Cronyism, corruption, use whatever noun along those lines you want. That's our government and the brazen actions of our officials, past and present!

Eric Holder Returns As Hero To Law Firm That Lobbies For  Big Banks

Well, if you still had any doubts as to why Eric Holder, as Attorney General, did not prosecute one single bank executive for the inumerable acts of fraud, insider trading, market manipulation, tax evasion, lwire and mail fraud or, lying under oath, here's why...he was preparing for his very lucrative career outside of government.

That career would be working for a law firm that LOBBIES FOR BIG BANKS.

And our leaders lecture other countries about corruption. What a fucking joke. We are all fools.

Attorney General Loretta Lynch cracks down on fraud...wow. 243 arrested for $700 million in medical fraud. Banks do billions $$, get off with fines.

Wow. So happy our new Attorney General, Loretta Lynch is getting tough on fraud. She had 243 people arrested for a $700 million case of medical fraud.

National Medicare Fraud Takedown Results in Charges Against 243 Individuals for Approximately $712 Million in False Billing

Attorney General Loretta E. Lynch and Department of Health and Human Services (HHS) Secretary Sylvia Mathews Burwell announced today a nationwide sweep led by the Medicare Fraud Strike Force in 17 districts, resulting in charges against 243 individuals, including 46 doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $712 million in false billings. Read more. 

Wow.

Hey,  $700 million is not peanuts, but what about the billions, no, tens of billions, hundreds of billions, TRILLIONS, that the banks committed and they get off with nothing but fines.

Shit...last month 5 banks pleaded guilty to currency manipulation and paid fines of $5.5 billion. If that was the fine imagine what the size of the fraud must have been?

Then there was Libor fraud, foreclosure fraud, money laundering, tax evasion, wire fraud, plus more in the past. Not to mention the fact they wrecked the entire global economy.

And what happened?

Nothing. Not a single bank executive was arrested.

What a sham.

FIFA execs arrested for corruption, but bankers free to steal billions (trillions) more!

Another one for the joke books.

The FBI announced a "big" arrest today of some FIFA officals who allegedly took $150 million in bribes (what bankers call, "pocket money") over a 24 year period. That's about $6 million per year or, about a quarter of Jamie Dimon's annual salary, but who's counting?

The Department of Justice indictment names 14 people on charges including racketeering, wire fraud and money laundering conspiracy. In addition to senior soccer officials, the indictment also named sports-marketing executives from the United States and South America who are accused of paying more than $150 million in bribes and kickbacks in exchange for media deals associated with major soccer tournaments. Read.

Thank God we have our vaunted, Department of Justice on this. We can all sleep easier now that these dangerous sports execs have been nabbed. Phew! Way to go, Attorney General Loretta Lynch!

Oh...wait...I forgot...

They got fines.

This is all part of the financial elites' plan, folks. Get the public addicted to these stupid games, make sure they're completely zombified and looted ($150 for a ticket to a baseball game?) by this industry, which really has only been created to serve as a major distraction so that the elites can rob us blind without us even knowing it or, caring about  it. (The elites own the teams, remember?)

But...if something "bad" happens in sports, like a bribe or, a player taking performance enhancing drugs (which the hypocritical fans love because it juices the players' performance to the max) or, God forbid, DEFLATED FOOTBALLS, then our "leaders" get real serious about these terrible "crimes" and throw the book at the "lawbreakers" hard. Destroy their careers or lock them up after media-frenzy raid that show them being led away in "perp walks."

Honestly, I don't know why the bankers and financial elites even want to steal: we throw trillions $$$ of taxpayer money at them for free. Maybe they rob just because they're bored and want something to do.

The joke's on us, folks. The joke's on us.

200 Years Ago, We Didn't Have To Explain "Where Money Comes From" To All Citizens. More Knew Then Than Do Now!

   (Commentary posted by Roger Erickson)

Battle Over Banking: A Public Bank for the Republic of Vermont (1803)

The first part is is a fascinating historical story, for multiple reasons. 

