In a column which oddly, or not, doesn't mention the President by title or by name, Krugman concludes:

The gist of the [TARP inspector general's AIG bailout] report is that government officials made no serious attempt to extract concessions from bankers, even though these bankers received huge benefits from the rescue. ...

For the A.I.G. rescue was part of a pattern: Throughout the financial crisis key officials — most notably Timothy Geithner, who was president of the New York Fed in 2008 and is now Treasury secretary — have shied away from doing anything that might rattle Wall Street. ....

That's the sting in the tail of this Golden Sacks report quoted at HuffPo. To GS, though status quo is best* (bien sur), the Senate Finance Bill is the "base" scenario, a watered down version of it the "bull" scenario_{MR SUBLIMINAL No shit} and the HR 3962 is the "bear" scenario. But remember the baseline on financial reform? That if the banksters aren't threatening to commit suicide, the reforms are too weak? Same here. If GS isn't saying the bills are the end of the world, they're too weak.)

A Goldman Sachs analysis of health care legislation has concluded that, as far as the bottom line for insurance companies is concerned, the best thing to do is nothing. A close second would be passing a watered-down version of the Senate Finance Committee's bill.

Haw.

A study put together by Goldman in mid-October looks at the estimated stock performance of the private insurance industry under four variations of reform legislation. The study focused on the five biggest insurers whose shares are traded on Wall Street: Aetna, UnitedHealth, WellPoint, CIGNA and Humana.

The Senate Finance Committee bill, which Goldman's analysts conclude is the version most likely to survive the legislative process, is described as the "base" scenario. Under that legislation (which did not include a public plan) the earnings per share for the top five insurers would grow an estimated five percent from 2010 through 2019. And yet, the "variance with current valuation" -- essentially, what the value of the stock is on the market -- is projected to drop four percent.

Things are much worse [that is, better for people who need health care], Goldman estimates, for legislation that resembles what was considered and (to a certain extent) passed by the House of Representatives. This is, the firm deems, the "bear case" scenario -- in which earnings per share for the top five insurers would decline an estimated one percent from 2010 through 2019 and the variance with current valuation is projected to be negative 36 percent.

What the firm sees as the best path forward for the private insurance industry's bottom line is, to be blunt, inaction.

The study's authors advise that if no reform is passed, earnings per share would grow an estimated ten percent from 2010 through 2019, and the value of the stock would rise an estimated 59 percent during that time period.

And now, here's the sting:

No Associated Press content was harmed in the writing of this post

Barney Frank has become something of a darling on the left because of his feistiness, which heaven knows is in short supply among Democratic politicians. That quality seems to work best for someone who will go down with the ship on principle, all other considerations be damned; someone like Dennis Kucinich, who voted against the House health care bill under just that circumstance. (Phoenix Woman brilliantly articulated the hazards of this outlook.*) It does not work so well with someone who appears to be at least half in the pocket of the interests he ostensibly oversees.

His interview with Ed Schultz earlier this week gave a clear illustration of why. Schultz pushed on a couple of key points: Last year's bailout came with no strings attached, and as a result the major players have gone back to the same reckless behavior. Frank turned prickly, which is what feisty looks like when you don't like it, and almost immediately said "don't condescend to me" when Schultz was obviously doing no such thing. He proceeded to condescend to Schultz throughout the interview; "the point I made to you several times" and "What's the matter with you?" stand out. There was also this:

SCHULTZ: Congressman, why can't you just admit that this was a serious misstep on the part of the Congress? You forked out billions of dollars to save the economy, I get all that, to get the structure back going again. But you didn't ask them questions about how this...

FRANK: No, Ed. You're wrong.

SCHULTZ: Oh, tell me I'm wrong.

FRANK: You're wrong. And I'd like to be able to explain it.

Andrew Sorkin:

Many of the most senior members of management on Wall Street now consider themselves “survivors,” as if they were cancer survivors or something. That’s the word they use. While many of them are self-aware enough to politely nod at the notion that they received help and were part of the problem, they seem reluctant to acknowledge they were “rescued” or “saved.” There are probably a few exceptions, so I shouldn’t paint them all with the same brush, but on the whole, that was the takeaway.

I recognize that that answer will only increase public outrage. But it is true.

Funny. I guess I'd see it differently; the banksters aren't "cancer survivors"--

[I thought I'd update and re-post this, since with HR3962 our GENIUS Dems have really outdone themselves their indefatigable efforts to preserve the two-party system by giving the Republicans ever better odds in 2010 and 2012. Not that it matters to them; they're all made in Versailles by now anyhow. --lambert]

Obviously, I'm not a member of that curious breed, the "Democratic Strategist," nor do I play one on the teebee, nor do I have an interest in joining the League of Triple-A Democratic Strategists as a way to make it into The Show; and anyhow, if I were any good at strategerizing, somebody would be paying me to do it (Inside Rotisserie Baseball commenters take note).

