September 12, 2018 State of the Union

Saturday marks the 10-year anniversary of Lehman Brothers filing for bankruptcy. As we look across the ravaged country today, it’s hard not to imagine it all turning out very differently if Wall Street executives had been prosecuted and the Obama administration hadn’t prevented a new New Deal. A lot less deaths of despair, and there’s likely no way that Donald Trump is in the White House. But, alas, here we are.

Wall Street Plutocrats 

“The Lehman Brothers party is a red herring – it’s the system that stinks” [Guardian] “And what else do those excessive top pay packages tell us? That, deep down, a lot of elite players in this system know how fragile it all still is. They are filling their boots while their luck lasts. They know that, in spite of all the regulatory reform, it could still be impossible to spot or avert another huge financial crisis. Do we really know what is going on up on those trading floors in the shiny glass towers? Is a switch about to be flicked on a trade that is about to bring the system crashing down again?”

“Looking Back on the Prosecution Failures after the 2008 Wall Street Crash” [Wall Street on Parade] “I was one of several trial lawyers at the SEC involved in the Commission’s investigations into conduct of the big banks and their employees.  I can say, based on my experience and that of other trial lawyers, that there was an inexplicable reluctance on the part of the Division of Enforcement to utilize conspiracy theories to investigate – let alone sue – higher ups at Goldman Sachs, Bank of America, Morgan Stanley and other large banks…Meanwhile, the SEC and the Department of Justice became what I have called The Toll Booths on the Bankster Turnpike.  Fines, historically large for the SEC and DOJ, but lunch money for the bankers, were obtained against the banking institutions, sometimes with vague admissions of liability, and agreements to “sin no more” or a deferral of criminal prosecution if steps were taken to heal their ways. Many of these banks have been the subjects of repeated criminal and civil law enforcement actions since, always with the levying of a fine and instructions to not violate the law again.  Rinse and repeat.  Settling violations of law with fines has become a cost of business for Wall Street.”

“Destruction Of Black Wealth During The Obama Presidency” [People’s Policy Project] “The paper finds that while President Obama had wide discretion and appropriated funds to relieve homeowners caught in the economic crisis, the policy design his administration chose for his housing program was a disaster. Instead of helping homeowners, at every turn the administration was obsessed with protecting the financial system — and so homeowners were left to drown. As a result, the percentage of black homeowners who were underwater on their mortgage exploded 20-fold from 2007 to 2013.”

From 2008:

“The Decline of Black Business” [Washington Monthly ] “Indeed, one of the legacies of Obama’s economic policies has been a particularly sharp drop in the number of black-owned banks. This is not only the result of lessened enforcement of the anti-monopoly laws but also an unintended side effect of measures like the Dodd-Frank Act. In the process of attempting to keep big banks from failing, Dodd-Frank created regulatory burdens that small banks could not meet. These policy changes contributed to a 14 percent decrease in the number of community banks between 2010 and late 2014. Particularly hard hit were black-owned banks, which decreased by 24 percent during this period.”

BIG BANKS WERE MEANT TO GAIN FROM BIPARTISAN DEREGULATION BILL ALL ALONG, SENATE LETTER REVEALS [The Intercept] ♣ No, this is not a pre-2008 headline. It’s from Aug. 20, 2018. “Democrats who collaborated on the bank deregulation lawpassed earlier this year have categorically insisted that it only benefits small community banks and credit unions…But a letter sent by seven Senate Republicans last week suggests that the law is trying to do precisely what its critics warned: provide regulatory relief for some of the largest banks in the country.”

“Lehman Brothers collapse: where are the key figures now?” [The Guardian]

“The Latest Incarnation of Capitalism” [Jacobin] “Financialization isn’t a perversion of an otherwise well-functioning system. It’s just capitalism’s latest survival mechanism.”

Silicon Valley Plutocrats

“No News Is Good News” [The Baffler] “Over ten long years, Facebook kneecapped the newspaper industry by devouring its main revenue stream. Together, Facebook and Google now take in more than 65 percent of digital advertising dollars—an extraordinary haul given that these sites grew fat in part by indexing and sharing the content produced by news organizations.”

“It’s Time to Break Up Facebook” [The Verge] “Antitrust law in Americaseems to be at an inflection point: after a proud history of aggressive enforcement that saw the breakups of everything from Standard Oil to the original AT&T, the past few decades have been incredibly lax as something called the “consumer welfare standard” has swept the courts. Basically, the consumer welfare standard says the government has to show that a merger will result in increasing prices for consumers before it can stop it.”

