Wednesday, 15 December 2010

Wheeler-dealers of fortune

The completely loathesome Pedro Espada, Jr., the outgoing Democratic Party leader of the New York state senate (yes, really) bit the pavement today in a richly deserved appearance at federal court. Espada [below right] & son are charged with embezzling scandalous sums from a Bronx health center dad helped found and then proceeded to loot for a decade. It’s too bad prosecutors took so many years to put an end to this clown’s shameless career, but at least they got around to it eventually.

Seeing the corrupt crash and burn is essential to the workings of democracy and, may I add, to capitalism, a detail largely forgotten by political ‘leaders’ of both parties these days as they maneuver to carry hod for the banker oligopoly. In the economics pages and blogs, which I read with great interest, there are more and more pleadings for someone, somewhere, to start slapping some subpoenas on the megacrooks who drove the economy into the ground and brought great suffering to millions.

Instead, the only criminal sent up the river from Wall Street is Bernie Madoff, who committed the highly punishable crime of stealing from the rich. But when Wall Street types themselves and a goodly portion of the economics profession are raising alarms about the future, it suggests something is deeply amiss.

Turning the capital markets into casinos has been great fun for the new ruling elite who now dominate our lives. The hurricane of financial manipulation will continue unchecked until the next meltdown, and the powerful will enjoy themselves immensely, thanks to the Republican mafia and its principal enabler, Barack O.

Now we have the hilarious spectacle of the Financial Crisis Inquiry Commission, another silly exercise in ‘bipartisanship’, now turning into a cat-foodfight along partisan lines. One cannot be amazed at anything these days, but the Republican idea of excising words like ‘Wall Street’ and ‘shadow banking’ from the consensus document is setting a new record for insanity, only surpassed by Obama’s latest Alzheimer moment in creating the damn bipartisan commission in the first place.

The estimable Yves Smith waxed particularly eloquent on the subject this morning:

Lordie, the Big Lie is with us in force.

The intent [of the Repub rewrite] is pretty transparent: to discredit an effort at fact-finding into the roots of the crisis by making it appear partisan and launching an alternative narrative to muddy the waters. And the reason is clear: . . . it appears that even lesser forms of criticism of the banksters must be sandbagged. . . .

This pathetic development shows how deeply this country is in thrall to lobbyists. But these so-called commissioners, who are really no more than financial services minions out to misbrand themselves as independent, look to have overplayed thier hand. This stunt shows more than a tad of desperation on the part of banks and their operatives in their excessive efforts block any remotely accurate, and therefore critical, report on the industry.

Perversely, this development may be a positive indicator on several fronts. . . . It may suggest that the banking industry is feeling more cornered than its continued high-handed posture might suggest. I continue to receive reports from industry insiders confirming that the biggest banks in the US are insolvent. The only sensible resolution of the mortgage mess involves deep principal mods, which will force the top four banks to write down their second mortgage books, blowing big holes in their balance sheets, and raising numerous, embarrassing questions (how could they and the Treasury defend paying back the TARP, much the less the level of 2009 and 2010 bonuses?)

In other words, the banks may be worried about the possibility of a backlash that might actually be effective. But they are already too late to stop the inevitable. They refuse to halt the juggernaut, a doomsday machine that continues to grind up families and communities and saddle innocent bystanders with the costs of higher taxes, unemployment, sagging infrastructure, and poor prospects for their children. This next two years may be the last window to leash and collar a parasitic financial services industry. If the authorities fail yet again, the cost will be both the rule of law and our unwritten social compact. If you tear asunder structures that fundamental, expect to reap a whirlwind.

I perversely hope Congress succeeds and undermines all restrictions on the bankers so that the next debacle occurs sooner rather than later. It will be great fun to watch the free marketeers destroy the goose that laid the golden egg as corruption, hustling and double-dealing spread far and wide and poison business transactions, legal contracts and even property titles a la Foreclosure-gate. Eventually, no one will be able to get anything done without the kinds of wholesale bribery, kickbacks and payoffs to the mighty that make China, Nigeria and Azerbaijan such great places to live. When it’s too late, these same jokers will weep copious tears for the capitalist marketplace they were unwilling to preserve and protect.

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