Wall Street, Big Banks
Spend $74 Million Trying to Get Joe Biden Elected
Drew Angerer/Getty Images
29 Oct 2020 330
3:03
Wall Street donors from the nation’s biggest banks will end up
spending about $74 million trying to get Democrat presidential candidate Joe
Biden elected.
The latest financial report from the Center for Responsive
Politics reveals that Biden is set to rake in more than $74 million from Wall
Street, which is more than the financial industry gave President Obama in his
2008 and 2012 campaigns combined.
CNBC reports :
The sum includes contributions that began in 2019 and continued
through the first two weeks of October to Biden’s joint fundraising committees
and outside super PACs backing his run. Former Goldman Sachs President Harvey Schwartz gave $100,000
this month to the Biden Action Fund , a joint fundraising
committee for the campaign, the Democratic National Committee and state
parties. [Emphasis added]
Biden also received a ton of financial support from leaders on
Wall Street in the third quarter . Going into the
final two weeks of the election, Biden, the DNC and their joint fundraising
committees had over $330 million on hand. That’s $110 million more than for
Trump, the Republican National Committee and their joint committees. Biden’s
campaign is on track to raise $1 billion in the six days until Election Day.
[Emphasis added]
…
Biden’s campaign chairman, Steve Ricchetti, met with finance
executives in January to encourage them to back his candidate , CNBC reported at the time. Attendees included Evercore founder
Roger Altman, longtime investor Blair Effron, Blackstone Chief Operating
Officer Jonathan Gray, former Citigroup executive Ray McGuire, Centerbridge
Partners co-founder Mark Gallogly, and former U.S. Ambassador to France Jane
Hartley. [Emphasis added]
Biden, by November 3, will have raised just about $13 million
less from Wall Street than Hillary Clinton in her failed 2016 presidential run.
President Trump has received just a fraction of what Biden has
taken from Wall Street. By November 3, Trump will finish the race with more
than $18 million from Wall Street executives and employees — a whopping $56
million less than Biden’s total.
CNN analysis from September noted that “all the big banks”
are backing Biden against Trump
this election, as they backed Clinton against Trump in 2016.
Moody’s Analytics and Goldman Sachs reports to
investors have sought to boost Biden’s chances against Trump by cheering a
potential “blue wave” on election day. Biden has reportedly promised Wall
Street donors, behind closed doors, a return to a globalized, economic status
quo that has forced working and middle-class American communities into a
managed decline for decades.
John Binder is a
reporter for Breitbart News. Follow him on Twitter at @JxhnBinder .
THE LOOTING OF
AMERICA:
BARACK OBAMA AND HIS CRONY BANKSTERS set
themselves on America’s pensions next!
The new aristocrats, like the lords of
old, are not bound by the laws that apply to the lower orders. Voluminous
reports have been issued by Congress and government panels documenting
systematic fraud and law breaking carried out by the biggest banks both before
and after the Wall Street crash of 2008.
Goldman Sachs , JPMorgan Chase, Bank
of America and every other major US bank have been implicated in a web of
scandals, including the sale of toxic mortgage securities on false pretenses,
the rigging of international interest rates and global foreign exchange
markets, the laundering of Mexican drug money, accounting fraud and lying to
bank regulators, illegally foreclosing on the homes of delinquent borrowers,
credit card fraud, illegal debt-collection practices, rigging of energy
markets, and complicity in the Bernie Madoff Ponzi scheme.
Goldman
Sachs Executive Who Profited Off Housing Collapse Pours $200K into Joe Biden
Campaign
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.
Former Goldman Sachs
Chief Pours $100K into Joe Biden’s Campaign
26 Oct 2020 374
1:41
A former Goldman Sachs president made a huge, last-minute
donation to Democrat presidential candidate Joe Biden’s campaign against
President Trump.
Harvey Schwartz, former president of Goldman Sachs, donated
about $100,000 to the Biden Action Fund in October, according to Federal
Election Commission data.
CNBC reports :
The filing lists Schwartz and a New York address and describes
his work profession as “self employed.” The contribution was processed on Oct.
5, records show.
Schwartz retired from the bank in 2018 after being its president
for just over a year. Prior to that role he was Goldman’s chief financial
officer.
Wall Street executives and employees has been a major donor to
the Biden campaign. One of the donors is a former Goldman Sachs
executive who profited from the housing crisis.
