JP Morgan: Bank Or Casino?

Robbie Conal

The New York Times reports that JP Morgan, "which emerged from the financial crisis as the nation’s biggest bank, disclosed on Thursday that it had lost more than $2 billion in trading, a surprising stumble that promises to escalate the debate over whether regulations need to rein in trading by banks."  Its CEO, Jamie Dimon, blamed “errors, sloppiness and bad judgment” for the loss, which stemmed from "a hedging strategy that backfired."

Surprising?  Hardly.  As Travis Waldon writes at ThinkProgress, these are the kind of errors that "could have been prevented were it not for extensive lobbying efforts from banks like JPMorgan, which has spent nearly $10 million on lobbying since the beginning of 2011 (including nearly $2 million already this year)."

Robert Reich reminds us that Dimon has incessantly argued against government regulation of Wall Street:

Last year he vehemently and loudly opposed the so-called Volcker rule, itself a watered-down version of the old Glass-Steagall Act that used to separate commercial from investment banking before it was repealed in 1999, saying it would unnecessarily impinge on derivative trading (the lucrative practice of making bets on bets) and hedging (using some bets to offset the risks of other bets).

And since then, Reich continues, "J.P. Morgan’s lobbyists and lawyers have done everything in their power to eviscerate the Volcker rule — creating exceptions, exemptions, and loopholes that effectively allow any big bank to go on doing most of the derivative trading it was doing before the near-meltdown."

As Waldon writes, "Thursday’s events prove that Wall Street hasn’t learned its lesson from the last crisis, and that America’s 'too big to fail' institutions are too irresponsible to avoid failure. The Volcker Rule, watered down as it may be, is aimed at preventing that. Unfortunately, Dimon and his Wall Street colleagues remain committed to making sure it won’t."

Matt Taibbi explains why we should care "if some idiot trader (who apparently has been making $100 million a year at Chase, a company that has been the recipient of at least $390 billion in emergency Fed loans) loses $2 billion for Jamie Dimon."

Because J.P. Morgan Chase is a federally-insured depository institution that has been and will continue to be the recipient of massive amounts of public assistance. If the bank fails, someone will reach into your pocket to pay for the cleanup. So when they gamble like drunken sailors, it’s everyone’s problem.

Taibbi concludes:

 If J.P. Morgan Chase wants to act like a crazed cowboy hedge fund and make wild exacta bets on the derivatives market, they should be welcome to do so. But they shouldn’t get to do it with cheap cash from the Fed’s discount window, and they shouldn’t get to do it with money from the federally-insured bank accounts of teachers, firemen and other such real people. It’s a simple concept: you either get to be a bank, or you get to be a casino. But you can’t be both. If we don’t have rules to enforce that concept, we ought to get some.

Death's Double Standard

By Tony Platt, cross-posted from his website, GoodToGo

It’s good news that the United Nations has authorized University of Arizona professor James Anaya, Special Rapporteur on the Rights of Indigenous Peoples, to carry out its first investigation into the status of Native Americans in the United States, with a particular focus on American compliance with standards embodied in the UN Declaration on the Rights of Indigenous Peoples, to which the US became a signatory in 2010.

The focus of Anaya’s scrutiny no doubt will be on today’s inequalities and injustices that deeply impact 2.7 million Native Americans throughout the country. But let’s not forget the inequities of death.

Despite popular images of tribal members getting rich from gaming pay-offs, the overwhelming majority of Native Americans remain mired in poverty, the victims of structural unemployment and racial exclusion, compounded by devastating rates of diabetes, suicide, infant mortality, and cardiovascular and alcohol-related diseases. There is a long way to go before, in the words of the Declaration, “indigenous peoples are equal to all other peoples” entitled to the right to “self-determination” and to “be free from discrimination of any kind.”

Inequality is a problem for the dead as well as the living. According to Article 12 of the U.N. Declaration, native peoples have a right to “the use and control of their ceremonial objects, and the repatriation of their human remains.” Repatriation as a central demand of Native American movements in the United States speaks to the long history of plunder of native artifacts and bodies.