First, for the mere fact that a savvy set of state legislators had it right from the beginning, like multiple American Colonies had done, previously. 

(Just like John Law had pointed out. Maybe he could read some Greek?)

Second, for the chilling story of how widespread bank monopolies conspired to do away with the Public Bank of Vermont.

Nothing much changes? The bank lobby is still winning, so far. Keeping us from further coordinating our own returns.

Russia raids infrastructure fund to save the banks

I have never seen such disastrous, ill-conceived policy. (Well, maybe with the exception of the Eurozone austerity, but we know that is solely to benefit the plutocrats.)

Russia is taking money away from infrastructure investments and giving it to the banks to "save" them.

First of all the banks don't need to be saved. They can still function in the role of clearing and settlement as long as the central bank makes sure their liabilities are met. No problem there--the libabilities are in rubles.

Did anyone over there ever have a look at Japan? Those banks have been zombies for decades thanks to loads of really bad investments, but no problem...people deposit money, checks get cashed, cleared...all the usual banking stuff happens without a hitch. They even make loans; the ones that are solvent at least.

Russia's in dire need of infrastructure investment. In fact that would be a great way to immunize the entire Russian economy against Western sanctions: boost infrastructure investment, massively.

But instead their new finance minister (excuse me, I meant to say, finance idiot) is imposing austerity as a way to "fix" the economy. Russia apparently ran out of rubles(?) and the ones they got left they're giving to the banks? Why this is happening I am not sure? I can only chalk it up to idiocy at the top levels of leadership.

I was bullish on Russia. I even bought some Russian ETF's recently. But now I think it's a dumb move. So much stupidity going on. So much. I really feel bad for the Russian people. They're good people. They deserve better.

Why Won't Our Senate Hold Hearings on Stealth-Finance Attacks Against The MiddleClass?

   (Commentary posted by Roger Erickson)

J&J Sixpack don't even know that they're being gutted, and are actually voting for MORE protection of their parasites? Sheesh! Teddy Roosevelt had it right, 100 years ago. Our job is not to be for or against banks, but to put them back in their adaptive place, SERVING the US Middle Class.

Senate to Hold Hearing on Cyberattacks Against Finance

Who do you suppose is behind the cyber "attacks" on our public servants? Another convenient StrawMan? I expect more of the following message, continuously.

"Clear the streets & empty your pockets. We must temporarily suspend all civil rights because of our need to defeat the Straw Men."

[translated from NeoLiberalese]

Complaining About Your Own Clerks Is A Symptom Of A Failed Aggregate.

   (Commentary posted by Roger Erickson)

I sympathize, but that complaint is so overly simplistic that it hurts more than it helps.

It is sellers who offer credit to buyers who pay over time, and with diverse substitutions.

That's how we create the increasingly complex transaction chains called an aggregate economy. 

For the most part, banks just denominate those credits & debits, although they often act as publicly "licensed" middle-men or market-makers who manage distributed liquidity on behalf of the public at large. 

Denominating distributed credit & dynamic liquidity is a necessary but not sufficient part of continuously increasing our cultural adaptive rate. Don't even think of throwing that baby out with the bathwater.

Bankers are accountants for the electorate. They are simply clerks who manage our books for us. It's up to US to regulate their behavior and pay.

An aggregate complaining about it's clerks is exactly like bad parents complaining about the behavior of their own kids.

Face it. If our aggregate is dissatisfied with their own servants, both the problem and solution are visible in the aggregate mirror. So just look closer, and help regulate this aggregate's own behavior.

Complaining about YOUR OWN CLERKS is a symptom of a failed aggregate. The solution is always to examine your group's own state of distributed organization, and come up with a way to coordinate on an even larger scale.

Look no further than your own mirror. Continuously finding new methods, for continuously scaling up all the expanding features of an adaptive culture ... well, that task is up to us, not anyone else.

When you look in your mirror, do you see only the static components and static values? That's just what was already produced yesterday.

Look closer and longer and, upon reflection, discern the return on coordination and the many dynamic values, already present, plus those which are always newly emerging.