While Biden has taken about 184 separate contributions from
Goldman Sachs executives and employees, President Donald Trump has taken
just 41 contributions
from the big bank. Trump’s contributions from Goldman Sachs total less than
$7,500.
As Breitbart News has noted , recent CNBC
analysis revealed that Wall Street has donated more than $50 million to Biden’s
campaign this election cycle. CNN analysis found that
“all the big banks” are backing Biden against Trump.
John Binder is a
reporter for Breitbart News. Follow him on Twitter at @JxhnBinder .
JOHANNES
EISELE/AFP via Getty Images
25 Oct 2020 711
2:30
Goldman Sachs, home to many big
donors to Democrat presidential candidate Joe Biden’s campaign, has admitted to
a record-setting $1.6 billion foreign bribery scheme this week.
The Justice Department announced charges against Goldman
Sachs for their executives’ involvement in a foreign bribery scheme, the
largest in United States history. As a result, Goldman Sachs will pay more than
$2.9 billion as part of a settlement.
“Goldman Sachs today accepted
responsibility for its role in a conspiracy to bribe high-ranking foreign
officials to obtain lucrative underwriting and other business relating to
[1Malaysia Development Bhd.],” said acting Assistant Attorney General Brian
Rabbitt of the Justice Department’s Criminal Division said in a statement.
“Today’s resolution, which
requires Goldman Sachs to admit wrongdoing and pay nearly three billion dollars
in penalties, fines, and disgorgement, holds the bank accountable for this
criminal scheme and demonstrates the department’s continuing commitment to
combatting corruption and protecting the U.S. financial system,” Rabbitt said.
The revelations of Goldman
Sachs’ involvement in the foreign bribery scheme comes as Biden has accepted
hundreds of thousands of dollars in campaign
contributions from executives and employees at the big bank.
Kathy Matsui and Richard
Friedman, in executive and banker roles at Goldman Sachs, have donated nearly
$105,000 to the Biden Victory Fund and the Biden Action Fund in June. Just this
week, news broke that the former Goldman Sachs executive who profited off the U.S. housing crash
has donated $200,000 to the Biden Victory
Fund.
While Biden has taken about 184
separate contributions from Goldman Sachs executives and employees, President
Donald Trump has taken just 41 contributions from the
big bank. Trump’s contributions from Goldman Sachs total less than $7,500.
As Breitbart News has noted , recent CNBC analysis revealed
that Wall Street has donated more than $50 million to Biden’s campaign this
election cycle. CNN analysis found that “all the big
banks” are backing Biden against Trump.
John Binder is a reporter for Breitbart News. Follow him on
Twitter at @JxhnBinder .
Wall Street Praises Kamala Harris as Joe Biden’s VP:
‘What’s Not to Like?’
AP
Photo/Richard Drew
13 Aug 2020 996
4:20
Wall Street executives are
praising Democrat presidential nominee Joe Biden’s choosing Sen. Kamala Harris
(D-CA) as his running mate against President Trump, feeling they dodged a
bullet from a progressive insurgency.
In interviews with the Wall Street Journal , CNBC , and Bloomberg , executives on Wall Street
expressed relief that Biden picked Harris for vice president on the Democrat
ticket, calling her a “normal Democrat” who is a “safe” choice for the
financial industry.
Morgan Stanley Vice Chairman
Tom Nides told Bloomberg that across Wall Street, Harris joining Biden “was
exceptionally well-received.”
“How damn cool is it that a
Black woman is considered the safe and conventional candidate,” Nides said.
Peter Soloman, the founder of a
multinational investment banking firm, told Bloomberg he believes Harris is “a
great pick” because she is “safe, balanced, a woman, diverse, what’s not to
like?”
As the Journal notes, many on
Wall Street see Harris is another conscious decision by the Democrat
establishment to stave off populist priorities to reform Wall Street:
To
some Wall Street executives, Ms. Harris’s selection signals a more moderate
shift for the Democratic Party, which its progressive flank has
pushed to the left in recent years. [Emphasis added]
“While Kamala is a forceful,
passionate and eloquent standard-bearer for the aspirations of all Americans,
regardless of their race, gender or age, she is not doctrinaire or rigid,” said Brad
Karp, chairman of law firm Paul Weiss , who co-led a committee
of lawyers across the country who supported Ms. Harris during the primary.
[Emphasis added]
Marc Lasry, CEO of Avenue
Capital Group, called Harris a “great” pick for Biden. “She’s going to help Joe
immensely. He picked the perfect partner,” Lasry told CNBC.
