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“First We’ll Undermine Wall Street”: Standard And Poor’s Had This Planned From The Start!

One of the funnier items in the news this past week was the assertion by lawyers for Standard & Poor’s that the Department of Justice, which is suing the agency for fraud, is just trying to punish it for its downgrade of U.S. credit in 2011.

S&P was one of the agencies that gave high ratings to complicated and very unsound investment instruments, especially collateralized debt obligations, in advance of the financial crisis. Since the agencies’ fees were paid by the same banks issuing the securities they were charged with evaluating, the agencies had no reason to be neutral in their assessments. They knew just how dangerous the securities were, but they were paid to look the other way.

Matt Taibbi looks over the evidence:

In incriminating e-mail after incriminating e-mail, executives and analysts from these companies are caught admitting their entire business model is crooked.

“Lord help our fucking scam…this has to be the stupidest place I have worked at,” writes one Standard & Poor’s executive. “As you know, I had difficulties explaining ‘HOW’ we got to those numbers since there is no science behind it,” confesses a high-ranking S&P analyst. “If we are just going to make it up in order to rate deals, then quants [quantitative analysts] are of precious little value,” complains another senior S&P man. “Let’s hope we are all wealthy and retired by the time this house of card[s] falters,” ruminates one more.

Had the agencies been doing their job correctly, poor ratings would have forced bankers to stay away from the toxic assets. “The firm provided cover,” Michael Hiltzick writes. “No securities trader would be fired for taking the plunge on a mortgage-backed security, no matter how dubious, if it bore the seal of approval of S&P.” Senior bank executives would have had a better idea of how much risk these supposedly safe investments really entailed, and they would have been able to prepare for, or even avert, the collapse.

After the national embarrassment that was the negotiation over the federal debt ceiling in 2011, S&P revoked its perfect “AAA” credit rating for United States. Now, the agency claims that the government’s lawsuit is “retaliation for defendants’ exercise of their free speech rights with respect to the creditworthiness of the United States of America.”

A few points. First, this defense contradicts another argument S&P made earlier this year: that everyone should have ignored S&P’s ratings because (and I kid you not) no reasonable investor would ever rely on them, and therefore S&P should not be blamed for the catastrophe. If that is true, and the ratings are completely and utterly meaningless, then S&P’s decision to downgrade Treasuries simply cannot be interpreted as a statement about the creditworthiness of the United States.

S&P’s earlier position, absurd though it is, actually has a basis in reality. The agency studiously ignored the dangers accumulating in the financial system, and then, when it revoked the government’s AAA rating, the entire world studiously ignored S&P. Investors, having learned that whatever S&P says about your creditworthiness is basically horsesh, made their own decision about the likelihood of a U.S. default and continued buying Treasury bonds. Interest rates actually fell, as Hiltzik notes. “Maybe S&P is still trying to prove its point that no one ought to take it seriously,” Paul Barrett writes.

Finally, S&P’s sanctimonious posturing after the debate over debt ceiling and its measured statement of profound concern regarding the stability of the national economy in the long term appear particularly hypocritical given its share of the responsibility for the financial crisis. Indeed, had S&P done its part to maintain the stability of the global financial system, the federal government’s finances would be much stronger now.

Maybe someone at S&P had the entire charade planned from the very beginning. “First we’ll blow up Wall Street,” I can imagine him saying. “Then, to protect ourselves from fraud litigation, we’ll make sure we’re the first to question the federal government’s creditworthiness after Congress responds to the crisis with a massive fiscal stimulus. It will look like retaliation if they try to sue us then.” Fortunately for the rest of us, this strategy probably won’t quite work all the way.

 

By: Max Ehrenfreund, Washington Monthly Political Animal, September 8, 2013

September 9, 2013 Posted by | Big Banks, Financial Crisis | , , , , , , , | 1 Comment

“The Summer Of Voting Discontent”: Texas’ Voter ID Laws Are Plain And Simple Discrimination

Last month, the Department of Justice sued Texas over the state’s discriminatory and punishing voter ID law, SB 14. The same law was blocked by a federal court last summer, which determined that a “law that forces poorer citizens to choose between their wages and their franchise unquestionably denies or abridges their right to vote.”

In a state and country where voters of color are significantly more likely to live in poverty than white voters, the impermissible choice that Texas has imposed on voters discriminates on the basis of class and race both. In the wake of Supreme Court’s decision earlier this summer in Shelby County, Alabama v. Holder, which immobilized a key provision of the Voting Rights Act, the Department of Justice’s lawsuit represents the next phase in pushing back against measures that are intended to make it harder for people of color to vote, and less likely that our votes will count when we do.

