All posts by admin

Impeach the Supreme Court Justices by David R. Dow

“A decision striking down the health care
law would be a statement that the only people entitled to health care
are the people who can afford it.”

“If the legislature acts to protect the poor and less powerful, its actions must be respected by the judicial branch.”

Impeach the Supreme Court Justices If They Overturn Health-Care Law

By David R. Dow

April 3, 2012

The Roberts Court’s rulings appear to be a concerted effort to send us back to the Gilded Age. If they dump the Affordable Care Act, writes David Dow, we should dump them.

You think the idea is laughable? Thomas Jefferson disagreed with you.

Jefferson believed Supreme Court justices who undermine the principles of the Constitution ought to be impeached, and that wasn’t just idle talk. During his presidency, Jefferson led the effort to oust Justice Samuel Chase, arguing that Chase was improperly seizing power. The Senate acquitted Chase in 1805, and no Justice has been impeached since, but as the Supreme Court threatens to nullify the health-care law, Jefferson’s idea is worth revisiting.

The problem with the current court is not merely that there is a good chance it will strike down a clearly constitutional law. The problem is that this decision would be the latest salvo in what seems to be a sustained effort on the part of the Roberts Court to return the country to the Gilded Age.

During that period—which ran from the years after of the Civil War to the start of the 20th century—wealth became highly concentrated and corporations came to dominate American business.

At the close of the Gilded Age, the U.S. infant mortality rate was around 10 percent—a number you find today in impoverished Central African nations. In some cities, it exceeded 30 percent. Women could not vote, and their lives were controlled by men. Blacks lived apart from whites and constituted an economic, social, and political underclass. Corporations exerted an unchecked and deleterious influence on the lives of workers.

All these ills were ultimately addressed by the federal government, but the strongest and most sustained resistance to fixing them came from the court. One exception was the great Justice Oliver Wendell Holmes, who argued that where economic regulations are at stake, judges must respect legislative decisions aimed at protecting society’s most vulnerable members. Our Constitution, Holmes famously wrote, does not enact social Darwinism. If the legislature acts to protect the poor and less powerful, its actions must be respected by the judicial branch.

That idea doesn’t appear to hold much water with the current court. Justice Clarence Thomas, in particular, has a well-known affinity for the values of the Gilded Age. But he has quietly gone from being an outlier to being only one of five consistently regressive votes.

The pattern began with the court’s 2007 decision in Gonzales v. Carhart, a case involving a rarely used, late-term abortion procedure. In holding that the government can prohibit abortion even where a woman’s life or health is at risk, the court overturned a decision that was not yet 10 years old.

To justify the ruling, Justice Anthony Kennedy—an ostensibly staunch believer in individual liberty—explained that some women who might otherwise undergo it would come to regret their decision. Ah, fickle women! Since Roe v. Wade the abortion debate has  always involved male-dominated legislatures enacting laws telling women what they can and cannot do. The Roberts Court, it seems, is similarly not averse to helping protect women from themselves.

A decision striking down the health care law would be a statement that the only people entitled to health care are the people who can afford it.

Also in 2007, the court ruled that a Seattle school district’s plan to achieve racial balance in its public schools was unconstitutional. Reasonable people can of course disagree about whether using race to arrive at a diverse student body is good policy or bad. But there is an unquestionable moral distinction between using race to encourage racial integration versus using race to keep the blacks away.

The latter is, of course, what the court allowed in 1896, when it upheld the so-called “separate but equal” doctrine in Plessy v. Ferguson. Justice Harlan famously dissented in Plessy, insisting that the Constitution is colorblind. In a perverse rhetorical move, Chief Justice John Roberts, writing for the court in the Seattle case, suggested that Harlan’s phrase applies equally where the government is trying to promote the blending of the races rather than maintaining their separation.

And then came Citizens United, in which the court struck down a popularly supported, bipartisan effort to place limits on the ability of the wealthy to dominate political discourse. Income inequality is a fact of life in a capitalist system. But when it comes to choosing our elected representatives, the people are supposed to stand on equal footing. Your right to control your destiny by electing people who share your visions and values is not supposed to depend on the fatness of your wallet. But now, thanks to five justices, it does. In ruling that corporations have a First Amendment right that precludes Congress from regulating how much money they can spend to support political candidates or causes, the court propped up a regime where the voices of the wealthy drown out all the rest.

