FedUpUSA

Archive for the ‘corporate power’ Category

In A Nutshell: Corporatocracy Has Replaced Capitalism

Capitalism Fixes Problems & Preserves Democracy: Capitalism is what we should be relying on to fix our problems. Capitalism has it’s own ecosystem, just like biology’s ecosystem. An economic ecosystem that weeds out the weak, has parasites that eat the failures and new bacteria that evolves and grows replacements for that which failed. A system that keeps everything in balance.

The problem is we are no longer a capitalistic society. What we were taught in school is now utter and absolute nonsense. Capitalism is a thing of the past.

As outlined in “It’s Not A Financial Crisis – It’s A Stupidity Crisis”, we created two back to back bubbles. The air out of the Tech Bubble was sucked up for fuel by our next stupidity crisis: The Housing Bubble.

Now, after the second Stupidity Crisis there isn’t a third bubble to inflate. If we still lived in a capitalistic environment the banks and financial institutions that created loans for folks who should have remained renters and then sold those loans as investments to pensions and countries would have been cleansed by capitalism’s ecosystem.

But that isn’t what happened.

In a very anti-capitalistic move the government decided that stupidity and criminal activity should be rewarded. I’d say they took our money, but it is worse, we didn’t have that much money. So they borrowed the money in our name. The loan has a variable rate. They borrowed so much money that our kids cosigned the loan. In fact, our kid’s future kid’s signed on the dotted line.

That is unequivocally immoral.

They gave that borrowed money to a bunch of morons as a reward for stupidity. Morons who created subprime loans, liar loans, no income no documentation loans and other fraudulent instruments. Morons bundled that trash, got it rated AAA and then sold these turds or weapons of mass destruction that they had the audacity to name complex financial instruments or derivatives to pensionfunds, countries and other “investors”.

Then it all blew up.

Big surprise.

For blowing up the world’s economy this Stupidity Crisis was falsely named an Economic Crisis by CNBC and 535 morons on a hill in DC (Ron Paul and a few other fiscally responsible adults excluded). The idiots who created the mess were rewarded with a 700 billion dollar “bailout”. This “bailout” was anything but a bailout and had a price tag of anything but 700 billion. The actual price tag is closer to 11 trillion and puts us on the hook for another 13-17 trillion – not counting interest.

Think about that for a second. This stupidity crisis is the equivalent of our Federal Debt which took a generations of politicians over a hundred years to wrack-up.

For anyone who still believes we live in a free country where capitalism reigns please show me one economic textbook which states that failure, and fraud get rewarded with borrowed taxpayer money. For anyone who believes we live in a democracy please show me a textbook that says the government will en-debt you and your kids and their kids to pay for a failed business. How is that democratic?

“Law of Morons”: Years ago, while serving on a committee I came to a sad realization. Like gravity, there is the another invisible force which I dubbed “The Law of Morons”. Put a group of very intelligent, well meaning people in a room together, put them on a committee or some governmental body that is devoid of guiding principles or merit-based decision making and “The Law of Morons” will prevail. The collective IQ will drop to the smallest shoe size in the room. And hope for loafers, because collectively this body won’t be able to tie anything together – not even a single shoelace.

Government Creates Problems: Basically our government is comprised of many well meaning intelligent people who for whatever reason, re-election, greed the “Law of Morons”, corporate puppet strings (read: lobbyist), self interest, corporatocracy or whatever else, do nothing but create massive problems. Lack of regulation, too much regulation.

And without any uncertainty — too much DEBT along with a deficit that will NEVER be paid.

They have failed us.

Terribly!

With debt and a failed capitalistic society our democracy is now at risk. Serious risk.

A democratic society requires a stable and effectively functioning economy. I trust that we and our successors at the Federal Reserve will be important contributors to that end.~ Alan Greenspan

Serious irony there unless he was talking about the end of a democratic society. Greenspan was primarily responsible for muzzling Brooksley Born’s attempt to regulate derivatives. 

Our deficit requires that we counterfeit “money” to service our debtpayments.

Forget about GDP, it is a bogus measure cooked by the BEA (US Bureau of Economic Analysis) . GDP is so baked that it makes the folks who cooked Enron’s books look like saints. Let’s focus on what we take in and what we pay out. We take in about 2 trillion in taxes and other revenues. We borrow about 2 trillion of which about 1 trillion must be taken off for debt service, and we spend well over 4 trillion.

To deal with the 1.6 trillion ++ shortfall we just print/counterfeit it. This debases the value of every dollar we hold, stealing wealth from every hard working American. It causes the need for more dollars to be injected into the system, which increases the amount of taxes that Americans pay.

There are only two crimes listed in our Constitution: Treason and counterfeiting.

“Solutions Create More Problems” ~ Al Bartlett (Worked on the Manhattan Project).

Another asked, “Is there any intelligent life on earth to change our future to a sustainable one?”

Dr. Bartlett replied, “Is there any intelligent life in Washington, DC is the bigger question?”

We Have a Corporatocracy: Not capitalism.

Corporatocracy: A government that serves the interest of, and may de facto be run by corporations.

