This morning’s key headlines from GenerationalDynamics.com
- Farcical MF Global decision excuses Jon Corzine and employees from guilt
- The Metastasis of Corruption
- Israel fires artillery into Syria for the third time
- Israeli delegation goes to Cairo for peace talks
Farcical MF Global decision excuses Jon Corzine and employees from guilt
In November 2011, the hedge fund firm MF Global went bankrupt. Thecompany had intermingled customer funds with company funds, when thetwo were supposed to be segregated. As a result, $1.6 billion incustomer funds were missing. Those investors who had simply trustedMF Global to hold their money safely lost their money.
The company’s chairman and CEO was Jon Corzine, former Democraticparty U.S. senator and Democratic governor of New Jersey and one-timechairman of Goldman Sachs. When Corzine was asked by a congressionalcommittee where the money was, he said that he had no idea which ofhis subordinates was responsible for losing it. “I simply do not knowwhere the money is,” he said, adding that he was “stunned” to learn itwas missing.
Well, since Corzine is a Democrat, the Obama administration and EricHolder’s Justice Department refused to investigate. This is becausethe Obama administration accepts millions of dollars in politicalcontributions, and would much rather let these mega-criminals go freethan do something that would protect American citizens from crooks.
And so, the Republicans in the House of Representatives decided toinvestigate, in the Financial Services Committee. But we have toremember that the Republicans ALSO receive fat contributions fromfinancial mega-criminals, so they don’t want really want toinvestigate either, but the political pressure was so great that theyhad to do an investigation.
The full committee report was published on Thursday. Here’s the majorconclusion, on page 78 of the report:
“As MF Global’s chief executive, Corzine wasresponsible for ensuring that the company maintained integratedsystems and controls for managing the company’s liquidity andprotecting customer funds. However, under Corzine’s tenure, thecompany’s cash management, liquidity monitoring, and regulatorycompliance functions remained fragmented among several of thecompany’s departments. MF Global lacked any formal liquiditymanagement framework, and the company could not fully assess andanticipate its liquidity needs. Under Corzine’s leadership, thecompany failed to address concerns raised in an internal auditsuggesting that MF Global’s liquidity tracking and forecastingcapabilities lagged behind the firm’s evolving business needs.
Consequently, MF Global was unable to coordinate its activitiesduring the liquidity crisis in its final days of operation. As thecompany struggled to find additional liquidity, company employeesidentified excess company funds held in customer accounts.However, because they did not have an accurate accounting of theamount of customer funds the company held, they withdrew customerfunds as well as company funds. Prosecutors and MF Global’sregulators will determine whether the company or its employeesviolated laws or regulations when these withdrawals weremade. However, the responsibility for failing to maintain thesystems and controls necessary to protect customer funds restswith Corzine. This failure represented a dereliction of his dutyas MF Global’s Chairman and CEO.”
Please note the following:
- Corzine wasn’t really at fault, because he didn’t understand what was going on.
- The people who worked for Corzine aren’t at fault, because Corzine didn’t understand what was going on.
This is a farcical piece of crap, but it’s typical of Washington andWall Street these days. But if you think that there’s no more to thefarce, then you’re wrong.
The piece of crap was prepared by the staff of Republican RandyNeugebauer, who is chairman of the committee.
But get this: Even though the report barely assigns any blame toCorzine, the Democratic co-chair of the committee, Michael E. Capuano,refused to sign off on the report. I assume that Capuano is in bedwith Corzine or, if not, a lot of other Democratic financial types.Washington Post and House Financial Services Subcommittee on Oversight and Investigations
The Metastasis of Corruption
As I’ve been pointing out for years, there has not been a singleconviction from the financial crisis, even though the evidence isoverwhelming that investment banks purposely and knowingly createdtrillions of dollars in fraudulent subprime-mortgage backed syntheticsecurities, and then purposely and knowingly defrauded thousands ofinvestors. (See my April, 2010, article “Financial Crisis Inquiry hearings provide ‘smoking gun’ evidence of widespread criminal fraud.”)And yet, the Obama administration adamantly refuses to prosecute thesecriminals, because they helped get Obama reelected with huge campaigncontributions.
(It would have been very interesting to see whether a Romney JusticeDepartment would have acted any differently, but I guess we’ll neverknow.)
The way that the fraud was committed is now well known. Gen-Xerspoured out of business schools in the 1990s with Masters degrees infraud. After the Nasdaq crash in 2000, many of them lost money andthey blamed it on the hated Boomers. They went into financialinstitutions with the intent to get even, and they did. Theycommitted these crimes under the noses of their Boomer bosses, just asCorzine’s employees did at MF Global.
As I’ve also said for years, since crimes aren’t being prosecuted, thesame people are in the same jobs, finding new ways to commit fraud.
Today we have huge sums of money pouring out of the Fed or theEuropean Central Bank into the hands of the same banks that caused thefinancial crisis in the first place. They no longer have to be subtleabout committing fraud, since the central banks are now just lettingthem defraud the taxpayers legally.
This is a new phenomenon. Whereas the fraud began in a specific way,with Gen-Xers purposely defrauding Boomers, the fraud has metastisizedso that everyone in Washington and Brussels and on Wall Street are nowpart of it. Those huge sums of money are flowing into the coffers ofpoliticians and into the multi-million dollar bonuses of banksters andinto big contracts with favored companies like Solyndra and GeneralElectric, but almost none of it is flowing into the hands of ordinarypeople or small businessmen. And don’t get me started (again) on thecatastrophic financial corruption in things like climate change andObamacare.
