Familiar Bedfellows

Frank Rich: Irving Picard, the special bankruptcy trustee for the Bernie Madoff estate, may yet prove to be the man who exposes Wall Street -- and in particular, JP Morgan Chase -- for their criminal (or at least actionable) misdeeds that created the financial crisis. And Jamie Dimon, Chase's CEO is "sick of" the "constant refrain" of people badmouthing bankers.

Here's my response to Rich's column:

There’s a good reason Bernie Madoff is the only financier doing time. Sen. Dick Durbin explained it back in April 2009 when he tried unsuccessfully, at the height of the financial crisis, to get mild bankruptcy reform through the Senate:

And the banks -- hard to believe in a time when we're facing a banking crisis that many of the banks created -- are still the most powerful lobby on Capitol Hill. And they frankly own the place.

 It is hardly surprising that the Congress is underfunding the S.E.C. – they don’t want the S.E.C. catching any big-time crooks. Those crooks are Congress’s bread-and-butter.

But the Congress needn’t have worried. Just as in the days when No One Would Listen to whistleblower Harry Markopolos, the S.E.C. is still pretty much sitting on its hands. Every once in a while, they nab some small-time (by Wall Street standards) crook in a $2,000 suit, but they keep their hands off the big boys. After all, the S.E.C. – in fact, all of the so-called “regulatory agencies” – are beholden to the crooks, too. Most of the high-ranking regulators come from Wall Street, and after they do their “public service” stint, they’ll be right back on the Street, raking in the big bucks.  Just yesterday, Eric Dash of the Times reported that "Joseph Jiampietro, one of the government’s top deal makers during the financial crisis, has joined Goldman Sachs as a senior investment banker covering the financial services industry...." Dash describes Jiampietro as the FDIC's "main liason to hedge funds and broader Wall Street community,” and he adds, “Mr. Jiampietro is the latest in a parade of top federal official to leave Washington for Wall Street." Prior to "his stint in Washington," Jiampietro was an investment banker. Do you really think Mr. Jiampietro's "stint in Washington" had anything to do with public service?

The chair of the S.E.C. – Mary Schapiro – has a long history as a regulator, beginning way back in the days when Ronald Reagan appointed her to sit on the S.E.C. You might think that would make her a tough cookie. Not really. Like the rest of her regulator colleagues, she’s in it for the dough. Back in 2008, her last year as head of the Financial Industry Regulatory Authority, Wall Street’s (ha ha ha) self-policing arm, Schapiro hauled in compensation of $3.3 million. According to Wikipedia, “on departure from FINRA, she received additional lump sum retirement benefit payments that brought her total package in 2008 to $8,985,334 (about the same as Goldman Sachs CEO Lloyd Blankfein made in that year.”

You might suppose that kind of payout would raise eyebrows in the Senate, which had to “advise & consent” to Schapiro's appointment to head the S.E.C. After all, the Senate regularly puts on hold for months or even years confirmation votes for minor appointments. But, no, in the wake of her big payoff and again during the height of the financial crisis, the Senate cleared Schapiro with a voice vote. The Senate in its wisdom Dr. Schapiro would follow that part of the Hippocratic Oath that reads “first, do not harm.” Just think of the great job Schapiro will get with all those marketable “on-the-job” skills she’s acquired at the S.E.C.

Which, to follow Frank’s structure, brings us back to Bernie Madoff. It is hardly surprising that Irving Picard is the prime mover in connecting the dots between Madoff and his enablers at JPMorgan Chase. Despite Mr. Markopolos’ many pleas to the S.E.C. and the extensive documentation he sent them, it wasn’t the S.E.C. that brought down Madoff. It was Madoff’s own sons who told the F.B.I. that their father was running a Ponzi scheme. Where was the S.E.C.? They had previously “investigated” Bernie Madoff. They didn't find a thing. They wouldn’t, would they?

The Commentariat -- February 12

** As the Worm Turned. Joby Warrick of the Washington Post: "Mubarak's defiant speech - described by some U.S. officials as bordering on delusional - was a final, wild plot twist in a saga that had played out in Egypt and Washington over the past 18 days. The likelihood of Mubarak's departure alternately rose and dipped as U.S. military officers and diplomats quietly worked with their Egyptian counterparts in a search for peaceful resolution to the country's worst unrest in six decades." CW: Warrick's report reads like a thriller. ...