Some states have government workers who have powerful unions that influence the government’s decisions. California has a massive pension mess, created in large part by government unions and elected officials who have catered to these unions.

“Too Big To Fail” is living proof that capitalism is dead. These TBTF institutions that blew up the economy in 2008 with their stupidity crisis, at the very least deserved to fail. They blew it. That is the definition of capitalism. You do well you are rewarded, you screw up you close shop. You commit fraud and you do time.

But with a Corporatocracy you have Hank Paulson – a former Goldman Sachs CEO worth about 700 million dollars who winds up becoming our past Secretary of the Treasury. There is a serious distinction between a civil servant and someone who serves a corporation, especially the last corporation he worked for. His salary was only six figures, but his benefit was that he got to cash out of his stocks and pay no taxes. He gave the morons who blew up the economy 700 billion dollars. He had another former Goldman Sachs employee disperse the funds while the current CEO of Goldman Sachs professed to be “Doing God’s work.”

The movie “The Corporation” can be viewed at NetFlix or online with Hulu.

In Summary: Our debt and our inability to revive capitalism and cut the waste in government will be our demise. Sadly, the only glimmer of hope I see is that Corporatocracy will destroy itself. I say sadly because it will destroy the average American citizen like some parasite that kills it’s host.

Capitalism is dead and that is why we are totally screwed.

Davos Sherman Okst ~ FinancialSense.com

The letter appears to be authentic…..

So long as this continues, there will be no solution to corporate fraud.

The bank simply has to pay a fine.  This is similar to what GSK recently did.

That might, at first blush, appear to be a decent deterrent.

It isn’t because the company can pass the cost on to its customers, and in some cases pass the cost onto the very people that were defrauded, effectively forcing the victims to pay twice!

There are only two effective means of punishment for corporate crimes.

• Prison.  For the individuals, including the executives, of the firm(s) involved.
• Imprisonment for the corporation.  That is, the suspension or revocation of the firm’s corporate certificate, thereby either barring it from operating as a corporation for some period of time (as with a prison sentence) or permanently (as would be the case for a “life term”.)  The latter is certainly appropriate under a “three strikes” rule.

Nothing else will do, and until we see the end of simple monetary penalties there will be no solution to the problem of corporate crime, even when the fraud involved is in the largest markets in the world.

We the people must insist that the above two punishments be served upon all corporate frauds.

And this one, if true, is BAD:

The liberal Daily Beast reports on a broadband project backed by a frequent Obama White House visitor and donor that has Pentagon officials concerned over potential military GPS interference. The Obama FCC took the lead in intervening on the donor, billionaire hedge fund manster Philip Falcone’s, behalf and granting his company called “LightSquared” one of those coveted Obama waivers from existing law. Then Obama officials reportedly pressured a general to alter his testimony about the company’s impact on military satellite transmissions.

This is a SERIOUS charge if true.

For the unaware the issue arises because Lightsquared acquired spectrum that was originally intended for satellite-to-ground communication and wanted to re-purpose it for ground-to-ground for 4g phone service, basically.  The problem is that in order to do so it would have to up the ERP (effective radiated power) of the devices by several orders of magnitude, and the spectrum in question was both on top of the non-US version of GPS (which runs on a different band) and damn close to US GPS frequencies.

The question of whether that license should have been granted becomes one of whether there would be interference or not and if so, was it limited to those companies that did irresponsible things (like building one device for a world market where there was no reasonable expectation that the world bands would remain “clear” in the US) or is there an issue of interference even with properly-designed devices?

There’s a national security and life-safety question here.  If, and I stress if – the Obama administration put pressure on people to intentionally mislead parts of the government on the interference issue so as to provide an operating license to a politically-connected entity even though it could severely interfere with GPS location devices inside the United States then you have the worst sort of corruption and someone – or a bunch of someones – need to fry for it.

I am not sold on this given the information currently available, but this is much, much worse than Solyndra if true.

That was just money (although a hell of lot of it) – this, if substantiated, was potentially an issue of lives.

Barack Obama recently made the following statement to American families that are struggling to survive in this economy: “If you’re a family trying to cut back, you might skip going out to dinner, or you might put off a vacation.” A few days after making that statement Obama sent his wife and children off on yet another vacation, this time to a luxury ski hotel in Vail, Colorado.  But the Obamas are not the only ones enjoying the high life.  Wealthy corporate executives and greedy Wall Street fatcats insist that profit margins are too tight to hire more American workers, and yet sales of luxury cars, private jets and vacation homes are soaring.  Meanwhile, most American families are going through economic hell right now.  In 2010, more Americans than ever before were living below the poverty line.  Over 4 million Americans have been unemployed for more than a year, and over 5 million Americans are at least two months behind on their mortgage payments.  As the Obamas and wealthy corporate executives jet off to fancy ski resorts, half of all American workers are earning $505 or less per week and 55 percent of American families are living paycheck to paycheck.  Something is very wrong with this picture.

