Vulture Capitalism: Both Parties Want to Stay on Wall Street’s Good Side

obama wall streetNothing better illustrates the core critique of the Occupy Wall Street movement against the financial sector’s dominance of our political institutions than the spectacle of high-profile Democrats, like former Pennsylvania governor Ed Rendell and Newark Mayor Cory Booker, fretting over the “tone” of the Obama campaign’s advertisements targeting Mitt Romney’s days as a vulture capitalist at Bain Capital.

The only political outcome of this internal bickering coming from Democrats who want their party to uncritically service Wall Street’s interests is to remind us that the Democrats were equally responsible for setting the stage for the financial meltdown that threw 8 million people out of work and continues to degrade the quality of American life.

Most people make no distinction between a “private equity” firm, a big investment bank, or a “financial services” corporation. All they remember is that taxpayers were left holding the bag on an $825 billion “bail out” to shore up Wall Street’s biggest banks (and the Federal Reserve opened the cash drawer to the tune of $7 trillion) while the rest of us got unemployment, underwater mortgages, austerity through budget cuts at the state and local level, and a general sense of economic insecurity.

Commentators have presented the thumbnail history of what led to our current economic malaise with dreary repetition: In the late 1990s, the Bill Clinton administration (and a Republican Congress) enthusiastically deregulated the financial sector gutting the 1933 Glass-Steagall wall of separation between commercial and investment banks and ensuring that “over the counter” derivatives would be regulation free. Clinton’s Treasury Secretaries, Robert Rubin and Larry Summers, along with Alan Greenspan (who Clinton reappointed as Fed chairman), showed zero concern about the potentially disastrous effects of their deregulatory zeal. They had dollars signs in their eyes. To these men, Wall Street’s interests always superseded the nation’s. They lit a fuse that blew up the economy in 2008, requiring a deeply unpopular taxpayer bailout or else (we were told) we were heading into another Great Depression.

The nation experienced a series of financial crises that would not have been possible had the regulatory laws been left in place: the dot-com bubble; the collapse of Enron, Worldcom, Tyco, Adelphia, Global Crossing, and many other corporations that traded derivatives; the mortgage/housing bubble; John Corzine’s MF Global; and JP Morgan’s credit default swap (CDS) loss, which will be followed by the next crisis, and the next one after that, and the next one after that.

And when President Obama turned to Larry Summers and his apprentice Timothy Geithner and other Wall Street hacks to manage his economic team, it showed that “Hope” and “Change” really meant “Business As Usual.”

Understandably, as the 2012 presidential campaign heats up the Obama people want to tap into the deep contempt held by most Americans toward anything involving Wall Street. They want to highlight the record of the president’s Republican opponent who boasts about his business acumen yet was among the most rapacious elements on the Street at the time when he built his vast fortune. Bain Capital is “fair game” we are told.

But Obama’s chumminess with people identical to those who ran Bain Capital in its glory days and the pathetic dependence of most Washington Democrats on Wall Street money undermines his populist appeal. It’s an uphill climb for Obama to even mildly criticize Mitt Romney for being a vulture capitalist given his lack of accomplishment in holding anyone on Wall Street accountable for the economic carnage they wreaked and for maintaining the bipartisan servitude to the big banks (even when the public was ready to tear them apart).

joseph palermoThe whining of Ed Rendell and Cory Booker and others about Obama’s campaign ads poor-mouthing Bain is a reminder that through legalized bribery and their control of more money than god financial kingpins have not only captured the federal regulatory apparatus but key politicians from both parties.

Immunity for the big banks was the whole point of deregulating financial services in the first place.

JP Morgan Chase’s recent $3 to $5 billion loss in credit default swaps shows that the reckless casino gambling using publicly insured money continues unabated. Whatever the Obama campaign says about Romney’s time at Bain Capital, JP Morgan CEO Jamie Dimon and others like him still hold a “Get-Out-Of-Jail Free” card. When news that Dimon’s CDS bet went sour what followed was the age-old pattern white-collar corporate criminals have been using for years:

  • First, deny there’s a problem, tell the public there’s nothing to worry about; it’s “a tempest in a teapot,” Dimon said.
  • Second, say you’re “investigating” the problem and like everyone else you want to “get to the bottom of it.”
  • Third, blame subordinates, engineer a few high-profile resignations, and throw some expendable people “under the bus.”
  • cory bookerFourth, spin it as an “error,” or the result of “sloppiness,” or even “misjudgment,” while admitting no liability and claiming your people had the best of intentions, and no crimes were committed, (i.e. “mistakes were made”).
  • Fifth, use your money, power, and influence over the Federal Reserve, the Treasury Department, the S.E.C., the Obama Administration and the Congress to sweep the whole thing under the rug (while saying you want to “move forward” and “look ahead”).

