Newsmen Selling Bogus News, Foxes Guarding Henhouses, Non-Profits Rigged For Profit

How the public is brainwashed:

This story is from AutoStraddle.

How the criminals who corrupted the economy and the markets also managed to corrupt the regulatory system put in place to keep them in check:

This story is from Reuters.

How “business think” corrupted one great non-profit, the American Red Cross:

This story is from ProPublica.

Since when are news organizations supposed to disinform the public?

Since when are regulators supposed to cover up crimes?

Since when are aid organizations supposed to keep their money by avoiding their mission?

We live in a far different America than we had 30 or 40 years ago. Both sides say they want to restore America, but it’s clear that the party now led by the guy with orange hair is more intent on driving it further into the ditch.

Kiss Up, Kick Down

What does it say about our modern values that we always give the benefit of the doubt to the wealthy and assume the worst about the poor? Here's an article from the Guardian about how we punish the poor for being poor.

Everybody agrees it’s wasteful to throw money at the poor. A lazy way of thinking. But the rich? So much is given to them you couldn’t begin to throw it, it has to be delivered in semi trucks, in supertankers. Everybody’s giving money to them, so it must be a good thing. That’s lazy too, and wasteful in much larger amounts. The rich get so much it seems to justify giving them everything. Rich people pass us in the street and without thinking we hand them the contents of our wallets. We buy them drinks and lunch, pay their parking meters, polish their cars, kiss their feet. Here's an article from Vox describing how the rich get richer no matter how lousy they are at their jobs, assuming they have one.

Poor people, though? Ugh. Let’s criminalize poverty. Let’s fine them for being poor and charge them a fee for being unable to pay the fine and imprison them when they cannot pay the fee for nonpayment of fines. This accomplishes two things: it teaches the poor a lesson––not to to be poor––and it adds to the enormous profits we pay to the for-profit prison industry and its wealthy shareholders.

Our society is so clever though. Always innovating. Inventing new ways to kiss up and kick down. Devising new methods for discouraging and penalizing the poor who are already discouraged and penalized and new rituals for worshipping the rich.

Our urban landscape has a new feature: spikes to prevent the homeless from lying down to sleep.

New apartment buildings are being built with separate doors for the rich and the poor. (This way the developers get a tax break for housing us poor folks without forcing the rich to tolerate our company in the elevator.)

Our society used to dish out indignity to one easily identified segment of the population, people with darker skin. The system was called Jim Crow. What will we call this new system?

Sadly, our vocabulary is deficient. We aren’t innovating there. We don’t have words that adequately describe this galloping unfairness. Why? Because in our kissing up we are careful not to cause offense to our betters. We don’t want to hurt the feelings of the rich by explaining how monstrous their privileges are. We don’t want to understand the ways they are robbing us all blind.

Let’s get to work on a fairer vocabulary. Terms like “wage theft” are just coming into use. Let’s see it used more often. Until it was labelled as theft, it seemed perfectly legal for rich employers to do what they were doing. We need to use our language. It’s the only weapon we have left.

“The salient fact of American politics is that there are fifty to seventy million voters each of who will volunteer to live, with his family, in a cardboard box under an overpass, and cook sparrows on an old curtain rod, if someone would only guarantee that the black, gay, Hispanic, liberal, whatever, in the next box over doesn’t even have a curtain rod, or a sparrow to put on it.” ~Davis X. Machina

Hedge Fund Billionaires are Saints and Schoolteachers are Greedy Bastards

So, let's try and understand this...

Fifth grade teachers and firefighters who rescue kittens from trees are greedy bastards.

And hedge fund billionaires are saints devoted to the wellbeing of the community.

I will pause while your mind explodes.

This is really happening. Voters in Rhode Island have elected a fearless crusader who is going after the greedy schoolteachers on behalf of the heroic hedge funds.

The people who worked their whole lives on behalf of the community, teaching children, fighting fires, cleaning streets, policing parks, taking less pay in exchange for a pension, are actually terrible selfish greedy monsters who must be reined in and their retirement must be confiscated by the good, honest, crusading friend of Wall Street who is working diligently to return those pension dollars to the offshore bank accounts of the brave, honest hedge fund billionaires who know best what to do with that money.