So is there anything wrong with working hard and enjoying the fruits of success?  Of course not, as long as it was done honestly and not on the backs of the American taxpayers.  But the truth is that many of the corporate executives that are enjoying luxury vacations right now would not even have companies to run if the American taxpayers had not stepped in and bailed them out during the financial crisis.  Thanks to the U.S. government and the Federal Reserve, Wall Street bankers and top corporate executives are once again enjoying bonuses that most of us would consider obscene.

Meanwhile, most of the rest of the country is suffering very deeply.

Over the past several decades, the biggest financial institutions and the biggest corporations have worked really hard to “fix” the rules of the game in their favor.  The truth is that our economy is no longer a “free market” capitalist system.  Rather, what we have now is more accurately described as “corporatism” or “neo-feudalism”.  The big corporations dominate almost everything, and whatever they don’t dominate the government does.

One of the key features of a “corporatist” system is that it tends to funnel all the wealth to the very top.

Back in 1976, the top 1 percent of earners in the United States took in 8.9 percent of all income.  By 2007, that number had risen to 23.5 percent.

Ouch.

There are two different Americas today.  There is the America of the gated communities, the private planes and the good life, and there is the America of declining wages, thrift stores and rising desperation.

What is saddest of all is that the most vulnerable people in society often suffer the most from all of this.

According to one recent study, approximately 21 percent of all children in the United States were living below the poverty line in 2010.

Do you think that the Obamas are thinking about any of this while they are enjoying their stay at a luxury ski hotel in Vail, Colorado?

The truth is that leadership is not just about words.  Leadership is about setting an example.

Back in August, Michelle Obama took her daughter Sasha and 40 of her friends for a vacation in Spain.

So what was the bill to the taxpayers for that little jaunt across the pond?

It is estimated that vacation alone cost U.S. taxpayers $375,000.

Hey, Barack Obama won the most votes in 2008 and so if he wants his family to get as much enjoyment out of these four years as they can that is his prerogative.

However, if he wants to tell American families that they “might put off a vacation” after all the vacations that the Obamas have taken over the past two years then he is just being a massive hypocrite.

According to the New York Post, Barack Obama enjoyed a total of 10 separate vacations that stretched over a total of 90 vacation days during the years of 2009 and 2010.

During his first two years in office, he also managed to play 29 rounds of golf.

Oh, but it is the rest of us that have to cut back on our vacations.

But it is not just the Obamas that are enjoying the high life right now.

The wealthy have recovered nicely from the “recession” and now they are spending money by the gobs once again.

According to Moody’s Analytics, the wealthiest 5% of households in the United States account for approximately 37% of all consumer spending.

Life is very good in America if you have got enough money.

A recent article in USA Today detailed some of the things that wealthy corporate executives are spending money on in 2011….

Luxury and high-end marketers have picked up on what they hope is a growing trend, offering products that bank on a looming spending spree. Germany’s PG-Bikes is rolling out the $80,000 Black Trail, a battery-powered bicycle. Swiss watchmaker Richard Mille is selling $525,000 timepieces. Steinway has launched a John Lennon-themed grand piano — at $90,000 and up. After selling out a $245,000 model, automaker Porsche is planning the 918 Spyder, a hybrid car that could sell for more than $630,000.

Nearly all luxury brands experienced a resurgence in 2010.  Just check out some of the sales increases for luxury car brands….

Porsche: 29%

Cadillac 36%

Rolls-Royce 171%

At the exact same time, however, life is getting really, really hard for the rest of America.

As I wrote about yesterday, the U.S. middle class continues to be decimated even in the midst of this “economic recovery”.

There are tens of millions of Americans that would like to have a full-time job that are not able to get a full-time job.  The number of Americans on food stamps has gone from about 26 million at the start of 2007 to 43 million today and it continues to set a brand new record every single month.  One out of every six Americans is now enrolled in at least one anti-poverty program run by the federal government.

Our economy has become a complete and total nightmare.

Over the past couple of days some of the readers of this column have been sharing some of their economic horror stories.  But they are far from alone.  There are literally millions of Americans with economic horror stories out there.  It is just that we don’t get to hear too many stories from the “other America” on our televisions.

The following stories of economic pain are from people just like you and me.  Times are incredibly hard for most of America right now, and they are only getting harder with each passing month….

Colin:

My mother is unemployed. She is 61 years old, has 25 years of experience working for a major telecommunications corporation, and has a four-year degree. I watch her send application after application to employers with no response. I watch her get contacted by recruiters who say she is a ‘perfect fit’ for a job and never deliver. I watch her slide into depression and staying in bed many hours of the day.

I am 38 years old, I have mental illness, and I recently lost my job as a delivery driver because the owner sold his business to a competitor.

I don’t believe that either my mother or I will ever be employed again. I am beginning to feel that I am permanently in the world of the unemployed.

