Obama’s Enron

14 05 2012

Politico:

President Obama’s Wall Street problem

The giant $2 billion trading loss at JPMorgan Chase highlights a central problem in President Barack Obama’s case for a second term: Four years after the financial crisis nearly brought the nation to its knees, very little appears to have changed.

No high-profile bank executives are in jail. Special multi-agency task forces to go after financial fraud and mortgage market abuses appeared in State of the Union addresses, only to issue a few news releases and mostly vanish from public view.

And now one of the largest banks in the United States, headed by a Democrat and operating with government guarantees, has turned in the kind of headline-grabbing, casino-style loss that drives voters crazy and that Obama’s financial reform bill was supposed to stop. It’s led to the immediate retirement of Ina Drew, the bank’s chief investment officer, along with a statement from Dimon that JPMorgan remains “strong.”

Senior administration officials make a nuanced and largely credible case that they pushed for the toughest law they could get through Congress. They say the JPMorgan trades might not have happened if banks were not lobbying like crazy to water down financial reform. And they argue that higher capital requirements mean banks can better handle large losses such as those suffered by JPMorgan. If a giant bank fails now, they say, it will be liquidated without taxpayer support.

Obama campaign officials point out that their presidential opponent, Republican Mitt Romney, wants to get rid of the Dodd-Frank overhaul legislation entirely. They launched a fresh assault on Romney’s experience at Bain Capital Monday morning, attacking their opponent with a new ad and website for the job losses and profits he made as a venture capitalist.

That dog doesn’t hunt, thanks to (of all sources) News Weak (sic).

The links between Obama and JPMC are stronger than the ones between Bush 43 and Enron.  The U.S. Attorneys that worked for Bush were pursuing criminal charges against Ken Lay, until his “death” (ahem ahem, cough cough, South America, cough cough) made them moot.  Meanwhile, the Obama Justice Department hasn’t pursued any criminal charges related to the 2008 Crash at all, though since I think the Crash was not a result of any great crimes, I don’t think they should.  But the Obama/holder DOJ isn’t even huffing and puffing.  We know with the Hutaree clusterfuck (hint:  This thing in Florida will turn out much the same way) that this DOJ will bring up flimsy bullshit charges against people they don’t like, not because they want to win, but because they want to give allies (in this case, the Paranoia-Industrial Complex, the SPLC and the ADL) the fund raising opportunities.  But there aren’t even flimsy bullshit charges against a good chunk of Lower Manhattan.

Also, Bush signed Dodd-Frank.  Even though Dodd-Frank as a cure for Enron and Arthur Andersen style perfidy was like giving aspirin to a person with advanced stages of AIDS.  Real reform in this stead would be to put a wall of separation between larger publicly traded firms and their auditors:  Instead of a firm hiring their own auditors (financial statements of publicly traded firms must be audited), which of course begs the obvious corruption, as the Enron-AA scandal proved, the money they use to hire auditors should go into a central pool, whose administrators choose the auditors who will audit the firm’s financials.  On top of that, I wouldn’t allow auditing firms that use H-1B visas to be eligible to be used by the central pool.  Of course, if it were up to me, H-1B visas would only be for identifiably white people from first world countries who have unique skill sets, such as Linus Torvalds.


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