A 1994 Report from GAO Warned Congress That Wall Street Could Explode


Fourteen years before Wall Street blew itself up in 2008, the General Accounting Office (now called the Government Accountability Office), warned Congress that Wall Street was on a dangerous path that could put the taxpayer at risk of bailouts as a result of trillions of dollars of derivatives being held by a handful of interconnected firms. These dangers were heightened according to the GAO by shoddy accounting practices for derivatives, inadequate regulatory reporting, and high leverage.

Despite the fact that almost every single warning that the GAO called out in 1994 was ignored by the U.S. Congress, leading to the greatest financial collapse since the Great Depression in 2008, Congress has still not attended to the most dangerous elements highlighted in the report.

Back in 1994, the GAO found that: “U.S. bank regulatory data indicate that the top seven domestic bank derivatives dealers by notional/contract amounts accounted for more than 90 percent of all U.S. bank derivatives activity as of December 1992. SEC data show a similar concentration of activity among U.S. securities derivatives dealers. The top five by notional/contract amounts accounted for about 87 percent of total derivatives activity for all U.S. securities firms as of their fiscal year-end 1992.”

GAO envisioned precisely what transpired in 2008, writing:

“Because the same relatively few major OTC derivatives dealers accounted for a large portion of trading in a number of markets, regulators and market participants feared that the abrupt failure or withdrawal from trading of one of these dealers could undermine stability in several markets simultaneously. This could lead to a chain of market withdrawals, or possibly firm failures, and a systemic crisis.”

GAO also correctly foresaw what happened to AIG in 2008, the big insurance company whose affiliate had sold credit default swaps in the billions of dollars to Wall Street firms and required a $182 billion taxpayer rescue because it could not make good on those swaps, creating a backdoor bailout to firms like Goldman Sachs, Merrill Lynch and Citigroup. GAO warned in the 1994 report: “Insurance companies’ OTC derivatives affiliates are subject to limited state regulation and have no federal oversight. Yet OTC derivatives affiliates of securities and insurance firms constitute a rapidly growing component of the derivatives markets.”

Rather than defusing the dangers of concentrated risk, the banks and securities firms the GAO was so worried about in 1994 were subsequently allowed to merge (even during the midst of the crisis in 2008) creating ever larger amounts of concentrated risk today. One chart in the GAO study shows that in 1992, Citicorp held derivatives equal to more than 200 percent of its equity capital and loans equal to more than 1200 percent. Citicorp was allowed to merge with Salomon Smith Barney, the investment bank, and Travelers, the insurance company, in 1998 to become Citigroup. During the crash, its stock went to 99 cents a share, requiring the largest taxpayer bailout of a bank in U.S. history.

The same 1992 chart also shows JPMorgan holding over 200 percent of its equity capital in derivatives and over 300 percent in loans. Chase Manhattan was holding over 300 percent of its equity capital in derivatives and over 900 percent in loans. In 2000, Chase bought JPMorgan, becoming JPMorgan Chase. During the crash of 2008, JPMorgan Chase became exponentially more dangerous, taking over the failed Bear Stearns and Washington Mutual.

The GAO report almost perfectly envisioned what was ahead at JPMorgan Chase when it stated: “The issue is one of striking a proper balance between (1) allowing the U.S. financial services industry to grow and innovate and (2) protecting the safety and soundness of the nation’s financial system.”

In 2013, JPMorgan Chase was fined $920 million by four of its regulators for gambling in exotic derivatives in London (London Whale saga) using not its own capital but the deposits of its FDIC-insured bank. Its losses amounted to at least $6.2 billion. JPMorgan’s settlement with one of the regulators of national banks, the Office of the Comptroller of the Currency (OCC), specifically flagged the safety and soundness issue. The OCC had this to say:

“The credit derivatives trading activity constituted recklessly unsafe and unsound practices, was part of a pattern of misconduct and resulted in more than minimal loss, all within the meaning of 12 U.S.C. § 1818(i)(2)(B).”

But even after the epic financial collapse in 2008 and JPMorgan’s epic gambles with bank depositors’ money a few years later, Congress has left this derivatives ticking time bomb ticking away.

According to a report from the OCC, as of September 30, 2015, insured U.S. commercial banks and savings associations had exposure to $192.2 trillion notional (face amount) of derivatives. The report notes that only four banks hold 90.8 percent of all derivatives: Citigroup, JPMorgan Chase, Goldman Sachs and Bank of America. (See the equally troublesome derivatives holdings of Morgan Stanley here.)

In other words, since the early 90s, instead of reducing systemic risk, Congress has allowed it to dramatically expand. Back then, seven banks represented 90 percent of derivatives activity. Today, just four banks hold 90.8 percent of all derivatives and the dollar amount of those derivatives has exploded.

In February of last year, the U.S. Treasury’s Office of Financial Research (OFR) released a new study showing seismic levels of interconnected risk among the largest Wall Street banks.

The OFR report was authored by Meraj Allahrakha, Paul Glasserman, and H. Peyton Young. It found that five U.S. banks had high contagion index values — Citigroup, JPMorgan, Morgan Stanley, Bank of America, and Goldman Sachs. (What do those banks all have in common – unfathomable levels of derivatives.)

The  OFR authors write:

“…the default of a bank with a higher connectivity index would have a greater impact on the rest of the banking system because its shortfall would spill over onto other financial institutions, creating a cascade that could lead to further defaults. High leverage, measured as the ratio of total assets to Tier 1 capital, tends to be associated with high financial connectivity and many of the largest institutions are high on both dimensions…The larger the bank, the greater the potential spillover if it defaults; the higher its leverage, the more prone it is to default under stress; and the greater its connectivity index, the greater is the share of the default that cascades onto the banking system. The product of these three factors provides an overall measure of the contagion risk that the bank poses for the financial system.”

