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.”

With Friends Like These.

“If the reporter’s own mother was losing $90 of foods a month out of an already-meager allotment, or the reporter’s son or daughter, I very much doubt that reporter would describe that loss as merely symbolic. I don’t know that reporter thinks their own breakfast, their own lunch, or their own dinner is merely symbolic. This is real money coming out of the grocery carts of real families.”

In Salon, former USDA official Joel Berg reads the riot act to lazy journalists and spineless Dems over the soon-to-pass Farm Bill, which cuts Food Stamps for the poor while expanding crop insurance subsidies for wealthy farms. “It infuriates me, that we live in a country with tens of thousands of actual loopholes that benefit the ultra-rich, [whereas] this is a provision authorized by law, perfectly legal, perfectly sensible, that governors of both parties have utilized…[Calling Food Stamp cuts “closing a loophole” is] basically a fabricated excuse. And it’s a smokescreen to obfuscate the fact that they’re taking food away from hungry families.”

Berg goes on: “George W. Bush proposed a billion dollars in cuts to SNAP, and virtually all these people were aghast at how horrible it is. For them to then turn around and justify cuts that are [eight] times as large as what George W. Bush proposed is a little hard to swallow. I do think our political system is basically evil versus spineless now.”

This. It’s the same dynamic you see on the NSA, on the Grand Bargain, and on countless other issues. And this is why I hard to find it to take so many Dems seriously anymore. Here’s the bill passage pablum from Senate Ag Chair Debbie Stabenow: “Congress is on the verge of taking bipartisan action that will create jobs and help reduce the deficit. This is not your father’s Farm Bill. It implements major reforms and ends unnecessary subsidies…Congress can pass a bipartisan bill that helps take us into the future and beyond the policies of the past.” And here’s the missing subtext: “Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) has received more contributions from the crop production industry than any other senator.”

Ain’t no use jiving, ain’t no use joking. Everything is broken, and we need to stop enabling it or it will never, ever get better.

Dirty Henry.

“Kissinger asked how long will it take you (the Argentines) to clean up the problem. Guzzetti replied that it would be done by the end of the year. Kissinger approved. In other words, Ambassador Hill explained, Kissinger gave the Argentines the green light.”

Another file for the war crimes prosecution: New evidence comes to light that Secretary of State Henry Kissinger, among his many other misdeeds, egged on Argentina’s Dirty War. “Kissinger watchers have known for years that he at least implicitly (though privately) endorsed the Argentine dirty war, but this new memo makes clear he was an enabler for an endeavor that entailed the torture, disappearance, and murder of tens of thousands of people.”

Worse than Enron? Shrug.

“Look at the numbers. Of the $410 million, $125 million represents the disgorgement of illicit profits from Morgan’s scheme — money the bank wouldn’t have collected at all if it operated within the law. (The sum is supposed to be returned to ratepayers.) So that doesn’t count. The real punishment is the balance of $285 million. How badly will that hurt JPMorgan Chase? Well, the big bank collected $97 billion in net revenue last year, so it represents a little more than a single day of intake.

Ask yourself: If you could steal $125 million, with the only downside being that if you got caught you might have to give the money back and lose a single day’s income, would you give it a go? Me too.”

On the announcement that J.P. Morgan will be paying a pittance for engaging in massive Enron-style energy fraud, the L.A. Times‘ Michael Hiltzik calls out the regulatory sham for what it is. “Our top regulators actually think they’ve gotten the better of a huge illegal enterprise, which is a good sign that they’re delusional. They didn’t even get Morgan to admit that it had done anything wrong.”

It’s tempting to hate on FERC for agreeing to this sucker’s deal, but let’s face it, this type of wink-and-a-nod, Potemkin oversight is endemic across our supposed regulatory agencies. (See also: the (lack of) fallout from JP Morgan’s Whale Trade.)

It used to be, not even all that long ago, people and companies who engaged in systemic energy and financial fraud went to prison. Now…not so much. Today, they not only continue to be treated as esteemed citizens by the highest levels of government — They even have the temerity to complain they’re being over regulated.

Meanwhile, our ostensibly progressive administration spends much of its days trying to prosecute whistle blowers and poor people to the fullest extent of the law. Some system. Honestly, if you’re not disgusted at this point, you’re not paying attention.