Jeff:

I graduated college in May 2000 with a Bachelors degree in Broadcasting/Minored in History. I have worked for major corporations as an Enterprise Sales Consultant selling Servers. I was a Network Engineer for Qwest Communications. I even worked for the Federal Government and held a Security Clearance for 4 years. I also won Dell Small Business Sales Consultant of the quarter as well. But since I don’t have an active clearance anymore no one wants to hire me in D.C. I lost my job in 07/2010 and from 07/2010-Present I have been unemployed. My food stamps were also recently cut off last month since the State of Virginia decided that for a household of 1 you can’t make more than $1178 a month. I make $1250 a month in Unemployment compensation before taxes so according to the Government I am too rich to receive Food stamps now. My Rent, Gas and Car insurance is $1000 a month and I am holding on for dear life. I am currently in the process of declaring Chapter 7 Bankruptcy and using my tax return to pay the attorney $1500 to file. That leaves me with only #250 a month for food, water and cell phone.

I have a list compiled in my Google email with approximately 784 applications I have filled out for every government agency, defense contractor and job available in the Washington, DC area. I even applied to Carmax and my old job in college waiting tables at red Lobster and the moving company I used to work at during the summers in college. If its bad for someone like me with over 10 years of Sales, Server/computer experience, Investigations and Network Engineering than I can’t imagine how bad it is for people that just have a high school diploma. I have been on one interview out of the almost 1000 jobs I have applied to (It takes about 2 hours to apply to one job). The one interview I went on offered me less than my unemployment gives me at $8 an hour. I can sit at home and make more money on unemployment than 80% of the jobs that I have applied too and even those jobs don’t call me. Is this what America has become? Is this what I sacrificed 5 years of my life in college from 17 years old to 21 years old and spent $40,000 to get a worthless degree that won’t even get you hired?

Todd:

Well, My family has been ripped to shreds alright.

Overall combined (My father, and myself) make about 60k a year. We can barely survive we keep looking to cut things, and make things cheaper but it’s just not working fast enough.

My wife can’t find a job, and now student loans are starting to become issues. (won’t go in to further details).

Tax returns taken, and various other things, Can’t even afford dental care. We don’t even get to go out anymore, and lucky to get any type of snacks. Just so you know there are 5 people living in this house.

Sharonsj:

The only reason I am not out on the street is that when I had money I paid off my mortgage.

However, because I did that, my food stamp allotment is only $25 a month. The heating assistance I get only paid for less than one months’ heat out of the six months I need here in Pennsylvania. All other expenses use up what’s left, so you learn to eat at home; I try not to leave the house because it’s going to cost me money.

I blame Congress for destroying America. They have given tax breaks to themselves and their rich friends at our expense. Did you know that anybody who serves 5 years in Congress gets a FULL pension at age 62? Us peasants work for 45 years and then if we retire at age 62 we are forced to give up 25% of what we earned.

Niles:

I lost my house, my family was split, and all my savings is gone.

I have lost hope. I served in the military, went to college and have high tech skills. My country doesn’t give a ***** about me. The bankers are as evil as the communists and I hate them.

Michael:

I’m also 38, and have worked in IT since the mid 90s. I lost my full time job in April ’03, and have only been able to find short term temporary work since. The contracts started to get shorter and fewer as the years went on, so in spring ’10 I retrained to be an Emergency Medical Technician (EMT) but have not been able to find work in the last 9 months. An ambulance company I applied with said that they have hundreds of applications in several Northern CA counties but no job openings. And health care jobs are supposed to be on the the only areas of growth. I deliver pizzas for cash on and off and am getting unemployment.

Mondobeyondo:

I lost track of how many resumes I’ve sent out during the past several months. My neighbors think I’m trying to win the Publishers Clearing House sweepstakes or something (yeah, that would help too! Ha!)

Maybe I should go back to school and become an RLP (Rejection Letter Professional).

Dorothy:

The rent at the place I lived was so high that I couldn’t afford it on a school bus driver’s salary, which I was doing for the past few years, because in spite of 30 years clerical experience, where I performed every function from clerk typist to executive legal secretary, I could not find employment. So I applied for subsidized housing and was forced to move back to Chicago, where the crime rate is very high in certain areas.

Before I moved I was getting $200 in food stamps, but now that I am in subsidized housing, I have to go and reapply and if I get anything at all, I have heard that it will be about $52 a month! Although the rent is subsidized, I have to pay for my own heat, and the building in which I live is completely electric! Energy assistance doesn’t cover it. They give with one hand and take away with the other.

All of the people above are still “surviving”, but what do you think is going to happen to many of them as the cost of living goes up dramatically?  Brent crude just hit $108 a barrel and the UN says that the global price of food recently hit a new all-time high.

Americans on fixed incomes or that are on government assistance are going to be absolutely devastated if prices for basics such as food and gas rise substantially.

Not only that, but budget cuts on the federal, state and local levels are also going to hurt many of these people deeply.

But this is where we are at as a nation.  A small privileged class is enjoying the high life while a rapidly growing poverty class pleads for the government to toss them some more crumbs.

The American people deserve better than this.  They deserve an economy that will provide them with good jobs which will enable them to pay their mortgages and feed their families.

Unfortunately, the U.S. economy is dying.  The number of good jobs is actually declining.  The middle class is being systematically wiped out.

