 months as head
of MF Global, Corzine pocketed $14.25 million in total compensation.
!!!!!!!!!!!!!!!!!!!!!!
The
64-year-old banker-politician personifies the intimate ties that bind the
Democratic Party to Wall Street. Leading Democratic officials, including
nominal “liberals” like Corzine, pass seamlessly between the corporate
boardroom and government office. They enrich themselves to the tune of millions
by engaging in financial manipulation and swindling and then oversee
legislation supposedly designed to regulate these very activities.
!!!!!!!!!!!!!!!!!!!
Corzine
was CEO of Goldman Sachs from 1994 to 1999, precisely the period when the
dismantling of corporate and banking regulations—which had begun under the
Democrat Carter and expanded under the Republicans Reagan and the elder
Bush—was completed under the Democrat Clinton. Corzine left his Wall Street
post with a reported fortune of $400 million. He proceeded to spend $62 million
of it to get himself elected US senator from New Jersey.
In
2005 Corzine spent another $38 million of his own money to win election as
governor of New Jersey. As governor, he imposed brutal cuts in health care,
pensions, higher education and aid to the cities, as well as slashing 5,000
state jobs. As a result, he lost his reelection bid in 2009 to right-wing
Republican Chris Christie, who has expanded the assault on New Jersey workers.
When
Corzine returned to Wall Street the following year he was given royal treatment
by government regulators. The president of the Federal Reserve Bank of New
York, William Dudley, another Goldman Sachs veteran, gave MF Global entry into
the exclusive and lucrative club of “primary dealers”—financial firms chosen to
market US Treasury securities. This was despite MF Global’s relatively small
size and the fact that it had been fined $10 million one year before as a
result of a trading scandal.
When
MF Global’s primary regulator, the Commodity Futures Trading Commission (CFTC),
moved to impose stricter limits on broker-dealers’ use of clients’ funds,
especially to invest in foreign sovereign debt, Corzine lobbied personally
against the regulation. Earlier this year, Gary Gensler, the head of the CFTC,
suspended implementation of the new rules.
Gensler
is another Goldman Sachs graduate, having worked with Corzine at the firm for
18 years, rising to become co-head of finance before leaving in 1997. Gensler
has been forced to recuse himself from the CFTC investigation into the MF
Global collapse.
Corzine also exemplifies the
seamless ties between Wall Street and the Obama administration. A major
fundraiser for Obama’s reelection campaign, the now-disgraced banker-politician
hosted the president’s first fund-raising event at his Fifth Avenue apartment
overlooking Central Park. He was expected by many to be named treasury
secretary in a second Obama term.
Corzine is but one of many
figures in or around an administration loaded with Wall Street
multi-millionaires. Obama’s former White House chief of staff Rahm Emanuel
joined his administration after taking time out from Democratic Party politics
to earn millions as an investment banker in Chicago. He was replaced by
Clinton-era Commerce Secretary William Daley, who left his post as a top
executive at JPMorgan Chase to head up White House operations.
Others
include Ron Bloom, a member of Obama’s auto task force and then chief adviser
on manufacturing, and Steven Rattner, the financier chosen to head the auto
task force. Rattner was later forced to step down after being indicted for
making payoffs to obtain contracts with New York State pension funds.
Corzine’s
troubles will complicate the cynical attempts by Obama and the Democrats to
appropriate the anti-Wall Street anger expressed in the Occupy movement and
channel it behind the Obama reelection campaign. What, in fact, the MF Global
saga and Corzine’s career demonstrate is that the fight against social
inequality, poverty and corporate domination of the government is a fight
against the Obama administration and both parties of the financial-corporate
elite.
It
requires the independent mobilization of the working class in a struggle to put
an end to capitalism and establish socialism.
Barry
Grey
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