American Oligarchy

[pangea]

First a definition:

An Oligarchy (Greek Ὀλιγαρχία, Oligarkhía) (oligocracy) is a form of government in which power effectively rests with a small elite segment of society distinguished by royal, wealth, intellectual, family, military, or religious hegemony.

Oligarchies have been tyrannical throughout history, being completely reliant on public servitude to exist.

Now some commentary.

Our public "servitude" is through asset price fixing, where price floors are set at astronomical levels not unlike a mob running a neighborhood racket. The difference is they [Oligarchs] where perfect suits and have our congress and the administration as their accomplices instead of the local police department.

Emphasis now in particular on "power". In the last year, contract law, accounting principles, bankruptcy law do not apply to the Oligarchs, they are EXEMPT. Usury rules supreme above everything. Where the few privileged now through the use of fear have leveraged not their own risks, but the entire fate of the United States which WAS (note past tense) a country where no man was above the law.

Leonardo da Vinci said "simplicity is the ultimate sophistication" And in that context, Gary North rounds up the catastrophic problem with simplicity:

Bait and switch is the heart of all fractional reserve banking. Bankers knowingly promise more than they can deliver to every depositor. The history of commercial banking has been the history of bankers' attempts to transfer liability for bank failures to the government, while maximizing income from making loans.

Now the usual suspects. These are not Ayn Rand capitalists any more than Alan Greenspan was. No matter how much he writes of his fetish for her throughout his scribblings.

Then what are they?

Socialists? NO.
Communists? NO.
Capitalists? NO. LOL!
Oligarchs? YES!

Yes, I know there are folks listed here who didn't make the cut, but it was the best line-up photo I could find without spending 3 hours in photoshop.

It's interesting, when spending time on google, the hardest person to find pictured with other government officials or other heads of banks? Lloyd Blankfein. I'm willing to bet that most of the PR groups of all of these Banksters never want to be photographed with other banksters or government types. For obvious reasons.

You really have to love this photo. They truly do give that look of "are you f'ing for real? do I really have to answer to you?"



The chief executives of banks that have received federal-government aid testified Wednesday before the House Financial Services Committee, including, from left: Lloyd Blankfein of Goldman Sachs, James Dimon of J.P. Morgan Chase, Robert Kelly of Bank of New York Mellon, Kenneth Lewis of Bank of America, Ronald Logue of State Street, John Mack of Morgan Stanley, Vikram Pandit of Citigroup and John Stumpf of Wells Fargo.



And the three Amigos - Hank Paulson, Ben Bernanke and Timothy Geithner.

Today you can thank them for all your creature comforts. Enjoy them while they last, you traded your liberty and short term happiness for their success.

Tomorrow as the nationalized debt of everything Oligarch approved cripples us ALL, especially those who played by the "old rules" and forces socialism and likely a dictatorship upon us, we'll remember who to thank.

Again, I quote Gary_North regarding Banksters aka Oligarchs,

Lenin said that in order to make an omelet, you must break a few eggs. What is the omelet? The desire of Congressmen and Senators to be re-elected. What are the eggs? Your plans for the future.

Source: http://www.marketoracle.co.uk/Article14058.html

I don't think it's an accident that one of the most popular blogs that represent the counter-oligarch movement is based on Tyler Durden. The character from the movie Fight Club who reminds everyone that in the end all this consumption and material hubris is meaningless. We are all animals searching for a purpose in life, for meaning.

America had meaning, it had a purpose that inspired millions to rally behind perspectives worth fighting for and ultimately worth dying for. Freedom and liberty through the rule of law that nobody was above.

The Oligarchs said NO MORE.

Now, we the animals in base form, are looking around at each other and saying "what the F*ck are we doing? Is this really what it's all about?"

-Pangea

[t12357]

Re: American Oligarchy

[don]

Re: American Oligarchy

"When Athens was powerful and successful, its democratic constitution had a magnetic effect on other states, but its defeat was decisive in the political development of Greece, sending it in the direction of oligarchy."

(The Peloponnesian War, Donald Kagan, p6)

[halcyon]

Re: American Oligarchy

This is along the lines of Simon Johnson's argument, which he started in :

The Quiet Coup
http://www.theatlantic.com/doc/200905/imf-advice

And continued in several interviews since:

http://www.pbs.org/moyers/journal/02132009/watch.html
http://www.pbs.org/moyers/journal/10092009/watch.html

I'm not sure I really agree with the exact labelling of the current bank-kings as oligarchy, but I accept it's a question of semantics. To me it's more like the shadow government that has the most amount of control of any single group over the nominated government. But that's semantics, the effect is currently nearly the same.

