This is the cover of the latest issue of New York Magazine. The words you can’t read are “Obama’s failure to right the wrongs of the crash has haunted his presidency and coul dundo it.“
Rich’s logic is simple: Obama has failed to to demand a reckoning from the moneyed intersts who brought the eocnomy down. And his recent obsession with the deficit instead of jobs has been doubly wrong. From the piece:
What haunts the Obama administration is what still haunts the country: the stunning lack of accountability for the greed and misdeeds that brought America to its gravest financial crisis since the Great Depression. There has been no legal, moral, or financial reckoning for the most powerful wrongdoers. Nor have there been meaningful reforms that might prevent a repeat catastrophe. Time may heal most wounds, but not these. Chronic unemployment remains a constant, painful reminder of the havoc inflicted on the bust’s innocent victims. As the ghost of Hamlet’s father might have it, America will be stalked by its foul and unresolved crimes until they “are burnt and purged away.”
After the 1929 crash, and thanks in part to the legendary Ferdinand Pecora’s fierce thirties Senate hearings, America gained a Securities and Exchange Commission, the Public Utility Holding Company Act, and the Glass-Steagall Act to forestall a rerun. After the savings-and-loan debacle of the eighties, some 800 miscreants went to jail. But those who ran the central financial institutions of our fiasco escaped culpability (as did most of the institutions). As the indefatigable Matt Taibbi has tabulated, law enforcement on Obama’s watch rounded up 393,000 illegal immigrants last year and zero bankers. The Justice Department’s ballyhooed Operation Broken Trust has broken still more trust by chasing mainly low-echelon, one-off Madoff wannabes. You almost have to feel sorry for the era’s designated Goldman scapegoat, 32-year-old flunky “Fabulous Fab” Fabrice Tourre, who may yet take the fall for everyone else. It’s as if the Watergate investigation were halted after the cops nabbed the nudniks who did the break-in.
The piece is worth reading for insight into how a president can say one thing,e.g. “A nation cannot prosper long when it favors only the prosperious” and do exactly the opposite.
To read Frank Rich’s excellent piece, click here.
Pushing the European problems down the road. Nouriel Roubini thinks 2013 will be a disaster, as Europe pushes its problems down the hill. Greece is in dire straits, according to Arminio Fraga in this week’s Business Week. He’s right. But they’re not bailing Greece out fully, or allowing it to default gracefully. In short, a mess. Greece is contagious. This is from Business Insider.
It’s still hard to fathom: A Moody’s downgrade having a huge impact on the market.
And yet it seems that indeed just that has happened today: What you see below is the incredible surge in Portuguese short-term yields, from under 12% yesterday afternoon to this morning to around 14.5% this morning to to over 16.5% right now, a really mammoth collapse in confidence for a country that’s already been bailed out!
This is, essentially, the European nightmare scenario. Because Greek private bondholders will be forced to take haircuts, the bonds of every other country are now treated like the plague.
Obviously no country can pay these interest rates for long.
Never, ever become a client of Goldman Sachs. From yesterday:
Harry: “So why is my account online so much lower than the paper you sent me a just couple of weeks ago?”
Goldman Sachs: “The online number is not accurate. By the end of the week you should see a higher number — by about $108,000.”
So, why is it not accurate? Who knows. No reason. Basic sloppiness.
I used to have a personal sales rep. They fired hm. Then they fired his replacement. Then I got consigned to a call center in Albany, New York with 20 random reps, few of whom (if any) have ever worked for Goldman at their New York headquarters. Think Microsoft’s call center in India. Yuch.
I get press releases. From yesterday:
Good Morning,
Today begins a new era for one of the nation’s top family entertainment centers. Chuck E. Cheese is making a good pizza even better with a revamped recipe, improved crust, and 100% real Mozzarella cheese.
Harry Newton who is late because he was listening to Warren Buffett on BubbleVision this morning. He really is a wonderful optimist on America. He points out that despite a depression and several wars, the average American now lives six times better than when he was born — 80 years ago. The new jobs are coming from the new startups and small companies. I see an explosion of companies with great ideas raising money.
Thanks for the link to the New York Magazine article. That's something I wouldn't have read otherwise. Speaking about “lack of accountability”, it will be interesting how many heads will / will not roll in the Atlanta school cheating case. Supposed “pillars of the community” operating with blatant corruption… and not just one or two. I'm betting the Superintendent will be thrown under the bus while the rest of the criminals get a slap on the wrist. From the standpoint of moral turpitude in office, that's about the tops.
My disappointment with Obama has no limits.
At the same time when the criticism comes strictly from the ideological Right, with the explicit or implied message that the right wing faction of the Republican party (that's probably at least 95 percent of the party) is the remedy, I part company and laugh; volumes could be and have been written about the Republicans' contribution to our economic crisis. It's a broken system and the Democrats are applying band aids to it, while the Republicans want to open up its veins and let the remaining blood seep out.
