Make the Call or Get Out of the Booth: After the President's "Wall Street" Speech

26Dems Editorial Comment: Simon Johnson, former IMF official and MIT professor is urging us all to contact Congress to pass a strong reform act that will make the banking system safer.

By Simon Johnson, MIT Professor and author of 13 Bankers
Huffington Post
April 22, 2010


The President's rhetoric today at Cooper Union was impressive and his body language indicates a major shift in administration attitudes towards the big banks over the past year. This is commendable.

But there is still the awkward question of legislation that would actually reduce the political power of big banks -- and make our financial system significantly safer. The latest indications from the Senate are that there will be some sort of "Dodd minus" compromise bill brought to the floor early next week. The Republicans have substantially backed down from Senator McConnell's "hell, no" position of last week because the polling is crystal clear: Anyone perceived as opposing financial reform will lose badly in November.

But the Democratic leadership is not seizing on this advantage and on the opportunity presented by the SEC case against Goldman Sachs -- key figures in the Democratic establishments are too worried about upsetting financial sector donors. As a result, come November, independents will view the Democrats with scorn, while the Democratic base will be far from energized; you do the math.

What can you do? What makes sense in both economic and political terms?

Call your Senator [Sen. Kyl [(202) 224-4521Fax: (202) 224-2207 Email.]
Sen. McCain [(202) 224-2235 Fax: (202) 228-2862 Email],
Call Senator Harry Reid (Senate majority leader) [Phone: 202-224-3542 / Fax: 202-224-7327Email], and
Call the White House [(202) 456-1111 Email]

Tell them that you support the Brown-Kaufman SAFE Banking Act (unveiled yesterday) -- as an amendment that would greatly strengthen the Dodd bill by capping the size and leverage of our biggest banks. Politely ask the people who answer the phone to make certain that this amendment gets an "up or down vote" in the Senate.

The Brown-Kaufman Act is our best near-term chance to reduce the size of Wall Street megabanks that are too big to fail and that threaten our economy. (If you don't understand why this is important, read 13 Bankers; quickly -- this could all be over by this time next week.)

Tell everyone you know why this makes sense and ask them to make the call also. These calls will determine the outcome. If the Democratic leadership understands the groundswell of support for breaking up big banks, the Brown-Kaufman proposal has a chance to come to the floor -- and who exactly on the Republican side would like to be on the record as opposing it?

If no one who reads this post speaks out (and makes the call), the Brown-Kaufman amendment will not come to the floor. If some of you speak out, there is a sliver of a chance. And if all of you -- and everyone you know and everyone they know -- make three simple, short, and friendly phone calls, there will be a vote.

This post is crossposted at The Baseline Scenario. The book 13 Bankers is on sale now.

26Dems Editorial Comment: Simon Johnson and Co-Author James KWAK appeared on Bill Moyers Journal April 18. The authors sum up how Big Finance grew powerful enough to bring down the global economy, plus their take on Washington politicians and hope for real reform. Click on the picture below to view this important commentary.

Arizona’s Plain Old Politics

By John Cheney-Lippold
Truthdig
Posted on Apr 23, 2010

Even before Arizona Gov. Jan Brewer signed the racist, anti-immigrant SB 1070 into law Friday, the climate around the debate on immigration in that border state had been saturated by politics.

Plain old politics, the refuge of self-involved scoundrels who vote and act not for the greater good but for the greater length of their terms in office. Plain old politics, the world of white men and corruption and corporate pillow talk.

Plain old politics, the ideological place from which we should expect a bill like SB 1070—one which legalizes the profiling of brown people, with or without documents and with or without cause—to spring, and to which it should be summarily thrown back. The public discourse surrounding the legislation has pointed out beyond a doubt its unconstitutionality, its waste of resources and its ultimately immoral standing.

Political opportunism has made a bad law a reality, as in so many of the critical political decisions that we have seen go awry in this country. “Everybody was afraid to vote no on immigration,” declared Republican state Sen. Bill Konopnicki in the most honest quotation I have heard from a politician in the past decade. The climate in Arizona proved terrifying enough to make every Republican legislator—even Konopnicki, who said he doesn’t even believe the bill will work—vote for it, as politicians prepare for re-election in the coming months. As far-right challengers attack Republican Party conservatives, more and more politicians are following in the footsteps of state senator and SB 1070 author Russell Pearce, darling of the discredited Minuteman movement and, until a couple of months ago, outlier of Republican ideology. The New York Times reports that while surveys show immigration to be less an issue than it was half a decade ago, many Republicans still wave their anti-immigrant banner and 82 percent of self-identified tea party advocates believe illegal immigration to be a “very serious” problem.

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William Black Warns That Financial Reform Bill Won't Stop The Wall Street Crime Wave

By Dan Froomkin
Huffington Post
Posted: April 21, 2010 04:28 PM

The answer, in this crisis, is "the financial version of Don't Ask Don't Tell,"

The securities fraud case against Goldman Sachs is a powerful reminder that the financial crisis responsible for millions of lost jobs and lost homes wasn't just the result of market vagaries and regulatory failure -- it was also the result of massive fraud at all levels of the financial system.

