Lehman Brothers

So all a Wall Street banker has to do is deny that he knows what someone else says he knows, and the SEC folds? Oy:

Mr. Fuld’s role was harder to ferret out. Bart H. McDade, another Lehman executive, told Mr. Valukas that Mr. Fuld “was familiar with the term” Repo 105 and “knew about the accounting.” But Mr. Fuld told the S.E.C. that he had never heard of Repo 105, officials said, undermining a potential case. A lawyer for Mr. Fuld declined to comment.

The S.E.C. team also concluded that Repo 105 would not have been “material” to investors because the firm’s leverage ratio was trending downward regardless of Repo 105.

That conclusion set off a wave of dissent inside the S.E.C. Senior accountants and the head of the S.E.C. unit that oversaw corporate disclosures questioned the findings. Ms. Schapiro urged Mr. Canellos to keep digging.

But Mr. Canellos, a former federal prosecutor who is now the co-head of the S.E.C.’s enforcement unit, did not budge. Despite the political pressure, he told colleagues at one of the meetings, they could not bring a case if the evidence was lacking.

“Our job is to seek justice,” he said.

Stealing home

If you didn’t already see this Washington Post piece from yesterday, you should read it. And by the way, I don’t think D.C. is the only place where this happens. I know the FBI has been investigating our former sheriff, and I’ve heard rumors of him “saving” properties in exchange for kickbacks:

On the day Bennie Coleman lost his house, the day armed U.S. marshals came to his door and ordered him off the property, he slumped in a folding chair across the street and watched the vestiges of his 76 years hauled to the curb.

Movers carted out his easy chair, his clothes, his television. Next came the things that were closest to his heart: his Marine Corps medals and photographs of his dead wife, Martha. The duplex in Northeast Washington that Coleman bought with cash two decades earlier was emptied and shuttered. By sundown, he had nowhere to go.

All because he didn’t pay a $134 property tax bill.

The retired Marine sergeant lost his house on that summer day two years ago through a tax lien sale — an obscure program run by D.C. government that enlists private investors to help the city recover unpaid taxes.

For decades, the District placed liens on properties when homeowners failed to pay their bills, then sold those liens at public auctions to mom-and-pop investors who drew a profit by charging owners interest on top of the tax debt until the money was repaid.
Continue reading “Stealing home”

Virtually Speaking Sunday

6p PT/9p ET

RJ Eskow & Cliff Schecter talk with Jay Ackroyd about the impact of Obama initiating Congressional support for Syria; Grand Bargain and the Affordable Care Act (ACA) debate; how the creation of the Frankenstein of the Tea Party is now threatening a huge number of Republicans and how this might tie into Syria and Medicaid; and the importance of language and messaging;

Plus political satire from Culture of Truth. Jay Ackroyd moderates.

Follow @CliffSchecter @RJEskow @JayAckroyd @Bobblespeak

Listen live or later http://www.blogtalkradio.com/virtuallyspeaking/2013/09/09/rj-eskow-cliff-schecter-virtually-speaking-sundays

Cory Booker

cory

Noam Scheiber with an excellent piece in the New Republic about the rising political star:

Booker’s aides insist he is a progressive at heart; it has just taken time for him to modulate his message for a national audience. “I think people grow … in terms of the way you understand how you can fix problems,” says a staffer. This may be true: For example, Booker quickly backtracked after his Bergen Record comment on Social Security. Yet the most alarming feature of Booker’s politics isn’t his proto-Rubinism. It’s a more primitive instinct—a skepticism of government that flourishes in certain (usually right-of-center) circles of financial elites. Naturally, Booker doesn’t quite put it this way. Often his skepticism is merely the subtext of a riff about some heroic collaboration with a deep-pocketed donor.

But it’s clearly there. “We in Newark have said that, if we as a government just try to solve our problems, try to rely on our state legislature, and just try to rely on the federal government … we’re never going to solve our problems,” Booker explained at an Aspen Institute discussion in 2011. “[W]e have to find a way to partner with other sectors.” He added that Americans “have obligations to make sacrifices above what we do in just paying taxes” and ticked off examples of philanthropists pouring money into Newark. “We now have the largest parks expansion [in America],” he said. “Not because of government action. But because of the courage of average American citizens [i.e., donors] to say, ‘I’m going to show that we can create global change right here in my neighborhood.’ ”

Don’t get me wrong: If I were mayor of Newark, I’d be looking for money anywhere I could find it, too. As Booker points out, you certainly wouldn’t want to wait for funds to trickle in from Trenton, or from the Republican-controlled House of Representatives. What I wouldn’t do is elevate this ad hoc hole-plugging tactic into a governing philosophy. Even his Aspen co-panelist Gavin Newsom, a fellow moderate who is the lieutenant governor of California, seemed to flinch during Booker’s monologue on the subject. (“Where I’ll disagree with Cory is I think it was by government action,” Newsom interjected.)

Kevin Griffis, Booker’s spokesperson, says that a Senator Booker would try to “think creatively about whether or not he can use his convening power … to bring the same innovations you’ve seen work in Newark” to other parts of New Jersey, even the country. To point out just one flaw in this plan: If corporations were less keen on using loopholes to save billions in taxes, we wouldn’t need to rely on the millions they donate to charities and cities like Newark. No doubt the country’s biggest corporations will be keen to embrace a freshman senator who preserves their cushy arrangement. And Booker will have plenty of chances—closed-door negotiations, dead-of-night amendments—to vindicate their enthusiasm.

