By Pam Martens and Russ Martens: March 1, 2016  Landing in the midst of the most critical election season since the New Deal era of the 30s, comes a masterpiece of labor history and political strategy from the prolific author, Robert W. McChesney, and John Nichols, the popular national affairs correspondent at The Nation.  Both McChesney and Nichols are co-founders of Free Press, a national media reform organization. People  Get Ready: The Fight Against a Jobless Economy and a Citizenless Democracy provides the reader with, first, an exquisite understanding of how the U.S. evolved into a society where the citizen has been kicked to the curb in their “democracy” and, next, a strategic road map for a peaceful revolution. The authors write that “The United States retains the façade of democracy. It remains a democracy on paper and in our hearts. But ours is, increasingly, a citizenless democracy…Oligarchs and their … Continue reading →

By Pam Martens and Russ Martens: February 29, 2016 You know there is something bizarre going on in American politics when the New York Times endorses Hillary Clinton for President at the end of January and then begins to question her judgment before a month goes by. What message does it send to voters when a major newspaper sounds like it has endorser’s remorse and we’re still in the primary season? One month ago, the Old Gray Lady said that Democratic primary voters “have the chance to nominate one of the most broadly and deeply qualified presidential candidates in modern history.” Unfortunately, they weren’t talking about Senator Bernie Sanders of Vermont, who has served with distinction in Congress for 25 years (16 years in the House and the last nine years in the Senate). The Times was speaking about Hillary Clinton, whose actual tenure in Washington feels like it is one … Continue reading →

By Pam Martens and Russ Martens: February 26, 2016  Maybe the presidential candidates should start wearing baseballs caps with the slogan: Make America Auditable Again. The country that has delivered epic accounting frauds like Enron, Worldcom, Tyco, and Bernie Madoff just flunked its own audit. Yesterday, the Government Accountability Office, the nonpartisan investigative arm of Congress, released a thumbs down report on how the U.S. government keeps its books. The GAO said it could “not render an opinion on the federal government’s consolidated financial statements for FY 2015 because of persistent problems with the Department of Defense’s (DOD) finances, the federal government’s inability to account for and reconcile certain transactions, an ineffective process for preparing the consolidated financial statements, and significant uncertainties.” How big of a deal is this? According to the GAO, what it was unable to effectively audit amounted to about “34 percent of the federal government’s reported … Continue reading →

By Pam Martens and Russ Martens: February 25, 2016 In a feeble public relations move, Bill Dudley, the President of the Federal Reserve Bank of New York and FINRA, the self-regulatory body on Wall Street, are making noises about cleaning up the culture on Wall Street. It’s always dangerous to make any predictions when it comes to Wall Street but in this case we can confidently predict that when it comes to the New York Fed and FINRA, the only possible impact they could have on the culture is to make it worse. The New York Fed didn’t see a problem for Bill Dudley’s spouse to collect $190,000 a year in deferred compensation from JPMorgan Chase while the New York Fed served as the bank’s main regulator. The New York Fed didn’t see a problem for Citigroup’s CEO, Sandy Weill, or JPMorgan CEO, Jamie Dimon, to sit on its Board … Continue reading →

By Pam Martens and Russ Martens: February 24, 2016 The same phenomenon that’s been playing out for months took center stage yesterday with one notable twist: oil prices dove, the broader stock market swooned, but the mega Wall Street banks took a worse beating than the broader stock market averages. The Dow Jones Industrial Average lost 1.14 percent yesterday while Bank of America, Citigroup and Morgan Stanley were off by more than 3 percent. In an unusual twist, JPMorgan Chase, the bank that analyst Mike Mayo has preposterously called the Lebron James of banking, performed the worst among its peers yesterday, down 4.18 percent. What knocked the wind out of JPMorgan’s sails yesterday is at the heart of why the banks keep tanking when oil prices swoon. In a nutshell, the market doesn’t think these banks are coming clean about their exposure to oil – whether it’s in loans to … Continue reading →

