Ten Years After the Lehman Collapse

How a decade flies by when you're Richie Rich, and your class has sucked up a full 94% of all the household wealth "lost" in the financial crisis which began with the death of Lehman Brothers on September 15, 2008.

To hear liberal pundit Paul Krugman revise history by ignoring the endemic corruption of the global financial system, and to foist the blame for the continuing social and economic meltdown almost entirely on Republican obstructionism is to continue sliding down an Orwellian memory hole.   

Why did the response to a depressed economy fall short? We can debate endlessly whether the Obama administration could have gotten a bigger, more sustained stimulus through Congress; what’s clear is that some officials failed to see the need for stronger policies. When Christina Romer, the administration’s top economist, argued for more stimulus, Tim Geithner, the Treasury secretary, dismissed it as “sugar.”

Beyond that, efforts to fight unemployment had to deal with a bizarre Beltway consensus that despite high unemployment and record low interest rates, debt, not jobs, was the real problem.

But the most important reason the great slump went on so long was scorched-earth Republican opposition to anything and everything that might have helped offset the fallout from the housing bust.

As you can see, Krugman almost, but not quite, chides the Obama administration by merely hinting at how enthusiastically the Democrats embraced an austerity regimen for the little people and boosted prosperity for the wealthy, not least by the extension of the Bush-era tax cuts. Instead, he harps upon the GOP "blackmail" of Barack Obama, as if Obama himself weren't a true believer in neoliberal ideology (the market replacing representative democracy.) Then again, it wouldn't do for the most influential liberal pundit in America to put a damper on Obama's own ongoing revisionist campaign tour, in which he absolves himself of any and all culpability for the ongoing disaster affecting most people in this country.

Krugman then pivots to the GOP hypocrisy evidenced by the most recent round of tax cuts for the rich and the new conventional wisdom that deficits don't matter when Republicans are in control. He forgets to mention that the Democratic leadership is already vowing to re-implement the austerian "pay-go" rules if and when they retake power in November. This means that social programs benefiting ordinary people will have to be paid for by slashing other social programs benefiting ordinary people. The trillion-dollar wars which are truly bankrupting this country both morally and financially will go on as usual.

My published response to Krugman, who completely ignored the crime and corruption which caused, and continues to cause, so much misery:

 It's true that the GOP impeded the recovery. But they couldn't have stopped the Obama administration from prosecuting financial criminals and ensuring that bailouts went to Main Street as well as Wall Street.

Instead, CNBC's Rick Santelli dog-whistled the blame at "irresponsible" mortgagors (read: the poor and minorities) rather than on bipartisan deregulation. That rant gave rise to the Tea Party, and eventually, to Trump.

It was during the Clinton administration that Commodity Futures Trading Commissioner Brooksley Born warned about toxic derivatives, and her SOS was duly shot down by Dep. Treasury Sec. Larry Summers, who accused her of fomenting financial crisis. How wrong he turned out to be, but expert that he is, he went on to become one of Obama's chief advisers.

For as Wikileaks has shown, Obama's cabinet was vetted by Citigroup. Geithner has since gone on to make big bucks in private equity, and Atty. Gen. Eric Holder's seat at white collar defense powerhouse Covington & Burling was kept nice and warm for him.

 Although the White House boasted in 2012 that it had criminally prosecuted 530 financiers since the collapse, a subsequent investigation by the DOJ's Inspector General revealed the real number to be only 107, with real restitution to the public less than $100 million, and not the boastful billion.

This is all a matter of public record. Maybe the Democrats will start winning elections once they start switching their allegiances to Regular Joe and Jane.

(as an aside, I really have to compliment the recent work of Times comment-moderators in removing all the nasty replies accusing me of being a Trump supporter, and worse, for my pointing out inconvenient and well-documented facts!)

The 2014 I.G. audit I referenced in my comment has to do with the Obama Justice Department's abject failure to investigate and prosecute mortgage fraud cases, and then blatantly lying to the public about it. It found that the absolute lowest priority of the FBI was in cracking down on fraud scams against homeowners and mortgagors. Despite Obama's ostentatious signing in 2009 of the Fraud Enforcement and Recovery Act (FERA) there was precious little enforcement or recovery. 

According to the I.G. report, this was despite what Krugman called a cynical obstructionist Congress appropriating "significant" funding ($196 million) to the Justice Department, through 2011, for the prosecution of mortgage fraud and other white collar crimes via the hiring of additional FBI agents and adding to the existing mortgage fraud tax force.

In a 2012 press conference, Eric Holder, along with officials from Housing and Urban Development and Treasury, outright lied about the number of cases brought under the so-called Distressed Homeowners Initiative. Remember, the fudging of the facts was the conclusion of Holder's own internal watchdog and not some lousy cabal of Republican obstructionists!

Meanwhile, as an elite soldier in the anti-Trump Resistance, Holder recently schmoozed to Ministry of Truth outlet CNN that he thinks he "has what it takes to be president" because  "(We need) somebody who has the vision for the job, somebody who has got the necessary experience, somebody who has the capacity, physical as well as mental. Somebody who also has the ability to inspire people, to make people believe government can be the force for good and make people believe in this thing we call America. (They) have to be able to move people, to bring up together in ways this President has clearly not done."

Translation: he has what it takes, because his white collar criminal friends have taken what everybody else once had. Holder has the proven ability to inspire more crooks to believe that government will be a force for their own good, ensuring that the very wealthy will continue to rely on socialism for themselves and penury and prosecution for everybody else. Trump has been woefully unable to pull the wool over ordinary people's eyes. The guy is pure, fake polyester. Plus, he is an incapable fat slob, while Eric is genuine silky-smooth, toned, and smart. He has a proven track record of moving people... right out of their homes.  