Texas, like many states, passed SB 14 for the ostensible reason of combating in-person voter fraud, which Hillary Rodham Clinton recently called a “phantom epidemic.” But Texas has not been able to identify a single instance of in-person voter fraud. Texas has said that the law is not intended to discriminate against Black and Latino voters, whose communities represent 90 percent of the state’s population grown in the past decade, and yet the state’s legislature refused to accept any of the amendments offered that would have mitigated any of SB 14’s burdens that disproportionately affect voters of color — amendments that, for example, would have created a way for poor voters to get free identification, or would have accepted student IDs.

A single comparison of the accepted and not accepted forms of photo ID makes the priorities of the law clear: SB 14 will allow voters to present a concealed handgun license at the polls, but not a student ID from any of Texas’s public universities.

In addition to challenging the discriminatory ID law itself, the DoJ lawsuit also seeks to bail Texas in to a preclearance structure similar to the one that was lost in the Shelby County decision. Texas’s longstanding history of crafting discriminatory voting laws and schemes extends far past the voter ID law at issue now; in fact, Texas boasts the inglorious accolade of being the only state for which federal authorities have challenged at least one of its statewide redistricting plans after every decennial census since 1970.

As recently as last year, a federal court concluded that the state had drawn up its various redistricting plans with the intent to suppress the growing political power of African-American and Latino districts. A provision of the Voting Rights Act asserted in the DOJ’s case can bring back to Texas the preclearance defense lost in June’s Shelby County decision.

As the summer of our voting discontent draws to a close, it should serve as a powerful message that the first major voting lawsuit filed by the DOJ since the Shelby County decision goes directly to a state with one of the most well-documented histories of racial discrimination in voting, and seeks to use the full power of the remaining provisions of the Voting Rights Act both to invalidate SB 14 and to bring Texas back under federal review.

 

By: Natasha Korgaonkar, Assistant Counsel of the Political Participation Group at the NAACP’s Legal Defense Fund, U. S. News and World Report, September 3, 2013

September 4, 2013 Posted by | Voter ID, Voting Rights | , , , , , , , | Leave a comment

“Motivated By Discriminatory Intent”: Justice Department Tells Texas It’s Voter Suppression Will Not Stand

In one week last August, federal courts found that Texas’ voter ID law and redistricting maps were discriminatory and violated the Voting Rights Act. The Supreme Court’s recent decision invalidating Section 4 of the VRA, which previously covered Texas, tragically wiped away those rulings. Now the Department of Justice is once again stepping in to fight for voting rights in the Lone Star State.

The DOJ announced today that it is objecting to Texas’ voter ID law under Section 2 of the VRA and will also seek to join a similar lawsuit against the state’s redistricting maps. Last month, DOJ asked a court in Texas to force the state to approve its voting changes with the federal government for a period of time under another provision of the VRA, Section 3, based on a finding of intentional discrimination in the restricting case. The federal courts found last year that Texas’ new maps for Congress and the state house were “enacted with discriminatory purpose.”

A federal court blocked Texas’ voter ID law last year for very good reason. As I wrote last August, here are the facts of the case:

The state admitted that between 603,892 to 795,955 registered in voters in Texas lacked government-issued photo ID, with Hispanic voters between 46.5 percent to 120 percent more likely than whites to not have the new voter ID; to obtain one of the five government-issued IDs now needed to vote, voters must first pay for underlying documents to confirm their identity, the cheapest option being a birth certificate for $22 (otherwise known as a “poll tax”); Texas has DMV offices in only eighty-one of 254 counties in the state, with some voters needing to travel up to 250 miles to obtain a new voter ID. Counties with a significant Hispanic population are less likely to have a DMV office, while Hispanic residents in such counties are twice as likely as whites to not have the new voter ID (Hispanics in Texas are also twice as likely as whites to not have a car).

The court objected to the law specifically because “(1) a substantial subgroup of Texas voters, many of whom are African American or Hispanic, lack photo ID; (2) the burdens associated with obtaining ID will weigh most heavily on the poor; and (3) racial minorities in Texas are disproportionately likely to live in poverty.” Along with North Carolina, Texas has the harshest and most absurd voter ID law in the nation. Case in point: you can use a gun permit to vote but not a student ID. The state is also doing nothing to encourage people to get the supposedly “free” ID; a month after the Supreme Court’s ruling, only six people in Texas had obtained one, even though 600,000 to 800,000 registered voters lack the government-issued ID.

In its new court filing, DOJ contends that the voter ID law “will disproportionately impact Hispanic and African-American voters in the State of Texas, resulting in their being disenfranchised at a greater rate than Anglo voters.” The department says the law, known as SB 14, was “motivated by discriminatory intent” and “will have a discriminatory result.”

