Thursday, May 14, 2015

Cities and States Pay Massive Secret Fees to Wall Street  (TPPed On Sold As Freedom?)

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What would possibly make U.S. citizens think at this moment in history (after all the mind-boggling, sense-altering, cunningly-allowed-private-party-stealing-of-billion-dollar-public-assets running amuck under the Democrats as well as that occurring previously and currently from the Republicans) that plots aren't afoot to steal all the rest?

By fees.

Works for Wall Street when their crimes are discovered.

Why not just an everyday tax on the etherially otherwise engaged. (We're talking out-of-our-minds working three jobs or living in the street.)

Known in regular quarters (and thought of fondly) as doofus Citizens.

Cities and States Pay Massive Secret Fees to Wall Street

By David Sirota

California’s report said $440 million. New Jersey’s said $600 million. In Pennsylvania, the tally is $700 million. Those Wall Street fees paid by public workers’ pension systems have kicked off an intensifying debate over whether such expenses are necessary. Now, a report from an industry-friendly source says those huge levies represent only a fraction of the true amounts being raked in by Wall Street firms from state and local governments.

“Less than one-half of the very substantial [private equity] costs incurred by U.S. pension funds are currently being disclosed,” says the report from CEM, whose website says the financial analysis firm “serve(s) over 350 blue-chip corporate and government clients worldwide.”

Currently, about 9 percent — or $270 billion — of America’s $3 trillion public pension fund assets are invested in private equity firms. With the financial industry’s standard 2 percent management fee, that quarter-trillion dollars generates roughly $5.4 billion in annual management fees for the private equity industry — and that’s not including additional “performance” fees paid on investment returns. If CEM’s calculations are applied uniformly, it could mean taxpayers and retirees may actually be paying double — more than $10 billion a year.

Public officials are overseeing this massive payout to Wall Street at the very moment many of those same officials are demanding big cuts to retirees’ promised pension benefits.

“With billions of public worker and taxpayer dollars put at risk in the highest-cost, most opaque investment schemes ever devised by Wall Street for a decade now, investigations that hold Wall Street profiteers accountable are long, long overdue,” said former Securities and Exchange Commission attorney Ted Siedle.

Private equity firms have argued that their fees are worth the expense, because they supposedly deliver returns for investors that beat low-fee index funds, which track the broader stock market. But those private equity returns are typically self-reported by the firms over the life of those longer-term investments, meaning there are few ways to verify whether the returns are real. Indeed, a recent study from George Washington University argued that private equity firms are using their self-reporting authority to mislead investors into believing their returns are smoother and more consistent than they actually are.

In a 2014 speech, the SEC’s top examiner, Andrew Bowden, sounded the alarm about undisclosed fees in the private equity industry, saying the agency had discovered “violations of law or material weaknesses in controls over 50 percent of the time” at firms it had evaluated.

To date, however, the SEC has taken few actions to crack down on the practices, but some states are starting to step up their oversight.

In New Jersey, for instance, pension trustees announced a formal investigation of Gov. Chris Christie’s administration after evidence surfaced suggesting that the Republican administration has not been disclosing all state pension fees paid to financial firms.

In Rhode Island, the new state treasurer, Seth Magaziner, a Democrat, recently published a review of all the fees that state’s beleaguered pension fund has paid. The analysis revealed that the former financial firm of Democratic Gov. Gina Raimondo is charging the state’s pension fund the highest fee rate of any firm in its asset class.

In Pennsylvania, the new Democratic Gov. Tom Wolf used his first budget address to call for the state “to stop excessive fees to Wall Street managers.”

These moves are shining a spotlight on one of the most lucrative yet little-noticed Wall Street schemes. With so much money at issue - and with pensioners retirement income on the line — that scrutiny is long overdue.
April 24, 2015
(David Sirota is a senior writer for the "International Business Times" and the best-selling author of the books Hostile Takeover, The Uprising and Back to Our Future. Email him at, follow him on Twitter @davidsirota or visit his website at

Karen Garcia at Sardonicky has the best title yet for being stolen blind and left by the side of the road mad, penniless and TPP'ed on.

Memorize it!

Read it at the link below or here in full. It's too speecy a meatball to miss. (And don't forget to delve into her Reader's Comments for a blast of intelligent (and international) analysis.)

TPP = Total Plutocratic Predation.

The fact that the Obama administration has threatened to prosecute any member of Congress who shares the contents of the Trans-Pacific Partnership with the public is all the proof you need that this is a terrible, horrible, no good, very bad deal.

