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Robert Scheer
Truthdig / Truthdig Op-Ed
Published: Friday 18 May 2012
“Being one of the smartest bankers means you are among those who best know how to skirt the law or, if that cannot be done, how to successfully lobby to gut it.”

Obama Can’t Knock the Hustle

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How did we end up with such smart scoundrels? Even after it was known that Jamie Dimon’s bank blew more than $2 billion on the same suspect derivatives trading that has bankrupted the world’s economy, Barack Obama still had praise for the intellect of his political backer and the integrity of the bank he heads: “JPMorgan is one of the best-managed banks there is,” the president told the hosts of ABC’s “The View” in an interview televised Tuesday, adding, “Jamie Dimon, the head of it, is one of the smartest bankers we got. And they still lost $2 billion and counting.”

A lesser bank would have gone under and needed to be bailed out, Obama argued: “That’s why Wall Street reform is so important.” But even when fully implemented, Obama’s tepid reforms would not have stopped this scam and will not stop the others that are sure to follow. Being one of the smartest bankers means you are among those who best know how to skirt the law or, if that cannot be done, how to successfully lobby to gut it.

Dimon understands and performs this drill well, for he was in cahoots with his mentor, Sandy Weill, in engineering a series of mergers and acquisitions that would have violated the Glass-Steagall law, which for decades had prohibited commingling investment and commercial banking. The two business executives were able to get Congress and President Bill Clinton to reverse Glass-Steagall, a change that made legal the creation of Citigroup, the too-big-to-fail bank that eventually was saved from bankruptcy only through an immense taxpayer bailout.

The best and the brightest in this case are the bane of the nation because their genius lies in outwitting all efforts to hold them accountable. Dimon, the most recent in a parade of now-disgraced Wall Street golden boys, was nonetheless just awarded $24 million in compensation for 2011 by JPMorgan. Like his mentor Weill, who ran Citigroup into derivative trading hell, Dimon will no doubt suffer little legal unpleasantness or social ostracism stemming from his dodgy behavior. Weill will soon be inducted into the American Academy of Arts & Sciences as an outstanding business leader and philanthropist. 

The fact that Dimon first rose to banking prominence as he worked alongside Weill to reverse Glass-Steagall did nothing to tarnish his reputation in Obama’s eyes. Although Dimon was instrumental in establishing Citigroup, he had a falling out with Weill and left the bank before the great crash. In his subsequent reincarnation at JPMorgan, now the country’s biggest financial conglomerate, Dimon was a major supporter of Democrats and had more access to the president than any other Wall Street leader.

Dimon was not shy about turning to Obama, whom he had backed with campaign contributions, to complain about the Dodd-Frank regulations. With the JPMorgan CEO exercising his easy access to the president and his Treasury secretary, Tim Geithner, the new regulations concerning bank derivatives trading were rendered meaningless. What did Obama think would happen when he appointed Dimon’s chief Washington lobbyist, William Daley, who served as presidential chief of staff through 2011, when the Dodd-Frank regulations were being promulgated?

As an Associated Press investigative report documented, Dimon led the Wall Street pack in the number of personal meetings and telephone calls with Secretary Geithner while the Obama administration was calibrating its response to the banking meltdown. Dimon has been a Class A director of the New York Fed since 2007, when Geithner was president of that institution, and the two worked closely then on details of JPMorgan’s takeover of Bear Stearns with a $55 billion Fed loan. That’s in addition to the $25 billion in TARP funds JPMorgan received.

Dimon’s close ties to Obama, whom he knew well when both were based in Chicago, were at moments tested by Obama’s feints into populism, but fellow Chicagoans Daley and Rahm Emanuel, who preceded Daley as chief of staff, made it clear that disagreements between the White House and Dimon were merely rhetorical. How much more influence could Dimon have wanted than having his former lobbyist controlling the president’s schedule?

It was a charade: Dimon pretended to welcome some banking regulation and Obama responded with the weakest of reforms.

Crunch time came this past February when JPMorgan executives, including Ina Drew, the recently resigned head of the bank’s unit that was behind the billions in losses, met with Federal Reserve officials to secure guarantees that the portfolio trading that later got the company into trouble was in fact legal. That so-called portfolio hedging, which Sen. Carl Levin, D-Mich., said “is a license to do pretty much anything” and violates the intent of the law, has now in fact been accepted by both the Treasury Department and the Fed as legal. As a result, there is a regulatory loophole that Levin called “big enough ... that a Mack truck could drive right through it.” Evidently one did.

This article was originally posted on Truthdig.