Each of these cases was decided by a 5-4 vote, along predictable and ideological lines. Each overturned comparatively recent precedent. Each paid obeisance to a 19th-century norm. And while any individual ruling can always be justified or explained away, a larger truth emerges ineluctably from the whole. A decision overturning the Affordable Care Act will fit snugly into this narrative.

The vacuity of the arguments against the health-care law has been well covered (see especially Akhil Amar’s analysis in Slate). I will add only two points.

First, Congress’s authority in passing the law rests on an elementary syllogism: You don’t have to drive, but if you do, th
e government can make you buy insurance. The logical structure at work here is that if you are going to do something (drive, for example), the government can make you purchase a commercial product (insurance, for example), so long as it has a good reason for doing so (making sure you can pay for any damage you do). That logic is obviously satisfied in the health-care context. You are going to use medical care, so the government can make you buy insurance in order to make sure you can pay for it. Liberty, like every other human and constitutional right, is not absolute. Under some circumstances, it can be regulated.

Which leads to the second point: critics of the health-care law say the only reason the rest of us have to pay for medical services used by people who have no money is that laws require hospitals to treat people who come in for emergencies regardless of their ability to pay. In other words, the critics say, the only reason there is a social cost—the only reason the syllogism works—is because of the underlying laws requiring hospitals to treat the poor.

Unlike silly examples involving broccoli and cell phones, that so-called “bootstrap” argument is sound. But here the critics drop their ideological mask as surely as the court dropped it in the Gonzales ruling. Their argument can be restated thusly: if you repeal laws requiring hospitals to treat the poor, you eliminate the constitutional basis for mandatory insurance coverage.

You don’t have to pull the analytical thread of that reasoning very hard to see that it boils down to an argument for allowing the poor to die. And if the Supreme Court strikes down the health-care law, that is exactly the ideology it will have to embrace. It will be saying that Congress cannot guarantee medical coverage for the poor and then implement a system to pay for it. In other words, the only people entitled to health care are the people who can afford it.

The last time the court went down this path, saner heads prevailed. Oliver Wendell Holmes’s view was historically and constitutionally correct, and the court finally acknowledged this in a pivotal 1937 case, West Coast Hotel v. Parish. In West Coast Hotel, the court ruled that the Constitution safeguards not just individual liberty but community interests as well; and in matters of economics, it is the legislature’s job to strike the appropriate balance between those two. If the Roberts Court overturns the Affordable Care Act, it will be mimicking the discredited court of 1935.

We can argue about whether President Jefferson was right to try to impeach Justice Chase. But there’s no question that he was right to say that impeachment is an option for justices who undermine constitutional values. There are other options, as well. We might amend the Constitution to establish judicial term limits. Or we might increase the number of justices to dilute the influence of its current members (though FDR could tell you how that turned out). In the end, however, it is the duty of the people to protect the Constitution from the court. Social progress cannot be held hostage by five unelected men.

David R. Dow is the Cullen Professor at the University of Houston Law Center and the Rorschach Visiting Professor of History at Rice. His most recent book is a memoir, The Autobiography of an Execution.


The War on the Poor by Ed Schultz

If you haven’t taken Ed Schultz on MSNBC you have missed one of our most vocal and “take no prisoners” broadcasters and spokespersons for the common good.

 “Eric Cantor is complaining about poor Americans who don’t pay income tax. But he leaves out all the tax that they do pay.”

 “The Ryan budget is the virtual battlefield map in the Republican war on the poor.”

 “There is no lobby for the poor in this country. The only thing that they can rely on is a little bit of government assistance to keep their dignity and their opportunities alive.”

 The War on the Poor: The Potential Impact of the Proposed Budget Cuts by Republicans

By Ed Schultz – Host, MSNBC’s ‘The Ed Show’ 

Posted: 04/20/2012

The Republicans are waging war on the poor in America. And just like the war on women, they want to pretend it doesn`t exist.

But it’s real. And millions of the most vulnerable Americans are being targeted.

Eric Cantor is complaining about poor Americans who don’t pay income tax. But he leaves out all the tax that they do pay. The working poor have payroll taxes. Some pay about seven percent of their wages to Social Security and Medicare taxes. In every state except Vermont, the poor pay a higher percentage on state and local taxes. There are other taxes like sales taxes, property taxes and gas tax. But Eric Cantor still says taxes should go up on these Americans opposed to the super rich.