Over a period of some two hundred years, from Thomas Jefferson’s exploration of a Native American barrow near his home in Virginia, to passage of the federal Native American Graves Protection and Repatriation Act (NAGPRA) in 1990, several hundred thousand native grave sites – maybe as many as one million – were dug up in the name of science, recreation, and commerce. There was a brisk trade in native body parts and funerary artifacts, propelled by the popularity of commercial and recreational “collecting,” scientific curiosity, and the heritage industry. The artifacts removed from graves ended up in private collections and public display cases around the world, including the Smithsonian, Royal Museum of Ethnology in Berlin, the British Museum in London, and museums in Prague, Zurich, Vienna, and Moscow.



During the 19th and early 20th centuries, scientists in universities and museums engaged in a frenzy of acquisition in the hope that native bodies would shed light on the origins of the species or on racial typologies of human difference. They were particularly interested in the bodies of Indians, who, it was believed, had been frozen in time since the Stone Age, and whose remains therefore were thought to hold the key to “secrets of human origins,” as well as provide physical evidence for claims about European superiority and native degeneracy. This science made it easier to frame the near extermination of native peoples in the imagery of natural rather than social history, subject to inevitable processes of erosion and decline, rather than as the result of human intervention and – in the case of California – genocide.

In widely read treatises – such as Samuel Morton’s Crania America (1839), Ales Hrdlicka’s Directions for Collecting Information and Specimens for Physical Anthropology (1904), and Edward Gifford’s Californian Anthropometry (1926) – the measurement of brain cavities, nostrils, and degree of slope in foreheads generated all kinds of scientific quackery to justify the civilizational superiority of white Europeans and innate inferiority of native peoples.

Aside from the racist assumptions that guided research on native bodies, the science was also flawed because documentation of provenience of bones and artifacts found in graves was often nonexistent. Moreover, scientists harvested far more corpses than they could ever study. Tens of thousands of native dead were stashed in boxes, cellars, and personal collections, only to be resurrected for display in cabinets of curiosities, museums, schools, and international expositions. A skull collected on Santa Rosa Island was included in the US exhibition at the Columbian Historical Exposition in Madrid in 1892. In the 1920s and 1930s, a self-styled amateur archaeologist dug up hundreds of dead Tongva Indians and used their bones to decorate his Catalina Museum of Island Indians. To this day, the Favell Museum in Klamath Falls, Oregon, proudly displays native artifacts looted from graves.

With passage of the Native American Graves Protection and Repatriation Act in 1990, the practice of widespread grave looting was officially stopped. Moreover, NAGPRA requires federally funded institutions to publish their holdings of native body parts, as well as artifacts taken from graves, and to facilitate their return to tribes that are able to make a case for genealogical or cultural connection.

NAGPRA was as significant a piece of legislation for Native Americans as the Civil Rights Act was for African Americans. And, similarly, it represents an unfinished revolution. The pace of repatriating human remains is glacially slow: by 2009, less than five percent nationwide had been returned to tribes. By 2010, the University of California at Berkeley had repatriated only 179 of its 10,000 native body parts.

There is nothing inherently wrong with using the dead to reconstruct the past. With the help of new developments in chemistry, DNA analysis and dating methods, we can learn a great deal from human remains about how our ancestors lived, worked, and died. Respectful collaboration between community groups, advocacy organizations, politicians, and scientists in New York in the 1990s, for example, made it possible to excavate what had been the Negros Buriel Ground, resulting in a detailed portrait of the daily lives of Africans in colonial New Amsterdam in the seventeenth and eighteenth centuries. A similar collaboration between the Muwekma Ohlone Tribe, archaeologists, and Pacific Gas and Electric Company – following the inadvertent exposure of native burials in Santa Clara, California, in 2008 – produced a great deal of information about the lives and deaths of Ohlone neophytes buried in the mission at the end of the 18th and beginning of the 19th centuries.

For most twentieth century archaeology, however, the decision to excavate and exhume native remains was typically made unilaterally and imposed by fiat.  The problem is not with the search for knowledge, but rather the unequal relations of power between investigator and subject, collector and collected; the lack of consultation and permission, the arrogance run wild; and how the products of knowledge are misused.