Once you can recognize dynamic value, it should be obvious how to re-regulate bankster behavior and more optimally manage the behavior our lowly bank clerks. Just start acting like a co-owner ... of democracy. If YOU don't act like an owner, don't expect your lowly clerks to not act like they own you.

Bank Lobby Still Trying To Kill Credit Unions (blind pursuit of profits over nation and citizens)

   (Commentary posted by Roger Erickson)

Starts out as a local issue raised by one lobby.

Runs amok when that lobby loses sight of all other inter-dependencies, and forgets that there must be tolerance limits on everything. Or else we don't have a culture. Only a mob. 

Instead of blind competition, what about the return on coordination?

http://www.frbsf.org/education/publications/doctor-econ/2005/march/credit-unions-regulation-supervision 

http://www.stlouisfed.org/publications/pub_assets/pdf/re/2013/b/banks_creditunions.pdf 

https://thefinancialbrand.com/29640/credit-unions-fight-banks-over-community-charters/

(hat tip Tom Hickey)

You want context? Consider the words of Marriner Eccles, 1932:

"The operation of our money world has failed to be our servant and instead is our tyrant and master." 

"We must correct the causes of the depression rather than deal with the effects of it!"

That was 82 years ago!!! Has the US electorate lost sight of Public Purpose? Have we lost sight of national goals?

Some May Find This Amusing. Many Other Citizens Are Left Baffled, Confused and Disoriented.

(Commentary posted by Roger Erickson)

Maybe sowing confusion is the real purpose?*

According to Chuck Lane, a longtime Editorial Writer for the Washington Post:

Banks aren’t the bad guys.

Chuck's entire essay establishes, at best, a vague position for a Washington Post editorial - so what is it's purpose?

Is he referring to some banks, or to no banks whatsoever? Or is he laying the cornerstone for the message that not all bank executives, or no bank executives whatsoever ... should ever be held accountable for their part in propagating significant local events as well as setting industry trends? How many readers - new or old - can tell exactly what Chuck means? Other's have different views on some of the points Chuck offers up, and even on the varying motives of diverse journalists.

Chuck Lane's current editorial - again, for the Washington Post, a prominent newspaper that prides itself on educating citizens - may, unfortunately, serve as a convenient reference for many future editorials seeking to slowly disorient and sway the views of an impatient public always in need of quick answers and consistent talking points.

What if some quick answers can be completely wrong, and even disastrously mal-adaptive? Can that be useful? One famous strategist, Napoleon Bonaparte, supposedly had a statement on just that topic. Undoubtedly, Napoleon wasn't the first to think this way, or the last.

"Never interrupt your enemy when he is making a mistake."

Does that strategy embody a helpful or harmful outlook for citizens of a supposed democracy? It all depends on the intended outcome, and where that intention falls in the spectrum between dog-eat-dog vs "a more perfect union"!

If Chuck Lane feels that some citizens are his enemies, it would be nice to know which citizens those are. All of us, or just some of us? And, if that's the case, exactly what mistake does he want to help us make? The mistake of NOT being an informed electorate? For propagandists, vaguely worded precedent statements serve the same function as subliminal advertising. Their only purpose is to prime the emotional disposition of audiences.

Chuck Lane's record and position also leaves many citizens truly baffled about the politics of the Washington Post's current and former owners. Do the WashPo's owners too, feel that some citizens of the USA are their enemies? This is very confusing ground, of course, but not the sort of situation we should be forced to wonder about when discussing the motives of a nationally prominent news organization.

When answers are needed, it helps to start with a useful question, and then pursue answers with adaptive methods. As George Washington supposedly wrote to James Madison: "Wisdom and good examples are necessary at this time to rescue the political machine from the impending storm." Unfortunately, Chuck Lane's current editorial on bank policy doesn't stand up as a very good example. If anything, it gums up our political machine and worsens the next impending storm.

Is there more to know about why Chuck is there at the Washington Post? At whose will? Whom does he serve? Are his messages just consistent cover for hidden goals?

