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EDITORIAL NOTE: I think Kristof hits the nail right on the head of the spinners — and I hope it leaves a mark. His hammer is the truth. The answer to the never asked question is of course we favor capitalism. It’s not the greatest thing since the wheel but it works far better than anything else we have come up with so far. What we oppose is Crony Capitalism which is what leads to oligopoly  — control of the government by a select few whose power from wealth alone has grown disproportionate to the opportunities that should be present for everyone.

On a good note, history shows that these cronies eventually turn on each other because, after all, the relationship is based upon money, not friendship. And their success is based upon a lack of morality, conscience or even willingness to obey the law, not from extreme competence and brilliance. If you look at the late Steve Jobs, Gates, Buffet, you see brilliance, creativity, and a great deal of wealth — but not measured in the trillions.

The object, lest we forget, is to have a society that actually works — i.e., one that gives us reason to stay together as opposed to dog eat dog. Fear works for a while but eventually fear leads to fracture. So unless we want the Untied States to dissolve into regional countries, we need to address those factors in our society that are simply not working. If safety, hunger and housing are not addressed then the society isn’t working. Yet we are quickly giving those up in the name of “austerity” when that is just code for the bankers saying “keep the money.”

For me, to say that the mega banks “earned” the trillions of dollars they stole and diverted is like providing  justification for genocide. In a word where there are only $50 trillion dollars worth of world currency, it is not possible that anyone could “earn” 1/3 of that. “Income redistribution” is a word used by bankers because they want to keep what they stole. Balancing of wealth throughout society through incentives and opportunity is what the rest of us are talking about.

The American public agrees by a wide margin. Bankers: your 15 minutes are up.

Crony Capitalism Comes Home


Whenever I write about Occupy Wall Street, some readers ask me if the protesters really are half-naked Communists aiming to bring down the American economic system when they’re not doing drugs or having sex in public.

The answer is no. That alarmist view of the movement is a credit to the (prurient) imagination of its critics, and voyeurs of Occupy Wall Street will be disappointed. More important, while alarmists seem to think that the movement is a “mob” trying to overthrow capitalism, one can make a case that, on the contrary, it highlights the need to restore basic capitalist principles like accountability.

To put it another way, this is a chance to save capitalism from crony capitalists.

I’m as passionate a believer in capitalism as anyone. My Krzysztofowicz cousins (who didn’t shorten the family name) lived in Poland, and their experience with Communism taught me that the way to raise living standards is capitalism.

But, in recent years, some financiers have chosen to live in a government-backed featherbed. Their platform seems to be socialism for tycoons and capitalism for the rest of us. They’re not evil at all. But when the system allows you more than your fair share, it’s human to grab. That’s what explains featherbedding by both unions and tycoons, and both are impediments to a well-functioning market economy.

When I lived in Asia and covered the financial crisis there in the late 1990s, American government officials spoke scathingly about “crony capitalism” in the region. As Lawrence Summers, then a deputy Treasury secretary, put it in a speech in August 1998: “In Asia, the problems related to ‘crony capitalism’ are at the heart of this crisis, and that is why structural reforms must be a major part” of the International Monetary Fund’s solution.

The American critique of the Asian crisis was correct. The countries involved were nominally capitalist but needed major reforms to create accountability and competitive markets.

Something similar is true today of the United States.

So I’d like to invite the finance ministers of Thailand, South Korea and Indonesia — whom I and other Americans deemed emblems of crony capitalism in the 1990s — to stand up and denounce American crony capitalism today.

Capitalism is so successful an economic system partly because of an internal discipline that allows for loss and even bankruptcy. It’s the possibility of failure that creates the opportunity for triumph. Yet many of America’s major banks are too big to fail, so they can privatize profits while socializing risk.

The upshot is that financial institutions boost leverage in search of supersize profits and bonuses. Banks pretend that risk is eliminated because it’s securitized. Rating agencies accept money to issue an imprimatur that turns out to be meaningless. The system teeters, and then the taxpayer rushes in to bail bankers out. Where’s the accountability?