It’s not only the unauthorized digging up of ancestors that haunts the memory of native peoples, it’s also the blatant double standard that adds indignity to insult. Remembrance and treatment of the dead is a highly selective political project. Some of our collective dead are respected, others humiliated. Consider some examples:

•    The priests who worked at Mission Carmel in California from 1771 to 1833 are buried in solid tombs and named in headstones. Junipero Serra, architect of the mission system, is interred in an ornate crypt. The thousands of Ohlones, whose slave labor built and ran the mission, are buried anonymously in mass pits. When I visited Mission Carmel in February with Louise J. Miranda Ramirez, tribal chairwoman of the Ohlone/Costanoan-Esselen Nation, she picked up several items from the ground. “Look,” she showed me, “these are human bones dug up by gophers. I’ve asked the authorities to bring in soil and cover the graves with some protection, but they don’t do anything.”

•    In the second half of the 19th century, while scientists and collectors raided native cemeteries for booty and bodies, the nation made amends for the Civil War by creating a system of national cemeteries and making a conscientious effort to preserve the names and identities of those killed. Today, a Defense Department unit with an annual budget of $55 million searches the world for unaccounted soldiers killed in the line of duty. No comparable effort is put into retrieving thousands of native remains unceremoniously stored in university, military, and museum basements.

•    An expensive effort, led by the FBI, is currently under way to find the remains of a six-year old boy killed in New York more than thirty years ago. Recently, a national scandal erupted when it was revealed that the mortuary at Dover Air Force Base in Delaware dumped in a landfill the body parts of some victims of the September 11, 2001 tragedy. Similarly, the Pentagon expressed strong condemnation of the Los Angeles Times for publishing photographs of American soldiers posing with the body parts of dead Afghan insurgents. No such objections were made when museums and newspapers throughout most of the 20th century displayed native skeletons as objects of curiosity and entertainment. 

•    A debate is under way today about the propriety of excavating the wreck of the Titanic when it may contain corpses that, say Federal officials, should be accorded the respect of a graveyard and shielded from “looters and artifact hunters.” In contrast, the University of California, Berkeley, is closing the Hearst Museum for two years in order to “renovate and transform its public spaces.” There are no plans, apparently, to give 10,000 native remains stacked in a dank basement a respectful burial or commemorate their theft from native graveyards.

Federal policies of repatriation are a step in the right direction. But most native remains are unclaimed or unknown. What should be a national ritual of remembrance and mourning has become a technical, bureaucratic process. In addition to tribal claims for the return of their dead, there is also a need for public commemoration that speaks to a national tragedy. Throughout much of the 20th century, while the government built memorials to the victims of world wars and now, as it continues to make efforts to account for every person missing from the Vietnam War, hundreds of thousands of native bones and skulls have been stored anonymously in basements and boxes, and their burial goods displayed as mementos of a “vanishing race” or as freak show curiosities. However much we have tried to assiduously forget this sorrowful history, the past continues to reverberate in the here and now. It is time to do justice to our living dead.

Just Another GOP Warrior Against Women: Romney Fails To Put Money Where His Mouth Is On Pay Equity

Mitt Romney supports pay equity in principle. Does he support the Paycheck Fairness Act?

By Laura Clawson, cross-posted from Daily Kos

DonkeyHotey

Senate Democrats are trying to pass the Paycheck Fairness Act, to take the next big step past the Lilly Ledbetter Fair Pay Act. Senate Republicans blocked it in 2010 despite a 58-vote majority in favor at the time. What could make congressional Republicans change their mind? Well, there's this little thing called a presidential election, and their party's presumptive nominee has said that he is favor of pay equity—in principle.

If Mitt Romney said he supported the Paycheck Fairness Act, might that flip some Republican votes? Greg Sargent argues that it might, and it would certainly put Republicans who care about winning the presidency in a tough spot if Romney embraced fair pay as a way to make the case to women that he would represent them and their economic concerns. But I'm with DNC Chair Debbie Wasserman Schultz: It's not going to happen.