Up is down. Good is bad. Greed is admirable. Unselfishness must be punished. Jesus was wrong. Hitler was right. ...Wait a minute, Obama is Hitler... I'm confused.

What do we know for certain?

Questioning billion dollar bonuses for Wall Street bankers is like lynching. We know that. It was in the papers the other day.

ObamaCare is like what Hitler did to the Jews. That was in the paper the other day too.

The CEO of Goldman Sachs is more saintly than Mother Teresa. That was also reported this week.

Mr. Rogers, who talked about kindness and unselfishness, was a sick individual who sapped the life force from two generations of Americans. I heard that on FoxNews.

And, yes, public school teachers and firefighters are horrible greedy bastards. It's been widely reported.

It's so hard to keep a solid grip on reality, on our values. Luckily America has talk radio to tell us what to believe.

Between $20 and $30 TRILLION are hidden offshore by the Super Rich

"The very existence of the global offshore industry, and the tax-free status of the enormous sums invested by their wealthy clients, is predicated on secrecy," according to James Henry, former chief economist for the global business consulting firm McKinsey.

This is the financial club Mitt Romney belongs to.

This story broke on the front pages of the British newspapers The Guardian and The Observer over the weekend. The articles discuss the burden wealthy tax evaders place on everyone else, not just by evading taxes but by removing their massive cash hoards from the economies where they earned them (and evaded taxes). The amount of hoarded cash is greater than the GDPs of Japan and the US combined. Need a reason for the global recession? This is it.

The summary in the Guardian

The details, in the Guardian

The world of private banks where our economy is being held hostage

Analysis of the problem

The white paper with all the numbers

Mitt Romney is the poster child for this elite group of super rich. They may have homes in this country, but their wealth is safely offshore where what they earn can't be touched to build roads or schools or hospitals. Or, for that matter, to pay the lifetime of healthcare for wounded veterans. They are above obligation to any country, especially the United States. We all try to minimize our tax bill, but for people like Romney it is a major effort of evasion that employs many banks and very complex schemes.

The article about Romney's tax havens in this month's Vanity Fair

The question then is: should Mitt Romney be running instead for the presidency of Bermuda?

Or the Cayman Islands? Or the Bahamas? Or Switzerland? It doesn't really matter what it says on his birth certificate. What matters is what it says on his tax returns. Where is he invested? Whose economy does he care about? Does he fulfill the basic duty of citizenship, the duty we all fulfill? Does he pay the taxes that pave the roads and educate our kids? Or does he evade them?

This matters.

The collusion of the big banks to rig global interest rates matters.

The involvement of major banks in money laundering for international terrorists and drug cartels matters too.

What's disturbing is they are laundering billions for ordinary American billionaires as well, helping them hide what they earn from the tax obligations that are a vital part of citizenship.

Why LIBOR Matters

“Fraud is a crime in ordinary business — why shouldn’t it be so in banking?” ~George Osborne, British Chancellor of the Exchequer

An enormous fraud has come to light in London, affecting trillions of dollars quietly stolen from bank accounts and loan accounts worldwide. Money stolen from you. It involves a rate formula called LIBOR. The L stands for London, but the London rate sets bank to bank lending worldwide, and bankers have been rigging that rate, fiddling it, manipulating it to earn themselves trillions of illegal gains over the past decade. It helped trigger the financial collapse of 2007-2008 by phonying the numbers and hiding the weaknesses in large banks. This is the kind of corruption enabled by the relaxing of financial regulation ushered in by George W. Bush and by Republican power brokers like Senator Phil Gramm.

From The Economist:

"[Referring to LIBOR, the rating system that establishes interest rates for everyone who uses credit] "In reality, the system is rotten. First, it is based on banks’ estimates, rather than the actual prices at which banks have lent to or borrowed from one another. “There is no reporting of transactions, no one really knows what’s going on in the market,” says a former senior trader closely involved in setting LIBOR at a large bank. “You have this vast overhang of financial instruments that hang their own fixes off a rate that doesn’t actually exist.”

"A second problem is that those involved in setting the rates have often had every incentive to lie, since their banks stood to profit or lose money depending on the level at which LIBOR was set each day. Worse still, transparency in the mechanism of setting rates may well have exacerbated the tendency to lie, rather than suppressed it. Banks that were weak would not have wanted to signal that fact widely in markets by submitting honest estimates of the high price they would have to pay to borrow, if they could borrow at all."