“Amazon Got a Patent to Put Workers in Cages. Now the Company Says It Was a ‘Bad’ Idea” [Fortune♣ No, not The Onion. 

The Wasteland

“The Other Side Of School Safety: Students Are Getting Tasered And Beaten By Police” [HuffPost]

“Students Under Siege: How the school-to-prison pipeline, poverty, and racism endanger our school children” [Institute for Policy Studies]

“How Struggling Dayton, Ohio, Reveals the Chasm Among American Cities” [Propublica] “In 1980, even after the first wave of deindustrialization, Middle American cities such as Dayton were remarkably close to par with their coastal peers. Per capita income in the Seattle area was only 16 percent greater than in the Dayton area. In metro Boston, the edge was only 6 percent. In New York, 14 percent. In Washington, 31 percent. And in the San Francisco Bay Area, 33 percent. All those cities have since left Dayton in the dust. Seattle’s per capita income is now 48 percent greater. Boston’s edge has jumped all the way to 61 percent — a tenfold increase. New York and Washington are both over 50 percent greater. And in the Bay Area, per capita income is 94 percent greater than in the Dayton area—that is, almost double. (And these stats are for the whole Dayton area, not just the diminished city proper, which has lost nearly half its population since 1960, to about 140,000 today, and where more than a third of the population now lives in poverty.) You’ll find similarly widening gaps if you substitute Dayton with St. Louis or Milwaukee or Fresno or Buffalo.”

“The Other Political Correctness: Why are America’s elite universities censoring themselves on China?” [The New Republic] ♣ Because the financialization of higher ed?  “In a previously unreported incident, Columbia University’s Global Center in Beijing canceled several talks it feared would upset Chinese officials, according to a person familiar with the matter. Some graduate students admitted to regularly censoring themselves…Many top American universities maintain a presence in China, through summer language programs like the Harvard Beijing Academy; institutes such as the Stanford Center at Peking University that serve as platforms to attract students, fund-raise, allow faculty to conduct research, and host events; or even full campuses, like New York University–Shanghai and Johns Hopkins Nanjing.”

“Imprisoned by algorithms: the dark side of California ending cash bail” [The Guardian] “The law replaces the cash bail system with “risk assessment” tools in which an algorithm would weigh factors about a person to help determine whether they should be released. Critics say it gives local authorities wide discretion to decide what is considered “high risk”, makes it easy for prosecutors and judges to keep people in jail, and expands the use of technology that could intensify racial biases.”

“ACLU Fears Protest Crackdowns, Surveillance Already Being Planned for Keystone XL” [Inside Climate News] “The Keystone XL pipeline is expected to draw protests from indigenous and environmental activists when construction begins, and many activists are worried law enforcement agencies may be planning surveillance and a militarized response. Now, the American Civil Liberties Union is accusing federal agencies of trying to hide the extent of these preparations, which the group says are clearly underway.”

Living the American Dream

“Colorado’s Attorney General Sues Purdue Pharma” [Managed Care Magazine] “The lawsuit claims that Purdue Pharma L.P. and Purdue Pharma Inc. misled doctors and patients in Colorado about the potential for addiction with prescription opioids and continued to push the drugs. The lawsuit further states that Purdue Pharma ‘downplayed the risk of addiction associated with opioids,’ ‘exaggerated the benefits’ and ‘advised health care professionals that they were violating their Hippocratic Oath and failing their patients unless they treated pain symptoms with opioids,’ according to the statement from the Colorado attorney general’s office.”

“OxyContin Maker Granted Patent for Opioid-Addiction Treatment” [Rolling Stone] “Rhodes Technologies Inc. has been granted a patent for a new drug that could help treat opioid addiction. This sounds like good news at first — like someone’s actually doing something to fight the epidemic that’s destroying lives across the country at an alarming rate. It sounds like good news, until you realize that Rhodes Technologies Inc. is a subsidiary of Purdue Pharma, the same company that many hold responsible for starting the opioid epidemic in the first place because they flooded the market with OxyContin and allegedly suppressed reports of the drug’s addictive properties for years.” ♣ How convenient.

“With thousands of Californians living in vehicles, lawsuit aims to stop cities from towing their homes” [CALmatters] “Sean Kayode says he watched his whole world roll away from him at 3 in the morning. Kayode had been living in his car in San Francisco about two years. During the early morning March 5, traffic police towed and impounded his black 2005 Mercedes Benz — for having too many overdue parking tickets…For Kayode, who now lives at Next Door, his car wasn’t just a place to sleep, it was how he earned a living, he said, delivering food through Uber Eats.”

“Thousands of Californians are working while homeless, and many don’t want their bosses to know” [CALmatters]

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