Friday, January 31, 2014


Banks Should Be Prosecuted

By Elizabeth Warren, Reader Supported News
31 January 14

PMorgan Chase recently reached yet another settlement with the U.S. government -- a $13 billion deal with the Department of Justice for peddling deceptive mortgages.
The banking giant broke the law, recklessly gambled with our economy, and had to pay a record government settlement. Guess what happened next? You guessed right: JPMorgan's CEO Jamie Dimon just got a 74% raise yesterday.
The New York Times speculates that Dimon got the raise because of his "active role" in negotiating government settlements last year. And as Dimon put it himself, it could have been a lot worse if JPMorgan had been forced to go all the way to a trial instead of just settling.
So here's my question: If JPMorgan is so happy with their settlements that they are rewarding their CEO with a big raise, do you really think the federal bank regulators were tough enough?
There are a lot of steps we can take to push the regulators to do their jobs and hold financial institutions fully accountable when they break the law, and I think a good starting place would be by enacting the Truth in Settlements Act.
This is the bill I recently introduced with Senator Coburn that would require accessible, detailed disclosures about settlement agreements so the public can hold regulators accountable -- no more hiding out behind closed doors and keeping the details secret.
When I question federal regulators in Banking Committee hearings, they insist that they don't need to take big banks to trial when they break the law. They stand by their claim that settlement agreements are tough enough.
But if a settlement is so weak that Wall Street is celebrating with pay raises, it's not a good deal for the American people.
This week Jamie Dimon admitted that the big banks don't want to go to trial, so now there's no doubt: If the regulators were willing to go all the way to a trial, even once in a while, they would have a lot more leverage in the settlement negotiations. And maybe they could get better deals on behalf of consumers and taxpayers.
This is simple: Bankers on Wall Street need to be held accountable when they break the law, and regulators in Washington need to be held accountable when they enforce the law.



It's classic. Wait till late on a Friday to announce a reprehensible decision in hopes of minimizing the uproar in response. But the extreme climate crisis doesn't take weekends off. And neither do we.

A State Department report has just declared that the environmental impact of the Keystone XL tar sands pipeline would be acceptable.This clears a path for Secretary of State John Kerry to give his approval to the pipeline.

Click here to tell Kerry and President Obama we will not stand for this project moving forward!

Scientists agree with the assessment of James Hansen that exploitation of the tar sands would be a catastrophe for the climate. This is a planetary emergency -- and right now this is a political emergency.

Take action now!

"Significant impacts to most resources are not expected along the proposed Project route assuming the following," reads the State Department report, before listing a series of improbable assumptions.

No wonder they waited for Friday afternoon!  

Please forward this email widely right now to anyone who cares about the future of the earth!

-- The team

P.S. RootsAction is an independent online force endorsed by Jim Hightower, Barbara Ehrenreich, Cornel West, Daniel Ellsberg, Glenn Greenwald, Naomi Klein, Bill Fletcher Jr., Laura Flanders, former U.S. Senator James Abourezk, Coleen Rowley, Frances Fox Piven, and many others.

P.P.S. This work is only possible with your financial support. Please donate.




William Rivers Pitt | The Sugar Makes the Poison Taste Sweet

Thursday, 30 January 2014 09:02By William Rivers Pitt, Truthout | Op-Ed
Obama State of the Union.President Barack Obama reviews his speech one last time while waiting in a room at the U.S. Capitol prior to delivering the State of the Union address in the House Chamber in Washington, DC, January 28, 2014. (Photo: Pete Souza / White House)
The President of the United States gave the annual State of the Union address on Tuesday night, and if you ask the right people, they'll tell you it was well and truly a barn-burner. President Obama dropped so many left-leaning, frown-inducing lines on the Republicans arrayed before him that Speaker Boehner, visible over the president's shoulder, changed hues from his standard orange to alarming red to call-the-paramedics purple on several notable occasions.

