In case you missed it, Elizabeth Warren made quite the splash at her first Senate Banking Committee hearing on Thursday.
In front of a panel entitled “Wall Street Reform: Oversight of Financial Stability and Consumer and Investor Protections,” Warren berated regulators for failing to prosecute a single Wall Street criminal in recent years, and for not letting institutional suspicions arise due to the fact that banks are trading at below-book value.
This, as you can imagine, did not sit well with banking executives.
According to POLITICO’s Ben White, they went apoplectic:
“We have been through more tests and thorough exams than any college student over the past four years, including many conducted by the CFPB,” said Richard Hunt, president and chief executive of the Consumer Bankers Association.
“While Sen. Warren had every right to ask pointed questions at [Thursday’s] Senate Banking Committee hearing, her claim that ‘nobody believes’ that bank books are honest is just plain wrong,” [another anonymous] executive said in an email. “As Federal Reserve Gov. [Daniel] Tarullo explained in response to her question, the low valuations are more likely due to continued economic uncertainty and concerns on the part of investors regarding the impact on banks’ profitability due to the hundreds of new regulations.”
White, however, left out key pieces of background here. The first is that Wall Street banks are performing like they were in 2006, and that their moaning about profitability rings hollow. The second is that to say the industry has a credibility problem would be the understatement of the decade: according to the Wall Street Journal and a trade publication called CFA Magazine, “one out of every ten people working on Wall Street are psychopaths.”
Not wanting to disappoint, the executive evidenced a delusional mendacity again in White’s article, when he said that “Elizabeth warren and [Texas Republican Senator] Ted Cruz are dueling for the title of ‘most extreme fringe freshman senator.’”
To this empty suit, it’s not just as if the financial crisis never happened. It’s as if Wall Street firms haven’t been mired in scandal after scandal since: foreclosure fraud, LIBOR, JP Morgan London Whale, FHA loan fraud, and MF Global to name a few. According to our faceless executive, wanting regulators to hold these well groomed pickpockets to account — for both crimes and reckless legal practices — is equal to slandering Chuck Hagel for having fictitious ties to North Korea or a blatantly made-up Hamas linked booster group (and certain publications continue to push this false equivalency in their fact-free devil-may-care attempts to be “objective” stenographers).
Fortunately for Wall Street, Warren might not have done herself any favors through her line of questioning. As Yves Smith, author of the the indispensable blog “Naked Capitalism” pointed out, the freshman Senator could have played a more subtle cat-and-mouse game to “tease out” information she claimed to have wanted – about why regulators never take cases to trial, namely, or why the fines they issue amount to a paltry “cost of doing business” amount. I suspect, however, that Warren was just trying to make a point – that whether regulators are scared of losing cases, or not wanting to find themselves shunned by Wall Street when they decide that they’ve had enough of Washington, they haven’t been doing the public any favors through inaction.
What’s important about this exchange, though, is that Warren demonstrated why she was elected. She might, thus far, be known as a one-issue kind of expert, but that issue is of massive importance to her constituents (and the American people). Her banking committee membership, I suspect, will be significantly more valuable the next time financier psychopaths pay a visit to one of the Senate office buildings to testify.
By: Brian Knight, Washington Monthly Political Animal, February 17, 2013
Gas prices continue to rise, which is finally giving Republicans an issue. Mitt Romney is demanding the president open up more domestic drilling; the super PAC behind Rick Santorum just released a new ad in Louisiana blasting the president on gas prices; and the GOP is attacking the White House on the Keystone XL Pipeline.
But the rise in gas prices has almost nothing to do with energy policy. It has everything to do with America’s continuing failure to adequately regulate Wall Street. But don’t hold your breath waiting for Republicans to tell the truth.
As I’ve noted before, oil supplies aren’t being squeezed. Over 80 percent of America’s energy needs are now being satisfied by domestic supplies. In fact, we’re starting to become an energy exporter. Demand for oil isn’t rising in any event. Demand is down in the U.S. compared to last year at this time, and global demand is still moderate given the economic slowdowns in Europe and China.
But Wall Street is betting on higher oil prices in the future — and that betting is causing prices to rise. The Street is laying odds that unrest in Syria will spill over into other countries or that tensions with Iran will affect the Persian Gulf, and that global demand will pick up as American consumers bounce back to life.
These bets are pushing up oil prices because Wall Street firms and other big financial players now dominate oil trading.
Financial speculators historically accounted for about 30 percent of oil contracts, producers and end users for about 70 percent. But today speculators account for 64 percent of all contracts.
Bart Chilton, a commissioner at the Commodity Futures Trading Commission — the federal agency that regulates trading in oil futures, among other commodities — warns that too few financial players control too much of the oil market. This allows them to push oil prices higher and higher — not only on the basis of their expectations about the future but also expectations about how high other speculators will drive the price.
In other words, a relatively few players with very deep pockets are placing huge bets on oil — and you’re paying.