Kareem Fahim & David Kilpatrick of the New York Times on Egypt -- and the Arab world -- the day after Mubarak's forced resignation.

... Tom Shanker & Eric Schmitt of the New York Times attempt to profile the two Egyptian military officers who will probably lead the government: Field Marshal Mohamed Hussein Tantawi & Lt. Gen. Sami Hafez Enan. Not very attractive portraits. ...

... Marcus Baram of the Huffington Post on how the Mubarak family acquired its billions.

Bob Herbert: "As the throngs celebrated in Cairo, I couldn’t help wondering about what is happening to democracy here in the United States.... We’re in serious danger of becoming a democracy in name only."

Obviously, Gibbs's departure is not the biggest one today.
-- Barack Obama

Dana Milbank on Robert Gibbs' testy tenure as President Obama's press secretary. Yesterday was Gibbs' last day on the job.

CW: President Obama is ready, willing & able to conspire with Republicans and ConservaDems in Congress to cut Social Security benefits. If you don't think so, read this post by Susan Madrak of Crooks and Liars; she heavily cites a Wall Street Journal article which is firewalled.

Eric Lipton & Charlie Savage of the New York Times: a group of firms that indirectly worked for the Bank of America & the Chamber of Commerce proposed to make misrepresentations to discredit and/or to blackmail their critics. BoA and the Chamber claim they never knew a thing about it. WikiLeaks, Glenn Greenwald and Think Progress were among their Targets. ...

... Greenwald has a thorough analysis of how these saboteurs work and he explains how the Department of Justice figures into the picture: "... the firms involved here are large, legitimate and serious, and do substantial amounts of work for both the U.S. Government and the nation's largest private corporations....  Moreover, these kinds of smear campaigns are far from unusual....  And perhaps most disturbing of all, Hunton & Williams [the law firm which represents BoA & which received the proposals] was recommended to Bank of America's General Counsel by the Justice Department -- meaning the U.S. Government is aiding Bank of America in its defense against/attacks on WikiLeaks." ...

... Lee Fang describes the proposed attacks on Think Progress: "ThinkProgress has learned that a law firm representing the U.S. Chamber of Commerce ... is working with [a] set of 'private security' companies and lobbying firms to undermine their political opponents, including ThinkProgress, with a surreptitious sabotage campaign."

Ezra Klein: "... the House GOP leadership has little sway and less control over the rank-and-file. The Republican Study Committee seems more powerful than the Republican leadership at this point. The budget proposal produced by Rep. Jim Jordan won out over the one favored by Rep. Paul Ryan.... I'd say the odds of a government shutdown -- either over cuts or the debt ceiling -- just went up dramatically."

Susan Stellin of the New York Times: "... in the wake of the furor last fall over pat-downs and body scanners, several industry organizations are working on proposals to overhaul security checkpoints to provide more or less scrutiny based on the risk profile of each traveler. While the proposals are in the early stages, they represent a growing consensus around a concept that has the support of John S. Pistole, the head of the Transportation Security Administration: divide travelers into three groups — trusted, regular or risky — and apply different screening techniques based on what is known about the passengers." CW: this story is several days old, but an old friend of mine, who is cited in the article, just brought it to my attention. 

The Revolving Door Keeps on Revolving. Eric Dash of the New York Times: "Joseph Jiampietro, one of the government’s top deal makers during the financial crisis, has joined Goldman Sachs as a senior investment banker covering the financial services industry...." He was the FDIC's "main liason to hedge funds and broader Wall Street community.... Mr. Jiampietro is the latest in a parade of top federal official to leave Washington for Wall Street." (Emphasis mine.) Prior to "his stint in Washington," he was an investment banker. CW: why do I think Mr. Jiampietro's "stint in Washington" had nothing to do with public service?

News Ledes

Washington Post: "Rep. Ron Paul (R-Tex.) won the always-anticipated, rarely predictive presidential straw poll Saturday at the annual Conservative Political Action Conference in Washington, but he did so with less than a third of the vote.... Former Massachusetts governor Mitt Romney came in second with about 23 percent. Beyond that the vote splintered, with no potential candidate rising above the single digits." ...

AP: "Protesters, still partying over their victory in pushing Mubarak out, now pressed for a voice in guiding their country's move to democracy." ...

