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Michigan will be having a CLOSED primary March 8th

Questions and Answers: Michigan’s Presidential Primary

Do I have to be a registered Republican or Democrat to participate in Michigan’s Presidential Primary?

Michigan’s Presidential Primary has been designated a closed primary. There is no political party registration requirement in Michigan Election Law. Any Michigan registered voter can participate in the primary. By law, you must make your ballot selection in writing by completing the Application to Vote/Ballot Selection Form on Election Day; or on the Absent Voter Ballot Application form if voting absentee the.

Why do I have to select a party ballot?

Michigan Election Law (MCL 168.615c) guides the conduct of the Presidential Primary. The law requires that voters indicate in writing which political party ballot he or she wishes to vote. This requirement only applies to Presidential Primary elections, and voters will not be required to select a political party ballot type at other types of elections.

Didn’t the legislature just eliminate straight-ticket voting?

Yes, the legislature did eliminate straight-ticket voting. But straight-ticket voting was only an option in November General elections. A closed Presidential Primary is a very different process. You are required by law to select a Republican or Democratic party ballot to participate in the Presidential Primary.

What is the difference between an Open Primary and a Closed Primary?

Voters in an open primary are given a ballot with a column listing each qualified party’s candidates. Voters then decide which party primary they wish to participate in by voting only in the column of their party choice while in the privacy of the voting station. Voting for candidates in more than a single party’s column will void the entire partisan ballot.
Voters in closed primaries must state the party primary they wish to participate in before being issued a ballot. The ballot given to voters only has candidates of the party that corresponds to the voter’s choice.

Will Michigan’s closed Presidential Primary procedures affect the August State Primary in any way?

No. The August primary is an open primary. Voters will not be asked to select a party before voting in the August primary. Voters will be issued ballots containing all political parties and their candidates, and will select one of the parties in the privacy of the voting station.

When I select a party ballot for the Presidential Primary, does that mean I have to vote in the same party primary in August?

No. The written selection made by a voter at the Presidential Primary has no bearing on how a person votes in the State Primary election.

Will my ballot selection be made public?

Yes. By law a public list must be made available that includes the Presidential Primary ballot type chosen by each voter in the Presidential Primary. This list must be made available within 71 days after the Presidential Primary election County, city and township clerks must retain the forms indicating each voter’s Presidential Primary ballot selection for 22 months. This ballot selection information is subject to disclosure under the Freedom of Information Act. The public list of voters’ Presidential Primary ballot selections and the documents containing this information held by local clerks must be destroyed after the 22-month retention period expires.

To be clear, only the political party ballot selection will be made public; the candidate you vote for will not be made public. Closed primaries also have secret ballots so that the candidate you vote for is never disclosed.

Who is on the ballot?

Michigan election law includes detailed requirements related to which candidates are eligible and how names would be placed on Michigan’s Presidential Primary ballot. By law, both Republican and Democratic Party candidates are listed, but on separate ballots.

The law required the Secretary of State to issue a list of individuals “generally advocated by the national news media to be potential presidential candidates”. In addition, Michigan’s Republican and Democratic parties had the ability to add candidates and others not on those lists had the opportunity to file petitions to be placed on the ballot.

Candidates had until December 11, 2015 to formally withdraw their names from Michigan’s ballot. Although some of the candidates have since suspended their campaigns nationally, state law required that the candidate listing be finalized in December 2015.

See the Michigan Voter Information Center (www.Michigan.gov/vote) for a sample ballot, which lists all candidates on the ballot.

Voters will also have the option of voting “uncommitted” on either the Republican or Democratic ballot.

What does an “uncommitted” vote mean?

Each party ballot has a vote position for “uncommitted.” When a voter selects “uncommitted”, this indicates the voter is exercising a vote for that political party, but is not committed to any of the candidates listed on the ballot. If enough voters cast “uncommitted” votes, the party may send delegates to the national nominating convention who are not committed to a specific candidate.

Will there be other things on the Presidential Primary ballot?

A number of local jurisdictions are holding special elections in conjunction with the Presidential Primary. Voters who do not wish to cast a vote in the Presidential Primary but want to vote in the local special election have the option of selecting a ballot containing only the local contests. A list of communities holding elections in conjunction with the Presidential Primary is available on our website at www.Michigan.gov/elections.

Where can I find more information?

For more information on your voter registration status, polling place, issues that will appear on your ballot, the absentee voting process and more, please visit the Michigan Voter Information Center at www.Michigan.gov/vote. For a detailed history of Presidential Primaries in Michigan, please visit www.Michigan.gov/elections. (See Presidential Primary Information)


Bernie Sanders, Donald Trump, and the Many Faces of Populism By Charles P. Pierce


Because Bernie Sanders is not a vulgar talking yam, when he gives a speech like the one he delivered on Tuesday afternoon—and it was an authentic Old Testament jeremiad about the greed and social vandalism as practiced by the money power in the United States—it doesn't even make the cut to be carried live on CSPAN. But it's worth reviewing, because this presidential campaign has done a great deal to distract and to obscure the fundamental corruption of the democratic experiment into mindless oligarchy, and anytime anyone rises up to tell that simple truth, it's worth the effort it takes to transmit it through the raucous noise of the carnival midway.

