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J O I N the C L A S S of 2 0 1 2 Follow us on Twitter Latest Coffee Connect Newsletter Via christopherritter, J'nene Solidarity Kay, Debilyn Molineaux, Eric Byler by Nancy Watzman, The Sunlight Foundation Newly published meeting logs from the Treasury Department show that Jamie Dimon, CEO of embattled JPMorgan & Chase, had a private audience with Secretary Timothy Geithner to discuss the Volcker rule and other issues on March 6. The logs also show that JPMorgan executives attended two other meetings that same month. Volcker was also on the table at another Treasury session the same day, this one a larger meeting with Deputy Assistant Secretary Lance Auer that also included representatives with other groups such as Credit Suisse and Goldman Sachs. The day before, JPMorgan representatives were also present at another group meeting, this one to discuss the issue of securitization, with Auer, Assistant Secretary for Financial Markets Mary Miller, and Tim Bowler. The Treasury Department updated the meeting log records Wednesdayday after being prompted by an inquiry from the Sunlight Foundation that the agency's self imposed deadline for releasing records had passed. The agency typically releases records for the previous month at the end of the month, so the current release reflects March meetings. In the past the agency has usually met its own deadlines for posting this information. [MORE] 
Excerpt from article by Romney also attributed the growth of the debt entirely to Obama’s policies. And, and while the numbers add up, that is a bit more difficult to justify. First of all, Obama has failed to convince Congress to enact some of his proposed policies — such as higher taxes on the wealthy — that likely would have reduced the deficit and thus kept the debt growing more slowly. But more to the point, a major factor in the debt explosion has been the decline in government revenues because of the recession. One could argue — and Romney might — that the laggard recovery is the result of Obama’s policies and thus he should also get all of the blame for the decline in revenues. But the chart [above] shows that the decline in revenues (the red line) began at start of the recession — a year before Obama took office. The chart also shows an explosion of spending (blue line) began at the start of the recession — that is the result of automatic stabilizers such as unemployment insurance kicking in. The spending kept going up, and a good chunk of that is Obama’s responsibility. Still, as the chart shows, it is not such a simple answer to pin this all on Obama’s “policies.” [MORE] Via Kerianne Leffew 
Excerpt from article by EZRA KLEIN, The Washington Post This trade, in fact, echoes the financial crisis: They bet on something unlikely as if it were impossible. That’s what all those banks did when they bet almost everything on the belief that the housing market never goes down everywhere all at once. It’s a reminder that even “good” banks make this kind of mistake. And remember, JPMorgan made this mistake less than four years after the fall of Lehman Brothers, so this came at a time when the lessons of the crisis were still fresh, and when regulators were watching closely. So what does this mean in Washington? JPMorgan has used its sterling reputation to fight the Volcker Rule. That’s the regulation that says banks that take commercial loans and get federal insurance to protect those loans — banks that you might open a checking account with, such as JPMorgan — can’t make speculative bets on their own behalf. If you’re going to be a bank, then you can’t play at the casino. The problem is that it’s very hard to say when a bank is betting on its own behalf and when it is betting on its clients’ behalf. JPMorgan says that this trade was a “hedge” — that it was there to reduce risk, not make money. But given how exquisitely it blew up in JPMorgan’s face, regulators are going to make sure that the Volcker Rule will stop trades like this one from happening. Otherwise, they’ll get the blame next time. That means a much tighter rule, which in turn means JPMorgan (and other banks) won’t make as much money in the coming years. [MORE] 