This war is not new. It has been going on for years. But it really stands out this week. In a span of a few days, Republicans chose to protect the rich by voting down the Buffett Rule in the Senate. Now, they are attacking the most vulnerable. It`s no surprise the Republicans have chosen this man as their standard bearer.

Romney tried to say he misspoke when he made that comment in February. But his policies prove, well, he was telling the truth. His economic plans puts money in the back pockets of the wealthiest Americans while raising taxes on people making less than $30,000 a year. Romney says he’s 100 percent supportive of Congress and Paul Ryan`s budget plan.

The Ryan budget is the virtual battlefield map in the Republican war on the poor. Ryan`s plan is Robin Hood in reverse. It takes $5.3 trillion from programs benefiting low income people. It gives a $4.3 trillion tax cut to the wealthiest in this country.

Here are some of the cuts Republicans want to make so millionaires can get their money back — $770 billion to Medicaid, $205 billion to Medicare, $1.6 trillion to the health care law, and nearly $2 trillion to other mandatory cuts.

This includes programs like welfare, federal pensions and food stamps. That’s right. Gather that.

The Republicans are trying to make big cuts to the federal food stamp program. According to the Associated Press, the cuts would force 3 million people off food stamps next year.

These cuts are so unbelievably cruel, the United States Conference of Catholic Bishops is speaking out against them. In a statement, the bishops urge Congress to resist the proposed cuts in hunger and nutrition programs at home and abroad.

Well, House Speaker John Boehner was quick to brush off their concerns. Here is his response when asked if he understands the bishop`s moral argument.

You see, Boehner says that we have to cut these programs in order to save them. The architect, Paul Ryan, also dismissed the bishops today.

Not only is Ryan cold-blooded when it comes to the poor. He`s wrong when it comes to the bishops.

The spokesman for the United States Conference of Catholic Bishops told Talking Points Memo, “Bishops who chair USCCB committees are elected by their follow bishops to represent all of the United States bishops on key issues on the national level. The letters on the federal budget were written by bishops serving in this capacity.”

Republicans always try to link themselves with religion. They position themselves as the party of moral righteousness. But the only Republican religion, let`s face, is the almighty dollar.

It`s been five years since the federal minimum wage was raised. It was 10 years before that. Take a look at this chart.

If you work a minimum wage job, this is the how many hours in a week it takes for you to work to earn rent for a two bedroom apartment. In Texas, it’s 88 hours. In Florida, it’s 97 hours. In Virginia, it’s 112 hours, on and on.

There is no lobby for the poor in this country. The only thing that they can rely on is a little bit of government assistance to keep their dignity and their opportunities alive.

Republicans want to take all of this away. Democrats need to advocate harder on behalf of the poor. President Obama gave it a shot in Ohio
on Wednesday.

It’s a start but it’s not enough. There needs to be an advocate for the working poor in this country, like Ted Kennedy. The only way you can fight an attack like the Republican war on the poor is to attack back. Ted Kennedy knew how to do that. He hit back hard for the vulnerable in this country.

It`s time for the Democrats to step up and protect the poor from the assault of the Republicans.

Let me know what you think — tweet me at @edshow and catch me on MSNBC at 8 p.m. ET tonight.


For He’s a Jolly Good Scoundrel by Robert Scheer

Kind of like our entertainment industry, making heroes out of the scum of the earth. (My comment, not Robert Scheer’s)

“Weill is the Wall Street hustler who led the successful lobbying to
reverse the Glass-Steagall law, which long had been a barrier between
investment and commercial banks. That 1999 reversal permitted the merger
of Travelers and Citibank, thereby creating Citigroup as the largest of
the “too big to fail” banks eventually bailed out by taxpayers.”

For He’s a Jolly Good Scoundrel

By Robert Scheer, Editor,; Author, ‘The Great American Stickup’

Posted: 04/19/2012

How evil is this? At a time when two-thirds of U.S. homeowners
are drowning in mortgage debt and the American dream has crashed for
tens of millions more, Sanford Weill, the banker most responsible for
the nation’s economic collapse, has been elected to the American Academy
of Arts & Sciences.