The words in the OFR report are slightly different than those of the 1994 GAO report but the message is the same: the U.S. financial system is not so much a financial system as it is a giant fireworks factory with a history of lax oversight of its explosive inventory.

That the President who promised hope and change allows this situation to persist, after the greatest Wall Street blowup since 1929, is nothing short of a national scandal.


A 1994 Report from GAO Warned Congress That Wall Street Could Explode

These Are the Wrong Gatekeepers to Clean Up the Culture of Wall Street


The New York Fed didn’t see a problem for Bill Dudley’s spouse to collect $190,000 a year in deferred compensationfrom JPMorgan Chase while the New York Fed served as the bank’s main regulator. The New York Fed didn’t see a problem for Citigroup’s CEO, Sandy Weill, or JPMorgan CEO, Jamie Dimon, to sit on its Board of Directors as their banks embarked on a serial reign of abuses against the investing public. In 2013, Carmen Segarra, a lawyer and former Bank Examiner at the New York Fed, filed a lawsuit alleging that Relationship Managers at the New York Fed obstructed her investigation of Goldman Sachs and attempted to bully her into changing her negative findings. When Segarra refused, she was fired by the New York Fed according to the lawsuit. Segarra later produced internal tape recordings backing up the toothless regulation of Goldman by the New York Fed.

In 2012, Wall Street On Parade reported on how a Barclays’ bank employee revealed to a Senior Financial Economist at the New York Fed that his bank was not “posting um, an honest Libor.” (Libor is the benchmark interest rate used to set the rates for trillions of dollars of financial products around the globe.) That conversation provided an early window into one of the biggest cartel frauds in history. The conversation occurred in April 2008 and yet no one at the New York Fed saw any reason to alert the U.S. Justice Department that a key interest rate benchmark was being rigged.

The New York Fed epitomizes failing up. Timothy Geithner was the President of the New York Fed from November 17, 2003 right through the buildup of unprecedented leverage and toxic subprime assets on Wall Street. He continued in the position until 2009, despite failing to foresee the impending crash or the systemic corruption. As a reward for his negligence as a regulator, President Obama appointed him to become the U.S. Treasury Secretary in 2009, where he proceeded to oversee an unprecedented taxpayer bailout of Wall Street.


Now the Financial Industry Regulatory Authority, a self-regulator known as FINRA, has joined the culture clean-up brigade. In a statement earlier this month, FINRA noted that “One estimate places fines and litigation costs to firms, or their parent companies, related to cultural failures at over $300 billion since 2010.”

What FINRA is missing in this context is that crime is its own profit center on Wall Street. The firms may have paid $300 billion in fines and litigation costs but the crimes initially produced huge profits, obscene executive pay and multi-million dollar bonuses – monies that were never clawed back in the majority of cases. No one went to jail in the majority of these cases either.

FINRA sent a letter to brokerage firms last week and now appears to be looking at how training of sales managers and sales representatives is conducted on Wall Street. We can provide a little insight to FINRA in that regard.

Back in the early 90s, a Merrill Lynch stockbroker, Michael Stamenson, sold billions of dollars of complex securities to Orange County, California which ran a pooled investment fund for close to 200 cities and school districts in the county. The county lost $1.7 billion when the highly leveraged fund imploded, the county filed bankruptcy, resulting in serious job losses and cutbacks in social services. As a firm, Merrill made approximately $100 million in fees with Stamenson received $4.3 million in just the two-year period of ’93 and ’94.

When the case went to court, evidence was produced that included a sales training tape made by Merrill for rookie stockbrokers. Stamenson stars in the training tape and offers up this prescription for becoming a success at Merrill Lynch: “the tenacity of a rattlesnake, the heart of a black widow spider and the hide of an alligator.”

As evidence against Stamenson and executives at Merrill Lynch gained focus in the courtroom, Merrill Lynch continued to pay compensation of $750,000 a year to Stamenson. The company eventually settled the case for $400 million and sealed the documents. Merrill also paid $30 million directly to Orange County to settle the case and abruptly end a grand jury investigation. Once again, the documents and testimony were sealed from public view.

FINRA also plays a pivotal role in keeping Wall Street’s darkest secrets sealed from public scrutiny. FINRA is the body that runs Wall Street’s private justice system calledmandatory arbitration where hearings are held in hotel rooms without the benefit of judge or jury, legal precedent, or case law. The arbitrators are frequently retreads from the depraved culture of Wall Street. The public is not allowed to attend the hearings as would be permitted if the case went to court.

A corrupted culture is killing Wall Street and setting it up for another epic collapse. But these are simply the wrong gatekeepers to deal with it.

These Are the Wrong Gatekeepers to Clean Up the Culture of Wall Street

Who is Morgan Stanley and Why Its $31 Trillion in Derivatives Should Concern You

Screenshot_2016-01-21-20-54-33Who is Morgan Stanley and Why Its $31 Trillion in Derivatives Should Concern You

According to a report from one of the regulators of national banks, the Office of the Comptroller of the Currency, as of September 30, 2015, insured U.S. commercial banks and savings associations had exposure to $192.2 trillion notional (face amount) of derivatives.  (Yes, that’s trillion with a “t”.) The report goes on to terrify with the revelation that only four banks hold 90.8 percent of all derivatives: Citigroup, JPMorgan Chase, Goldman Sachs and Bank of America.Screenshot_2016-01-21-20-56-28

Who and what exactly is Morgan Stanley and why should its derivatives concern us? Morgan Stanley was created in 1935 after the Glass-Steagall Act barred JPMorgan from holding insured deposits while simultaneously operating an investment bank to engage in underwriting and speculating in stocks. The massive losses experienced by banks after the 1929 crash was blamed on reckless speculations in the stock market and a leading cause of the Great Depression. Prior to the Glass-Steagall Act in 1933, there was no FDIC insurance on bank deposits, thus millions of people lost everything that had been in the failed banks as a result of the crash. JPMorgan chose to remain a commercial bank accepting newly insured deposits while other partners left the firm to form the investment bank, Morgan Stanley.