As most people know, in the 1990s and later, the financial interests spent billions of dollars in lobbying and campaign contributions to force through Congress the deregulation of Wall Street, the repeal of the Glass-Steagall Act and the weakening of consumer protection laws in states. They spent this money in order to get the government off their backs and to show the American people what they could do with that new-won freedom. Well, they sure showed the American people. In 2008, the greed, recklessness and illegal behavior on Wall Street nearly destroyed the U.S. and global economy. Millions of Americans lost their jobs, their homes and their life savings. While Wall Street received the largest taxpayer bailout in the history of the world with no strings attached, the American middle class continues to disappear, poverty is increasing and the gap between the very rich and everyone else is growing wider and wider. And Wall Street executives still receive huge compensation packages as if the financial crisis they created never happened.

Of all the misappropriated and misunderstood terms in our political lexicon, "populism" is right at the top of any respectable list...However, even at its worst, it never was simply an excuse to rail and to hate. Even at its worst, it was a reaction against the corrupting power of money in a self-governing democratic republic. Even at its worst, it was an argument to distrust big money as much as we distrust big government because, too often, the latter is the servant of the former. Even at its worst, it was a statement that privatized threats to liberty are just as great as those that emerge from government. That's the history lesson behind Bernie Sanders' campaign.

There were undeniable campaign elements to the speech; Sanders was very tough on what he perceives to be Hillary Rodham Clinton's milquetoast proposals to reform the financial goliaths further. But the real meat of the thing was to demonstrate that—as populists have done for over a century—unaccountable money power inevitably corrupts everything it touches, and that unaccountable money power turns the principles of self-government into a ludicrous form of vaudeville.

It is no secret that millions of Americans have become disillusioned with our political process. They don't vote. They don't believe much of what comes out of Washington. They don't think anyone is there representing their interests. In my view, one of the reasons for that deep disillusionment is the widespread understanding that our criminal justice system is broken and grossly unfair—and that we do not have equal justice under the law. The average American sees kids being arrested and sometimes even jailed for possessing marijuana or other minor crimes. But when it comes to Wall Street executives, some of the wealthiest and most powerful people in this country, whose illegal behavior caused pain and suffering for millions—somehow nothing happens to them. No police record. No jail time. No justice. We live in a country today that has an economy that is rigged, a campaign finance system which is corrupt and a criminal justice system which, too often, does not dispense justice.

In that kind of political system—and I believe that Sanders is deadly accurate in his assessment—the people are prone to the worst instincts of the mob as an entity, and to the worst impulses of every member of it. I have little patience with the argument that the same voters energized by He, Trump are energized by Bernie Sanders simply because both men are seen as being outside some fanciful conception of their party's respective "establishments." They have become vehicles for entirely different populist impulses, the personification of the two halves of old Tom Watson's soul. In his case, the darker impulses won out. That's why it would be a capital mistake to assume that, when Bernie Sanders says this…

And so my message to you today is straightforward: If elected president, I will rein in Wall Street so they can't crash our economy again. Will they like me? No. Will they begin to play by the rules if I'm president? You better believe it. Thank you and I look forward to working with the most powerful force in our great nation, not the Barons of Wall Street but the people our government was created to serve.

…he is talking only about his own party's frontrunner.

This is amusing


The latest from the psych ward is that we who support Bernie aren't even Democrats to begin with!

I don't know who writes this stuff, but if they are getting paid for it, they are better con men than Reagan, Bush, and Cheney.

So, the juries are blocking the posts, for the moment...they can't block the thoughts! If that's what Hillary's Swarm really think, then why do they post in a community that is, by Skinner's own report, running 6-1 for Bernie Sanders?

I think a reality check is overdue.

Weekend Economists Ask: R WEE Donne? January 8-10, 2016

It's been an interesting week in the markets. When China's ricky-ticky stock markets started to go crazy, all the other markets (and the hot money and the shadow banksters) went into full panic attack mode. The hordes and their hoards were violently upheaved.

US stock market drops, ending its worst week since 2011


A wave of late selling pummeled U.S. stocks Friday and pushed the market to its worst week in four years. The dismal start to the new year comes as investors worry that China's huge economy is slowing down. That has helped send the price of oil plunging to its lowest level since 2004, the latest blow to U.S. energy companies. Industrial and technology companies such as Boeing and Apple that do a lot of business in China have also fallen sharply this week. Mining companies such as Freeport-McMoRan plunged as copper prices have fallen. China is a major importer of copper.

Stocks started the day higher, driven in part by news of an encouraging burst in hiring last month by U.S. employers. China's stock market also rose 2 percent overnight, recovering somewhat after steep drops earlier in the week triggered trading halts. Indexes wavered between small gains and losses for most of the day, but took a decisive turn lower in the last hour of trading. That made this the worst week since September 2011, when the market was roiled by the fight over the U.S. debt ceiling and Standard & Poor's move to cut the credit rating of the U.S. government.

