Rolling Stone April 26 2013
The obscene greed-and-arrogance stories emanating from Wall Street are piling up so fast, it’s getting hard to keep up. This one is from last week, but I missed it – it’s about the foreclosure/robo-signing settlement that was concluded earlier this year.
The upshot of this story is that in advance of that notorious settlement, the government ordered banks to hire “independent” consultants to examine their loan files to see just exactly how corrupt they were.
Now it comes out that not only were these consultants not so independent, not only did they very likely skew the numbers seriously in favor of the banks, and not only were these few consultants paid over $2 billion (over 20 percent of the entire settlement amount) while the average homeowner only received $300 in the deal – in addition to all of that, it appears that federal regulators will not turn over the evidence of impropriety they discovered during these reviews to homeowners who may want to sue the banks.
In other words, the government not only ordered the banks to hire consultants who may have gamed the foreclosure settlement in favor of the banks, but the regulators themselves are hiding the information from the public in order to shield the banks from further lawsuits.
Secrets and Lies of the Bailout
To recap: in the foreclosure deal, 13 banks agreed to pay a total of $9.3 billion to settle their liability in a number of areas, including robo-signing, which is just a euphemism for mass-perjury – robo-signing is the practice of having low-level bank employees sign documents attesting to full knowledge of case files in court foreclosure actions, when in fact they were signing hundreds of files per day, often having no idea whether the paperwork was correct or not.
It was done across the industry and turned housing cases across America into nightmares of jumbled and/or forged paperwork, in which even people who did not deserve to be thrown out of their homes were uprooted thanks to systematic errors by faceless bureaucrats who cut legal corners purely to save money.
All the major banks were guilty on a mass scale, but they worked with federal regulators like the Fed and the Office of the Comptroller of the Currency to secure this wide-ranging, industry-saving settlement, which not only covered the robosigning epidemic but a host of other bad or illegal practices, like the wrongful denial of modifications and the improper levying of (often hidden) fees.
As stocks have risen in recent years, the big hedge funds and the “too big to fail” banks have used borrowed money to make absolutely enormous profits. But when you use debt to potentially multiply your profits, you also create the possibility that your losses will be multiplied if the markets turn against you. When the next stock market crash happens, and the gigantic pyramid of risk, debt and leverage on Wall Street comes tumbling down, will highly leveraged banks such as Goldman Sachs ask the federal government to bail them out? The use of leverage is one of the greatest threats to our financial system, and yet most Americans do not even really understand what it is. The following is a basic definition of leverage from 
If you’ve ever suspected politics is increasingly being run in the interests of big business, I have news: Jeffrey Sachs, a highly respected economist from Columbia University, agrees with you – at least in respect of the United States.
What has been going on in Washington, D.C., since the financial meltdown of 2008 has been a disaster for the country. Taxpayers bailed out crooked, incompetent bankers while tens of millions lost their homes and jobs. The bailouts have cost trillions of dollars, and they’re not finished. The Federal Reserve has set a key interest rate to near zero percent until 2015, and it is printing $85 billion a month to prop up the banks and our own government. The Fed calls this little operation “open-ended.” No one has gone to jail for causing this enormous hardship on ordinary Americans, and not a word is spoken in the halls of Congress about stopping the bailouts or bringing criminals to justice. This is immoral, disgusting, repugnant, nonexistent leadership.
President George W. Bush is remembered largely for his role in curbing civil liberties in the name of his “war on terror.” But it’s President Obama who signed the 2012 NDAA, including its clause allowing for indefinite detention without trial for terrorism suspects. Obama promised that “my administration will interpret them to avoid the constitutional conflict” — leaving us adrift if and when the next administration chooses to interpret them otherwise. Another law of concern is the National Defense Resources Preparedness Executive Order that Obama issued in March 2012. That order authorizes the president, “in the event of a potential threat to the security of the United States, to take actions necessary to ensure the availability of adequate resources and production capability, including services and critical technology, for national defense requirements.” The president is to be advised on this course of action by “the National Security Council and Homeland Security Council, in conjunction with the National Economic Council.” Journalist Chris Hedges, along with co-plaintiffs including Noam Chomsky and Daniel Ellsberg, won a case challenging the NDAA’s indefinite detention clause on Sept. 1, when a federal judge blocked its enforcement, but her ruling was overturned on Oct. 3, so the clause is back.
Big banks aren’t the only entities that our country has deemed “too big to fail.” But our oceans won’t be getting a bailout anytime soon, and their collapse could compromise life itself. In a haunting article highlighted by Project Censored, Mother Jones reporter Julia Whitty paints a tenuous seascape — overfished, acidified, warming — and describes how the destruction of the ocean’s complex ecosystems jeopardizes the entire planet, not just the 70 percent that is water. Whitty compares ocean acidification, caused by global warming, to acidification that was one of the causes of the “Great Dying,” a mass extinction 252 million years ago. Life on Earth took 30 million years to recover. In a more hopeful story, a study of 14 protected and 18 non-protected ecosystems in the Mediterranean Sea showed dangerous levels of biomass depletion. But it also showed that the marine reserves were well-enforced, with five to 10 times larger fish populations than in unprotected areas. This encourages establishment and maintenance of more reserves.
OPINION ~ Wall Street lobbyists are awesome. I’m beginning to develop a begrudging respect not just for their body of work as a whole, but also for their sense of humor. They always go right to the edge of outrageous, and then wittily take one baby-step beyond it. And they did so again last night, with the passage of a new House bill (HR 2827), which rolls back a portion of Dodd-Frank designed to protect cities and towns from the next Jefferson County disaster.