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Chris Hedges Arrested in Front of Goldman Sachs November 4, 2011

Posted by rogerhollander in Economic Crisis, Occupy Wall Street Movement.
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Posted on Nov 3, 2011

David Shankbone (CC-BY)
 

Chris Hedges made this statement in New York City’s Zuccotti Park on Thursday morning during the People’s Hearing on Goldman Sachs, which he chaired with Dr. Cornel West. The activist and Truthdig columnist then joined a march of several hundred protesters to the nearby corporate headquarters of Goldman Sachs, where he was arrested with 16 others.

Goldman Sachs, which received more subsidies and bailout-related funds than any other investment bank because the Federal Reserve permitted it to become a bank holding company under its “emergency situation,” has used billions in taxpayer money to enrich itself and reward its top executives. It handed its senior employees a staggering $18 billion in 2009, $16 billion in 2010 and $10 billion in 2011 in mega-bonuses. This massive transfer of wealth upwards by the Bush and Obama administrations, now estimated at $13 trillion to $14 trillion, went into the pockets of those who carried out fraud and criminal activity rather than the victims who lost their jobs, their savings and often their homes.

Goldman Sachs’ commodities index is the most heavily traded in the world. Goldman Sachs hoards rice, wheat, corn, sugar and livestock and jacks up commodity prices around the globe so that poor families can no longer afford basic staples and literally starve. Goldman Sachs is able to carry out its malfeasance at home and in global markets because it has former officials filtered throughout the government and lavishly funds compliant politicians—including Barack Obama, who received $1 million from employees at Goldman Sachs in 2008 when he ran for president. These politicians, in return, permit Goldman Sachs to ignore security laws that under a functioning judiciary system would see the firm indicted for felony fraud. Or, as in the case of Bill Clinton, these politicians pass laws such as the 2000 Commodity Futures Modernization Act that effectively removed all oversight and outside control over the speculation in commodities, one of the major reasons food prices have soared. In 2008 and again in 2010 prices for crops such as rice, wheat and corn doubled and even tripled, making life precarious for hundreds of millions of people. And it was all done so a few corporate oligarchs, the 1 percent, could make personal fortunes in the tens and hundreds of millions of dollars. Despite a damning 650-page Senate subcommittee investigation report, no individual at Goldman Sachs has been indicted, although the report accuses Goldman of defrauding its clients. 

When the government in the fall 2008 provided the firm with billions of dollars in the form of cheap loans, FDIC debt guarantees, TARP, AIG make-wholes, and a late-night label-shift from investment bank to bank holding company, giving the firm access to excessive Federal Reserve aid, access [the corporation] still has, it enabled and abetted Goldman’s criminal behavior. Goldman Sachs unloaded billions in worthless securities to its clients, decimating 401(k)s, pension and mutual funds. The firm misled investors about the true nature of these worthless securities, insisted the securities they were pushing on their clients were sound, and hid the material fact that, simultaneously, they were betting against these same securities—$2 billion against just one of their deals. The firm then had the gall to extort from its victims—us—to make good on its bets when the global economy it helped trash lost $40 trillion in worldwide wealth and huge insurance firms were unable to cover their bad debts.

The Securities Act of 1933, established in the wake of the massive fraud that pervaded the securities market before the 1929 Crash, was written to ensure that “any securities transactions are not based on fraudulent information or practices.” The act “prohibits deceit, misrepresentation, and other fraud in the sale of securities.” The subcommittee report indicates that Goldman Sachs clearly broke security laws.

As part of the political theater that has come to replace the legislative and judicial process, the Securities and Exchange Commission agreed to a $550 million settlement whereby Goldman Sachs admitted it showed “incomplete” information in marketing materials and that it was a “mistake” to not disclose the nature of its portfolio selection committee. This fine was a payoff to the SEC by Goldman Sachs of about four days’ worth of revenue, and in return they avoided going to court. CEO Lloyd Blankfein apparently not only lied to clients, but to the subcommittee itself on April 27, 2010, when he told lawmakers: “We didn’t have a massive short against the housing market, and we certainly did not bet against our clients.” Yet, they did.

 

And yet nothing has been done. No Goldman Sachs officials have gone to trial. This is because there is no way within the corporate state to vote against the interests of Goldman Sachs. There is no way through the formal mechanisms of power to restore the rule of law. There is no way to protect the ordinary citizen and the poor around the globe from the predatory activity of financial institutions such as Goldman Sachs. Since our courts refuse to put on trial the senior executives at Goldman Sachs, including Blankfein, who carried out these crimes and lied to cover them up, we will. Speculators like those in Goldman Sachs—who in the 17th century when speculation was a crime would have been hanged—must be prevented by law from again destroying our economy, preying on ordinary citizens, hoarding food so the poor starve and running our political process. We are paying for these crimes—not those who orchestrated perhaps the most massive fraud in human history. Our teachers, police, firefighters and public employees are losing their jobs so speculators like Blankfein can make an estimated $250,000 a day. Working men and women are losing their homes and going into personal bankruptcy because they cannot pay their medical bills. Our unemployed, far closer to 20 percent than the official 9 percent, are in deep distress all so a criminal class, a few blocks from where I speak, can wallow in luxury with mansions and yachts and swollen bank accounts.