Rep. Steve Stockman (R-TX) stormed out of the chamber before the speech was finished. Rep. Randy Weber (R-Also TX) sent out a Tweet calling Mr. Obama the "Kommandant-In-Chef" before the speech even began. After the speech was over, no less than four Republican members of Congress - plus Ron Paul, who threw his two bent cents in for good measure - rose up to offer rebuttals, each of which went in their own merrily deranged direction, serving to underscore the shattered state of today's GOP. It was the Sybil Syndrome on network television, with neckties and Jesus thrown in to boot.

If you're not a fan of the Republicans in Congress, which you probably aren't according to all available polling data, it sounds like Tuesday was a pretty great night. If you deal with politics the way those little skimmer summer bugs deal with the surface of your favorite lake, it was. The president talked about income inequality, job creation, environmental protection, education, women's rights, voting rights, health care, and the warfare industry. Mr. Obama hit all the g-spots, and made it sound like he was just the guy to get it all done.

But then, if you're smart, you read the damned speech in detail...and if you did, like as not you have some serious questions to ask.
Questions, for example, like why Mr. Obama spent a good portion of his speech sounding for all the world like an Occupy Wall Street protester before turning on a dime to bend his knee to the failed religion of free-market economics. He did not say the words "Trans-Pacific Partnership." He did, however, say this: "Over the past five years, my administration has made more loans to small business owners than any other. And when ninety-eight percent of our exporters are small businesses, new trade partnerships with Europe and the Asia-Pacific will help them create more jobs."
Moles burrowed deep underground know by now that he wants that trade deal, and wants Congress to give him fast-track authority to get it done as soon as possible, despite the fact that the whole thing has been negotiated in secret, and will be, if ratified, caustic to American jobs in general, labor rights, environmental protections and human rights across the board. The Trans-Pacific Partnership, like its smaller cousin NAFTA, will not "create more jobs" as the president said Tuesday night, but will suck jobs out of the country and send them flying overseas. Again.
And then there is the question of why the president sounded like a Greenpeace activist when discussing environmental protections, before turning on a dime once again to promote a gas-mining practice called "fracking" that has already done lasting pollutive damage to communities all across the country. There are places in America, right this very minute, where you can light the tap water on fire because of the residue left over by this practice. A number of other countries have banned the process outright, but on Tuesday night, the president of the United States was hats-over-the-windmill thrilled by the prospect of spreading fracking far and wide. "In a fact sheet accompanying the speech," noted The Hill on Wednesday morning, "the White House called on Congress to establish 'sustainable shale gas growth zones.'"
Fracking is not sustainable. I guess that didn't make it into the notes for the speech. Can't imagine why.
And as we're on the subject of the environment, there's this state on the Eastern seaboard called West Virginia that Mr. Obama is president of along with the other 49. A company called Freedom Industries dumped poison into the water supply - two separate and distinct poisons, as it turns out - and left 300,000 people, their businesses, their schools, their hospitals, their retirement homes, without water to drink or bathe in or cook with for days and days and days.
According to Industry Specialists, the water is safe to drink now...but here's the funny part: the poison(s) that got dumped into the water supply have a funny way ofbreaking down into formaldehyde after a time, which they now have, and so all those West Virginians who had to avoid drinking the water are now drinking and cooking with and showering in - read "ingesting and breathing in" - a known carcinogen, and no one seems to be dealing with it. The president made no mention of that state, those citizens, or the industry that poisoned the water in the first place. If there is right now a better example of why we need stricter environmental regulations to protect the American people from these kinds of incidents, I'm not aware of it...and the president gave it a miss.
So three cheers to the wonderful rhetoric Mr. Obama devoted to the environment in his speech on Tuesday night. So long as you ignore the hazards of fracking, and ignore entirely the state of West Virginia (mission accomplished, Mr. President), he sounded for all the world like a true green hero. And since he also didn't mention the Keystone XL pipeline, we all get to wait to find out if he's going to green-light a fragile tube that will transport the dirtiest oil available on Earth across America's breadbasket and over our most vital water aquifer.
And then...and then, there was Cory Remsburg, the last invited guest Mr. Obama made note of. Remsburg, an Army Ranger, was injured by a roadside bomb in Afghanistan during his tenth deployment.
His tenth deployment.
His tenth deployment.
Cory Remsburg rose up before that parliament of whores, disfigured, maimed for life, and was duly recognized for his service and devotion to country. He received a deafening ovation from a room filled with the worst people in the country, many of whom voted over and over again to send him back to war ten times over, who cheered so loudly to cover over their shame...including the president himself, whose Afghanistan "surge" played its own part in putting Cory Remsburg in the path of the bomb that left him barely able to stand, blind in one eye, and forever damaged.
The President of the United States made no mention of the insanity of any soldier having to endure ten deployments, made no mention of the concept of actions and consequences, even as he stood before the loudest microphone on the planet. Perhaps he and his people thought the face of Cory Remsburg said it for him, and if so, that is another sorry example of the eleventy-dimension chess being played by an administration which is trying to run a country that only knows, politically, how to play checkers.
There are times when real leaders have to say things out loud into microphones, even when those things are so obvious that they bleed on the pavement. What happened to Cory Remsburg was wrong. It was, in fact, a crime, a long act of profiteering that has fed tens of thousands of men and women like him into the meat grinder, to be spat out into a VA system that is utterly overwhelmed and paralyzed before the avalanche of bodies it is tasked to help.
Instead, Mr. Obama said this: "My fellow Americans, men and women like Cory remind us that America has never come easy. Our freedom, our democracy, has never been easy. Sometimes we stumble; we make mistakes; we get frustrated or discouraged. But for more than two hundred years, we have put those things aside and placed our collective shoulder to the wheel of progress..."
We have put those things aside? Cory Remsburg, and the tens of thousands of soldiers who share his damage, cannot put those things aside. Mr. Obama turned that soldier's plight into a pep rally for the country that fed him to the bomb that almost killed him. "Sometimes we stumble; we make mistakes" was the only apology that ravaged Ranger got from his Commander in Chief. He deserved far more than that, as do all the men and women not lucky enough to get applause from Congress on television.
It is easy peasy for politicians to talk about putting difficult issues "aside," out of mind, away. That's the bread and butter of the Teflon not-my-problem political hack. Leaders, real leaders, address those difficult issues head-on. They challenge we the people to take them head-on, as well, and that is how we heal and rise and move on. That did not happen on Tuesday night. Again.
If you ask the right people, they'll tell you it was a great speech.
Ask me, and I'll tell you I saw a man talk like an Occupy protester while promoting the same tired, failed economic principles that spawned our yawning inequality in the first place. I saw a man talk like a Greenpeace activist while promoting or ignoring the dirtiest fuel industries in the business. I saw a man honor a ten-times-deployed wounded veteran with an "Oops." I saw a man talking very eloquently out of both sides of his mouth, again, and it made me sick in my soul.
"Between the idea and the reality," said a poet, "falls the Shadow."
It's the sugar that makes the poison taste sweet.
Copyright, Truthout. May not be reprinted without permission.