    The Dow Jones industrial average dropped 167.65 points, or 1 percent, to 16,346.45.

    The Standard & Poor's 500 index fell 21.06 points, or 1.1 percent, to 1,922.03.

    The Nasdaq composite index shed 45.80 points, or 1 percent, to 4,643.63.

The Dow and S&P 500 are each down about 6 percent for the week. The Nasdaq composite fell even more, 7.3 percent.
That index is heavily weighted with technology and biotech companies, both of which were high-fliers last year. The largest losses on Friday went to financial stocks. JPMorgan Chase lost $1.35, or 2.2 percent, to $58.92 and Citigroup fell $1.43, or 3 percent, to $46.13. Health care stocks slumped, led by drug companies. Energy stocks also skidded as the price of oil, already at decade lows, continued to fall.

European stocks also rose early in the day, but couldn't hang on. The FTSE 100 index of leading British shares declined 0.7 percent while Germany's DAX lost 1.3 percent. The CAC-40 in France slid 1.6 percent.

The same pattern held in the U.S. In its monthly jobs report, released before the stock market opened, the Labor Department said U.S. employers added 292,000 jobs in December, far more than economists had forecast. That's the latest sign the U.S. economy is still growing. On average employers added 284,000 jobs per month in the fourth quarter, the best rate in a year...Throughout the week, worries about China's economy and shocks to its markets have canceled out positive news from the U.S. and Europe. While China's economy is still growing, that growth isn't as fast as it has been. That could hurt sales of everything from iPhones to oil and heavy machinery.

Oil prices also lost ground.
U.S. crude fell 11 cents to close at $33.16 a barrel in New York and Brent crude, a benchmark for international oils, declined 20 cents to $33.55 a barrel in London. Exxon Mobil lost $1.54, or 2 percent, to $74.69 and Tesoro fell $5.41, or 5 percent, to $101.62.

This week retailers started disclosing their holiday-season results.
Gap and American Eagle both reported disappointing sales. Gap stock dropped $3.83, or 14.3 percent, to $22.91, its lowest in almost four years. American Eagle tumbled $2.64, or 16.6 percent, to $13.24. Department stores were among the biggest losers on the S&P 500. Their holiday sales have been hurt by the unusually warm winter weather. Kohl's fell $2.98, or 5.9 percent, to $47.88 and Macy's lost $1, or 2.7 percent, to $35.89. The Container Store reported a surprise third-quarter loss and disappointing sales, and its stock plunged $2.96, or 41.2 percent, to $4.22. The company went public in November 2013 with an IPO that priced at $18 per share and it finished its first trading day at $36.20.

The price of gold fell $9.90, or 0.9 percent, to $1,097.90 an ounce. Silver declined 42.6 cents, or 3 percent, to $13.918 an ounce. Copper was unchanged at $2.022 a pound.

The euro fell to $1.0903 from $1.0927 and the dollar edged up to 117.67 yen from 117.50 yen late Thursday. Bond prices rose. The yield on the 10-year Treasury note edged down to 2.12 percent from 2.15 percent.

In other energy trading, wholesale gasoline fell 1.8 cents to $1.128 a gallon, heating oil fell 1.4 cents to $1.052 a gallon and natural gas rose 9 cents to $2.472 per 1,000 feet.

So, is this the beginning of the end of the Capitalist Complacency? Will the 1% sink back into the middle of the pack, as their paper assets go up in smoke? Will the Great Hegemon of the West dissipate like smoke on the water? Will the 3rd World be allowed to proceed without the Crazy Uncle sticking his nose into their every affair?

Let's find out what John Donne would say. This English poet and cleric would be able to deal with the metaphysical aspects of it all:

Death, be not proud, though some have called thee
Mighty and dreadful, for thou art not so;
For those whom thou think'st thou dost overthrow
Die not, poor Death, nor yet canst thou kill me.
From rest and sleep, which but thy pictures be,
Much pleasure; then from thee much more must flow,
And soonest our best men with thee do go,
Rest of their bones, and soul's delivery.
Thou art slave to fate, chance, kings, and desperate men,
And dost with poison, war, and sickness dwell,
And poppy or charms can make us sleep as well
And better than thy stroke; why swell'st thou then?
One short sleep past, we wake eternally
And death shall be no more; Death, thou shalt die.

or as others have remarked: sic transit gloria mundi

I think we need a pool: a "betting pool" for Iowa

By how many points will Bernie scoop the caucuses, or whatever the measuring stick is in a caucus state? After all, Causcus Night is 3 weeks after Monday...

wikipedia: The Iowa caucuses are an electoral event in which residents of the U.S. state of Iowa meet in precinct caucuses in all of Iowa's 1,681 precincts and elect delegates to the corresponding county conventions. There are 99 counties in Iowa, and thus there are 99 conventions. These county conventions then select delegates for both Iowa's Congressional District Convention and the State Convention, which eventually choose the delegates for the presidential nominating conventions...

