So WTH, I'm going to start posting stuff again, if only to document some of the insanity of the Trump Years. I don't know if I have any special insight, as I'm not a trained psychologist, but here goes anyway....
Here, Matt Taibbi and backyard wrestling's liberal "heel" Daniel Richards described what I've noted for a while now: Trump is all negative, all the time.
Even when Trump is for something -- like, um, our Lord and Savior Jesus Christ at the recent Values Voter Summit -- he can't do it without naming an enemies list. His enemies are God's enemies.
Trump's fuel is spite and vengeance....And I guess that's where Taibbi kind of muddies the waters, speculating that Bannon trained Trump how to exploit cultural wedge issues. Nope, not entirely.
Indeed to be a truly good heel, it can't be entirely an act, as Taibbi said. The difference is that Old Man Trump has changed. Young Man Trump was kind of a winking, coy political chameleon -- just watch his interviews from the 80s and 90s. But by now, it's all a big positive-negative reinforcement loop: the crazies, old people, flyover states, Bible-thumpers, gun-lovers and neo-Nazis all love him; the liberals, young, gays, both coasts, and minorities all hate him. Meanwhile Trump has consumed Fox on TV as his main media for years now. Trump was not always, but has become, a quintessentially isolated, rich, grumpy old white man.
And Trump, who prizes loyalty above all else, loves who loves him, and hates who hates him. In that sense, he's still apolitical, he's still the narcissistic shell of a man he's always been, but he realizes he's made his bed with the crazies and now he has to sleep with them. And this time there won't be a quickie divorce.
Wrestling's Newest Star, Daniel 'The Progressive Liberal' Richards, on Trump
By Matt Taibbi
October 9, 2017 | Rolling Stone
URL: http://www.rollingstone.com/sports/features/wrestler-the-progressive-liberal-daniel-richards-on-trump-w507900
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Showing posts with label Taibbi. Show all posts
Showing posts with label Taibbi. Show all posts
Sunday, October 15, 2017
Tuesday, September 3, 2013
Sirota: Higher education should be a right like high school
Following up on Matt Taibbi's expose of the scam that federal student loans have become, David Sirota offers us an alternative [emphasis mine]:
Just consider the critical difference between how high school and college education programs are funded.The former is funded by broad-based taxes and few would ever suggest changing it to an individual tuition system. Why? Because we've come to view access to high school as a right. This view is based not just on notions of morality but also on an economic calculation. Basically, we know we need a workforce with as many high school graduates as possible, and we've decided that forcing young people to go into crushing debt to get a high school degree would deter many from getting the degree.Yet, even though we know that higher education is also increasingly an economic necessity, we do not have the same funding model or outlook for college. Instead, we still predicate access to higher education on a student's wealth and/or their willingness to go into crushing debt.[...] No doubt, shifting our policies to treat post-secondary education as equally necessary as high school -- and therefore worthy of similar fiscal treatment -- requires a paradigm shift in thinking.It requires us to see higher education as not just 4-year university programs, but also 2-year community college programs and vocational and technical education.
As I've been saying for years, we can give millions of Americans marketable, in-demand job skills without four-year colleges. For too many, four years of college is an extravagant waste of time and money; they don't want or really even need to be there, (hurting the college experience for those who do); they just need a piece of paper at the end that generically qualifies them for gainful employment.
By David Sirota
August 29, 2013 | Alternet
Tuesday, August 27, 2013
Taibbi: College loan system scam
Better late than never, I'm posting this exposé by Taibbi about the exorbitant cost of U.S. higher education.
As Taibbi reveals,
... the dirty secret of American higher education is that student-loan interest rates are almost irrelevant. It's not the cost of the loan that's the problem, it's the principal – the appallingly high tuition costs that have been soaring at two to three times the rate of inflation, an irrational upward trajectory eerily reminiscent of skyrocketing housing prices in the years before 2008.
Another dirty little secret is that the federal government, by its own estimates, stands to make $185 billion in profit on student loans over the next 10 years. Boosting the government's profits, borrowers cannot discharge their student loan debt through personal bankruptcy. The Department of Education can even garner federal disability checks!
So why is college so expensive in America? The knee-jerk conservative response is: tenured ivory tower professors; and money for Democrats from the education lobby.
The former is untrue and the latter is only partly true. But conservatives should note that the federal student loan system does cause a kind of market distortion, the so-called "Bennet hypothesis," named after conservative William Bennett: with any accredited college eligible to receive students with federal financial aid, there is really no incentive for colleges to cut costs, compete, or focus on degrees that give students a decent Return on Investment (ROI).
"A degree in bullshit" does the job for both colleges and the government lender when the collection rate on student loans can exceed 100 percent.
"A degree in bullshit" does the job for both colleges and the government lender when the collection rate on student loans can exceed 100 percent.
And as we all know, the newer for-profit colleges have been gaming the student loan system -- as well as the education allowances given to members of the U.S. Military -- for several years now, even as students at for-profit colleges have a loan default rate as high as 40 percent.
Another reason colleges are so expensive is what Taibbi calls "gilding": the expensive administration buildings, sports stadiums and celebrity professors. These used to be paid for by nervous, eager parents... until they ran out of money. Now the federal government subsidizes colleges. So why shouldn't colleges go on a spending spree?
By Matt Taibbi
August 15, 2013 | Rolling Stone
Monday, July 22, 2013
JPMorgan Chase: The 'good' TBTF bank?
Remember when I pointed out that JP Morgan -- the "good" Wall Street bank -- was paying 20 percent of its annual net profits in fines and litigation?
