“Extremism And Corruption In The Sunshine State”: What Americans Don’t Know (Yet) About Jeb Bush
Whenever the deep thinkers of the Republican establishment glance at their bulging clown car of presidential hopefuls – with wacky Dr. Ben Carson, exorcist Bobby Jindal, loudmouth Chris Christie, and bankruptcy expert Donald Trump jammed in against Senators Rand Paul and Ted Cruz, to name a few – they inevitably start chattering about Jeb Bush.
Never mind that his father was a one-term wonder of no great distinction, or that his brother is already a serious contender, in the eyes of historians, for worst president of the past hundred years. And never mind that on the issues most controversial among party activists — immigration and Common Core educational standards — he is an accursed “moderate.”
Lacking any especially attractive alternative, powerful Republicans are pushing Jeb Bush to run in 2016. And he seems to be on the cusp of a decision. Besides, more than a few Democrats agree that Bush, however damaged his family brand, would be the most formidable candidate available to the GOP. They too whisper about him as “the only one who could beat Hillary.”
Perhaps he could, although nearly all the polling data so far suggests Clinton would trounce Bush. But it is far too early to tell – in part because Jeb Bush, a politician who has been around for more than 20 years, is so little known to the American public. Most voters are ignorant about Bush’s record in Florida, where he was an exceptionally right-wing governor. They either don’t know or don’t remember, for example, how he signed a statute enabling him to intervene in the case of Terry Schiavo, a woman in a persistent vegetative state, despite her husband’s wishes. Florida’s highest court later voided that law as unconstitutional – and the conservative majority on the U.S. Supreme Court likewise rejected an appeal.
Extremism and corruption in the Sunshine State during Bush’s tenure will provide ample fodder for investigative reporters and primary opponents, as will many episodes in his long business career.
Five months after he left the governor’s mansion in 2007, he joined Lehman Brothers as a “consultant.” No doubt he was well compensated, as reporters may learn if and when he releases his tax returns someday. The following year, Lehman infamously went bust – and left the state of Florida holding around a billion dollars worth of bad mortgage investments. (A Bush spokesperson said “his role as a consultant to Lehman Brothers was in no way related to Florida investments.”)
There are many equally fascinating chapters in the Jeb dossier, rooted in his declaration three decades ago that he intended to become “very wealthy” as a developer and yes, “consultant.” His partners back then included a certain Miguel Recarey, whose International Medical Centers allegedly perpetrated one of history’s biggest Medicare frauds. (Connection to Medicare fraud seems to be a prerequisite to becoming governor of Florida, at least among Republicans; see Rick Scott and the Columbia/HCA scam.)
Indicted by the feds, the mobbed-up Recarey fled the country – but not before Jeb had placed a call on his behalf to his presidential dad’s Health and Human Services Secretary, Margaret Heckler. For serving as a crook’s flunky, Recarey awarded Bush a generous tip of $75,000.
He performed a similar service, with more success, on behalf of the Cuban political gangster Orlando Bosch, for whom he sought a presidential pardon from his father. The boastful murderer of dozens of innocent people – and a prosecution target of the U.S. Justice Department — Bosch deserved a pardon about as much as the worst jihadi in Gitmo. But his sponsors were the same Cuban-Americans in Miami who had fostered Jeb’s real estate business there, so he ignored the Republican attorney general’s denunciation of Bosch as an “unreformed terrorist.”
It will be fascinating to see whether the mainstream press, which vetted his brother George W. so inadequately during the 2000 presidential race, will perform any better this time. But one way or another, American voters are going to learn much more about frontrunner Jeb than they know – or remember – today.
By: Joe Conason, Editor in Chief, The National Memo, December 4, 2014
“A Nation Divided, With Liberty And Justice For Some”: White-Collar Crimes Are Not Considered “Appropriate For Jail”
It swallowed people up.
That’s what it really did, if you want to know the truth. It swallowed them up whole, swallowed them up by the millions.
In the process, it hollowed out communities, broke families, stranded hope. Politicians brayed that they were being “tough on crime” — as if anyone is really in favor of crime — as they imposed ever longer and more inflexible sentences for nonviolent drug offenses. But the “War on Drugs” didn’t hurt drugs at all: Usage rose by 2,800 percent — that’s not a typo — in the 40 years after it began in 1971. The “War” also made America the biggest jailer on Earth and drained a trillion dollars — still not a typo — from the Treasury.
