Friday :: Apr 2, 2010

Never Gets Back To JP Morgan


by paradox

I was un-surprised and non-distressed over the recent polling data that found large majorities of Americans oppose a new government agency to reign in our marauding banking and finance “industry.” It wasn’t and isn’t a mulish obtuseness to protecting self-interest or, heaven forbid, an unconscious acceptance of Republican rejection to building government solutions, but rather a serene and sure knowledge we have perfectly good regulatory structures in place now but lamely and infuriatingly refuse to use them.

One bright side of this coin recently winked from Texas, of all places, incubator of George Bush [shudders]. Texas doesn’t have a mortgage crisis because regulators live a life of duty for little people and understand systems. Financing is almost always a process of steps, to move it in one direction doesn’t require taking it all on or junking it, just applying critical pressure or cuts to certain wires will bring it under control or shut it down, whatever is necessary.

The usual scenario recently surfaced from the slime of human greed via Matt Taibbi from Birmingham, Alabama, an almost unbelievable story of finance avarice and rip-offs that has left that city broke and destitute, literal corpses of little people littering the scene everywhere in suicides, broken families and early deaths. It was far, far too late for the Securities and Exchange Commission to stop any of it when they finally moved their flabby incompetent asses, but they did prosecute and imprison the local crooks who facilitated all the vast felonious activity.

But although the felonies are crystal clear and convictions stark about how crooks worked for the bank—JP Morgan—there is not one prosecution for any banking official in that searing mess, "It never gets back to JP Morgan." The SEC can put little people behind bars, no problem, but some magical finance pixie dust forever charms the lives of our banking felons. It’s an old human story, unfortunately, and the little people of course know it fully well. Why create a new regulatory agency when we should be fixing the SEC? If part of the finance ripoff system results in JP Morgan officials becoming felons and doing prison time, well, very soon that system won’t be implemented again, while naturally the other vultures in the “industry” of course will watch and learn.

Political science, half-sister to Social science, may be a “soft” science—meaning our crude and absurdly easily-manipulated measurement device of polling (among others) gives slippery and interpretive results---but we do have the great, great advantage of watching other models and systems running in real time in other countries for precious observations and learning. United Kingdom has amazing healthcare, Canada has a healthy finance “industry” that doesn’t leave the lives of little people in ruins with a relatively few big players, how come?

“Too big to fail” has been a concept I have vigorously opposed since this American finance “industry” nightmare started, yet with the Canadian model running right next door with too-big-to-fail players doing well I’m willing to trust Paul Krugman that breaking them down to size should not be a current objective of finance reform.

If other regulatory structures are maintained and given immutable mandates to function. What in Al Gore’s name are those charlatans doing at the SEC? Just what is the precise answer in how little people got jailed in Birmingham but JP Morgan felons are still ensconced in their distasteful world of childish indulgence?

Somehow the SEC got “captured,” completely unwilling to fulfill its core mission by a deliberate process of neglect and staffing with bought fools. Americans have seen this many times and won’t give much time for any new regulatory agency to similarly overtaken by industry goons and sycophants, another reason the idea doesn’t poll well.

What in fact will work, even if we get a new regulatory structure and rules for the derivative market? An unwavering political commitment to the little people and willingness to fight extremely well-monied interests. Does that exist? Evidence from Birmingham clearly demonstrates it does not, no matter the voluminous bombastic statements currently blaring forth reform from DC.

Couple this general finance “industry” with an appalling unemployment rate and the political environment should be—but it is not yet—explosive. The Republicans have come through yet again with a pathetic agenda of their own in this debacle, so all eyes and minds turn to the Obama administration with the hopes that in the very least of all to happen, JP Morgan felons and their cronies go to prison. That would go a long, long way in forestalling future finance “industry” conflagrations.

paradox :: 6:26 AM :: Comments (1) :: Digg It!