Posted in Uncategorized, Economics, the Rigged Game, Politics, corruption, free trade, war, income redistribution, wealth redistribution, goldman sachs, student loans | Tagged income redistribution, Wall Street, Goldman Sachs, government, corruption, college, student loans, education, war, Afganistan, opportunity cost, fiscal year | Leave a Comment »
Yesterday, US Senator Elizabeth Warren called for a Federal investigation of the passionate relationships between the New York Federal Reserve Bank and the investment banks of Wall Street. The senator wrote on her Facebook page, “When regulators care more about protecting big banks from accountability than they do about protecting the American people from risky and illegal behavior on Wall Street, it threatens our whole economy. We learned this the hard way in 2008. Congress must hold oversight hearings on the disturbing issues raised by yesterday’s whistle-blower (sic) report when it returns in November – because it’s our job to make sure our financial regulators are doing their jobs.”
US Senator Sharrod Brown serves on the Senate Banking Committee with Warren. He backed her request in a statement of his own. “These allegations deserve a full and thorough investigation, and American taxpayers deserve regulators who will fight each day on their behalf,” the Ohio senator and frequent financial industry critic said.
Carmen Segarra is the whistle blower in question. The former bank examiner jumped into public consciousness earlier this month when she filed a wrongful termination lawsuit alleging that the Federal Reserve Bank of New York fired her after she refused to go soft on investment banking behemoth Goldman Sachs.
Her allegations of cozy relationships between the big investment banks and a 2009 internal report cited by This American Life and Pro Publica paint a picture of what’s called “regulatory capture” at the Fed. That means that an independent oversight body has stopped acting on its intended motivations of protecting the public from misdeeds by the entities it regulates and started acting on behalf of those entities’ own interests. Regulatory capture is a subtle thing defined less by concrete facts and figures and more by the tone of meetings and the way friendships between regulators and businesses color the regulators’ actions and views. If capture takes hold and goes unchecked, the regulatory cops on the beat turn into enablers. In the radio segment based on Segarra’s tapes, host Ira Glass compares captured regulators to “a watchdog who licks the face of an intruder, and plays catch with the intruder, instead of barking at him.”
Regulatory capture is just one example of the many abstract cultural forces on Wall Street that create an environment where financial misdeeds can flourish, imperiling the real economy that employs everyone else in the business of making and selling goods and services. Surveys of industry insiders have repeatedly found worrying evidence of ethical lapses among people in the financial business, including outright disregard for the law. A quarter of those surveyed in 2013 said that they would knowingly break the law for financial gain. That number jumped to 38 percent for respondents who have worked in finance for less than a decade. The same survey also found that women are twice as likely to fear retaliation for whistle blowing as men.
Most government regulations of Wall Street are to keep things honest, which you can’t expect Wall Street to do. The result of Wall Street investment bank transgressions in both the short and long term are typically income redistribution from the 99 to the 0.01 percent.
Posted in corruption, Economics, Economics, recession, Federal Reserve, goldman sachs, income redistribution, the Rigged Game, Uncategorized | Tagged Bank examiners, Carmen Segarra, economy, Elizabeth Warren, Federal Reserve, Goldman Sachs, investment banks, Ira Glass, Pro Publica, regulations, regulators, Regulatory capture, Senate banking committee, Sharrod Brown, This American Life, United States, US, Wall Street | Leave a Comment »
Clearly, the political process is a game rigged in favor of the 1 percent!
In fact, trickle down economics redistributed income from the 99 to the 1 percent. The rich used their tax cut money from President Ronald Reagan to corrupt government at all levels, to purchase legislation such as free trade treaties, privatization scams, deregulation schemes, school testing, greater student loan debt for the 99 percent, and so much more. All of this redistributes income from the 99 to the 1 percent. And we can’t forget regulatory agencies, such as how the corruption of government extends into the Securities and Exchange Commission, the US Department of Agriculture and the Food and Drug Administration. All of these agencies are run by corporate hacks whose primary job is to ensure an ever rising corporate profitability at the expense of the health and finances of the 99 percent.