By Lee Fang, Republic Report In March, Senator Mark Warner (D-VA) led members from both parties in introducing legislation to delay the implementation of the Volcker Rule, a new regulation to limit risky trading by big banks. He was joined by Pat Toomey (R-PA), one of the biggest proponents of financial deregulation in the Senate. The legislation may come back to haunt Warner, who has cultivated close financial ties with J.P. Morgan Chase & Co. ... Just as J.P. Morgan’s lobbying now faces new scrutiny, Warner’s ties to the investment bank should be placed under the microscope. The Huffington Post noted that in the first three months of last year, the senator had received over a quarter of his donations from the bank, which had organized a fundraiser in his honor. But the ties between Warner and J.P. Morgan run deep. A Republic Report review of Warner’s personal finance disclosures reveal that the Virginia senator keeps a large amount of his money invested with Dimon’s bank. Most surprising is the fact that Warner is among the elite group of investors with money in Highbridge Capital, a J.P. Morgan-owned hedge fund that might be affected by the Volcker Rule. [MORE] 
Without compromise, Clinton reminds Tea Party Republican Mourdock, the Constitution would never have been written (see video) by MICHAEL McAULIFF, Huffington Post Indiana's GOP Senate primary winner Richard Mourdock represents what's wrong with American politics these days, former President Bill Clinton said Tuesday, arguing that Republicans are too "scared" to compromise. Clinton, speaking at the Peter G. Peterson Foundation’s Fiscal Summit, advocated for Democrats and Republicans to come together and work on a big-picture plan to deal with debt and deficits. Asked if Washington could do that, Clinton said it was unlikely until after the elections. "The evidence is that the Republicans will be scared to do it after what happened to Sen. [Richard] Lugar," Clinton said, referencing the six-term Indiana senator Mourdock defeated last week. "We will see, with two or three other primaries, what happens. Obviously, I think there should be a big, bipartisan coalition for this. We may just have to wait till the election is over." Mourdock, the state Treasurer who was enthusiastically backed by Tea Party groups, thumped Lugar in the primary, running on a promise to avoid compromising with Democrats. “The Republican position that tends to prevail in these primaries was expressed by the gentleman who beat Sen. Lugar, who said, 'I’m just against compromise, we need to stop it, it’s weak, it’s foolish, our views are irreconcilable, we have to force the American people to choose which one of us is right' -- if that prevails, we’re toast. We’ll look like a bush-league country.” Clinton said his side shares blame for the gridlock in Washington, but predicted that enough Democrats would be willing to reform some of their cherished programs for the sake of making progress. He also said voters share blame for political gridlock because they elected the Tea Party-backed freshmen who ran promising to avoid compromise. "They go around telling everybody how sorry these politicians are, and they voted for them," Clinton said, noting that the freshman members of Congress are likely confused by their record-low approval ratings. "They must be bewildered. All they're doing is what they promised to do when they won that overwhelming victory. It is not like they did not tell everybody what they were going to do." [MORE] 
by JOE MANSOUR, No Labels The most basic responsibility Congress has is deciding how much money the government takes in and how much it spends. But Congress has passed its spending bills on time only four times since 1952. In the last 14 years, annual spending bills have been submitted an average of four months late. Please email Congress and urge them to ask Senators Harry Reid and Mitch McConnell to bring the No Budget, No Pay Act (H.R. 1981 & S. 1981) up for a vote during consideration of the various budget resolutions this week on the Senate floor. Sen. Dean Heller, No Budget, No Pay's sponsor, is urging his colleagues to bring the bill to the floor. And with 10 co-sponsors in the Senate, we already have momentum. We’ve already defied the odds once with a Senate hearing on the No Budget, No Pay Act. Let’s do it again and bring it to a vote this week. CLICK HERE to participate. 
