The Harsh Light of Cromnibus.

“One of the frustrating things about covering American politics from a vaguely left-liberal perspective is that many of the left-left theories turn out to be true, or true enough. You try to point out to the street protesters and tenured Marxists that things are more complicated than Noam Chomsky and the late Paul Sweezy would have you believe, and, all too often, it turns out they aren’t much more complicated. The richest 0.1 per cent really is getting richer and richer while most Americans see their living standards stagnate. The C.I.A. really did torture people in secret prisons overseas, and the N.S.A. has just received authorization to carry on gathering all of your phone records. The big banks and corporations really do run Washington—or, at least, that’s how it seems on this chilly December day.”

As the terrible-idea-filled, regulation-gutting “CRomnibus” became law earlier this month — thanks to a tag-team lobbying operation by Barack Obama and Jamie Dimon — The New Yorker‘s John Cassidy laments what it means for American democracy: Namely, the banks clearly write the laws. “‘It’s morally reprehensible,’ Sherrod Brown, the Ohio Democrat, told reporters. ‘They’re saying government bailouts are back.'”

By the way, if the bad news is too much to handle these days, there was one silver lining to the godawful CRomnibus: Crom may laugh at the four winds, but it does alright by space. Otherwise, well…

Getting Away With It.

“I have been following the absence of legal prosecutions since 2008, and have posted on that subject more than 500 times. But this isn’t the obsession of one lone crank (i.e., me). Many others in banking, law enforcement and government who aren’t on the payroll of banks have reviewed the events of the financial crisis and have reached the same conclusion — that the law was broken repeatedly by bankers.”

In the wake of a ridiculous apologetic in the NYT — and news that the government now wants to waive sanctions for Credit Suisse — Bloomberg’s Barry Ritholtz re-asks one of the central questions of the financial crisis, and Obama’s response to it: Why have no Banksters gone to jail?

“Political access and lobbying go part way toward explaining the absence of prosecutions and, therefore, the lack of convictions…As we have repeatedly shown, Treasury Department officials, including former Treasury Secretary Timothy Geithner, had convinced prosecutors in the Justice Department of the dangers of prosecuting banks and bankers for the economy.” (Cartoon above via here.)

Geithner: Wrong on Everything

“At every turn on housing — on mass refinancing, on principal reduction, on leverage for homeowners in the bankruptcy process, on forcing banks to write down mortgages, on a modern-day HOLC–the evidence points to Tim Geithner preferring whatever option put the least pressure on banks, rather than actually helping ordinary people. He made far more excuses to do nothing than any effort to make a difference…In fact, the programs were never meant to help homeowners, designed only to ‘foam the runway’ for the banks, to spread out foreclosures and allow banks to absorb them.”

In the wake of Tim Geithner’s new rehab book tour — currently being aided and abetted by Wall Street’s usual court stenographer, Andrew Ross Sorkin — Dave Dayen says not so fast. “I don’t have to just focus on housing; this is indicative of Geithner’s worldview, which sees protecting the financial system at all costs as the only thing that matters.”

Yves Smith has also ably eviscerated Geithner’s game of “Three Card Monte”: “The entire edifice of the piece is a sleight of hand…The focus on TARP (and to a lesser degree, Lehman) allows Sorkin to omit mention of actions that were clearly Geithner’s doing…The bigger point, which is not lost on the public, was there were plenty of other options for saving the system. The one chosen, that left the banks largely unreformed and no one of any consequence punished, was clearly just about the worst of the available options, unless, of course, you are, like Geithner, a banker.”

And here’re economics and finance professors Atif Mian and Amir Sufi: “Whatever reasons he had for opposing assistance to underwater homeowners, a careful evaluation of the policy effects was not among them. The evidence is pretty clear: an aggressive bold attack on household debt would have significantly reduced the horrible impact of the Great Recession on Americans. The fact that Secretary Geithner and the Obama administration did not push for debt write-downs more aggressively remains the biggest policy mistake of the Great Recession.”

Noam Scheiber has his say in TNR: “[The article] inadvertently highlights something deeper about Geithner, which is the shocking extent to which he’s accepted financialization of the economy as a benign, even admirable, development. The people who spend their days shuffling trillions of dollars around the globe are really just like you and me, except with nicer offices. They deserve the same sympathy and respect, notwithstanding their abysmal track record. That blinkered view colors pretty much every one of Geithner’s utterances as he makes the rounds hawking books.”

