Oppressed peasant and champion of the laboring man (despite being himself a highly paid journalist and graduate of Brown) Kevin Roose gate-crashed a financial industry’s private club party at the St. Regis, and was shocked, shocked to find joking about the financial crisis (and cross dressing) going on.
Roose indiscreetly waved his cell phone around, recording songs and monologues, and taking snapshots, until they finally recognized him as an interloper and threw him out.
As I walked through the streets of midtown in my ill-fitting tuxedo, I thought about the implications of what Iâ€™d just seen.
The first and most obvious conclusion was that the upper ranks of finance are composed of people who have completely divorced themselves from reality. No self-aware and socially conscious Wall Street executive would have agreed to be part of a group whose tacit mission is to make light of the financial sectorâ€™s foibles. Not when those foibles had resulted in real harm to millions of people in the form of foreclosures, wrecked 401(k)s, and a devastating unemployment crisis.
The second thing I realized was that Kappa Beta Phi was, in large part, a fear-based organization. Here were executives who had strong ideas about politics, society, and the work of their colleagues, but who would never have the courage to voice those opinions in a public setting. Their cowardice had reduced them to sniping at their perceived enemies in the form of satirical songs and sketches, among only those people who had been handpicked to share their view of the world. And the idea of a reporter making those views public had caused them to throw a mass temper tantrum.
The last thought I had, and the saddest, was that many of these self-righteous Kappa Beta Phi members had surely been first-year bankers once. And in the 20, 30, or 40 years since, something fundamental about them had changed. Their pursuit of money and power had removed them from the larger world to the sad extent that, now, in the primes of their careers, the only people with whom they could be truly themselves were a handful of other prominent financiers.
Perhaps, I realized, this social isolation is why despite extraordinary evidence to the contrary, one-percenters like Ross keep saying how badly persecuted they are. When youâ€™re a member of the fraternity of money, it can be hard to see past the foie gras to the real world.
Traditional WASP culture, any Ivy League graduate should know perfectly well, is not utterly and completely built around hard work, steady habits, and the Protestant Ethic. It occasionally lapses into self-mockery and carnival.
WASP culture has a recognizable penchant for creating extremely socially exclusive, but purely farcical, tongue-in-cheek “secret” societies devoted to holding occasional banquets featuring abundant alcohol, comedy sketches, and cross dressing.
The Financial Industry’s Kappa Beta Phi is clearly an institution created on the basis of the same impulses, and operating the same way, as San Francisco’s Bohemian Club. Membership in this sort of club is a rare honor, awarded only to persons famous and eminent, but it is also entirely a joke.
You clearly couldn’t have a mock secret society of progressive journalists with its own annual comedy dinner. They take themselves too seriously, and are too poorly informed to be capable of accurately identifying the causes of current events like the great recession. Kevin Roose thinks it was the financial industry’s “foibles,” rather than federal meddling in real estate finance followed by Obamacare, which produced “real harm to millions of people in the form of foreclosures, wrecked 401(k)s, and a devastating unemployment crisis.” He would never get the point of a comedy routine, mocking the failure of the News Industry to properly vet a radical democrat candidate for the presidency.
That’s what this Occupy Wall Street protestor learned in college, and he says that you should pay his tuition for him… just because that’s what he wants.
Besides, he knows that billionaires are getting a lot of money, just out of greed, and he’s learned on-line that “they pay twenty five cents in taxes for every dollar we’re taxed.” Except this young man undoubtedly doesn’t pay income taxes. But what does that matter, you can say whatever you want, he has his couple of sound bites and he wants free tuition.
The left is protesting Wall Street while Barack Obama continues to whip up popular resentment of the US financial industry, but the massive regulation of that industry effectuated by Sarbanes-Oxley and Dodd-Frank are already making sure that liberals are not going to have the world center of finance capitalism based conveniently in Lower Manhattan when they feel like kicking it around some more.
As the Wall Street Journal reported yesterday, Wall Street is in serious decline. Jobs are evaporating.