Jamie Dimon. (photo: Jason Alden/Bloomberg)
Jamie Dimon. (photo: Jason Alden/Bloomberg)

Jamie Dimon's Raise Proves US Regulatory Strategy Is a Joke

By Matt Taibbi, Rolling Stone
31 January 14

f you make a big show of punishing someone, and when you're done they still don't think they have a behavior problem, you probably picked the wrong punishment. Every parent on earth knows this implicitly - but does the Obama White House finally get it, too, now, after Jamie Dimon's raise?
When the board of JP Morgan Chase gave its blowdried, tirelessly self-regarding CEO a whopping 74 percent raise - after a year in which the Justice Department blasted the bank with $20 billion in sanctions - it was one of those rare instances where Main Street and Wall Street were mostly in agreement.
Everyone from the Financial Times to to the Huffington Post decried the move. The Wall Street pundits mostly thought it was a dumb play by the Chase board from a self-interest perspective, one guaranteed to inspire further investigations by the government. Meanwhile, the non-financial press generally denounced the raise as a moral obscenity, yet another example of the serial coddling of Wall Street's habitually overcompensated executive class.
Both groups were right. But to me the biggest news was how brutal an indictment Jamie's raise was of the Obama/Holder Justice Department, which continues to profoundly misunderstand the mindset of the finance villains they claim to be regulating.
Chase's responses to Holder's record penalties have been hilarious. Their first move was to make sure people outside the penthouse boardroom took on all the pain, laying off 7,500 employees and freezing salaries for the non-CEO class of line employees.
Next, Chase's board members sat down, put their misshapen heads together, considered the impact of this disastrous year of settlements, and decided to respond by more than doubling the take-home pay of the executive in charge, giving Dimon about $20 million in salary and equity.
In the end, the fines left the decision-making class of the company not just uninjured but triumphant. Dimon's raise was symbolic of a company-wide boost in compensation following the mass layoffs, as average per-employee expenses rose four percent overall, to $122,653, despite the $20 billion burden imposed upon the firm by the state.
There were a variety of reasons for the board's decisions, but one of the big ones, according to various reports, was that bank honchos wanted to send a message to the government that it believed the company had been unfairly treated. This was a notion Dimon himself snootily trumpeted just before his raise was announced.
So Eric Holder and his lieutenants thought they were getting tough on Chase by dropping a monster settlement on the firm, but actually all they did was a) inspire the company to punish thousands of low-level innocent employees, while b) doubly- or triply-reinforcing the mass-narcissistic delusion gripping the company's management that the bank's serial ethical violations - which ranged from providing see-no-evil banking services, to Bernie Madoff, to rigging retail electricity prices, to covering up billions in losses in the "London Whale" episode - were the fault of someone else.
Apparently the bank's board believed the Justice Department was simply caving in to anti-bank sentiment when it targeted Chase, not punishing real offenses. They seem to have decided their only "problem" was that the Justice Department lacked the political will to ignore the public's irrational cries for action.
Again, if you punish a firm, and its executives come out of the episode convinced their only problem was an irrational PR issue, your enforcement strategy probably needs tweaking. It doesn't exactly send much of a message when, mere months after you've imposed record enforcement penalties, the CEO of your target company is being led down Wall Street on a donkey, board members showering him with cash.
In contrast, when the LIBOR scandal blew up in England, British authorities essentially removedBarclays CEO Bob Diamond from office right away, in addition to levying fines and other penalties. We never heard about Bob Diamond getting a raise after LIBOR because as far as the world is concerned, there is no more Bob Diamond. He could be on the moon for all we know. It's not jail, but it's still more of a punishment than Eric Holder dropped on Chase and Jamie Dimon.