* Lyndon LaRouche's writing was also spectacularly confusing and disorienting, but strangely effective - at least for the goal of advancing his, hard to fathom, personally desired outcome.

Same Old Story

Commentary by Roger Erickson

Saw this today on twitter.

INET Economics @INETeconomics6h
"Banks simultaneously create new private credit and new money – this is a fundamental macroeconomic variable." INET Sr. Fellow Adair Turner.

Ostensibly, banks should primarily denominate real credit extenstion with fiat currency bookkeeping, thereby allowing dynamic, diverse liquidity. When bankers do that, they are really acting as market-makers between suppliers & receivers of dynamic- & static-value credits.

Even then, the range of useful credits that banks selectively "liquify" has to be actively regulated ... or else a foolish population and it's options are soon parted.

Any bank that's using it's own imagination to "create" credit de novo (without underwriting standards), is

a) either putting it's own capital at risk (market maker for it's own, extended credit; covered by static asset capital requirements), or

b) is in the business of making liars loans?

When the 99% Wake Up, It's "Timmie, Bar the Bank Door"

Lawrence Wilkerson Transcript - Part 2

[Dominant influence by the 1%] -- More Dangerous, Worse Than A Coup

While the 1st part of this article and interview discusses the militarization of the USA, the part on disillusionment of the 99% is far more compelling reading.  Larry Wilkerson may not understand fiat currency, but he does recognize a litany of screwed up processes when he sees them.

...it's just unbelievable to see when you go to some place like Southern Ohio, or Southern Pennsylvania, or out West where I just was, in Eastern Washington State, [or] in Northern Idaho, and you find people who say things like " I'm going to vote for Mitt Romney, because Mitt Romney is going to restore this economy. ' And you look at them and you say "How?" 'And they can't tell you how, because they can't tell you what's wrong with this economy.

They can't even tell you that, for example, our gross domestic product used to be seventy five percent [75%] manufacturing and maybe twelve percent [12%] services, and that our gross domestic product today is seventy-eight percent [78%] services and less thaneleven percent [11%] manufacturing. And they can't grasp ... what the corporate leadership of this country has done to us.

It's not just exporting jobs to China. It's rape, pillaging, and plundering the country, largely the middle class, and the banks have been their conduits for doing so. And the banks are largely responsible for storing these trillions of dollars of taxpayers'money. They don't understand! But one day they will. One day they will. And when they do, Katie, bar the door!

Failure of US Long Range Strategic Planning, National Economic Security, Public Law

If we are living in the solution rather than the problem, then why not look at a National Referendum to force ethical planning and transparency into corporate and government planning documents.  

Why not seek a referendum requiring all US organizations include a paragraph in their objectives, mission statements, and long range organizational plans that would address larger national failures that resulted in the sub-prime housing bubble, savings and loan crisis, 2008 financial crisis, Dot Com Crash, high unemployment, low taxes for high income earners, federal income tax rules that can't be understood by any one individual, court systems that are too expensive for common man on Main Street, and political and regulatory capture by those with the money to 'get in the game'.

Politics based on power is no longer acceptable.  And business or multinational business based on money or power is no longer acceptable or sustainable.  That means leaving money overseas off-shore till legislation is drafted for the US Congress - is no longer acceptable for those that pay payroll taxes automatically every payday.  Balancing power between people, the government, and corporations is a much better policy.

The main advantage of a National scheme or referendum for government and organizational ethics clauses is to make up for failure of the US Constitution and Federal Legislation.  We should adopt some national pride codified by public law that supports public discussion and transparency to keep our US Organizations on the right track.  The theory being that if we think right, can point to common goals and national concerns, then we will act 'right'.  We will address as a team or community the weakness in policy or actions.  Employees will raise discussions on their own to bring their organization in line with ethical objectives.  And it is very appropriate as ethics training for our young students and businessmen and businesswomen.  

I believe there is value looking at a kind of "reorganization" of government based on transparency, ethics, and opportunity for everyone.  I believe this kind of reorganization can be accomplished though goal setting and long range planning.  Of course the idea is to position our nation for the future and correct the failures of the past.