“It speaks volumes that Romney can’t say whether or not he would have signed [Lily Ledbetter] into law,” Wasserman Schultz said on the call. “And so I feel quite certain that he also opposes the Paycheck Fairness Act.” “That bill is not law, because Republicans blocked it,” she continued. “Republicans have absolutely no interest in ensuring pay equity in this country ... Romney would turn back the clock and leave us stagnant and stifled.”

Republicans blocked this law once, and Mitt Romney—he's a Republican. And he's no kind of leader. Not only does he not want to see women have a better chance at fair pay, he would never take the political risk of trying to get Senate Republicans to do something they don't want to do.

But if Romney is going to go around the country making claims about Barack Obama having been bad for women economically, he really needs to tell us where he stands on this. Pay equity in principle is all very well, but where does Mitt Romney stand when it comes to making the principle reality? Does he stand with women and against discrimination, or does he stand with employers looking to save a buck by discriminating against women and with Senate Republicans fighting the War on Women?

Whatever Mitt Romney thinks, tell your senators to vote for the Paycheck Fairness Act.

Senate Passes Expanded Violence Against Women Act; It's Now The House's Turn

The Violence Against Women Act provides critical funding and training to curtail domestic violence, including funding for police training to handle cases involving sexual assault.  The legislation became law in 1994, and since then incidents of domestic violence against women have dropped by over 50 percent.

The Senate has voted to reauthorize a bipartisan version of the Act that will extend its protection to the LGBT community, undocumented immigrants and Native Americans.  House Republicans, however, are opposed to expanding protections to these groups.

As reported by Laura Clawson at Daily Kos:

Reauthorization of the Violence Against Women Act passed the Senate by a bipartisan vote of 68 to 31. The bill had reached 61 cosponsors, including eight Republicans, well before the vote; the further Republican votes have to be seen as a tribute to the effectiveness of the campaign Democrats waged in favor of the bill, including its protections for undocumented immigrant, LGBT, and Native American victims of abuse. Republicans tried and failed to remove those protections, and whined extensively about the politicization of the law as a result of their failure.

The House has yet to take up a VAWA reauthorization, but Republicans there are standing against those expanded protections for groups of people they don't like.

Send an email to your member of the U.S. House of Representatives, telling him or her to pass the expanded, bipartisan Senate reauthorization of the Violence Against Women Act.

Jamming Too Slow On Student Loans

"I'm President Barack Obama, and I too want to slow jam the news."

You've probably seen this already -- President Obama's appearance on Late Night with Jimmy Fallon during which they "slow jam the news" on the need for Congress to prevent interest rates on student loans from doubling (Congress must do so by July 1, or rates will go up from 3.4 to 6.8%):



At this point Republicans are predictably against extending the current rates, and their presidential candidate, Mr. Etch-a-Sketch, used to be with them.  Remember when he said students shouldn't count on the government's help:  “It would be popular for me to stand up and say I’m going to give you government money to pay for your college, but I’m not going to promise that . . .  And don’t expect the government to forgive the debt that you take on.”

But Romney is beginning to understand how potent an issue this is, and this week conceded that he would support an extension of the current interest rates on Stafford-loans, although as Amy Davidson points out, "there was no musical component to the announcement."

His fellow Republicans in Congress obscure their opposition to having the government assist students with their debt by claiming they don't object to extending the lower interest rates (although the Ryan Budget that passed the House doesn't do so) but are concerned with how to pay for it.  As Greg Sargent points out they are floating various ways to pay for the extension that seem likely to get shot down by the Democrats.

And while Democrats are merely trying to maintain the status quo, it is worth making the important point, as Robert Borosage does, that they should be building the groundwork for more progressive reforms to help students, such as 0% loans and/or free tuition at public colleges.

The Zombie Rises: The Return Of Simpson-Bowles

By Robert Borosage, cross-posted from Campaign for America's Future

Take a good look at Europe - bloody riots in Athens and Madrid, rising unemployment, spreading poverty and suicide, and a deepening recession - because the current American elite consensus bizarrely wants to drive America down that same path.