With toothless federal oversight and a long tradition of immunity for rich and powerful people like Jamie Dimon this predictable pattern is sure to run its course.

Financial shocks today are like streetcars but with each go-around the giant banks become more consolidated, more concentrated, more powerful, too big to fail, too big to manage — too big PERIOD. Wall Street money has so corrupted our political system that there can never be even the hint of using existing Anti-Trust law to break up these behemoths, which can bring down the whole house of cards at any given time if their casino bets go south.

Joseph Palermo

Joseph Palermo

The bailouts were deeply unpopular. Millions of Americans are feeling more insecure about their economic wellbeing and their futures and it’s affecting their political attitudes and their view of the role of government. Wall Street’s immunity, as soon as it became clear that the Obama administration was not going to do anything substantial to hold people accountable, spawned an enormous and spontaneous social movement that literally occupied Wall Street and spread like wildfire to cities across America.

The evidence is mounting that the 1 percent controls both of our major political parties. And now the corporate wing of the Democratic Party is getting pissy about the “tone” that its standard bearer is showing toward vulture capitalism? It’s going to be a long campaign.

Joseph Palermo
Joseph Palermo’s Blog

Posted: Thursday, 24 May 2012

Related Posts Plugin for WordPress, Blogger...

Comments

  1. says

    O.K. , nice whiny rant , I agree so where’s the solution ? .

    That’s what we need now and i’m no armchari quarterback , I need to know what’s a real  and realistic solution .

    TIA , -Nate

  2. says

    “Immunity for the big banks was the whole point of deregulating financial services in the first place.”

    It took a constitutional amendment to give utopia to public employees with immunity from torts, and corruption abuse of power under the color of law. 

    Immunity is only appropropiate for diplomats!  “Par en parem non habet imperium,” Bartolus of Sassofforratus.

  3. says

    I’m amazed at all the issues that enrage people, but in context when issues that enrage or cause grievance, have only one basis or origin.  I used to have many issues that concerned me, and those that caused grievance, could actually be redressable.  But the element in all issues, is “abuse of power.”  If you percieve the government is acting outside the constitution, I have found, it is very hard for officials to act outside the constitution or violate their oath.  This is due to Sovereign Power, reclaimed by the 11th amendment in 1793.   We citizens are perceived as idiots by the Supreme Court.  They actaully contradicted James Wilson, the key architect of the Constitution, when he as a Supreme Court Justice stated, “to the constitution, the word sovereign is totally unkown.”  Therefore, it is not possible in this day and age to dispute something that was not disputed in 1793, when Chisholm v. Georgia asserted and stoped an attempt of a coup by the state of Georgia who suggested that the revolution didn’t end sovereign despotic rule, it merely transfered it to the new officials.  Two days after Justice Wilson put a kybosh on that, congress brought to the floor the 11th. amendment, uncogent perversion of diplomatic immunity essential to world communication.  We are all idiots, as perceived by the Supreme Court in Alden v. Maine in 1999, when after Justice Souter cited Chisholm 35 times, but to no avail.  Our beloved fatherly wolf in sheep clothing Scalia chimed that Sovereignty did not derive from the 11th amendment, but from the constitution itself.  Apparently Wilson, who wrote and edited most of the Constitution stated it didn’t exist.  Our Supreme Court has abandoned democracy for “absolute immunity” synonymous with a dictorship far from democracy.   The 11th amendment therefore can be repealed, and then Alden v. Maine overturned by another court or congress simply make another amendment restoring the absense of sovereign power against our citizens that gives them a constitutional right to abuse us!  So there is not many issues, there is only one, and that is the right for officials to escape “representation” in courts to curtail abuse of power or deprivation of right under the color of law claims.  This is why chaos is devoleping. The doctrine of immunity cultivates corruption, “a right enistimable and formidable for tyrants only,” “The Declaration of Independance.! 

    Please think about this, and start fighting the battle on the front lines, not the “divide and conquer” strategy that has captivated the minds of emotional men and women attacking a protected right of corrupton, see Bogan v. Scott-Harris U.S. 1998, “even if corrupt…the law will not tolerate a citizen “redressing wrongs…” in other words, the law will not tolerate citizens excersizing the First Amendment.  I bet you didn’t know that!  Now you do, or prove me wrong!

  4. Michael nola says

    You would think that Rendell and Booker should understand the obvious; that Obama’s remarks about Bain capital and his tepid comment on JP Morgan’s bets going south were nothing but campaign rhetoric and in no way reflected or reflect his position when actually governing, which is all that matters, though not to many people who continually tell themselves that Obama is playing the long game and will spring forth, Phoenix like, as a fire breathing liberal populist come his expected second term.  Obama is playing the long game; the long con for his corporate masters as he leads along those oh so easy to please and fool followers of his.

Leave a Reply

Your email address will not be published. Required fields are marked *