Here we have Matt Taibbi pointing out that JP Morgan just recently paid another $1 billion to the FERC for manipulating energy prices in California and Michigan.
And let's keep in mind, this was the settlement price. That means, whatever JP Morgan did, it was much worse than $1 billion.
Taibbi reminds us that, "In the three-year period between 2009-2012, Chase paid out over $16 billion in litigation costs," or 12 percent of Chase's net revenue over the same period.
What kind of bank, what kind of business, can allow itself to do that? Only a corrupt and broken business, that's what. Break up the TBTF banks!
By Matt Taibbi
July 18, 2013 | Rolling Stone
Saturday, June 29, 2013
Taibbi: All journalists are 'advocacy journalists'
Yes, yes, yes! Taibbi makes a great point about "objective" journalists, in the context of Glenn Greenwald's scoops on the NSA domestic spying story [emphasis mine]:
... because all reporters are advocates. If we're only talking about people like Glenn Greenwald, who are open about their advocacy, that's a crazy thing to say. People should be skeptical of everything they read. In fact, people should be more skeptical of reporters who claim not to be advocates, because those people are almost always lying, whether they know it or not.[...] That's what makes this new debate about Greenwald and advocacy journalism so insidious. Journalists of all kinds have long enjoyed certain legal protections, and those protections are essential to a functioning free press. The easiest way around those protections is simply to declare some people "not journalists." Ten years ago, I would have thought the idea is crazy, but now any journalist would be nuts not to worry about it. Who are these people to decide who's a journalist and who isn't? Is there anything more obnoxious than a priesthood?
Journalists are supposed to be fair, not objective. "Objectivity" is impossible, so let's not set the bar there. I would much rather have a journalist be honest with me about his convictions (aka biases), then I can filter his reporting as I like, instead of looking for his "hidden" messages.
This is similar, yet also unrelated, to my personal practice of prefacing any discussion of politics with strangers with, "I'm a big lefty liberal who voted for Obama twice." Why do I do that? Because why not? It's the truth, and I have nothing to hide. Surprisingly, things go much better after that. At least my interlocutor knows where I'm coming from. Then it's all about the merit or weight of my arguments. Plus people just appreciate honesty. People are funny that way.
By Matt Taibbi
June 27, 2013 | Rolling Stone
Thursday, May 2, 2013
Taibbi: 'TBTF' bill faces opposition from...S&P?!
In the bizarro world of high finance, the ostensibly conservative ratings agency Standard & Poor's has come out against the bipartisan Brown-Vitter "TBTF" bill in the Senate Banking Committee that would "elegantly" eliminate, according to Matt Taibbi, the Too Big To Fail problem by requiring any bank with more than $500 billion in assets to keep about 15 percent of its capital in reserve, so as not to require a government bailout if their risky investments fail.
Stay tuned, everybody!....
Here's S&P excuse during Senate testimony:
Under our methodology, we would potentially no longer factor in government support if we believed that once large banks are broken up, we would not classify these banks as having high systemic importance.
Here's Taibbi's response to that:
S&P writes about having to factor out the implicit government backing of big banks as though that would be a bad thing. But if implicit government support is the only thing keeping the ratings of these companies even as high as they are now, that means they really should be rated lower, in a true free market. And Standard and Poor's is, what – against admitting that? It's nuts.
On the other hand, the Brown-Vitter TBTF bill is supported by the Independent Community Bankers of America, that is ostensibly sick and tired of borrowing at higher rates and having a constant institutional disadvantage compared to Wall Street banks.
If the voting public continues to pay attention to the TBTF problem then we'll win, because both the far Left and far Right and everybody in between supports ending TBTF, ideologically. But if we get distracted, then the TBTF lobbyists and the corrupt institutions like S&P will cut and gut this bill in the Senate. They don't mind sounding absurd and hypocritical to protect their advantages with the status quo.
Stay tuned, everybody!....
UPDATE (05.04.2013): For those who are interested, here's a summary from my man Ritholtz of the Brown-Vitter 'TBTF' bill:
- Stricter capital requirements on megabanks, defined as institutions with over $500 billion in assets.
- Six U.S. banks — JPMorgan Chase., Citigroup, Goldman Sachs, Morgan Stanley, Bank of America and Wells Fargo — meet the TBTF criteria.
- Eliminates risk-weights as part of a capital assessment (less reliance on unreliable ratings).
- Does not rely on ratings agency grades.
- Removes off-balance-sheet assets and liabilities as different class — they are treated as if they were on-balance sheet.
- Requires derivatives positions to be included in a bank’s consolidated assets.
- Requires capital cushion that a bank hold be liquid.
- Mandates capital measures be more transparent.
- Eliminates Basel III as a regulatory requirement.
- Restores competition to industry by removing competitive disadvantages mega banks have over smaller and regional community bankers.
By Matt Taibbi
May 1, 2013 | Rolling Stone:
Saturday, March 2, 2013
Dimon: 'That's why I'm richer than you'
Off with his head! Dimon is just begging for it.