Wall Street On Parade decided to see if Wall Street’s regulators have become more obliging and transparent with the public’s right to know following the greatest Wall Street collapse since the Great Depression. We emailed the SEC and inquired as to why it was allowing a bank holding millions of brokerage accounts for moms and pops across America to simultaneously be housing $31 trillion in derivatives. We received an email back from Judith Burns in the SEC’s Public Affairs office with this: “Decline comment, thanks.”

#FreeRevPinkney December 1 #GivingTuesday Twitter Storm



December 1, 2015

All Day – Whenever You can join in!

#RevPinkney: Jail Time for a Petition! http://www.youtube.com/watch?v=Jc234sQcrR8&sns=tw via @YouTube #GivingTuesday #FreeRevPinkney

Interview with #RevPinkney at the Democracy Convention in Madison Wisconsin http://www.youtube.com/watch?v=oJAukx6iyV8&sns=tw via @YouTube #GivingTuesday

Protest Demands #FreeRevPinkney!
See https://t.co/Z69GMlikty

Educate yourself on #RevPinkney #FreeRevPinkney

Emergency Managers, coming to a town near you, #RevPinkney  #FreeRevPinkney https://t.co/vvZtUzT5eW  Pls donate on #GivingTuesday at bhbanco.org

On this #GivingTuesday donate bhbanco.org
#RevPinkney statement prior to unjust sentencing:
Corruption in Michigan!
Why Americans Have No Idea What Really Happens In Prisons  #FreeRevPinkney #GivingTuesday

Constitutional Rights Violations
alleged in case of #RevPinkney of Benton Harbor
#GivingTuesday https://t.co/gtqopmt2Ce

#GivingTuesday is great day to donate bhbanco.org as Rev. needs legal counsel in Marquette! #FreeRevPinkney

Feb. 27
Civil rights activist denied appeal bond https://t.co/EsO9Hqk9wb @workersworld #GivingTuesday #FreeRevPinkney

🚨 🚨 ALERT! 🚨 🚨
#RevPinkney in Solitary Confinement!

#RevPinkney spoke about the negative impact of Emergency Financial Managers.
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B A N C O: ACLU of Michigan Supports Release of Faith Leader… #FreeRevPinkney http://t.co/7owwJdgjtl Pls give on #GivingTuesday at bhbanco.org

B A N C O: “We have to educate the people,” says Rev. Pinkney… http://t.co/tNm6c6kX0f #FreeRevPinkney #GivingTuesday

Who Pays?
The True Cost of Incarceration on Families:
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Political Prisoners with Lynne Stewart, Ralph Poynter & #RevPinkney http://www.youtube.com/watch?v=uIOyfHlaSTk&sns=tw  #FreeRevPinkney #GivingTuesday donate today!

Feb. 27
Civil rights activist denied appeal bond https://t.co/EsO9Hqk9wb @WWPnatl
#FreeRevPinkney #GivingTuesday

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#Black pastor imprisoned in US over petitioning effort.
#p2 #GivingTuesday

Detective Supplied Informants with Prewritten Statements
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Constitutional Rights Violations
alleged in case of Rev Pinkney of Benton Harbor.
#BlackLivesMatter https://t.co/6h3o6s1z8g

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Letter From Political Prisoner Rev Edward Pinkney
http://t.co/wZ015hbIoF #GivingTuesday #FreePinkney
#Anonymous http://t.co/JuFMb9aYjS

Letter From Political Prisoner
https://t.co/IcxJT8pUTl Pls donate legal fund 4 Rev.Pinkney
#GivingTuesday #FreeRevPinkney
Oct 16
Detroit Light Brigade Stands Up:
https://t.co/sZOuI2oJVf #GivingTuesday https://t.co/Bj1U30CpNE

RT: @aldaelectrician
#FreeRevPinkney #DetroitLightBrigade #GivingTuesday https://t.co/rtWIUafEAX

Rev. Pinkney:
From #Ferguson To Benton Harbor! #FreeRevPinkney #GivingTuesday https://t.co/Rin6t5OaKl https://t.co/eZ69GMlikty

Oct 27
Happy 67th Birthday, Rev. Pinkney!
#BlackPowerFriday #Justice4Pinkney #FreeRevPinkney https://t.co/oFNBp6ANXq

Boycott #Whirlpool ‘Till #RevPinkney Released! #FreeRevPinkney #BlackPowerFriday https://t.co/Rin6t5OaKlhttps://t.co/Y53pLzZW6A

RT: @LeeCamp
Boycott #Whirlpool @whirlpoolusa until they #FreeRevPinkney! https://t.co/ETSkbeBkf2x

Rev. Pinkney:
#Whirlpool Exterminates a City! #FreeRevPinkney #GivingTuesday https://t.co/Rin6t5OaKlhttps://t.co/XENb13O07s

New York City activists demonstrate boycott of #Whirlpool to support #FreeRevPinkney On #GivingTuesday pls donate! https://t.co/PCfefQ5Ye6a

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Boycott #Whirlpool ‘Till #RevPinkney is Released!
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.@whirlpoolusa: your involvement in this is disgusting and shameful! https://t.co/h88Z34Nqf0 https://t.co/ECgsU1BFso