by JOSH ISRAEL, Think Progress Last week, former Sen. John Danforth (R-MO) told ThinkProgress that his party was becoming “increasingly inconsequential” and “intolerant” following the defeat of veteran Sen. Dick Lugar (R-IN). Now, former Sen. Chuck Hagel (R-NE) has also taken aim at his party for its ideological extremism.Hagel — who served two terms in the Senate, between 1997 and 2009 — told Foreign Policy magazine on Friday that the Republican Party “is in the hands of the right, I would say the extreme right, more than ever before.” He observed: "Reagan wouldn’t identify with this party. There’s a streak of intolerance in the Republican Party today that scares people. Intolerance is a very dangerous thing in a society because it always leads to a tragic ending. Ronald Reagan was never driven by ideology. He was a conservative but he was a practical conservative. He wanted limited government but he used government and he used it many times. And he would work with the other party… "Now the Republican Party is in the hands of the right, I would say the extreme right, more than ever before. You’ve got a Republican Party that is having difficulty facing up to the fact that if you look at what happened during the first 8 years of the century, it was under Republican direction… "The Republican Party is dealing with this schizophrenia. It was the Republican leadership that got us into this mess. If Nixon or Eisenhower were alive today, they would be run out of the party." [MORE] 
MICHAEL KIRKLAND, UPI If money has an impact in U.S. elections, the race for the White House and other high offices may be determined by faceless donors pulling the strings from the shadows. Not exactly an image promoted by the Founding Fathers. In January 2010's Citizens United vs. FEC, the U.S. Supreme Court ruling effectively ended the restrictions on political contributions from the general funds of corporations and unions for independent electioneering. The U.S. appeals court in Washington then used Citizens United to rule in SpeechNow.org vs. FEC that limits on individual contributions to groups making independent expenditures are unconstitutional. The two rulings established a new order in how outside groups can affect elections, one pretty much without boundaries. 
Excerpt from article and report by Fareed Zakaria, CNN What is surprising however, is the drop in net legal migration. This has several explanations. The U.S. economy is weaker. On the other hand, Mexico's economy is strengthening. Its GDP per capita is 15,000 dollars - about a third that of America's. Some of Mexico's competitiveness is due to NAFTA - the North American Free Trade Agreement. Because it avoids U.S. tariffs, its exports work out to be cheaper than China's. Last year, Mexico did 400 billion dollars worth of business with the U.S. That's more than Argentina and Brazil combined. But whatever the set of reasons behind the Pew findings, immigration is always determined by both pull-and-push - the need to leave a place is as crucial as the lure of a new destination. So, are we losing our allure? If that's the case, that's not good news. The U.S. has always benefitted from being demographically dynamic. A major advantage we have over Japan, Europe, and even China is that our population will continue to expand. And it's been expanding with young people who are hard-working and full of drive and pay lots of taxes. Look at the data: The median age in the U.S. was about 37 years in 2010. China's was lower at 34 years. But come 2050, that dynamic will be reversed, thanks to decades of Beijing's one-child policy and American immigration. The median age here will be 40 but in China it will hit nearly 49 years. [MORE including video] 
The Bottom Line with Jessica English Sunday May 13, 5 pm ET (2 pm PT) CLICK HERE to listen Call in and join the conversation: (646) 929-2495 Today's show will be an open-call tribute to moms everywhere on Mothers Day 2012. If you are a mom, please call in to share your wisdom, observations, aphorisms. If you spent time with your mom today, please call and tell us how you celebrated. And if you weren't able to be with your mom today, please call and tell us what your mom means to you. My allergies are acting up, so I'll be doing a lot of listening today. That means I'm depending on you. And don't forget to wish me Happy Mothers Day. I didn't get to celebrate because I had to work at Target, so I'll be celebrating with you. —Jess 
How J.P. Morgan Chase Has Made the Case for Breaking Up The Big Banks and Resurrecting Glass-Steagall by ROBERT REICH, Secretary of Labor when our budget was balanced and our economy was strong J.P. Morgan Chase & Co., the nation’s largest bank, whose chief executive, Jamie Dimon, has lead Wall Street’s war against regulation, announced Thursday it had lost $2 billion in trades over the past six weeks and could face an additional $1 billion of losses, due to excessively risky bets. The bets were “poorly executed” and “poorly monitored,” said Dimon, a result of “many errors, “sloppiness,” and “bad judgment.” But not to worry. “We will admit it, we will fix it and move on.” Move on? Word on the Street is that J.P. Morgan’s exposure is so large that it can’t dump these bad bets without affecting the market and losing even more money. And given its mammoth size and interlinked connections with every other financial institution, anything that shakes J.P. Morgan is likely to rock the rest of the Street. Ever since the start of the banking crisis in 2008, Dimon has been arguing that more government regulation of Wall Street is unnecessary. 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). Dimon argued that the financial system could be trusted; that the near-meltdown of 2008 was a perfect storm that would never happen again. Since then, 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. [MORE] |