The answer is not to “tax the rich” so that we can toss the rapidly growing poverty class a few more crumbs.  The answer is to radically transform our economy back into the kind of economy our founding fathers originally intended.

But wealthy corporate executives and politicians such as Barack Obama are not going to have any of that.  Those sitting on top don’t want any real change to happen.  Sadly, the general population has become so dumbed-down that they don’t even know the questions that they should be asking.

So unfortunately it appears we are going to keep heading down the exact same economic path that we have been heading for decades.  The middle class will keep being ripped apart and politicians like George W. Bush and Barack Obama will just keep on smiling.

The Economic Collapse

Financial crooks brought down the world’s economy — but the feds are doing more to protect them than to prosecute them

By Matt Taibbi – Rolling Stone

Over drinks at a bar on a dreary, snowy night in Washington this past month, a former Senate investigator laughed as he polished off his beer.

“Everything’s fucked up, and nobody goes to jail,” he said. “That’s your whole story right there. Hell, you don’t even have to write the rest of it. Just write that.”

I put down my notebook. “Just that?”

“That’s right,” he said, signaling to the waitress for the check. “Everything’s fucked up, and nobody goes to jail. You can end the piece right there.”

Nobody goes to jail. This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world’s wealth — and nobody went to jail. Nobody, that is, except Bernie Madoff, a flamboyant and pathological celebrity con artist, whose victims happened to be other rich and famous people.

This article appears in the March 3, 2011 issue of Rolling Stone. The issue is available now on newsstands and will appear in the online archive February 18.

The rest of them, all of them, got off. Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted. Their names by now are familiar to even the most casual Middle American news consumer: companies like AIG, Goldman Sachs, Lehman Brothers, JP Morgan Chase, Bank of America and Morgan Stanley. Most of these firms were directly involved in elaborate fraud and theft. Lehman Brothers hid billions in loans from its investors. Bank of America lied about billions in bonuses. Goldman Sachs failed to tell clients how it put together the born-to-lose toxic mortgage deals it was selling. What’s more, many of these companies had corporate chieftains whose actions cost investors billions — from AIG derivatives chief Joe Cassano, who assured investors they would not lose even “one dollar” just months before his unit imploded, to the $263 million in compensation that former Lehman chief Dick “The Gorilla” Fuld conveniently failed to disclose. Yet not one of them has faced time behind bars.

Invasion of the Home Snatchers

Instead, federal regulators and prosecutors have let the banks and finance companies that tried to burn the world economy to the ground get off with carefully orchestrated settlements — whitewash jobs that involve the firms paying pathetically small fines without even being required to admit wrongdoing. To add insult to injury, the people who actually committed the crimes almost never pay the fines themselves; banks caught defrauding their shareholders often use shareholder money to foot the tab of justice. “If the allegations in these settlements are true,” says Jed Rakoff, a federal judge in the Southern District of New York, “it’s management buying its way off cheap, from the pockets of their victims.”

Taibblog: Commentary on politics and the economy by Matt Taibbi

To understand the significance of this, one has to think carefully about the efficacy of fines as a punishment for a defendant pool that includes the richest people on earth — people who simply get their companies to pay their fines for them. Conversely, one has to consider the powerful deterrent to further wrongdoing that the state is missing by not introducing this particular class of people to the experience of incarceration. “You put Lloyd Blankfein in pound-me-in-the-ass prison for one six-month term, and all this bullshit would stop, all over Wall Street,” says a former congressional aide. “That’s all it would take. Just once.”

But that hasn’t happened. Because the entire system set up to monitor and regulate Wall Street is fucked up.

Just ask the people who tried to do the right thing.

Wall Street’s Naked Swindle

Here’s how regulation of Wall Street is supposed to work. To begin with, there’s a semigigantic list of public and quasi-public agencies ostensibly keeping their eyes on the economy, a dense alphabet soup of banking, insurance, S&L, securities and commodities regulators like the Federal Reserve, the Federal Deposit Insurance Corp. (FDIC), the Office of the Comptroller of the Currency (OCC) and the Commodity Futures Trading Commission (CFTC), as well as supposedly “self-regulating organizations” like the New York Stock Exchange. All of these outfits, by law, can at least begin the process of catching and investigating financial criminals, though none of them has prosecutorial power.

The major federal agency on the Wall Street beat is the Securities and Exchange Commission. The SEC watches for violations like insider trading, and also deals with so-called “disclosure violations” — i.e., making sure that all the financial information that publicly traded companies are required to make public actually jibes with reality. But the SEC doesn’t have prosecutorial power either, so in practice, when it looks like someone needs to go to jail, they refer the case to the Justice Department. And since the vast majority of crimes in the financial services industry take place in Lower Manhattan, cases referred by the SEC often end up in the U.S. Attorney’s Office for the Southern District of New York. Thus, the two top cops on Wall Street are generally considered to be that U.S. attorney — a job that has been held by thunderous prosecutorial personae like Robert Morgenthau and Rudy Giuliani — and the SEC’s director of enforcement.

