Friday, January 15, 2010

TOO HOT TO HANDLE: NYT won't publish my comment

In response to Paul Krugman's column today "Bankers Without A Clue", I wrote the comment below:

Dr. Krugman,

Do you really believe men like Jamie Dimon, John Mack and Lloyd Blankfein are "clueless"? First of all, if they are clueless and the government had to bail them out, why weren't they replaced? To me, they seem to be calculating and devastatingly effective.

1) They now have explicit backing of the Fed and U.S. Treasury. "Privatized profits, socialized losses" should be stamped on our currency under "In God We Trust".

2) They gutted derivatives regulation in the financial reform bill. Derivatives like CDOs and CDSs are at the heart of this man-made crisis.

3) Take Lloyd Blankfein of Goldman Sachs (please). He is the least "clueless", at least according to Greg Gordon's brilliant Goldman series on McClatchy. Just one of many:

Investors Could Only Lose in Goldman's Caymans Deals

GS created extraordinarily complex derivatives they knew would fail because they bet against them with credit default swaps, paid for AAA ratings from compliant credit rating agencies, got investors to buy them, and collected on their bets when the derivatives inevitably failed. So they certainly knew the securitized subprime-backed bonds were no good. As their defense, they claim their investors were too sophisticated not to know what they were buying.

These guys should be prosecuted under the RICO Act. This is not the Pecora hearings. We will not get meaningful regulation, anything like Glass-Steagall or FDIC insurance as reassurance. Instead, we will get cosmetic changes at best. The financial lobbyists are in Congress right now writing the reform bill, just as Lloyd Blankfein huddled with Henry Paulson to decide AIG's fate. We know what happened then: 100 cents on the dollar to Goldman.

Meanwhile, the rightwing populist rage is rising. We can see that in the Senate race in Massachusetts, a true blue state, where Kennedy's seat is in jeopardy. The teabaggers are making inroads everywhere.

Unless the Democrats can do something meaningful or at least show solidarity with the 99% of us who are holding tenuously onto the middle class, they will sweep into power. I'm tired of "liberals" telling progressives that it's our fault because we're not taking to the streets against the Senate filibuster rules. Let's call lobbying what it really is, bribery, and get rid of everyone who accepts it.

The only stated reason for not publishing a comment is if it is abusive or not on topic. Mine was neither. Could it be the NYT is hiding something? A conflict-of-interest? You decide.


Janet Amateau said...

Please try posting this again at the Times. People need to see what you've written; you've called it clearer than anything else I've read on this gargantuan SHAM.

maverick said...

I think this is a fabulous comment. I love your attention grabbing headline too.