... AP: "Egypt's military rulers have promised the country will abide by its international agreements, a nod to allay concerns that Egypt's peace deal with Israel could be threatened following the ouster of President Hosni Mubarak. The military has also asked the current government, appointed by Mubarak, to continue operating until a new one is formed. It also says it is committed to eventually handing over power to an elected administration." ...

... Los Angeles Times: "Across the Middle East, [Egypt's] euphoria was contagious. Young men waved flags through the streets of Ramallah in the West Bank, spontaneous rallies broke out at the Egyptian Embassy in Jordan, and people across the region ripped through the contact lists on their cellphones to share an empowering sense of incredulity, followed by possibility, that accompanied the news." ...

... Washington Post: "Even as they celebrated their triumph over a dictator, many of Egypt's revolutionaries vowed Saturday to continue their peaceful occupation of Tahrir Square, saying their demands for democracy and accountability were still unmet."

New York Times: "With the government likely to bump up against its $14.3 trillion borrowing limit sometime between April 5 and May 31, and a difficult drama about to play out in Congress, Treasury officials are trying to buy as much time as they can to avoid a default." They are taking a series of emergency steps "which could, in theory, push back the projected date for hitting the debt limit by as much as eight weeks, possibly into July."

New York Times: "Citing Wisconsin’s gaping budget shortfall for this year and even larger ones expected in the years ahead, [Republican] Gov. Scott Walker proposed a sweeping plan on Friday to cut benefits for public employees in the state and to take away most of their unions’ ability to bargain. The proposal ... is expected to receive support next week in the State Legislature...."

The Commentariat -- February 11

President Obama speaks about the Egyptian revolution; the segment begins with a brief report from Brian Williams & Richard Engel:

     ... Here's the transcript of the President's remarks. New York Times story here. ...

... Nicholas Kristof: "It’s also striking that Egyptians triumphed over their police state without Western help or even moral support.... A word of caution.... In essence the regime may have decided that Mubarak had become a liability and thrown him overboard — without any intention of instituting the kind of broad, meaningful democracy that the public wants.... So if the military now takes over, how different is it?"

David Sirota gives a good picture of the Obama Administration's so-called support for democracy: "... the Obama administration was so certain it wouldn't have to embody its [pro-democracy] platitudes that it was actively slashing grants for democracy-building in Egypt while maintaining military aid to the Mubarak dictatorship." Read the whole thing. ...

... Caryle Murphy & Howard Schneider of the Washington Post: "Hosni Mubarak ... ruled Egypt for nearly 30 years, longer than any modern leader of the country. And in the end, he will be remembered for his refusal to leave -- until he finally bowed Friday to public pressure.... If the public uprising caught the U.S. unawares, it most certainly did Mubarak as well." ...

"Internet Revolution." Wael Ghonim on how young Egyptians planned the uprising:

Here's an excerpt of President Obama's strongly-worded statement on Egypt, issued following Mubarak's speech. The full text is here at the White House site:

The Egyptian government must put forward a credible, concrete and unequivocal path toward genuine democracy, and they have not yet seized that opportunity.... We believe that the universal rights of the Egyptian people must be respected, and their aspirations must be met. We believe that this transition must immediately demonstrate irreversible political change, and a negotiated path to democracy. To that end, we believe that the emergency law should be lifted. We believe that meaningful negotiations with the broad opposition and Egyptian civil society should address the key questions confronting Egypt’s future: protecting the fundamental rights of all citizens; revising the Constitution and other laws to demonstrate irreversible change; and jointly developing a clear roadmap to elections that are free and fair.

Mark Landler & Mark Mazzetti of the New York Times: "The chaotic events on Thursday called much of the administration’s strategy in dealing with the Egyptian crisis into question." ...

... Adam Entous & Jay Solomon of the Wall Street Journal: "The defiant tone taken by Egyptian President Hosni Mubarak — and widespread confusion about the meaning of his speech — had White House officials stumbling for their next step in a crisis that was spinning out of their control. After Mr. Mubarak's speech, the White House was consumed with a sense of 'disbelief,' one U.S. official said. Director of National Intelligence James Clapper ... compar[ed the crisis] to foreseeing "earthquakes in California.' ... 'This is really bad,' a senior U.S. official said after Mr. Mubarak's address. 'We need to push harder—if not, the protests will get violent.'" ...

... Here's a transcript (English trans.) of President Mubarak's speech. ...