Moreover, when the Royal Bank of Scotland got caught up in the same LIBOR scandal, British and European regulators basically set up a base camp in the bank's backside, forcing the company to disclose all of its dirty laundry via a merciless long-term cooperation agreement that has already led to the exposure of another major scandal, the foreign exchange manipulation case.
Meanwhile, in the U.S., Eric Holder drops a bunch of fines on the Chase corporate entity from 20,000 feet and then watches as bank leaders give themselves raises, force low-level underlings to pay the tab, and publicly denounce the settlements as undeserved. And get away with doing it.
Well done, Justice Department! Way to flex those biceps!
There is a school of thought that the massive fines should have worked, if only in the sense that they should have provided Chase with an incentive to avoid future investigations. Adam Hartung at Forbes put it this way, in his critique of the Chase board's decision:
The Board of a troubled bank with billions in trading losses and billions in fines for illegal behavior decided to withhold employee pay raises, but double the CEO compensation, in order to snub the nose of the regulators who have been pointing out years of unethical, if not illegal, behavior? The same regulators who might well see this very action as a good reason to heighten their investigations . . . ? This is some pretty tortured logic.
Yes, that's tortured logic. But the whole point of this entire era of finance-sector corruption is that the leaders of these companies have not been logical. They've not only been depraved and antisocial from a corporate citizenship perspective, they haven't even acted in their own commerical interest.
People like Holder still don't understand that the leaders of these rogue firms have no problem blowing up their own companies and/or imperiling the world economy, so long as they continue to personally get paid.
Regulators have been blind to this for years, decades. It's why the Fed, the OCC, the OTS, the Justice Department and a host of other agenices missed incoming icebergs like the AIG and Lehman disasters, once upon a time.
In fact, since the days of Alan Greenspan and his halcyon dreams of a future of pure self-regulation, the notion that corporate leaders will always act in the interest of their own firms - that they'll behave according to the principled corporate egoism that was an article of faith both for Ayn Rand and acolytes like Greenspan - has been a core basis for broad policies of regulatory restraint.
Greenspan described his faith in corporate self-interest as the "whole intellectual edifice" guiding modern risk management. This edifice didn't admit the even theoretical existence of the corporate executive who behaves with capitalistically impure motives, i.e. the executive who treats his publicly-traded corporation like a mobster treats a restaurant, as a mark to be taken over and burgled for personal profit.
But as we all know by now, when business leaders can get paid tens or hundreds of millions upfront for deals that take years to pan out (or not), when personal compensation isn't tied to the long-term performance of the company, executives will tend to leverage their firms to the hilt in search of short-term profits, and they won't think twice about zooming past safety thresholds. This is irrational behavior from a corporate perspective, sure, but totally rational from a personal-greed perspective.
For instance, the men who ran Lehman Brothers, or the unit of AIG that sank that company, each walked away with hundreds of millions, rich forever. Angelo Mozilo pulled $132 million out of Countrywide in 2008 alone, even as all the rotten subprime loans he'd written over the years were collapsing and his company was losing $704 million that year.
Ultimately even Greenspan conceded that individual greed trumps corporate greed. "Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity," he told the House after the 2008 crash2014-01-31, "are in a state of shocked disbelief."
So even Alan Greenspan figured this out eventually, but apparently Eric Holder and Barack Obama still haven't caught on. They decided last year to make a big show of punishing JP Morgan Chase as a symbol of bank corruption, then forgot to punish the actual people who oversaw the bank's misdeeds. This is a little like trying to rein in a class bully by halving his school's budget. It doesn't work. Crimes are committed by people, and justice has to target people, too. Or else the whole thing is a joke, as we found out last week.