Orange is the Same Old Black.

“Last month, President Obama quietly did something that should shake every American to the core. Seeking to enforce federal crack cocaine laws that have since been repealed, the Obama administration asked a federal appeals court to ensure that thousands of human beings, mostly poor and mostly black, remain locked in prison – even though everyone agrees that there is no justification for them to be there.”

Yet another for the Hope-and-Change file: Obama’s DOJ urges the Courts to keep prisoners convicted under outdated sentencing requirements in jail, because…because…well, it’s hard to fathom, really. “For several years, federal judges have done nothing to remedy this injustice; one famously concluded that the prisoners sentenced under the old law had simply ‘lost on a temporal roll of the cosmic dice”. So, there are American citizens serving tens of thousands of years in prison because, according to all three branches of government, it’s just their tough luck?”

If you’re keeping score at home, folks, Obama’s Department of Justice has basically said at this point that whistleblowers and non-violent drug offenders should get the book thrown at them, but economy-toppling banksters and torturers should walk free. Yessir, they’re really speaking truth-to-power over at DOJ these days. What a courageous bunch.

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.

Snowden’s Secret.

“‘I don’t see myself as a hero,’ he said, ‘because what I’m doing is self-interested: I don’t want to live in a world where there’s no privacy and therefore no room for intellectual exploration and creativity.'”

Breaking everywhere the past week: 29-year-old former CIA IT guy and defense contractor Edward Snowden reveals to Glenn Greenwald that the NSA has been indiscriminately collecting everyone’s phone records and gouging into the data networks of Apple, Google, Facebook, and other mainstays of today’s social media. “The Prism program allows the NSA, the world’s largest surveillance organisation, to obtain targeted communications without having to request them from the service providers and without having to obtain individual court orders.”

Sadly, this isn’t all that surprising. There have been intimations that the NSA has been up to no good — even beyond the warrantless wiretap fiasco under Dubya — since that weird visit to John Ashcroft’s hospital bed. Nor, sadly, is it all that surprising that — despite saying exactly the opposite in 2007 — our current President is both fine with these surveillance practices and authorizing them. (And at least from my perspective, the idea that getting the rubber stamp approval of a secret FISA court that never says no makes it all ok does not hold water.)

This is exactly what I was talking about last update. Obama acts tortured about continuing all of Dubya’s most terrible civil liberties violations, but then goes ahead and does them anyway. For Crom’s sake, he’s even picked James Comey, the guy who approved warrantless wiretaps back in 2006, to be the new FBI chief. And because this president and this administration is so brazenly two-faced about their anti-terror policies, you end up with disturbing polls like this:

Speaking of which, at the very least these revelations of blatant NSA overreach have had the healthy effect of exposing which alleged lefties out there walk the walk.

For example, in the Senate: On one hand, we have Ron Wyden, Mo Udall, and Jeff Merkley calling out Obama for continuing with this extra-legal, ginormous-net approach to surveillance. “‘As far as we can see, all of the useful information that it has provided appears to have also been available through other collection methods that do not violate the privacy of law-abiding Americans in the way that the Patriot Act collection does,’ Udall and Wyden said.”

On the other hand, here’s ostensibly Democrat Dianne Feinstein yesterday going full Body Snatcher about Snowden: “‘I don’t look at this as being a whistle-blower,’ Sen. Dianne Feinstein (D-Calf.) said. ‘I think it’s an act of treason.‘” (FWIW, John Boehner and Lindsey Graham were right there with her.) Of course, it’s never “treason” when Feinstein continually does it, and, in any case, this wasn’t breaking news either: The senior Senator from California has long been a quintessential “symbol of the worthless Beltway Democrat.”

This revealing breeze stirred by the NSA revelations is coursing through media outlets too. On one hand, Slate‘s Fred Kaplan has — quite correctly — called for James Clapper’s resignation, given that he flat-out lied to Congress: “We as a nation are being asked to let the National Security Agency continue doing the intrusive things it’s been doing on the premise that congressional oversight will rein in abuses. But it’s hard to have meaningful oversight when an official in charge of the program lies so blatantly in one of the rare open hearings on the subject.” Spot on.