RT: @LeeCamp
Boycott #Whirlpool @whirlpoolusa ’till they #FreeRevPinkney! https://t.co/Yqy1PlloWQK

RT: @00atmen
Boycott #Whirlpool til they #FreeRevPinkney! https://t.co/mPbWMTCsOs

Rev. Pinkney:
From #Ferguson To Benton Harbor! #FreeRevPinkney #BlackPowerFriday https://t.co/HChJTYk4fC https://t.co/Y53pLzZW6A

Boycott #Whirlpool ‘Till #RevPinkney is Released!
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Sept 5
Berrien County Trial Court Has No Shame!
https://t.co/gqyhsGyehU #FreeRevPinkney
#GivingTuesday -Donate bhbanco.org

@workersworld would #FreeRevPinkney! https://t.co/FPDcABJw1W

#FF @justice4pinkney
New Website https://t.co/2XejIn3JxQ
Email: justice4pinkney@gmail.com for details
ALL reliable #FreeRevPinkney info

Instead of investigating, as ACLU-MI requested, Rev. Pinkney’s now in SOLITARY! Abuse of #humanrights https://t.co/WWvJ9KQmdS Help w/legal funds #GivingTuesday

“Because I exercised my democratic right…I was charged with five felony counts!” #RevPinkney
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Really thoughtful letter from innocent man in prison 40 years! #FreeRevPinkney #BlackLivesMatter  https://t.co/eahQzAN3iZ

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@TheDonSean votes to #FreeRevPinkney! https://t.co/kQ1BYen6QIU

#RevPinkney -This is NOT a movie!
On #GivingTuesday, pls donate! bhbanco.org

Sept 17
The Derailing of Democracy
https://t.co/JvueFt3E2K #FreeRevPinkney #GivingTuesday – donate & THX!

#FF @FreeRevPinkney
#GivingTuesday Visit https://t.co/Rin6t5OaKl https://t.co/Q1AYkqpz9K

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#RevPinkney’s wife Dorothy and Michigan activist Marcina Cole visited the Rev. in Marquette.
#GivingTuesday for donations bhbanco.org
Sept 23
#RevPinkney Speaks from Prison:
Appeal Bond Denied
https://t.co/MtgL4Xqc8T #FreeRevPinkney #BlackPowerFriday https://t.co/Q1BYen6QIU

RT @aldaelectrician intends to #FreeRevPinkney!
#BlackPowerFriday https://t.co/gEyuwxWM6wQ

#Justice4Pinkney in Benton Harbor, Michigan
Visit https://t.co/BiVKoUQwg4 #BlackPowerFriday  https://t.co/qy1PlloWQK

RT: @LeeCamp
Boycott #Whirlpool ’til they #FreeRevPinkney https://t.co/xN4iPXFxzn

Lee Camp wants to #FreeRevPinkney!
#BlackPgh5qkrnNUE #RevPinkney https://t.co/qKWZUjN54c

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Polly @PollyHughes10 demands #Justice4Pinkney
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Visit https://t.co/Rin6t5OaKl
#BlackPowerFriday https://t.co/0AtxnV9kjl

Sept 26
Ring of Snitches:
How Detroit Slaps On False Murder Convictions
https://t.co/GMZoqqhAUF https://t.co/EyuwxWM6wQ

Thank YOU @oppermanreport for spreading word, exposing corruption of #Whirlpool!
#FreeRevPinkney #BlackPowerFriday https://t.co/J6FP4IpEOm

B A N C O:
“We have 3 unsolved murders; which one do you want?”
#FreeRevPinkney #BlackPowerFriday

Sign the Petition:
#FreeRevPinkney #BlackPowerFriday https://t.co/RIiay1Bheu

Sept 22
Visiting Issues at Lakeland Correctional Facility
https://t.co/u3r8yaFVTs #FreeRevPinkney #BlackPowerFriday https://t.co/sTtcxZ5EtP

Detroit union supports political prisoner Rev.EdwardPinkney
https://t.co/DMMrN0brzv @RichardTrumka #1u
#FreeRevPinkney #justiBj1U30CpNE

Let’s all pitch in to bring Rev.Pinkney home! #FreeRevPinkney
#BlackPowerFriday https://t.co/bB91i6IVNN

RT: @ihopetowin
#FreeRevPinkney #BlackThanksgiving https://t.co/Fgzy2kU0df

Sept 25
Berrien County Commish Steals $1Mil + from Taxpayers!
#BlackPowerFriday https://t.co/HKoW2B8M98

Rev. Pinkney Was Cheated:
The Details
#FreeRevPinkney #BlackPowerFriday

Sept 27
The City of Detroit’s Corrupt Police Force
https://t.co/hULttA17z1 #FreeRevPinkney #BlackPowerFriday https://t.co/A3nOuOw5yNA3nOuOw5yN

FREE Reverend Edward Pinkney! #FreeRevPinkney #Justice4Pinkney #BlackPowerFriday https://t.co/Rin6t5OaKlhttps://t.co/Bj1U30CpNE

https://t.co/VUNoCkYaRW via @P4sedBlog
#BlackPowerFriday #FreeRevPinkney

Sept 26
Ring of Snitches:
How Detroit Slaps On False Murder Convictions
https://t.co/GMZoqqhAUF https://t.co/EyuwxWM6wQ

Please spread far & wide from @LeeCamp about the great #RevPinkney!
#FreeRevPinkney #BlackPowerFriday

RT: @LeeCamp
Boycott @whirlpoolusa until political prisoner is released!
#FreeRevPinkney https://t.co/uO7Er83Zef

Sept 25
Berrien County Commish Steals $1Mil + from Taxpayers! #RevPinkney
#FreeRevPinkney https://t.co/HXENb13O07s

.@BernieSanders @POTUS @RepFredUpton
#FreeRevPinkney NOW!
Watch: https://t.co/9rMrF1DlB7 Read: https://t.co/nW1usrO13a

Nov 10
“I believe Berrien County officials have put a hit on me, inside the prison system!” #RevPinkney writes!