The “Lousy Home” Address of President George W. Bush (The George Washington University Tuesday, Oct. 15, 2002)Subtitle: “I Was Against It Before Barney Frank and ACORN Made Me Do It”Inspiration: “The best antidote to random bullshit is a verbatim quote.” – Sir Francis Bacon, at halftime of Superbowl XXV (I think).THE PRESIDENT: …. I appreciate your attendance to this very important conference. You see, we want everybody in America to own their own home. That's what we want. This is — an ownership society is a compassionate society.More and more people own their homes in America today. Two-thirds of all Americans own their homes, yet we have a problem here in America because few than half of the Hispanics and half the African Americans own the home. That's a homeownership gap. It's a — it's a gap that we've got to work together to close for the good of our country, for the sake of a more hopeful future …I set an ambitious goal. It's one that I believe we can achieve. It's a clear goal, that by the end of this decade we'll increase the number of minority homeowners by at least 5.5 million families. (Applause) … And it's going to require a strong commitment from those of you involved in the housing industry…I appreciate so very much the home owners who are with us today, the Arias family, newly arrived from Peru. They live in Baltimore. Thanks to the Association of Real Estate Brokers, the help of some good folks in Baltimore, they figured out how to purchase their own home. Imagine to be coming to our country without a home, with a simple dream. And now they're on stage here at this conference being one of the new home owners in the greatest land on the face of the Earth. I appreciate the Arias family coming. (Applause.)I told Mel Martinez I was serious about this initiative… And the good news is, Mel Martinez believes it and means it, as well. He's doing a fine job of running HUD, and I'm glad he has joined my Cabinet. (Applause.)And I picked a pretty spunky deputy, as well, Alphonso Jackson — my fellow Texan. (Applause.) I call him A.J. …All of us here in America should believe, and I think we do, that we should be, as I mentioned, a nation of owners. Owning something is freedom, as far as I'm concerned. It's part of a free society … It brings pride to people … It's a part of — it's of being a — it's a part of — an important part of America.Homeownership is also an important part of our economic vitality. If — when we meet this project, this goal, according to our Secretary of Housing and Urban Development, we will have added an additional $256 billion to the economy by encouraging 5.5 million new home owners in America …Low interest rates, low inflation are very important foundations for economic growth. The idea of encouraging new homeownership and the money that will be circulated as a result of people purchasing homes will mean people are more likely to find a job in America. This project not only is good for the soul of the country, it's good for the pocketbook of the country, as well.To open up the doors of homeownership there are some barriers, and I want to talk about four that need to be overcome. First, DOWN PAYMENTS. A lot of folks can't make a down payment … I think if you were to talk to a lot of families that are desirous to have a home, they would tell you that the down payment is the hurdle that they can't cross. And one way to address that is to have the federal government participate. And so we've called upon Congress to set up what's called the American Dream Down Payment Fund, which will provide financial grants to local governments to help first-time home buyers who qualify to make the down payment on their home. [T]his should help 200,000 new families over the next five years become first-time home buyers.Secondly, AFFORDABLE HOUSING is a problem in many neighborhoods, particularly inner-city neighborhoods. … I'm … proposing a single-family affordable housing credit to encourage the construction of single-family homes in neighborhoods where affordable housing is scarce. (Applause.) Over the next five years the initiative will provide home builders … with $2 billion in tax credits to bring affordable homes and therefore provide an additional supply for home buyers. …Another obstacle to minority homeownership is the LACK OF INFORMATION. You know, getting into your own home can be complicated. It can be a difficult process. I had that very same problem. (Laughter and applause.) Every home buyer has responsibilities and rights that need to be understood clearly. And yet, when you look at some of the contracts, there's a lot of small print. And you can imagine somebody newly arrived from Peru looking at all that print, and saying, I'm not sure I can possibly understand that. Why do I want to buy a home? There's an educational process that needs to go on … Homeownership education is critical. And so today, I'm pleased to announce that through Mel's office, we're going to distribute $35 million in 2003 to more than 100 national, state and local organizations that promote homeownership through buyer education. (Applause.)And, of course, one of the larger obstacles to minority homeownership is FINANCING, is the ability to have their dream financed. Right now, we have a program that all of you are familiar with … and that's what they call a Section 8 housing program … We think it's important that we use [Section 8] vouchers, that federal money to help low-income Americans go from being somebody who leases to somebody who owns; that we use the Section 8 program to not only help with down payment, but to help with continuing monthly mortgage payments after they're into their new home …LAST JUNE, I ISSUED A CHALLENGE TO EVERYONE INVOLVED IN THE HOUSING INDUSTRY TO HELP INCREASE THE NUMBER OF MINORITY FAMILIES TO BE HOME OWNERS. And what I'm talking about, I'm talking about your BANKERS and your BROKERS and DEVELOPERS, as well as members of faith-based community and community programs. And the response to the home owners challenge has been very strong and very gratifying … PARTNERS in the MORTGAGE FINANCING INDUSTRY are encouraging homeownership by purchasing more loans made by banks to African Americans, Hispanics and other minorities.Representatives of the real estate and homebuilding industries, through their nationwide networks or affiliates, are committed to broadening homeownership. They made the commitment to help meet the national goal we set.Freddie Mae – FANNIE MAE and FREDDIE MAC — I see the heads who are here; I want to thank you all for coming — (laughter) — have committed to provide more money for lenders. They've committed to help meet the shortage of capital available for minority home buyers …The other thing Kirbyjon [Rev. Kirbyjon Caldwell, pastor of Houston’s Windsor Village UMC] told me, which I really appreciate, is YOU DON'T HAVE TO HAVE A LOUSY HOME for first-time home buyers. If you put your mind to it, the first-time home buyer, the low-income home buyer can have just as nice a house as anybody else. And I know Kirbyjon. He is what I call a social entrepreneur who is using his platform as a Methodist preacher to improve the neighborhood and the community in which he lives….Again, I want to tell you, this is an initiative — as Mel will tell you, it's an initiative that we take very seriously. … Thank you for coming. May God bless your vision. May God bless America. (Applause.)
