The social contract of the prosperous and roughly democratic America I was born into has been coming apart for decades, but not for any straightforward reason like “it didn’t work.” It’s coming apart because certain people want it to come apart; because they stand to gain if it comes apart; and yet for them to pull it apart they have to have our consent.
via Six Questions for Thomas Frank—By Simone Richmond (Harper’s Magazine).
In this research we looked at the ethical conduct among society’s haves and have-nots. In one study we found that wealthier subjects cheated more. After five apparently random rolls of a computer die for a chance to win some cash, wealthier participants were more likely to report scores higher than 12 — even though the game was rigged so that scores higher than 12 were impossible. When we positioned assistants at four-way traffic stops and pedestrian zones, wealthy drivers in high-priced cars were more likely to cut off other drivers or ignore pedestrians. In still other studies, the wealthy were more likely to lie in negotiations and endorse unethical behavior at work, like deceiving clients for profit. Wealthier subjects even took more candy from a jar that was ostensibly for children.
via Greed on Wall Street Prevents Good from Happening – Room for Debate – NYTimes.com.
Greg Smith’s unflattering glimpse into Goldman Sachs’ corrupt culture triggered a financial blow to the firm Wednesday, as the company lost $2.15 billion of its market value, making Smith’s 1,283-word op-ed worth a whopping $1.675 million per word.
Goldman Sachs, as Bloomberg reports, saw it shares drop 3.4 percent in trading Wednesday
But they’ll make it up in volume.
via Op-Ed Cost Goldman Sachs $2.15 Billion Yesterday – Business – The Atlantic Wire.
It’s been four years since the government, in the name of preventing a depression, saved this megabank from ruin by pumping $45 billion of taxpayer money into its arm. Since then, the Obama administration has looked the other way as the bank committed an astonishing variety of crimes – some elaborate and brilliant in their conception, some so crude that they’d be beneath your average street thug. Bank of America has systematically ripped off almost everyone with whom it has a significant business relationship, cheating investors, insurers, depositors, homeowners, shareholders, pensioners and taxpayers. It brought tens of thousands of Americans to foreclosure court using bogus, “robo-signed” evidence – a type of mass perjury that it helped pioneer. It hawked worthless mortgages to dozens of unions and state pension funds, draining them of hundreds of millions in value. And when it wasn’t ripping off workers and pensioners, it was helping to push insurance giants like AMBAC into bankruptcy by fraudulently inducing them to spend hundreds of millions insuring those same worthless mortgages.
But despite being the very definition of an unaccountable corporate villain, Bank of America is now bigger and more dangerous than ever. It controls more than 12 percent of America’s bank deposits (skirting a federal law designed to prohibit any firm from controlling more than 10 percent), as well as 17 percent of all American home mortgages. By looking the other way and rewarding the bank’s bad behavior with a massive government bailout, we actually allowed a huge financial company to not just grow so big that its collapse would imperil the whole economy, but to get away with any and all crimes it might commit. Too Big to Fail is one thing; it’s also far too corrupt to survive.
via Bank of America: Too Crooked to Fail | Politics News | Rolling Stone.
The Greg Smith resignation letter has gone viral. Here’s a live blog of responses.
In a frank opinion column for The New York Times, Greg Smith, a Goldman Sachs executive, explained on Wednesday why he was resigning from the firm.
Mr. Smith, who was head of Goldman’s United States equity derivatives business in Europe, the Middle East and Africa, said clients’ interests were sidelined in how the firm operated and thought about making money. Mr. Smith placed the blame for this cultural change on top management, including Goldman’s chief executive, Lloyd C. Blankfein, and its president, Gary D. Cohn.
via Live Blog: Reacting to Goldman Executive’s Resignation Letter – NYTimes.com.
Goldman Sachs is broken, and now takes a predatory view of its clients. Is current management just blowing it up to inflate the trust funds they’ll leave to their grandchildren in an environmental disaster?
For more than a decade I recruited and mentored candidates through our grueling interview process. I was selected as one of 10 people (out of a firm of more than 30,000) to appear on our recruiting video, which is played on every college campus we visit around the world. In 2006 I managed the summer intern program in sales and trading in New York for the 80 college students who made the cut, out of the thousands who applied.
I knew it was time to leave when I realized I could no longer look students in the eye and tell them what a great place this was to work.
When the history books are written about Goldman Sachs, they may reflect that the current chief executive officer, Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm’s culture on their watch. I truly believe that this decline in the firm’s moral fiber represents the single most serious threat to its long-run survival.
Looks like the Obamicans are pulling out all stops for the election.
JPMorgan Chase became the first bank on Tuesday to say regulators have completed stress tests of its balance sheet, and it said it would raise its quarterly dividend by a nickel to 30 cents and buy back as much as $12 billion of stock this year.
The Atlantic ran a recent article about how these “stress tests” are a scam intended to make bank for the 1%, not to protect the financial system for the 99%.
via JPMorgan Passes Stress Test, Raises Dividend – NYTimes.com.
Nassim Taleb is an economist and a student of risk. And that’s why he’s endorsing Paul. “Only one candidate, Ron Paul, seems to have grasped issues and is offering the right remedies for the central problems we are facing.” Only Paul understands the economic risks the Republicrat CorpState is creating. Paul’s addressing structural problems in the economy. The others are dulling the pain with Novocain; Ron Paul’s going for the cure with root canal.
According to Taleb, Paul is the only one with the right policies for the “Big Four”:
A failure to prosecute anyone at MF Global would be, if anything, even worse. It would mean that executives at a broker-dealer can indeed steal customer money and get away with it — so long as it was “unintentional.” And it would only deepen the cynicism so many people feel about government. I’ve heard it suggested, for instance, that the Justice Department won’t prosecute Corzine because it would hurt President Obama. (Corzine, the former governor of New Jersey, had been a big fund-raiser for the president.) I don’t happen to subscribe to that theory, but I certainly understand why others might.
To be sure, it is early yet. Federal investigators are still digging into the facts surrounding MF Global’s failure, no doubt searching for that elusive smoking gun. But if, in the end, they decide they can’t make a case, I hope they understand what they are telling the rest of us. Giving the big guys a pass isn’t good for the financial markets. And it isn’t good for democracy either.
The Obama administration is pursuing an energy policy that will just accelerate environmental destruction. Extracting oil and gas from unconventional sources (shale, tar sands, deep sea) is risky and uncertain, degrades the environment directly, and wastes energy and water in the process.
All drilling activity requires energy, which produces GHGs [greenhouse gasses]; producing unconventional oil and gas, however, usually requires far more energy than drilling for conventional fuels and so emits a correspondingly greater amount of GHGs.
Conventional oil and gas supplies are usually carried to the surface by natural forces once a well is drilled, whereas unconventional fuels are too dense to move by themselves (as in the case of tar sands) or are embedded in rock (as in the case of shale oil and gas) and so must be extracted using energy-intensive techniques. Hence, in addition to all the emissions we can expect from the prolongation of the fossil fuel era, we will experience a GHG increment from the growing reliance on unconventional hydrocarbons. Based on this sort of reasoning, the EIA calculates that global emissions of carbon dioxide will rise by 43 percent between 2008 and 2035, jumping from 30.2 billion to 43.2 billion metric tons. Such an increase will erase any hope of averting the apocalyptic consequences of planetary warming.
Truth and Traditions 