The former Goldman Sachs executive who helped one of the biggest banks profit off the nation’s housing collapse in 2008 is pouring hundreds of thousands of dollars into Democrat presidential candidate Joe Biden and Sen. Kamala Harris’s (D-CA) campaign.
Donald Mullen Jr., as first noted by the Washington Free Beacon, gave $200,000 to the Biden Victory Fund in August. Mullen was a key architect of the “Big Short” scheme that allowed Goldman Sachs to profit from the housing collapse.
New York Magazine detailed the scheme:
In the years leading up to the financial crisis, a team of mortgage executives and traders at Goldman Sachs predicted that the housing market was in trouble. So they designed a massive bet against it, using a bunch of esoteric financial instruments known as collateralized debt obligations that would pay off in the event that housing prices fell and homeowners defaulted on their mortgages . [Emphasis added]
That bet, now known colloquially as “the big short,” allowed Goldman and its clients (including hedge-fund managers like John Paulson) to avoid losses and make billions of dollars when the housing market collapsed , at the same time that people around the country lost their homes to foreclosure. [Emphasis added]
Meanwhile, millions of America’s working and middle class lost their homes, as Business Insider reported in 2018:
After the real estate bubble burst in 2008, many families living in the US found that the cost of running their homes was no longer affordable , resulting in many of those people losing their homes. [Emphasis added]
The widespread consequences were that, between 2006 and 2014, nearly 10 million homeowners in America saw the foreclosure sale of their own homes , which entailed having to give up their property to lenders or selling it as quickly as possible via an emergency sale, according to the Süddeutsche Zeitung. [Emphasis added]
Livelihoods were threatened and the financial damage was colossal — not to mention the emotional damage suffered by victims of the crisis — a 2014 study shows a correlation between the crisis and an increased suicide rate. But where are the victims of the real estate and financial crisis now? [Emphasis added]
It’s not just Mullen Jr. who is showering Biden with campaign cash to defeat President Trump on November 3. Biden has taken nearly 200 contributions from employees at Goldman Sachs — including contributions of nearly $50,000 to $55,000 from the bank’s top executives.
Altogether, a recent CNBC analysis revealed, Wall Street has donated more than $50 million to Biden’s campaign this election cycle and CNN has noted that “all the big banks” are backing Biden and Harris against Trump.
John Binder is a reporter for Breitbart News. Follow him on Twitter at @JxhnBinder .
OBAMA AND HIS BANKSTERS:
And it all got much, much worse after 2008,
when the schemes collapsed and, as Lemann points out, Barack Obama did not
aggressively rein in Wall Street as Roosevelt had done, instead restoring the
status quo ante even when it meant ignoring a staggering white-collar crime
spree. RYAN COOPER
The Rise of Wall Street Thievery How corporations and
their apologists blew up the New Deal order and pillaged the middle class.
by Ryan Cooper
MAGAZINE
A merica has long had a
suspicious streak toward business, from the Populists and trustbusters to
Bernie Sanders and Elizabeth Warren. It’s a tendency that has increased over
the last few decades. In 1973, 36 percent of respondents told Gallup they had
only “some” confidence in big business, while 20 percent had “very little.” But
in 2019, those numbers were 41 and 32 percent—near the highs registered during
the financial crisis.
Clearly, something has
happened to make us sour on the American corporation. What was once a stable
source of long-term employment and at least a modicum of paternalistic benefits
has become an unstable, predatory engine of inequality. Exactly what went
wrong is well documented in Nicholas Lemann’s excellent new book, Transaction
Man . The title is a reference to The Organization Man , an
influential 1956 book on the corporate culture and management of that era.
Lemann, a New Yorker staff writer and Columbia journalism
professor (as well as a Washington Monthly contributing
editor), details the development of the “Organization” style through the career
of Adolf Berle, a member of Franklin D. Roosevelt’s brain trust. Berle argued
convincingly that despite most of the nation’s capital being represented by the
biggest 200 or so corporations, the ostensible owners of these firms—that is,
their shareholders—had little to no influence on their daily operations.
Control resided instead with corporate managers and executives.
Transaction Man: The Rise of the Deal and the
Decline of the American Dream
Berle
was alarmed by the wealth of these mega-corporations and the political power it
generated, but also believed that bigness was a necessary concomitant of
economic progress. He thus argued that corporations should be tamed, not broken
up. The key was to harness the corporate monstrosities, putting them to work on
behalf of the citizenry.