... Mark Lynch of Foreign Policy: "It's hard to exaggerate how bad Hosni Mubarak's speech today was for Egypt.... With the whole world watching, Mubarak ... offered a meandering, confused speech promising vague Constitutional changes and defiance of foreign pressure.  He offered a vaguely worded delegation of power to Vice President Omar Suleiman, long after everyone in Egypt had stopped listening. It is virtually impossible to conceive of a more poorly conceived or executed speech." ...

... Tom Friedman has a very fine column on the Egyptian uprising. "Mubarak, in one speech, shifted this Egyptian democracy drama from mildly hopeful, even thrilling, to dangerous." CW: I guess Friedman is atoning for his warmongering Iraq. ...

... David Kirkpatrick of the New York Times on President Mubarak's speech:

... Kirkpatrick & Scott Shane: "Even as pro-democracy demonstrations in Cairo have riveted the world’s attention for 17 days, the Egyptian military has managed the crisis with seeming finesse, winning over street protesters, quietly consolidating its domination of top government posts and sidelining potential rivals for leadership, notably President Hosni Mubarak’s son Gamal.... The standoff between the protest leaders and Mr. Mubarak, hours before major demonstrations set for Friday, could pose a new dilemma for military commanders." ...

... Kareem Fahim & Thanassis Cambanis of the New York Times report on the reaction in Tahrir Square to the Mubarak speech.

The most encouraging thing I’ve seen in a long time is what’s happening in Egypt and the potential it has. I know there’s a lot of risks as well. But the potential, I think, is enormous in terms of liberating the Arab world from the shackles of authoritarian regimes that have kept their people down and subjugated the role of women and resulted in a lack of opportunity and provided fertile ground for terrorism. -- Rep. Adam Schiff (D-Calif.) ...

... Daniel Williams of Human Rights Watch in a Los Angeles Times op-ed: "In Egypt, the military is not a profession; it's a ruling caste. If that doesn't change, ousting Hosni Mubarak will mean little." Williams describes his arrest & detention in Cairo last week, which was supervised by the military.

... AND WTF was with CIA Director Leon Panetta? Greg Miller of the Washington Post: "CIA Director Leon Panetta helped touch off an avalanche of erroneous expectations Thursday when he testified that there was a 'strong likelihood' that Egyptian President Hosni Mubarak would step down by the end of the day." Testifying before the House intelligence committee, when asked about news reports that Mubarak would resign, Panetta said, "I got the same information you did, that there is a strong likelihood that Mubarak may step down this evening, which would be significant in terms of where the hopefully orderly transition in Egypt takes place." ...

... CW: so Panetta, the CIA director, testifies Mubarak is resigning -- and Mubarak doesn't resign -- AND, speaking before the same House committee, the National Intelligence Director James Clapper says the Muslim Brotherhood is "a very heterogeneous group, largely secular, which has eschewed violence and has decried Al Qaeda as a perversion of Islam." Right. Clapper is the same genius who in December went to ABC News for an interview without knowing one damned thing about the terrorism story driving the day. Is it any wonder the Administration doesn't know what to do from moment to moment? The heads of our "intelligence" agencies are fucking clueless, so the "intelligence" the President is getting is stupid. Fire Clapper. Now. ...

... Maybe Andy Borowitz has the real story: "Explaining why he had been convinced yesterday that Egyptian President Hosni Mubarak was about to relinquish his position, President Barack Obama said that he had been misled by Mr. Mubarak’s out of office autoreply to Mr. Obama’s email. Embarrassed at the misinterpretation, Mr. Obama conceded today that 'maybe I took it a little too literally.'”

Howard Gleckman of TaxVox points out that federal Fannie & Freddie subsidies are cheap compared to the biggest homeowner subsidy of all: the mortgage interest deduction, which is a progressive tax break, giving most to those who need it least: "Pols are shocked that we’d add $130 billion to the nation’s burgeoning debt to subsidize owner-occupied housing this way. Except we spend far more than that each year buying down the cost of home ownership through the tax code.... The single biggest housing subsidy is the mortgage deduction, which will add $130 billion to the deficit in the coming year alone.... The Tax Policy Center estimates that more than 70 percent of the benefit of the mortgage and property tax deductions go to the highest-earning 20 percent of households...." (CW: this page was messed up when I linked to it, but you can still read the article.)