Actually, I'd love to see Eric on a stage with former NYC Shrillionaire Mayor Mike Bloomberg, who is also planning a presidential run on the Democratic ticket. After they finish gushing all over each other, they can argue about who's the tougher guy: Holder, who protected the banksters and evicted the poor, or Bloomberg, who is so nasty that even the nasty and corrupt New York governor, Andrew Cuomo, thought he was going too far when he mandated that food stamp applicants be fingerprinted.

Wall Street Might Run For President Directly

Former Attorney General Eric Holder, who made the term "too big to jail" infamous, says he is pondering another revolving-door spin from his gig defending white collar criminals - this time all the way to the Oval Office. 

We’ll see,” he said during a breakfast sponsored by the Christian Science Monitor in Washington, DC.

 

He was asked if he’s mulling a run for the White House because he’s learning how to raise funds and giving political speeches.
“I think I’ll make a decision by the end of the year about whether or not there is another chapter in my government service,” he replied.

This is known as the political trial balloon. We'll see whether enough voters swoon when he again explains his deferred prosecution agreements with Wall Street criminal banks and how he agonized over giving presidents, including most recently the demented Donald Trump, the right to drone people to death at will anywhere on the planet.

Admittedly, the bar has been set conveniently low for Democrats, even a heavily damaged Democrat like Holder. In his first "major rare interview," he did after all schmooze to Rachel Maddow that even one of his kids would be a better president than Trump. Unlike the Normless Wonder, Holder would protect and respect the FBI and other members of the Intelligence Community who have all but ignored "the malefactors of great wealth" in order to set up sting operations against Muslim terrorists. Unlike Trump, Holder never called their countries of origin "shitholes" as he respectfully wrote his often-secret legal opinions on how to quietly tail them if not therapeutically drone them to death by means of unnaccountable surgical strikes.

Ditto for immigration. Holder never used racist dog-whistles as he gave the Obama administration legal cover for its record mass deportations, many of whom were unaccompanied minors who were condemned to almost certain deaths from gang and political violence when they were forcibly returned to their Central American home countries.

Somehow, the issue of Trump's horrific pardon of Sheriff Joe Arpaio never came up during the "rare" sit-down with his good pal Rachel, because that might have led to the awkward question of his own notorious pardon recommendation for Clinton donor and fugitive Wall Street crook Marc Rich, issued on the eve of Holder's first revolving door-spin from ignoring wealthy criminals in public to vigorously defending them, for big bucks, in private.

His kid-glove treatment of the money-laundering, drug-dealing kingpin HSBC alone should disqualify Holder from a presidential run.But no matter. The luxury corner office of Covington and Burling will always stay open for him, as would another revolving door spin the next time a corporate Democrat wins.

The Gravitas of the Chin-Stroker

Excuses, Excuses

Methinks the Obama Administration doth protest too much about its dubious record of the most whistleblower prosecutions in presidential history. The New York Times today has the White House and its Justice Department actually blaming their predecessors for the number of petty leak cases they were apparently forced to prosecute.

They also blame technology and emails for the ease in prosecuting stupid leak cases at the same time they insist that the blatant paper and e-trails of Wall Street crimes are just too hard to parse. They're twisting themselves into enough pretzels to choke ten Dubyas. They're desperately trying to wipe off the well-deserved egg on their face for their dumb prosecutions of John Edwards and Roger Clemens.

Eric Holder apparently just realized he does not want incompetence and pettiness to be his legacy. And President Obama doesn't want anyone to think that going back on a campaign promise to protect government whistleblowers is going to be part of his legacy, either. The six whistleblower prosecutions done under his watch in the past three years are totally accidental! From The Times:

When we took office in January 2009, I don’t think bringing a lot of leak cases was high on anyone’s agenda,” said Matthew Miller, who was director of public affairs at the Justice Department until July. “But then they came up one by one, and without anyone realizing it, we had set a record.”

(snip) 

Like most presidents, Mr. Obama has been infuriated by some leaks, but aides say he never ordered investigations. Current and former officials said Mr. Obama and Mr. Holder, who are social friends, have avoided discussing investigations and prosecutions to avoid any appearance of improper White House influence, a charge Democrats lodged against the Bush administration.

Asked whether the White House had a role in the leak cases, a spokesman for the National Security Council, Tommy Vietor, said, “Decisions about leak prosecutions are made by the Department of Justice.”

For decades, the Justice Department was where leak complaints from the intelligence agencies went to die. The department’s counterespionage section was more interested in finding foreign spies than American blabbermouths, officials said.

Now that Holder has ordered, or pretended to order, leak investigations into recent revelations on  American cyber-attacks against an Iranian nuclear facility and another underwear bombing plot involving a double or maybe a triple CIA agent, his department is trying to downplay its own role in prosecuting leaks that simply exposed government stupidity and wrongdoing. For example, the prosecution of Thomas Drake deservedly fell apart because far from exposing government secrets, he was merely exposing government waste.

According to The Times, Holder could have halted any of the left-over cases but went ahead anyway for fear that the lawyers under him might get mad. That, to put it delicately, is quite a stretch. Especially since it was only two weeks ago that Eric Holder bragged to Congress that the Obama Administration is a gung-ho champion of going after leakers.

Damned if he does and damned if he doesn't, the poor guy. Having it both ways is so exhausting. And to be slapped with a contempt of Congress charge to boot, and be forced to beg his own boss for executive privilege protection. Oh, the humanity. Oh, what a racket.