My views this week.

First up, the AIG bonuses.

This is on its face a bunch of crap. It is crap that these financial giants give money to those who brought on the bankruptcy of their own corporations. It is crap that they take money from taxpayers to do it. It is crap that Congress - meaning Democrats AND Republicans - didn’t do something to prevent it. It’s crap that neither Bush nor Obama saw it coming, or if they did they ignored it. It’s crap to hear so many in positions of power feign outrage. It’s crap that AIG tries to claim that this is an effort to “retain the best and the brightest” when they are neither, and many who got the cash have already left.

The world if full of crap, and this is just more of it.

Next, I read a very interesting report regarding our current economic crisis by WALL STREET WATCH.

In it they point to “12 Key Policy Decision” that led to where we are now:

1. In 1999, Congress repealed the Glass-Steagall Act, which had prohibited the merger of commercial banking and investment banking.

2. Regulatory rules permitted off-balance sheet accounting — tricks that enabled banks to hide their liabilities.

3. The Clinton administration blocked the Commodity Futures Trading Commission from regulating financial derivatives — which became the basis for massive speculation.

4. Congress in 2000 prohibited regulation of financial derivatives when it passed the Commodity Futures Modernization Act.

5. The Securities and Exchange Commission in 2004 adopted a voluntary regulation scheme for investment banks that enabled them to incur much higher levels of debt.

6. Rules adopted by global regulators at the behest of the financial industry would enable commercial banks to determine their own capital reserve requirements, based on their internal “risk-assessment models.”

7. Federal regulators refused to block widespread predatory lending practices earlier in this decade, failing to either issue appropriate regulations or even enforce existing ones.

8. Federal bank regulators claimed the power to supersede state consumer protection laws that could have diminished predatory lending and other abusive practices.

9. Federal rules prevent victims of abusive loans from suing firms that bought their loans from the banks that issued the original loan.

10. Fannie Mae and Freddie Mac expanded beyond their traditional scope of business and entered the subprime market, ultimately costing taxpayers hundreds of billions of dollars.

11. The abandonment of antitrust and related regulatory principles enabled the creation of too-big-to-fail megabanks, which engaged in much riskier practices than smaller banks.

12. Beset by conflicts of interest, private credit rating companies incorrectly assessed the quality of mortgage-backed securities; a 2006 law handcuffed the SEC from properly regulating the firms.

For a full pdf copy of “Sold Out: How Wall Street and Washington Betrayed America,” click here (warning: large document - 3 MB)

The executive summary is here .
Highlights of the report’s campaign contribution and lobbyist data is here .

The report introduction by Harvey Rosenfield is here .

~ SamSez