New York City’s securities industry could lose nearly 10,000 jobs by the end of 2012, New York state’s comptroller predicted, a painful blow to the area’s economy and government budgets.
New York City’s securities industry could lose nearly 10,000 jobs by the end of 2012, New York state’s comptroller predicted, a painful blow to the area’s economy and government budgets, Aaron Lucchetti reports on Markets Hub. Banks in the New York area are also poised to shed jobs. Photo: AP.
In a report set to be released Tuesday, Comptroller Thomas P. DiNapoli also said bonuses are likely to shrink this year, reflecting lower profits on Wall Street.
Since January 2008, the securities industry in New York has seen 22,000 jobs evaporate. If Mr. DiNapoli’s prediction of 10,000 more jobs losses between August 2011 and year-end 2012 comes true, that would represent a decline of 17%. About 4,100 jobs have been eliminated since April, and deeper cuts are widely seen as inevitable given a recent flurry of corporate expense-trimming announcements.
There is a 1:1 relationship between recent federal regulations and Wall Street’s decline. Disgruntled lesbian rockers who think that capitalism has not been properly compensating them will soon have to go demonstrate in London and Abu Dhabi.
There is a new Tumblr site responding to the people claiming to be the 99% featuring responses from members of the 53% who actually pay taxes. Some of the postings are pretty eloquent. Good going, Brittney.
Lawrence Myers explains the dynamic that makes people become grievance-afflicted members of the crowds demonstrating against the financial industry.
Unhappy people become Liberals. People seek out those that are similar. Birds of a feather flock together. An unhappy person looks around and sees two groups: happy people, and unhappy people. Rather than take a page out of the former group, enter the herd and ask for (and likely receive) help and guidance on how to become happy, the person is more likely to choose the path of least resistance â€” of instant acceptance. â€œCome to Mumsy, darling, youâ€™re one of us.â€ And once in the herd, it becomes very, very difficult to leave it.
The Liberal, of course, will deny this pathology. No, they say, they are only trying to make things fair. Liberals are consumed with fixing the world. By eliminating what is unfair, by eliminating the evil banks and the greedy corporations, all the little people will receive what is rightfully theirs! (Subconsciously, then, nobody will be more successful than they are.) So twisted with hate, and so convinced of their own inefficacy, they cannot even rely on themselves to overthrow The Other. They hand over their own power to a third party â€” the government â€” to do their dirty work in the form of the confiscatory process of increased taxation and regulation.
Liberals, however, have got it turned around. They seek to heal the world before healing themselves first. They see this as somehow noble, great sacrifice. Well, itâ€™s easy to make a sacrifice when you regard yourself as valueless. Beyond this, however, every major religion, and the mythology across almost every culture, instructs man to take care of himself first, and then attempt to heal the world.
Who is out there demonstrating against the American financial system?
J.D. Samson, a representative Boho artist, explains just how badly the capitalist system has failed her.
Like so many teenagers, I believed in the “American Dream,” that I could move to New York from the Midwest and become an artist. I would achieve both fame and success, and I would never have to think about money. The first half was true. I made art and lived activism, and I achieved amazing amounts of success that I feel incredibly proud of. The second half, not so much. I have been able to live well, eat well, invest in my arts and make my own schedule, but I forgot to save money and think about my future.
This summer I tried to rent an apartment in Williamsburg, Brooklyn. The process sent me into an emotional crisis and awakened me into a whole new realization of our economy, the music industry at large and, more specifically, what it means to be a queer artist in 2011.
I spent days trolling around Williamsburg, looking at shitty apartments with cockroaches lining the doorways, fighting neighbors, rats in the ceiling, bedbugs infesting the linoleum floors, fifth-floor walk-ups and cat-pee-soaked carpets. The rent was exorbitant, availability was scarce, and I was turned down by two different landlords for being “freelance.” To be honest, I don’t blame them. Not only am I freelance, but I’m lesbian freelance. Double whammy. What was the reason they turned me down? Because it was easier to rent to a rich, trust-fund, straight-guy banker who wants to live in the coolest borough in the world? Because when he met me he saw a tattooed gender outlaw who makes “queer electronic punk music” and isn’t sure when the next check is going to come in? Yeah, I don’t blame him. He doesn’t give a shit about how kids email me all the time thanking me for keeping them from committing suicide. It’s not part of his capitalist business practice.