Then again, because I'm not paid [except for your donations!], I can't ignore the obvious on health care insurance reform, and it seems to me that the "some bill, any bill" that the current Congress is going to emit will have some problems down the line. Among them:

1. Pffft. That deflated feeling, as of air escaping from a tire, will come when people compare the promise of "hope" and "change" to what is actually delivered -- and when (2013). As far at the [a|the] [strong|robust]? public [health insurance]? [option|plan], I still think my "baseline scenario" -- the mandate will force millions to buy junk insurance, bailing out the insurance companies -- is the most likely outcome, and it's not going to play well over time, especially with Obama's youthful base [UPDATE See Ian Welsh]. Then again, we might think that the electoral process has become a stepping stone to lucrative jobs on K Street or on the teebee, and so what we think of as the politics or optics of it all is just not relevant to insiders and wannabe insiders.

Krugman:

[T]he G.O.P. has been taken over by the people it used to exploit.

If only the same thing would happen with the Democrats!

The Lords get the vaccine while the peasants wait in line. What could be more natural or fair?

Today, Citizens for Responsibility and Ethics in Washington (CREW) asked Health and Human Service (HHS) Secretary Kathleen Sebelius to investigate why the Center for Disease Control (CDC) approved the distribution of the H1NI vaccine to Wall Street firms at a time when the vaccine is unavailable to most Americans.

Recent news reports indicate 13 companies, including Citigroup, Goldman Sachs, JP Morgan Chase and Time Warner, have been cleared to receive the vaccine.

Melanie Sloan, executive director of CREW said today, “Although CREW has been unable to uncover the demographic makeup of Goldman Sachs, Citigroup, and JP Morgan Chase, it seems safe to assume the vast majority of their employees are not pregnant women, infants and children, young adults up to 24 years old, and healthcare workers.”

No, seriously.

Krugman asks, and answers "politics" (that is, right wing bromides like "government is the problem"). Of course:

Obama, stumping for NJ former Golden Sacks CEO Jon Corzine:

[Obama] told a crowd of about 5,000 people in Camden that Corzine was "not going to rest until not only is Wall Street doing well, but Main Street is doing well, and businesses are hiring again."

"Not only." I just love that.

No Associated Press content was harmed in the writing of this post

Issues of financial reform and regulation can be intimidating to laymen (this layman anyway) because of its insanely complex nature. It is easy to imagine the system as a big Jenga tower, and moving one piece might cause the whole thing to come crashing down. No one wants to be seen as inadvertently - but earnestly! - advocating for a ruinous policy. Of course, that means the opposite extreme is then in play: Turning into Hamlet and endlessly agonizing over what to do at the expense of actually doing something. Not to mention the fact that, not to put too fine a point on it, wide swaths of our leadership has for years now been deliberately advocating ruinous policies both at home and abroad. That should certainly make those of us in the unwashed masses comfortable with forcefully advocating what seems reasonable based on available data. It's not as though we could screw it up any worse.

Still, it would be nice to have a rule of thumb, compass point or guiding principle to go by. Having been a reasonably close observer of the meltdown and its aftermath, here is one I have come up with: It is necessary (but not sufficient) that any proposal be strenuously opposed by Goldman Sachs (GS). In a largely protected industry Goldman appears to be the closest thing to untouchable as we have. It is in Matt Taibbi's already-legendary description "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money." It has installed a revolving door between the highest levels of the government and its board room, enjoys privileged lines of communication with the Treasury secretary exceeding even that of our closest allies, was happily positioned as a key competitor died, then days later benefited as a key debtor was drenched in cash (Yves Smith called it a "massive backdoor subsidy to the likes of Goldman"), and as it happens was the second largest contributor to the president in the 2008 election cycle. More so than any other player in financial services, GS always seems to be nearby when bad things happen.

Harrison provides a nice round up of judicial victories for homeowners (show me the note!) as well as links about Citi's problems in Belgium (where it got people to move money from savings accounts to investments in Lehman) and evidence that Citi is in trouble globally.

Insurance premiums for small businesses are being driven higher not just because of an increase in healthcare costs, but also because Wall Street wants higher returns:

The higher premiums at least partly reflect the inexorable rise of medical costs, which is forcing Medicare to raise premiums, too. Health insurance bills are also rising for big employers, but because they have more negotiating clout, their increases are generally not as steep.

Higher medical costs aside, some experts say they think the insurance industry, under pressure from Wall Street, is raising premiums to get ahead of any legislative changes that might reduce their profits.

Now, you might think with health insurance reform pending in Congress, the industry would be concerned about screwing its customers. But you'd be wrong because Washington doesn't run this country, Wall Street does:

“There’s no one out there who hasn’t had to do a mea culpa to Wall Street,” said Sheryl Skolnick, an analyst for Pali Capital who follows the companies. While the industry is particularly vulnerable now in Washington, she said, “it seems like they’re more afraid of Wall Street.”