Cloak, Dagger & State Secrets. Jeff Stein of the Washington Post: "A former CIA security officer is alleging that the agency is unjustifiably invoking a 'state secrets' claim to cover up evidence that he and his family suffered illnesses as a result of exposure to environmental contamination at an agency facility. Kevin Shipp, 55, a counterterrorism consultant now employed by a firm with government contracts, said that the agency also has sought to prevent him from publicizing his ordeal by heavily redacting the manuscript he hopes to publish. The book describes what the family experienced during and after their exposure: illness, alcoholism, marital discord, and a campaign of harassment and surveillance that Shipp says was carried out by the CIA."

President Obama, yesterday, speaking on the National Wireless Initiative, at Marquette University:

Austen Goolsbee explains the wireless initiative:

Right Wing News

Ken Vogel & Ben Smith of Politico: "In an expansion of their political footprint, the billionaire Koch brothers plan to contribute and steer a total of $88 million to conservative causes during the 2012 election cycle, according to sources, funding a new voter micro-targeting initiative, grassroots organizing efforts and television advertising campaigns."

CW: in case you hadn't noticed, I'm not linking to stories about CPAC (because I don't care what those jerks say) unless I come across something that pleases me, like this:

Jon Bershad of Mediaite: "Dick Cheney strolled on stage to cheers and the inspirational tune of Tina Turner’s 'Simply the Best' and got began to present the 'Defender Of The Constitution' award to Donald Rumsfeld. However, as the chants of 'USA! USA!' died down, a voice screaming 'War criminal!' could be heard.... As Cheney continued to talk up his former colleague, a shouting match began between supporters of Ron Paul and the rest of the convention hall. The Paul supporters eventually walked out in the middle of Rumsfeld’s speech as way of protest." Here's the video. The pleasure of hearing someone confront Cheney makes it worth watching:

Dave Weigel wonders whose bright idea it was to put Cheney & Rumsfeld in front of a gaggle of screaming libertarians. CW: whoever had the "bright idea," -- thank you.

News Ledes

As Al Jazeera put it, "the 30 seconds that ended the 30 years of Mubarak rule":

MUBARAK STEPS DOWN. New York Times: "President Hosni Mubarak of Egypt turned over all power to the military and left the Egyptian capital for his resort home in Sharm el-Sheik, Vice President Omar Suleiman announced on state television on Friday." ...

... Al Jazerra: "Suleiman's short statement was received with a roar of approval and by celebratory chanting and flag-waving from a crowd of hundreds of thousands in Cairo's Tahrir Square, as well by pro-democracy campaigners who attended protests across the country on Friday."

... New York Times: "As tens of thousands of chanting protesters thronged Tahrir Square on the 18th day of Egypt’s uprising, the powerful armed forces scrambled on Friday to offer assurances and concessions, endorsing President Hosni Mubarak’s refusal to step down while seeking to defuse the outrage and anger it has provoked among protesters." Washington Post story here.  ...

... AP: "Denmark's prime minister [Lars Loekke Rasmussen] became the first Hosni Mubarak to step down, just hours after Mubarak vowed to remain in power despite pro-democracy protests."

Los Angeles Times: "Iran's president declared Friday that Egypt's uprising shows a new Middle East is emerging that will doom Israel and break free of American 'interference,' even as Tehran clamped down on its own opposition movement.... Iran has sought to portray the uprisings in Tunisia and Egypt as a replay of its 1979 Islamic Revolution -- whose anniversary was marked Friday.... Iranian opposition groups have called for marches on Monday to express solidarity with Egypt's demonstrators. Iranian officials have warned of crackdowns if protesters return to the streets." ...

... New York Times: "Iran’s authorities have increased pressure on the country’s political opposition days before a rally proposed by opposition leaders in support of the popular uprisings in Tunisia and Egypt. Security forces stationed outside the home of the reformist cleric Mehdi Karroubi, one of the country’s most prominent opposition leaders, prevented Mr. Karroubi’s son from seeing his father on Thursday...."

Washington Post: "An already wobbly week for House Republicans turned chaotic Thursday as their unruly new majority flatly rejected a spending plan crafted by House leaders, saying its cuts fell far short of fulfilling a campaign pledge to slice $100 billion from federal programs. House leaders offered to redo the package but were struggling to identify the massive and unprecedented cuts that will be required to meet their goal."

USA Today: "Arizona is suing the U.S. government, claiming the feds have failed to secure the border and protect the state from "an invasion" of illegal immigrants. Gov. Jan Brewer said the intent of the lawsuit is to force the federal government to protect Arizonans."