I surround myself with amazing and talented people, people who have made it in every sense of those words. They buy apartments, invest in their futures successfully, have children, save money. How do they do it? How can I keep up with them?
So I have to ask myself: where did I go wrong? And I can only guess that the answer lies in a combinations of three things: 1) my family is not rich, 2) I am a queer woman, and 3) I am trying so desperately to keep up with my peers that I am living beyond my means. …
I’m so lucky to have gained so much from my life and my amazing career, but I’m ready to feel secure. I’m ready to build my future and save money so that I can have a family, so that I can enjoy making art and not trying to create a product out of it, so that I can spend more time being present and less time being a workaholic, frantically searching for the profitable answer. And if I need to, I’m ready to get a job, go to work in the morning, get a paycheck once a week, go to the dentist, get a check-up, bottom out to a boss and appreciate music without being worried that I can’t keep up.
We live in a society where people equate success with money. They see me on the pages of Vogue. They see me playing to an adoring crowd. They see me flying to gigs all across the world. And I’m not sure what people imagine, but I’m struggling, too. Over the past couple of weeks, I have realized how many other artists and musicians are in my position, people who are proud of their success but feel unable to continue, based on financial strain. Artists such as Spank Rock, Das Racist and the Drums have featured lyrics on their new records about struggling financially. My band MEN put out a record in February with similar tones. I know the economy is failing, but I think it is important to remember that it is failing for everyone. Even the people you think might have money. So here we go. Another reason to come together. Another reason to occupy Wall Street. Another reason for change.
Hat tip to Jonah Goldberg.
Frances Fox Piven (a government-salaried university professor) addresses the crowd.
Older and more respectable (i.e. employed) lefties weren’t occupying Wall Street. Instead, they were smiling happily and fantasizing about the Revolution, or at least another great big wave of punitive regulation and taxation, as the young, the dumb, and the Bohemian took to the streets in Lower Manhattan to protest against Wall Street and the bankers.
Somebody gave those protesters the wrong address.
If they want to wave signs and shout slogans at the people really responsible for our economic problems, they ought to be protesting in front of the offices of their own educators, the same people who overcharged them and left them quite commonly without either wisdom or marketable skills, but buried in student loans.
Those protestors are typically college graduates, and there they are on the streets, bearing allegiance to political sentiments and theories alien to their own country’s fundamental values and traditions. They are overloaded with fashionable poses and slogans, but are perfectly innocent of serious political philosophy. They don’t like their own country’s political and economic system, institutions, and history, but they might think very differently if they had ever actually been informed accurately what any of those things are.
If those protestors knew enough of history and economics to associate the material prosperity and technological progress that they are accustomed to with the free economic system that produced them, if they even had been given enough of an adult understanding of the world that they could understand that business corporations, like Wall Street banks, are not, and cannot possibly be, charities, they would not be protesting where they are.
Wall Street did not cause the recession. Government caused the recession (by following the same left-wing philosophy that those protestors and the people who educated them embrace) by inadvertently grossly inflating home real estate prices, as the product of efforts to make long-term mortgage financing ever more widely and easily available. Government has worsened, and prolonged the recession, by dramatically meddling in the economy in the area of health care, by adding to the regulatory burden, and by generally increasing uncertainty. All of the damage was done on the basis of precisely the same ideas and philosophy that those demonstrators are trying to advance.
If all those kids, drop outs, poets, and Bohemians had the benefit of a decent education; if they actually understood history, economics, and political philosophy; if they understood how the world actually works and what banks do; none of them would be where they are doing what they are doing.
The New York Times rejoiced in the passage of the massive and occult 2300-page Financial Reform Bill with its customary propagandistic progressive nonsense.