Hannah Arendt, in her 1949 book “Origins of Totalitarianism,”described a similar phenomenon in Germany in the lead-up to theHolocaust. She described Bertolt Brecht’s famous play TheThree-Penny Opera as presenting “gangsters as respectablebusinessmen and respectable businessmen as gangsters.” I will at somelater date quote a lot more from Arendt’s book to show how 1930sGermany was similar to America today, but for now I simply want tomake Arendt’s point that it was massive financial corruption thatpreceded the Holocaust.
I’ve written about the comparion between today and 1930s Germany manytimes. In the 1930s, the younger Lost Generation hated the previousMissionary Generation just as much as today’s younger Gen-Xers hatethe previous Boomer Generation. (See “The Legacy of World War I and the Holocaust”) Theattitudes and behaviors of today’s Gen-Xers are the same as theattitudes and behaviors of 1930s Lost Generation Germans.
Ordinary Lost Generation Germans blamed Jews for Germany’s humiliationin the Great War, and for Germany’s financial problems. In 1934, theGerman government passed only fairly simple discriminatory lawsagainst the Jews. This corresponds to the actions of “financialengineers” in the 2004-2007 time period.
However, these simple laws metastasized into greater and greaterdiscrimination, with a turning point being reached with Kristallnachtin 1938, where Nazi gangs destroyed Jewish property across thecountry, with “fashionably dressed women clapping their hands andscreaming with glee, while respectable middle-class mothers held uptheir babies to see the ‘fun.'” After that, Lost Generation criminalswere fully in charge of Germany’s government. By 1942, the criminalactivity had metastasized completely in the concentration camps andthe Holocaust.
Today we’re seeing same metastasis in Washington and Wall Street, asGen-X criminality spreads to everyone, Gen-Xers and Boomers alike.
I’ve had dozens of conversations with Gen-Xers in the last few yearsas they twist themselves into pretzels giving me tortured explanationswhy the Obama administration should not investigate and prosecutefinancial engineers who engineered the financial crisis. I’ve seenseveral of them act just as gleefully as the fashionable women ofBerlin did in seeing Jewish property destroyed. “They were victims oftheir Boomer bosses,” is the moronic argument I always hear, just asGerman war criminals justified their actions in exactly the same wayafter the war.
Interestingly, what I’ve heard at least a dozen times is: “I’m notopposed to people going to jail. For example, I’d like to see JonCorzine go to jail.” However, they never mention Corzine’s employeesgoing to jail as well.
Well, isn’t that hilarious. The Republicans investigated Corzine fora year, and came to the farcical conclusion last week that Corzine wasguilty of nothing more than innocent confusion, as were his employees.So you can see why the Gen-X argument I just quoted really is trulymoronic.
The 1930s Holocaust was not just caused by the few Germans who ran thetrains and the concentration camps, in cooperation with the mainstreammedia. It was caused by millions of German businessmen andpoliticians who refused to acknowledge that crimes were beingcommitted, or to do anything about them. Today’s Gen-Xers haveexactly the same attitudes and behaviors as ordinary 1930s Germans.
I would like to send a message to President Barack Obama, to AG EricHolder, to Republican Randy Neugebauer, to Democrat MichaelE. Capuano, and to all the other Gen-Xers and Boomers who refuse toacknowledge criminality because they benefit from it:
You are the Rudolph Hess, the Hermann Göring, the Ernst Kaltenbrunner,the Albert Speer of today.
If you’ve ever wondered how the Holocaust was even possible, then youshould know that if you had lived in the 1930s rather than today, thenyou would would have been the ones sending Jews to their deaths inconcentration camps. You have the same attitudes and behaviors asthose men did in the 1930s, and you are just as much criminals as theywere. If you’ve ever stopped to wonder how the Holocaust could havehappened, now you know.
Israel fires artillery into Syria for the third time
Syria’s conflict may be “last week’s war,” but the Gaza conflicthasn’t affected it, except to remove it from the front pages. OnSunday, Israel shelled Syrian fighters in Syria, after soldiers inSyria fired gunshots into the Golan Heights. According to the Israelimilitary, the Israelis scored a hit, though they don’t know whetherthe hit was on supporters of Bashar al-Assad or the opposition.Irish Times
Israeli delegation goes to Cairo for peace talks
Negotiators from Israel and Hamas are arriving in Cairo Egypt to beginpeace talks to end the Gaza war. Sunday was the deadliest day of thewar for Gaza, but so far there’s no sign that an Israeli groundinvasion is imminent.
Israel’s objectives in the war are to destroy as much of Hamas’s missilelaunching capability as possible. Israel’s objectives in the peace talksare to get guarantees that there will be no more rocket attacks.
Hamas’s objectives in the war and in the peace talks are to loosen theblockade around Gaza, and to permanently open the crossing into Egypt, sothat goods and people can flow back and forth unhindered.
Israel will disagree with Hamas’s objectives, saying that they will permitHamas to import a new supply of rockets and other weapons to be usedagainst Israel.
Hamas will not be capable of guaranteeing that there will be no morerocket attacks, since Hamas is unable to control Islamic Jihad andother Shia militant groups. As I’ve pointed out in the past, theaverage age of the people in Gaza is 17 (contrasted to 37 for theUnited States), meaning that Gaza is a region made up of littlechildren running around with guns and missiles. AP