From the brief:

While the stated purpose of SB 14 was to ensure the integrity of elections, voter ID proponents cited virtually no evidence during or after enactment of SB 14 that in-person voter impersonation—the only form of election fraud addressed by the identification requirements of SB 14—was a serious problem or that the State’s then-existing identification procedures had failed to prevent in-person voter impersonation.

The State knew or should have known that Hispanic and African-American Texans disproportionately lack the forms of photo ID required by SB 14, as compared to their Anglo counterparts.

Nevertheless, supporters of voter ID in the Texas legislature made little to no effort to analyze the potential effect of photo ID requirements on minority voters and rejected amendments requiring investigation of the effect of SB 14.

The long history of voting discrimination in Texas makes the new law all-the-more worrisome. DOJ writes: “The State of Texas’s history of official racial discrimination against its African-American and Hispanic citizens is longstanding and well-documented. Federal intervention has been necessary to eliminate numerous devices intentionally used to restrict minority voting in Texas.” Texas has lost more Section 5 enforcement suits than any other state.

It will be much harder for the Department of Justice to block Texas’ voting changes under Section 2 of the VRA than it would have been under Section 5, but they’re smart to try. (See my piece on why Section 2 is no replacement for Section 5.) “We will not allow the Supreme Court’s recent decision to be interpreted as open season for states to pursue measures that suppress voting rights,” Attorney General Eric Holder said today. “This represents the Department’s latest action to protect voting rights, but it will not be our last.”

Since the Court’s decision, seven Southern states have rushed to pass or implement onerous new voting restrictions. North Carolina recently adopted the country’s worst voter suppression law (which voting rights groups are also challenging under Section 2), with local election boards escalating attacks on student voting hours after its passage by shutting down polling places at college campuses and preventing students from running for office. Since Holder has vowed more action to protect voting rights, there’s a very good chance that the Tarheel State will be next on his list.

By: Ari Berman, The Nation, August 22, 2013

August 23, 2013 Posted by | Civil Rights, Voting Rights | , , , , , , , | Leave a comment

“We Only Discriminate For Partisan Reasons”: Texas Struggles To Defend Discriminatory Voting Policies

It’s been about three weeks since the Justice Department, relying on what’s left of the Voting Rights Act, went after voter-discrimination policies in Texas. The U.S. Supreme Court may have severely damaged the VRA, but the Justice Department nevertheless argued that when “intentional voting discrimination” is found, changes to voting rights cannot be permitted to continue.

This week, as Adam Serwer reported, Texas submitted a brief presenting their defense.

Texas didn’t discriminate against minority voters. It was only because they were Democrats. And even if it did, the racial discrimination Texas engaged in is nowhere near as bad as the stuff that happened in the 1960s.

These are some of the arguments the state of Texas is making in an attempt to stave off federal supervision of its election laws. In late July, citing the state’s recent history of discrimination, the Justice Department asked a federal court to place the entire state back under “preclearance.” That means the state would have to submit its election law changes in advance to the Justice Department, which would ensure Texas wasn’t disenfranchising voters on the basis of race.

The arguments from Gov. Rick Perry’s (R) administration are pretty amazing, especially considering federal courts already found Texas’ election policies discriminatory as recently as two years ago, before the Supreme Court intervened.

As Kevin Drum explained, Texas’ first argument, as pushed by state Attorney General Greg Abbott, “is that, sure, Texas has tried to discriminate as recently as 2011, but their efforts were overturned by a court. So that means there are no current violations, and thus no reason to grant any kind of ‘equitable relief.'”

The second argument is the half-glass-full tack. As Serwer put it, “[T]he state claims, even if Texas did discriminate, and the state stresses that it did not, it was nothing as bad as ‘the ‘pervasive,’ ‘flagrant,’ ‘widespread,’ and ‘rampant’ discrimination that originally justified preclearance in 1965.’ So as long as Texas skies aren’t alight with flames from burning crosses, what’s the big whoop?”

But it’s the third argument that’s truly amazing.

From the brief filed by the state:

DOJ’s accusations of racial discrimination are baseless. In 2011, both houses of the Texas Legislature were controlled by large Republican majorities, and their redistricting decisions were designed to increase the Republican Party’s electoral prospects at the expense of the Democrats….The redistricting decisions of which DOJ complains were motivated by partisan rather than racial considerations, and the plaintiffs and DOJ have zero evidence to prove the contrary.

Got that? Texas wasn’t trying to discriminate against racial and ethnic minorities; Texas was simply trying to discriminate against racial and ethnic minorities who vote for Democrats.

In other words, Texas’ defense is that state policymakers were trying to crush the Democratic vote, and this led to inadvertent discrimination against African Americans and Latinos. As such, the argument goes, Texas was motivated by crass partisanship, and not racism, so the discrimination doesn’t really count.