Through "Wikileaks," though, we’ve been made privy to its wish list of corporate power grabs. These include, but are by no means limited to:  global pharmaceutical price-fixing; putting the world's casino banking cartel on a steady diet of crack cocaine; scrapping the Fair Use doctrine and the free Internet and by extension, free speech; and riding roughshod over a whole panoply of food safety, public health, environmental, and labor laws.

Even if all the above were to be removed from the deal, the mere survival of a clause that replaces sovereign court systems with investor state dispute tribunals ruled by corporate lawyers is heinous enough. It's so bad that Obama and his Wall Street cronies need it to stay a classified secret for at least four years, lest the frogs wake up in their simmering soaking tubs, hop out in the nick of time, run wild, and eat the rent-seeking rich.

Joe Firestone has just published a masterful 23-count indictment of the TPP - or as he calls it, a Dayenu Seder chant with 23 stanzas. Read, croak or intone the whole thing, then call your Congress critter and repeat. A litany repeated often enough can be even more powerful than a bribe, especially when each stanza rings true.

Obama and the Republicans are orchestrating an act of aggression, not only against American citizens, but against 40% of the world’s economy. This is a President, after all, who has given himself the right to kill anyone at any time in any place. This is a Congress which not only gives him a blank check to kill, but has its members regularly attend snuff films showing people getting blown up by presidential fiat.

This is a Supreme Court which has declared money to be speech and political bribery to be legal. This is a Fourth Estate which now holds that accessing the comfortable and the powerful is easier and more career-rewarding than afflicting them.
So, think of the TPP as an invisible predator drone buzzing over your head. Once it strikes, it’ll be too late to run or hide. Protest will be futile. Because despite Obama’s derisive comparison of TPP opponents to Sarah Palin, it is indeed a death panel. By virtue of both its opacity and its toxicity, it effectively condemns democracy to an early grave. Did I mention another clause which guarantees that the entire treaty is designed to remain ironclad for at least the next several administrations?

Obama recently revealed his true inner Joe Wilson pissiness when he publicly shrilled out to TPP critic Elizabeth Warren:"You lie!"  He is absolutely shameless in slapping the “progressive” label on this deal and falsely claiming it supports millions of American jobs -  when it is specifically designed to offshore millions of jobs, effectively depressing wages and ramping up mass precarity.

Can you imagine, as Democratic Senator Sherrod Brown did recently, if Obama had expended half as much energy pushing for a jobs bill and living wage legislation and universal health care and student debt forgiveness as he is in cramming this latest corporate tyranny grab down our throats?

The White House openly and chillingly admits that the neoliberal overthrow of state sovereignty is one of the "pillars of his presidency". At the expense of our own future, he has supreme visions of his own:

Finalists, Obama Library and Shrine design contest (credit: Curbed Chicago)

Tell your Congressional reps to vote against fast track, and tell them today. Our time is running out. Remind them that regardless of their powerful donors, they still rely on ordinary human voters for their continued employment.

 We won’t ever forget. Ribbit, ribbit, ribbit.


And horrifying for the future "democratic" USA USA USA!!!

Don't miss her latest essay.

This one is pure sublimity:

May 13, 2015

Obama's Snafu

 *Updated below.

The giant middle finger that Barack Obama has been giving us these past six years is now dangling at the root, the victim of its own terminal corruption. And yet he and his sycophants persist in downgrading yesterday's crumbling of the "pillar of his presidency" into an annoying little hangnail.

"It's just a procedural snafu," whined Josh Earnest, the aptly named White House press flack of the "stinging defeat" Obama suffered from members of his own party, who shockingly denied him the right to "fast-track" democracy into oblivion via the secretive Trans-Pacific Partnership.

If you want to get Panglossian about it, Snafu (situation normal, all fucked up)  is slightly better than Fubar (fucked up beyond all recognition.) And, let's face it:  the Democrats of the Senate did not suddenly go all populist overnight, despite the good work of Elizabeth Warren and Bernie Sanders in exposing the TPP for the nasty corporate coup that it is. They were pissed because Majority Leader Mitch McConnell pulled a fast one on them, and didn't include the fig leaves (currency manipulation rules, monetary aid for displaced American workers, feeble union protections, and anti-child labor measures) that would otherwise have allowed Democrats to sell out their constituents. These people actually still love the TPP. Most of them don't even care about those odious investor state tribunals replacing sovereign court systems.

What makes the TPP now so Fubar and so toxic for the selfish interests of the oligarchs is that Japan, one of the countries negotiating the deal, is adamantly against any TPP clause forbidding it to manipulate its own currency. Barack Obama is damned if he does go along with Democratic demands, and damned if he doesn't.

Hot damn!