By Matt Taibbi
February 27, 2013 | Rolling Stone
Saturday, February 16, 2013
Taibbi: U.S. Gov't. let banksters get away with murder
Here's how Matt Taibbi sums up what British bank HSBC did:
For at least half a decade, the storied British colonial banking power helped to wash hundreds of millions of dollars for drug mobs, including Mexico's Sinaloa drug cartel, suspected in tens of thousands of murders just in the past 10 years – people so totally evil, jokes former New York Attorney General Eliot Spitzer, that "they make the guys on Wall Street look good." The bank also moved money for organizations linked to Al Qaeda and Hezbollah, and for Russian gangsters; helped countries like Iran, the Sudan and North Korea evade sanctions; and, in between helping murderers and terrorists and rogue states, aided countless common tax cheats in hiding their cash."They violated every goddamn law in the book," says Jack Blum, an attorney and former Senate investigator who headed a major bribery investigation against Lockheed in the 1970s that led to the passage of the Foreign Corrupt Practices Act. "They took every imaginable form of illegal and illicit business."
But here's why the U.S Government didn't prosecute HSBC in its own words:
Again, about a week later, the U.S. Justice Department gave a pass to UBS, which helped to illegally fix the LIBOR rate:"Had the U.S. authorities decided to press criminal charges," said Assistant Attorney General Lanny Breuer at a press conference to announce the settlement, "HSBC would almost certainly have lost its banking license in the U.S., the future of the institution would have been under threat and the entire banking system would have been destabilized."
But the Justice Department wasn't finished handing out Christmas goodies. A little over a week later, Breuer was back in front of the press, giving a cushy deal to another huge international firm, the Swiss bank UBS, which had just admitted to a key role in perhaps the biggest antitrust/price-fixing case in history, the so-called LIBOR scandal, a massive interest-raterigging conspiracy involving hundreds of trillions ("trillions," with a "t") of dollars in financial products. While two minor players did face charges, Breuer and the Justice Department worried aloud about global stability as they explained why no criminal charges were being filed against the parent company."Our goal here," Breuer said, "is not to destroy a major financial institution."
HSBC was given warning after warning. An HSBC employee charged with detecting money-laundering blew the whistle to the FBI. Nothing. This gives the lie, once again, that businesses can be left to regulate themselves.
And, not to sound like a blood-and-guts conservative, but, without the death penalty (prosecutions, jail time) there is no deterrent. We now have, according to our own government, "an unarrestable class" of banksters who are too socially and economically important to prosecute. To which I say: destroy away! Off with their heads! After all, isn't "creative destruction" what free enterprise is all about?
How HSBC hooked up with drug traffickers and terrorists. And got away with it
By Matt Taibbi
February 14, 2013 | Rolling Stone
Saturday, November 17, 2012
Taibbi's hilarious take on Friedman's latest mangled opus
Bottom line: if any of you still believes that Thomas Friedman is a cogent geopolitical analyst, or even (wince!) a good writer, then please read these two Matt Taibbi posts. Friedman doesn't just mix metaphors, he holds them in his iron fist as he blows them up and drenches them in acid then midwifes them into a new twisted (non-)meaning. (No kidding, those are all real Friedman mixed metaphors). The dude really must be smoking weed.
By Matt Taibbi
November 15, 2012 | Rolling Stone
By Matt Taibbi
November 14, 2012 | Rolling Stone
Taibbi's readers' responses to his challenge to one-up Friedman's nonsense were hilarious. When random smart people chime in brilliantly it renews my faith in the Internet. On the other hand, Thomas Friedman still writes for the NYT, he's still all over the Internet, still filthy rich, and still gets listened to by all sorts of influential people, which kind of cancels out my faith in the Internet. Or just humanity. I cant decide which.
Saturday, November 10, 2012
Taibbi: GOP's attitude, not policies, is screwing them
Like me, Taibbi has been checking out Rush Limbaugh and other right-wing outlets to see how they're reacting to Obama's re-election. BTW, yesterday there was a good summary at HuffPo of the 11 excuses Republicans are giving for Romney's defeat.
Post-election, finally Republicans are addressing the elephant in the room: that only white men vote GOP. They're "soul-searching" what to do about it. Folks like Limbaugh ask rhetorically if the GOP should just give in and throw tokens at minorities and women to get their votes. Rush even coined a new term: "Hispandering." Yeah, that's gonna help, Rush. Please, for us Democrats, keep it up.
His dismissive attitude echoes that of conservative pundit Edward Klein, who complained on FOX that, "[David] Axelrod and his team had already succeeded in pandering to special interest groups, such as Hispanics, gays, and women." It was such an unconscious, perfect giveaway of the GOP mindset: anybody who is not a straight white guy is a "special interest group" to them! Here's how Taibbi put it:
[T]he fact that so many Republicans this week think that all Hispanics care about is amnesty, all women want is abortions (and lots of them) and all teenagers want is to sit on their couches and smoke tons of weed legally, that tells you everything you need to know about the hopeless, anachronistic cluelessness of the modern Republican Party. A lot of these people, believe it or not, would respond positively, or at least with genuine curiosity, to the traditional conservative message of self-reliance and fiscal responsibility.But modern Republicans will never be able to spread that message effectively, because they have so much of their own collective identity wrapped up in the belief that they're surrounded by free-loading, job-averse parasites who not only want to smoke weed and have recreational abortions all day long, but want hardworking white Christians like them to pay the tab. Their whole belief system, which is really an endless effort at congratulating themselves for how hard they work compared to everyone else (by the way, the average "illegal," as Rush calls them, does more real work in 24 hours than people like Rush and me do in a year), is inherently insulting to everyone outside the tent – and you can't win votes when you're calling people lazy, stoned moochers.
It's hard to say whether it's good or bad that the Rushes of the world are too clueless to realize that it's their attitude, not their policies, that is screwing them most with minority voters. If they were self-aware at all, Mitt Romney would probably be president right now. So I guess we should be grateful that the light doesn't look like it will ever go on. But wow, is their angst tough to listen to.
