political shenanigans - Represent Consumers

The most perplexing question that arises out of the S&P downgrade of the U.S. debt is why we’re still worrying about what they think, after all the credit rating agencies’ previous political shenanigans.

The credit rating agencies claim they are entitled to their opinions under the First Amendment, even if they are bought and paid for by Wall Street.

But anything that the S&P offers should be taken with a huge grain of salt. As James Kwak pointed out on Baseline Scenario, the S&P’s latest insights into our financial/economic/political mess weren’t exactly earth-shattering. Apparently S&P wanted us to know that they recognized we’re suffering from political gridlock in Washington.

Thank you, S&P.

If the rating agency really wanted to offer a public service, it might have pointed out that the big banks’ bundled mortgages were nothing but trash before the economy collapsed.

But of course, as we know should all know by now, S&P and the other credit rating agencies are no more interested in peddling public service any more than they are interested in offering accurate information or thorough analysis.

S&P and the others are interested in serving the interests of Wall Street, and right now Wall Street is interested in forcing its austerity agenda on the rest of us. S&P is just trying to do its small part to batter any resistance we might offer.

Like the too big to fail banks, S&P has perfected the kind of lack of shame which allows it to dispense its financial opinions with a straight face, demanding to be taken seriously even though it missed the fraud, sloppiness and greed that led up the financial collapse.

Come to think of it, there is a more perplexing question about S&P: how come a swarm of federal investigators hasn’t taken the agency down, following up on the earlier Senate investigation?

Jane Hamsher has an interesting take on that question at firedoglake, posing the theory that S&P’s thrashing of the U.S. credit rating is an effort to pay back Republicans for keeping the authorities off S&P’s back. In the bigger picture, S&P is just trying to play its part in efforts by leaders of both parties to slash Social Security and other programs that benefit the middle class under the guise of balancing the budget.

But the S&P tipped its political hand by favoring cuts to social programs over tax loophole-closing, revenue-raising, or real defense cuts. When Wall Street and its cronies need help, the credit rating agencies will always do their part.

Hollywood loves a good chase. Last night at the Oscars, Tinsel Town sent a strong message to the rest of the country – the bad guys are getting away, and the cops aren’t even on their trail.

For a brief instant the Obama administration’s sorry efforts in holding bankers accountable for the financial collapse took center stage at, of all places, the Academy Awards.

Accepting his Oscar for “Inside Job,” his documentary about the financial collapse, Charles Ferguson used the opportunity to remind the audience of millions that not a single banker had gone to prison for fraud.

Ferguson was saying what the mainstream media has deemed a non-story, following President Obama’s lead in downplaying accountability while highlighting evidence of economic recovery.

But Ferguson joins a handful of prominent critics, including Bill Black, Simon Johnson, former Sen. Ted Kaufman, Dean Baker and Matt Stoller, who have been sending the same message in a variety of less prominent venues.

Meanwhile the president, far from insisting that his prosecutors develop fraud cases against top bankers, appoints them to top positions in his administration.

Typical is this recent column from the New York Times oped columnist Joe Nocera, who pooh-poohs the criminal aspects of the financial meltdown, blaming it on widespread “mania.”

Make no mistake; these are hard cases to make. In the 90s I covered the prosecution of savings and loan magnate Charles Keating, the poster child for bad behavior and political shenanigans for that earlier banking fiasco that also followed a rash of deregulation. Keating was convicted in both state and federal court. Though the convictions were overturned, Keating did serve four and a half years of his five-year state sentence.

Good prosecutors don't mind tough cases. They enjoy the challenge. But their bosses set their priorities and have to give them the support they need.

The Obama administration is barely even trying, afraid of alienating the bankers it’s trying to court. The cases that have been brought are either minor sideshows or they’ve been mishandled.

A local prosecutor told me that federal authorities have shown no interest in the painstaking work of building serious cases against bank executives, which would involve authorities going after minor players such as mortgage brokers, and working their way up the chain of responsibility.

In Inside Job, former New York state attorney general Eliot Spitzer has a suggestion for prosecutors – do unto the bankers what the prosecutors did unto him: go through their credit card receipts looking for evidence of illicit activity, like paying for high-priced hookers. Bust the bankers for their bad personal behavior and then obtain their cooperation in investigating financial abuse.

It may work; it may not. But at least prosecutors wouldn’t be sitting on their hands. They’d be doing their jobs – aggressively going after the bad guys.

Debt Wish

Don't Let the Bad Guys Get Away!