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REMINDER: All investment, economics, and finance related material now appears at the new IaconoResearch.com. For the time being at least, this has become a personal blog covering a variety of mostly unrelated topics.
It’s not clear exactly what to make of this William Banzai 7-modified schematic of a Phillips Machine that is apparently based on something very real that came out of Cambridge University in the 1940s – a machine intended to mimic the economy.
There’s more on the orginal machine in this 2009 story at the New York Times and there’s even a YouTube video of the machine in operation, though you won’t see any Goldman Sachs buckets filling up with cash.
Zach Carter files this Huffington Post report on what is believed to be a concerted effort to make life difficult for Elizabeth Warren as she goes about setting up a consumer protection agency within the Federal Reserve per last year’s financial reform bill, the scheme allegedly masterminded by a former employee of everyone’s favorite vampire squid bank.
Ex-Goldman Banker Behind WSJ ‘Smear Campaign’ Against Elizabeth Warren
A Wall Street Journal editorial writer who has been closely involved with the paper’s recent attacks on Elizabeth Warren is a former Goldman Sachs banker. The same editorial writer, Mary Kissel, is readying another piece critical of Warren and the new consumer agency, according to a source familiar with the coming article.
Like most major newspapers, the Journal does not disclose the authors of its editorials. Kissel recently appeared on the John Batchelor radio show as a representative of the Journal’s editorial board do discuss Warren, and repeated the main arguments used in the editorials.
The editorials paint both Warren and the new Consumer Financial Protection Bureau as an immensely powerful, unaccountable organization. The nascent agency is assuming the consumer protection duties currently exercised by regulators at the Federal Reserve and the Office of the Comptroller of the Currency.
The author, Mary Kissel, worked for Goldman between 1999 and 2002 as a fixed income research and capital markets specialist.
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“There has definitely been an uptick in attacks on her and on the agency over the past few weeks, it’s hard to imagine it hasn’t been well-coordinated by somebody,” said a source close to Warren. “The smear campaign by The Wall Street Journal’s editorial board this week includes the most unfactual and outrageous hit pieces on her yet. If it’s true that the author of the editorials and Goldman Sachs coordinated on them, they should both be exposed and called to account.”
The main complaint about the agency is accountability since, as part of the Fed, it answers to no one but the too-big-to-fail banks that, for all intents and purposes, own the central bank. This is the reason that it has long been thought that the consumer protection bureau would be ineffectual, but it looks like Warren is doing her best to prove that theory wrong.
I’m only about half way through watching “Inside Job”, but it’s already clear why it won an academy award. Thanks to Documentary Heaven (and probably other online video sources) you can now watch it online and, hopefully, this will help the masses better understand what exactly led up to the events of 2008 (if you can’t hear it, turn your volume up – you won’t want to miss the opening remarks about Iceland followed by Peter Gabriel’s Big Time).
Of course, former Fed chief Alan Greenspan is prominently featured in the story (not in a good way) and the same sordid tale is told about how years of deregulation of the financial services industry on Wall Street combined with years of easy money from Washington offered only the fleeting illusion of long-term prosperity for most of the nation.
I’ve not yet read Matt Taibbi’s Griftopia, but I’m adding it to my list of books to get if for no other reason than that Taibbi makes the financial crisis and the many ills of the Wall Street-Washington economy so entertaining. Of course, another reason is chapter two titled “The Biggest Asshole in the Universe”, what this review at OpenLettersMonthly dubs a “phenomenal disemboweling” of former Fed Chairman Alan Greenspan.
Taibbi’s flourish about imagining the whole economy as a casino comes in Greenspan’s chapter. It’s appropriate, since Greenspan was given charge of vast swaths of economic policy during its conversion to a casino. Even in my senior year of high school’s introductory, half-semester course in economics, one of the few books we read was Maestro, Bob Woodward’s glowing account of the many supposedly perfect changes Alan Greenspan either made or directly advocated for, and got, during his tenure at the Fed. It never occurred to me as a 17-year-old, much less to America’s leading adult figures at the time, that entrusting one human with the entirety of American economic policy could cause some problems. Humans are flawed! And Taibbi would find Greenspan more flawed than most:
Greenspan’s rise is … a tale of a gerbilish mirror-gazer who flattered and bullshitted his way up the Matterhorn of American power and then, once he got to the top, feverishly jacked himself off to the attentions of Wall Street for twenty consecutive years–in the process laying the intellectual foundation for a generation of orgiastic greed and overconsumption and turning the Federal Reserve into a a permanent bailout mechanism for the super-rich.
It’s unclear if Wall Street was ever in the room while Alan Greenspan jacked off to its attentions for twenty consecutive years, but otherwise, Taibbi’s characterization works. Because the man with the most power to determine American economic policy was an ideologue: A one-time member of anti-government extremist Ayn Rand’s inner circle who used his powers as Fed chairman, and his persuasive lobbying abilities, to shift economic power dramatically in favor of Wall Street. Few seemed to notice about these changes when he was the “Maestro” and the bubble economy hadn’t exploded spectacularly. Taibbi is justified to call him “The Biggest Asshole in the Universe” as long as Greenspan keeps being invited to explain the economy on Meet the Press panels, weekly.
Now, I’m not big on ad hominem attacks, but I’m happy to make an exception in this case because the “gerbilish mirror-gazer” characterization really does work.
Spotted over at Jesse’s Cafe was this Democracy Now interview with Matt Taibbi, author of the recent Rolling Stone article Why Isn’t Wall Street in Jail? and the new book Griftopia, who tries to answer the question of why Wall Street isn’t in jail.
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They dropped the criminal charges against Angelo Mozilo the other day, so, it doesn’t seem that much has changed, Bernie Madoff still the only individual who is now behind bars, his big mistake apparently being that he stole from rich people.
Matt Taibbi has penned another lengthy piece for Rolling Stone that – surprise! – sheds new light on the Wall Street casino where the house holds a decided advantage with the blessings of those government agencies tasked to regulate it. Vegas never had it so good.
Over drinks at a bar on a dreary, snowy night in Washington this past month, a former Senate investigator laughed as he polished off his beer.
“Everything’s fucked up, and nobody goes to jail,” he said. “That’s your whole story right there. Hell, you don’t even have to write the rest of it. Just write that.”
I put down my notebook. “Just that?”
“That’s right,” he said, signaling to the waitress for the check. “Everything’s fucked up, and nobody goes to jail. You can end the piece right there.”
Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world’s wealth — and nobody went to jail. Nobody, that is, except Bernie Madoff, a flamboyant and pathological celebrity con artist, whose victims happened to be other rich and famous people.
In a way, Wall Street banks are a lot like organized crime in its glory days when payoffs were just one of the many costs of doing business, the distinction being that, for banks today, political contributions and multi-million dollar fines are out in the open for all to see. As was the case for the Goldman “vampire squid” expose, this is well worth reading in its entirety for those looking to become thoroughly depressed.
By Tim Iacono, Since 2005
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