Chilton estimates that drivers of small cars like Honda Civics are paying an extra $7.30 every time they fill up — and that money is going into the pockets of Wall Street speculators. Drivers of larger vehicles like the Ford Explorer are paying speculators $10.41 when they fill up.
Funny, but I don’t hear Republicans rail against Wall Street speculators. Could this have anything to do with the fact that hedge funds and money managers are bankrolling the GOP as never before?
Wall Street isn’t bankrolling Democrats nearly as much this time around because the Street is still smarting from the Dodd-Frank Wall Street reform law pushed by the Democrats, and from the president’s offhand remark in 2010 calling the denizens of the Street “fat cats.”
The Commodity Futures Trading Commission is trying to limit how much speculators can bet in oil futures — a power it was given by Dodd-Frank. It issued a rule in October, but it won’t take effect for another year.
Meanwhile, Wall Street has gone to court to stop the rule. It’s already won a stay.
As rising gas prices start wagging the election-year dog, the president should let America know what’s really causing prices to rise.
By: Robert Reich, From The Robert Reich Blog, Published in Salon, March 15, 2012
I imagine everyone has seen the bumper sticker that says, “Lord, protect us from your followers.” I have an idea for a related sticker that reads, “Republicans, protect us from your elected officials.”
In the existing political landscape, the real problem is not with GOP voters; it’s with GOP policymakers. This isn’t to let the party’s supporters off the hook entirely — they’re the ones who supported and elected the officeholders — but it’s hard to overstate how much more constructive the political process would be if Republican lawmakers in any way reflected the priorities of their own supporters.
Last week, a national poll found that Republican voters broadly support the Democratic jobs agenda — a payroll tax cut, jobs for teachers/first responders, infrastructure investments, and increased taxes on millionaires and billionaires — in some cases by wide margins. This week, Tim Noah noticed this observation can be applied even further.
I’m liking rank-and-file Republicans better and better. Earlier this month we learned that they favor Obama’s plan to tax the rich. Now we learn that a 55 percent majority of them think Wall Street bankers and brokers are “dishonest,” 69 percent think they’re “overpaid,” and 72 percent think they’re “greedy.” Fewer than half (47 percent) have an unfavorable view of the Occupy Wall Street protests. Thirty-three percent either favor them or have no opinion, and 20 percent haven’t heard of them. Also, a majority favor getting rid of the Electoral College and replacing it with a popular vote. After the 2000 election only 41 percent did. Now 53 percent do. How cool is that?
Every one of these positions puts the GOP rank-and-file at odds with their congressional leadership and field of presidential candidates.
I don’t want to exaggerate this too much. The fact remains that the Republican Party is dominated by conservative voters, especially those who participate in primaries and caucuses. I’m not suggesting for a moment that the party’s rank-and-file members are moving to the left.
But the recent poll results are also hard to miss — many if not most GOP voters are perfectly comfortable with plenty of progressive ideas, including tax increases on millionaires and billionaires. It’s starting to look like the party’s rank and file is made up of mainstream conservatives who want their party to help move the country forward.
And yet, when we look to Republican officials in Washington, how many GOP members of Congress are willing to endorse any of these popular measures? Zero. Literally, not even one Republican lawmaker has offered even tacit support for ideas that most GOP voters actually like. In the Senate, a united Republican caucus won’t even allow a vote — won’t even allow a debate — on popular job-creation ideas during a jobs crisis.
If the actions of GOP lawmakers in any way resembled the wishes of GOP voters, our political system wouldn’t be nearly as dysfunctional as it is now.
Congratulations, congressional Republicans. You’re far more extreme than your own supporters.
By: Steve Benen, Washington Monthly Political Animal, October 25, 2011
Just two weeks after denouncing economic-justice protesters as an angry “mob,” House Majority Leader Eric Cantor (R-Va.) seemed to be shifting gears. Last Sunday, Cantor acknowledged the “warranted” frustrations of the middle class, and this week, was even poised to deliver a speech on economic inequality.
As it turns out, Cantor changed his mind. Yesterday, the oft-confused Majority Leader abruptly canceled, saying the University of Pennsylvania’s Wharton School invited the public to attend the speech, which meant Cantor would refuse to appear. The Republican appears to have been fibbing — university officials explained that the event had always been billed as “open to the general public,” and that Cantor’s accusation of a last-minute change in attendance policy simply wasn’t true.
That Cantor was afraid to talk about economic inequalities in front of the public is pretty ridiculous. That Cantor is making dishonest excuses makes matters slightly worse.
But let’s put all of that aside and consider what the Majority Leader intended to say if he’d kept his commitment and shown up. The Daily Pennsylvanian, UPenn’s campus newspaper, published the prepared text of Cantor’s speech, offering the rest of us a chance to see the GOP leader’s thoughts on the larger issues.
After having read it, it seems Cantor probably made a wise choice canceling at the last minute.
How would the Majority Leader address growing income inequalities? He wouldn’t. In fact, Cantor’s plan seems to be to discourage people from talking about the issue altogether.