Meanwhile, TPM’s Josh Marshall, who likes to pretend his blog is a font of independent thinking, hems and haws about it all in classic pusillanimous Village-think fashion, all the while making sure never to say anything that might harm his establishment respectability. “I’ve made clear that I don’t see Manning as a hero or a whistleblower or really anything positive at all…Pretty early I realized that to his supporters Manning was a whistleblower who was being persecuted by the government, almost like a political prisoner or prisoner of conscience.” No, Josh, it doesn’t “seem” that way “to his supporters” — That is in fact what is %#%@ happening.

In any case, so as not to fall into the same trap, I’ll just say it outright: First, if Snowden and Manning are traitors, then so is Daniel Ellsberg and so, for that matter, is Dianne Feinstein and any other politician or government official who leaks when it’s convenient. (Also, sorry, folks. there is no substantive difference between revealing secrets to the criminal Julian Assange or to the venerable Bob Woodward. But please do let me know when Richard Armitage is put in a sweatbox for 23 hours a day.)

Second, this vast surveillance apparatus NSA has been constructing is both obviously overkill and clearly legally and constitutionally repugnant, and if this president lived up to even half the rhetoric he continually espoused before he was elected, he would have ended it years ago. Quite frankly, the doubletalk from him, and from so many other Democrats about these revelations so far, is both inexcusable and out-and-out pathetic.

Yes, We Tortured.

“‘[I]t is indisputable that the United States engaged in the practice of torture’ and that the nation’s highest officials bore ultimate responsibility for it…The use of torture, the report concludes, has ‘no justification’ and ‘damaged the standing of our nation, reduced our capacity to convey moral censure when necessary and potentially increased the danger to U.S. military personnel taken captive.’ The task force found ‘no firm or persuasive evidence’ that these interrogation methods produced valuable information that could not have been obtained by other means.”

A “nonpartisan, independent review of interrogation and detention programs in the years after the Sept. 11, 2001, terrorist attacks,” headed by two former Members of Congress (Republican Asa Hutchinson and Democrat James Jones) offers an in-depth investigative report on our national post-9/11 torture regime.

“The sweeping, 577-page report says that while brutality has occurred in every American war, there never before had been ‘the kind of considered and detailed discussions that occurred after 9/11 directly involving a president and his top advisers on the wisdom, propriety and legality of inflicting pain and torment on some detainees in our custody.'”

Of course, we have known all this for awhile now. And yet, just as with the folks who brought us the financial crisis, there has been zero accountability coming from Obama’s Justice Department or anywhere else. Instead, our powers-that-be have been too busy trying to round up purported public enemies like Bradley Manning and Aaron Swartz.

And yet, as this report unequivocally lays out, the evidence of an American torture regime, planned and carried out after 9/11 at the highest levels of government, is indisputable. For the rule of law’s sake as much as for the values we purportedly stand for, we still need a reckoning.

Warren vs the Banksters.

“People may have outrage fatigue about Wall Street, and more stories about billionaire greedheads getting away with more stealing often cease to amaze. But the HSBC case went miles beyond the usual paper-pushing, keypad-punching sort-of crime, committed by geeks in ties, normally associated with Wall Street. In this case, the bank literally got away with murder – well, aiding and abetting it, anyway.”

In Rolling Stone, Matt Taibbi explains how and why the Justice Department refused to prosecute HSBC for sundry violations of the law. In short, they were Too Big to Jail. “An arrestable class and an unarrestable class. We always suspected it, now it’s admitted. So what do we do?”

In related news, Wall Street bankers throw one of their customary hissyfits over a gaggle of fully complicit, bought-and-paid-for regulators finally being asked a hard question or two by the Senate Banking Committee — thanks to its and our new champion, Senator Elizabeth Warren. “The anonymous banker followed up [with Politico, naturally]: ‘Elizabeth Warren and Ted Cruz are dueling for the title of ‘most extreme fringe freshman senator.”

Anonymous Banker, let me choose my words carefully: Go fuck yourself. If this administration’s promises of change-we-can-believe-in were worth a dime, you and so many others would be doing hard time right about now.