Europe's miseries come from imposing austerity before recovering from the recession caused by the financial collapse. Conservatives in Germany and England inflicted harsh measures to enforce budget discipline - hiking taxes, cutting spending.

In the US, the Obama recovery plan and the deal with Republicans over extending the Bush tax cuts combined to limit and slow the imposition of austerity. The result: Europe is sinking, while the US economy retains slow, but halting growth.

But now the deficit hawks are gearing up for another run at driving the US back into economic recession.

At the end of the year, we face a train wreck. After the November election, the Bush tax cuts, the payroll tax cut and extended unemployment benefits expire. The automatic cut - "sequester" in budget speak - of nearly 10% of military and domestic discretionary spending (everything except guaranteed programs like Medicare and Social Security and interest on the national debt) kicks in. We even hit the debt limit to add to the high stakes.

If all this is allowed to occur, it will subtract over 3% of GDP from an economy growing at 2.5% or less. A drop back into recession would be almost inevitable. So a deal is needed.

But the deal in everyone's head is some kind of "grand bargain," like that almost cut by House Speaker John Boehner and President Obama last year, or like that outlined by the co-chairs of the President's deficit commission, Erskine Bowles and Alan Simpson (which failed to gain the needed votes to pass the commission).


Centrist Democrat Kent Conrad, chair of the Senate Budget Committee, has announced that he will use the Simpson Bowles recommendations as a guideline for budget negotiations that he assumes will take place in the lame duck Congress have the election.

There's lots not to like in Simpson-Bowles which marches under the banner of "shared sacrifice" at a time when 1% of the population is capturing 93% of the rewards of growth, while paying the lowest tax rates in living memory.

But the horror is less the bad terms of the supposed bargain, than its zombie like infliction of austerity on an economy barely out of the emergency room.
We've still got some 23 million people in need of full time work. We haven't recovered the jobs that were lost in the collapse, much less the jobs needed for young people coming into the economy. Wages are still failing to keep pace. Nearly one in four mortgages are under water; foreclosures are rising.

Yes, we have trillion dollar deficits. But austerity - some deal that raises taxes and cuts spending now - will put more people out of work and make reducing deficits even harder.

After experiencing the horrors of this misguided policy, European leaders will eventually turn back to trying to get their economies moving again. What we need this fall is a different grand bargain - a global agreement, like that that was forged in early 2009, for coordinated action by governments to reflate the economy - to borrow and spend to put people back to work.

For this to occur, the bipartisan elite fixation about inflicting austerity now must be challenged. If we are to avoid a lost decade or worse, we need action to support still weak and staggering economies. Global coordination would be the best way to achieve that. That requires putting a stake in Simpson Bowles, the Boehner-Obama grand bargain and other zombies.

In this country, the necessary remedies are clear. With interest rates near zero, a decrepit infrastructure that must be rebuilt, a construction industry flat on its back, anyone with a whit of business sense would finance a massive Rebuild America program over the next few years, put people back to work, and build the sinews vital for a more competitive economy. We will never have a better opportunity to make the investments that we will have to make anyway.

We should send money to states to rehire teachers, make universities affordable, and strengthen not weaken our public schools. It's simply nuts to make kids pay the price of Wall Street's follies.

And if we could get beyond ideological perversities, we'd set up a green corps, an urban corps, and a jobs corps to guarantee a job for every veteran and young person under 25. No one should risk their life for the country and return to an economy with no place for them. Young people are coming out of school into the worst economy since the Great Depression. Condemning them to idleness is a recipe for depression, drugs, crime, and misery. And we will all pay dearly for a lost generation.

Certainly, we have to be serious about getting our books in order. The wealthy and the corporations should pay more so we can afford the investments we need. But the overwhelming source of our long-term budget woes comes from projections of soaring health care costs. If we paid for health care at the rate other industrial countries do (with better results), we would be projecting surpluses, not deficits.

But right now, the focus should be on putting people back to work and getting the economy moving. Until that happens, austerity - as Europe is now experiencing - is a contagion, not a cure.