Executives at Citigroup and
Centerview Partners made similar comments about Harris to CNBC and the Journal , calling her a “great
choice” and “direct but constructive.”
Founder of financial consulting
firm Kynikos Associates Jim Chanos was elated in an interview with Bloomberg
over Harris joining Biden on the Democrat ticket:
“She’s
terrific,” said Chanos , founder of Kynikos Associates. “She’s got force of personality
in a good way. She takes over a room. She certainly has a charisma and a presence
which will be an asset on the campaign .” [Emphasis added]
Harris is no stranger to praise
from Wall Street executives. In the 2019 Democrat presidential primary, Harris
won over a number of financial industry donors, even holding a fundraiser in
Iowa that was backed by Goldman Sachs Group, Inc.
While criticizing “the people who have the
most” in Democrat primary debates, Harris raked in thousands in campaign cash from
financial executives from firms such as the Blackstone Group, Morgan Stanley,
Bank of America, Goldman Sachs, and Wells Fargo.
This month, the New York Times admitted the “wallets of Wall
Street are with Joe Biden” in a gushing headline about the financial industry’s
opposition to Trump:
Financial industry cash flowing
to Mr. Biden and outside groups supporting him shows him dramatically
out-raising the president, with $44 million compared with Mr. Trump’s $9
million.
Harris’s views on trade and
immigration, two of the most consequential issues to Wall Street, are in
lockstep with financial executives’ objective to grow profit margins and add
consumers to the market.
On trade, Harris has balked at
Trump’s imposition of tariffs on foreign imports from China, Mexico, Canada,
and Europe — using the neoliberal
argument that tariffs should not be used to pressure foreign
countries to buy more American-made goods and serve as only a tax on taxpayers.
Likewise, the Biden-Harris plan
for national immigration policy — which seeks to drive up legal and illegal
immigration levels to their highest levels in decades — offers a flooded labor
market with low wages for U.S. workers and increased bargaining power for big
business that has long been supported by Wall Street.
John Binder is a reporter for Breitbart News. Follow him on
Twitter at @JxhnBinder.
Goldman Sachs has been fined $2.9
billion by the US Department of Justice (DoJ) in a deal announced yesterday
that closes one of the biggest corruption cases in the history of Wall Street.
Together with a settlement reached
with Malaysian authorities in July, Goldman Sachs will pay more than $5 billion
for its involvement in the 1MDB scandal.
While the amounts are large, the
settlement follows the pattern of earlier deals on corruption. In return for an
agreement to pay fines out of corporate revenue, the company and its executives
escape prosecution for criminal activity. The financial penalties are simply
written off as a cost of making profit.
Besides avoiding prosecution, Goldman
will also escape the appointment of a government monitor to oversee its
compliance department which had earlier been put forward by officials involved
in pursuing the case.
While the financial penalties amount
to around two-thirds of its annual profits, Goldman had already taken them into
account, as they had been mooted for some time. Company shares actually rose by
more than 1 percent after a report earlier this week by Wall Street
Journal about the expected action by the DoJ.
Following the DoJ announcement, the
bank’s share price barely moved. “This is already priced in. The stock price is
already reflecting this kind of action,” Sumit Agarwal, finance professor at
Singapore’s National University told the Financial Times .
Goldman’s involvement with 1MDB was
in response to the situation it confronted in the wake of the financial crisis
in 2008, as its earnings prospects in the US declined and it went in search of
profitable opportunities. The Malaysian government had launched the 1MDB fund,
supposedly to finance infrastructure development. Goldman stepped forward to
organise the sale of $6.5 billion in bonds, with the aim of collecting large
fees, in 2012 and 2013.
The whole operation saw the
development of a vast corruption ring. According to the prosecution, around
$2.7 billion was stolen from 1MDB and more than $1.6 billion was paid out in
bribes.
Much of the money was stolen by an
adviser to the fund, businessman Jho Low, who was aided by two Goldman bankers
working for its Malaysian subsidiary as well as associates in the Malaysian
government. It is claimed that the former Malaysian Prime Minister Najib Razak,
now serving a 12-year jail term, received $700 million.
The DoJ said Goldman had played a
“central role” in the looting of 1MDB and should have detected warning signs.
The acting head of the DoJ’s criminal division, Brian Rabbitt, said: “Personnel
at the bank allowed this scheme to proceed by overlooking or ignoring a number
of clear red flags.”
