Wednesday, June 4, 2014

So, Jebbie's the Smaacht One? Low Echelon Republicans Brag About Knowing the Meaning of Nerd (However, Little Understanding in General Exhibited) Repeal of Glass-Steagall Continues To Reap Corruption

I guess if you can read comprehensibly at all, that makes you an intellectual in Republican circles? (Remembering what the rightwingers fund as "think tanks*" helps.)

Nerds unite! The Bushes are baaaaaaaaaaacccck! (Or the never-dying Bush Sales Machine is (big time).)

But not how you (or they) thought.

My guess is that this ploy is just another shot in the dark hoping that the country has become sick enough of the anti-Obama propaganda to buy another Bush try.

Or something. Cause this article is factual (for what it's worth).

Is this really what Jeb’s team feels is its biggest political liability? That Jeb is perceived to be stupid, like his brother? Because that’s … misguided. Bush does need to distinguish himself from his brother, but in different ways and to different audiences.
And this piece puts the cart before the horse. Jeb Bush does not need to worry about proving his intellectual bona fides to the more pressing audience, the GOP presidential primary electorate. There’s plenty about George W. Bush’s legacy that they don’t like, but none of it has to do with the popular perception of him as a moron. These are not discerning customers, in that regard. What they do remember negatively about George W. Bush’s presidency, and have worked hard to eradicate from their ranks ever since, is his big-government conservatism. In this respect, George and Jeb are nearly identical:

But the bookishness and pragmatism that strike mainstream Republican leaders as virtues highlight the potential difficulty that Mr. Bush may face in igniting the passions of more conservative members of the party.
The questions he grapples with most frequently, and enthusiastically, revolve around improving the effectiveness of government in areas like education, immigration and criminal justice. It is a message unlikely to electrify Tea Party and libertarian wings of his party that are openly hostile to the very idea of government.
Technocratic reform within the education and immigration sectors were two of George W. Bush’s top domestic policy priorities, and they appear to hold the same weight within Jeb Bush’s heart as well. As long as this is the case, conservative primary voters won’t care how many Polk biographies or policy journals Jeb has thumbed through.
But suppose Jeb manages to get through the primaries and win the nomination. It’s possible. The Bush clan knows how to win elections in ways that no other Republicans do, and a Jeb Bush candidacy would have plenty of money and donor support to work with. To a general election audience, then, would showing off the smarts be the most effective way for him to distinguish himself from his brother?
It’s not clear that George W. Bush’s predilection for the gut over the brain, in and of itself, was what got him in trouble with the vast majority of American people by the end of his presidency. The country did elect him two times (well, 1.5) based on this “gut” business.

By about 2005-06, though, the country had abandoned him, largely over the Iraq War. That memory lingers. If Jeb wants to distinguish himself from his brother among the 5-10 percent of remaining swing voters in the country, then, he’d be better served denouncing the Iraq War and the willy-nilly interventionist ideology that birthed it. Is he willing to throw his brother under the bus like that? Ehh, probably not.
Jeb Bush will have problems with both primary and general election voter pools if he decides to run for president. And showing off his reading list to the New York Times won’t solve any of them.

And one essay on a related subject now occurs to me. Wonder how many other gifted American children feel the same way?

The Wall Street Etiquette Guide to Helping Oneself to Other People’s Money

By Pam Martens: March 18, 2014

Sanford (Sandy) Weill, Appearing On CNBC July 25, 2012

In case you haven’t figured it out yet, there is a right way and a wrong way to help yourself to other people’s money on Wall Street. The right way propels you into the one percent replete with mansions and yachts, your name memorialized on buildings, a golden parachute, an office and car for life fronted by defrauded shareholders and regular invitations to appear on CNBC and lecture others on how to structure the financial system.

Then there’s the wrong way – as Gary Foster found out the hard way in June 2012 when he was sentenced to eight years in the slammer for embezzling more than $22 million from Citigroup and compounding his lack of etiquette in the most unforgiveable fashion – he wired the funds to Citigroup’s arch rival, JPMorgan Chase.
Foster broke multiple etiquette rules for stealing money on Wall Street. First, his crime was too simple. He made it just too easy for prosecutors to explain to a jury how he wired funds from various corporate accounts at Citigroup, using fake contract numbers, to his personal accounts at JPMorgan. A man lacking so little criminal creativity is eschewed on Wall Street; he clearly has no future there so he might as well go to jail.
Foster broke another etiquette rule when he had the audacity to buy a luxury home in Tenafly, New Jersey rather than Greenwich, Connecticut. You’re just not going to build an adequate Rolodex of connections to get you out of jail in Tenafly.
Consider Foster’s simple plan with the bold and wickedly creative plan hatched by Sanford (Sandy) Weill to extract money from Citigroup. Weill’s plan became colloquially known on Wall Street as the Count Dracula stock option plan – you simply could not kill it; not even with a silver bullet. You couldn’t prosecute it because Citigroup’s well-paid Board of Directors was rubber-stamping it.