So much for the academy’s proclaimed “230-plus year history of
recognizing some of the world’s most accomplished scholars, scientists,
writers, artists, and civic, corporate, and philanthropic leaders.”
George Washington, Ralph Waldo Emerson and Albert Einstein must be
rolling in their graves at the news that Weill, “philanthropist and
retired Citigroup Chairman,” has joined their ranks.

Weill is the Wall Street hustler who led the successful lobbying to
reverse the Glass-Steagall law, which long had been a barrier between
investment and commercial banks. That 1999 reversal permitted the merger
of Travelers and Citibank, thereby creating Citigroup as the largest of
the “too big to fail” banks eventually bailed out by taxpayers. Weill
was instrumental in getting then-President Bill Clinton to sign off on
the Republican-sponsored legislation that upended the sensible
restraints on finance capital that had worked splendidly since the Great

Those restrictions were initially flouted when Weill, then CEO of
Travelers, which contained a major investment banking division, decided
to merge the company with Citibank, a commercial bank headed by John S.
Reed. The merger had actually been arranged before the enabling
legislation became law, and it was granted a temporary waiver by Alan
Greenspan’s Federal Reserve. The night before the announcement of the
merger, as Wall Street Journal reporter Monica Langley writes in her book Tearing Down the Walls: How Sandy Weill Fought His Way to the Top of the Financial World … and Then Nearly Lost It All,
a buoyant Weill suggested to Reed, “We should call Clinton.” On a
Sunday night Weill had no trouble getting through to the president and
informed him of the merger, which violated existing law. After hanging
up, Weill boasted to Reed, “We just made the president of the United
States an insider.”

The fix was in to repeal Glass-Steagall, as The New York Times
celebrated in a 1998 article: “… the announcement on Monday of a
giant merger of Citicorp and Travelers Group not only altered the
financial landscape of banking, it also changed the political landscape
in Washington. … Indeed, within 24 hours of the deal’s announcement,
lobbyists for insurers, banks and Wall Street firms were huddling with
Congressional banking committee staff members to fine-tune a measure
that would update the 1933 Glass-Steagall Act separating commercial
banking from Wall Street and insurance, to make it more politically
acceptable to more members of Congress.”

At the signing ceremony Clinton presented Weill with one of the pens
he used to “fine-tune” Glass-Steagall out of existence, proclaiming,
“Today what we are doing is modernizing the financial services industry,
tearing down those antiquated laws and granting banks significant new
authority.” What a jerk.

Although Weill has shown not the slightest remorse, Reed has had the
honesty to acknowledge that the elimination of Glass-Steagall was a
disaster: “I would compartmentalize the industry for the same reason you
compartmentalize ships,” he told Bloomberg News. “If you have a leak,
the leak doesn’t spread and sink the whole vessel. So generally
speaking, you’d have consumer banking separate from trading bonds and

Instead, all such compartmentalization was ended when Clinton signed
the Gramm-Leach-Bliley Act in late 1999. In his memoir Weill brags that
he and Republican Sen. Phil Gramm joked that it should have been called
the Weill-Gramm-Leach-Bliley Act. Informally, some dubbed it “the Citigroup Authorization Act.”

Gramm left the Senate to become a top executive at the Swiss-based
UBS bank, which like Citigroup ran into deep trouble. Leach — former
Republican Rep. James Leach — was appointed by President Barack Obama
in 2009 to head the National Endowment for the Humanities, where his
banking skills could serve the needs of intellectuals. Robert Rubin, the
Clinton administration treasury secretary who helped push through the
Citigroup Authorization Act, was the most blatant double dealer of all:
He accepted a $15-million-a-year offer from Weill to join Citigroup,
where he eventually helped run the corporation into the ground.

Citigroup went on to be a major purveyor of toxic mortgage-based
securities that required $45 billion in direct government investment and
a $300 billion guarantee of its bad assets in order to avoid

Weill himself bailed out shortly before the crash. His retirement
from what was then the world’s largest financial conglomerate was
chronicled in The New York Times under the headline “Laughing
All the Way From the Bank.” The article told of “an enormous wooden
plaque” in the bank’s headquarters that featured a likeness of Weill
with the inscription “The Man Who Shattered Glass-Steagall.”

That’s the man the American Academy of Arts & Sciences now
honors, among others, for “extraordinary accomplishment and a call to
serve.” Disgusting.