To me, as a non-US citizen, one thing bothers me:

Why do you put up with this? Why don't you start a new party? Vote for somebody else? Start a legal proceedings (maybe a class-action suit?), move to another country, etc?

I don't mean to blame you, I'm just honestly wondering about this.

We have our issues in where I live, but the politicians we nail, we kick out - and no silly legal immunities like in Italy.

I guess the more general version of this would be: how do we get rid of or reduce the influence of the oligarchs once they have a big enough grip on a nation and it's decisions/finances?

Is the Putin way the only way? A new coup (of sorts) and an iron ruler. Make them co-operate or ship them off to Siberia.

[Diarmuid]

Re: American Oligarchy

This is along the lines of Simon Johnson's argument, which he started in :

The Quiet Coup
http://www.theatlantic.com/doc/200905/imf-advice

And continued in several interviews since:

http://www.pbs.org/moyers/journal/02132009/watch.html
http://www.pbs.org/moyers/journal/10092009/watch.html

I'm not sure I really agree with the exact labelling of the current bank-kings as oligarchy, but I accept it's a question of semantics. To me it's more like the shadow government that has the most amount of control of any single group over the nominated government. But that's semantics, the effect is currently nearly the same.

To me, as a non-US citizen, one thing bothers me:

Why do you put up with this? Why don't you start a new party? Vote for somebody else? Start a legal proceedings (maybe a class-action suit?), move to another country, etc?

I don't mean to blame you, I'm just honestly wondering about this.

We have our issues in where I live, but the politicians we nail, we kick out - and no silly legal immunities like in Italy.

I guess the more general version of this would be: how do we get rid of or reduce the influence of the oligarchs once they have a big enough grip on a nation and it's decisions/finances?

Is the Putin way the only way? A new coup (of sorts) and an iron ruler. Make them co-operate or ship them off to Siberia.

Where in your democratic eutopia are going to deal with the IMF, BIS, The World Bank, EU commission and all the other supra national organisations. The unrelenting hammer noise of the media. Sure they are all answerable to the demos, right? no unwelcome or undue influence there?

"ah my dear Chaerephon, we seem to be utterly short sighted judges of what is possible and impossible"

[don]

Re: American Oligarchy

It takes a government to build an oligarchy....

While the Federal Trade Commission was receiving gut-wrenching documentation of predatory lending abuses at a unit of Citigroup, the Federal agency mandated to level the playing field for low income homeowners, the U.S. Department of Housing and Urban Development, was quietly awarding 19,968 mortgages of homeowners in distress to Citigroup to dispose of as it saw fit. HUD legally became Citigroup’s joint venture partner in at least two of the deals, retaining a minority interest.

On March 6, 2001, the FTC brought suit against Citigroup, CitiFinancial Credit Company and two firms it had acquired (Associates First Capital Corporation and Associates Corporation of North America) charging them with engaging in deceptive and illegal lending practices.

The FTC had substantive evidence that a culture of incentivizing an aggressive sales force to pile predatory loans onto unsophisticated borrowers was an enshrined business model at Citigroup’s consumer lending unit.

On July 20, 2001 a former Assistant Manager for CitiFinancial, Gail Kubiniec, testified as follows to the FTC:

“At CitiFinancial, emphasis was placed on marketing new loans, particularly real estate loans (loans secured by a home mortgage), to present borrowers of CitiFinancial. Employees would receive quarterly incentives, called “Rocopoly Money,” based on how many present borrowers they ‘renewed’ (refinanced) into new loans…Typically, employees would only state the total monthly payment amount in selling a proposed loan. Additional information, such as the interest rate, and the financed points and fees, closing costs, and ‘add-ons’ like credit insurance, were only disclosed when demanded by the borrower…It was also common practice to try to sell borrowers the largest loan possible…All CitiFinancial branch offices had quotas for the sale of credit insurance…Loans were typically presented to consumers with ‘100% coverage,’ meaning that real estate loans were presented with at least credit life and disability already included, and personal loans were presented with at least credit life, disability, involuntary unemployment, and property insurance already included. When quoting the monthly payment, I frequently quoted the payment with coverages already included, telling the consumer only that it was ‘fully protected.’ This was a common practice used by employees at CitiFinancial…The pressure to sell coverages came from CitiFinancial’s Regional and District Managers. Each branch had monthly credit insurance sales goals to meet…If these goals were not met, the District Manager would call and put pressure on the Branch Manager to get the branch up to par.”