Rather than going to polls and casting ballots, Iowans gather at a set location in each of Iowa's 1,682 precincts. Typically, these meetings occur in schools, churches, public libraries and even individuals' houses. The caucuses are held every two years, but the ones that receive national attention are the presidential preference caucuses held every four years. In addition to the voting and the presidential preference choices, caucus-goers begin the process of writing their parties’ platforms by introducing resolutions...

The Republicans and Democrats each hold their own set of caucuses subject to their own particular rules that change from time to time. Participants in each party's caucuses must be registered with that party. Participants can change their registration at the caucus location. Additionally, 17-year-olds can participate, as long as they will be 18 years old by the date of the general election. Observers are allowed to attend, as long as they do not become actively involved in the debate and voting process. For example, members of the media and campaign staff and volunteers attend many of the precinct caucuses. Youth who will not be eligible to vote by the date of the general election may also attend as observers and may volunteer to attend the county convention as youth delegates.

...The process used by the Democrats is more complex than the Republican Party caucus process. Each precinct divides its delegate seats among the candidates in proportion to caucus goers' votes. Participants indicate their support for a particular candidate by standing in a designated area of the caucus site (forming a preference group). An area may also be designated for undecided participants. Then, for roughly 30 minutes, participants try to convince their neighbors to support their candidates. Each preference group might informally deputize a few members to recruit supporters from the other groups and, in particular, from among those undecided. Undecided participants might visit each preference group to ask its members about their candidate.

After 30 minutes, the electioneering is temporarily halted and the supporters for each candidate are counted. At this point, the caucus officials determine which candidates are viable. Depending on the number of county delegates to be elected, the viability threshold is 15% of attendees. For a candidate to receive any delegates from a particular precinct, he or she must have the support of at least the percentage of participants required by the viability threshold. Once viability is determined, participants have roughly another 30 minutes to realign: the supporters of inviable candidates may find a viable candidate to support, join together with supporters of another inviable candidate to secure a delegate for one of the two, or choose to abstain. This realignment is a crucial distinction of caucuses in that (unlike a primary) being a voter's second candidate of choice can help a candidate.

When the voting is closed, a final head count is conducted, and each precinct apportions delegates to the county convention. These numbers are reported to the state party, which counts the total number of delegates for each candidate and reports the results to the media. Most of the participants go home, leaving a few to finish the business of the caucus: each preference group elects its delegates, and then the groups reconvene to elect local party officers and discuss the platform. The delegates chosen by the precinct then go to a later caucus, the county convention, to choose delegates to the district convention and state convention. Most of the delegates to the Democratic National Convention are selected at the district convention, with the remaining ones selected at the state convention. Delegates to each level of convention are initially bound to support their chosen candidate but can later switch in a process very similar to what goes on at the precinct level; however, as major shifts in delegate support are rare, the media declares the candidate with the most delegates on the precinct caucus night the winner, and relatively little attention is paid to the later caucuses...


Democratic caucus participants (though not Republicans, whose caucuses vote by secret ballot) must publicly state their opinion and vote, leading to natural problems such as peer pressure from neighbors and embarrassment over whom his or her preferred candidate might be. Another criticism involves the amount of participants' time these events consume. Participants are often required to listen to speeches from local political leaders.

An Iowa caucus can last around two hours, preventing people who must work, who are sick, or who must take care of their children from casting their vote. Absentee voting is also barred, so active-duty Iowan members of the military lose the opportunity to participate. The final criticism is the complexity of the rules in terms of how one's vote counts at the Democrat caucus meetings, as it is not a simple popular vote.

Arguments in favor of caucuses include the belief that they favor more motivated participants than simple ballots, and that supporters of non-viable candidates are able to realign with a more popular candidate and still make their vote count. Additionally, many caucus-goers consider them more interesting due to how much more interactive they are than a primary. Lastly, one other argument in favor is that caucus-goers get more information before making their vote, so those voting will potentially be more educated about their candidate choices than primary-goers.

Each precinct's vote may be weighed differently due to its past voting record. Ties can be solved by picking a name out of a hat or a simple coin toss, leading to anger over the true democratic nature of these caucuses. Additionally, the representation of the caucus has had a traditionally low turnout. Others question the permanent feature of having caucuses in certain states, while perpetually ignoring the rest of the country...

Wait. So THAT’S what the bailouts were about? October 2014


One of the reasons that no one went to jail for the elite control fraud that caused the financial crisis is because of the pervasiveness of the criminality. You couldn’t send one guy to jail without having that guy very publicly rat out everyone else. To get to a high level on Wall Street you had to be dirty, like in a corrupt police department. No one trusts the one guy who won’t take bribes. Which brings us to Maurice “Hank” Greenberg, the former AIG CEO who is now, for lack of a better word, ratting everyone else out.