The relationship between the SEC and the DOJ is necessarily close, even symbiotic. Since financial crime-fighting requires a high degree of financial expertise — and since the typical drug-and-terrorism-obsessed FBI agent can’t balance his own checkbook, let alone tell a synthetic CDO from a credit default swap — the Justice Department ends up leaning heavily on the SEC’s army of 1,100 number-crunching investigators to make their cases. In theory, it’s a well-oiled, tag-team affair: Billionaire Wall Street Asshole commits fraud, the NYSE catches on and tips off the SEC, the SEC works the case and delivers it to Justice, and Justice perp-walks the Asshole out of Nobu, into a Crown Victoria and off to 36 months of push-ups, license-plate making and Salisbury steak.

That’s the way it’s supposed to work. But a veritable mountain of evidence indicates that when it comes to Wall Street, the justice system not only sucks at punishing financial criminals, it has actually evolved into a highly effective mechanism for protecting financial criminals. This institutional reality has absolutely nothing to do with politics or ideology — it takes place no matter who’s in office or which party’s in power. To understand how the machinery functions, you have to start back at least a decade ago, as case after case of financial malfeasance was pursued too slowly or not at all, fumbled by a government bureaucracy that too often is on a first-name basis with its targets. Indeed, the shocking pattern of nonenforcement with regard to Wall Street is so deeply ingrained in Washington that it raises a profound and difficult question about the very nature of our society: whether we have created a class of people whose misdeeds are no longer perceived as crimes, almost no matter what those misdeeds are. The SEC and the Justice Department have evolved into a bizarre species of social surgeon serving this nonjailable class, expert not at administering punishment and justice, but at finding and removing criminal responsibility from the bodies of the accused.

The systematic lack of regulation has left even the country’s top regulators frustrated. Lynn Turner, a former chief accountant for the SEC, laughs darkly at the idea that the criminal justice system is broken when it comes to Wall Street. “I think you’ve got a wrong assumption — that we even have a law-enforcement agency when it comes to Wall Street,” he says.

In the hierarchy of the SEC, the chief accountant plays a major role in working to pursue misleading and phony financial disclosures. Turner held the post a decade ago, when one of the most significant cases was swallowed up by the SEC bureaucracy. In the late 1990s, the agency had an open-and-shut case against the Rite Aid drugstore chain, which was using diabolical accounting tricks to cook their books. But instead of moving swiftly to crack down on such scams, the SEC shoved the case into the “deal with it later” file. “The Philadelphia office literally did nothing with the case for a year,” Turner recalls. “Very much like the New York office with Madoff.” The Rite Aid case dragged on for years — and by the time it was finished, similar accounting fiascoes at Enron and WorldCom had exploded into a full-blown financial crisis. The same was true for another SEC case that presaged the Enron disaster. The agency knew that appliance-maker Sunbeam was using the same kind of accounting scams to systematically hide losses from its investors. But in the end, the SEC’s punishment for Sunbeam’s CEO, Al “Chainsaw” Dunlap — widely regarded as one of the biggest assholes in the history of American finance — was a fine of $500,000. Dunlap’s net worth at the time was an estimated $100 million. The SEC also barred Dunlap from ever running a public company again — forcing him to retire with a mere $99.5 million. Dunlap passed the time collecting royalties from his self-congratulatory memoir. Its title: Mean Business.

The pattern of inaction toward shady deals on Wall Street grew worse and worse after Turner left, with one slam-dunk case after another either languishing for years or disappearing altogether. Perhaps the most notorious example involved Gary Aguirre, an SEC investigator who was literally fired after he questioned the agency’s failure to pursue an insider-trading case against John Mack, now the chairman of Morgan Stanley and one of America’s most powerful bankers.

Aguirre joined the SEC in September 2004. Two days into his career as a financial investigator, he was asked to look into an insider-trading complaint against a hedge-fund megastar named Art Samberg. One day, with no advance research or discussion, Samberg had suddenly started buying up huge quantities of shares in a firm called Heller Financial. “It was as if Art Samberg woke up one morning and a voice from the heavens told him to start buying Heller,” Aguirre recalls. “And he wasn’t just buying shares — there were some days when he was trying to buy three times as many shares as were being traded that day.” A few weeks later, Heller was bought by General Electric — and Samberg pocketed $18 million.

After some digging, Aguirre found himself focusing on one suspect as the likely source who had tipped Samberg off: John Mack, a close friend of Samberg’s who had just stepped down as president of Morgan Stanley. At the time, Mack had been on Samberg’s case to cut him into a deal involving a spinoff of the tech company Lucent — an investment that stood to make Mack a lot of money. “Mack is busting my chops” to give him a piece of the action, Samberg told an employee in an e-mail.

A week later, Mack flew to Switzerland to interview for a top job at Credit Suisse First Boston. Among the investment bank’s clients, as it happened, was a firm called Heller Financial. We don’t know for sure what Mack learned on his Swiss trip; years later, Mack would claim that he had thrown away his notes about the meetings. But we do know that as soon as Mack returned from the trip, on a Friday, he called up his buddy Samberg. The very next morning, Mack was cut into the Lucent deal — a favor that netted him more than $10 million. And as soon as the market reopened after the weekend, Samberg started buying every Heller share in sight, right before it was snapped up by GE — a suspiciously timed move that earned him the equivalent of Derek Jeter’s annual salary for just a few minutes of work.