By Pam Martens and Russ Martens: February 23, 2016  Thanks to the Presidential debates, most Americans have heard of the Glass-Steagall Act which kept the country’s banking system safe for 66 years until it was repealed by President Bill Clinton in 1999, allowing the risky activities of Wall Street trading firms to merge with insured-deposit banks, setting the stage for the Wall Street collapse in 2008. But few Americans have ever heard of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, which Bill Clinton signed into law less than two years after taking office. The Riegle-Neal legislation allowed bank holding companies to acquire banks anywhere in the nation and invalidated the laws of 36 states which had allowed interstate banking only on a reciprocal or regional basis. Put these two pieces of legislation together with the Commodity Futures Modernization Act of 2000, also signed into law by Bill … Continue reading →

  By Pam Martens and Russ Martens: February 22, 2016  Fourteen years before Wall Street blew itself up in 2008, the General Accounting Office (now called the Government Accountability Office), warned Congress that Wall Street was on a dangerous path that could put the taxpayer at risk of bailouts as a result of trillions of dollars of derivatives being held by a handful of interconnected firms. These dangers were heightened according to the GAO by shoddy accounting practices for derivatives, inadequate regulatory reporting, and high leverage. Despite the fact that almost every single warning that the GAO called out in 1994 was ignored by the U.S. Congress, leading to the greatest financial collapse since the Great Depression in 2008, Congress has still not attended to the most dangerous elements highlighted in the report. Back in 1994, the GAO found that: “U.S. bank regulatory data indicate that the top seven domestic … Continue reading →

By Pam Martens and Russ Martens: February 19, 2016  Neel Kashkari, the newly installed President of the Federal Reserve Bank of Minneapolis, shook things up earlier this week by suggesting options to deal with Wall Street’s too-big-to-fail banks that include breaking them up, as Senator Bernie Sanders has suggested, or regulating them like public utilities such as nuclear power plants. The nuclear power plant regulatory regime analogy was not a good one. In fact, that’s how we’ve been regulating the complex, high-risk banks with the same kind of catastrophic outcomes to the public in terms of economic impact: think Chernobyl disaster in 1986; Fukushima Daiichi nuclear disaster in 2011; versus global financial meltdown in 2008 resulting from inept regulatory oversight. In fact, just ten days before Kashkari spoke on February 16, CNN was reporting that radioactive tritium was leaking into groundwater at the Indian Point nuclear power plant in Buchanan, … Continue reading →

By Pam Martens and Russ Martens: February 18, 2016  Last year, Ian Millhiser released his book, Injustices: The Supreme Court’s History of Comforting the Comforted and Afflicting the Afflicted. On the book jacket, Millhiser cogently summed up the cruelties inflicted on this nation as a result of lifetime appointments of bigoted and elitist gatekeepers on the U.S. Supreme Court: “The justices of the Supreme Court have shaped a nation where children toiled in coal mines, where Americans could be forced into camps because of their race, and where a woman could be sterilized against her will by state law. The Court was the midwife of Jim Crow, the right hand of union busters, and the dead hand of the Confederacy. Nor is the modern Court a vast improvement, with its incursions on voting rights and its willingness to place elections for sale.” On the topic of race, the book explores … Continue reading →

By Pam Martens and Russ Martens: February 17, 2016  What is it about Goldman Sachs that makes so many people want to go rogue? There is the brilliant Nomi Prins, a former Managing Director at Goldman, who called the firm an “autocratic and hypocritical organization” in her groundbreaking 2004 book Other People’s Money: The Corporate Mugging of America. On March 14, 2012, Goldman Sachs VP Greg Smith tendered his resignation with a scorching oped in the New York Times, lamenting “how callously people talk about ripping their clients off,” and noting that he had witnessed “five different managing directors refer to their own clients as ‘muppets.’ ” Carmen Segarra didn’t actually work for Goldman Sachs but she was frequently stationed there as its bank examiner from the New York Fed. Segarra should have received a national award in 2014 as the gutsiest bank examiner in America. To back up her … Continue reading →