Another reason that the TPP may now be Fubar is that people are finally paying attention to it. And Barack Obama has only himself to blame. He has essentially fingered himself and the neoliberal agenda, for all the world to see.

If he hadn't publicly and pettily dissed Elizabeth Warren, falsely and chauvinistically accusing her of greed and mendacity, the gossip-loving mainstream press probably wouldn't have bothered with the TPP story.

His trip to Offshore Sweatshop Central (Nike) last week didn't help his pro-plutocracy public relations campaign, either. Nor did his simultaneous announcement allowing Shell to drill for oil in the ecologically fragile Arctic.

Nor did his onslaught of fund-raising for his half-a-billion-dollar Chicago shrine, and his announcement of a sketchy greed-washing "initiative" that would raise money by and for corporations for the ostensible purpose of trickling down to the same minority poor people that Obama's Wall Street-friendly policies have already thrown under the economic bus.

Even Obama's most diehard fans are at least mildly peeved and disappointed with him at this stage. He has skipped Lame Duck mode entirely, prematurely careering straight into Post-Pre$idency Clintonoid Nirvana.

Despite yesterday's heartening victory, we must not rest on our laurels. These people don't quit, and they don't take No for an answer. But their greedy quest for more, more and more suddenly got a whole bunch of new roadblocks in its way, and their journey is not going to be the walk in the privatized park they thought it would be.

Sunlight is still the best disinfectant.

Before yesterday's Senate vote, the "New York Times" published an odious little editorial that urged the parties to go along to get along and bipartisanly compromise on the TPP, including whatever fig leaves are necessary to ram it through. Needless to say, readers were neither amused nor placated.

My comment:

How is a compromise possible on a treaty whose terms are being kept from the public? How is this possible when the White House has threatened to prosecute any member of Congress who divulges details they are allowed to scan only under the watchful eye of the Security State?

Rather than urge a smarmy bipartisan compromise under cover of darkness, I just wish the N.Y. Times had noted how undemocratic this whole process has been. The only reason we know some of the details we do is because of "WikiLeaks."

The clause allowing investor state tribunals to subsume sovereign court systems even contains a sub-clause dictating that it remain a classified secret for at least four years from the date of ratification. That's how bad it is. That's how much the billionaires and corporations dictating the terms of this deal know how bad it is, and how much we would hate it if we were allowed to know about it.

As Margot Kaminski of Yale's "Information Society Project" wrote in a "Times" op-ed last month, fast track authorization is "little more than a euphemism for Avoid the public, and benefit the fortunate few."

The citizens of the 11 other countries are standing against the secret TPP as well. They're also worried, and rightly so, that multinational corporations headquartered in the US will quickly ignore any labor protections for their low-wage workers built into the agreement as a fig leaf to ease passage.

Free trade agreements kill - economically, socially, and literally.


It was all pretty much a head fake. We are now back to full-bore Fubar, and Barack Obama has put his damaged middle finger in a splint, the better to screw you with, my dears. "The Washington Post" reports that the men in a room have reached their deal and agreed to make the currency manipulation a separate bill, thus ensuring that any final TPP package would be acceptable to Japan. Obama must be so relieved.

The Democrats apparently also got a grudging concession from Republicans on compensation for the American workers becoming collateral damage in the latest attack in the class war - if and when the TPP and TTIP make corporations free to further depress wages and exploit those abused workers in already ill-protected countries like Vietnam.

So, after yesterday's Kabuki, the full Senate will start their show over with a Thursday matinee, with multiple melodramatic bravura performers vying for attention and lobbyist dollars in the first act of the Plutocrat Grand Prix Theater. Watch those phony plastic traffic cones begin falling like dominoes.

Just more evidence, in case you still needed any, that the much ballyhooed and bemoaned Congressional gridlock the pundits love to kvetch about only applies to measures that might benefit the little people. I hope you didn't waste any of your time today calling your Group of Ten senators with your premature thanks for their phony stance yesterday.

I hope you will continue to bombard them with warnings of what they can expect at the ballot box as they "cave" to giving the center-right president authority to turn the screws in utter secrecy.

The first tranche of Democratic quislings includes Carper of Delaware, Cantwell and Murray of Washington, Wyden of Oregon, Nelson of Florida, Warner and Kaine of Virginia, Bennet of Colorado, Heitkamp of North Dakota and Cardin of Maryland. These are all Obama needs to supplement the loyalists in his own Republican Party.

Meanwhile, members of the House are expected to vote on Fast Track as early as next month. Get ready for another stampede of lobbyists to make those hordes of holdouts an offer they can't refuse.

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I wonder if they will offer us phone cards?

You know. Like Worldcom's lawyers did to its miffed shareholders for their part of the settlement?


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