Berle
exerted major influence on the New Deal political economy, but he did not get
his way every time. He was a fervent supporter of the National Industrial
Recovery Act, an effort to directly control corporate prices and production,
which mostly flopped before it was declared unconstitutional. Felix
Frankfurter, an FDR adviser and a disciple of the great anti-monopolist Louis
Brandeis, used that opportunity to build significant Brandeisian elements into
New Deal structures. The New Deal social contract thus ended up being a
somewhat incoherent mash-up of Brandeis’s and Berle’s ideas. On the one hand,
antitrust did get a major focus; on the other, corporations were expected to
play a major role delivering basic public goods like health insurance and
pensions.
Lemann
then turns to his major subject, the rise and fall of the Transaction Man. The
New Deal order inspired furious resistance from the start. Conservative
businessmen and ideologues argued for a return to 1920s policies and provided
major funding for a new ideological project spearheaded by economists like
Milton Friedman, who famously wrote an article titled “The Social
Responsibility of Business Is to Increase Its Profits.” Lemann focuses on a
lesser-known economist named Michael Jensen, whose 1976 article “Theory of the
Firm,” he writes, “prepared the ground for blowing up that [New Deal] social
order.”
Jensen
and his colleagues embodied that particular brand of jaw-droppingly stupid that
only intelligent people can achieve. Only a few decades removed from a crisis
of unregulated capitalism that had sparked the worst war in history and nearly
destroyed the United States, they argued that all the careful New Deal
regulations that had prevented financial crises for decades and underpinned the
greatest economic boom in U.S. history should be burned to the ground. They
were outraged by the lack of control shareholders had over the firms they
supposedly owned, and argued for greater market discipline to remove this
“principal-agent problem”—econ-speak for businesses spending too much on
irrelevant luxuries like worker pay and investment instead of dividends and
share buybacks. When that argument unleashed hell, they doubled down: “To
Jensen the answer was clear: make the market for corporate control even more
active, powerful, and all-encompassing,” Lemann writes.
The
best part of the book is the connection Lemann draws between Washington
policymaking and the on-the-ground effects of those decisions. There was much
to criticize about the New Deal social contract—especially its relative
blindness to racism—but it underpinned a functioning society that delivered a
tolerable level of inequality and a decent standard of living to a critical
mass of citizens. Lemann tells this story through the lens of a thriving
close-knit neighborhood called Chicago Lawn. Despite how much of its culture
“was intensely provincial and based on personal, family, and ethnic ties,” he
writes, Chicago Lawn “worked because it was connected to the big organizations
that dominated American culture.” In other words, it was a functioning
democratic political economy.
Then
came the 1980s. Lemann paints a visceral picture of what it was like at street
level as Wall Street buccaneers were freed from the chains of regulation and
proceeded to tear up the New Deal social contract . Cities hemorrhaged
population and tax revenue as their factories were shipped overseas. Whole
businesses were eviscerated or even destroyed by huge debt loads from hostile
takeovers. Jobs vanished by the hundreds of thousands.
And
it all got much, much worse after 2008, when the schemes collapsed and, as
Lemann points out, Barack Obama did not aggressively rein in Wall Street as
Roosevelt had done, instead restoring the status quo ante even when it meant
ignoring a staggering white-collar crime spree. Neighborhoods drowned
under waves of foreclosures and crime as far-off financial derivatives
imploded. Car dealerships that had sheltered under the General Motors umbrella
for decades were abruptly cut loose. Bewildered Chicago Lawn residents
desperately mobilized to defend themselves, but with little success. “What they
were struggling against was a set of conditions that had been made by faraway
government officials—not one that had sprung up naturally,” Lemann writes.
T oward the end of the
book, however, Lemann starts to run out of steam. He investigates a possible
rising “Network Man” in the form of top Silicon Valley executives, who have
largely maintained control over their companies instead of serving as a sort of
esophagus for disgorging their companies’ bank accounts into the Wall Street
maw. But they turn out to be, at bottom, the same combination of blinkered
and predatory as the Transaction Men. Google and Facebook, for instance, have
grown over the last few years by devouring virtually the entire online ad
market, strangling the journalism industry as a result. And they directly
employ far too few people to serve as the kind of broad social anchor that the
car industry once did.
In
his final chapter, Lemann argues for a return to “pluralism,” a “messy,
contentious system that can’t be subordinated to one conception of the common
good. It refuses to designate good guys and bad guys. It distributes, rather
than concentrates, economic and political power.”
This
is a peculiar conclusion for someone who has just finished Lemann’s book, which
is full to bursting with profoundly bad people—men and women
who knowingly harmed their fellow citizens by the millions for their own
private profit. In his day, Roosevelt was not shy about lambasting rich people
who “had begun to consider the government of the United States as a mere
appendage to their own affairs,” as he put it in a 1936 speech in which he also
declared, “We know now that government by organized money is just as dangerous
as government by organized mob.”