As American politics assumes its new form in the post-Citizens United era, the credit or the blame goes mostly to Roberts... by Jeffrey Toobin, The New Yorker ... In a different way, though, Citizens United is a distinctive product of the Roberts Court. The decision followed a lengthy and bitter behind-the-scenes struggle among the Justices that produced both secret unpublished opinions and a rare reargument of a case. The case, too, reflects the aggressive conservative judicial activism of the Roberts Court. It was once liberals who were associated with using the courts to overturn the work of the democratically elected branches of government, but the current Court has matched contempt for Congress with a disdain for many of the Court’s own precedents. When the Court announced its final ruling on Citizens United, on January 21, 2010, the vote was five to four and the majority opinion was written by Anthony Kennedy. Above all, though, the result represented a triumph for Chief Justice Roberts. Even without writing the opinion, Roberts, more than anyone, shaped what the Court did. As American politics assumes its new form in the post-Citizens United era, the credit or the blame goes mostly to him. [MORE] 
Healthy information consumption habits are about more than productivity and efficiency. They're about your personal health, and the health of society. Just as junk food can lead to obesity, junk information can lead to new forms of ignorance. The Information Diet provides a framework for consuming information in a healthy way, by showing you what to look for, what to avoid, and how to be selective. In the process, author Clay Johnson explains the role information has played throughout history, and why following his prescribed diet is essential in today's information age. With this book, you’ll learn:
Grab Your Copy and Start a Healthier Diet 
ZACHARY CARTER, Huffington Post Issa -- who endeared himself to the tech community in 2011 by speaking out against the Stop Online Piracy Act -- is again taking up Silicon Valley's cause in the talks surrounding the Trans-Pacific Partnership, a multilateral free trade agreement currently being negotiated between the United States and eight Pacific nations. His move follows a barrage of criticism over U.S. demands in the talks, which have alarmed global health experts, domestic labor unions and government transparency advocates. But a common complaint from nearly every non-profit group monitoring the Trans-Pacific deal is the intense level of secrecy surrounding it. The governments of every nation involved in the talks can see the draft proposals offered by the Obama administration, as can American corporate officials serving on government advisory boards. But the proposals are shielded from the general public, with many nonprofits only made aware of the potential impact on jobs, health or technology through leaked texts. [MORE] 
by Associated Press Nebraska state Sen. Deb Fischer has won the Republican nomination for U.S. Senate, setting the stage for a high-stakes November election against former Democratic Sen. Bob Kerrey. Kerrey, who is seeking to reclaim his old seat in one of the year's most contested Senate races, easily captured the Democrats' nomination. Democratic Sen. Ben Nelson, a two-term moderate, is retiring and both parties are eyeing his seat. Democrats want to keep it to maintain their narrow Senate majority, while Republicans see an opportunity in their drive to win back control of the Senate. The 53-year-old Fischer overcame low name familiarity and being outspent by two competitors to win the nomination in Tuesday's election. She was backed by 2008 Republican vice presidential nominee Sarah Palin and former presidential candidate Herman Cain. [MORE] 
By Dan Froomkin and Paul Blumenthal, The Huffington Post WASHINGTON -- One of the most consequential campaign finance loopholes affecting the 2012 race -- the one allowing big-money donors to secretly funnel millions into campaign ads -- is now closed, after an appellate court ruling on Monday. In April, a district court judge struck down a Federal Election Commission regulation that allowed donors to certain nonprofit groups -- including those created by Karl Rove and the Koch brothers -- to evade normal disclosure requirements. And on Monday, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit turned down a request to stay that ruling on a 2 to 1 vote. “This case represents the first major breakthrough in the effort to restore for the public the disclosure of contributors who are secretly providing massive amounts to influence federal elections," said Democracy 21 President Fred Wertheimer, one of the lawyers who filed the original lawsuit that led to the April decision, in a statement. [MORE] 
A famous donor has dropped his support for Mitt Romney‘s campaign, asked for a refund, and thrown his support to Barack Obama after the President announced his support for same-sex marriage and Mitt Romney derided it at his commencement address at Liberty University over the weekend.