AIG, of course, is the massive insurance company which was bailed out by the government, with the Fed taking an 80% ownership stake in 2008. The AIG bailout was a strange deal, and it was renegotiated many times over the years. In a normal clean financial company resolution, AIG shareholders would have gotten wiped out. In the bailouts for Goldman, Morgan Stanley, and most of the big banks, shareholders got to keep their shares. AIG shareholders, by contrast, got to keep a little bit of what they had, a sort of split the baby in half deal. Hank Greenberg, as a shareholder, is extremely angry that he was treated this way. He thinks that he was not given equal treatment to Goldman shareholders, and in that he’s right. Most of us think that he should have been wiped out, and Goldman’s shareholders should have been wiped out too, so there’s little sympathy for this very rich man. But it’s utterly true, and everyone (even the most bank-friendly journalist Andrew Ross Sorkin) is acknowledging that it is true, that the government treated AIG shareholders differently. Greenberg is alleging, with good reason, that the motive here was quite sordid.

To understand the backstory, let’s take a quick look at AIG’s role in the housing bubble. Broadly speaking, AIG sells insurance, and one of its divisions (AIG Financial Products) sold a very specific type of insurance called a credit default swap. If you were a big bank and you owned a mortgage backed security (stuffed into a collateralized debt obligation, or CDO), you could buy a credit default swap against the possibility that the security would default. Then, because you owned this insurance, whatever that security might contain, be it good loans or the most toxic dreck imaginable, it was as good as gold. Default? No problem, AIG had you covered. The problem was that AIG covered everyone in the market (well not everyone, but a lot of the big players especially Goldman) so while the company had a really big balance sheet, it ended up being liable for sums that were larger than the amount of capital the parent company could access. There were other serious problems at AIG, such as its securities lending operation, but those aren’t as relevant to the story. And yes, technically speaking, a credit default swap wasn’t legally considered a type of insurance, it was considered a ‘derivative’. But that was just a legal fiction so that insurance regulators, who would have forced AIG to hold enough money to back its bets, couldn’t touch the company. A credit default swap is insurance.

So anyway, AIG blew up because it guaranteed an entire collapsing market of mortgage-backed securities. The Federal Reserve came in and pumped money into the company, for fear of the whole system collapsing. So why the lawsuit? Seems open and shut. Beyond that, Greenberg wasn’t even the CEO of AIG at the time of the crisis, he had already been dispatched for accounting shenanigans by then-New York Attorney General Eliot Spitzer in an earlier blood feud. The answer is that Greenberg plays hardball, and he’s still a big shareholder in AIG. Beyond that, he was excluded by the government from negotiations during the restructuring of a company he ran for decades, so he has a personal motive in spending his time and money harassing Geithner, Paulson, Bernanke, and company...Bernanke, Geithner, and Paulson have told their sides of the story, through friendly reporters or through books of their own. But no one has had the chance to cross-examine them, to demand they prove that what they were telling the public was true (my read of Geithner’s book was that his recollection of the bailouts was a long and charming set of lies, but you can draw your own conclusions). But now these men are being put on the stand, and an alternative set of facts is coming to light. We’ve always had alternative theories about what happened during the pressure-filled days of the bailouts, but actual evidence has been based on self-serving portraits from CEOs, regulators, and the reporters who love them. And guesses.

No longer. We have already learned a few interesting facts about AIG (courtesy of Yves Smith). First of all, we learned that AIG didn’t necessarily need to be bailed out by the United States government. There were two and a half offers on the table to recapitalize the insurance company. One came from China, which offered to buy parts of the company. Paulson prevented this from happening. We don’t know why, though it could be due to national security concerns (rumors of AIG being heavily involved with the CIA have always floated around). The second offer came from rich Middle Eastern investors, represented by Senator Hillary Clinton (through her friend Mickey Kantor). This didn’t happen either, and again, we don’t know why. Could be national security. But the third offer suggests otherwise. The New York financial regulator offered to let AIG dip into $20 billion of capital it had in an insurance subsidiary, but Geithner said the company didn’t need it. You heard that right — Geithner turned down an internal recapitalization of AIG. $20 billion wasn’t enough to plug the hole, but it wouldn’t have hurt.

There’s more funky stuff that went on. The board of AIG was never even shown the term sheet for the bailout by the government, and the board only approved it because their lawyer — superlawyer Rodge Cohen —made a dramatic reversal of his legal position. Cohen at first told the board that a bankruptcy was a reasonable option, but a few days later he said that if the board chose bankruptcy rather than the government offer, sight unseen, the board members could be personally liable. At the same time, Cohen was also representing AIG counterparties, and was informally advising the government. Whoa there.

In addition to all this, we’ve learned that the Fed, in doing all of this, was probably breaking the law. First, the New York Fed changed the terms of its offer without authorization from the Board of Governors, which was a no-no. More importantly, the Federal Reserve simply could not do what it was doing, which was to buy shares in AIG and take a controlling interest (even if it stuck the shares in a trust, which was the structure it chose). Here’s Scott Alvarez, the Fed’s attorney, saying that. (see link)

This legal jeopardy also explains a lie that Bernanke told about the commercial paper market (which is the mechanism big companies use to borrow money). The week before the bailouts passed Congress, Bernanke explained to Congress that the commercial paper market was freezing up. If they didn’t approve the Troubled Asset Relief Program (TARP), even companies like General Electric would go down. After Congress approved TARP, Bernanke then created a wholly Federal Reserve-concocted facility to back the commercial paper market, thus showing he could protect that market with or without TARP. Why did Bernanke want TARP so badly? Because the Fed needed Treasury to get the authority to buy shares, so Treasury could take the Fed’s illegally held AIG shares off their hands.