🚨 🚨 ALERT! 🚨 🚨
Mistreatment & violations reported by #RevPinkney!
#FreeRevPinkney #BlackPowerFriday

Jeff Ritherdon @ihopetowin wants to #FreeRevPinkney! https://t.co/TSJPbmd4Hd

Check this out on Pinterest. Free Reverend Pinkney #FreeRevPinkney #BlackPowerFriday https://t.co/xmjwcM6GgJY

Why #FreeRevPinkney?
Another Case of Political Persecution!
@NatCounterPunch https://t.co/dF8bmOLm09

How Much Must the Pinkneys Endure? (updated 10.26.15*)
#FreeRevPinkney #BlackPowerFriday

Attorney General Loretta Lynch,
John Conyers:
Jailed By Corporate Powers!
#BlackPowerFriday https://t.co/mjwcM6GgJY

Nov 13
#RevPinkney’s life is in DANGER!
https://t.co/mxkNMcWiKG #FreeRevPinkney #Justice4Pinkney #BlackPowerFriday https://t.co/1PI5zTTPZa

Listen to repot on mistreatment & write letter to #Obama:
#FreeRevPinkney #BlackPowerFriday https://t.co/lEyuwxWM6wQ

https://t.co/OpGKkiTumh via @P4sedBlog #FreeRevPinkney #BlackPowerFriday

#RevPinkney, hero of Benton Harbor, speaks from prison
https://t.co/1WK1NS9xuG @sfbayview
#BlackPowerFriday #FreeRevPinkney

Nov 16
Visiting #RevPinkney in Marquette
https://t.co/12k88C3t0b @FreeRevPinkney #FreeRevPinkney #BlackPowerFriday https://t.co/sTtcxZ5EtP

We Must Stand Together and Demand Justice! https://t.co/WUmaX0FDFe via @LAProgressive
#FreeRevPinkney #BlackPowerFriday

Nov 16
Letter from ACLU of #Michigan to Director Washington & Warden Napel
#FreeRevPinkney https://t.co/vbiR6nhGBG https://t.co/Bj1U30CpNE

PLEASE SIGN THIS PETITION TODAY to Free #RevPinkney immediately!
Thank you!
#BlackPowerFriday #FreeRevPinkney

Nov 18
Update on #RevPinkney’s Appeals
https://t.co/AZl1RAp13x #BlackPowerFriday #FreeRevPinkney #Justice4Pinkney https://t.co/dF8bmOLm09

Nov 19
Writings from #RevPinkney
https://t.co/pGvm5x9cEu #BlackPowerFriday #FreeRevPinkney

Nov 21
More Writings from #RevPinkney in Prison
https://t.co/wBKgMCm9rh #FreeRevPinkney #BlackPowerFriday https://t.co/mjwcM6GgJY

.@POTUS Please Pardon political prisoner #RevPinkney!
#FreeRevPinkney #BlackPowerFriday https://t.co/QJwhdRWtZJ

🚨 🚨 ALERT! 🚨 🚨
#RevPinkney in SOLITARY CONFINEMENT! https://t.co/SA6UxSLU87

Racist Jailers Isolate Activist Reverend by David Sole
#FreeRevPinkney #BlackPowerFriday https://t.co/t5antEOrtt…

EastBay artist/activist RichBlack urges all 2 help #FreeRevPinkney! #BlackPowerFriday
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#FreeRevPinkney Fundraiser/Publicity T-shirts!
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Polly Hughes @PollyHughes10 demands #Justice4Pinkney
#FreeRevPinkney NOW!
Visit https://t.co/B2YrMILyXV

President Barack Obama
The White House
1600 Pennsylvania Avenue NW
Washington,DC 20500

#BlackPowerFriday #FreeRevPinkney

Fire Warden Napel!
#FreeRevPinkney #BlackFriday
Check https://t.co/BiVKoUQwg4 daily for news! https://t.co/4Ufq9QRdzS

Rep. Fred Durhal, Jr. 1-517-373-0844 Senator Bert Johnson 1-517-373-7748
#BlackPowerFriday https://t.co/F9PJ1bA9oF

Sign the Petition:
https://t.co/KnXEc5PuYA #BlackPowerFriday
@mvmt4bl @deray @BlackLivesMpls

#Police Can Track Everywhere You Go Using Google, See Your Map: https://t.co/WvA2vUmJGZ #BlackPowerFriday

.@Pontifex #FreeRevPinkney political prisoner isolated/silenced/mistreated Marquette prison https://t.co/Rin6t5OaKl

RT: Thanks for Your Support!
#FreeRevPinkney #BlackPowerFriday  https://t.co/LTSkbeBkf2x

#FreeRevPinkney Updates
Video: https://t.co/UdZ9Ls9PJp
Petition: https://t.co/zs9XiXbZqJ
Help: https://t.co/z9mIeWqGkO

Go to https://t.co/dvelmztfMC Sign petition, write to @POTUS call prison, call MDOC . . .Thx to all! #FreeRevPinkney https://t.co/UFKhb14wEl


The Inhuman Failure of ‘Austerity’ | Consortiumnews


The Framers of the U.S. Constitution said the Government should provide for the “general Welfare,” a mandate to help build a strong and prosperous nation. But the concept has been lost in a wave of anti-government, “neoliberal” propaganda!