Bill White, the former President of the Intrepid Sea-Air-Space Museum, a veterans activist, and founder of the strategic consulting firm Constellations Group, wrote Mitt Romney and expressed his dissatisfaction.
“I feel that I no longer wish to support your presidential campaign and ask that you please return the maximum contribution that I gave to you last year,” Bill White wrote in a letter addressed to Romney, CNN reports:
“You have chosen to be on the wrong side of history and I do not support your run for president any longer." [MORE] 
by JAKE SHERMAN and MJ LEE, Politico Speaker John Boehner is once again promising that any increase in the nation’s borrowing limit will have to be accompanied by a greater amount of spending cuts. The Ohio Republican’s position, which will be announced at the Peter G. Peterson Fiscal Summit Tuesday in D.C., seems to mirror his stance during last year’s all-consuming debt ceiling standoff. “When the time comes, I will again insist on my simple principle of cuts and reforms greater than the debt limit increase,” Boehner plans to say, according to excerpts released by his office. “This is the only avenue I see right now to force the elected leadership of this country to solve our structural fiscal imbalance. If that means we have to do a series of stop-gap measures, so be it – but that’s not the ideal. Let’s start solving the problem. We can make the bold cuts and reforms necessary to meet this principle, and we must.” 
by JIA LYNN and SARI HORWITZ, The Washington Post The Justice Department has initiated a criminal probe into the $2 billion trading loss at JPMorgan Chase, according to a law enforcement source familiar with the situation. The inquiry is at a very early stage, said the person, who spoke on condition of anonymity because the matter is private. It is unclear what laws may have been violated. Dean Boyd, a Justice spokesperson, declined to comment. The news came as Jamie Dimon, the embattled chief executive of JPMorgan Chase, faced questions from shareholders Tuesday about the company’s recent $2 billion trading loss, its lobbying on new financial regulations and Dimon’s post on the board of the Federal Reserve Bank of New York. Dimon opened the annual shareholder meeting in Tampa, which lasted for less than an hour, by speaking rapidly about the bank’s surprising trading loss, calling the mistakes “self-inflicted.” “This should never have happened,” Dimon said. The company’s multibillion-dollar misstep has rekindled questions about whether regulators are equipped to monitor banks making risky, complex trades. [MORE] 
by PAUL KRUGMAN, New York Times OP-ED One of the characters in the classic 1939 film “Stagecoach” is a banker named Gatewood who lectures his captive audience on the evils of big government, especially bank regulation — “As if we bankers don’t know how to run our own banks!” he exclaims. As the film progresses, we learn that Gatewood is in fact skipping town with a satchel full of embezzled cash. As far as we know, Jamie Dimon, the chairman and C.E.O. of JPMorgan Chase, isn’t planning anything similar. He has, however, been fond of giving Gatewood-like speeches about how he and his colleagues know what they’re doing, and don’t need the government looking over their shoulders. So there’s a large heap of poetic justice — and a major policy lesson — in JPMorgan’s shock announcement that it somehow managed to lose $2 billion in a failed bit of financial wheeling-dealing. Just to be clear, businessmen are human — although the lords of finance have a tendency to forget that — and they make money-losing mistakes all the time. That in itself is no reason for the government to get involved. But banks are special, because the risks they take are borne, in large part, by taxpayers and the economy as a whole. And what JPMorgan has just demonstrated is that even supposedly smart bankers must be sharply limited in the kinds of risk they’re allowed to take on. Why, exactly, are banks special? Because history tells us that banking is and always has been subject to occasional destructive “panics,” which can wreak havoc with the economy as a whole. Current right-wing mythology has it that bad banking is always the result of government intervention, whether from the Federal Reserve or meddling liberals in Congress. In fact, however, Gilded Age America — a land with minimal government and no Fed — was subject to panics roughly once every six years. And some of these panics inflicted major economic losses. So