In other words, we learned that AIG was bailed out by the Federal Reserve because Paulson, Bernanke and Geithner wanted it bailed out by the Federal Reserve. They exceeded their legal authority to buy AIG for the government, and then lied about it. The $700 billion Troubled Asset Relief Program then bailed them out of this jam.

But why?

Greenberg alleges that their motive was to steal AIG from its shareholders, and then funnel money through AIG to banks like Goldman. There’s compelling evidence this is true; we also learned that banks, even Bank of America and Goldman, were willing to give up some of the money they were owed by AIG as part of their credit default swap payoffs. They would take less than 100 cents on the dollar for counter-party payouts. But Geithner ensured that these banks would get 100 cents on the dollar, as well as legal indemnity. To put it another way, AIG owed these banks a bunch of money, but if it had to pay the banks, it would go bust. But if it didn’t pay the banks, the banks would lose money. The banks were willing to lose a little bit of money, but Geithner said no no, you don’t have to lose any money in the deal at all. The accusation is that Geithner and co. shot AIG in the head, and then let other banks feast on its rotting carcass (liberally spiced with government money). Paulson has actually confirmed this was the goal. Big bank shareholders got bailed out, while AIG shareholders only got partially bailed out, both of course by the public. It was an utterly selective political judgment to choose one set of actors over another set of actors. What’s really interesting is not just this allegation, but how the New York Fed — run at the time by Tim Geithner — tried to hide it. Here are several examples of New York Fed officials explicitly trying to avoid the Freedom of Information Act, as well as SEC disclosure requirements. (See page 72.)

Eventually Republican Darrell Issa, of all people, got information of who was benefitting from the AIG death rattle (Goldman, Soc Gen, etc), and leaked it. Even so, the ‘AIG as backdoor bailout’ theory was vehemently denied for years, until now. Now it’s being understood, even by people like Hank Paulson, as true. Sorkin, says as much in his piece in Dealbook.

The government never sought to couch A.I.G.’s lifeline as a way to push money into the hands of Goldman Sachs, Deutsche Bank, Société Générale and the dozens of other banks around the world that were the beneficiaries. That idea was never going to win a popularity contest. But that was the effect of the assistance to A.I.G. And that was the point.

Dean Baker shows the significance of this statement, and notes that the idea of AIG as a backdoor bailout “was not something generally conceded in policy circles.”

This matters because if everyone understood that the $192 billion injected into AIG was largely about keeping big banks from failing then there might have been more political support for breaking up the big banks and in other ways restricting their conduct. Conceding this point now that the debate over financial reform is largely in the past seems more than a bit dishonest.

In other words, Greenberg’s case is revealing that the bailouts were done selectively, and there was an attempt to cover up what happened. The Federal Reserve and the Treasury ended up treating Goldman/JP Morgan/Citigroup shareholders and employees exceptionally well, AIG shareholders less well, and the public like irrelevant peasants. Greenberg is right to complain about the unequal treatment. Of course he doesn’t deserve any money himself, because AIG really was insolvent, and he was treated better than he should have been. If the judge could dispense justice, the judge would rule in Greenberg’s favor, and then simply take away the money that big bank shareholders got to keep, claw back bank bonuses, and then also confiscate the rest of Greenberg’s assets held in AIG stock. That would be equal treatment for all citizens. Of course the judge can’t do that. The best he can do is let the trial move forward, and show the public what really happened.

There is an attempt to make this whole episode go away, to say that the government’s decisions at the time, though perhaps illegal and perhaps unfairly favoring a set of actors over another, were necessary. And besides, the bailouts made money. And none of this is news, anyway, so what are you whining about? ...This narrative is fundamentally dishonest. Opponents of the bailouts said a lot of things at the time about the motives of the people in charge. It turns out that bailout opponents were largely correct, and the bailout apologists were lying and/or wrong. Increasingly, the public, judges, and politicians will recognize that the way the corrupt manner in which bailouts were done turned property rights into an explicit reflection of arbitrarily exercised political power.

Once it is broadly recognized that property rights in the post-bailout era truly are such an arbitrary exercise of political power, then a lot of things become possible. I believe in property rights; they are an important part of a just society and a mechanism to protect people from tyrannical public power (as long as they are enforced equally and with an understanding that they must also be balanced against other questions of justice, such as the threat of private monopolies to our freedoms). But because of these bailouts, no one can with a straight face claim we live in a culture that enforces property rights as a mechanism to protect individual liberties. And I’m not sure the bailout proponents are going to like where that leads.

Hank Greenberg Wins Trial But No Damages Over AIG Bailout June 2015


Hank Greenberg’s other AIG trial: A fight that just won’t end


Believe it or not, there is yet another trial starring the former AIG CEO waiting in the wings.

Hank Greenberg isn’t just fighting over money.

