“Heads We Win, Tails The Taxpayers Lose”: Wall Street’s Revenge; Dodd-Frank Damaged In The Budget Bill
On Wall Street, 2010 was the year of “Obama rage,” in which financial tycoons went ballistic over the president’s suggestion that some bankers helped cause the financial crisis. They were also, of course, angry about the Dodd-Frank financial reform, which placed some limits on their wheeling and dealing.
The Masters of the Universe, it turns out, are a bunch of whiners. But they’re whiners with war chests, and now they’ve bought themselves a Congress.
Before I get to specifics, a word about the changing politics of high finance.
Most interest groups have stable political loyalties. For example, the coal industry always gives the vast bulk of its political contributions to Republicans, while teachers’ unions do the same for Democrats. You might have expected Wall Street to favor the G.O.P., which is always eager to cut taxes on the rich. In fact, however, the securities and investment industry — perhaps affected by New York’s social liberalism, perhaps recognizing the tendency of stocks to do much better when Democrats hold the White House — has historically split its support more or less equally between the two parties.
But that all changed with the onset of Obama rage. Wall Street overwhelmingly backed Mitt Romney in 2012, and invested heavily in Republicans once again this year. And the first payoff to that investment has already been realized. Last week Congress passed a bill to maintain funding for the U.S. government into next year, and included in that bill was a rollback of one provision of the 2010 financial reform.
In itself, this rollback is significant but not a fatal blow to reform. But it’s utterly indefensible. The incoming congressional majority has revealed its agenda — and it’s all about rewarding bad actors.
So, about that provision. One of the goals of financial reform was to stop banks from taking big risks with depositors’ money. Why? Well, bank deposits are insured against loss, and this creates a well-known problem of “moral hazard”: If banks are free to gamble, they can play a game of heads we win, tails the taxpayers lose. That’s what happened after savings-and-loan institutions were deregulated in the 1980s, and promptly ran wild.
Dodd-Frank tried to limit this kind of moral hazard in various ways, including a rule barring insured institutions from dealing in exotic securities, the kind that played such a big role in the financial crisis. And that’s the rule that has just been rolled back.
Now, this isn’t the death of financial reform. In fact, I’d argue that regulating insured banks is something of a sideshow, since the 2008 crisis was brought on mainly by uninsured institutions like Lehman Brothers and A.I.G. The really important parts of reform involve consumer protection and the enhanced ability of regulators both to police the actions of “systemically important” financial institutions (which needn’t be conventional banks) and to take such institutions into receivership at times of crisis.
But what Congress did is still outrageous — and both sides of the ideological divide should agree. After all, even if you believe (in defiance of the lessons of history) that financial institutions can be trusted to police themselves, even if you believe the grotesquely false narrative that bleeding-heart liberals caused the financial crisis by pressuring banks to lend to poor people, especially minority borrowers, you should be against letting Wall Street play games with government-guaranteed funds. What just went down isn’t about free-market economics; it’s pure crony capitalism.
And sure enough, Citigroup literally wrote the deregulation language that was inserted into the funding bill.
Again, in itself last week’s action wasn’t decisive. But it was clearly the first skirmish in a war to roll back much if not all of the financial reform. And if you want to know who stands where in this coming war, follow the money: Wall Street is giving mainly to Republicans for a reason.
It’s true that most of the political headlines these past few days have been about Democratic division, with Senator Elizabeth Warren urging rejection of a funding bill the White House wanted passed. But this was mainly a divide about tactics, with few Democrats actually believing that undoing Dodd-Frank is a good idea.
Meanwhile, it’s hard to find Republicans expressing major reservations about undoing reform. You sometimes hear claims that the Tea Party is as opposed to bailing out bankers as it is to aiding the poor, but there’s no sign that this alleged hostility to Wall Street is having any influence at all on Republican priorities.
So the people who brought the economy to its knees are seeking the chance to do it all over again. And they have powerful allies, who are doing all they can to make Wall Street’s dream come true.
