Matt Taibbi: Our Shredder At Work!

[don]

Re: Matt Taibbi: Our Shredder At Work!

The main relevance of The Great Crash, 1929 to the great crisis of 2008 is surely here. In both cases, the government knew what it should do. Both times, it declined to do it. In the summer of 1929 a few stern words from on high, a rise in the discount rate, a tough investigation into the pyramid schemes of the day, and the house of cards on Wall Street would have tumbled before its fall destroyed the whole economy. In 2004, the FBI warned publicly of "an epidemic of mortgage fraud." But the government did nothing, and less than nothing, delivering instead low interest rates, deregulation and clear signals that laws would not be enforced. The signals were not subtle: on one occasion the director of the Office of Thrift Supervision came to a conference with copies of the Federal Register and a chainsaw. There followed every manner of scheme to fleece the unsuspecting ....

This was fraud, perpetrated in the first instance by the government on the population, and by the rich on the poor.

from Economist James K. Galbraith's introduction to his father, John Kenneth Galbraith's, definitive study of the Great Depression, The Great Crash, 1929.

[don]

Re: Matt Taibbi: Our Shredder At Work!

putting a face on fraud . . .



Peter Haller, also known as Peter Simonyi, a former Goldman Sachs VP now working for Chairman Issa to block regulations on Goldman Sachs

Has Rep. Darrell Issa (R-CA) turned the House Oversight Committee into a bank lobbying firm with the power to subpoena and pressure government regulators? ThinkProgress has found that a Goldman Sachs vice president changed his name, then later went to work for Issa to coordinate his effort to thwart regulations that affect Goldman Sachs’ bottom line. In July, Issa sent a letter to top government regulators demanding that they back off and provide more justification for new margin requirements for financial firms dealing in derivatives. A standard practice on Capitol Hill is to end a letter to a government agency with contact information for the congressional staffer responsible for working on the issue for the committee. In most cases, the contact staffer is the one who actually writes such letters. With this in mind, it is important to note that the Issa letter ended with contact information for Peter Haller, a staffer hired this year to work for Issa on the Oversight Committee.

Issa’s demand to regulators is exactly what banks have been wishing for. Indeed, Goldman Sachs has spent millions this year trying to slow down the implementation of the new rules. In the letter, Issa explicitly mentions that the new derivative regulations might hurt brokers “such as Goldman Sachs.”

Haller, as he is now known, went by the name Peter Simonyi until three years ago. Simonyi adopted his mother’s maiden name Haller in 2008 shortly after leaving Goldman Sachs as a vice president of the bank’s commodity compliance group. In a few short years, Haller went from being in charge of dealing with regulators for Goldman Sachs to working for Congress in a position where he made official demands from regulators overseeing his old firm.

It’s not the first time Haller has worked the revolving door to help out Goldman Sachs. According to a report by the nonpartisan Project on Government Oversight, Haller — then known as Peter Simonyi — left the Securities and Exchange Commission (SEC) in 2005 to work for Goldman Sachs, then quickly began lobbying his colleagues at the SEC on behalf of his new firm. At one point, Haller was requiring to issue a letter to the SEC stating that he did not violate ethics rules and the SEC agreed. A brief timeline of Haller’s work history underscores the ethical issues raised with Issa’s latest letter to bank regulators:

– After completing his law degree in 2000, Haller was employed by Federal Energy Regulatory Commission as an economist, and later with the Securities and Exchange Commission in the Office of Enforcement.
– In April of 2005, Haller resigned from the SEC to take a job with Goldman Sachs. Although he was not a registered lobbyist, he soon began lobbying the SEC on compliance issues on behalf of Goldman Sachs.
– In 2006, Haller left Goldman Sachs, according to a Goldman official who spoke to ThinkProgress.
– In 2008, he took a job with the law/lobbying firm Brickfield Burchette Ritts & Stone.
– In January of 2011, Haller was hired to work for Issa on the Oversight Committee. Under the supervision of Haller, Issa sent a letter dated July 22, 2011 to bank regulators (including the heads of the Federal Reserve, FDIC, FCA, CFTC, FHFA, and Office of Comptroller) demanding documents to justify new Dodd-Frank mandated rules on margin requirements for banks dealing in the multi-trillion dollar OTC derivatives market, like Goldman Sachs.

When he took over the chairmanship of the Oversight Committee this year, Issa dramatically shifted the committee’s focus away from its traditional role of investigating major corporate scandals. Instead, Issa has used the committee to merge the responsibilities of Congress with the interests of K Street and Issa’s own fortune.

In June of this year, ThinkProgress broke the story about Issa’s own complicated relationship with Goldman Sachs. We revealed that Issa purchased a large amount of Goldman Sachs high yield bonds at the same time as he used the Oversight Committee to attack an investigation into allegations that Goldman Sachs had systematically defrauded investors leading up to the financial crisis. This conflict of interest, along with our exclusive story about Issa’s earmarks benefitting his own real estate empire, received coverage in a recent piece by the New York Times.

We also broke a story last month revealing other revolving door conflicts within Issa’s staff. Peter Warren, Issa’s new policy director, maintains some type of financial contract with a student loan lobbying group he led last year, and received a bonus from the lobbying group before leaving to work for Issa.

Since joining Issa’s staff, Warren and his colleagues have fought to weaken the recently created Consumer Financial Protection Bureau, the new agency charged with overseeing student loans.

http://thinkprogress.org/politics/20...-darrell-issa/

[LazyBoy]

Re: Matt Taibbi: Our Shredder At Work!

You know if we want to dig ourselves out of this output gap, we are going to need a leap in productivity. I don't see this happening. More and more regulation. A lot of work is performed to prevent law suits, and comply with state and federal nanny state regulation and tax code. All this is taking away from our R&D budget, that makes new products for less money.

It's interesting to note the lack of regulation on Finance and the excessive regulation on the productive economy.