Not all Democrats are smart, but you don't have to be smart to sense it when somebody despises you and looks down on you. Republicans can't even begin to start persuading people that their policies are right when the best they can do is faking genuine concern and respect for others. Repeat: faking it is the best the GOP can do. On an ordinary day the GOP is downright hostile to them.
By Matt Taibbi
November 8, 2012 | Rolling Stone
Friday, November 2, 2012
Taibbi: We're all 'Big Government conservatives'
Matt Taibbi's latest post is worth reading in full but here are the best parts:
All year, the press has been banging a similar drum, i.e. that Mitt Romney and his budget-slashing sidekick Paul Ryan are for small government, while the closet socialist Barack Obama and his old-school New Dealer VP Joe Biden are the obvious big-government candidates.The only problem with this new line of rhetoric is that it isn't really true. The almost certain reality is that we'll end up with a big (and perhaps even a rapidly-expanding) government no matter who gets elected. People seem to forget that this time four years ago, George W. Bush was winding down one of the most activist, expensive, intrusive presidencies in history, an eight-year period that saw a massive expansion in the size of the federal government.
And it's not only Dubya who was a hypocrite; we're all "Big Government conservatives" at heart:
In the abstract, most Americans want a smaller and less intrusive government. In reality, what Americans really want is a government that spends less money on other people.Hurricane Sandy is a perfect, microcosmic example of America's attitude toward government. We have millions of people who, most of the year, are ready to bash anyone who accepts government aid as a parasitic welfare queen, but the instant the water level rises a few feet too high in their own neighborhoods, those same folks transform into little Roosevelts, full of plaudits for the benefits of a strong state.The truth is, nobody, be he rich or poor, wants his government services cut.
That's right, Big Gubument is here to stay:
The point is, we will end up with a big government no matter who wins next week's election, because neither Mitt Romney nor Barack Obama is supported by a coalition that has any interest in tightening its own belt. The only reason we're having this phony big-versus-small argument is because of yet another longstanding media deception, i.e. that the only people who actually receive government aid are the poor and the elderly and other such traditional "welfare"-seekers. Thus a politician who is in favor of cutting services to that particular crowd, like Mitt Romney, is inevitably described as favoring "small government," no matter what his spending plans are for everybody else.
So is it any wonder that U.S. politicians refuse to be honest with voters when voters refuse to be honest with themselves?
It's this weird national paranoia about being seen as needy, or labeled a parasite who needs government aid, that leads to lunacies like the idea that having a strong disaster-relief agency qualifies as a "big government" concept, when in fact it's just sensible. If everyone could just admit that government is a fact of life, we could probably do a much better job of fixing it and managing its costs. Instead, we have to play this silly game where millions of us pretend we're above it all, that we don't walk on regularly-cleaned streets or fly in protected skies. It shouldn't take a once-in-a-generation hurricane for Americans to admit they need the government occasionally, but that's apparently where we are.
Let the silly game continue this Tuesday....
By Matt Taibbi
November 1, 2012 | Rolling Stone
Wednesday, September 26, 2012
Taibbi: Romney SHOULD be getting creamed
I'm not superstitious about jinxes, but I guess I've seen too many movies where the guy who relaxed and turned his back on his opponent for premature gloating got a rude surprise.
Anyhow, Matt Taibbi's latest post seems pretty on-target. Maybe it's just because the last few elections have been barn burners, but...
The mere fact that Mitt Romney is even within striking distance of winning this election is an incredible testament to two things: a) the rank incompetence of the Democratic Party, which would have this and every other election for the next half century sewn up if they were a little less money-hungry and tried just a little harder to represent their ostensible constituents, and b) the power of our propaganda machine, which has conditioned all of us to accept the idea that the American population, ideologically speaking, is naturally split down the middle, whereas the real fault lines are a lot closer to the 99-1 ratio the Occupy movement has been talking about since last year.
Premature reports of Occupy's death aside, they did successfully change the national conversation from debt reduction to the welfare of the 99 Percent. That was their genius. In that light, candidate Romney, who is a caricature of the One Percent, should be getting creamed:
He has a $250 million fortune, but he appears to pay well under half the maximum tax rate, thanks to those absurd semantic distinctions that even Ronald Reagan dismissed as meaningless and counterproductive. He has used offshore tax havens for himself and his wife, and his company, Bain Capital, has both eliminated jobs in the name of efficiency (often using these cuts to pay for payments to his own company) and moved American jobs overseas.The point is, Mitt Romney's natural constituency should be about 1% of the population. If you restrict that pool to "likely voters," he might naturally appeal to 2%. Maybe 3%.If the clichés are true and the presidential race always comes down to which candidate the American people "wants to have a beer with," how many Americans will choose to sit at the bar with the coiffed Wall Street multimillionaire who fires your sister, unapologetically pays half your tax rate, keeps his money stashed in Cayman Islands partnerships or Swiss accounts in his wife's name, cheerfully encourages finance-industry bailouts while bashing "entitlements" like Medicare, waves a pom-pom while your kids go fight and die in hell-holes like Afghanistan and Iraq and generally speaking has never even visited the country that most of the rest of us call the United States, except to make sure that it's paying its bills to him on time?
[...] The fact that Barack Obama needed a Himalayan mountain range of cash and some rather extreme last-minute incompetence on Romney's part to pull safely ahead in this race is what really speaks to the brokenness of this system.