It’s not just rabble-rousers at Occupy Wall Street who are seeking to put America’s capitalists on a more capitalist footing.

“Structural change is necessary,” Paul Volcker, the former chairman of the Federal Reserve, said in an important speech last month that discussed many of these themes. He called for more curbs on big banks, possibly including trimming their size, and he warned that otherwise we’re on a path of “increasingly frequent, complex and dangerous financial breakdowns.”

Likewise, Mohamed El-Erian, another pillar of the financial world who is the chief executive of Pimco, one of the world’s largest money managers, is sympathetic to aspects of the Occupy movement. He told me that the economic system needs to move toward “inclusive capitalism” and embrace broad-based job creation while curbing excessive inequality.

“You cannot be a good house in a rapidly deteriorating neighborhood,” he told me. “The credibility and the fair functioning of the neighborhood matter a great deal. Without that, the integrity of the capitalist system will weaken further.”

Lawrence Katz, a Harvard economist, adds that some inequality is necessary to create incentives in a capitalist economy but that “too much inequality can harm the efficient operation of the economy.” In particular, he says, excessive inequality can have two perverse consequences: first, the very wealthy lobby for favors, contracts and bailouts that distort markets; and, second, growing inequality undermines the ability of the poorest to invest in their own education.

“These factors mean that high inequality can generate further high inequality and eventually poor economic growth,” Professor Katz said.

Does that ring a bell?

So, yes, we face a threat to our capitalist system. But it’s not coming from half-naked anarchists manning the barricades at Occupy Wall Street protests. Rather, it comes from pinstriped apologists for a financial system that glides along without enough of the discipline of failure and that produces soaring inequality, socialist bank bailouts and unaccountable executives.

It’s time to take the crony out of capitalism, right here at home.

22 Responses

  1. Like Tyco and Enron convictions, you cannot carve out the fat in a deal or transfer to unsuspecting investors the crap by securitizing the value while moving the liabilities off balance sheet.

    The lien they received at settlement is convered by a UCC filed in records.The mortgage is divested of it value as the Ibanez case called Bifurcation. (please I cant take much more) .

    How else are foreign national banks like Deutsche Bank and HSBC (bad bad past in asia money laundering ) allowed to encumber the securities transaction on a pledge which is admitted to in court documents? (See securities Cutoff Date and Closing Date.) My God, they – by their own admission describe the elements of a surety and haven taken bare and legal title (this is what I would use to support the cases some I know are prevailing in) . . . while hiding the facts behind MERS Corp..

    What are you arguing to date? Mers Corp and the lost note are not claims but evidentury to support the aforementioned arguments.

    My beleifs are founded and claims are the member banks regulatory supervision and appointed trustee is subject to res judicatta and ajudication for the matter to go to a debt collector. What is taking place is an orchestration of a receivers release for claims under a best efforts recovery through attorneys and brokers hoping you will keep calling, buy into a modification offer or do something like call the rip off rerort until they drain you and take the house.

    Below is a freebie … LOL
    Good Luck


    1921 – Law Fourscore and so many years ago , in the matter of Uncle McBain, The Law and Practice of Municipal Home Rule, 278. … 12 Cases cited, supra, n. 10. 18State v. Plainfield (1882) 44 NJL 118; Chilvers v. … 486; In re Chipchase (1896) 56 Kan. 357, 43 Pac. 264; In re Martin (1901) 62 Kan. …pathetic

  2. Here is a link to an article I found from March 1933 regarding the House of Morgan and how the Glass Steagal Act was going to effect J.P. Morgan more than anyone else.

    I also found and would like to start a campaign to have enacted a Bill from the House of Representatives to make the government owners of the twelve Federal Reserve Banks




    HR 7230




    In case you missed it—this video nicely explains how and why Glass-Steagall was repealed…then financial markets literally had free reign to do whatever the hell they wanted…so what did they do??? They created a massive fake mortgage ponzi scheme…because they COULD. How the hell does Obama think that is “legal”??? He doesn’t. I really think if he had some balls he would end up killed.

