Peter Baker and David Herszenhorn: Wall Street Reform Reporting Lacking

Mitch McConnelThe massive trading and swapping of Collateralized Debt Obligations (CDOs) and other abstractions cooked up by the fertile minds of sociopathic Wall Street “traders” not only did nothing to lubricate the real economy through financial intermediation, but they helped bring down the entire system and cost taxpayers hundreds of billions of dollars.

The role of the ratings agencies, Moody’s, Standard & Poor’s, and Fitch, as Senator Carl Levin’s committee is methodically uncovering, was nothing short of disgraceful. Writing down trillions of dollars worth of Mortgage Backed Securities (MBSs) from “Triple-A” to junk is pretty extreme and the internal emails show they knew exactly what they were doing. The few people in these agencies who still valued being truthful to investors sent warnings to their superiors that were ignored. Turns out the top brass didn’t want to lose market share or the lucrative contracts from corrupt issuers who were peddling garbage but needed it labeled “investment grade.” In the end, it was the pension plans of fire fighters, police officers, and teachers that took the losses while the rating agencies and the investment banks (along with hedge fund managers like John Paulson) walked away with the cash.

The press must bear some responsibility. Here’s how the New York Times’ Peter Baker and David M. Herszenhorn conclude their piece that appeared in the paper edition on Friday describing the recent lying by Congressional Republicans about President Barack Obama’s Financial Reform proposals:

“Democrats rebutted Republican criticisms on Thursday at a news conference where they showed video clips of Republican leaders making what Democrats called false assertions about the bill. Republicans argued Democrats had not been honest with the American people.”

Many of the same journalists, especially those in the business press, who were cheerleaders for Wall Street at the height of the housing bubble are so bought into the system they are now muddying the waters about the legislation that tries to correct the problem. Baker and Herszenhorn are telling their readers that even videotapes of Republicans lying about financial reform are not enough. They give us the bland and falsely “balanced” idea that they simply cannot check for themselves who is lying and who is telling the truth.

This article is a very bad sign because it shows that even among the “paper of record” the press is determined to carry water for the richest, most powerful interests on Wall Street. Even the title of their piece, “Obama Chastises Wall Street . . .” is demeaning to the importance of what the President is trying to do. Shouldn’t Baker and Herszenhorn explain whether or not the current legislation really is a “permanent bailout bill” as the Republicans have been claiming?

Now, apparently even video tapes of politicians lying are not enough evidence for journalists to draw a conclusion. I suppose all of those surveillance videos of guys robbing liquor stores also have no weight as evidence.

Maybe Baker and Herszenhorn should take a look at some very recent history of what went on at Enron when its “traders” were bilking California’s energy market to refresh their memories and help them learn how to discern truth from falsehood. Here’s but one exchange between two Enron energy traders who by today’s standards on Wall Street would be considered boy scouts:

“He just fucks California. He steals money from California to the tune of about a million.”
“Will you rephrase that?”

“OK, he, um, he arbitrages the California market to the tune of a million bucks or two a day.”

“If you took down the steamer, how long would it take to get it back up?”

“Oh, it’s not something you want to just be turning on and off every hour. Let’s put it that way.”

“Well, why don’t you just go ahead and shut her down.”

“They’re fucking taking all the money back from you guys?”

“All the money you guys stole from those poor grandmothers in California?”

“Yeah, grandma Millie, man”

“Yeah, now she wants her fucking money back for all the power you’ve charged right up, jammed right up her asshole for fucking $250 a megawatt hour.”

“Burn baby, burn, it’s a beautiful thing.”

After all the country has been through in recent years, the lost productivity and the taxpayer bailouts of the biggest investment banks; and after all the suffering caused by the massive layoffs and home foreclosures that have devastated communities and destroyed families, the best our elite journalists can do is tell us that they have no way to discern who is lying and who is telling the truth?

The truth is that Wall Street, and those on Capitol Hill defending the practices that brought down the economy and now oppose any new regulations, are worthy of nothing but our contempt. The old standard of fake journalistic “balance” just doesn’t apply in this circumstance.

Joseph Palermo

Crossposted with Joseph A Palermo


  1. Elaine says

    I didn’t see where you mentioned Al Gore & Pelosi, Boxer, Waxman & others that screwed California over with the lies on global warming & climate change. I didn’t see where you said anything about Obama demanding your Governor to bring up the standards on all emissions there. Van Jones is a self professed communist that he said he became in prison & decided that is what he wanted to be when he got out. I guess when he grew up.LOL The cap & trade bill that Obama said would skyrocket electrical bills but he is still for it; so does that mean when Kerry, Lieberman, & Graham get it passed your electric bill will go up even more. The water that you must used to save a minnow instead of giving it to the farmers to grow crops is a really good EPA approach, also. Have you noticed how much Madoff, Enron, & Obama have in common? Now he is pretending he wants to put up 50B Panel to save us from bailing out these big banks again. It seems to me we do not have to put up a bunch of taxpayers money for something like this. That problem can be solved as it should have been solved before. If you can’t work something out with the other bankers then you are just going to have to fail because the taxpayers refuse to bail out you (big banks) or any auto companies, or anyone else. All these people got bailed with taxpayers money & no one asked us if they could do it, then Obama even sends money over to other banks in foreign banks, bails out Chrysler & merges it with Fiat, that piece of junk owed by Italy, & gives them bail out money that went to Italy & we, the taxpayers, got screwed again. This health care bill that is going to cost us more money in taxes that we will pay for a total of 10 years for a rationed, government run so called health care plan that has killed many of the people in Britain & Canada. That is why the people that could afford to come to the USA for their surgeries did because the waiting list & the doctors, hospitals & nurses are better here because a lot of theirs quit because they could not live up to their hippocratic oath. Everyone knew that when Obama finally took control of 1/6th of the American Economy he was not going to stop there. Now he wants to take over Wall Street which is no more then another power play. He wants control over everything & everybody & as long as the American people either can’t see this or do not care & want to live being controlled by the government & become a welfare state, he will continue to do so. Oh, yes, lets not forget he wants to take over the lakes, rivers & streams.

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