Part of me is sorry we didn't get to witness a real campaign contest between President Obama and an unapologetically mean-spirited, in-your-face, screw-the-poor, angry-white-guy Republican like Newt Gingrich or Chris Christie. Oh well, maybe next time... if the GOP hasn't completely cleaned house and started over in four years, that is.
By Matt Taibbi
September 25, 2012 | Rolling Stone
Wednesday, September 19, 2012
Taibbi: Dems wimped out on Wall St. reform
Never let it be said I don't criticize Democrats. They had the votes to end Too Big To Fail, and end naked short-selling by re-instating the "uptick rule," but they were cowed by Wall Street lobbyists. They pussed out, pure and simple.
By Matt Taibbi
September 18, 2012 | Rolling Stone
Thursday, August 30, 2012
Taibbi: Romney's wealth came from debt
Taibbi pointed out:
What most voters don't know is the way Mitt Romney actually made his fortune: by borrowing vast sums of money that other people were forced to pay back. This is the plain, stark reality that has somehow eluded America's top political journalists for two consecutive presidential campaigns: Mitt Romney is one of the greatest and most irresponsible debt creators of all time. In the past few decades, in fact, Romney has piled more debt onto more unsuspecting companies, written more gigantic checks that other people have to cover, than perhaps all but a handful of people on planet Earth.
And who financed Romney's leveraged buyouts? Wall Street investment banks. So don't hold your breath waiting for Romney to regulate the TBTF banks. Romney gives two thumbs up to the financialization of the U.S. economy.
During the GOP primaries, Gov. Rick Perry called Romney a "vulture capitalist." Taibbi gives an example of what Perry meant: KB Toys in Massachusetts. Bain bought it with just $18 million of its own cash and $302 million in borrowed money, and then induced KB to pay $120 million in dividends to Bain and its investors, and forced KB to take out $60 million in bank loans to finance it. Plus KB had to pay for the debt that Bain took on to buy the company!
Bain did the same thing to Dunkin' Donuts. Taibbi noted that DD must sell 2.5 million cups of coffee every month just to service Bain's debt.
Romney and Bain Capital were not in the business of "turning around" ailing companies or employing U.S. workers. Romeny was about making a big, fast return for Bain and its investors by any means necessary.
So why does this matter? Because Romney's job as POTUS would be the opposite of his job at Bain Capital: not to create a profit for a small in-group by loading up firms with debt and cutting jobs, but rather to create jobs and wealth for the most U.S. citizens possible and cutting the national debt. Romney does not know how to do that. Romney's business experience, his vast wealth, came from doing the exact opposite of what America needs today.
By Amy Goodman
August 30, 2012 | Democracy Now
Saturday, August 18, 2012
Taibbi: AG's Goldman catch & release shows Obama has no balls
"But what about Fast & Furious, wah-wah-wah!...". Enough. That's a deliberate distraction, a media fabrication meant to pull the wool over your eyes while the real crooks make their getaway.
Let's admit that Attorney General Eric Holder has a job and he's not doing it because Obama told him not to, because Obama's Wall Street donors told him not to. That's the real Eric Holder scandal. But don't hold your breath waiting for WSJ, FOX, GB, Rush, et al to talk about it, because letting the banksters off scott free is just what they want.
By Matt Taibbi
August 15, 2012 | Rolling Stone
Thursday, May 10, 2012
Taibbi: How Wall St. killed Dodd-Frank after it passed
Concludes Taibbi, sadly:
But money never gets tired. It never gets frustrated. And it thinks that drilling holes in Dodd-Frank is every bit as interesting as The Book of Mormon or Kate Upton naked. The system has become too complex for flesh-and-blood people, who make the mistake of thinking that passing a new law means the end of the discussion, when it's really just the beginning of a war.
It's bad enough that the banks strangled the Dodd-Frank law. Even worse is the way they did it - with a big assist Congress and the White House.
By Matt Taibbi
May 10, 2012 | Rolling Stone
Labels:
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Wednesday, April 11, 2012
Taibbi: By signing JOBS Act Obama winks at fraud
By Matt Taibbi
April 9, 2012 | Rolling Stone
Boy, do I feel like an idiot. I've been out there on radio and TV in the last few months saying that I thought there was a chance Barack Obama was listening to the popular anger against Wall Street that drove the Occupy movement, that decisions like putting a for-real law enforcement guy like New York AG Eric Schneiderman in charge of a mortgage fraud task force meant he was at least willing to pay lip service to public outrage against the banks.
Then the JOBS Act happened.
The "Jumpstart Our Business Startups Act" (in addition to everything else, the Act has an annoying, redundant title) will very nearly legalize fraud in the stock market.
In fact, one could say this law is not just a sweeping piece of deregulation that will have an increase in securities fraud as an accidental, ancillary consequence. No, this law actually appears to have been specifically written to encourage fraud in the stock markets.
Ostensibly, the law makes it easier for startup companies (particularly tech companies, whose lobbyists were a driving force behind its passage) attract capital by, among other things, exempting them from independent accounting requirements for up to five years after they first begin selling shares in the stock market.
The law also rolls back rules designed to prevent bank analysts from talking up a stock just to win business, a practice that was so pervasive in the tech-boom years as to be almost industry standard.
Even worse, the JOBS Act, incredibly, will allow executives to give "pre-prospectus" presentations to investors using PowerPoint and other tools in which they will not be held liable for misrepresentations. These firms will still be obligated to submit prospectuses before their IPOs, and they'll still be held liable for what's in those. But it'll be up to the investor to check and make sure that the prospectus matches the "pre-presentation."