The attempts to claim that one of the
largest corruption operations in history was a matter of oversight simply does
not pass muster. In court yesterday, Karen Seymour, Goldman’s senior counsel,
admitted its Malaysian subsidiary had paid bribes “in order to obtain and
retain business for Goldman Sachs.”
According to court papers, when an
employee told an unnamed senior executive he was concerned that a 1MDB deal was
being delayed because one of the participants was seeking a bribe, he was told:
“What’s disturbing about that? It’s nothing new, is it?”
The deals were organised by two
Goldman bankers, Timothy Leissner and Roger Ng. Leissner, the former head of
Goldman’s Southeast Asian business, pleaded guilty to his role in the 1MDB case
in 2018. He received more than $200 million from 1MDB and paid bribes to
government officials.
Goldman chief executive David
Solomon, who took over from Lloyd Blankfein—author of the infamous comment in
2009 that big profits for banks meant they were doing “God’s work”—said: “We
recognise that we did not adequately address red flags and scrutinise the
representations of certain members of the deal team.”
As details of the corruption began to
emerge, Goldman sought to blame its involvement on “rogue operators.” In fact,
their activities were encouraged. According to the Wall Street Journal ,
one of the 1MDB bond deals organised in 2012, “won one of Goldman’s most
prestigious internal awards, praised for its ‘spirit of creativity and
entrepreneurial thinking’.”
In an effort to clean up its image,
Goldman announced that four senior executives, including CEO Solomon, would
forfeit $31 million in pay this year, and that it would attempt to claw back
bonuses paid to Blankfein in the past. But the penalty imposed on current
executives amounts only to about one-third of what they were paid in 2019.
The notion that Goldman was somehow
the victim of “rogue” activity and that its involvement in massive corruption
is simply the result of oversight is belied by its history, in particular, the
role it played in the lead-up to the financial crisis of 2008.
The Senate investigation into the
crisis, which found that the financial system was a “snake pit rife with greed,
conflicts of interest, and wrongdoing,” singled out Goldman for special
mention.
In 2006, Goldman determined that
subprime mortgage assets it was selling to clients were destined to flounder.
Goldman went short in the market in the expectation that it would crash and it
would make a profit on the other side of the very trades it had been promoting.
The sums were not small. At one point the firm held short positions amounting
to $13 billion.
In an email, referring to an
unsuspecting investor, a Goldman executive wrote: “I think I found a white
elephant, flying pig and unicorn all at once.”
But the exposure of criminal activity
did not bring any prosecutions, let alone jail terms, merely fines, which
Goldman and others simply wrote off. In 2013, President Obama’s
attorney-general, Eric Holder, clearly recognising the extent of the
malfeasance, said that prosecutions would impact on the stability of the US and
global banking system.
Since 2008, notwithstanding claims by
authorities that there would be a clamp down, the corrupt practices have
extended, of which Goldman’s involvement in 1MDB is only one expression.
Last month, documents published
by BuzzFeed News from the US Treasury’s Financial Crimes
Enforcement Network, known as FinCEN, showed that between 1999 and 2017, major
banks has been involved in financial transactions of $2 trillion flagged as
potentially involving money laundering. The banks involved were some of the
biggest in the world including JP Morgan, HSBC and Standard Charter Bank.
Earlier this month, JPMorgan Chase
was fined $920 million over “spoofing” activity involving the quick placing and
withdrawal of buy and sell orders to create the impression there was a surge of
activity around a particular financial asset in order to create a profitable
opportunity.
According to one of the lead
investigators in the case, “a significant number of JP Morgan traders and sales
personnel openly disregarded US laws that serve to prevent illegal activity in
the marketplace.”
But despite the fact that the
practice was not only well known but was actively promoted, no one in the upper
echelons was prosecuted, and the fine has been written off as an operating
expense.
The issue which clearly arises is:
what is the underlying cause of this system of corruption and illegality?
Commenting on the latest Goldman
case, Seth DuCharme, the acting US attorney in Brooklyn, might have gone
further than he intended when he remarked: “This case is … about the way our
American financial institutions conduct business.”
It certainly is. However, it would be
wrong to simply ascribe it to the greed of the financial executives and others,
and thereby able to be countered through tighter regulations.
Of course the greed of executives and
others exists in abundance. But their activities are, in the final analysis,
the expression of processes rooted at the very heart of the profit system—they
are the personification of objective tendencies.