By: Paul Krugman, Op-Ed Columnist, The New York Times, December 15, 2014
“Our Democracy Is Dying”: For All Intents And Purposes, Our Government Is Merely The Handmaiden Of Corporations
In case anybody hasn’t noticed, democracy in America is dying now. This isn’t an overstatement; it’s a fact. Corporate interests dominate our politics so much at this point that our government, for all intents and purposes, is merely its handmaiden. Whatever Wall Street wants, Wall Street gets. Corporatism is the new order of the day. One political party stands for it; the other political party won’t stand against it.
The word inertia means the tendency of an object to move in whatever direction its been moving until and unless there’s the introduction of a counterforce, and the Democratic Party is simply not providing the necessary counterforce to the corporatist agenda so exalted by the Republicans. Such a possibility is undermined by Democrats with corporatist agendas of their own. Watch them trying to sideline Elizabeth Warren as I write this. It’s all gotten so terribly predictable.
Some people are pussyfooting around the word, but others are realizing it’s time to say it: we need a peaceful revolution in America. In the words of President John F. Kennedy, “Those who make peaceful revolution impossible make violent revolution inevitable.” The American people have simply got to stand up now. This isn’t the time for any of us to go mute – whether it’s those who feel there’s no point in saying anything, or those who feel there’s too big a risk in saying anything. And you know who you are.
The social revolution we need is comprised of two major categories: What we say No to, and what we say Yes to. In the American Revolution, with the Declaration of Independence we said no to what we would no longer accept (living under British rule). In ratifying the Constitution, we said yes to what we would do instead (form our own system of government). The template was genius then, and it’s genius now. Today, we need to say no to a situation in which our government is bought and paid for, and yes to a return to democracy. Nothing short of an historic, nothing namby-pamby-about-it, serious social movement will take us out of our free fall and set America back on the track to real liberty. Today, lobbyists – not the people – are in control. And that is not freedom.
The situation has shaken out – and thank you, Senators McConnell and Reid for adding to the disaster of Citizens United by upping the amount people can contribute to political parties; that really helps (not) – in such a way that nothing short of a Constitutional Amendment will stop the big money flowing into our political campaigns like poison into the veins of our democracy. The best bet now — given the resistance within both major parties to seriously taking down the dastardly “For Sale” sign posted on the front yard of our government — is for the people ourselves to call for a Constitutional Convention, state by state. And that’s what has started to happen.
If something inside you says, “That’s true,” then I hope you get active. We’re in serious straits now and things won’t get better by themselves. In denial about this? Go stand over there. Too cynical to think we can change things? Go stand over there. Too sedated to be upset yet? Go stand over there. An apologist for the system? Go stand over there. Ready to kick ass? Go to http://www.wolf-pac.com/ and express yourself big time. Work with that organization, or with any other you like. But this isn’t a time to sit on the sidelines. Our democracy is sick – it is really, really sick — and all of us are needed now to nourish it and make it well.
By: Marianne Williamson, The Blog, The Huffington Post, December 14, 2014
“An Ounce Of Courage”: We Need To Talk About Guns, Whether The NRA Likes It Or Not
The medical community has been no match for the National Rifle Association for decades. By the time Congress leaves town for the holidays, we’ll know if senators have shown an ounce of courage or if the NRA has bagged one more trophy. Either way, we won’t get the high-stakes discussion we need about guns.
At issue is the fate of Dr. Vivek Murthy, nominated over a year ago to be surgeon general but consigned to limbo due to his completely unremarkable view that gun violence is a public health problem. Murthy’s pre-nomination Twitter feed attests to his passion for the tighter gun laws that he, like most doctors, believes would cut down on deaths and injuries. But if Murthy lands the job, don’t expect him to talk about any of that. He told a Senate committee in February that he wouldn’t use the post as a bully pulpit for new gun laws.
So much for the surgeon general’s role as “the nation’s leading spokesman on matters of public health.” And so much for standing up to the NRA.
The group blasted out of the box charging that Murthy supported “radical gun control measures” and would use the office of surgeon general to advance “his pre-existing campaign against gun ownership.” Kentucky Sen. Rand Paul, an ophthalmologist and 2016 presidential prospect, said Murthy would attack the constitutional right to own firearms “under the guise of a public health and safety campaign” and said he would try to block his confirmation.