The Real Price of War by Ted Folkert

The Real Price of War

By Ted Folkert

April 15, 2012

It is virtually impossible to keep a dry eye and a dry nose as you read Nicholas Kristof’s “A Veteran’s Death, a Nation’s Shame” and Timothy Grucza’s “Good Night Ryan” in the New York Times today:

The right-wingers, who think they are so tough, like to say: “well, they volunteered, that is what they signed up for.”

I beg to differ. That is not what they signed up for. They didn’t sign up to kill or be killed. They didn’t sign up to be sent to the hell hole of the Earth, the mountainous regions of Afghanistan, to carry on a mission that is thankless and inexplicable. They didn’t sign up to be the hunter and the hunted for year after year and tour after tour of duty in a territory that is impossible to determine why anyone would want to fight for it. And above all, it is a thankless job while they are there and a thankless job when they get home, if they are so lucky to get home alive. It is the furthest thing from the minds of most of us who are safe and warm at home, as we skim across the headlines that depict the horror that these brave kids are experiencing.

I have never experienced warfare, but I was in the military long enough to remember that it removes you from society for a period of time. It takes you out of touch with the world you have always known, the safety and security of your nation, your state and your city. It takes you out of touch from the warmth and comfort of your family, your loved ones, your friends, your society – and for these kids, for an extensive period of time and miserable conditions. And then they come back physically debilitated and mentally scarred, if not from stress disorder, from brain trauma, suffered in this modern warfare of an explosion a minute. That must be the most miserable living conditions one can imagine.

And for this loving mother in Kristof’s article and Grucza’s article, who had two sons facing what we really can’t describe or feel the true impact of, we tell her we have a 6 month waiting list for treatment for suicidal conditions as she watches one son die because he just couldn’t stand the unbearable pain any longer. This is just one kid of thousands.

This story has been written many times with different names and the same outcome. When will we stop to consider the real costs of war – it isn’t the trillions of dollars wasted on the military industrial complex that the rich and powerful love so much, it is the lives of our poor kids who the rich send to fight the wars they start. It seems that the least we could do is take care of these faceless, nameless warriors after we bring them home.

That is the real price of war and a price that we should think about is an election year such as this. This is our opportunity to get involved in the conversation and the cure, if we are willing to take the time and express our opinion and elect those who will deal this tragic attitude that we have as a nation about the value of human life and dignity.


The Other 1 Percent by Timothy Egan

“George W. Bush started the two wars in a great flourish of righteous bluster and — in the case of Iraq — outright lies.

Bush is retired, playing golf and
watching baseball. Dick Cheney is still giving speeches justifying the
enormous deception of the Iraq debacle. In the meantime, there is a
larger consequence at home, the veterans next door — those 2.3 million men and women who served in one of the two wars.

The Other 1 Percent

By Timothy Egan on American politics and life, as seen from the West.

March 15, 2012

The yellow banners, the halftime tributes, the bloviating by politicians of both parties — it’s so easy for the 99 percent of us who aren’t serving in the military to act like we support them. We all love the troops, blah, blah, blah.

And then, you see an Army lieutenant colonel accused this week of plotting to blow up the Washington State Capitol and kill his commanding officer. You see, two months ago, a man not long out of his Army uniform gunning down a park ranger in her uniform. You hear of the massacre of children and women in Afghanistan — civilians all — allegedly by an Army sergeant who served four tours of duty.

All of those incidents came from people connected to Joint Base Lewis-McChord, south of Tacoma, Wash., the largest military installation on the West Coast. And all of the suspects had completed combat tours in Iraq or Afghanistan. Is it the base, or the service, or the wars? Who’s failing these soldiers?

For now, we all are. George W. Bush started the two wars in a great flourish of righteous bluster and — in the case of Iraq — outright lies. And he had the backing of most Americans. We honked our horns at bypasses near Lewis-McChord, and told the troops our hearts were with them.

Of late, the polls show that more than 60 percent of Americans think both the Iraq and Afghanistan wars were not worth the costs in blood and money. But, more telling, veterans who fought those wars are not far behind the public in sharing the same sense of futility. A Pew poll last fall found that only a third of all people who served in Iraq or Afghanistan said the wars were worth it.

So, I guess we can move on, yes?

Nobody likes to say that someone’s service was for a misguided cause. How does a mother who lost a son, a wife who lost a husband, a child who lost a mother fit those tragedies into a cognitive conclusion that will carry them through the days?