The neoliberals are prisoners of the Eighteenth Century. They have not advanced since the neo-feudal teachings of Adam Smith (1723-1790). Smith is the godfather of economics and wrote the “bible” of capitalism, An Inquiry into the Nature and Causes of the Wealth of Nations. Smith was among the first to give much thought about economics.

In Eighteenth Century Great Britain, half the population lived in poverty. They survived, if they did, with disease, famine, illiteracy, lack of sanitation and in slums. It was normal then. Things had always been that way. They thought the poor, starving and ignorant mass of people would always be among them.  They thought their society was according to the law of nature.

Smith was a charitable man. He fretted about poverty, and gave a great deal of thought about wages. With a large pool of the unemployed, the new industrial class only had to pay subsistence wages.

Smith tried to tell the industrialists that people were like cattle. He said if one gave their cows more grass, then they would produce more milk. The industrialists said that if they gave their workers higher wages, then it would come out of profits, and the workers would just produce more children with mouths to feed, leading to greater starvation. The neoliberals still think this way.


The neoliberals see Adolf Hitler or Joseph Stalin behind every government social program. In the 1940s the neoliberal’s idol, Friedrich von Hayek (1899-1992) wrote a thesis called The Road to Serfdom. It is a simple book in its Eighteenth Century theories about government and freedom. There is a comic book version, courtesy of General Motors. Hayek won the Nobel Prize for it.

John Maynard Keynes (1883-1946) and Hayek were colleagues at the London School of Economics. They had a long-running debate for years over the role of government. Keynes realized that government was important, that it has an active role in the economy. He said the government could do “good” and manage the economy well. Hayek said it was the road to serfdom.

Keynes was an economic advisor for the British government during World War I. He also advised the British during the Treaty of Versailles to negotiate Germany’s surrender. Keynes resigned from his position at Versailles in disgust, saying the harsh austerity the Allies were demanding of Germany and Austria would cause massive poverty and starvation. He said it was inhumane and would result in the rise of fascism and war. He proved to be right. He was not awarded the Nobel Prize.


During the Great Depression (1929-1939), President Franklin Delano Roosevelt turned to Keynes for advice about the Great Depression. Keynes wrote a letterto Roosevelt advising him on the need for government social programs to stimulate the economy. Keynes further warned FDR that lowering interest rates and increasing the money supply alone would only bailout speculators, but would not sustain economic recovery.

By contrast, President Barack Obama took the neoliberal advice in the Great Recession and bailed out the speculators. Keynes would have predicted that the result would be anemic economic recovery. He would have been right.

Keynes gave worthy advice that would do the American people well in the Twenty-first Century. The neoliberals keep sabotaging good advice from past sages. Their sabotage is well-funded by corporations, foundations, foreign governments and the wealthy.

John Kenneth Galbraith (1908-2006) was a genius with Twenty-first Century ideas. Galbraith served as an economic advisor to both FDR and John F. Kennedy.  His most famous book is The Affluent Society (1958), a popular book during the 1960s.

During the Stagflation of the 1970s, the neoliberals allied with the religious-right and racists to purge Keynes’s and Galbraith’s teachings. In the 1980s, the Reagan-Thatcher revolution established neoliberals, corporate hegemony and right-wing extremists in the halls of power.


Fed Officials Are Attending Big Bank Board Meetings? Is This Stockholm Syndrome?



Wall Street On Parade has been warning for some time that things have gotten way too chummy and “synergistic” between the Federal Reserve and the mega Wall Street banks that it regulates.

In July 2012, we reported that the New York Fed had been given an early warning that the interest rate benchmark, Libor, was being rigged. It sat on that information. In the same month, we reported that Ann Darby, wife of the New York Fed President, William Dudley, had holdings of more than $1.5 million in deferred income accounts at JPMorgan Chase where she had worked previously, and was receiving $190,000 in payments annually from those accounts – payments which were expected to continue through 2021. The Fed did not see a problem with this despite the fact that the New York Fed was a key regulator of JPMorgan Chase.

In November 2013, we reported on how the trading floor of the New York Fed had begun to mirror the trading floors across Wall Street, complete with ultra expensive Bloomberg trading terminals and speed dials to Wall Street. The New York Fed’s trading floor begins monitoring markets around the world at 4:30 a.m. each day. The New York Fed is the only one of the 12 regional Fed banks to have a trading floor and the majority of Americans would be shocked to know that one exists. The New York Fed denied our requests for photographs of the floor. We obtained them from fleeting shots in educational videos released by the Fed.

In December 2013, we reported on the Fed’s “Relationship Managers” who are assigned to managing the “relationships” with the banks the Fed supervises. That sounds more like a concierge job for pampered guests at a ritzy hotel rather than a tough cop overseeing serial miscreants on Wall Street.

Last year we reported that even after JPMorgan Chase received two deferred felony counts for aiding and abetting the Madoff fraud, the New York Fed made it custodian of $1.7 trillion (that’s trillion with a “t”) of the Mortgage-Backed Securities (MBS) it had purchased under its various quantitative easing programs.

Then there was the case of Carmen Segarra, a lawyer and former bank examiner at the New York Fed. Segarra charged in a lawsuit filed in October 2013 that she was told to change her negative examination of Goldman Sachs by colleagues at the New York Fed, who also obstructed and interfered with her investigation. According to her lawsuit, when she refused to alter her findings, she was terminated in retaliation and escorted from the Fed premises. After her case was dismissed by a Judge whose husband was representing Goldman Sachs, Segarra turned over her 46 hours of secretly made tape recordings of the mattter to ProPublica’s Jake Bernstein and public radio’s This American Life.