While the aim and driving force of
the capitalist system is the accumulation of profit the mode of accumulation
has undergone profound changes, above all in the US. No longer is the chief
source of profit investment and production in the real economy.
It occurs through operations in the
financial system based on speculation, clever trades, the securing of fees for
the passage of money (without questioning its source) and where the “value” of
assets is determined by arcane algorithms and other forms of “financial
engineering.”
Consequently, in conditions where
profits are increasingly divorced from the underlying real economy, lies,
deception, misinformation, corruption and criminality come to dominate the
entire financial system.
Goldman Sachs Executive Who Profited Off
Housing Collapse Pours $200K into Joe Biden Campaign
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
by Nicholas Lemann
Farrar, Straus and Giroux, 320 pp.
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.
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 .
Goldman Sachs Bankster “King of the Foreclosures” Treasury Secretary
Steven Mnuchin vows that the Goldman Sachs infested Trump Admin will hand
no-strings massive socialist bailouts to Trump Hotels. Mnuchin says the welfare
will exceed the Bankster-owned Democrat Party’s massive bailout of Obama crony
Jamie Dimon of J P Morgan’s bailout in 2008
OBAMA CRONY DONORS Goldman
Sachs, JPMorgan Chase, Bank of America and every other major US bank have been
implicated in a web of scandals, including the sale of toxic mortgage
securities on false pretenses, the rigging of international interest rates and
global foreign exchange markets, the laundering of Mexican drug money,
accounting fraud and lying to bank regulators, illegally foreclosing on the
homes of delinquent borrowers, credit card fraud, illegal debt-collection
practices, rigging of energy markets, and complicity in the Bernie Madoff Ponzi
scheme.
Treasury
Secretary Steven Mnuchin embodies the plutocratic principle that a crisis is a
terrible thing to waste.
By Eric Levitz @EricLevitz
Steve Mnuchin knows his way around
a crisis. Twelve years ago, the Treasury secretary was still a middling
multi-millionaire of little renown or historical import. But whenever God
closes a door on an underwater home-owner, he opens a window to an unscrupulous
speculator, and in 2008, the Big Man began closing a lot of doors. Mnuchin
didn’t miss his opening. He may have been just a humble
Goldman Sachs nepotism hire turned Hollywood financier back then, but he had a
few million dollars to play with and a few friends with many millions more. Together, they bought up a failing
mortgage lender, rapidly foreclosed on thousands of borrowers, and resold the
homes at a nifty profit. By the end of his tenure as a bank CEO, Mnuchin had
earned himself the title “Foreclosure King” — and a return of $200 million.
That’s the kind of money that can buy you entrance into the good graces of a
Republican nominee, especially if he’s already alienating a lot of the party’s
biggest donors. And from there, it’s walking distance to the White House.
Thus far, the
COVID-19 crash has been as kind to Mnuchin as the Great Recession once was. If
the last global economic crisis made him rich enough to purchase a lofty perch
in our government, this one is making the Treasury secretary powerful enough to
claim a prominent place in U.S. history. Before the novel coronavirus made its
presence felt, Mnuchin’s most memorable achievement as a public servant may
have been commandeering a government plane for a solar-eclipse-themed day trip.
Since the pandemic sickened global markets, he has brokered the largest
stimulus legislation ever passed and won control of a multi-trillion-dollar bailout fund .
Which is to say:
We’ve put one of the primary beneficiaries of America’s inequitable response to
the last economic crisis in charge of crafting our nation’s response to this
one.
Of course, it wasn’t really
God who opened the window to Mnuchin’s foreclosure profiteering or the
profiteering of all the well-heeled investors who bought low during the
financial crisis, then sold high amid the bailout-buoyed recovery (the Almighty
contracts out those jobs to protect his brand integrity). Rather, it was an
economic system that keeps a wide swath of Americans one bad break from
financial ruin — and another tiny class draped in gold-plated armor.
From the first
capital-gains-tax cut of the modern era in Jimmy Carter’s day to the
supply-side bonanza of Donald Trump’s, this system’s essential rationale has
remained the same: If capitalists cannot reap big rewards from their winning
bets, they will have no incentive to take the great personal risks that fuel
collective prosperity.
Mnuchin’s career and
the pandemic response he has overseen belie most of that sentence’s premises.
In truth, the Treasury secretary owes his success to a series of low-risk,
high-reward bets of little-to-negative social value. Which makes sense. After
all, if America’s brand of capitalism actually required the superrich to assume
great personal risk in order to reap outsize returns, they wouldn’t be so
invested in it.