Bush is retired, playing golf and watching baseball. Dick Cheney is still giving speeches justifying the enormous deception of the Iraq debacle. In the meantime, there is a larger consequence at home, the veterans next door — those 2.3 million men and women who served in one of the two wars.

They will be trying to live with the horrors they saw and felt for the rest of their lives, perhaps another 60 or 70 years. Their suicide rate — 38 per 100,000 — is more than three times that of the population at large. And that same Pew poll found that 37 percent of the war veterans suffered from a degree of post-traumatic stress.

At the same time, it would be wrong to put these veterans in a box, pegged as time bombs and malcontents. Too many Vietnam vets were branded as psychos or lone avengers — see Rambo, and numerous cultural clones — a perception that still lingers.

But there are a couple of things the 99 percenters can do:

One is to make sure that the Veterans Administration — and by extension, taxpayers — does not fail these citizens who put themselves in harm’s way. The Army is now conducting an investigation into whether budget concerns prompted authorities at the Madigan Army Medical Center, which serves Lewis-McChord vets, to overturn post-traumatic stress diagnoses for 285 people. Did the Army reverse its findings on the mental strain of these soldiers to save money?

If the Pew poll is accurate, more than 800,000 veterans are re-entering society with some form of psychological trauma. The wars will cost at least $2.4 trillion through 2017, according to a Congressional Budget Office estimate, which includes interest for borrowed money. The balance between money for armaments going in and mental health going out should never scrimp on the exit.

In 2009, President Obama signed a new G.I. Bill to help veterans go to college. More than 700,000 have taken advantage of it. But many ex-soldiers complain of bureaucratic ineptitude, resulting in failure to pay tuition on time and crushing debt.

A second, and larger, consideration is caution concerning all the war talk as tensions mount with Iran. Republicans Newt Gingrich, Rick Santorum and Mitt Romney — none of whom served in uniform — have all but unleashed the dogs of combat, acting as if striking Iran would be the “cakewalk” the Bush Administration predicted for Iraq.

I thought President Obama and the British prime minister, David Cameron, struck the right tone in their comments this week about the wars that most Americans have now put behind them, and the war that could loom ahead.

“No one wants war,” said Obama. “Anybody who answers a poll question about a war saying enthusiastically, we want war, probably hasn’t been involved in a war.”

Most of us do not, cannot and will not ever understand this as much as the 1 percent who fought on behalf of the 99.

The JOBS Act Is So Criminogenic by William K. Black

“…. the
comically forced effort to create a catchy acronym, is the most cynical
bill to emerge from a cynical Congress and Administration. It is an
exemplar of why congressional approval ratings are well below those of
used car dealers. The JOBS Act is something only a financial scavenger
could love. It will create a fraud-friendly and fraud-enhancing

The JOBS Act Is So Criminogenic That It Guarantees Full-Time Jobs for Criminologists

By William K. Black, Assoc. Professor, Univ. of Missouri, Kansas City; Sr. regulator during S&L debacle

Posted: 03/20/2012

Co-written with Henry N. Pontell and Gilbert Geis*

As white-collar criminologists (and a former financial regulator and enforcement head) our careers and research focus on financial fraud by the world’s most elite private sector criminals and their political cronies. Therefore, we write to thank Congress and the president for preparing to adopt a JOBS Act that will provide us with job security for life. We will be the personal beneficiaries of Congress’ decision to adopt the law without the pesky hearings that would allow critics to launch devastating attacks on the proposed bill based on a brutally unfair tactic — the presentation of facts.

The “Jumpstart Our Business Startups” Act, the comically forced effort to create a catchy acronym, is the most cynical bill to emerge from a cynical Congress and Administration. It is an exemplar of why congressional approval ratings are well below those of used car dealers. The JOBS Act is something only a financial scavenger could love. It will create a fraud-friendly and fraud-enhancing environment. It will add to the unprecedented level of financial fraud by our most elite CEOs that has devastated the U.S. and European economies and cost over 20 million people their jobs. Financial fraud is a prime jobs killer.