This week, Starr International, the company run by former AIG CEO Hank Greenberg, filed its appeal in the bitterly contested and highly publicized case over the government’s financial crisis bailout of AIG. Greenberg says that the judge, who found that the government’s conduct was indeed illegal—one lawyer for the Fed even wrote that the government was on “thin ice”—should also award Starr, which was AIG’s biggest investor, damages; he has argued that the bailout improperly enriched the government by at least $18 billion.

But there is another trial starring Greenberg that is waiting in the wings. It is the remnants of a civil case that Eliot Spitzer, who was then New York’s Attorney General, brought against Greenberg, AIG, and AIG’s former CFO, Howard Smith, in May 2005—a decade ago, two attorney generals ago, and in the pre-financial crisis era. The case has been delayed, and delayed and delayed again, by numerous appeals. In pragmatic terms, what’s left of the original blockbuster seems remarkably petty. None of the punishments, particularly the monetary ones, that the AG is seeking seem momentous in the grand scheme of all things Greenberg.

And yet, of all the legal thrillers starring Hank Greenberg, this case might actually be the one that matters most. The official remedies and the legal wrangling are beside the point. For both sides, it is a highly emotional battle to define the legacy of a financial industry titan.

Reading the original complaint, which accused the defendants of “routinely engag[ing] in misleading accounting and financial reporting,” is like going back in time. “American International Group is the world’s largest commercial insurance company,” it begins. “For 2004, it reported net income of more than $11 billion on revenues of nearly $100 billion. It has approximately 93,000 employees in 130 countries. For 38 years, AIG was run by defendant Maurice R Greenberg, also known as ‘Hank.’”

Even before the complaint was brought, the investigation had forced Greenberg out of the insurance giant. In 2006, AIG agreed to pay $1.6 billion to settle the AG’s, as well as the SEC’s, claims against the company. AIG also restated its financial results going back to 2000, reducing its previously reported profits by almost $4 billion, or about 10% of the total, due to what it called “accounting errors” involving the transactions in the AG’s complaint.

The original complaint detailed nine ways in which AIG’s financial results had been manipulated, and charged Greenberg and Smith with violations of New York’s Martin Act and with common law fraud. But by the end of 2006, Spitzer’s office had filed an amended complaint, dropping five of the transactions as well as the common law fraud charges, leaving just the Martin Act. Unlike common law fraud, the Martin Act, which is meant to cover “all deceitful practices contrary to the plain rules of common honesty,” does not require prosecutors to prove that Greenberg and Smith knowingly intended to commit fraud.

Over time, the government dropped two more transactions from its complaint, leaving just two, neither of which were alleged to have affected AIG’s net income or shareholders’ equity. But they did affect AIG’s reserves, which are viewed by investors as a critical measure of an insurer’s strength.

The bulk of the remaining case against Greenberg and Smith involves a transaction that AIG did with General Re, an insurance company owned by Warren Buffett’s Berkshire Hathaway, in late 2000 and early 2001 that allegedly allowed AIG to increase its reserves by $250 million each quarter. At the time Spitzer brought the charges, there was great concern about the use of so-called “finite reinsurance” transactions to manipulate an insurer’s financial statements. It’s perfectly legitimate for one insurer to reinsure another’s risks, but the deal is illegal if no risk is actually transferred. The language in the original complaint was explosive. “The entire AIG Gen Re transaction was a fraud,” it read. “It was explicitly designed by Greenberg from the beginning to create no risk for either party.”

In early 2008—just before AIG was taken over by the government, something which Greenberg and his supporters say never would have happened if he hadn’t been forced out—four former Gen Re executives and one AIG executive were found guilty in a criminal trial based on the activities alleged in the complaint.

In 2009, Greenberg and other AIG executives agreed to pay $115 million to settle a shareholder lawsuit based in part on the AG’s case; at the same time, Greenberg paid another $15 million to settle with the SEC. (Smith paid $1.5 million.) The SEC’s complaint alleges, among other things, that Greenberg and Smith “knew about the effects that certain improper transactions would have on AIG’s reported financial results.”

Neither man admitted nor denied the SEC’s allegations.

Then, in early 2011, the Second Circuit Court of Appeals overturned the convictions of the Gen Re and AIG executives. The decision itself was based on something of a technicality, but the court also noted “compelling inconsistencies” in the testimony of the government’s star witness, a former Gen Re executive named Richard Napier, that “suggest[ed] that Napier may well have testified falsely.” In a letter sent to current New York Attorney General Eric Schneiderman last fall, Greenberg’s defense counsel, the prominent attorney David Boies, wrote, “Mr. Napier is the sole witness proffered for the assertions that Mr. Greenberg, or indeed anyone at AIG, was advised or understood” that there were questionable aspects of the deal. Nor, Boies noted, did Napier ever actually speak to Greenberg. (The government did not retry the case; in turn, the executives agreed that “aspects” of the deal were “fraudulent.”) The extent to which Napier has been discredited is yet another hotly contested issue, with the AG arguing that other evidence backs him up where it matters most.