The 2014 campaign, with its band of skittish red-state Senate Democrats vulnerable to NRA attacks, put Murthy’s future on hold. His pivotal moment — vote? no vote? failed vote? — has finally arrived, and it happens to coincide with the Dec. 14 anniversary of the murder of 26 children and educators at Sandy Hook Elementary School in Newtown, Connecticut. The juxtaposition is illuminating.
One rap against Murthy is that, in Paul’s words, he would encourage doctors to “use their position of trust to ask patients, including minors, details about gun ownership in the home.” To which I say, if only. If only the health professionals who examined and treated Adam Lanza had asked him and his mother those questions and managed to get that home arsenal out of reach before he went on his Sandy Hook rampage two years ago.
Paul also said he was concerned that Murthy considers guns “a public health issue on par with heart disease and has diminished the role of mental health in gun violence.” But in a lengthy study of Adam Lanza’s “psychological deterioration” released last month, Connecticut’s Office of the Child Advocate said repeatedly that guns are the critical factor in mass shootings.
“The conclusion that access to guns drives shooting episodes far more than the presence of mental illness is inescapable. Those countries that have tight gun controls in general experience less overall gun violence and have fewer episodes per capita of mass shootings,” the authors wrote. They said mental illness “plays only a small role” in mass murder while guns, “especially assault weapons with high-capacity magazines,” play a “ubiquitous role.” Widespread access to such weapons and ammunition “is an urgent public health concern,” they wrote.
Medical professionals agree. The American Academy of Pediatrics website lists eight priorities in its federal advocacy section, and No. 1 is “Keeping children safe: Gun violence prevention.” Banning assault weapons is the top item on its state advocacy page. The American Medical Association favors an assault weapons ban and closing loopholes that allow gun buyers to avoid background checks.
Gun safety activists marked the second anniversary of Sandy Hook by releasing a study that found at least 95 school shootings in 33 states have occurred since that tragedy. Sen. Chris Murphy (D-CT) called Congress “complicit in these murders if we continue to sit back and do nothing to reverse this trend.”
There was never a more complicit moment than in April 2013, four months after Sandy Hook, when the Senate tried to pass a bipartisan bill to require background checks online and at gun shows. Supporters needed 60 votes to break a filibuster, and only mustered 54.
Under Senate rules for nominations, Murthy needs only 51 votes. If he prevails, he told senators he’ll focus primarily on obesity, “the defining challenge of our time.” In other words, he’d be another Michelle Obama, who chose obesity as a worthy but relatively non-controversial First Lady cause. He wouldn’t be another C. Everett Koop, the Reagan-era surgeon general who crusaded against tobacco and mailed sexually explicit AIDS information to every household in America.
Restraint could get Murthy confirmed. To make real progress against gun violence, he’d need to channel Koop.
By: Jill Lawrence, The National Memo, December 11, 2014
“An Affront To Our National Values”: The Gigantic Disaster Of The CIA’s Torture Program
The Senate Intelligence Committee released the executive summary of its report on the CIA’s use of torture in the years after the September 11 attacks, which took place at “black sites” in foreign countries (the full report can be read here). While we’ve known a good deal about this for some time, many of the details are new, and I want to focus attention on a few of them to make a particular point about this program and how we’re debating it today.
The picture the CIA itself and Bush administration officials have always tried to paint of the torture program is one of highly trained professionals using carefully considered, perfectly legal techniques that were limited and humane, and produced valuable intelligence that directly saved American lives. When you read the Senate report, however, you see something very different: people who essentially had no idea what they were doing.
Their task was urgent, and their fear was genuine, but in that urgency and fear they brutalized prisoners, withheld information and in some cases lied outright to other agencies of government (including Congress, the State Department, and the White House), and generally made a mess of things. There’s no other way to put this: the torture program was a gigantic disaster; if this weren’t a family newspaper I’d use a word that starts with “cluster.”