Also in the trove of documents at the FTC, a series of Faxes to the sales force from one CitiFinancial manager, Mike Moniot, had the creepy feel of a Survivor-type reality tv show:

“Fax dated December 30, 2000: ‘…The manager must personally attempt to sell the loan while the customer is still on the phone if our offer is rejected when the employee pitches it. No call backs. Manager must get on the phone immediately. I expect to see notes from the managers on the results of their attempt. It makes sense for managers, our best salespeople to pitch the most difficult sales…’

“Memorandum dated June 12, 2001: ‘Good morning ladies and gentlemen. Today is the day we must rally on real estate. Our team has booked 7 R/E loans this month. This is a pathetic number folks. I will be calling you for your commitment this am…’

“Fax dated June 26, 2001: ‘Enough is enough ladies and gentlemen. We did not achieve the improvement I hoped for last week. The following is in place effective today for the remainder of this month: Tom Politano, Cindy Lee: You are substantially below the min $/1000 level. You will personally close all personal loans the rest of this month…’

“Fax dated July 2, 2001: “The transfer by zip code of former Associates accounts was processed over month end…We have a contest in place for July to determine who does the best job of renewing these accounts. I will award points for renewing transferred accounts…The branch with the most points earns a day off for each employee in August.’”

The FTC also had testimony from Michele V. Handzel, a former Branch Manager for CitiFinancial:

“CitiFinancial put much more pressure on employees than the Associates did to include as many credit insurance and ancillary products as possible on every loan….In fact, I feel that the credit insurance sales practices at CitiFinancial were worse than at The Associates. From January to June 2001, the policy was that no personal loan at CitiFinancial would be approved if it did not include some type of credit insurance, nor would a real estate loan be approved without some type of ancillary product…There were several internal measures in place to effectuate this policy. For instance, District Managers would frequently refuse to send a loan to underwriting if it did not include some type of insurance product. Moreover, loans that were closed and did not include any insurance would be identified by CitiFinancial’s internal insurance auditors, and the employee who closed the loan would be written up…Closings at CitiFinancial resembled those at The Associates – they were brief. Personal loan closings took approximately 10 minutes. Real estate loan closings took a little longer but also did not provide a lot of details about the loan. At CitiFinancial, I was instructed to do a ‘closed folder’ closing, meaning that information would be discussed orally first. Only after the borrower indicated that he wanted to sign would the employee open the folder and have the borrower sign the papers.”

Around this same time Citigroup was running a “Live Richly” ad campaign conceived by ad agency Fallon Worldwide. According to Citigroup, the campaign was to communicate “that Citi is an advocate for a healthy approach to money. Citi is an active partner in achieving perspective, balance, and peace of mind in finances and in life for its customers.”

In reality, the dark underbelly of the consumer lending divisions of Citigroup was creating a torrent of mail to federal agencies and members of Congress:

On April 22, 2001, a resident of San Antonio, Texas wrote:

“I ask for you help. Federal law and regulations are being violated intentionally in CRIMINAL, perhaps RACKETEERING, manner by a spaghetti-like entanglement of corporations…I refer to Sanford Weil[l]’s Citigroup…The particular criminal activity is that, despite federal law & regulation, despite what is written on its customers’ statements, Citigroup/Universal Card refuses to abide by mandated policy about the purchase of defective merchandise…”

On August 28, 2001, an Ohio woman wrote to HUD as follows:

“This will be my 3rd request for someone from this dept to assist me. I am a victim of predatory lending. Citifinancial gave me a loan at 24.99% in June of ’99. I had a perfect credit score. The[y] called me back into their office one week later. Refinanced that same loan at 18.99% and had a check for $500.00 waiting for me…this time they told me that I had to use my home as collateral to get the lower interest rate…I feel that because I am a female and black that they…thought they could get away with this…”

A distraught woman in Enid, Oklahoma wrote to her Senator, James Inhofe:

“…We had paid our home loan off in full…The new loan…was in the amt. of $24,139.20. This was a rehabilitation loan for our home. The first problem occurred when we wanted to hire L.E. Clark as our General Contractor. The loan officer (whose name is Audrey) said that we had to use B&K Home Improvement Inc. as our contractor. We told her that we did not want B&K. We knew Mr. Clark and his work. She said that it was none of our business. She had hired B&K and if my husband called back she would file harassment charges…We were supposed to co-sign a check to B&K every ¼ of work approved. Audrey gave B&K ¾ of money up front. This was done without our knowledge or consent...at this time we are desperate…We are living in our ‘gutted’ house which is actually unlivable but we had no choice. Any help that you can give us would/will be very much appreciated. You are our last hope. We have tried everything.”