The JOBS Act also loosens a whole range of other reporting requirements, and expands stock investment beyond "accredited investors," giving official sanction to the internet-based fundraising activity known as "crowdfunding."
But the big one, to me, is the bit about exempting firms from real independent tests of internal controls for five years.
When I first read this, I asked myself: how does a law exempting a Silicon Valley startup from independent accounting actually encourage investment? If American companies have to post real, independently-verified numbers when they go public, doesn't that give investors all around the world a big reason to put their money here, instead of investing in, say, Mobbed-Up Siberian Aluminum LLC, or Bangalore Sweatshop Inc.?
In other words, how does letting www.investonawhim.com go to market (and stay on the market for five years!) without publishing real numbers actually help the industry attract more financing in general, when the whole point of all of these controls is to make investment a less risky experience for the investor?
Get ready for the ostensible answer, because you won't believe it. Here's how CNN explained the reasoning behind that exemption:
Having 500 investors or raising $5 million previously forced a company to register with the SEC -- a costly endeavor. Filling out stacks of legal forms and undergoing independent accounting audits can cost hundreds of thousands of dollars. The law loosens requirements for most companies by raising several thresholds.
We needed Barack Obama and the congress to compromise the entire U.S. stock market because it's too expensive for a publicly-listed company with billion-dollar ambitions to hire an accountant? That almost sounds like a comedy routine:
SILICON VALLEY EXECUTIVE: Listen, IJustThoughtOfSomething.com is the hottest thing on the internet. We're so huge it hurts... I can't even walk to my corner bodega without women throwing me their phone numbers!
INVESTOR: I'd love to invest. Can I see your numbers from last year?
SILICON VALLEY EXECUTIVE: Well, that's just the thing. We painted the bathrooms last March, and then we also had that Vitamin Water machine put in the lounge. You know, the one next to the ping-pong table? So we just didn't have any money left over for an accountant. But I estimate our revenues for 2014 to be $4.2 billion.
INVESTOR: Sounds hot! Where do I send the check?
There's just no benefit that the JOBS Act brings to an honest startup company. In fact, it puts an honest company at a severe disadvantage, because now it has to compete against other, less scrupulous companies that can simply make their projections up on the backs of envelopes.
This is like formally eliminating steroid testing for the first five years of a baseball player's career. Yes, you can pretty much bet that you'll see a lot of home runs in the first few years after you institute a rule like that. But you'd better be ready to stick a lot asterisks in the record books ten or fifteen years down the line.
In the same way, get ready for an avalanche of shareholder suits ten years from now, since post-factum civil litigation will be the only real regulation of the startup market. In fact, there are already supporters talking up future lawsuits as an appropriate tool to replace the regulations being wiped out by this bill.
The JOBS Act seems like it will invite a replay of the disastrous tech-stock bubble of the late nineties. That mess was made possible by a historic collapse in accounting standards, with the great investment banks the pioneers of the collapse. In the old days, in the fifties and sixties for instance, you would never take a company public that wasn't profitable at the time of the IPO, or didn't have a multi-year track record of solid revenues.
When the banks stopped insisting on proven track records or real profitability before taking a company public, there was a sudden explosion of stock-market investment into heretofore unknown internet firms. Companies with no track records went from having literally no revenues at all to having five or six billion dollars' worth of market capitalization overnight. Banks explained that the new way to measure a company was by the quality of its ideas, not boring old indicators like revenues.
Even Alan Greenspan told the world that technology had made such great advances that the traditional laws of economics no longer applied, that there was "new paradigm," and that it was possible to have long-term growth without inflation. He essentially told the world that the bubble wasn't a bubble, because all that phony growth was not phony at all, it was just a whole bunch of people properly evaluating great new ideas, albeit before they had actually performed.
And we later found out, of course, a lot of that value wasn't value at all. And a lot of that sharp growth in the nineties was actually caused by complex fraud schemes like "spinning" and "laddering,", wherein banks artificially pumped up startup stocks in exchange for future business, or rigged the IPOs so that they would have fake "bumps" in investment at pre-arranged times.
Sometimes the companies themselves were the victims in the fraud scams, and sometimes the company executives were beneficiaries of fraud. But in virtually all of these schemes, the casual investor was the big dupe in the con. When the dot-com bubble finally collapsed, costing the world about $5 trillion in losses, the major victims were ordinary people. We can expect a replay of the same thing now, only on a much bigger scale.
The finance world is buzzing over this bill. The reactions I've heard so far range from minutes-long guffaws of dark laughter to bloodcurdling, I-can't-freaking-believe-they-went-this-far outrage. "I thought I had lost the ability to be shocked," one friend of mine, a former regulator, told me this weekend, chuckling at the sheer stones it took to push the law. "But this thing is just inspired. They broke the mold with this one."
There are some crazy side-stories that I'll get to later in the week, including the hilarious influence certain preposterous individuals had in pushing this bill (most notably Steve Case, former co-founder of AOL and a veteran of multiple accounting fraud scandals, who was recruited by both parties to lobby the bill). There are also some remarkable contradictions in the arguments the bill's supporters made when they pushed for the bill's passage. Anyway, more on this to come.
In the meantime, let's just say this is a dramatic step taken by Barack Obama. Nobody should have any illusions about where he stands on Wall Street corruption after this thing. Boss Tweed himself couldn't have done any worse.