The deal looked like a classic case of insider trading. But in the summer of 2005, when Aguirre told his boss he planned to interview Mack, things started getting weird. His boss told him the case wasn’t likely to fly, explaining that Mack had “powerful political connections.” (The investment banker had been a fundraising “Ranger” for George Bush in 2004, and would go on to be a key backer of Hillary Clinton in 2008.)

Aguirre also started to feel pressure from Morgan Stanley, which was in the process of trying to rehire Mack as CEO. At first, Aguirre was contacted by the bank’s regulatory liaison, Eric Dinallo, a former top aide to Eliot Spitzer. But it didn’t take long for Morgan Stanley to work its way up the SEC chain of command. Within three days, another of the firm’s lawyers, Mary Jo White, was on the phone with the SEC’s director of enforcement. In a shocking move that was later singled out by Senate investigators, the director actually appeared to reassure White, dismissing the case against Mack as “smoke” rather than “fire.” White, incidentally, was herself the former U.S. attorney of the Southern District of New York — one of the top cops on Wall Street.

Pause for a minute to take this in. Aguirre, an SEC foot soldier, is trying to interview a major Wall Street executive — not handcuff the guy or impound his yacht, mind you, just talk to him. In the course of doing so, he finds out that his target’s firm is being represented not only by Eliot Spitzer’s former top aide, but by the former U.S. attorney overseeing Wall Street, who is going four levels over his head to speak directly to the chief of the SEC’s enforcement division — not Aguirre’s boss, but his boss’s boss’s boss’s boss. Mack himself, meanwhile, was being represented by Gary Lynch, a former SEC director of enforcement.

Aguirre didn’t stand a chance. A month after he complained to his supervisors that he was being blocked from interviewing Mack, he was summarily fired, without notice. The case against Mack was immediately dropped: all depositions canceled, no further subpoenas issued. “It all happened so fast, I needed a seat belt,” recalls Aguirre, who had just received a stellar performance review from his bosses. The SEC eventually paid Aguirre a settlement of $755,000 for wrongful dismissal.

Rather than going after Mack, the SEC started looking for someone else to blame for tipping off Samberg. (It was, Aguirre quips, “O.J.’s search for the real killers.”) It wasn’t until a year later that the agency finally got around to interviewing Mack, who denied any wrongdoing. The four-hour deposition took place on August 1st, 2006 — just days after the five-year statute of limitations on insider trading had expired in the case.

“At best, the picture shows extraordinarily lax enforcement by the SEC,” Senate investigators would later conclude. “At worse, the picture is colored with overtones of a possible cover-up.”

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In the shocking video you are about to watch, Howard Dean declares that it is the job of the government to redistribute our wealth.  Not only that, he says it in such a way that indicates that he believes that such a notion should be obvious to anyone with half a brain.  Well, while it is true that the United States has become a highly socialized nation, the reality is that this is not what the founding fathers intended.  The founders intended for us to live in a land where we would have enough freedom and enough liberty to be able to work hard and enjoy life, liberty and the pursuit of happiness.  They did not intend for a gigantic federal government to take huge amounts of money from one group of people and give it to another group of people.  In any nation where a large scale redistribution of wealth is happening, the incentive to work goes right out the window.  Pretty soon you end up with an entire class of people that have learned how to “make a living” by being a parasite of the government, and that is not good for any economy.

If our founding fathers were alive today, they would be horrified by what we have turned into.  In 1816, Thomas Jefferson wrote the following….

“To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it.”

The sad truth is that democracy starts to break down once people start realizing that they can vote themselves money out of the national treasury.  In fact, that is a very large part of what politics in America is all about today.  Politicians are constantly promising what they are “going to do” for various groups of people.

Benjamin Franklin once stated the following….

“When the people find that they can vote themselves money, that will herald the end of the republic.”

Not that our founding fathers were against charity.  In fact, they believed in it very much.  It is just that they did not believe in repressive taxation by a huge national government and they did not believe in large scale redistributions of wealth.

With all of that in mind, watch this shocking video of Howard Dean declaring that it is the job of the government to redistribute our wealth….

Obviously Howard Dean envisions an “America” that is very different from the one that our founding fathers intended.

But does that mean that all government welfare programs are bad?

Of course not.

In fact, if we were to cut them all off today we would have millions of people starving in the streets.

A very large percentage of Americans today don’t even know how to take care of themselves.  If we pulled away all government support all of a sudden there would be chaos and anarchy in the streets.

The sad reality is that we have tens of millions of Americans that are now deeply dependent on the socialist system that we have established.

Unfortunately, this is what socialism does – it turns people into pets of the government.  Our society should be teaching people to be self-sufficient, but instead we are teaching people to allow the government to take care of them from the cradle to the grave.

So does that mean that our founding fathers would be in favor of the rampant corporate greed that we are witnessing today?