Steve Mnuchin wasn’t born on third
base so much as a few inches to the left of home plate. His grandfather co-founded
a yacht club in the Hamptons. His father was a Yale-educated partner at Goldman
Sachs. If his family’s name didn’t secure Steve’s own Yale admission, its
wealth certainly covered his tuition, books, personal Porsche, and “dorm” at
New Haven’s Taft Hotel. From this perch, it would have been harder for Mnuchin
to tumble down America’s class ladder than to climb higher still. The former
would have required prodigious acts of self-destruction; the latter mere
fluency in ruling-class social mores and the art of strategic sycophancy — and
the wallflower cipher Steve Mnuchin is a master of both.
At Goldman, Mnuchin’s
colleagues did not consider him “especially book smart.” And some have
suggested that his steady ascent at the firm was fueled less by merit than
pedigree (Mnuchin’s elevation to partner in 1996 came at the expense of Kevin
Ingram, an African-American trader who’d risen from a working-class childhood
up through MIT’s engineering school, then Goldman’s ranks, where he struck one
colleague as both “much smarter than Steven” and more “accomplished”).
After Mnuchin paid
his dues at Goldman, he founded a hedge fund called Dune Capital and a
motion-picture-financing company called Dune Entertainment (both named after a
stretch of beach near his house in the Hamptons). He helped bankroll Avatar and the X-Men
franchise, hobnobbed in Beverly Hills, and hoarded his investment profits in a
tax haven. He had everything America’s “temporarily embarrassed millionaires”
imagine a person could want. But Mnuchin longed for higher things. And when the
housing market collapsed, he knew he was in luck.
Early in his career,
Mnuchin had watched his superiors turn America’s savings-and-loan crisis into
their own buying-and-selling bonanza. In the summer of 2008, Mnuchin was
watching television in his New York office when an invitation to emulate his
old mentors flashed across the screen: Out in California, frightened depositors
were lined up outside IndyMac, one of the nation’s largest mortgage lenders,
waiting to withdraw their cash. “This bank is going to end up failing, and we
need to figure out how to buy it,” Mnuchin told a colleague. “I’ve seen this
game before.”
He played it like a
natural. Mnuchin reached out to George Soros, John Paulson, and other
billionaires whose trust he’d cultivated. They marshaled a $1.6 billion bid.
Eager to unload the bank — whose balance sheet was chock-full of toxic assets —
the FDIC agreed to cover any losses that might accrue to the investors above a
certain threshold. Which is to say, the government agreed to partially
socialize Mnuchin & Co.’s downside risk. This public aid came with one
major condition: The new bank, which Mnuchin dubbed OneWest, would need to make
a good-faith effort to help homeowners avoid foreclosure. The FDIC would
ultimately pay OneWest more than $1.2 billion.
This was not enough
to buy Steve Mnuchin’s good faith.
Purchasing IndyMac secured
OneWest a claim on a lot of undervalued housing. The catch, of course, was that
much of it was full of broke people. And California’s foreclosure laws make the
process of separating low-net-worth humans from high-value housing stock long
and arduous. But this was nothing a little entrepreneurship couldn’t solve:
Mnuchin’s bank (ostensibly) bet it could get away with “robo signing” and
backdating documents to expedite foreclosures. One-West got caught red-handed
on the first count but emerged with a slap on the wrist. Investigators at the
California attorney general’s office concluded the bank was guilty on the
second and requested authorization to pursue an enforcement action. It’s
unclear exactly why then–Attorney General Kamala Harris denied this request.
But as the investigators themselves noted, to pursue legal action against an
entity with OneWest’s resources would mean investing years of time — and large
sums of the public’s money — in a deeply uncertain enterprise. The government
could afford to take only so many risks, which meant the idea that the state
could hold all its superrich residents accountable to its laws was a bluff.
Mnuchin called it.
In the spring of 2016, another promising investment opportunity caught the eye of the
now-former One-West CEO. Mnuchin had crossed paths with Trump several times
over the years; his hedge fund had invested in (at least) two of the mogul’s
projects. So when Donald invited Steve to swing by his tower on the night he
won the New York primary, Mnuchin obliged. A dozenish hours (and a glass or two
of Trump-branded wine) later, Mnuchin agreed to become the finance chairman of
the future GOP nominee’s campaign.