what can be done? In the 1930s, after the mother of all banking panics, we arrived at a workable solution, involving both guarantees and oversight. On one side, the scope for panic was limited via government-backed deposit insurance; on the other, banks were subject to regulations intended to keep them from abusing the privileged status they derived from deposit insurance, which is in effect a government guarantee of their debts. Most notably, banks with government-guaranteed deposits weren’t allowed to engage in the often risky speculation characteristic of investment banks like Lehman Brothers. This system gave us half a century of relative financial stability. Eventually, however, the lessons of history were forgotten. New forms of banking without government guarantees proliferated, while both conventional and newfangled banks were allowed to take on ever-greater risks. Sure enough, we eventually suffered the 21st-century version of a Gilded Age banking panic, with terrible consequences. It’s clear, then, that we need to restore the sorts of safeguards that gave us a couple of generations without major banking panics. It’s clear, that is, to everyone except bankers and the politicians they bankroll — for now that they have been bailed out, the bankers would of course like to go back to business as usual. Did I mention that Wall Street is giving vast sums to Mitt Romney, who has promised to repeal recent financial reforms? [MORE] 
DEREK THOMPSON, The Atlantic Here is Barney Frank's statement on JP Morgan's of $2 billion loss in derivatives: This regrettable news from JPMorgan Chase obviously goes counter to the bank's narrative blaming excessive regulation for the woes of financial institutions. Interestingly, in the Economist's long attack on the financial reform bill, one of their leading examples of the harm the bill is doing was JPMorgan Chase's assertion that complying with the new rules will cost $400 to $600 million at the outset (a number which will obviously go down as compliance processes are set in place). In other words, JP Morgan Chase, entirely without any help from the government has lost, in this one set of transactions, five times the amount they claim financial regulation is costing them." Here is the quote Frank is referring to:
By WILLIAM DERESIEWICZ (essayist, critic and the author of “A Jane Austen Education”) THERE is an ongoing debate in this country about the rich: who they are, what their social role may be, whether they are good or bad. Well, consider the following. A recent study found that 10 percent of people who work on Wall Street are “clinical psychopaths,” exhibiting a lack of interest in and empathy for others and an “unparalleled capacity for lying, fabrication, and manipulation.” (The proportion at large is 1 percent.) Another study concluded that the rich are more likely to lie, cheat and break the law. The only thing that puzzles me about these claims is that anyone would find them surprising. Wall Street is capitalism in its purest form, and capitalism is predicated on bad behavior. This should hardly be news. [MORE] 
by E.J. DIONNE, The Washington Post It's not often that a sound bite from a Democratic candidate gets so under the skin of my distinguished colleague George F. Will that he feels moved to quote it in full and then devote an entire column to refuting it. This is instructive. The declaration heard 'round the Internet world came from Elizabeth Warren, the consumer champion running for the U.S. Senate in Massachusetts. Warren argued that "there is nobody in this country who got rich on his own," that thriving entrepreneurs move their goods "on the roads the rest of us paid for" and hire workers "the rest of us paid to educate." Police and firefighters, also paid for by "the rest of us," protect the factory owner's property. As a result, our "underlying social contract" requires this hardworking but fortunate soul to "take a hunk" of his profits "and pay forward for the next kid who comes along." In other words, there are no self-made people because we are all part of society. Accomplished people benefit from advantages created by earlier generations (of parents whom we didn't choose and taxpayers whom we've never met) and by the simple fact that they live in a country that provides opportunities that are not available everywhere. The successful thus owe quite a lot to the government and social structure that made their success possible. [MORE] |
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