Of course not.

As I have written about previously, the founding fathers were against all large concentrations of power.  During the Boston Tea Party, it was the tea of perhaps the most powerful corporation in the entire world at the time (the East India Trading Company) that our founders dumped into the harbor.

If you study early American history, you soon come to realize that corporations were generally very limited in scope and size for many, many years.  The era of the giant corporation is relatively new, and our founding fathers never intended for our society to be dominated by gigantic international corporations.

So when the Democrats argue that we should give more power to the federal government and the Republicans argue that we should give more power to the big corporations they are both wrong.

Our founding fathers did not intend for our federal government to have nearly so much power and they did not intend for big, wealthy corporations to have so much power either.

Fortunately, many Americans today are getting back in touch with those principles.  There is a growing dissatisfaction with the size of government, and according to Gallup two-thirds of Americans are now dissatisfied with the size and influence of major corporations in America today.

However, it is one thing to discuss the finer points of political and economic philosophy, but it is another thing altogether to deal with the reality of tens of millions of people that cannot feed themselves.

As I have mentioned many times before, there are over 43 million Americans on food stamps today.

So what are we going to do with all of them?

Allow them to starve?

Almost 53 million Americans receive Social Security payments.

What are we going to do – cut off Social Security and watch millions of elderly and disabled people freeze to death in their own homes?

Of course not.

But we have got to start swinging the pendulum back in the other direction.  Right now one out of every six Americans is enrolled in some kind of anti-poverty program run by the federal government.

How many Americans being taken care of by the federal government will be too much?

One out of five?

One out of four?

One out of three?

Eventually the entire system crumbles when there are too few people still willing to work hard.

If you ever get the chance to visit a communist country you should.  You will notice that nobody really works very hard.  That is because there is no incentive to work hard.  Very little real wealth gets produced and everyone suffers for it.

So does that mean the U.S. system works?

Of course not.

What we have in the United States today is not real capitalism.  It is more aptly called “corporatism”.  The big corporations and the big financial institutions have accumulated an absolutely stunning amount of economic power and over the decades they have gotten the government to tilt all of the rules of the game in their favor.

In America today, it is really hard for the average person to start a successful business.  The big, powerful international corporations that dominate our economy are everywhere.

So most Americans today have to rely on working for an employer.  Unfortunately, the big employers have started to realize that they can make much larger profits by shipping our jobs overseas.  That is really bad news for the U.S. middle class.

Well, can’t we just tax all of these big corporations like crazy and even everything out?

Unfortunately it just does not work that way in today’s global society.

As I have written about previously, the ultra-wealthy and many of the biggest corporations have figured out how to “minimize” their tax burdens.  While you and I are being taxed into oblivion, the global elite have figured out how to move their money around to escape taxation as much as possible.  In fact, it is estimated that today approximately a third of all the wealth in the world is held in “offshore” tax havens.

Ultra-wealthy individuals and mega-powerful corporations can call just about anywhere “home” in today’s global economy.  That is just the way the world works now.

In order to “tax the rich”, you first must get legal jurisdiction over their money.

Our tax system has become entirely unfair and it simply does not work.  The whole thing needs to be scrapped.

But as we discuss tax policy, there are tens of millions of Americans that are living in poverty.

So what are we going to do about the growing number of Americans that cannot even feed themselves without government help?

Well, the truth is that what they really need is not more handouts.

If you give people handouts, they will just need more handouts tomorrow.

No, what all of these Americans really need are good jobs.

Unfortunately, there are a whole lot less good jobs in America today than there were ten years ago.

Our politicians have stood by as the giant corporations have moved thousands of facilities over to places such as China and India where they can legally pay people slave labor wages.

Since 2001, over 42,000 U.S. factories have closed down for good, and that number is going to continue to increase unless someone stops it.

But nobody is.

Virtually all of our politicians are just standing off to the side with their hands in their pockets.

So now we have 19.3 percent of the workforce that is either unemployed or underemployed.

Our entire economic system is breaking down.  Millions of Americans families are scrambling to find some way to survive.  Over the past two years, U.S. consumers have withdrawn $311 billion more from savings and investment accounts than they have put into them.

Other Americans are going very deep into debt because they don’t have any other options.  When they finally can’t keep up with all the debt, many of these families are losing their cars and their homes.

We are in the middle of an economic nightmare that is absolutely unprecedented.  “Redistributing the wealth” would just be like rearranging the deck chairs on the Titanic at this point.  It would not fix a darn thing.

When our politicians promise that a little “change” here or a little “tweak” there will get our economy back to normal they are lying to you and most of them know it.

What we need is a comprehensive overhaul of our entire economy.  Basically what we need to do is to go back to the blueprint (the U.S. Constitution) and essentially start over.

But most Americans are not ready for that.  Most Americans are still enjoying the tremendous prosperity that the biggest debt binge in the history of the world has purchased for us.  Most Americans still do not believe that an economic collapse is really coming.

But a massive economic collapse is coming.  This whole thing is going to come crashing down and it is not going to be pretty.

The Economic Collapse