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ABOUT Robert Scheer
Robert Scheer, editor in chief of Truthdig, has built a reputation for strong social and political writing over his 30 years as a journalist. His columns appear in newspapers across the country, and his in-depth interviews have made headlines. He conducted the famous Playboy magazine interview in which Jimmy Carter confessed to the lust in his heart and he went on to do many interviews for the Los Angeles Times with Richard Nixon, Ronald Reagan, Bill Clinton and many other prominent political and cultural figures.

Time to dump anyone vaguely

Time to dump anyone vaguely resembling Bush, Obama, Cheney, Romney LBJ, Nixon, (or Adolf Hitler, for that matter). When will we EVER learn?!!!

The only way things are ever

The only way things are ever going to change is to let the entire system fall flat on it's face. A total system-wide failure. And, that still won't fix anything. There is, as Sartre explained in his book by the same name, No Exit.

It doesn't take a smart man

It doesn't take a smart man to Buy or Rig the system so that it slants toward him and other Rich and Powerful Men and Corporations, Companies, Institutions and Organizations like him and his.

All that is need is is a lot of money and a Willing, Greedy and Corrupt Elected Politician to sell his Soul and Vote.

How do we correct this problem??? First we look at the voting records of the Men and Women who represent us in the Congress of the United States of America. We search for those who voted to repeal "Glass-Steagall" and other Banking Regulations. Find those who worked to weaken the Dodd-Frank Financial Reform Act. When we have those names we work to make sure that they get voted out of the Congress by publicizing their actions.

We must get the Corporate, Comapny, Instituion and Organization money out of POLITICS.....

Because of the Citizens United v. Federal Election Commission, from the United States of America's Supreme Court ruling, I want A Constitutional Amendment to the United States of America's Constitution Article 1, to clearly define that an Individual is a Living Breathing Member of the Homo-Sapiens Species and that Corporations, Companies, Institutions, or any kind of Organization are not Individuals and do not have the same Rights as do Living Breathing Individuals.

I also want it to clearly state that only Congress has the Right and the Ability to place limits upon What, Where, When and How an individual may make Contributions to a Political Party or to an Individual running for a Political Office.

An Individual may only make a Contribution to a Political Party or Individual Political Candidate that lives or operates within the State that the Individual Contributor lives in 51% of the Year. We the People want outsiders stopped from affecting elections in our home states. The Individual making the contribution has to send it to the Federal Election Commission specifying the Political Party or the Political Candidate they want the funds to go to. The Federal Election Commission would then once a month, send the Contribution to the Political party or the Individual Political Candidate but it would be Anonymous so that neither the Political Party nor the Individual Candidate would feel an obligation to the Donor.

Political Action Committees may only advertise their Support for, or Against an Issue that they have an interest in. They MUST NEVER be permitted to be for or against an Individual Candidate or Political Party.

We must outlaw Lobbing.

We must outlaw Filibustering in the Senate. We must place limits on HOLDS no more than one per person or legislation, reason must be stated for hold, person who places hold must be identified, length of hold would be a maximum of 30 days and then a floor vote must be taken.

We must make it the law in the Senate and in the House of Representatives that the passing of any action or legislature is by a vote of a simple majority of those eligible to vote.

The Entire Income Tax Code MUST be Repealed and Replaced. By the elimination of ALL the EXCEPTIONS, EXEMPTIONS, and DEDUCTIONS and by making every source of Income [Wages, Bonuses, Benefits, Interest Earnings, dividends and capital gains and any other Earnings or Gains] be subject to the same Tax Code and Rate no matter How it was earned, Where it was earned, or What it was earned from.

I would also create a Financial Transaction Fee of $ .50 on each and every Financial Transaction, to generate from $2 to $3 Trillion in Revenue to “Reduce the Deficit and to Invest in our future, our Infrastructure and our middle class.”

Create a Corporate Tax Rate Corporations would pay 15.0% Income Tax Rate with NO Exceptions, No Exemptions and the NO Deductions. Or they can pay the same Tax Rates as an Individual, seeing as the Supreme Court has ruled they have the same Right to Freedom of Speech, therefore they should have the same Right to pay the same Income Tax Rates.

If Congress wants to provide an incentive to Corporations, Companies, Institutions or Organizations, Congress can do so by creating a Specific Tax Credit for A Specific Corporation or Company, with specified amounts and for specified time limits.

That we write a Constitutional Amendment that would make it Mandatory for the Federal Government of the United States of America to have a Balanced Budget. In each year of a Declared War, or Declared National Emergency Congress would have the Right, Authority and Ability with a 2/3 vote of the Congress to grant a Deficit Budget.