If
concentrated economic power is a bad thing, then the corporate form is simply a
poor basis for a truly strong and equal society. Placing it as one of the
social foundation stones makes its workers dependent on the unreliable goodwill
and business acumen of management on the one hand and the broader marketplace
on the other. All it takes is a few ruthless Transaction Men to undermine the
entire corporate social model by outcompeting the more generous businesses. And
even at the high tide of the New Deal, far too many people were left out,
especially African Americans.
Lemann
writes that in the 1940s the United States “chose not to become a full-dress
welfare state on the European model.” But there is actually great variation
among the European welfare states. States like Germany and Switzerland went
much farther on the corporatist road than the U.S. ever did, but they do
considerably worse on metrics like inequality, poverty, and political
polarization than the Nordic social democracies, the real welfare kings.
Conversely,
for how threadbare it is, the U.S. welfare state still delivers a great deal of
vital income to the American people. The analyst Matt Bruenig recently
calculated that American welfare eliminates two-thirds of the “poverty gap,”
which is how far families are below the poverty line before government
transfers are factored in. (This happens mainly through Social Security.)
Imagine how much worse this country would be without those programs! And though
it proved rather easy for Wall Street pirates to torch the New Deal corporatist
social model without many people noticing, attempts to cut welfare are
typically very obvious, and hence unpopular.
Still,
Lemann’s book is more than worth the price of admission for the perceptive
history and excellent writing. It’s a splendid and beautifully written illustration
of the tremendous importance public policy has for the daily lives of ordinary
people.
Ryan Cooper is a
national correspondent at the Week. His work has appeared in the Washington
Post, the New Republic, and the Nation. He was an editor at the Washington
Monthly from 2012 to 2014.
Fact Check: Big Banks that Kamala
Harris ‘Took on’ Now Support Her 2020
Democratic National Convention / YouTube
Volume 90%
19 Aug 202017
2:53
CLAIM: Former Labor
Secretary Hilda Solis suggested that because Sen. Kamala Harris (D-CA) “took
on” the big banks as attorney general of California, she will stand up to them
as vice president.
VERDICT: While Harris was among 49 state attorney generals
who secured a $25 billion
settlement from big banks, many executives from those banks now support her as
Democrat nominee Joe Biden’s vice presidential choice.
“When millions of
families lost their homes, my friend in California, Sen. Kamala Harris, took on
the big banks and won,” Solis said in reference to the case which
involved Bank of America, Wells Fargo, JPMorgan Chase, Citigroup, and Ally
Bank.
BLOG EDITOR: AS
ATTORNEY GENERAL OF CALIFORNIA, KAMALA HARRIS REFUSED TO CRIMINAL PROSECUTE ANY
OF HER GENEROUS BANKSTERS DESPITE THAT FACT THAT CA WAS GROUND ZERO FOR
BANKSTER-CAUSED MORTGAGE MELTDOWN AND FORECLOSURE!
A number of executives
on Wall Street with links to Wells Fargo, Citigroup, and Bank of America
now support Harris in her
effort with Biden to defeat Trump.
As Breitbart News
reported recently, Wells Fargo Vice Chairman for Public Affairs Bill
Daley, who served as Obama’s chief of staff from 2011 to 2012, called a Harris
a “reasonable, rational person who has worked in the system.”
Citigroup
executive Ray McGuire called Harris a “great
choice” for vice president. During the Democrat presidential primary, Harris
raked in campaign donations from executives and employees with Bank of America.
In These Times reported the donations at
the time:
Then there’s California Sen.
Kamala Harris, who received a total of $44,947 from these 12 firms. Harris,
who was once branded a “bankster’s worst nightmare,” and has touted her
prosecutorial record against banks as evidence of her progressive credibility,
received donations from five executives of these firms. They include Blackstone
managing director Tia Breakley, Morgan Stanley’s new head of
international wealth management Colbert Narcisse, Bank of America
senior vice president for diversity and inclusion Alex Rhodes, and Goldman
Sachs vice president of financial crime compliance Margaret
Cullum. [Emphasis added]
Harris’s most enthusiastic
source of support among these firms, however, is Wells Fargo, from whose
employees she received a total of $16,713 — the most funding
from the bank out of any other candidate examined. The donors span multiple
tiers of the bank’s hierarchy, from bankers and consultants, to a regional
director and a manager, to executives like National Head of Cards and
Retail Services Beverly Anderson, both of whom gave the maximum individual
donation of $2,800 to Harris. [Emphasis added]
John Binder is a
reporter for Breitbart News. Follow him on Twitter at @JxhnBinder .
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