Faced with that stunning record of costly failure, a growing coalition of observers has been demanding the obvious remedy. End the War. The Obama administration has been unwilling to go quite that far, but apparently, it is about to do the next best thing: Declare a ceasefire and send the prisoners home.
Attorney General Eric Holder announced last week that the government is embarking upon an aggressive campaign to extend clemency to drug offenders. Those whose crimes were nonviolent, who have no ties to gangs or large drug rings and who have behaved themselves while incarcerated will be invited to apply for executive lenience to cut their sentences short.
Nobody knows yet how many men and women that will be. Easily thousands.
Combined with last year’s announcement that the government would no longer seek harsh mandatory minimum sentences for nonviolent drug offenders, this may prove the most transformative legacy of Barack Obama’s presidency, excluding the Affordable Care Act. It is a long overdue reform.
But it is not enough.
As journalist Matt Taibbi observes in his new book The Divide: American Injustice in the Age of the Wealth Gap, Holder’s Justice Department has declined, essentially as a matter of policy, to prosecute the bankers who committed fraud, laundered money for drug cartels and terrorists, stole billions from their own banks, left taxpayers holding the bag, and also — not incidentally — nearly wrecked the U.S. economy. But let some nobody get caught with a joint in his pocket during a stop-and-frisk and the full weight of American justice falls on him like a safe from a 10th-story window.
For instance, a man named Scott Walker is 15 years into a sentence of life without parole on his first felony conviction for selling drugs. Meantime, thug bankers in gangs with names like Lehman Brothers and HSBC commit greater crimes, yet do zero time.
We have, Taibbi argues, evolved a two-track system under which crimes committed while wearing suit and tie — or pumps — are no longer considered jailable offenses. Taibbi said recently on The Daily Show that prosecutors have actually told him they no longer go after white-collar criminals because such people are not considered “appropriate for jail.”
Who is “appropriate”? Do you even have to ask?
Black people. Brown people. Poor people of whatever hue.
Thousands of whom are apparently coming home now. One hopes there will be a mobilization — government agencies, families, churches, civic groups — to help them assimilate into life on the outside. But one also hopes we the people demand reform of the hypocritical system that put them inside to begin with.
These men and women are being freed from insane sentences that should never have been imposed, much less served. Contrary to the pledge we learned in school, it turns out we are actually one nation divided, with liberty and justice for some.
So yes, it is good to see the attorney general dismantle the War on Drugs. But while he’s at it, let him dismantle the War on Fairness, too.
By: Leonard Pitts, Jr., Columnist for The Miami Herald; Published in The National Memo, April 28, 2014
“The Debt Ceiling Matters”: House Republicans Are Threatening To Unambiguously Violate The Constitution
The word we keep hearing is “catastrophe.”
“A U.S. Default Seen as Catastrophe, Dwarfing Lehman’s Fall,” screams the headline in Bloomberg Businessweek. “A default would be unprecedented and has the potential to be catastrophic,” says a Treasury Department report issued on Thursday — two weeks before the government is expected to begin running out of cash.
But what does “catastrophic” actually mean in this context? In the summer of 2011, when Republicans refused to raise the debt ceiling unless President Obama caved to their extortionist demands, the same word was bandied about. It scared the political class enough that they kicked the can and avoided a default.
This time around, the need to raise the debt ceiling doesn’t seem to be generating nearly the same concern. Indeed, Tea Party Republicans seem to be almost rooting for the government to default, as if that would somehow bring about the smaller government they so yearn for.
But this is incredibly wrongheaded. A failure to raise the debt ceiling, should it come to that, would likely inflict a different kind of pain than sequestration or even a shutdown of the federal government. It won’t make the government smaller. But it does have the potential to diminish the value of one of America’s greatest assets — the backing of its debt — while throwing the world economy into chaos.
The first point worth making is that the 14th Amendment to the Constitution, which declares that “the validity of the public debt of the United States . . . shall not be questioned,” was added precisely to avoid what is happening now: a faction of Congress using the debt ceiling as a bargaining chip. That basic truth, as Fortune’s Roger Parloff noted in a recent blog post, “ought to weigh very heavily in the minds — and on the consciences — of the House Republican faction that is now unambiguously violating its letter and spirit.”