First I wanted to point out some problems with Strategic Planning, organizational missions and objectives. Maybe we can agree that a strategic plan by Henry Kissinger or Zbigniew Brezinski for the world based on an ethnocentric perspective is flawed and likely unethical. Perhaps we can even agree that strategic planning is a corrupting influence on the world based on the killing of non-christians and suppression of foreign governments by our own governments. 

I think a government or corporate executive can be easily understood as a human working on his mission to secure revenue, funding, profit, or value for his organization. Each of us may play roles during the work day as a corporate player, an ideologue, as a financial investor, as a person that provides service to his community, as a parent, as a friend, or as a moral citizen. Each human has many different motivations and interests.

So how do you fight the Long Range Strategic Plan for Goldman Sachs?

How do you stop a Long Range Strategic Plan by some faction of Big Businessmen, Big Multinationals, Big Petroleum Interests, World Bankers, or some evil doer?  Well you don't.  You regulate to discourage crime and fraud.  But if you can create a national imperative or national initiative to include ethical rules in all Strategic Planning it may accomplish very much in my opinion.  

In the Government they call this a "Reorganization". Clearly new rules of transparency (regulations) and new "Grand Goals", "National Goals", or "Sustainable Social Goals" would have to be adopted.

There is a precedence for this kind of legislation under public statutory law known as the social contract between a citizen and a state. The social contract defines the relationship between a state and an entity that owes allegiance to it according to wikipedia. Further, public law interacts with civil and human rights.

What is the weakness of my idea?  Well there is no way to know what government is doing. No one wants people sticking their nose into their business even government business. We have a federal "Freedom of Information Act of 1966" that has helped US Transparency and various states have passed their own version. So there is a conflict of interest between the corporate or government employee/manager/executive and letting citizens know the details of business operations. The point is large organizations by their nature do not want their operations publicly known, will resist transparency, and citizens will face years of work to get the full picture of government activities in order to demand that remedies or reparations be made through public planning documents. 

In summary this is my proposal: 

1) Insert National rules for mission statements and objective statements

2) Insert National rules for ethical behavior in goal statements

3) Mandate that US Legal Organizations Strategic Planning clearly state and addresses the community, environmental, financial interests of the government in unemployment, job preservation, and social safety nets that may be affected by job losses created by mergers and leveraged take-overs by hostile or unfriendly firms that may saddle the organization with huge debt

4) Make all US Corporations, Fountadtions, governments, and legal organizations incorporate mission, objectives, and goals that are ethical and transparent to the public and employees.

5) US Strategic Planning as practiced in the US is focused as it is on it's own goals is acting like a maverick, acting like a loner, acting to the exclusion of national identity and responsibility. US Organizations ARE Acting like an off-shore privateer, a pirate, or a disinterested party. 

6) There is nothing wrong with forcing corporations to serve the country if not the community by being transparent. I think we would expect the same of NGOs, Foundations, PACs, 501 (c)(4) organizations, 527 organizations (soft money), and any legal entity formed or incorporated in the USA.  US Legal entities must be better citizens or state economy participants.

Links for discussion of weakness in current US Strategic Planning:

http://en.wikipedia.org/wiki/Long_range_planning
http://en.wikipedia.org/wiki/Geopolitics
http://en.wikipedia.org/wiki/Realpolitik 
http://en.wikipedia.org/wiki/Foreign_policy
http://en.wikipedia.org/wiki/Foreign_policy_analysis
http://en.wikipedia.org/wiki/International_relations
http://en.wikipedia.org/wiki/International_relations#Epistemology_and_IR_theory
http://en.wikipedia.org/wiki/Foreign_policy_analysis#Bureaucratic_Politics_Model
http://en.wikipedia.org/wiki/Foreign_policy_analysis#Other_models
http://en.wikipedia.org/wiki/Foreign_policy#Grand_Strategy
http://en.wikipedia.org/wiki/Foreign_interventionism
http://en.wikipedia.org/wiki/Democratic_mundialization
http://en.wikipedia.org/wiki/Neoliberalism
http://en.wikipedia.org/wiki/Hegemony
http://en.wikipedia.org/wiki/Finlandization
http://en.wikipedia.org/wiki/Appeasement
http://en.wikipedia.org/wiki/Foreign_interventionism#Unilateral_intervention

http://en.wikipedia.org/wiki/International_organization

Banks don't lend their reserves. Even if they could, it would be stupid.

