News & Comment

New York Attorney General Eric Schneiderman has filed a lawsuit against JPMorgan Chase over allegations of wholesale fraud by Bear Stearns, which JPM acquired during the 2008 financial crisis. The lawsuit's critics, including Rep. read more »

New York Attorney General Eric Schneiderman has filed a lawsuit against JPMorgan Chase over allegations of wholesale fraud by Bear Stearns, which JPM acquired during the 2008 financial crisis. The lawsuit's critics, including Rep. read more »

Americans for Tax Fairness does a pretty devastating take-down of the group of CEOs who were at the New York Stock Exchange Thursday ringing the opening bell under the banner "Fix the Debt." Their picture makes the point: read more »

Freddie Mac, the taxpayer-owned mortgage giant, made it harder for millions of Americans to refinance their high-interest-rate mortgages for fear it would cut into company profits, present and former Freddie Mac officials disclosed in recent interviews. In closed door meetings, two Republican-leaning board members and at least one executive resisted a mass refi policy for an additional reason, according to the interviews: They regarded it as a backdoor economic stimulus. Freddie's policy was financially brutal: During the worst years of the Great Recession, when homeowners most needed the savings they could have gotten from refinancing to lower interest rates, Freddie helped keep millions of borrowers locked in high-interest-rate mortgages. read more »

Gore Vidal, the recently demised American writer, once famously quipped that the US economic system is "free enterprise for the poor and socialism for the rich". Since the outbreak of the global financial crisis in 2008, not only has the US lived up to Vidal's caricature but the whole of the rich capitalist world has become more "American". The poor are increasingly exposed to market forces, with tougher conditions on the diminishing state protection they get, while the rich have unprecedented levels of protection from the state, with virtually no strings attached. read more »

Before the campaign contributors lavished billions of dollars on their favorite candidate; and long after they toast their winner or drink to forget their loser, Wall Street was already primed to continue its reign over the economy. For, after three debates (well, four), when it comes to banking, finance, and the ongoing subsidization of Wall Street, both presidential candidates and their parties’ attitudes toward the banking sector is similar  – i.e. it must be preserved – as is – at all costs, rhetoric to the contrary, aside.Obama hasn’t brought ‘sweeping reform’ upon the Establishment Banks, nor does Romney need to exude deregulatory babble, because nothing structurally substantive has been done to harness the biggest banks of the financial sector, enabled, as they are, by entities from the SEC to the Fed to the Treasury Department to the White House. read more »

Originally published at Capital Gains and Games. Have you heard the one about the big-name financial services CEOs who last week released a letter to Congress and the president demanding they do whatever it takes to avoid the fiscal cliff? read more »

It is common fare for people like me to point disapprovingly to the revolving door between business and government, which ensures that every Treasury Department is well stocked with representatives of Goldman Sachs. In 13 Bankers, the revolving door was one of the three major channels through which the financial sector influenced government policy, alongside campaign contributions and the ideology of finance. The counterargument comes in various forms: people like Robert Rubin and Henry Paulson are dedicated civil servants who wouldn’t favor their firms or their industries, the government needs people with appropriate industry experience, etc. It is certainly possible that industry experts provide valuable skills and experience to the government. But that value comes with a cost; put another way, it’s not just the public good that benefits read more »

America’s growth-inhibiting inequality is making it less able to compete, and less able to serve as an exemplar for others, in the global arena. Ideologically driven myopia, which mistakenly cherishes anything in the private sector status quo, even when it is destructive of free markets and vigorous competition, and disdains anything government does, even when it is necessary for economic growth and the fullest use of human capital, is needlessly weakening the relative as well as absolute position of the United States. read more »

President Obama should propose that the nation’s biggest banks be broken up and their size capped, and that the Glass-Steagall Act be resurrected. It’s good policy, and it would smoke out Mitt Romney as being of, by, and for Wall Street — and not on the side of average Americans. It would also remind America that five years ago Wall Street’s excesses almost ruined the economy. Bankers, hedge-fund managers, and private-equity traders speculated on the upside, then shorted on the downside — in a vast zero-sum game that resulted in the largest transfer of wealth from average Americans to financial elites ever witnessed in this nation’s history. read more »