The second point worth making is that U.S. government debt is the only risk-free asset in the world. That debt undergirds the entire world financial system — precisely because the whole world has such faith in it. There is always demand for U.S. government debt. Almost every other asset you can think of is in some way measured against it. A default would destabilize the market for Treasuries. And that, in turn, would likely destabilize every other asset.
The stock market would fall. Interest rates would rise — meaning, for instance, mortgages would become more expensive just as the housing market is starting to revive. Treasuries themselves would likely have to pay higher interest to investors, which would create a rather sad irony: a default would exacerbate the country’s long-term debt (the very problem the Republicans claim to care about).
Let’s move to the havoc a destabilized Treasury debt would have on the banking system. “The plumbing of the global financial system depends on Treasuries,” says Karen Petrou, a banking expert at Federal Financial Analytics. Remember what happened to Lehman Brothers? As the market lost faith in the company’s ability to meet its obligations, Lehman lost access to the “repo” market, which is the way banks are funded on a short-term basis. Treasuries make up a great deal of the collateral in the repo market. If a default were to cause the repo market to freeze, the entire banking system would find itself in crisis. Meanwhile — more shades of Lehman Brothers — the ratings agencies would likely downgrade Treasuries, forcing money market funds to start dumping government debt.
Painful choices would have to be made. Right now, the Treasury Department says it does not have the authority to pick and choose which creditors to pay. But, in the event of a default, it is hard to imagine that the government wouldn’t make some tough decisions about who should get paid in the short term — and who would have to wait. And, though this would infuriate millions of Americans, bondholders in China would likely get their money ahead of, say, Social Security recipients.
“From a purely cost-benefit analysis,” says Mark Zandi of Moody’s Analytics, “not paying bondholders would wind up costing the U.S. much more than not paying Social Security recipients” — because if bondholders lost faith in Treasuries, it would cost the government billions more in interest payments each year.
During the 2011 debt-ceiling crisis, consumer confidence dropped by 22 percent. When consumer confidence falls, people are less willing to spend and businesses are less willing to hire. That’s how recessions — or depressions — begin, and that may be the most important consequence of all.
For as long as anyone can remember, the ability of the United States government to pay its bills on time has given the rest of world tremendous confidence. At the same time, to have the one asset everyone in the world trusts has given America great advantages.
Why on earth would we ever risk that? Why?
By: Joe Nocera, Op-Ed Columnist, The New York Times, October 8, 2013
“Biggest Banks Are Bigger Than Ever”: Five Years After Lehman Brothers, We’re Still Just One Crisis From The Edge
Five years ago tomorrow, the investment bank Lehman Brothers filed for bankruptcy, officially kicking off the financial crisis that led to what we now call the Great Recession. Lehman’s bankruptcy was followed by the bailout of insurance giant AIG, the $700 billion bank bailout known as TARP and an alphabet soup of Federal Reserve programs launched in an attempt to stem the damage being done to the economy.
But even with those emergency measures, the final toll of the crisis was staggering: 8.7 million jobs were lost, $16 trillion in household wealth was wiped out and 12 million homeowners were left underwater, owing more on their mortgages than their homes were worth. According to the Federal Reserve Bank of Dallas, the cumulative effects of the crisis – wealth lost during the recession plus the effect that lower earnings and wealth will have on future earnings and output – could add up to more than $28 trillion.
The crisis began with a housing bubble fueled by subprime mortgage lenders, who were encouraged to make loan after loan by Wall Street banks that wanted mortgage securities to slice, dice and sell around the world. But it was exacerbated by the fact that the biggest Wall Street banks were so interconnected that the failure of one meant all the others were brought to the brink of collapse. The banks – engorged on debt and engaging in risky trading for only their own benefit – put the whole economy at risk.
Since then, quite a lot of time, effort and ink have been spent trying to fix what went wrong. So how did that attempt go?
The main legislative response to the crisis – the Dodd-Frank financial reform law – undeniably contains some things that will make the next crisis, whatever its form, easier to manage (or even prevent). There’s now a regulator explicitly tasked with policing consumer financial products, the Consumer Financial Protection Bureau. There’s a new process that, at least in theory, will allow the government to dismantle a failing mega-bank without resorting to ad-hoc bailouts, a legal process that was sorely missing during the 2008 crisis.
There’s a new regulatory regime for derivatives – the risky financial instruments that helped bring down AIG – that should make their market much more transparent. And banks are now required to hold more capital on hand to protect against a sudden downturn.