Was there any evidence to support the premise that CitiFinancial was targeting minorities and the vulnerable? Absolutely. According to their former Assistant Manager, Gail Kubiniec:

“I and other employees would often determine how much insurance could be sold to a borrower based on the borrower’s occupation, race, age, and education level. If someone appeared uneducated, inarticulate, was a minority, or was particularly old or young, I would try to include all the coverages CitiFinancial offered. The more gullible the consumer appeared, the more coverages I would try to include in the loan…”

The FTC settled their suit on September 19, 2002 for $215 million. But the press release issued by the FTC made it appear, incorrectly, that the abuses stemmed from The Associates firms that Citigroup had acquired when the evidence clearly demonstrated that CitiFinancial was fully holding up its end of the predatory brotherhood. The press release quoted Timothy J. Muris, Chairman of the FTC at the time: “I am pleased that Citigroup has agreed to remedy the grave injury caused by The Associates and that Citigroup has announced new measures at CitiFinancial aimed at preventing these kinds of problems.”

Just one month later, HUD would make its second award to Citigroup in as many years, handing over 6,656 mortgage loans insured by HUD sibling, FHA, of people experiencing financial hardship and delinquent on their loan payments. HUD left the decision in Citigroup’s hands as to whether to foreclose, sell off the loans en masse to other investors (securitization), or restructure the loans.

The HUD mortgage sales in 2002 though 2005 are a stark departure from HUD’s stated mandate of helping low income people remain in their homes during periods of financial hardship. Even the controversial sales HUD made in the 90s that eventually erupted into charges and counter-charges of improprieties had many built-in protections that do not appear to have been present in the current round of sales.

According to a June 1999 report from the U.S. Government Accountability Office (GAO), “Homeownership: Information on Single Family Loans Sold by HUD,” the purchasers were required by HUD “to offer borrowers the same forbearance, or lower loan payments, that HUD was required to offer before the loans were sold.” To monitor that the purchasers were actually honoring the protections contained in the loan sales agreements -- including reduced mortgage payments -- HUD conducted reviews of loan servicers and established a toll-free telephone complaint line for borrowers whose loans had been sold.

That contrasts with the current program which states that the private partners “determine how best to maximize the return on the loan…Loans liquidated through note sales generally earn a higher return than property sales, so the JV [joint venture] has an incentive to maximize the share of note sales relative to property sales.”

Turning over a swath of a critical social policy mandate to the piranhas of Wall Street who have demonstrated an unprecedented knack for financial incompetence except in the realm of campaign donations, is clearly a matter for congressional subpoenas and testimony under oath. Both Congress and the public at large will be more cognizant of the escalating devastation to lives and property values by making the time to watch Andrew and Leslie Cockburn’s emotionally-gripping film, American Casino.
Despite repeated requests over the past ten days to Lemar Wooley in the Public Affairs Office of HUD, Kathleen Malone, Director of the Office of Asset Sales, and John Lucey, Deputy Director, HUD refuses to confirm the names of the winning bidders and co-bidders of distressed single family mortgage sales that stretched from at least 2000 through 2005.

In addition to the awards reported in the first part of this series (see Wall Street Titans Use Aliases to Foreclose on Families While Partnering With a Federal Agency, CounterPunch, October 5, 2009), we have learned from outside sources that a division of Citigroup also received a bid award in 2000 consisting of 8,503 loans. As we previously reported, Lehman Brothers (now bankrupt) won a 2003 award and Bear Stearns (rescued by JPMorgan Chase and the Federal Reserve) won a 2005 award.

Pam Martens worked on Wall Street for 21 years; she has no security position, long or short, in any company mentioned in this article other than that which the U.S. Treasury has thrust upon her and fellow Americans involuntarily through TARP.

http://www.counterpunch.org/martens10122009.html