Powerful regulatory regimes — strong accounting rules, strict corporate governance, tough securities laws, and vigorous civil and criminal enforcement of the regulations and laws is the greatest infrastructure for strong economic growth that a nation can provide. For decades, the U.S. had an enormous competitive advantage over other nations in raising funds through securities because investors placed great trust in issuers that were subject to effective regulation. U.S. equities traded at a substantial premium compared to securities issued in other nations (which means that companies could raise capital much more effectively and inexpensively). Regulators serve as the “cops on the beat” that prevent a Gresham’s Dynamic in which “bad ethics drives good ethics out of the markets.”

Our system worked brilliantly. America prospered. American businesses and investors prospered. Unfortunately, economists decided to destroy what worked and to replace it with a fraud-friendly, deregulated world. Alan Greenspan was only the most prominent high priest of the following dogma: “a rule against fraud is not an essential or … an important ingredient of securities markets” (Easterbrook & Fischel 1991). This faith-based economics had no basis in reality, but it led to aggressive anti-regulatory leaders whose policies were so criminogenic that they led to recurrent and ever-larger serious financial crises.

George Akerlof, Nobel Laureate in Economics (2001), and Paul Romer wrote the definitive economics article on financial fraud in 1993 (Looting: the Economic Underworld of Bankruptcy for Profit). They ended it with the following to emphasize a profound policy message.

“Neither the public nor economists foresaw that S&L deregulation was bound to produce looting. Therefore, they could not imagine how serious it would be. Thus the regulators in the field who understood what was happening from the beginning found lukewarm support, at best, for their cause. Now we know better. If we learn from experience, history need not repeat itself” (p. 60).

But economists, as a group, proved that they did not “know better” and that their problem was not that they were “unaware of the concept” of looting “control frauds” (frauds led by the leaders of seemingly legitimate entities). Economists, overwhelmingly, have ignored a Nobel Laureate in economics, white-collar criminologists and experts on public administration and regulation. They have compounded their mistakes and they have dominated financial policy in the U.S. and Europe — the epicenters of the crises.

Among the many stupid, fraud-friendly policies that led to the deregulation that prompts our recurrent, intensifying financial crises, the undisputed stupidest aspect is the recurrent, intensifying embrace of the “regulatory race to the bottom.” The “logic” of the argument in the securities law context is that (1) dishonest issuers like bad regulation because it allows them to defraud with impunity, (2) our “competitor” nations (typically described as the City of London) offer weaker regulation to induce the fraudulent issuers to locate abroad, and (3) we must not allow this to happen; we must make sure that fraudulent issuers are based in America. Of course, they never phrase honestly their “logic” about dishonesty. Four national commissions investigated the causes of financial crises — the S&L debacle, the ongoing U.S. crisis, the Irish crisis, and the Icelandic crisis. Each of the commissions has decried the idiocy of the “race to the bottom” dynamic and warned that it must end. The arguments advanced by industry in support of the JOBS Act reflect and worship at the altar of “the race to the bottom.”

It is self-defeating for us to say this because as criminologists we would have job security for life if this bill was adopted. But this bill is an atrocity. It is literally composed of the wish list in regard to fraud-friendly provisions that those intent on cheating have been dreaming about and salivating to achieve for decades. This bill will kill millions of jobs because financial frauds are weapons of mass financial destruction. It will start an international fraud-friendly deregulation race to the bottom and will become the basis for further criminogenic U.S. congressional actions.

* William K. Black is Associate Professor of Economics and Law at the University of Missouri-Kansas City. Henry N. Pontell is Professor of Criminology, Law and Society at the University of California, Irvine. Gilbert Geis is Professor Emeritus of Criminology, Law and Society at the University of California, Irving.


What if Goldman Sachs Was Run by ‘Fiona’ Blankfein? by Amy Siskind

“An interesting question in light of survey data just released by the Harvard Business Review which analyzes the leadership styles of women and men. Are women better leaders than men? The finding of the survey: unambiguously, yes!

What if Goldman Sachs Was Run by ‘Fiona’ Blankfein?

By Amy Siskind, President, The New Agenda

Posted: 04/ 3/2012

Wake up Goldman Sachs! If your firm had more women, things would be better.

In recent years, those of us on the outside have come to view Goldman Sachs as the perennial poster child for ethical lapses. But, when a departing employee — an insider for 12 years — writes an op-ed describing the Goldman environment as ”toxic and destructive” — unrecognizable from when he joined in 1999, it’s all the more damning:

When the history books are written about Goldman Sachs, they may reflect that the current chief executive officer, Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm’s culture on their watch. I truly believe that this decline in the firm’s moral fiber represents the single most serious threat to its long-run survival.