Congress approved a sweeping expansion of federal financial regulation on Thursday, reflecting a renewed mistrust of financial markets after decades in which Washington stood back from Wall Street with wide-eyed admiration.
The bill, heavily promoted by President Obama and Congressional Democrats as a response to the 2008 financial crisis, cleared the Senate by a vote of 60 to 39, largely along party lines, after weeks of wrangling that allowed Democrats to pick up the three Republican votes to ensure passage.
The vote was the culmination of nearly two years of fierce lobbying and intense debate over the appropriate response to the financial excesses that dragged the nation into the worst recession since the Great Depression.
The result is a catalog of repairs and additions to the rusted infrastructure of a regulatory system that has failed to keep up with the expanding scope and complexity of modern finance.
Over the last half-century, as traders and lenders increasingly drove the nationâ€™s economic growth, politicians of both parties scrambled to get out of the way, passing a series of landmark bills that allowed financial companies to become larger, less transparent and more profitable.
Usury laws were set aside. Banks were allowed to expand across state lines, sell insurance, trade securities. The government watched and did nothing as the bulk of financial activity moved into a parallel universe of private investment funds, unregulated lenders and black markets like derivatives trading.
That era of hands-off optimism was gaveled to an end on Thursday as the Senate gave final approval to a bill that reasserts the importance of federal supervision of financial transactions.
The financial crisis, of course, had absolutely nothing to do with usury, banks expanding across state lines, selling insurance, or trading securities. The crisis had everything to do with mortgage lenders who, rather than being unregulated, were specifically federally required to make more risky loans to persons with dubious credit. At the center of the current financial crisis are the federally-created mortgage corporations and they are completely overlooked by the new legislation.
As the Wall Street Journal explains our saviours are now going to protect us with a bevy of new agencies and a blizzard of yet-to-be-defined regulations, to be worked out later behind closed doors.
The bill, to be signed into law soon by President Barack Obama, marks a potential sea change for the financial-services industry. Financial titans such as J.P. Morgan Chase & Co., Goldman Sachs Group Inc. and Bank of America Corp. may be forced to make changes in most parts of their business, from debit cards to the ability to invest in hedge funds.
Congress approved a sweeping rewrite of rules that touch every corner of finance in the biggest expansion of government power over banking and markets since the Great Depression.
The Senate passed the bill 60-39 Thursday, following House passage last month. Earlier in the day, three northeastern Republicans joined with Democrats to block a filibuster, allowing the bill to squeak through.
Now, the legislation hands off to 10 regulatory agencies the discretion to write hundreds of new rules governing finance. Rather than the bill itself, it will be this processâ€”accompanied by a lobbying blitz from banksâ€”that will determine the precise contours of this new landscape, how strict the new regulations will be and whether they succeed in their purpose. The decisions will be made by officials from new agencies, obscure agencies and, in some cases, agencies like the Federal Reserve that faced criticism in the run-up to the crisis. …
The legislation creates a council of regulators to monitor economic risks; establishes a new agency to police consumer financial products; and sets new standards for the way derivatives are traded. â€œThese reforms will benefit the prudent and constrain the imprudent,â€ Treasury Secretary Timothy Geithner said in a press conference. â€œStrong banks, the well-managed financial innovators, will adapt and thrive under the new rules of the road.â€
Republicans said the bill could jeopardize the recovery by constraining credit and crimping the banking industry, and chided the expansion of government power it envisions.
The bill â€œis a 2,300-page legislative monsterâ€¦that expands the scope and the powers of ineffective bureaucracies,â€ said Sen. Richard Shelby (R., Ala.).
Itâ€™s all a farce, of course. The professional political class is simply taking advantage of the financial crisis it created itself to ride to the supposed rescue and carve itself out another huge chuck of power over the economy.
Well-connected people with the right kinds of background and education will regulate in collusion with the wealthiest and most influential financial industry players, friends of the system in Washington will get favors, their less-well-connected competitors will get the shaft, higher entry barriers will be put into place, and regulators when they leave office will move on to more lucrative positions and consultancies. The powers that be will prosper and the public will pay.