“There are politicians and others who want to demonize people that [sic] have earned success in certain sectors of our society. They claim that these people have now made enough, and haven’t paid their fair share. But, pitting Americans against one another tends to deflate the aspirational spirit of our people and fade [sic] the American dream.”
This is just dumb. Asking those who’ve benefited most from society to pay a fair share isn’t “pitting Americans against one another” or “demonization.” (An actual example would be when Cantor and his ilk condemn labor unions, scientists, teachers, economists, trial lawyers, and community organizers.) What’s more, in context, didn’t use these tired platitudes as a transition to a substantive point; there were no substantive points.
“Much of the conversation in the current political debate today has been focused on fairness in our society. Republicans believe that what is fair is a hand up, not a hand out. We know that we all don’t begin life’s race from the same starting point. I was fortunate enough to be born into a stable family that provided me with the tools that I needed to get ahead. Not everyone is so lucky. Some are born into extremely difficult situations, facing severe obstacles. The fact is many in America are coping with broken families, dealing with hunger and homelessness, confronted daily by violent crime, or burdened by rampant drug use.”
And how would Cantor help improve these conditions, clearing the way for income mobility? He’d cut taxes on the wealthy again, and wait for wealth to trickle down. That’s his solution to the growing gap between rich and poor.
The Majority Leader went on to say, “We should want all people to be moving up and no one to be pulled down.” Tim Noah noted how misguided Cantor’s understanding of economics is: “Cantor’s income inequality solution is to elevate all of the bottom 99 percent in incomes up to the top 1 percent. That would shut up the Occupy Wall Street crowd for sure! A more practical solution — and one that doesn’t violate the laws of mathematics — would be to encourage mobility, by all means (the U.S. has actually fallen behind most of western Europe in this regard) but also to pay close attention to what happens to the people who don’t make it to the top. The bottom 99 percent contribute to prosperity too, and lately they haven’t had much to show for it. Cantor seems not in the slightest bit curious as to how that happened.”
How many policy ideas did Cantor present to address economic inequalities, in his speech about economic inequalities? None.
Keep in mind, this was a prepared speech, not comments made off the kuff in an interview. Cantor was able to take his time, think about the subject in depth, and rely on his staff to present a coherent vision with some depth.
And the intellectually bankrupt Majority Leader still couldn’t think of anything interesting to say.
By: Steve Benen, Washington Monthly Political Animal, October 22, 2011
The votes by Maine Republican Senators Olympia Snowe and Susan Collins against the American Jobs Act, which Moody’s Analytics estimated would create nearly 2 million new jobs, have sparked protests in Augusta:
The ongoing series of Wall Street protests moved to Maine’s capital Thursday as about two dozen trade workers, state employees and residents held a rally calling for passage of a federal jobs bill and a new tax to pay for it.
“They got bailed out, we got sold out,” the protesters chanted from under their umbrellas as they left the State House in the rain for the federal building a couple of blocks away to deliver their demands to the offices of U.S. Sens. Olympia Snowe and Susan Collins. Those demands included lists of projects that could be funded in Maine. [...]
“Workers like us didn’t crash the economy; Wall Street did,” said Dawn Frank of Oxford, an electrician who has had difficulty finding work. “It’s been rough. It’s been rough for everybody. Let’s get Maine workers like me rebuilding our country.”
Donna Dachs, a retired teacher from Readfield, said the state’s schools, roads, bridges and ports urgently need upgrades.
And the protesters aren’t just unhappy with Wall Street — they want some answers from their senators, too:
The folks here, like Cokie Giles, President of the Maine State Nurses Association, say they want congress to pass legislation to create jobs. “The first one is good jobs with livable wages. There’s a difference between having a job and having livable wages,” Giles said. [...]
Senators Olympia Snowe and Susan Collins both voted against the president’s jobs bill earlier this week. A move that angered the people gathered in Augusta. “What we’re gonna do is ask Senators Snowe and Collins what side they’re on. Are they on Wall Street’s side or are they on Main street?” Giles asked the supporters.
That’s a good question — but Snowe has already answered it. In her five-paragraph statement about her vote against the jobs bill, Snowe indicated an objection to only one of the bill’s provisions: the surcharge on adjusted gross income in excess of one million dollars a year, which would affect only one-tenth of one percent of Maine residents.
So it’s pretty clear what side Snowe is on: She sides with the richest one-tenth of one percent of Mainers, and against 99.9 percent of her constituents. It really doesn’t get much clearer than that. But just to drive the point home, Snowe spoke to group of businessmen this morning, where she courageously told themtheir taxes are too high and they are over-regulated. That probably played better with the financial elites who fund her campaigns than with the struggling working-class voters who elect her, but it is neither the problem with the economy nor the solution to its problems. Snowe also backed a balanced budget amendment, which, according to Gus Faucher, Moody’s Analytics’ director of macroeconomics, “is likely to push the economy back into recession.” Naturally, Snowe didn’t explain how she’d balance the budget — she likes to leave the solutions to others.
Jamison Foser, Media Matters, October 14, 2011