This epidemic of fraud has gone largely uninvestigated and almost entirely unprosecuted.

And the incentive structures that led so many people to intentionally take advantage of so many others for personal gain remains largely unaddressed by the legislation being considered in Congress.

Indeed, while there's plenty of talk of unwinding big banks, there's been little discussion of undoing the system that rewarded mortgage brokers for getting people to lie on their applications, sent more business to credit raters the fewer questions they asked, and encouraged massive investment banks to hide their losses and pitch investment vehicles designed to crash.

When you start to see fraud at the heart of the financial crisis, you turn to different people to explain what happened -- and to propose solutions. "Once you understand the implications of massively fraudulent practices," said James Galbraith, a progressive economist at the University of Texas, "it changes the professional community that has the principal say about interpreting the crisis."

Economists, he said, should move into the background -- and "criminologists to the forefront."

One such criminologist -- with a personal track record of two-fisted regulatory effectiveness during the savings and loan crisis of the late 1980s -- is William F. Black, now a professor at the University of Missouri and author of the book, "The Best Way to Rob a Bank Is to Own One".

Black sees what he calls "control fraud" at the heart of the financial crisis. "Control fraud," he explained, "is when the people controlling a seemingly legitimate entity use the entity as a weapon to defraud." It's fraud committed by design, by the people at the top. And here is the rest of it.

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House Financial Services Committee Testimony: Lehman's Failure A Story of Fraud, "Liars Loans"

Giffords Highlights Successes in Curbing Border Drug Trafficking

Ed Schultz Show: Supreme Court Pick Should Stick Up for the Powerless

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Ed Schultz Show: Arizona's Immigration Meltdown

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Students Arrested at AZ. State Capitol opposing SB 107

Attorney General Candidate Vince Rabago Blasts Senate Bill 1070 | Urges Gov. Brewer to Veto Dangerous Legislation

TUCSON — Democrat Vince Rabago releases the following statement concerning SB1070, “safe neighborhoods; immigration; law enforcement”:

Prior to making a decision on whether or not to sign SB 1070, I urge the governor to stop, take a deep breath and fully consider the implications of enacting this shortsighted bill and the inevitable consequences to our state.

The threats to our constitutional rights from this legislation are much too significant to ignore. The proponents’ stated reason for this legislation is to secure our border. This bill does absolutely nothing to secure the border. Instead, it scapegoats significant segments of our population and targets them for racial profiling.

This legislation effectively establishes a national ID – if you do not have the appropriate identification, then you are “presumed” to be an illegal immigrant and subject to arrest. This is wholly inconsistent with the values of justice and liberty on which our great nation was built. Simply put, it’s un-American.

This bill will also shift the burden of enforcing federal immigration laws to local law enforcement. This will inevitably lead to diversion of limited law enforcement resources away from protecting the public and will result in higher taxes. This bill simply enables the federal government’s continued negligence in failing to secure the border and enact comprehensive immigration reform.

Border violence is caused by criminal activities — drug and human smuggling. More law enforcement resources are needed at the border to stop these criminal activities. SB 1070 does not address this issue and does not make our border more secure or protect Arizonans.

I strongly urge Governor Brewer to veto this legislation.

Paid for by Vince Rabago for Attorney General
Vince4AZ.com
P.O. Box 24515
Tempe, AZ 85285

Rep. Raul Grijalva Proposes Economic Boycott Over Racial Profiling Measure

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The Roots of Stalin in the Tea Party Movement

By Yasha Levine
Alternet
April 17, 2010

The Koch family, America's biggest financial backers of the Tea Party, would not be the billionaires they are today were it not for the godless empire of the USSR.

The Tea Party movement's dirty little secret is that its chief financial backers owe their family fortune to the granddaddy of all their hatred: Stalin's godless empire of the USSR. The secretive oil billionaires of the Koch family, the main supporters of the right-wing groups that orchestrated the Tea Party movement, would not have the means to bankroll their favorite causes had it not been for the pile of money the family made working for the Bolsheviks in the late 1920s and early 1930s, building refineries, training Communist engineers and laying down the foundation of Soviet oil infrastructure.

The comrades were good to the Kochs. Today Koch Industries has grown into the second-largest private company in America. With an annual revenue of $100 billion, the company was just $6.3 billion shy of first place in 2008. Ownership is kept strictly in the family, with the company being split roughly between brothers Charles and David Koch, who are worth about $20 billion apiece and are infamous as the largest sponsors of right-wing causes. They bankroll scores of free-market and libertarian think tanks, institutes and advocacy groups. Greenpeace estimates that the Koch family shelled out $25 million from 2005 to 2008 funding the "climate denial machine," which means they outspent Exxon Mobile three to one.

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