I carefully excerpted and formatted the Bush speech – paragraph breaks, etc. – but upon posting, the software didn't pick up the formatting. Makes it all hard to read. For those who may want to see the speech in full, see:
http://autosandeconomics.blogs…
The Frank Rich article is another left wing liberal whitewash! The “stunning lack of accountability for the greed and misdeeds that brought America to its gravest financial crisis…” as he puts it starts and ends with the politicians and government themselves. It was under Clinton that banking regulations were relaxed. It was Barney Frank and other top Dems that pushed back during multiple Congressional hearings over many years when they were warned that sub prime lending was getting too risky and out of control. 2 Secretaries of Treasury under 2 different presidents came before Congress and warned that lending by Fannie Mae and Freddie Mac was dangerously imperiling our financial system. Fed Gov Alan Greenspan appeared before Congress on 2 separate occasions and warned that sub prime lending was dangerous and must be curtailed. Led by Frank and other Dems they were turned away and told that American home ownership should be encouraged and funded even if it meant lending money to people who couldn’t pay it back. ACORN and the Community Reinvestment Act demanded that banks continue to make these risky loans. From this Congressional support grew the abuses that followed. From this Congressional and Democratic support did Wall St begin to package and securitize these toxic loans. It is no coincidence that the biggest beneficiaries of Fannie Mae, Freddie Mac, etc campaign contributions were Barney Frank and his cronies. The new financial regulatory laws under the Dodd Frank bill remarkably make no mention of Fannie Mae and Freddie Mac. Arguably these 2 government sponsored agencies were at the heart and root cause of the financial crisis and yet the bill that was drafted and passed doesn’t even address their involvement. While we hear about the billions of dollars of bailout money to JP Morgan, Goldman Sachs, AIG it is Fannie Mae and Freddie Mac that took the most tax payer money and havent paid back a dime yet! Most if not all of the others have paid back some or all of their money.
Every defense of Democrats and Obama starts and ends with the financial mess they inherited. Every excuse including this article blames Republicans. Thats a joke! The greed and misdeeds start and end with the politicians that ignored numerous warnings of imminent and grave danger in the sub prime space. While senior executives from Countrywide Fin, Lehman, Bear Stearns, Bk of America , etc lost jobs and tens of thousands of financial workers lost jobs, and many more lost fortunes and life savings….Barney Frank, Bill Clinton, Charlie Rangel, Chuck Schumer, and the rest of the Washington garbage have not paid the price. In fact they get re-elected and keep taking special interest dollars.
Wasn’t it Obama that promised “change'? Wasnt it Obama who said that lobbyists and special interests would have no place in his White House? Thats right-lets just blame Republicans!
Ronnierant in the house!…..Ayn Rand couldn't have said it any better.
Correct. Very correct. I agree with Frank Rich (hold on!) in that I'd also like to see a bunch of the responsible folks (maybe that should be “irresponsible folks”) go to jail, which would address two major problems. First, put the guilty away before they do more damage and, second, reduce the ranks of stupid dishonest “hands out” politicians and regulators in Wash DC. Because, as Ronnierant says, this mess very clearly (except to Frank Rich, a jerk) starts and ends in Washington, not Wall Street. And I'm no fan of Wall Street.
Harry,
Dig deep down and ask yourself “Why am I a client of Goldman Sachs?”. You have read all of the Taibbi pieces, you have seen them tell their clients to short something, while they are buying, you have seen them completely derail the financial industry (among others), yet you are still a client? Actions, not words, will force change. You know that. If your true answer is that you are a client for social reasons, then you are not being true to yourself.
It's actually quite simple. I'm in a couple of Goldman funds, which I can't sell or move.In short, I'm stuck, for now.
Funny how they suck you in like that huh?