Also of note: Geithner doesn’t seem to understand how Social Security works, and, in classic #ThisTown fashion, he — the Secretary of the Treasury! — just parrots the same ignorant Beltway line about zomg out-of-control entitlements as all Very Serious People™ do. To wit, from Geithner’s book:

“I remember during one Roosevelt Room prep session before I appeared on the Sunday shows, I objected when Dan Pfeiffer [a senior advisor to the Obama White House] wanted me to say Social Security didn’t contribute to the deficit. It wasn’t a main driver of our future deficits, but it did contribute. Pfeiffer said the line was a ‘dog whistle’ to the left…code to the Democratic base, signaling that we intended to protect Social Security.”

And here’s the LA Times’ Michael Hiltzik: “But let’s get to the nub. Does Social Security ‘contribute to the deficit’? The answer is, bluntly, no. By law, it can’t contribute to the federal deficit, because Social Security isn’t allowed to spend more than it takes in. Those who claim — as Geithner has at one point or another — both that the program contributes to the deficit yet will be forced to reduce benefits to retirees once its trust fund is depleted are trying to have things both ways: The reasoning behind the threat of reduced benefits is that Social Security can’t engage in spending money it doesn’t have, i.e., deficit spending. Pick one, fellas. If it can contribute to the deficit, then there’s no reason to cut benefits.”

So is there’s anything positive about Geithner’s rewriting of history here? Well, the Sorkin piece does include this telling anecdote: “At another point, [Geithner] cheerfully relayed a story that also appears in his book about the time he sought advice from Bill Clinton on how to pursue a more populist strategy: ‘You could take Lloyd Blankfein into a dark alley,’ Clinton said, ‘and slit his throat, and it would satisfy them for about two days. Then the blood lust would rise again.'”

Could somebody please tell me again why I should be excited about Hillary 2016?

Update: Sheila Bair offers her take. “On his book tour, to explain the need for bailouts, Tim has used a clever analogy of a pilot trying to land a plane that is on fire and in the back, sit the terrorists who started it. He argues that the pilot can’t leave the cockpit to put them in handcuffs. He first has to land the plane. The problem with this analogy is that the plane landed at the end of 2008. And let’s face it, instead of handcuffing the terrorists, we escorted them to the executive lounge.”

A Wagonful of Crooks.

“Attorneys, forensic accountants and consumer advocates have long suspected that banks were systematically creating improper documents to prove ownership of loans. Foreclosure defense lawyers use the term ‘ta-da’ endorsement to describe situations in which they say a document appears, as if by magic, in the bank’s possession as needed in a foreclosure case…The manual…appears to provide step-by-step instructions for a Wells Fargo Home Mortgage ‘Default Docs Team’ and foreclosure attorneys if a blank endorsement is in a file and the attorney wants that note executed.”

In another example of banksters taking notes on a criminal f**king conspiracy, the NY Post get their hands on Wells Fargo’s How-To-Manual for ginning up fraudulent foreclosure documents. “Foreclosure experts called these procedures shocking. ‘It’s an explosive document,’ said forensic accountant Jay Patterson.” Hey, can somebody go to jail now?

Update: Nope, doesn’t look like it. “Four years after President Obama promised to crack down on mortgage fraud, his administration has quietly made the crime its lowest priority and has closed hundreds of cases after little or no investigation, the Justice Department’s internal watchdog said on Thursday.”

Banksters of America.

“‘Everyone knew that we weren’t helping people,’ said Erik Schnackenberg, a customer-service manager who left Urban Lending in 2011…’They were giving us all the pressure and none of the power to change anything. It was this absurd, self-contained ecosystem of worthlessness.'”

Bloomberg‘s Hugh Son delves into Urban Lending, the fraudulent front group/vendor that serial offender Bank of America worked with to profit from families facing foreclosure. “Instead of helping homeowners as promised under agreements with the U.S. Treasury Department, Bank of America stalled them with repeated requests for paperwork and incorrect income calculations…Tens of thousands of HAMP modifications were improperly denied by Bank of America and Urban Lending since April 2009.” Sure would be nice if somebody went to jail for this. (Image via Rolling Stone.)

Update: “As Judge Jed Rakoff recently wrote in a scathing essay in the New York Review of Books, the failure to prosecute those responsible for the biggest financial crisis since the Great Depression ‘must be judged one of the more egregious failures of the criminal justice system in many years.'” In very related news, David Dayen makes the case for Jamie Dimon’s long-overdue perp walk. “Open the business pages at random and they often read like the police blotter.”

Trolling the House of Morgan.

“JPMorgan’s bankers are getting used to business deals with young men who communicate in emojis and text-message abbreviations…Yet, when the bank devised the promotional Q&A, it may not have fully grasped the extent to which new media has transformed how people share information, and how this has tipped existing structures of power.”