In other words, only oversight and regulation (which Wall Street and the banks say they don't need) will keep them from stealing trillions from us.

Gretchen Morgensen of the New York Times: "Manipulating the Libor is a big deal because it affects the cost of money for almost everyone. The Libor is used to set rates on mortgages, credit cards and all manner of loans, personal and commercial. The amount of money affected by the phony rates is at least $500 trillion, British regulators have estimated."

Five hundred TRILLION.

"“We’re clean but we’re dirty-clean, rather than clean-clean,” an executive said in a phone conversation. Talk about defining deviancy down.

“Dirty clean” versus “clean clean” pretty much sums up Wall Street’s view of cheating. If everybody does it, nobody should be held accountable if caught. Alas, many United States regulators and prosecutors seem to have bought into this argument."

Interviewed in The Independent, Nobel Prize economist Joseph Stiglitz puts the scandal in its proper context. Isn't this what bankers do? Aren't bankers supposed to try to make money and profits? Yes, but... Corruption destroys the strength of an economy by diverting investments and activity away from producing goods and services and infrastructure to theft, to gaming weaknesses, to rigged gambling on rigged numbers.

"It's a textbook illustration," Stiglitz said. "Where there are these asymmetries a lot of these activities are directed at rent seeking [appropriating resources from someone else rather than creating new wealth]. That was one of my original points. It wasn't about productivity, it was taking advantage."

Elliot Spitzer knows this territory well. He used to investigate and prosecute these guys.

The Financial Times is by no means a leftist newspaper, but it is reporting this scandal very aggressively.

Gary Gensler, one of Obama's regulators, is one of the Good Guys trying to clean up the financial sector: “I don’t think the public should be left at risk of a trade association, with the most sophisticated, largest banks, setting a rate that’s so critical to our credit cards, our student loans, our mortgages... These benchmarks matter; we all lose if the markets aren’t reporting accurate information.”

One Financial Times columnist calls for getting rid of the current generation of leaders in the financial industry. He also calls for breaking up the big banks, because "Too Big To Fail" is also "Too Big To Jail."

Robert Reich does a good job of explaining why this should matter to average Americans, in The Guardian (a reliably good source of information on the corruption in markets. They also broke the story about how Rupert Murdoch's papers hacked into thousands of phones and corrupted Scotland Yard and the British government.)

"The typical saver or borrower on both sides of the Atlantic trusts that the banking system is setting today's rate based on its best guess about the future worth of the money. And we assume that the banks' guess is based, in turn, on the cumulative market predictions of countless lenders and borrowers all over the world about the future supply and demand for money.

"But if that assumption is wrong – if the bankers are manipulating the interest rate so they can place bets with the money we lend or repay them, bets that will pay off big for them because they have inside information on what the market is really predicting which they're not sharing with the rest of us – it's a different story altogether.

"It would amount to a rip-off of almost cosmic proportions – trillions of dollars that average people would otherwise have received or saved on their lending and borrowing that have been going to the bankers instead."

"It would make the other abuses of trust Americans have witnessed in recent years – predatory lending, fraud, excessively risky derivative trading with commercial deposits, and cozy relationships with credit-rating agencies – look like child's play by comparison."

Every honest economist, every honest banker, every honest politician, every honest journalist and reporter is taking this rigging of the financial markets, this enormous fraud, very seriously. The ones who are brushing it off or minimizing it or defending it or ignoring it are probably owned by the corrupt financiers themselves.

This fraud isn't confined to the London market. It affected trillions of transactions and resulted in many trillions of dollars defrauded from average households worldwide. It helped cause the financial collapse of 2007-2008, and has continued after that. The wizards of Wall Street continue to use this fraud to pay themselves billions in bonuses to this day.

“It is clear that what happened in Barclays and potentially other banks was completely unacceptable, was symptomatic of a financial system that elevated greed above all other concerns and brought our economy to its knees. Punish wrongdoing. Right the wrong of the age of irresponsibility.” ~George Osborne, British Chancellor of the Exchequer

It's an age of irresponsibility Obama is trying to end, and which the Republicans are determined to protect and extend.