The far bigger problem, though, is that Booker’s philosophy simply doesn’t scale, to borrow a word he has learned from the tech sector. Most mayors don’t have a fraction of the star power and connections that Booker does, something he’s happy to note. (“I don’t mean to sound immodest,” he told his local paper. “But [the private donors] all say, if you run the schools, we will come to Newark.”) And even if there were a hundred mayors who could match Booker’s wattage, there aren’t nearly enough check-writing billionaires to make much of a dent in their to-do lists. Only the federal government and a handful of states have those kinds of resources.

Outside the context of a local politician struggling to fund his agenda, Booker’s worldview—the mild suspicion of government initiative, the trivialization of paying taxes as a way to bring about change, the sanctification of corporate do-gooding—is a few ticks to the right of a Clinton-era New Democrat. Really more like enlightened Paul Ryan-ism. There are definitely worse philosophies. But it’s not exactly progressive.

Trans Pacific Partnership is very very secret because it’s very very bad

Techdirt:

We’ve been reporting for several years about the extraordinary levels of secrecy surrounding the TPP negotiations, where little information was released about what was going on, and there were few opportunities for representatives of civic and other groups to meet with negotiators to present their point of view. More recently, there have been some indications that this lack of transparency is fuelling increasing discontent among some of the participating nations.

In order to get the trade deal sewn up by the end of this year, and before resistance spreads further, the negotiators have decided to hold ‘inter-sessional’ meetings for the remaining unresolved areas. But as this article from Scoop explains, these won’t be like routine TPP meetings, with their routinely unhelpful levels of opacity:

Detective work indicates that informal ‘inter-sessional’ meetings on six chapters are scheduled within the next four weeks — all in North America.

‘ “Inter-sessional” is a misnomer’, says Professor Kelsey, ‘because they are not planning any more formal sessions. There will be no access for the media or stakeholders to these smaller meetings.’

‘Past inter-sessionals have been shrouded in secrecy to ensure we can’t find out what’s happening and we don’t have access to those negotiators who see value in talking with us.’

‘The last three years of the TPPA have been widely condemned for their lack of transparency. The process is now going further underground’.That is, rather than opening up TPP in response to widening criticisms, its negotiators will now be meeting in complete secret, presumably until they emerge with some kind of a deal, however bad. Since no information will be released about those gatherings behind closed doors, and there will be no opportunities to convey concerns to the participants, the public in whose name all these talks are taking place will have no way of knowing what is going on or of offering its views. It’s the ultimate in arrogant, “we know best” negotiations where citizens are expected to accept what is given, no discussion allowed.

H/t Steve Duckett.

Virtually Speaking Thursday

6p PT/9p ET – Listen live or later: http://www.blogtalkradio.com/virtuallyspeaking/2013/09/06/gaius-publius-dave-johnson-stuart-zechman-w-jay-ackroyd

Who are ‘we the people’?  How might clear majorities of people prevail given that all the electeds (mostly) are against us?  Dave Johnson, Gaius Publius, Stuart Zechman and Jay Ackroyd consider the political environment often described as left, right, center and the inverse relationship between the views of the people with power and the general populace.

For example, large majorities in both Republican-supporting voters and Dem-supporting voters favor No Cuts  to Education, Medicare and Social Security.

How do we bring this popular coalition together in a way that wins? What are our best strategies for doing that?

Bill Clinton speech on healthcare

You might have missed it yesterday, but Clinton did a pretty good job explaining why it’ll help and why instead of complaining about the problems in the bill, Republicans should work with Democrats to fix them. (I never understood why Obama kept denying there were serious problems. There are.)

Clinton’s policy explanations, contained in a prepared text he read with glasses perched on his nose, were familiar to anyone with a basic understanding of how the new health care law operates. But he wrapped up his case for bipartisan cooperation by outlining flaws in the law desperately in need of repair that won’t be fixed without legislative action at the state and federal levels. This was notable because the Obama Administration has downplayed glitches and unintended consequences that may result from the law.

Some flaws in Obamacare seem like actual errors, according to Clinton. The law, for instance, requires large employers to provide health insurance to employees, but not their family members. This is the case even though spouses and children of the employees will be required by the law to have health insurance, but aren’t eligible for federal subsidies to buy coverage independently. “It’s obviously not fair and bad policy, but it’s not clear to me that anybody intended this,” said Clinton. “I think Congress should fix it.”

Clinton also said he believes Obamacare tax credits created for small businesses to help them afford health insurance for their workers are too small and limited to too few companies.

Clinton also pointed to what is probably the most pressing problem in the law’s design. Obamacare was designed to provide Medicaid coverage, through a large national expansion, to all Americans earning up to 138% of the federal poverty level (FDL). Those earning above that level but below 400% of FDL will be eligible for federal subsidies to buy private coverage. But the Supreme Court’s 2012 ruling that the Medicaid expansion must be optional for states has left legions of the working poor with no way to afford insurance. Those who don’t qualify for Medicaid in a state like Texas, where Medicaid eligibility is very strict and will remain so under Obamacare, won’t qualify for subsides unless they earn more than 100% of FDL. “You get the worst of all worlds,” Clinton said. “You’re too poor to get help…And this is a problem only the states can fix.”

Clinton’s ability to persuade Republican state lawmakers to suddenly begin working with the Obama Administration on implementation of the health care law after three years of resistance is limited at best. But at this stage, less than a month before the law’s health insurance marketplaces launch, the White House seems willing to try anything—even if it means admitting, through an intermediary, that the law is flawed and needs Republican participation to fix it.