Saturday, February 25, 2012
Taibbi: GOP makes 'circular firing squad' for lack of targets
Here's Taibbi's take-away from the GOP presidential primaries so far, culminating in the Arizona debate:
"This is where the Republican Party is now. They've run out of foreign enemies to point fingers at. They've already maxed out the rhetoric against us orgiastic, anarchy-loving pansexual liberal terrorists. The only possible remaining explanation for their troubles is that their own leaders have failed them. There is a stranger in the house!"This current race for the presidential nomination has therefore devolved into a kind of Freudian Agatha Christie story, in which the disturbed and highly paranoid voter base by turns tests the orthodoxy of each candidate, trying to figure out which one is the spy, which one is really Barack Obama bin Laden-Marx under the candidate mask![...]"These people have run out of others to blame, run out of bystanders to suspect, run out of decent family people to dismiss as Godless, sex-crazed perverts. They're turning the gun on themselves now. It might be justice, or it might just be sad. Whatever it is, it's remarkable to watch."
Or, as somebody else noted, even Ronald Reagan wouldn't be considered Reaganeque enough by today's hardcore rightwing electorate.
Not that my opinion or Taibbi's matters to Republicans, nevertheless, I've been trying to keep silent about just how crazy the available GOP choices are, so as not to jinx anything. Too bad it looks like Gingrich is out of the running. My next best choice is Rick "Every Sperm is Sacred" Santorum. (Fifty percent of American voters are women, you dumbass.) Of course Romney, the nominee apparent, will be fun to watch squirming as he denies perhaps his best achievement as governor of Massachusetts, "Romneycare."
Nope, nobody can pass the GOP's Primary Purity Test; but it's fascinating to watch them all try. Then it will be even more fun to watch the eventual nominee try and take it all back as he runs to the middle: "No, no, America. That's not what I meant! I'm not that crazy!"
By Matt Taibbi
February 23, 2012 | Rolling Stone
Sunday, November 20, 2011
Taibbi: Now I Love the OWS Protests
Although I do wish the OWS protests would "get specific" and really go after corrupt Wall Street banks as their name suggests, it's their prerogative to focus on some issues or none at all, because it's their protests. I'm not out there camping with them, that's for sure.
Also, as I said before, it's not really fair or realistic to expect this mass of mostly young people to have all the answers. They've done America quite a service, in fact, simply by saying, "This is f***ed up." As in, the system is fundamentally corrupt, money-driven and undemocratic. Their job is to beat that drum until enough people -- liberals included -- really get the message. They are right that an election or "issues campaign" won't solve anything.
They've done us a great favor by diagnosing America with terminal cancer. Collectively, it's up to us to find the cure.
Much more than a movement against big banks, they're a rejection of what our society has become.
By Matt Taibbi
November 10, 2011 | Rolling Stone
I have a confession to make. At first, I misunderstood Occupy Wall Street.
The first few times I went down to Zuccotti Park, I came away with mixed feelings. I loved the energy and was amazed by the obvious organic appeal of the movement, the way it was growing on its own. But my initial impression was that it would not be taken very seriously by the Citibanks and Goldman Sachs of the world. You could put 50,000 angry protesters on Wall Street, 100,000 even, and Lloyd Blankfein is probably not going to break a sweat. He knows he's not going to wake up tomorrow and see Cornel West or Richard Trumka running the Federal Reserve. He knows modern finance is a giant mechanical parasite that only an expert surgeon can remove. Yell and scream all you want, but he and his fellow financial Frankensteins are the only ones who know how to turn the machine off.
That's what I was thinking during the first few weeks of the protests. But I'm beginning to see another angle. Occupy Wall Street was always about something much bigger than a movement against big banks and modern finance. It's about providing a forum for people to show how tired they are not just of Wall Street, but everything. This is a visceral, impassioned, deep-seated rejection of the entire direction of our society, a refusal to take even one more step forward into the shallow commercial abyss of phoniness, short-term calculation, withered idealism and intellectual bankruptcy that American mass society has become. If there is such a thing as going on strike from one's own culture, this is it. And by being so broad in scope and so elemental in its motivation, it's flown over the heads of many on both the right and the left.
The right-wing media wasted no time in cannon-blasting the movement with its usual idiotic clichés, casting Occupy Wall Street as a bunch of dirty hippies who should get a job and stop chewing up Mike Bloomberg's police overtime budget with their urban sleepovers. Just like they did a half-century ago, when the debate over the Vietnam War somehow stopped being about why we were brutally murdering millions of innocent Indochinese civilians and instead became a referendum on bralessness and long hair and flower-child rhetoric, the depraved flacks of the right-wing media have breezily blown off a generation of fraud and corruption and market-perverting bailouts, making the whole debate about the protesters themselves – their hygiene, their "envy" of the rich, their "hypocrisy."
The protesters, chirped Supreme Reichskank Ann Coulter, needed three things: "showers, jobs and a point." Her colleague Charles Krauthammer went so far as to label the protesters hypocrites for having iPhones. OWS, he said, is "Starbucks-sipping, Levi's-clad, iPhone-clutching protesters [denouncing] corporate America even as they weep for Steve Jobs, corporate titan, billionaire eight times over." Apparently, because Goldman and Citibank are corporations, no protester can ever consume a corporate product – not jeans, not cellphones and definitely not coffee – if he also wants to complain about tax money going to pay off some billionaire banker's bets against his own crappy mortgages.
Meanwhile, on the other side of the political spectrum, there were scads of progressive pundits like me who wrung our hands with worry that OWS was playing right into the hands of assholes like Krauthammer. Don't give them any ammunition! we counseled. Stay on message! Be specific! We were all playing the Rorschach-test game with OWS, trying to squint at it and see what we wanted to see in the movement. Viewed through the prism of our desire to make near-term, within-the-system changes, it was hard to see how skirmishing with cops in New York would help foreclosed-upon middle-class families in Jacksonville and San Diego.