Still the financial system will survive:
Kate Sullivan: One day weâ€™ll smarten up and pass some laws and put you out of business.
Lawrence Garfield: They can pass all the laws they want. All they can do is change the rules. They can never stop the game. I donâ€™t go away. I adapt.
â€”Other Peopleâ€™s Money (1991)
By JDZ Comments Off on America Gets Financial Reform | Permalink
John Heilemann is a progressive, and thus believes that Wall Street greed and deregulation, not government mortgage policies, caused the financial crisis, Obama saved capitalism when he should perhaps have simply nationalized the entire financial industry, and those deluded bankers don’t understand the righteous anger of the workers and the peasants. It is the moderate Obama, you see, that has been standing between them and the pitchfork-waving mob.
Personally, I think all that is a crock, but Heilemann’s gossipy account of the politics of Wall Street “reform” is amusing, and I do believe that he is accurately reporting the Street’s disenchantment with the Chosen One. I’d say where those bankers were clueless was back in 2008 when they allowed image, demeanor, and style to persuade them to believe that ideas and political polarities don’t really matter.
The speed and severity of the swing from enchantment to enmity would be difficult to overstate. When Obama was sworn into office, Democrats on Wall Street rejoiced at the ascension of a president in whom they saw many qualities to admire: brains, composure, bi-partisan instincts, an aversion to class-based combat. And many Wall Street Republicansâ€”after witnessing the horror show that constituted John McCainâ€™s response to the financial crisisâ€”quietly admitted relief that the other guy had prevailed.
Today, itâ€™s hard to find anyone on Wall Street who doesnâ€™t speak of Obama as if he were an unholy hybrid of Bernie Sanders and Eldridge Cleaver. One night not long ago, over dinner with ten executives in the finance industry, I heard the president described as â€œhostile to business,â€ â€œanti-wealth,â€ and â€œanti-capitalismâ€; as a â€œredistributionist,â€ a â€œvilifier,â€ and a â€œthug.â€ A few days later, I recounted this experience to the same Wall Street CEO whoâ€™d called the Volcker Rule a testicular blow, and mentioned Iâ€™d been told that one of the most prominent megabank chiefs, who once boasted to friends of voting for Obama, now refers to him privately as a â€œChicago mob guy.â€ Do all your brethren feel this way? I asked. â€œOh, not everybodyâ€”just most of them,â€ he replied. â€œJamie [Dimon]? Lloyd [Blankfein]? They might not say Obamaâ€™s a socialist, but they come pretty close.â€ …
At Goldman and elsewhere, the belief is strong that the case against Wall Streetâ€™s most storied firm was politically motivated; lately, Blankfein has taken to trashing Obama to his friends in unusually brutal personal terms. Dimonâ€”who is fond of declaring, â€œIâ€™m a patriot!â€ in meetings with White House officialsâ€”recently described himself publicly as â€œa wavering Democrat.â€
And even those less bruised than them have found the experience traumatizing. â€œTheyâ€™re not accustomed to being engaged in politics this way,â€ says a private-equity investor. â€œTheir skin isnâ€™t toughened. They actually take [the attacks by Obama] personally. This is a profession with a lot of smart people, but who arenâ€™t necessarily terribly introspective. They think they actually deserve to make all this money. So any attack on their livelihood is, ahem, unpleasant.â€
Maybe it was inevitable that the dewy-eyed affair between Wall Street and the White House would so quickly and nastily come a cropper. For more than 30 years, the approach of every administration to the financial industry has been either laissez-faire or actively deregulatory. On the left, much blame is placed at the feet of Clinton, Rubin and his then-deputy, Summers, but in truth they were merely part of a continuum that stretched back to Jimmy Carter. Considering how close the financial system came in 2008 to Armageddon, the consensus for imposing new rules and greater order was nearly universal (among the sane, at least). Yet that does little to lessen the sense of shockâ€”of violation, reallyâ€”that Wall Street feels. …
There are those who reckon that, what with the wailing and gnashing among both the plutocrats and the populists, Obama has actually found the political sweet spot. â€œMain Street is mad at the president because heâ€™s too close to Wall Street, and Wall Street is mad at him because heâ€™s too populist,â€ Altman says. â€œTherefore, almost by definition, heâ€™s in the right place.â€
Yet the political and financial implications of the rift between Obama and Wall Street may be significant. Already, Goldman, JPMorgan, UBS, and many other financial-services firms are shifting their contributions toward the GOP. Not long ago, a big-time Obama Wall Street fund-raiser asked his go-to guy at one of the megabanks that had lavishly supported the candidate in 2008 what level of donations the president might expect from the firmâ€™s people in 2012. The answer was less than a tenth of the previous total.