That all Laws and Regulations must be written to protect the Individual Citizens Health, Safety, and Welfare. We live in a time of massive disparity between penalties for street criminals and corporate wrongdoers. Corporations, which claim all the rights of “persons,” are subjected too much weaker punishments than real people. It doesn’t have to be.

That Ethic Rules and Regulations be written that cover every Individual that is employed by the Federal Government and that the enforcement of these Laws and Regulations be the responsibility of the Justice Department. That there be Mandatory Sentences for the Violation of these Laws, Regulations and Rules.

That these be made RIGHTS of an American Citizen: Equal and Free Education, Mandatory HealthCare for all, a Minimum Retirement Guarantee, Minimum Housing and a Minimum Adequate Food supply. I would also require that if recipients are mentally and physically able to perform any available work, that they must accept any employment that they are, qualified to perform to receive these Rights.

Social Security Reform, remove the Caps on the amounts of Income that is Taxable. Make all types of Income be taxable no matter what they are, where they came from or how they were earned. Make receiving Social Security be "Means Tested."

The Medicare and Medicaid programs were established in the 1960s. Medicare, which was created but failed to be funded, should be made the Mandatory Universal Health Care Insurance for every Citizen of the United States of America. The Cost of Medicare must remain a part of the General Federal Budget. Medicaid should also be made a part of the General Federal Budget.

If a financial institution is too big to fail, it is too big to exist. Today, the six largest financial institutions have assets equal to more than 60 percent of GDP. The four largest banks in this country issue two-thirds of all credit cards, half of all mortgages, and hold nearly 40 percent of all bank deposits.

Incredibly, after we bailed out these big banks because they were "too big to fail," three out of the four largest are now even bigger than they were before the financial crisis began. It is time to take a page from Teddy Roosevelt and break up these behemoths so that their failure will no longer lead to economic catastrophe and to create competition in our financial system.

Financial Institutions need to have Regulations and be limited in the services that they furnish, either they are Investment Banks or they are Commercial Banks, but they cannot be both.

Congress should set a Dollar Value on what the maximum size an Institution, Corporation, Company or Organization could be. I reccomend that it be some percentage of the GDP.

We should Outlaw Speculation, or credit defaults, derivatives, stock options and futures and establish a Wall Street speculation fee on each transaction, and other Financial offerings that are similair.

“WE the PEOPLE" demand that every single member of the Federal Reserve Board and the Treasury Department be removed from their positions if they have ever worked for or Consulted for the Banking Industry and the Financial Institutions, unless they are willing to sign an agreement that they will NEVER accept any Job or Position with another Financial Investment Institution nor will they ever Consult with another Financial Investment Institution during the rest of their life time. We can get the employees we need from the Academic World.

It is a well-known fact in the Congress of the United States of America that the Majority of the Members of the Federal Reserve Board and the Treasury Department were employed by the Financial Institutions before they accepted positions with the federal Government and that the majority of them will return to the employment of the Financial Institutions when they leave the employment of the Federal Government.

Talk about a "CONFLICT of INTEREST." They are supposed to Regulate and protect "WE the PEOPLE' from the Greed and Corruption of the very people who employed them in the past and will employee them in the future. We need a Law that simply states that if you are employed by the Federal Government in any position, then it is Illegal for you to ever accept any Employment with a Corporation, Company or Organization that you had any function over, or responsibility for hen employed by the Federal Government.

We must always ensure that Education is kept Public and never let it become only Private. The biggest "theft" by the 1 percent has been of the primary source of wealth knowledge, for its own benefit. Many of the advances that have propelled our high-tech economy in recent decades grew directly out of research programs financed and, often, collaboratively developed, by the federal government and paid for by the taxpayer. Then our Greedy and Corrupt Politicians gave the patents to the "Rich and Powerful Corporations, Companies, Institutions and Organizations."

Glass-Steagall made sense.

Glass-Steagall made sense. Dumping it did not. Glass-Steagall seemed to have the intended effect of keeping the banks somewhat honest, at least regarding the kind of flim-flam that brought on the meltdown. With Galss-Steagall; no meltdown. Without it; meltdown. Whadya think? Do we need to bring back Glass-Steagall?

Friggin OBVIOUSLY!!!

Friggin OBVIOUSLY!!!

Obama's phony Wall Street

Obama's phony Wall Street "reform" (Dodd-Frank) was Kabuki theater, so was his phony "reform" of Health Care (ultraconservative Heritage Foundation's plan, aka Romneycare).

Real "Savvy" . . . NOT!

Savvy Wall Street reform would have been Glass-Steagall rerinstated, and Health Care reform would have been Single Payer Medicare-for-All.

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