Weill’s stock option plan worked like this:

every time he exercised one set of stock options, he got a reload of approximately the same amount of options. Now, stock option grants are supposed to be based on outstanding performance benefitting the shareholders. But even in years when Citigroup was getting dragged through the press for facilitating frauds at WorldCom and Enron and issuing fraudulent research to the public, Weill was reloading the hell out of his stock options.
Graef “Bud” Crystal, the corporate compensation expert, is the man who coined the Dracula analogy for Weill’s stock options. Writing for Bloomberg News, Crystal explained that between 1988 and 2002, Weill “received 96 different option grants” on an aggregate of $3 billion of stock. Crystal says “It’s a wonder that Weill had time to run the business, what with all his option grants and exercises. In the years 1996, 1997, 1998 and 2000, Weill exercised, and then received new option grants, a total of, respectively, 14, 20, 13 and 19 times.”
When Weill stepped down as CEO in 2003, he had amassed over $1 billion in compensation, the bulk of it coming from his reloading stock options. (He remained as Chairman of Citigroup until 2006.) Weill wasted no time in cashing in some of his chips. One day after stepping down as CEO, the Citigroup Board of Directors made an exception and allowed Weill to sell back to the corporation 5.6 million shares of his stock for $264 million.
Weill did not have to concern himself with driving down the price of his shares when that quantity of shares flooded into the market. His Board kindly negotiated the price at $47.14 for all of the shares. Two years after Weill stepped down as Chairman, Citigroup was insolvent and its shares were trading at 99 cents. Regulators discovered that the company had hid subprime debt off its balance sheet and was drowning in toxic debt. The company became one of the largest recipients of taxpayer bailouts and below-market-rate loans from the Federal Reserve.
The economic prospects of the United States, the newly poor, the unemployed whose benefits have run out, are all paying the price for Sandy Weill’s wickedly creative compensation schemes. The hodge-podge of companies that Weill had assembled prior to his convincing John Reed of Citicorp to merge that huge bank with Weill’s Travelers Group, required the repeal of the Glass-Steagall Act – the depression era investor protection legislation that barred FDIC insured banks from merging with their casino cousins, investment banks and brokerage firms.
Weill sold this idea to regulators and the media and Congress on the basis that it would make the U.S. more competitive; that one-stop financial supermarkets would be good for the consumer. But according to John Reed in an interview with Bill Moyers, Weill’s real motivation was about getting rich. (See excerpt below.)
Weill’s “creativity” has been very good for him. He owns multiple estates; his name and that of his wife appears on multiple buildings around the country; and Weill is permitted to opine on CNBC about the need to break up the banks – now that all the damage is already done.
Weill may be able to delude himself about his role in the financial collapse and the long-term impact to our country, but the facts speak for themselves. In February of last year, the General Accountability Office (GAO) released a devastating appraisal of the financial toll the 2007 to 2009 Wall Street financial crisis has had on the U.S. economy and workers. According to the GAO, cumulative output losses alone could exceed $13 trillion. A key concern expressed throughout the study is whether the U.S. economy and many older workers can ever recover from the crisis. According to the report:
“Some studies describe reasons why financial crises could be associated with permanent output losses. For example, sharp declines in investment during and following the crisis could result in lower capital accumulation in the long-term. In addition, persistent high unemployment could substantially erode the skills of many U.S. workers and reduce the productive capacity of the U.S…CBO [Congressional Budget Office] reported that recessions following financial crises, like the most recent crisis, tend to reduce not only output below what it otherwise would have been but also the economy’s potential to produce output, even after all resources are productively employed…”
The other thing you need to know about the Etiquette Guide on Wall Street is that getting rich at a bank like Citigroup that is serially charged with wrongdoing will be no impediment to going on to high office in the U.S. government. As Senator Elizabeth Warren remarked to Fed Nominee and former Citigroup International President Stanley Fischer last week in his confirmation hearing:
“Many big banks are well represented in Washington but the connection between Citigroup and Democratic administrations really sticks out. Three of the last four Democratic Treasury Secretaries have Citigroup ties; the fourth was offered but turned down the CEO position at Citigroup. Former Directors of the National Economic Council and the Office of Management and Budget at the White House and our current U.S. Trade Representative also have Citigroup ties. You once served as President of Citigroup International and are now in line to be number two at the Federal Reserve…”
March 16, 2012: Bill Moyers Interview on PBS With John Reed, former Co-CEO of Citigroup.
JOHN REED: [Speaking about the repeal of Glass-Steagall.] “No one that I’m aware of saw it clearly. You point out to some Senators and Congressmen who did, but somehow we described them as being peripheral. And I simply said, ‘They’re wrong.’ Turned out they weren’t…
“Sandy Weill. I mean, his whole life was to accumulate money. And he said, ‘John, we could be so rich.’ Being rich never crossed my mind as an objective value. I almost was embarrassed that somebody would say that out loud. It might be happening but you wouldn’t want to say it.
“But you know, the biggest bonus I had ever received when I was at Citi was three million dollars. The first year I worked with Sandy it was 15 [million]. I said to the board, ‘I’m the same guy doing the same job, same company. There are two of us. The company’s bigger but there are two of us. What’s going on?’ ‘Oh, you don’t understand.’ And it was just a totally different culture. And see, Wall Street developed that culture.”

* AEI, Brookings (surprise!), CATO Institute.

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