Election 2012: Obama’s Wall Street
Lets connect a few dots:
Dot 1. In the 2008 election Wall Street contributed disproportionately to Obama and the Democrats, forming a significant chunk of his financial base. Obama’s new chief of staff is Bill Daley who has strong Wall Street connections, including a stint with JP Morgan Chase. Obama’s campaign war chest this cycle will exceed $1 billion.
Dot 2. Phil Angelides’ Financial Crisis Inquiry Commission assessment of the financial crisis provides lots of detailed reading about causes and effects as well as specific examples of companies and individuals taking reckless and knowingly fraudulent actions – like creating and touting badly flawed derivatives while they sold them from their own accounts. Similar to Obama’s Deficit Reduction Panel, the commission was created to deflect outrage, only to have its report totally ignored by the administration.
Dot 3. The Dodd-Frank financial reform bill creates a bunch of regulation and creates a Consumer Protection Agency to control politically popular things like credit card rates, but it does nothing to get at the real cause of the 2008 melt down. Nothing on the credit rating agencies; nothing to break up the large banks (which actually got larger by acquiring the failures); nothing to change Fannie Mae and Freddie Mac who still control a majority of the mortgage market (and have cost taxpayers hundreds of billions of dollars); nothing to separate commercial banking from investment banking. Wall Street’s 2010 bonuses were $20.8 billion – an average of $128,000 per worker. The Republicans took the heat for continuing the top bracket Bush-era tax cuts, but the Democratic contributors on Wall Street took the cash.
Dot 4. With this week’s decision to pass on prosecuting Countrywide’s Angelo Mozillo, it seems that none of the players in the wanton fraud of the loose mortgage / securitization / toxic investment era will be criminally charged. (Bernie Madoff’s ponzi scheme and Raj Rajaratnam’s insider trading network were too offensive for the professional prosecutors to be ignored.) That compares to the prior decade when Dennis Kozlowski of Tyco, John Rigas of Adelphia, and Bernie Ebbers of WorldCom went to jail for less damaging offenses.
There was a day when the Republicans represented Wall Street and the Democrats the workers. Now it is an odd alliance indeed – the environmentalists, the labor unions, the liberal academics, and Wall Street against a Tea Party-led insurrection.
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