Posts Tagged Wall Street

America needs a financial transactions tax

An idea that’s time has come.

Wall St. trading could generate taxes
Politico

Peter DeFazio is angling to tax the trading of stocks, bonds and derivatives. The Oregon Democrat has teamed up with Sen. Tom Harkin (D-Iowa) to introduce the measure — a sequel to their 2009 bill — before the November G-20 meeting in Cannes, France.

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Who’s Lying to Congress – Wall Street or Warren?

So, Mr. Patrick McHenry, Chairman of the U.S. House Oversight Subcommittee on TARP and Financial Services thinks Elizabeth Warren, interim head of the Consumer Financial Protection Bureau, lied to Congress.

Decorum Breaks Down at House Hearing
A panel chairman accused Elizabeth Warren, who is directing the new Consumer Financial Protection Bureau, of lying.

Since it’s becoming increasingly clear that officials from major banks, Goldman Sachs in particular, may have lied to Congress regarding their role in the 2008 financial crisis, if the Chairman cares about fairness he needs to summon them before his committee as well.

Curious that he so forcefully pursues and seeks to discredit one of the nation’s leading consumer advocates, while so far, seems to be giving a pass to the architects of the financial crisis.  While the desire to watch the watchmen is laudable, surely watching the foxes in the henhouse is of equal, if not greater, importance.

The Senate Permanent Subcommittee on Investigations’ report on the financial crisis details these matters and would be a good place for the Chairman to start.

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Investigating Wall Street – New York Style

My post on the New York Attorney General investigating banking’s role in the 2008 financial crisis, reminded me of a recent conversation I had with a good friend about possible methods to investigate potential criminal activity by bank executives.

Tap Phones and Email

My friend reminded me of news reports about data-mining programs used by the National Security Agency and the Department of Homeland Security to tap email and phone communications involving suspected terrorists and their contacts in the United States. Provided the proper warrants and court orders were obtained, seems to me that such surveillance methods and technologies might prove very fruitful in compiling evidence against potential Wall Street criminals. Unlikely that the New York AG will be able to convince the NSA or DHS to help out. Too bad.

Paying for the Oldest Profession

While investigators are at it, why don’t they round up a few brokers on prostitution charges and offer pleas for them to reveal what they know about securities fraud on Wall Street particularly during the period between 2004 and 2008. As the film, Inside Job pointed out, where fraudulent billing of prostitutes as a business expense is so prevalent, it wouldn’t be hard to motivate a broker to talk. Kristin Davis, the so-called “Manhattan Madam” interviewed in the film noted that while prosecutors offered a plea bargain, “[t]hey weren’t interested in any of my records.” Why not?

Eliot Spitzer explained:

“There is a sensibility that you don’t use people’s personal vices, in the context of Wall Street cases necessarily, to get them to flip. Maybe after the cataclysms that we’ve been through, maybe people will reevaluate that. I’m not the one to pass judgment on that right now.”

As the film points out, federal prosecutors took time to investigate Mr. Spitzer’s personal vices. Perhaps they should do the same for brokers on Wall Street. Where, for example, do Ms. Davis’ records lead? Who, beyond Dominique Strauss-Kahn, do they name? And what do those individuals know about securities fraud, conspiracy to commit securities fraud, or other financial crimes?

Where’s RICO?

And what about RICO cases under the Racketeer Influenced and Corrupt Organizations Act. If what transpired on Wall Street wasn’t a racket, it’s hard to imagine what is.

In any case, it’s gratifying to see the New York Attorney General investigating the activities that led to the 2008 financial crisis and as far as I’m concerned he needs to use the same methods on the white collar crowd that have proven tried and true on more blue collar types. Justitia, after all, is blind to wealth and power. Or at least she is as she appears on the Seal of the State of New York.

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Questions Worth Asking about Capitalism and Justice

RSA Animate has a very interesting animation up on YouTube about the Crises of Capitalism.

The final image reflects a sentiment recently expressed by Matt Taibbi in Rolling Stone – Why Isn’t Wall Street in Jail?

 

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Political Clout Threatens Consumer Financial Protection

Undoubtedly one of the reasons there has not been a social revolution over the 2008 financial crisis is that the banks wield enormous political clout and work diligently to prevent any meaningful effort to hold them accountable for their mistreatment of consumers. As evidence, consider the following regarding a recent oversight hearing on the Consumer Financial Protection Bureau, and the sole witness – Elizabeth Warren.

An Advocate Who Scares Republicans
By JOE NOCERA
Published: March 18, 2011
Many Republicans fear Elizabeth Warren will run the new Consumer Financial Protection Bureau, fighting for consumers by cracking down on banks.

Read the full article here.

The War on Warren
By PAUL KRUGMAN
Published: March 20, 2011
The attacks on Elizabeth Warren are meant to block credible consumer protections.

Read the full article here.

Here is a link to the oversight hearing, conducted by the House Committee on Financial Services.

Unfortunately, these articles highlight the partisan treatment (or mistreatment) of financial reform, financial regulation and the work of the CFPB. It remains to be seen if CFPB and Ms. Warren will receive similar treatment during any oversight hearings by the Senate. And even more important, will Ms. Warren even be nominated to serve as the full-time Director of the Bureau. If the Obama Administration follows through and names her to the post, perhaps there will be some light at the end of the tunnel, some hope for accountability and responsibility, some chance you and I will have the same protections as bankers and brokers. If not, well, as a wise man once said – “It’s a Wall Street Government.”

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Two Stories about Greed: The Corporation & Inside Job

Continuing my research on the lack of a social revolution in America over the 2008 financial crisis, I finally watched Inside Job and another film, The Corporation.

After viewing the films I don’t mind admitting that I was so angry all I could do was mutter profanity at the screen. Okay, it was more than a mutter but less than a scream…. But then the blindness of anger passed. I don’t know why I should be surprised by these revelations of greed. For all the fancy schemes and intricate deceptions revealed by the films, the problems they describe reduce to the basest of human motivations. As observed by Marc Barry in The Corporation – “People want money – that’s the bottom line.” The teachings of wisdom warn that greed is a primary cause of the world’s suffering and we must guard against it. With that in mind, here are links and a few random observations:

The Corporation
The film discusses the origins and attributes of the modern corporation and examines the its impact of on culture, government, education and society generally. Based on work by an eminent Canadian law professor and legal theorist, the film contends the modern business corporation is created by law to function effectively in the same manner as a psychopathic personality. A provocative contention to be sure.

One of my favorite observations from the film came from Ray Anderson, CEO of Interface:

“The day must come when this is illegal. When plundering is not allowed.”

Inside Job
Perhaps a bit less obscure since it won the Academy Award for Best Documentary just a few weeks ago, the film examines the role of Wall Street banking firms in creating the 2008 world financial crisis and the subsequent Great Recession.

The award for Most Chilling Quote Except it’s Too Obvious goes to Robert Gnaizda, former director of the Greenling Institute: “It’s a Wall Street Government.”

Somewhere near the end of my two-day cinematic research session, I recalled another quote, this time from that classic, All the President’s Men: “Follow the Money.” So, all I can say is watch the films (they are available on iTunes). If you can, watch them together or at least within a few days of each other. Keep an open mind. Suspend your disbelief for the few hours it takes. Drink a glass of water. Ride it out to the end and don’t despair. Ask yourself, is it possible that even a bit of this is true? If so, what can I do about it? More on that soon and at the websites for each film.  Here are the links again:

The Corporation

Inside Job

Even if greed is the bottom line – it’s not the end of the story.

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