First, let me quote from the executive summary of today’s report, about one of the black sites:
Conditions at CIA detention sites were poor, and were especially bleak early in the program. CIA detainees at the COBALT detention facility were kept in complete darkness and constantly shackled in isolated cells with loud noise or music and only a bucket to use for human waste. Lack of heat at the facility likely contributed to the death of a detainee. The chief of interrogations described COBALT as a “dungeon.” Another senior CIA officer stated that COBALT was itself an enhanced interrogation technique. At times, the detainees at COBALT were walked around naked or were shackled with their hands above their heads for extended periods of time. Other times, the detainees at COBALT were subjected to what was described as a “rough takedown,” in which approximately five CIA officers would scream at a detainee, drag him outside of his cell, cut his clothes off, and secure him with Mylar tape. The detainee would then be hooded and dragged up and down a long corridor while being slapped and punched.
One of the detainees at this site was left overnight shackled to the wall and naked from the waist down in near-freezing temperatures. The next morning he was found dead of hypothermia.
Now let me cite a couple of the specific cases. This an email from a medical officer present for the interrogation of Abu Zubaydah:
The sessions accelerated rapidly progressing quickly to the water board after large box, walling, and small box periods. [Abu Zubaydah] seems very resistant to the water board. Longest time with the cloth over his face so far has been 17 seconds. This is sure to increase shortly. NO useful information so far.. ..He did vomit a couple of times during the water board with some beans and rice. It’s been 10 hours since he ate so this is surprising and disturbing. We plan to only feed Ensure for a while now. I’m head[ing] back for another water board session.”
In addition to waterboarding, Zubaydah was subjected to extended use of stress positions, which are designed to produce excruciating pain. At the end of the intensive period of interrogation, CIA officers declared the torture a success — not because Zubaydah had actually given up information on upcoming attacks, but because the officials decided they had completely broken his will and satisfied themselves that he had no such information to give.
Quite naturally, what concerned interrogators most was the prospect of future attacks. However, in multiple cases, they were faced with prisoners who were cooperative and supplied intelligence on things like the structure of al-Qaeda, but if the prisoner said he had no information about upcoming attacks, that would be taken as proof that he should be tortured further.
A significant amount of the report focuses on the site known as Cobalt, which is described not only as a horrific “dungeon” but a place where personnel rotate in and out and few seem to have any idea what they’re doing. Here’s the result of a visit there by a military legal advisor:
The U.S. military officer also noted that the junior CIA officer designated as warden of the facility “has little to no experience with interrogating or handling prisoners.” With respect to al-Najjar specifically, the legal advisor indicated that the CIA’s interrogation plan included “isolation in total darkness; lowering the quality of his food; keeping him at an uncomfortable temperature (cold); [playing music] 24 hours a day; and keeping him shackled and hooded.” In addition, al-Najjar was described as having been left hanging — which involved handcuffing one or both wrists to an overhead bar which would not allow him to lower his arms — for 22 hours each day for two consecutive days, in order to “‘break’ his resistance.” It was also noted al-Najjar was wearing a diaper and had no access to toilet facilities…According to the CIA inspector general, the detention and interrogation of Ridha al-Najjar “became the model” for handling other CIA detainees at DETENTION SITE COBALT.
But it wasn’t always the on-site interrogators pushing the interrogations to be more brutal. In one case cited by the report, the interrogators judged that a detainee named Abd al-Rahim al-Nashiri, who was implicated in the 2000 attack on the USS Cole, was being cooperative and forthcoming, based on their interactions with him and the fact that he was giving information on things like the structure of al-Qaeda. But he claimed that he didn’t have any information on upcoming attacks. The interrogators’ superiors at CIA headquarters wrote to them, “it is inconceivable to us that al-Nashiri cannot provide us concrete leads…. When we are able to capture other terrorists based on his leads and to thwart future plots based on his reporting, we will have much more confidence that he is, indeed, genuinely cooperative on some level.”
In other words, the idea that the prisoner simply didn’t have information on upcoming attacks was inconceivable to them. So they sent an untrained interrogator known for his temper to the site, who proceeded to do things like threaten the prisoner with a gun and an electric drill.