Which left me to wonder: what if Goldman were run instead by ‘Fiona’ Blankfein?

An interesting question in light of survey data just released by the Harvard Business Review which analyzes the leadership styles of women and men. Are women better leaders than men? The finding of the survey: unambiguously, yes!

Here’s how the Goldman Sachs insider described the ingredients — the secret sauce — of the firm’s successful culture: “It revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients.”

According to Harvard Business Review, a ‘Fiona’ would outperform Lloyd in every element: ‘Collaboration and Teamwork’ — female mean percentile +6.1, ‘Displays High Integrity and Honesty’ +9.3, ‘Practices Self Development’ +9.4 and ‘Builds Relationships’ +7.1.

Women managers represent the same values which allowed Goldman to earn it’s clients’ trust for 143 years.

Truth is, however: the difficulties at Goldman Sachs are not unique — even if they are the latest corporate pariah. My former employer, Morgan Stanley, recently announced its 2012 class of Managing Directors — 83 percent are men. The same as our current Congress (83 percent) which, by the way, is the least productive and least popular Congress in our country’s history!

The problem of gender imbalance is endemic and our leadership is failing us. Desperately failing us.

And here’s the startling fact behind the numbers: unless we take action and change course, trends suggest gender imbalance will only get worse!

The Truth about Women’s Progress:

Where are the Fionas? On Wall Street, in corporate America and in politics, women today aren’t even getting into the pipeline.

In the last decade — during the period depicted as ‘toxic and destructive’ in the Goldman op-ed — 141, 000 women — roughly 2.6 percent of female workers in finance — left Wall Street (389,000, or 9.6 percent, more men entered). More alarming, over that same period, the number of college and young women entering Wall Street declined by 22 percent. (Read why women are leaving Wall Street here).

And it’s not just on Wall Street. For the first time in decades, from corporate management to even politics, women’s progress has stalled or is moving backwards.

The Rules of Engagement:

A gift of the women’s movement in the 60s and 70s was for women to enter the workforce. But it was like giving us a car, without driving lessons. Women still haven’t learned to play the game.

How could we? We haven’t been taught and these ways aren’t intuitive to us. It’s not our rules of engagement. The game remains male defined and male oriented. Because men still occupy the vast majority of leadership positions.

And since we all tend to hire ‘people like us‘ (We all pay lip service to the melting pot, but we really prefer the congealing pot), we’re in a vicious cycle. The way to break the cycle is advancing Fionas. Once women have a chance to set new rules of engagement, we will flourish and succeed.

National Girlfriends Networking Day (‘NGN Day’):

How do we get there? By cultivating and supporting one another.

Today, just as many Fionas are graduating from college as Lloyds. But after college, women and men have vastly different trajectories with salaries and promotions. Why? Connections and networks are readily available and established for men. But women don’t
have these connections, don’t think we deserve them, and don’t know how to build them.

Decades ago, as women entered the workforce, we made a conscious effort to bring our daughters to work once a year. Today, we need to teach our daughters what to do once they are there — to teach women, young and old, to build their network of connections.

This year we are starting that process — on June 4th — the first annual National Girlfriends Networking Day!

On that day, we’ll begin the process of linking women together by creating a national network to help us all succeed. Women around the country will be meeting for breakfast, coffee, lunch and drinks to connect. Get involved by pledging to connect, attending a virtual event around the country — or making herstory as an Angel Investor along with prominent women like Senator Kirsten Gillibrand and FOX News co-anchor Gretchen Carlson.

Desperately Seeking Fiona!

We also need to give college and young women — our Fionas — a road map to success: A Girlfriends’ Guide. Our goal is to provide a realistic game plan — concrete steps and actions which young women can take, starting in their 20s — towards become tomorrow’s Fionas. Teaching them how to build their networks, connections and brand — and on their own terms! A Girlfriends’ Guide changes lives (read this)!

Join us cultivating and supporting tomorrow’s Fiona’s: 1) Get involved in National Girlfriends Networking Day; 2) Devote one hour a month to mentor a young woman at The Mentor Exchange; and 3) Reach out to The New Agenda set up a presentation of A Girlfriends Guide on campus.