What both sides missed is that OWS is tired of all of this. They don't care what we think they're about, or should be about. They just want something different.
We're all born wanting the freedom to imagine a better and more beautiful future. But modern America has become a place so drearily confining and predictable that it chokes the life out of that built-in desire. Everything from our pop culture to our economy to our politics feels oppressive and unresponsive. We see 10 million commercials a day, and every day is the same life-killing chase for money, money and more money; the only thing that changes from minute to minute is that every tick of the clock brings with it another space-age vendor dreaming up some new way to try to sell you something or reach into your pocket. The relentless sameness of the two-party political system is beginning to feel like a Jacob's Ladder nightmare with no end; we're entering another turn on the four-year merry-go-round, and the thought of having to try to get excited about yet another minor quadrennial shift in the direction of one or the other pole of alienating corporate full-of-shitness is enough to make anyone want to smash his own hand flat with a hammer.
If you think of it this way, Occupy Wall Street takes on another meaning. There's no better symbol of the gloom and psychological repression of modern America than the banking system, a huge heartless machine that attaches itself to you at an early age, and from which there is no escape. You fail to receive a few past-due notices about a $19 payment you missed on that TV you bought at Circuit City, and next thing you know a collector has filed a judgment against you for $3,000 in fees and interest. Or maybe you wake up one morning and your car is gone, legally repossessed by Vulture Inc., the debt-buying firm that bought your loan on the Internet from Chase for two cents on the dollar. This is why people hate Wall Street. They hate it because the banks have made life for ordinary people a vicious tightrope act; you slip anywhere along the way, it's 10,000 feet down into a vat of razor blades that you can never climb out of.
That, to me, is what Occupy Wall Street is addressing. People don't know exactly what they want, but as one friend of mine put it, they know one thing: FUCK THIS SHIT! We want something different: a different life, with different values, or at least a chance at different values.
There was a lot of snickering in media circles, even by me, when I heard the protesters talking about how Liberty Square was offering a model for a new society, with free food and health care and so on. Obviously, a bunch of kids taking donations and giving away free food is not a long-term model for a new economic system.
But now, I get it. People want to go someplace for at least five minutes where no one is trying to bleed you or sell you something. It may not be a real model for anything, but it's at least a place where people are free to dream of some other way for human beings to get along, beyond auctioned "democracy," tyrannical commerce and the bottom line.
We're a nation that was built on a thousand different utopian ideas, from the Shakers to the Mormons to New Harmony, Indiana. It was possible, once, for communities to experiment with everything from free love to an end to private property. But nowadays even the palest federalism is swiftly crushed. If your state tries to place tariffs on companies doing business with some notorious human-rights-violator state – like Massachusetts did, when it sought to bar state contracts to firms doing business with Myanmar – the decision will be overturned by some distant global bureaucracy like the WTO. Even if 40 million Californians vote tomorrow to allow themselves to smoke a joint, the federal government will never permit it. And the economy is run almost entirely by an unaccountable oligarchy in Lower Manhattan that absolutely will not sanction any innovations in banking or debt forgiveness or anything else that might lessen its predatory influence.
And here's one more thing I was wrong about: I originally was very uncomfortable with the way the protesters were focusing on the NYPD as symbols of the system. After all, I thought, these are just working-class guys from the Bronx and Staten Island who have never seen the inside of a Wall Street investment firm, much less had anything to do with the corruption of our financial system.
But I was wrong. The police in their own way are symbols of the problem. All over the country, thousands of armed cops have been deployed to stand around and surveil and even assault the polite crowds of Occupy protesters. This deployment of law-enforcement resources already dwarfs the amount of money and manpower that the government "committed" to fighting crime and corruption during the financial crisis. One OWS protester steps in the wrong place, and she immediately has police roping her off like wayward cattle. But in the skyscrapers above the protests, anything goes.
This is a profound statement about who law enforcement works for in this country. What happened on Wall Street over the past decade was an unparalleled crime wave. Yet at most, maybe 1,500 federal agents were policing that beat – and that little group of financial cops barely made any cases at all. Yet when thousands of ordinary people hit the streets with the express purpose of obeying the law and demonstrating their patriotism through peaceful protest, the police response is immediate and massive. There have already been hundreds of arrests, which is hundreds more than we ever saw during the years when Wall Street bankers were stealing billions of dollars from retirees and mutual-fund holders and carpenters unions through the mass sales of fraudulent mortgage-backed securities.
It's not that the cops outside the protests are doing wrong, per se, by patrolling the parks and sidewalks. It's that they should be somewhere else. They should be heading up into those skyscrapers and going through the file cabinets to figure out who stole what, and from whom. They should be helping people get their money back. Instead, they're out on the street, helping the Blankfeins of the world avoid having to answer to the people they ripped off.
People want out of this fiendish system, rigged to inexorably circumvent every hope we have for a more balanced world. They want major changes. I think I understand now that this is what the Occupy movement is all about. It's about dropping out, if only for a moment, and trying something new, the same way that the civil rights movement of the 1960s strived to create a "beloved community" free of racial segregation. Eventually the Occupy movement will need to be specific about how it wants to change the world. But for right now, it just needs to grow. And if it wants to sleep on the streets for a while and not structure itself into a traditional campaign of grassroots organizing, it should. It doesn't need to tell the world what it wants. It is succeeding, for now, just by being something different.
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