In other areas, though, not much has changed. For instance, the biggest banks are bigger than ever. In fact, the six largest banks in the U.S. now hold $9.6 trillion in assets, a 37 percent increase from five years ago. That total is equal to 58 percent of the entire economy. As Fortune’s Stephen Gandel noted, “The biggest bank in the nation, JPMorgan, has $2.4 trillion in assets alone — the size of England’s economy.”
And while those banks have gotten bigger, rules meant to rein in their risky trading have gone precisely nowhere. A key part of Dodd-Frank known as the Volcker Rule – which was supposed to prevent banks from making risky trades with taxpayer-backed dollars, such as consumer deposits – was watered down by Congress even before it passed, and is now stuck in a bureaucratic and lobbying morass. (Overall, just 40 percent of the rules in Dodd-Frank are actually finished.) More ambitious reforms, like capping the size of banks, garnered just one unsuccessful vote in the Senate.
Homeowners, meanwhile, continue to struggle. Not only are 7.1 million still underwater, but banks are engaging in shady practices to push homeowners into foreclosure who should have been able to stay in their homes. A much ballyhooed settlement stemming from rampant “foreclosure fraud,” as it’s called, doesn’t seem to have actually stopped these pernicious practices.
So while some things have certainly changed for the better – and having a consumer regulator will hopefully shortcircuit a lot of problems before they start – the biggest banks are still just one catastrophe away from pulling the country back to the edge of a cliff. And if the new process for unwinding a failed mega-bank doesn’t work, there won’t be many options available other than the odious bailouts used in 2008. In the meantime, homeowners who have suffered at the hands of the financial industry still find themselves with few avenues for receiving any justice.
Is there any momentum for new reform? Well, Sen. Elizabeth Warren, D-Mass., has been beating the drum for breaking up the biggest banks, and introduced a bill – along with Sens. John McCain, R-Ariz., Maria Cantwell, D-Wash., and Angus King, I-Maine – that would bring back a Depression-era regulation keeping investment and commercial banking separate. Former Citigroup CEO John Reed, who presided over the nation’s first true banking behemoth, told the Financial Times recently that breaking up banks can and should be done, making him one of a handful of Wall Street titans to take such a position.
But the financial industry is as strong as ever, so the prospects of real reform happening absent another crisis or a real populist reawakening are still pretty slim. If another crash comes along, we’re going to have to hope that the tinkering and tweaking that’s already occurred is enough to save us.
By: Pat Garofalo, U. S. News and World Report, September 14, 2013
Former Sen. Phil “Mental Recession” Phil Gramm Endorses His “Protege” Rick Perry
Texas Gov. Rick Perry (R) yesterday jumped in the 2012 GOP presidential primary, saying that “it is time to get America working again.” “I will work every day to make Washington, DC, as inconsequential in your lives as I can, and free our families, small businesses and states from a burdensome and costly federal government so they can create, innovate and succeed,” he said. And Perry quickly picked up the endorsementof former Sen. Phil Gramm (R-TX):
Former senator and current banker Phil Gramm of Texas — well-connected to big donors but controversial for his role in preventing tighter regulation of Wall Street — told The Huffington Post yesterday that he is endorsing his former student and political protege, Texas Gov. Rick Perry...”I’m for Rick and I will do what I can to help,” Gramm said in an interview in Detroit. “He has been an effective governor. He is a determined guy from a small town who knows how to get things done.”
In 2008, Gramm, who was advising Sen. John McCain’s (R-AZ) presidential campaign (and was floated as McCain’s choice for Treasury Secretary) gained notoriety for saying that the country was “a nation of whiners” that was only in a “mental recession.”
But Gramm’s legacy goes much deeper than that. In 2001, he tucked the Commodity Futures Modernization Act into an unrelated, 11,000 page appropriations bill. That act ensured that the huge market in over-the-counter derivatives stayed unregulated, laying the groundwork for the 2008 financial crisis (and the implosions of AIG and Lehman Brothers). He also believes there should be no minimum wage and has derided the working poor by saying, “we’re the only nation in the world where all our poor people are fat.”
Perry was a student of Gramm’s at Texas A&M, and when Perry became governor “Gramm and his bank pushed a controversial proposal to allow the company to take out insurance polices on teachers and other workers, even though the workers themselves would not benefit.” If Gramm’s support is any indication, Perry’s zeal for financial deregulation will know no bounds.
By: Pat Garofalo, Think Progress, August 14, 2011
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