Any chance this might be persuasive in court? Brenda Wright, a voting law expert with the liberal think tank Demos, told Serwer, “I don’t think it’s going to work, frankly. The mere desire to achieve partisan advantage does not give Texas a free hand to engage in racial discrimination. If the only way you can protect white incumbents is by diluting the voting strength of Hispanic citizens, you are engaging in intentional racial discrimination, and the courts will see that.”

 

By: Steve Benen, The Maddow Blog, August 13, 2013

August 14, 2013 Posted by | Racism, Voting Rights | , , , , , , , | 1 Comment

“An Obama-Holder Conspiracy”: How The Conservative Media Are Eating Up The Zimmerman Trial

George Zimmerman’s trial in the shooting of Trayvon Martin is coming to a close. For what it’s worth, I think he’ll probably get acquitted, since 1) the lack of any eyewitnesses leaves room for doubt, and 2) my impression is that in Florida it’s perfectly legal to pursue somebody, confront them, and then when the confrontation turns physical and you begin to lose the fight, shoot them in the chest. You know—self defense.

In any case, conservative media are feasting on the Zimmerman trial (as are some other media). Their basic storyline goes like this: Trayvon Martin was a thug. George Zimmerman’s gated community was beset by roving gangs of vicious black teen criminals. Zimmerman was in the right. And most critically, this whole thing is being drummed up by racial provocateurs, most especially Barack Obama and Eric Holder, to continue their ongoing war on white people, who are the real victims of racism in America today.

Let’s take, for instance, this little story. After Martin’s killing, when protests were being organized, the Justice Department sent a team of mediators from its Community Relations Service down to Sanford, Florida to try to keep things peaceful. Here’s how the Miami Herald described the work of one of the mediators: “[Thomas] Battles, southeastern regional director of the CRS, acted as a trusted third party, gathering opposing factions to address the simmering tension by developing reconciliation strategies. He worked with city and civic leaders to allow the protests, but in peaceful manner. He also worked with the city to create its nine-point plan that aims to improve race and police relations, and tapped into the city’s faith community to help guide the healing.”

Sounds like a good thing, right? The (white) mayor of Sanford is effusive in his praise for Battles. But conservative media have a different take on the CRS’s efforts to diffuse the anger over the case, which came to their attention when the conservative group Judicial Watch obtained documents detailing the CRS’s expenses of a couple of thousand dollars for their time in Sanford. In their reading, it’s a Justice Department conspiracy, in which Obama and Holder are working with Al Sharpton to organize anti-Zimmerman protests. “Docs: Justice Department Facilitated Anti-Zimmerman Protests,” said the Daily Caller. Fox News, which has been treating its viewers to the commentary of thoughtful race analysts like Mark Fuhrman and Pat Buchanan about this case, was a tad more circumspect, posing it as a question: “Did Justice Department Support Anti-Zimmerman Protests After Martin Shooting?” Breitbart.com saw the entire prosecution as a result of the mediators: “Judicial Watch: Zimmerman Prosecution Might Have Been Forced By DOJ-Organized Pressure.” Powerline was even more dramatic: “Did the Department of Justice Stir Up Trayvon Martin Riots?” Interesting question, particularly since there were no riots. “The United States government has been converted by Obama and Holder into a community organizing agitator bunch!” thundered Rush Limbaugh in response to the report about the CRS. “This regime saw an opportunity to turn something into a profoundly racial case for the express purpose of ripping the country apart.”

This is just one little corner of the way this case has been covered in the conservative media. From the beginning, it has fit neatly into the race-baiting project they’ve been on since before Barack Obama got elected. They’ve told their audiences that Barack Obama has, in Glenn Beck’s immortal words, “a deep-seated hatred for white people,” and everything he does, from health care reform to economic stimulus, is about exacting cruel revenge on white people for long-ago sins of racism. As Limbaugh said yesterday, “Stoking the racial stuff is the way Obama was raised … He’s got a chip on his shoulder about it, and he’s here to square the deal. And Holder too. I think all of these guys have an anger about them  …And so all of this is being done so the rest of us can get a taste of it.”

You might think George Zimmerman acted perfectly reasonably, and he would have followed and confronted Trayvon Martin if the teen was white. Or you might think there’s just no way to know. But one thing’s for sure: in the conservative media, they’re pleased as punch about this case, because it allows them to renew all their old claims about Barack Obama, and assure their audiences that white people are, as always, the real victims.

By: Paul Waldman, Contributing Editor, The American Prospect, July 11, 2013

July 12, 2013 Posted by | Zimmerman Trial | , , , , , , , , | Leave a comment

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