What we are asking for today is simple—it is a return to the rule of law. And since the formal mechanisms of power refuse to restore the rule of law, then we, the 99 percent, will have to see that justice is done.

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Workers Laid Off, Executives Paid Off, Bernard Madoff December 16, 2008

Posted by rogerhollander in Economic Crisis, Labor.
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Posted on Dec 16, 2008, www.truthdig.com

By Amy Goodman

The global financial crisis deepens, with more than 10 million in the U.S. out of work, according to the Department of Labor. Unemployment hit 6.7 percent in November. Add the 7.3 million “involuntary part-time workers,” who want to work full time but can’t find such a job. Jobless claims have reached a 26-year high, while 30 states reportedly face potential shortfalls in their unemployment-insurance pools. The stunning failure of regulators like the Securities and Exchange Commission was again highlighted, as former NASDAQ head Bernard Madoff (you got it, pronounced “made off”) was arrested for allegedly running the world’s largest criminal pyramid scheme, with losses expected to be $50 billion, dwarfing those from the Enron scandal. The picture is grim—unless, that is, you are a corporate executive.

The $700-billion financial bailout package, TARP (Troubled Assets Relief Program), was supposed to mandate the elimination of exorbitant executive compensation and “golden parachutes.” As U.S. taxpayers pony up their hard-earned dollars, highflying executives and corporate boards are now considering whether to give themselves multimillion-dollar bonuses.

According to The Washington Post, the specific language in the TARP law that forbade such payouts was changed at the last minute, with a small but significant one-sentence edit made by the Bush administration. The Post reported, “The change stipulated that the penalty would apply only to firms that received bailout funds by selling troubled assets to the government in an auction.”

Read the fine print. Of the TARP bailout funds to be disbursed, only those that were technically spent “in an auction” would carry limits on executive pay. But Treasury Secretary Henry Paulson and his former Goldman Sachs colleague Neel Kashkari (yes, pronounced “cash carry”), who is running the program, aren’t inclined to spend the funds in auctions. They prefer their Capital Purchase Program, handing over cash directly. Recall Paulson’s curriculum vitae: He began as a special assistant to John Ehrlichman in the Nixon White House and then went on to work for a quarter-century at Goldman Sachs, one of the largest recipients of bailout funds and chief competitor to Lehman Brothers, the firm that Paulson let fail.

The Government Accountability Office issued a report on TARP Dec. 10, expressing concerns about the lack of oversight of the companies receiving bailout funds. The report states that “without a strong oversight and monitoring function, Treasury’s ability to ensure an appropriate level of accountability and transparency will be limited.” The nonprofit news organization ProPublica has been tracking the bailout program, reporting details that remain shrouded by the Treasury Department. As of Tuesday, 202 institutions had obtained bailout funds totaling close to $250 billion.

House Speaker Nancy Pelosi said recently, “The Treasury Department’s implementation of the TARP is insufficiently transparent and is not accountable to American taxpayers.” Barney Frank, D-Mass., chair of the House Financial Services Committee, said earlier, “Use of these funds … for bonuses, for severance pay, for dividends, for acquisitions of other institutions, etc. … is a violation of the terms of the act.”

Republican Sen. Charles Grassley of Iowa said of the loophole, “The flimsy executive-compensation restrictions in the original bill are now all but gone.” Put aside for the moment that these three all voted for the legislation. The law clearly needs to be corrected before additional funds are granted.

The sums these titans of Wall Street are walking away with are staggering. In their annual “Executive Excess” report, the groups United for a Fair Economy and the Institute for Policy Studies reported 2007 compensation for Lloyd Blankfein, CEO of Goldman Sachs (Paulson’s replacement), at $54 million and that of John Thain, CEO of Merrill Lynch, at a whopping $83 million. Merrill has since been sold to Bank of America, after losing more than $11 billion this year—yet Thain still wants a $10-million bonus.

Paulson, Kashkari and their boss, President George W. Bush, might not be the best people to spend the next $350-billion tranche of U.S. taxpayer money, with just weeks to go before the new Congress convenes Jan. 6 and Barack Obama assumes the presidency Jan. 20. As Watergate leaker Deep Throat was said to have told Bob Woodward, back when Paulson was just starting out, “Follow the money.” The U.S. populace, its representatives in Congress and the new Obama administration need to follow the money, close the executive-pay loophole and demand accountability from the banks that the public has bailed out.

Denis Moynihan contributed research to this column.

Amy Goodman is the host of “Democracy Now!,” a daily international TV/radio news hour airing on more than 700 stations in North America.

© 2008 Amy Goodman

Distributed by King Features Syndicate