Not sure about the legal theory here, but that's certainly the practice. Avedon:

I think it's already been established that contracts with corporations aren't real contracts. Corporations offer me contracts all the time that say that I am obliged to X and they will do Y, and then all of a sudden I get something in the mail varying my contract to say that they can change their mind at any time, but I still have to do whatever it was I contracted for. When your credit card company sent you something you couldn't read in teeny-tiny print saying they've decided they are no longer just charging interest on what you owe them, but on what you used to owe them before you started paying them back, you didn't get to send them your own tiny and incomprehensible update informing them that your terms had also changed, did you? And when Enron and airlines simply didn't bother to live up to their side of pension agreements and simply admitted they hadn't kept contracted-for pension funds paid up, the courts didn't say, "You had contracts, you can't just break them," they said, "Oh, you want to stiff your employees? Sure!" So, tell me, what makes Wall Street bonuses so special? (via).

Too bad there's no equivalent of "produce the note" for things like credit cards. Or maybe there is?

Isn't it time to have a Democratic President? A long quote from Taibbi, but a good one. And I'm glad we're starting this discussion now instead of in 2010 or, heaven forfend, 2012:

I’m personally of the opinion that our main problem lay with the fact that the Democratic Party as currently constituted is more afraid of losing the financial support of Wall Street and the health insurance industry and the pharmaceutical industry than it is of losing progressive voters. In fact, I think I’ve put that wrong, because it implies that the Democratic Party pushes the agenda of industry insiders out of fear. That is a misread of the situation, I think.

Pam Martens has an excellent article in Counterpunch that explains the whole process:

Three plain talking judges, in state courts in Massachusetts and Kansas, and a Federal Court in Ohio, have drilled down to the “straw man” aspect of securitization. The judges’ decisions have raised serious questions as to the legality of hundreds of thousands of foreclosures that have transpired as well as the legal standing of the subsequent purchasers of those homes, who are more and more frequently the Wall Street banks themselves. ....

Are you going?

I can't, but believe me if I could, I would be there. It's hard not to like stuff like this:

The same financial institutions that caused the economic crisis and took billions in taxpayer bailouts are back to earning incredible profits. Meanwhile, Americans face shrinking pensions, rising foreclosures and unemployment, state budget cuts, predatory lending, outrageous overdraft fees, and sky-high credit card interest rates.

The American people want oversight, accountability and common-sense financial reform NOW. This is the classic David vs. Goliath fight, with Wall Street spending millions and millions on lobbying to defeat reforms that would protect the American people and our economy

Yves on Krugman's column today. She writes:

My big beef is that he didn’t go far enough and is WAAY too forgiving of the motivations and actions of Larry Summers and by extension, Team Obama.

Somebody kidnapped Paul Krugman at that White House dinner, didn't they? Krugman wrote:

Why the change in tone? Administration officials are furious at the way the financial industry, just months after receiving a gigantic taxpayer bailout, is lobbying fiercely against serious reform. But you have to wonder what they expected to happen. They followed a softly, softly policy, providing aid with few strings, back when all of Wall Street was on the ropes; this left them with very little leverage over firms like Goldman that are now, once again, making a lot of money.

Yves comments:

Paul Sullivan in The World's Greatest Newspaper (not!):

[Robert Clarfeld, president of the wealth management firm Clarfeld Financial Advisors], who manages $3 billion largely for financial services executives, takes exception to lumping all of Wall Street together. He said his clients felt that they had worked hard and honestly for their money [of course, of course and were now being unjustly judged alongside those who did not.

He is counseling clients to live their lives largely as they’ve done in the past, though in a slightly toned-down form. Mr. Clarfeld said he had taken his own advice to heart. He bought his dream car, a Jaguar XKR, before the market crash but then felt uncomfortable about it. “I didn’t like the way it made me feel but not enough that I was going to get rid of the car,” he said. So he made light of it with a vanity plate to recall better times: “PRE LEHM.”

Yep. That's a kneeslapper. Tom Joad would have loved it!

AP actually does some reporting; turns out it's not really banksters who own Timmy; it's just a few banksters, among them our favorite, Goldman Sachs:

The calendars, obtained by the AP under the Freedom of Information Act, offer a behind-the-scenes glimpse at the continued influence of three companies -- Citigroup Inc., JPMorgan Chase & Co. and Goldman Sachs Group Inc. -- whose executives can reach the nation's most powerful economic official on the phone, sometimes several times a day.

What the calendars show, however, is that only a select few can call the treasury secretary.

And, they say that it's "just" a recession. Chaos decided to roost in Detroit, today, as the truly despressed and distressed came out in droves seeking housing and utility payment assistance from the City of Detroit:

The economic tsunami washing over metro Detroit swept its casualties to the doors of Cobo Center on Wednesday in the form of 35,000 people so desperate for help with mortgage and utility bills that threats were made, fights broke out and people were nearly trampled.

Some were treated by emergency medical workers on site.