Congress Must Act To End Prosecutorial Misconduct

By Ginny Sloan, cross-posted from Huffington Post

When federal prosecutors charged the late Senator Ted Stevens (R-AK) with failing to report more than $250,000 in illegal gifts and home renovations, they knew the stakes were sky high. Stevens, after all, was only the 11th senator in history to be indicted while in office. In 2008, the prosecutions succeeded in convincing a Washington, DC jury to convict Stevens. A month later, Stevens, the longest serving Republican senator in history, was defeated in his bid for re-election by fewer than 4,000 votes; most observers think the conviction helped to sway the election. Stevens died two years later in a plane crash.

Thanks to a two-and-a-half year independent investigation ordered by the judge in the case, Emmet Sullivan, and finally released several weeks ago, we now know how prosecutors won Stevens' conviction: they cheated. They violated his constitutional rights by intentionally concealing evidence that they knew would have supported Stevens' claim that he intended to pay for all work performed on his house. They hid documents and they allowed a cooperating witness to testify falsely to the jury. The investigators' 514-page report is a chilling reminder that not even the most powerful leaders in the nation are safe when federal prosecutors ignore their duty to seek justice, and instead pursue victory at any cost.

Sadly, the Ted Stevens case was not an isolated incident. Although the failure to disclose evidence is a constitutional violation that by its very nature often goes undiscovered (anything that the government chooses not to disclose to the defense generally remains unknown), we still know it occurs with disturbing frequency. For example, a 2010 USA Today investigation documented 86 cases since 1997 in which judges found that federal prosecutors had failed to turn over evidence that they were legally required to disclose. A number of organizations have reached similar conclusions about the frequency of these violations.

I have tremendous respect for the men and women who serve as federal prosecutors and believe that the vast majority of them act in good faith to fulfill their constitutional and legal obligations. However, it is difficult for even well-meaning prosecutors to understand what exactly those obligations entail in the face of murky rules and conflicting standards. When violations are occurring by even those prosecutors who intend to seek justice, something must be done.

Legislation offered by Senator Lisa Murkowski (R-AK) gives Congress the opportunity to address this serious problem. Senator Murkowski's "The Fairness in Disclosure of Evidence Act" is a bipartisan proposal that would require federal prosecutors to turn over to defendants all evidence favorable to their cases, and would provide appropriate penalties when they fail to do so. Passage of the bill would ensure that defendants receive all information to which they are constitutionally entitled, and would create greater consistency in federal prosecutions by eliminating jurisdictional disparities.


The Constitution Project has long been dedicated to protecting constitutional safeguards in the criminal justice system, and the Murkowski bill is an important step towards doing just that. Its safeguards are the bedrock of our system and absolutely essential in protecting the public from abuses of the government power to deprive individuals of their liberty and even their lives.

We recently released a statement from 140 criminal justice experts from across the political spectrum calling on Congress to adopt legislation to address the problem highlighted in the Stevens case -- legislation that is consistent with the Fairness in Disclosure of Evidence Act. More than 100 former federal prosecutors are among those joining the call, including: Stuart Gerson, former Acting U.S. Attorney General under President Clinton; Larry Thompson, former Deputy Attorney General during President George W. Bush's first term; former FBI Director William S. Sessions; and famous author Scott Turow.

These experts point out that federal courts, the Department of Justice and other entities have for years tried to fix the problem, only to articulate inconsistent or inadequate standards, making it difficult for individual prosecutors to determine the scope of their obligations to disclose information. The group concluded, "Only federal legislation can adequately address these continued violations by federal prosecutors, creating a uniform standard for what must be disclosed and what remedies will exist for non-disclosure, and sending a strong message to the DOJ that there will be consequences when federal prosecutors violate their discovery obligations."

Congress has the power to prevent another injustice like what happened to Senator Stevens from occurring. It should act swiftly to pass the Fairness in Disclosure of Evidence Act, creating clear standards for what information federal prosecutors are obligated to disclose to the defense and providing appropriate remedies when prosecutors fail to do so.

Virginia E. Sloan founded The Constitution Project in 1997 and is now its President and serves on its Board of Directors.  The Constitution Project is a politically independent think tank established to promote and defend constitutional safeguards. More information about the Constitution Project is available at constitutionproject.org.