Rep. Grimm Apologizes to NY1 Reporter for On-Camera Threat

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Staten Island Rep. Michael Grimm has apologized to NY1 political reporter Michael Scotto a day after physically threatening him at the conclusion of an interview in the Capitol Rotunda following the president's State of the Union address. (Video of the interview can be seen at the bottom of the article.) Washington bureau reporter Geoff Bennett filed the following report for NY1.
After initially saying he did nothing wrong, Republican Rep. Michael Grimm picked up the phone and apologized Wednesday to NY1 Washington bureau reporter Michael Scotto.
"I apologized. I called Michael Scotto. He was very gracious and accepted my apology," Grimm said. "We're going to have lunch sometime next week and just make sure this is all behind us.
Grimm's Wednesday morning apology came after he first characterized Scotto's question about his campaign donations as a "disrespectful" cheap shot.
Grimm blamed his behavior on Hurricane Sandy, saying issues surrounding the storm weighed on him, and that contributed to his outburst.
"It is a lot of pressure to deliver because I want my constituents to know I do have their back," Grimm said. "But the bottom line is, this was an unfortunate incident that shouldn't have happened, and I'm sure my Italian mother is going to be yelling at me, saying, 'You aren't raised that way,' and she's right."
Grimm's office turned down our request for a one-on-one interview. He's trying to quickly move on from Tuesday night's incident, much like House Republican leadership. On Wednesday, House Speaker John Boehner, in a written statement, would only say that Grimm's apology was appropriate.
On Wednesday, a Washington-based government watchdog group filed an ethics complaint against Grimm, saying he violated a House rule that requires members to conduct themselves "at all times in a manner that reflects creditably on the House."
"If the kitchen's too hot, get the heck on out," said Rep. Charles Rangel, whose district covers parts of Manhattan and the Bronx.
Rangel, who endured a two-year House ethics investigation that led to a censure, said that Grimm should have been prepared for tough questions.
"I do know from personal experience, all a reporter has to find out is that there is an investigation, and you can bet your life you're going to hear a lot about it. So it comes with the job. It comes with the profession, and you really got to take it," Rangel said. "We give a lot out. We got to take it when reporters give it back to us."
TWC News: Rep. Grimm Apologizes to NY1 Reporter for On-Camera Threat
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