Er…let’s not overdo it. Existing structures of power haven’t changed at all, and, after a bad week’s press, JP Morgan is still laughing all the way to the bank. Still, I was proud to get in early on the co-opting of JP Morgan’s inane #AskJPM forum on Twitter last week, which got tweets of mine mentioned in BusinessWeek, WaPo, The New Yorker, and various other venues — undoubtedly the strangest being a somber tweet-reading by the venerable Stacy Keach. In any case, if any of those links have led you back here to GitM this week, welcome, and thanks for dropping by.

Still Too Big to Jail.

“‘I think that there is a great sense of frustration and a sense of injustice that the laws have not been enforced in the way most Americans think they should have been,’ said Miller, who wrote the report’s chapter on regulatory enforcement. He notes that 79% of Americans ‘think more bankers and other financial executives should have been criminally prosecuted for their role in the financial crisis.'”

A welcome new report drafted by Americans for Financial Reform and Mike Konczal and championed by Senator Elizabeth Warren makes the much-needed case for further financial reform.“Today, the four biggest banks are 30% larger than they were five years ago. And the five largest banks now hold more than half of the total banking assets in the country.”

At the moment, Hillary Clinton’s 2016 ascendancy to the Democratic nomination, and subsequently the presidency, is looking like a virtual lock. But if Clinton really wants to nip a serious 2016 primary challenge in the bud, she’d start moving to the left on these matters. I’m not holding my breath. (Striking Guy Fawkes Day “Million Mask March” pic above via the OWS Twitter feed.)

Jamie Dimon, meet the New Day Co-op.

“The hiring-as-bribery in China charges against the bank took a turn for the worse late last night after Dawn Kopecki of Bloomberg News reported the Justice Department and SEC’s investigation has ‘expanded to countries across Asia’ and JPMorgan has itself flagged 200 of its own hires for an internal investigation. What’s worse is that the review has uncovered an ‘internal spreadsheet that linked appointments to specific deals pursued by the bank.'”

“N***a, is you takin’ notes on a criminal f**king conspiracy?” Buzzfeed‘s Matthew Zeitlin explains what the banksters at J.P. Morgan could learn from Stringer Bell and the New Day-Co-Op. “[S]pelling out in a spreadsheet your exact intentions about hiring specific people for their parents’ help for specific deals is probably not considered best practices.”

Cold Irons Bound.

“Our prison system is increasingly built and run by for-profit corporations, who have a financial interest in increasing the number of people in prison while decreasing the amount of money it costs to house them. Since 1980, the US prison population has grown by 790%. We have the largest prison population of any nation in the history of the world. One in three African-American men will go to jail at some point in his life.”

In The Guardian Jill Filipovic examines the national shame that is our private prison-industrial complex. “Imprisoning that many people, most of them for non-violent offenses, doesn’t come cheap, especially when you’re paying private contractors…who are doing quite well living off of American corporate welfare -– at the expense of the American taxpayer.” $50 billion a year — that funds a lot of stadium.

This article was found, by the way, in Slate‘s discussion of Sesame Street’s new incarceration kit, which helps explain to 3-8-year-olds that their parent has gone to jail. “That this even has to exist in the first place shows how much pointless damage our prison system does not just to people who are caught up in the overly punitive, often racially biased justice system, but also to their families.”

It’d be nice to say this fiasco is on the national agenda, but, Jim Webb’s efforts in 2009 and some green shoots earlier in the year notwithstanding, Congress and the Obama administration, for all their talk of belt-tightening, seem pretty content with this ridiculous status quo. (One key reason: felons can’t vote.) But, hey, you know who they still don’t put in jail these days? Wolves of Wall Street. So there’s that.

Shudder Island.

If Gatsby didn’t satisfy your hankering for Leo di Caprio amid the playgrounds of the idle rich, the trailer for Martin Scorsese’s The Wolf of Wall Street is now online, also with Matthew McConaughey, Jonah Hill, Margot Robbie, Jean Dujardin, Jon Bernthal, Kyle Chandler, Spike Jonze, Shea Whigham, Rob Reiner, Jon Favreau, and the inimitable Joanna Lumley.

I dunno…I know it’s Scorsese and all that, but at least Gatsby had period panache going for it. This looks like yet another generic Rise and Fall of the Financial Sector Douchebros, and Boiler Room, Margin Call and the Wall Streets, among other films, already covered these useless yahoos enough to my satisfaction. We’ll see.