economy – Page 4 – Hank Kalet

Times asks Paulsen the wrong questions

We must be in crisis. Otherwise, why would anyone want to know what Henry Paulson had to say?

As the story in today’s Times points out, Paulson was at the helm in 2008 when the financial system entered meltdown and, if we wanted to be accurate about it, we would admit that he bore significant responsibility for the crash and the malaise that has followed.

But the Times left much of that out of its piece, preferring instead to focus on the prospects for the future. That might seem the best way to move forward to some, but the reality is that we cannot move forward without answering questions about cause and effect.

Rather than going to Paulsen for a diagnosis, we should be suing him for malpractice.

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Read poetry at The Subterranean.
Certainties and Uncertainties a chapbook by Hank Kalet, will be published in November by Finishing Line Press. It can be ordered here.
Suburban Pastoral, a chapbook by Hank Kalet, available here.

Sell outs and sell offs

The Dow Jones Industrial Index tumbled sharply today, a sign that even Wall Street has no stomach for the nation’s economic malaise and the international debt crisis.

The sell-off should have been expected. Our political system has failed us at a time when we need it functioning at a high level to deal with issues of unemployment, housing and wage stagnation. Rather than working to create jobs and inject money into the economy, we have a political class that is in thrall to the debt-hawks and a Republican Party whose only goal is the destruction of a presidency.

I was talking at lunch today with some of my fellow writers, and it is clear that we all feel the same sense of hopelessness, as though the nation’s well-being was being held hostage to political gamesmanship.

And the ugly undercurrent that has been bubbling up from the depths — the racism and xenophobia that has used a black president as an excuse for extreme behavior — is having real results in the halls of Congress and on the streets of America’s cities.

The left has failed to provide an alternative narrative, one in which government aids Americans and acts as our defender against corporate greed. That is the story we should be telling — while also reminding people that the Bush tax cuts, the recession and our two wars are responsible for most of the budget problems we are facing.

If we do not do that, we run the risk of allowing the right-wing populists to dominate debate and take the nation into the darkest of places.

The

Send me an e-mail.
Read poetry at The Subterranean.
Certainties and Uncertainties a chapbook by Hank Kalet, will be published in November by Finishing Line Press. It can be ordered here.
Suburban Pastoral, a chapbook by Hank Kalet, available here.

Dodd-Frank is the Obama presidency

The Dodd-Frank financial reforms are a year old and very little has changed in the banking system. As Matt Stoller points out, the bill was more about creating the illusion of a solution to the financial crisis than imposing the kind of financial restructuring needed to prevent future problems and begin a real stabilization of the economy.

After the immediate crisis was contained, losses were socialized, and profits returned to financial executives, Congress had to put together a “solution”. It would have a giant bite at the apple in restructuring our regulatory apparatus. But in order to perpetrate the oligarchic banking structure, it would be important that no structural changes to the industry be implemented. Not one regulator was fired for his or her part in the crisis. The Justice Department adopted a posture of legalizing financial control fraud by refusing to prosecute anyone involved in the meltdown, and continues to allow millions of cases of foreclosure fraud to continue. Ben Bernanke was renominated, and the administration fought a bitter below-the-radar battle to secure his confirmation. With a few modest exceptions, the risk-taking and leverage in our financial markets continues apace, and the deregulatory neoliberal mindset is still dominant. The Federal Reserve has been audited, but the system is now accountability-free for high level operatives in finance and politics. And now that Elizabeth Warren has been thrown overboard by the administration, the lockdown of the financial system is nearly complete.

And mostly, that’s what Dodd-Frank accomplished. It rearranged regulatory offices and delivered a new set of mandates, but effected no structural changes to our banking system. Congress never asked what happened, or why, or even, what kind of banking system do we want? And that’s because Obama’s Treasury Secretary already had the answers to these questions.

So, unemployment hovers at between 9 and 10 percent, the housing market remains in the dumper and consumer confidence remains low. The euphoria that followed the election of a Democrat who professed to be a reformer has abated once it was clear that he is nothing more than a brand (in Chris Hedges’ words) who talks a good game and shills for the establishment. So now, rather than the dawning of a promised progressive era, the November 2010 election brought us a Congress controlled by kooks and cranks who are more than willing to send the nation to financial default.

But the president and his supporters continue to praise his efforts, which they say prevented a full collapse. That may have been enough in the early part of 2009, but two years on, we have a right to expect more from him and from the Republicans who now control the House of Representatives.
The sad fact, as Dodd-Frank hits its first birthday, is that it is a perfect representation of the Obama presidency.

Send me an e-mail.
Read poetry at The Subterranean.
Certainties and Uncertainties a chapbook by Hank Kalet, will be published in November by Finishing Line Press. It can be ordered here.
Suburban Pastoral, a chapbook by Hank Kalet, available here.

Dramatic, yes, but missing the point

http://www.hbo.com/bin/hboPlayerV2.swf?vid=1175400

Trailer

I just watched HBO’s Too Big to Fail and I have to say that, dramatically, it lives up to the hype. The story moves along at a brisk pace and the star-studded cast turns in a collection of powerful performances.

And yet, Too Big to Fail fails in the same way that historical recreations often fail: It simplifies the 2008 financial disaster, turns a massive systemic derailment into a story of individuals. Hank Paulson and Timothy Geithner and Ben Bernanke and the leaders of the big banks and investment houses — these are the players, the decision-makers and the men (almost exclusively) who nearly drove the nation off a cliff and then, at the last minute, righted it.

This makes for great cinema and storytelling, but it is lousy history. The 2008 financial crisis had far deeper roots than the film implies. They go far deeper than just the Clinton-era financial reforms that turned the Street into a casino, deeper than the deregulatory mania of the Carter and Reagan years. The problem is capitalism itself, which is prone to boom-and-bust cycles and demands profits at all costs.

Too Big to Fail is, in the end, insider baseball, the story of how Washington insiders averted a crisis of their own making.

Send me an e-mail.
Read poetry at The Subterranean.
Certainties and Uncertainties a chapbook by Hank Kalet, will be published in November by Finishing Line Press. It can be ordered here.
Suburban Pastoral, a chapbook by Hank Kalet, available here.

Memo to banks from New York AG: No impunity

If the feds won’t dig into banking practices, then the states will have to — or, at least, New York will.

The New York attorney general has requested information and documents in recent weeks from three major Wall Street banks about their mortgage securities operations during the credit boom, indicating the existence of a new investigation into practices that contributed to billions in mortgage losses.

Officials in Eric T. Schneiderman’s, office have also requested meetings with representatives from Bank of America, Goldman Sachs and Morgan Stanley, according to people briefed on the matter who were not authorized to speak publicly. The inquiry appears to be quite broad, with the attorney general’s requests for information covering many aspects of the banks’ loan pooling operations. They bundled thousands of home loans into securities that were then sold to investors such as pension funds, mutual funds and insurance companies.

Send me an e-mail.
Read poetry at The Subterranean.
Certainties and Uncertainties a chapbook by Hank Kalet, will be published in November by Finishing Line Press. It can be ordered here.
Suburban Pastoral, a chapbook by Hank Kalet, available here.