0 comment Wednesday, August 6, 2014 | admin


So, ho, ho. Ho, hum, it's back to the economy glum.
But perhaps there is a sliver of good news. A modern-day Brooksley Born has apparently emerged in the form of Rob Johnson, of the Roosevelt Institute. There's not much I can add to this piece in Harpers, highlighted over at the eco-blog Naked Capitalism.

The kicker? These banks are using our taxpayer dollars to fund their lobbying efforts. Can you say PPIP or TARP? TALF or BARF? Here's a happy headline for you: "Banks Lobby to Screw Taxpayers Out of Billions."

Recall it was derivative contracts that got Brooksley Born up in arms and ultimately thrown under the bus; it was derivatives that brought our economy to its knees.


The hearing proceeded with little fanfare from the press. Maybe because derivatives are sort of boring, not to mention complicated. Maybe it was because of the coinciding super-colliding Balloon Boy escapade.
But at least Harper's covered it. Here, some excerpts from the piece:
In response to complaints from Americans for Financial Reform, which represents hundreds of consumer groups and labor unions, the committee issued an invitation�the night before the hearing was held � to Rob Johnson of the Roosevelt Institute. For the committee, the last minute inclusion of Johnson � a former managing director at Bankers Trust Company and former economist at the Senate Banking Committee and Senate Budget Committee � apparently constituted sufficient balance.
Predictably, witnesses at the hearing trotted out positions urging caution in regard to the matter of reform. Derivatives and other exotic financial devices have reaped the finance industry vast profits, but for Hixson of Cargill the common man and woman would be the real losers if Congress were to act too severely. "We offer customized hedges to help bakeries manage price volatility of their flour so that their retail prices for baked goods can be as stable as possible for consumers and grocery stores," he told the committee�s wagging heads. "We offer customized hedges to help a restaurant chain maintain stable prices on their chicken so that the company can offer consistent prices and value for their retail customers when selling chicken sandwiches."
Johnson, who came last, offered the only serious critical viewpoint, saying that the American public had been "quite demoralized by�the bailouts that we experienced last fall." After about five minutes of his testimony, Congresswoman Melissa Bean�another industry-funded committee member who chaired the hearing because Frank was absent�had heard enough. "I�m just going to ask you to wrap up because we�re running out of time," she told Johnson.
Johnson gamely continued. "When I hear the testimony today that are largely financial institutions and end users, I believe that I represent a third group that comes to the table, which is the taxpayers, the working people of the United States," he said.
"I do need a final comment," Bean interjected seconds later.
That put an end to Johnson�s testimony. "I was just called to this hearing last night, so I will provide detailed comments on your bill and a statement for the record that will finish my comments," he concluded.


You see Congress is investigating Countrywide's subprime mortgage practices and the numerous VIPs -- the "friends of Mozilo" -- who received outrageously favorable and unconscionable loan terms.

But hells bells. Can we really feign surprise when Congress tries protect their own?
I'm not feigning illness either, though I wish I were. Halloween is still two days away and already, having had not one piece of candy yet, on this news I'm about to throw up.

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