    De-regulation directly linked to OWS….but most don’t know it…yet.

  4. Yeah, it’s called DEREGULATION which was BOUGHT.

    We have to END IT NOW.

  5. Well, if the government has allowed itself to be controlled by the select few, who do you blame, the government or the select few? Does it make sense to blame a shark for being a shark? Would each person not to the same as these oligarchs do if given the opportunity?

    People should really occupy Washington DC instead of Wall Street. The issue to be resolved is how do you limit power in a society? The only solution I know of is take that power from every person and give it to a piece of paper — the Constitution.

    There has been a systemic failure in the institutions of government in this country to limit power of certain individuals and to uphold the Constitution — the written document limiting everyone’s power through written word and through a covenant to follow and enforce that written word.

    People need to be educated about this so that they can immediately vote out those in the government who allow the government to be controlled by the select few.

    A constitutional amendment may be required to fix the Supreme Court’s blunder in allowing campaign contributions by non-physical persons (corporations and other fictitious entities).

  6. to carie: put those fleas (from the dog) in the envelopes back to the bankers – blood suckers united . . .!

  7. What a great idea – I just stuffed a capital one envelope full of all kinds of shit from DirectTV, u name it.

    Now I will enjoy getting junk mail and getting back at them by sending garbage and helping keep postal workers in business!! Kudos e. tolle – keep circulating this piece . . . it’s wonderful!

  8. E.Tolle—I just got done ordering flea medicine for my dog, then saw your posts…PERFECT analogy.

    Perpetual Parasitic Plundering Pricks’ Preying and Pillaging MUST END!!!!!!!!!!!

  9. @ cubed, this one’s for you. A little something we all need to spend the extra time doing in order to set things straight. I never can seem to get these codes to embed, may be you can.


  10. The underlying theme to the above author’s narrative and the truth apparent everywhere on the streets around the world is that capitalists will begrudgingly agree that a few things might need fixing here and there due to the destruction of the lower caste and the inevitable danger of them being exposed to trickleupitis. In the parasitic relationship between us, the lower 99 hosts, and the elite parasitic pricks above, they would prefer that all stays the same, and would argue that all is well if only we would simply put shoulder to boulder and shut the fuck up.

    Our grumblings and rebelliousness only disturb the parasites when there’s the real possibility that their ability to continue to engorge themselves off the life-blood of all of us is not only called out for what it is, but is actually threatened, and that’s the only reason for their apprehension and concern.

    In other words, the peasants are revolting and they don’t like it one bit as it doesn’t fit their plunder model. And that’s a great thing. Keep up the great rebellion you rabble-rousers!

  11. Make no mistake, genocide is where this will go if Americans don’t wake up.

  12. and this———


    all this crap because of securization————–

  13. I’m gonna eat your dog———–


    see what the banks and their lobbyists have done to this Country,,,,,,,,,,they have pitted us against each other all for MONEY which they create with no risk or loss…………..

    Stay away from the banks

  14. sorry , “states” should be “starts”

  15. any state can do something like this—

    “In conjunction with the attorney general, the circuit court also ordered Cavalry to send written notices to all consumers affected by the order. After the notices are sent, Cavalry may accept payments made voluntarily by consumers but must first place them into escrow and report all payments received to the Attorney General’s office.”


    so why can’t any state now make a new law reguiring PRESENTMENT of mortgage notes and Deed of Trusts, original wet ink notes before any foreclosure action states——————–???????????????

  16. […] Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Tagged: bankruptcy, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, TILA audit, trustee, WEISBAND Livinglies’s Weblog […]

  17. and another—————-

  18. The state labor department said Friday that LVNV and Resurgent Capital’s violations include filing “false, deceptive or deficient affidavits” in their court cases, misrepresenting the amount owed and collecting unauthorized attorney fees.

  19. Here is an example of crony capitalism:

    A variety of companies buy consumer debts and then sue, often — the state contends — with little evidence to prove they have the right to collect.,0,2807830.story

  20. That’s a good article and is what is happening.

    And I approve that message.

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