When that also failed to produce information on upcoming attacks, a contractor psychologist visited and created a new interrogation plan, based on yet more brutal techniques. This led the CIA’s chief of interrogations to inform his colleagues that he was retiring. In an email, he wrote, “this is a train wreak [sic] waiting to happen and I intend to get the hell off the train before it happens.” Eventually, everyone concluded that al-Nashiri didn’t have any information on upcoming attacks.
That’s just a bit of what’s in the report. One other interesting detail that jumped out at me was that on a couple of occasions, interrogators used mock executions, a favorite psychological torture technique of the Iranian regime.
We should note that many in the CIA dispute the details, particularly whether they were dishonest in their dealings with other agencies. What seems beyond dispute, however, is that the United States of America initiated a program of torturing prisoners that was planned and executed by people who knew next to nothing about interrogation.
As John McCain — who was subjected to some of these same torture techniques as a prisoner of war in Vietnam — said about this report: “The truth is sometimes a hard pill to swallow. It sometimes causes us difficulties at home and abroad. It is sometimes used by our enemies in attempts to hurt us. But the American people are entitled to it, nonetheless.” Many in his party don’t share that belief.
And even the White House can’t seem to bring itself to call this by its true name. Today I was on a background call with a group of senior administration officials, and they were asked repeatedly why they seemed so reluctant to use the word “torture,” even after President Obama admitted that “we tortured some folks.” One official replied, “We’re not going to go case by case in a report like this and try to affix a label to each action.” But they do affix a label: “enhanced interrogation techniques,” which they used again and again, accepting the euphemistic label the Bush administration affixed to it.
The White House certainly deserves credit for ultimately supporting the release of this report (even if they seemed reluctant to do so). For all the protestations of the CIA, Bush administration officials, and their supporters, a few things are beyond dispute. George W. Bush and the people who worked for him made torture the official policy of the United States government. The program that carried out their wishes was an unholy mess. It was an affront to all the values that this nation is supposed to stand for. And it made it much easier for terrorist groups to recruit new adherents.
And there are a lot of people talking on television, writing op-eds, and even running for office who sound like they’d be only too happy to do it all over again.
By: Paul Waldman, Contributing Editor, The American Prospect; The Plum Line, The Washington Post, December 9, 2014
“Where Anger And Fear Have Brought Us”: Children Are Children, No Matter Their Race Or Ethnicity
Darren Wilson made if very plain in his testimony before the grand jury that he was afraid of Michael Brown. As a matter of fact, his entire case is based on whether or not people believe that to be true. We also know that the officers who shot and killed 12 year-old Tamir Rice assumed that he was about 20 years old.
This is all part of a pattern that was recently the subject of research published by the American Psychological Association.
Black boys as young as 10 may not be viewed in the same light of childhood innocence as their white peers, but are instead more likely to be mistaken as older, be perceived as guilty and face police violence if accused of a crime, according to new research.
Beyond the Michael Brown’s and Tamir Rice’s, those assumptions also lead to this:
Fourteen states have no minimum age for trying children as adults. Children as young as eight have been prosecuted as adults. Some states set the minimum age at 10, 12, or 13…
Some 10,000 children are housed in adult jails and prisons on any given day in America. Children are five times more likely to be sexually assaulted in adult prisons than in juvenile facilities and face increased risk of suicide.
Whether they are being shot on the street, tried as adults, or locked up in adult prisons, Jonathan Capehart is right.
In America, black children are just that, children. It’s a damned shame people’s fears and prejudices blinds them to that fact. It’s a crying shame black kids must suffer because of it.
A lot of people are thinking that the one area where bipartisanship is possible in the next Congress is on criminal justice reform. But anything meaningful in that arena has to include the premise that children are children – no matter their race or ethnicity. A system that fails to treat them as such can never call itself “just.”
Bryan Stevenson, founder and director of the Equal Justice Initiative, brings it all together when he says that these kinds of policies are the result of “a political vision that is fueled by fear and sustained by anger.” He echoes President Obama in suggesting that we have to find a “voice of hopefulness to turn these things around.”
By: Nancy LeTourneau, Political Animal, The Washington Monthly, December 6, 2014
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