In May of this year we reported that as the U.S. Justice Department was preparing to accept a criminal felony plea from JPMorgan Chase for its role in rigging foreign exchange markets, the perpetually blindfolded New York Fed saw nothing wrong with keeping Troy Rohrbaugh, the head of Foreign Exchange Trading at JPMorgan Chase, as the Chair of its own Foreign Exchange Committee.

When Fed Chair Janet Yellen testifies before Congress, she sounds like an extremely knowledgeable, level-headed central banker. But the more we learn about the Fed as a regulator and supervisor of the biggest, interconnected, hopelessly complex banks in the world, the more we are certain that it was one of the greatest Congressional failings of all time for the Dodd-Frank legislation to give the Fed greater regulatory authority. The Fed was a hopelessly failed regulator going into the crash of 2008 and it is a hopelessly failed regulator now. 

Fed Officials Are Attending Big Bank Board Meetings?
Is This Stockholm Syndrome?

New York Times Discovers Courts Have Been Privatized – 20 Years Too Late!



The Times writes:

“Over the last 10 years, thousands of businesses across the country — from big corporations to storefront shops — have used arbitration to create an alternate system of justice. There, rules tend to favor businesses, and judges and juries have been replaced by arbitrators who commonly consider the companies their clients, The Times found.”

Wall Street On Parade decided to take a look at who is currently on the Board of Directors of the American Arbitration Association. According to Bloomberg Business, the AAA Board includes lawyers from some of the most prominent go-to law firms for Wall Street and corporate America: Michael Mukasey of Debevoise & Plimpton LLP; Daniel Price of Sidley Austin; Guillermo Aguilar-Alvarez of King and Spalding; Albert Bates Jr. of Duane Morris LLP; and John Fellas of Hughes Hubbard & Reed LLP, among others.

The major problem with The Times investigation is that it makes only a few fleeting references to Wall Street – the longest purveyor of a private justice system dating back decades and the only industry in America that shuttles allclaims by both customers and employees into mandatory arbitration hearings. (Under the Dodd-Frank financial reform legislation passed in 2010, whistleblower claims are now exempted from mandatory arbitration agreements.)

The Times has been on notice of the systemic abuses in the securities industry’s mandatory arbitration hearings since at least June 9, 1994 when Margaret Jacobs, writing for the Wall Street Journal, penned an in-depth seminal piece on the kangaroo courts routinely masquerading as justice on Wall Street. Jacobs wrote: 

“Helen L. Walters says her boss called her a ‘hooker,’ a ‘bitch’ and a ‘streetwalker.’ Sometimes he brandished a riding crop in front of her and once he left condoms on her desk.

“Ms. Walters, then a trading-room secretary at a California brokerage firm, filed a complaint against him alleging sexual harassment.  In a formal hearing, he readily admitted to the whip and the condoms, and to using all of those epithets.  Her case, legal scholars agree, seems a textbook example of illegal harassment as defined by the Supreme Court: a situation in which a ‘reasonable person’ would find the work environment ‘hostile or abusive.’ ”

Walters lost her case because arbitrators in security industry proceedings are not required to follow legal precedent or case law, or write reasoned decisions. It is almost impossible to succeed in a court appeal of a mandatory arbitration decision – no matter how egregious the ruling is.

New York Times Discovers Courts Have Been Privatized – 20 Years Too Late!


Coup d’État in Portugal!

Coup d’État in Portugal


The President of Portugal, Anibal Cavaco Silva, has rejected the coalition government formed with the support of the new parliamentary majority, on the grounds that it includes personalities from the left-wing block and also some Communists.

« In 40 years of democracy, no Portuguese government has ever depended on the support of anti-European forces, in other words, forces which have campaigned to repeal the Treaty of Lisbon, the Budgetary Pact, and the Stability and Growth Pact, as well as calling for the dismantling of the Monetary Union and an exit from the Euro zone – not to mention leaving NATO », the President commented.

« This is the worst possible time for radical change in the foundations of our democracy (…) After having realised a difficult programme costing considerable sacrifice, it is my duty, in my constitutional power, to do everything possible to avoid sending false signals to the financial institutions, the investors and the markets », he continued.

The President pointed out that the majority of the electorate had not voted for an exit from the Euro zone – which is true – but he said nothing about the popular movement of rupture with the Troika’s politics of austerity.

This decision, which constitutes a coup d’État according to the terms of the Portuguese Constitution, is the first institutional affirmation of a ban on opposers of NATO entering into a government of the European Union. It attests to the fact that the Gladio principle did not die with the Soviet Union.


The ‘Anti-Knowledge’ of the Elites

The ‘Anti-Knowledge’ of the Elites


It would be comforting to believe that somewhere in the commanding heights of our permanent government, there are important players who are serious grownups who know what they are doing. That, at least, is the impression they seek to convey with their sober demeanors, credentials from think tanks or prestigious universities, and the measured, almost soporific testimony they deliver to congressional committees.

Think of Robert Gates, Ashton Carter, Timothy Geithner or Eric Holder. On the surface, they seem the very antithesis of the Tea Party fanatic, gibbering aboutISIS training camps in America. The preferred pose of these establishment personages is that of the politically neutral technocrat offering well-considered advice based on their profound expertise.

That pose is nonsense. They are deeply dyed in the hue of the official ideology of the governing class, an ideology that is neither specifically Democrat nor Republican. Domestically, whatever they might privately believe about essentially diversionary social issues (“rube bait”) like abortion or gay marriage, they almost invariably believe in the “Washington Consensus”: financialization, outsourcing, privatization, deregulation and the commodification of labor.