The common story line we have been hearing for the past four years is that the Fed has "printed" all this money and reserves have grown exponentially so they will soon be "lent out" into the economy and that will create inflation.

Or what about this: Lawmakers wringing their hands over the fact that the gov't (Fed) gave the banks all this money and now they should be making loans.

It's wrong. All wrong.

First of all we need to understand that banks create loans by merely creating an accounting entry on their books. That's it. That's all there is to it. That's the power you have, granted to you by the government once you have a commercial bank charter. You create loans literally out of thin air. The only thing constraining your ability to do that is your capital. Nothing more than some capital and a blessing from the government and you're in business to "create money" (credit money) out of thin air. No reserves, no taking from Peter to lend to Paul. Nothing of the sort.

The point I am making is, if a bank needs nothing more than some capital and a book keeping system to make a loan, why would they lend out their reserves? From a business standpoint it would be really, really, dumb.

Don't forget, reserves earn interest for banks. Even if the interest rate is very low, the interest earned adds up. It's something. It flows to the banks' bottom line. More importantly, it's a no-risk stream of income and for a businesss that is fraught with risk (banking), that's a very precious thing. You don't want to play around with that.

So the obvious question is, why would a bank lend out its reserves and forego that risk free income when it's not even necessary? Again, the loan is just an entry on the banks' books. They can make that happen at will AND let the reserves sit there earning income at the same time.

Indeed, I'm not even sure if the banks are legally allowed to make loans with those reerves. I believe reserves can only be invested in things specified by the regulatory authorities and that mostly inlcudes government securities.

Therefore, no lending of reserves. Not necessary. Stupid, even.

Spitzer and Ratigan — Mitt Romney's State of the Union Challenge on the Mortgage Crisis

What Americans should be taking from this episode is that finance, while complex, is not conceptually hard. If it's a lie on the balance sheet, it's going to be destructive to ordinary people. If you stop the balance sheet lying, the economy will do better. But while Mitt Romney might have said this out loud, they all know it behind closed doors. Our question is, who will be the first to make this a policy reality?

Read it at The Huffington Post
Mitt Romney's State of the Union Challenge on the Mortgage Crisis

by Elliot Spitzer and Dylan Ratigan

Loan growth surging, but incomes are not keeping up

Total loans and leases have increased by over $200 bln since the end of March, so private credit expansion is replacing falling government spending. That’s good because it’s keeping the economy supported, but it can only go so far as incomes have to be able to support the expanding debt service. The problem is, incomes have been falling.

Take a look:

But personal income has started contracting...

So it doesn't look like this is sustainable for very long.

"Horizontal money" (private credit creation) needs income to sustain it.

"Verticle money" (the government's fiat) adds to income.

It's a lot better to have the latter than the former, at least during times like now.

Bank loans surge as government spending slows

Followers of MMT understand that government deficits add to non-government (private sector) income and savings. That means high and rising deficits tends to cool credit demand because private sector balance sheets are getting healthier.

On the other hand, a slowdown in deficit spending tends to do the opposite: it DRAINS income and savings thus causing credit demand to rise in order to compensate for that loss in income and savings.

The chart below is quite eye-opening. It shows a very strong correlation between government spending and private credit creation. Bank loans have begun to grow since the slowdown in net government spending that started back in March-April of this year. And when net government spending went negative year-over-year in July, bank lending absolutely took off.

The private sector is now tapping credit as the government begins to step out of the economy. Unfortunately, this will not be a repeat of 2004 - 2007, where we had a credit boom, because credit conditions are, generally, much tighter now. And with unemployment high, the ability to get credit and service that credit is poor, so this credit cycle can collapse very quickly.