This decision baffled
some of Mnuchin’s Hollywood pals. The bankroller of The LEGO Batman Movie didn’t strike them as a political animal, let alone a
Trumpist. But his motives weren’t mysterious. For someone in Mnuchin’s
socioeconomic position, Trump’s presidential campaign was just another
low-risk, high-reward bet. Or, as Mnuchin himself put it in an interview in August
2016, “Nobody’s going to be like, ‘Well, why did he do this?,’ if I end up in
the administration.”
Mnuchin is the last of the “adults
in the room” — that cabal of semi-credentialed advisers whose presence in the
West Wing eased the troubled minds of Never Trump pundits circa 2017. None of
the others — not Rex Tillerson, Gary Cohn, James Mattis, H. R. McMaster, or John Kelly — could marshal the requisite
combination of unscrupulous sycophancy and patient politicking to weather each
turn in Trump’s tempestuous moods. Only the former Foreclosure King has what it
takes to unequivocally defend the president’s kind words for alt-right marchers
in Charlottesville or echo his attacks on NFL players who dared to protest
police abuse. So when the biggest economic crisis since the Great Depression
hit, Mnuchin became — in The Wall Street Journal ’s appellation — “Washington’s indispensable crisis manager.”
Unburdened by ideological conviction or economic literacy, Mnuchin has proved
to be the GOP’s most able dealmaker. Working out of a temporary office in the
Capitol’s Lyndon Baines Johnson Room, Mnuchin spent the closing weeks of March
running (and massaging) messages between the Senate’s Democratic and Republican
camps as they sought consensus on a gargantuan coronavirus relief bill.
“Mnuchin played the middleman, and he must have been in my office 20 times in
three days,” Senate Minority Leader Chuck Schumer told the Journal, going on to
praise the reliability of the Treasury secretary’s word. House Speaker Nancy
Pelosi has said that she and Mnuchin can communicate through a “shorthand”
devoid of time-wasting “niceties or anything like that.”
The soft skills
Mnuchin had once deployed to ink billion-dollar investment deals now eased the
passage of a $2.2 trillion economic-relief package. And there was much to
admire in the legislation’s headline provisions: an unprecedented expansion in
federal unemployment benefits that would leave many laid-off workers with as
much — if not more — income than they’d earned at their old jobs, forgivable
loans for small businesses that agreed to forgo layoffs during the crisis, and
onetime cash payments to all nonaffluent Americans.
But this is still a
Republican stimulus, however much schmoozing Steve has done with Chuck and
Nancy this spring. Congress’s persistent underfunding of the small-business aid
has kept America’s most vulnerable mom-and-pops out in the cold. And our
nation’s decrepit unemployment-insurance offices have struggled to administer
benefits as the ranks of the jobless grow millions stronger every week. The
Treasury Department has allowed debt collectors to garnish the relief checks of
cash-strapped Americans, and Congress has essentially refused to bail out
hospitals whose budgets have suddenly been destroyed by COVID-driven
shortfalls, meaning that over the next few years, whole essential health
systems and services could abruptly be suspended.
Most of all, the
legislation’s largest appropriation — $454 billion to backstop a $4 trillion
Federal Reserve lending program to large corporations — gives Mnuchin
significant personal discretion over which firms will have access to low-cost
credit and on what terms, thereby leaving a connoisseur in the art of
subverting federal crisis management for personal profit in charge of
preventing America’s corporate titans from subverting federal crisis management
for personal profit.
The White House’s
next big idea for promoting economic recovery is, reportedly, to formally
suspend the enforcement of labor and environmental regulations on small
businesses, a measure that would enable petit bourgeois tyrants to suspend all
pretense of concern for their workers’ health and well-being in the midst of a
pandemic.
Nevertheless, could
we have reasonably expected anything better, all things considered? A GOP
president and Senate majority were always going to comfort the comfortable and
toss crumbs to the afflicted. And when Congress approved $2.2 trillion in
coronavirus relief funds last month, nurses were intubating patients without
proper PPE, grocery-store clerks were jeopardizing their health to keep others
fed, and delivery drivers were forfeiting the security of social distancing so
others could more comfortably enjoy it. The legislation included zero dollars
in hazard-pay benefits for those workers. It did, however, provide $90
billion in tax cuts to the owners of pass-through businesses, such as, for
instance, the Trump Organization. Such “relief” was necessary, the American
Enterprise Institute later explained, to mitigate the “penalty” on economic
risk-takers.
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