The ‘Anti-Knowledge’ of the Elites

Exclusive: It’s fairly easy to spot the “anti-knowledge” spouted by the Tea Party and the Religious Right’s favorite candidates, but a more subtle form of reality-deprived “group think” pervades America’s elites though it is rarely noted in the polite circles of the mainstream media, writes Mike Lofgren.

By Mike Lofgren

In a previous piece, I described how the Republican Party and its ideological allies in the fundamentalist churches have confected a comprehensive media-entertainment complex to attract low-information Americans and turn them into partisans.

The propaganda they are fed has become so disconnected from facts, evidence and logic that it is all too easy to laugh at people operating on demonstrably — and even ridiculously — false premises, such as the notion that Barack Obama, born in Hawaii, is not a natural-born American, or that the Sandy Hook school massacre was an elaborate fake designed to take away the firearms of patriotic Americans.

Coffins of dead U.S. soldiers arriving at Dover Air Force Base in Delaware in 2006. (U.S. government photo)

It would be comforting to believe that somewhere in the commanding heights of our permanent government, there are important players who are serious grownups who know what they are doing. That, at least, is the impression they seek to convey with their sober demeanors, credentials from think tanks or prestigious universities, and the measured, almost soporific testimony they deliver to congressional committees.

Think of Robert Gates, Ashton Carter, Timothy Geithner or Eric Holder. On the surface, they seem the very antithesis of the Tea Party fanatic, gibbering aboutISIS training camps in America. The preferred pose of these establishment personages is that of the politically neutral technocrat offering well-considered advice based on their profound expertise.

That pose is nonsense. They are deeply dyed in the hue of the official ideology of the governing class, an ideology that is neither specifically Democrat nor Republican. Domestically, whatever they might privately believe about essentially diversionary social issues (“rube bait”) like abortion or gay marriage, they almost invariably believe in the “Washington Consensus”: financialization, outsourcing, privatization, deregulation and the commodification of labor.

Internationally, they espouse Twenty-first Century American Exceptionalism: the right and duty of the United States to meddle in every region of the world, coercive diplomacy, boots on the ground, and the right to ignore painfully-won international norms of civilized behavior. To paraphrase what Sir John Harrington said over 400 years ago about treason, now that the ideology of the Deep State has prospered, none dare call it ideology.

Let us consider some of the tenets of their faith:

–Almost a decade and a half later, it is now permissible to suggest that the invasion of Iraq was less than well considered. But to actually hold the authors of the invasion politically accountable is taboo and to suggest criminal culpability is to get oneself ejected from the salons of the Consensus.

–There is ample evidence of conscious criminal malfeasance, including selling investment instruments deliberately designed to fail, in the financial saturnalia leading, in 2008, to the greatest global economic collapse in 80 years. But our highest law enforcement official said maybe we shouldn’t prosecute the high-level instigators. Why? Just because.

–ISIS is seen in Washington as a grave terrorist threat with the potential to knock over the unpopular and unstable regimes of the Middle East (i.e., our client states) like bowling pins. Yet the Washington Consensus sees as the key to defeating ISIS the undermining of the regime of Bashar al-Assad, ISIS’s principal military enemy. If a U.S. general in 1942 declared the only way to defeat the Wehrmacht would be for us to fight Nazi Germany and the USSR simultaneously, he would have been committed to a lunatic asylum.

–Could widening income inequality just possibly have something to do with corporations and the rich inducing their bought-and-paid-for politicians to rewrite the tax code, trade laws, labor protections and pension rules – in other words, rigging the system? Oh, no, it was all inevitable, say the “sensible centrists;” that’s just the way the world works. So maybe if the little people just got off their duffs, loaded up on student debt, and got educated, they’d be ready for the brave new world of the Washington Consensus.

–American International Group executives whose malfeasance or incompetence led to the company being bailed out (and nationalized in all but the name) by the American taxpayer are entitled to keep their stratospheric salaries and bonuses because of a holy principle called “sanctity of contract.”Do autoworkers, or pensioners of the City of Detroit, get to keep their previously agreed-to compensation? No, because that’s how a globalized economic system works.


GOP and the Rise of Anti-Knowledge

GOP and the Rise of Anti-Knowledge


In the realm of physics, the opposite of matter is not nothingness, but antimatter. In the realm of practical epistemology, the opposite of knowledge is not ignorance but anti-knowledge. This seldom recognized fact is one of the prime forces behind the decay of political and civic culture in America.


At present, however, a person can be blissfully ignorant of how to locate Kenya on a map, but know to a metaphysical certitude that Barack Obama was born there, because he learned it from Fox News. Likewise, he can be unable to differentiate a species from a phylum but be confident from viewing the 700 Club that evolution is “politically correct” hooey and that the earth is 6,000 years old.

And he may never have read the Constitution and have no clue about the Commerce Clause, but believe with an angry righteousness that the Affordable Care Act is unconstitutional.

This brings us inevitably to celebrity presidential candidate Ben Carson. The man is anti-knowledge incarnated, a walking compendium of every imbecility ever uttered during the last three decades. Obamacare is worse than chattel slavery. Women who have abortions are like slave owners. If Jews had firearms they could have stopped the Holocaust (author’s note: they obtained at least some weapons during the Warsaw Ghetto rising, and no, it didn’t). Victims of a mass shooting in Oregon enabled their own deaths by their behavior. And so on, ad nauseam.

It is highly revealing that, according to a Bloomberg/Des Moines Register poll of likely Republican caucus attendees, the stolid Iowa burghers liked Carson all the more for such moronic utterances. And sure enough, the New York Times tells us that Carson has pulled ahead of Donald Trump in a national poll of Republican voters. Apparently, Trump was just not crazy enough for their tastes.