Frank Luntz debunks the democrats’ supposed financial “reform” at Huffington Post of all places. This editorial would fit just fine on any conservative blog site.
The New York Times’ headline said it all: “Off Wall St., Worries About Financial Bill”. The Democrats in Washington may think it’s a slam dunk, but the rest of America doesn’t agree.
Look, those who are on the side of significant financial reform are fighting on the side of the angels — and with broad public support. We are fed up with Wall Street abuses and arrogance that makes life for the rest of us on Main Street more difficult. Let’s hold people and businesses more accountable and responsible for what they do and how they do it.
But that doesn’t suddenly equate to support for the legislation now being considered by the Senate. In exactly the same way that the public wanted healthcare reform, just not Obama’s healthcare reform, they want something done to punish the perpetrators of the financial meltdown, but not at the expense of their own checking accounts — or American economic freedom.
The dirty secret of the Senate financial reform bill is that some of its biggest supporters work on Wall Street. Recipients of taxpayer bailout money have no concerns about the bill — in fact, the CEOs of Citi and Goldman Sachs have publicly endorsed it, and several of the other big banks have expressed support. It keeps the “too big to fail” guarantees in place for another generation of financial services companies.
But here’s where it gets really interesting. The Democrats supporting the current legislation have assured an anxious electorate that whatever funds are used to create whatever regulatory scheme created will come from the banks, not the taxpayers. Let me emphasize that so that even casual readers will catch it: the Democrats promise that you won’t pay for their legislation, banks will.
Since when have corporations ever paid taxes, fees or penalties? Employees end up paying in the form of lower salaries and benefits. Customers end up paying in the form of higher costs.
And in this case, every account holder will be forced to pay higher fees on their checking account and savings account. That’s you, my friendly reader. Can you say “checkbook tax”? I can, and I think lots of candidates will be saying it come November. Is that what you really want to do to your constituents, Senator Lincoln? Is that what you really want to explain on the campaign trail, Senator Bennett?
But it goes deeper than just taxation and regulation. Wall Street can pass it all onto consumers. Main Street cannot. And that’s because Wall Street firms have all those pesky well-connected, nicely dressed lobbyists to ensure that whatever is passed strengthens their hand at the expense of the little guy.
Regardless of what side you’re on, the financial reform bill is special interest heaven — a bill written by lobbyists, for lobbyists, and will probably be implemented by lobbyists. The Dodd bill has carve-outs right from the get-go. Real estate agents, title companies, the Farm Credit system, even Fannie Mae and Freddie Mae are exempt from its onerous and costly provisions. And for everyone else, it’s been a special interest feeding frenzy.
More than 130 companies have publicly hired lobbyists seeking their own loophole. Mars Candy wants to continue to use derivatives to hedge against price hikes in sugar and chocolate, so they’ve hired a lobbyist. Harley Davidson wants to protect dealer financing of their bikes, so they’ve hired a lobbyist. And eBay wants to not harm its subsidiary, PayPal, so they’ve hired … well … a team of lobbyists.
But most average Americans — the ones who bailed Wall Street out in the first place — cannot afford lobbyists, and won’t be exempted from the legislation.
There’s a reason why American trust in government is at an all-time low. Voters believe legislation like this is passed not for the public interest, but for special interests. And that is certainly the case with the Dodd bill.