Everyone agrees that Greenberg did call Ronald Ferguson, the CEO of Gen Re, to initiate the transaction in question. But the strong language in the original complaint—that the deal was “explicitly designed by Greenberg from the beginning to create no risk for either party”—turns out to be less than iron clad.

In the criminal case, Greenberg was identified as an “unindicted co conspirator,” but he wasn’t charged. In a hearing, a prosecutor explained to the judge why that was the case. “There wasn’t a single email that we had—that we are able to produce a [sic] trial involving Mr. Greenberg that I … know of standing here … there were no recorded phone calls to Mr. Greenberg … there was no—not even—a substantial witness who spoke about this to Mr. Greenberg.”

10 Powerful Reasons Why Bernie Scares Wall Street


Bernie Sanders has declared war on the biggest players in Wall Street’s financial sector, saying they are overrun with “greed, fraud, dishonesty and arrogance,” and criticizing his top rival for the Democratic nomination, Hillary Clinton, as being naïve about what needs to happen to create a financial system that “works for all Americans.”

“To those on Wall Street who may be listening today, let me be very clear,” Sanders said in a midtown Manhattan speech on Tuesday. “Greed is not good. In fact, the greed of Wall Street and corporate America is destroying the fabric of our nation. And here is a New Year’s resolution that I will keep if elected president: If you do not end your greed, we will end it for you.”

Sanders laid out a 10-point program to deeply change the nature of the financial sector, while occasionally digressing to emphasize how much more sweeping his proposals are compared to Clinton's. As always, he started by recounting how the “20 richest people own more wealth than the bottom 150 million Americans”—and said the finance industry has spent “billions” to get Congress and federal agencies to deregulate almost all areas of the financial industry while weakening consumer protection laws.

“They spent this money in order to get the government off their backs and to show the American people what they could do with that new-won freedom,” he said. “They sure showed the American people. In 2008, the greed, recklessness and illegal behavior on Wall Street nearly destroyed the U.S. and global economy. Millions of Americans lost their jobs, their homes and their life savings.” Sanders continued, “While Wall Street received the largest taxpayer bailout in the history of the world with no strings attached, the American middle class continues to disappear, poverty is increasing and the gap between the very rich and everyone else is growing wider and wider.”

Here are the 10 major components to Sanders’ Wall Street reforms:

1. End too-big-to-fail.
2. Break up the biggest banks.
3. Pass a 21st-century Glass-Steagall Act.
4. End too-big-to-jail.
5. Criminalize Wall Street’s business model.
6. Tax the casino culture.
7. Reform the financial rating agencies.
8. Cap credit card interest and ATM fees.
9. Let the USPS offer banking.
10. Reform the Federal Reserve.

details and more at link

Governor helped hush-hush delivery of water filters to Flint pastors


Gov. Rick Snyder quietly helped deliver 1,500 water filters to Flint last month -- even as state officials gave assurances that the city's tap water was safe and meeting all regulatory standards.

Dave Murray, a spokesman for Snyder, confirmed that the filters, distributed by the Concerned Pastors for Social Action, came from a "corporate donor that does not wish to be recognized but cares deeply about the community."

The donor "worked with the governor to provide 1,500 faucet filters to be distributed to city homes," Murray said in an email.

The state's involvement in the filter distribution was never publicized and pastors told The Flint Journal-MLive Tuesday, Sept. 29, that they were asked by staffers in the governor's office not to speak about it...

What is "Progress"? Some historical punditry

"You don't stick a knife in a man's back nine inches, and then pull it out six inches, and say you're making progress." --
Malcolm X

"The test of our progress is not whether we add to the abundance of those who have much. It is whether we provide enough to those who have little." - Franklin D. Roosevelt

"All our lauded technological progress -- our very civilization - is like the axe in the hand of the pathological criminal." - Albert Einstein

"Scientific progress makes moral progress a necessity; for if man's power is increased, the checks that restrain him from abusing it must be strengthened" - Madame de Stael (French woman of letters, political propagandist, 1766-1817)

"Human progress is neither automatic nor inevitable... Every step toward the goal of justice requires sacrifice, suffering, and struggle; the tireless exertions and passionate concern of dedicated individuals." - Martin Luther King

Bernie Sanders to warn Wall Street: ‘Greed is not good’


Democratic presidential candidate Bernie Sanders on Tuesday will seek to cast himself as Wall Street’s toughest cop and rebut criticism from the Clinton campaign that his policies aren’t comprehensive enough.

In a policy speech on Tuesday in New York City -- just blocks away from Wall Street itself -- Sanders is expected to lay out more details of his plan to crack down on the industry. He will reiterate his calls for breaking up banks that are too big to fail and to reinstate the Glass-Steagall Act, which separated commercial and investment banking. Hillary Clinton, his chief rival and the front-runner for the Democratic nomination, opposes that measure.

“To those on Wall Street who may be listening today, let me be very clear,” Sanders will say, according to prepared remarks provided by his campaign. “Greed is not good. Wall Street and corporate greed is destroying the fabric of our nation. And, here is a New Year’s Resolution that we will keep: If you do not end your greed we will end it for you.”

Sanders has made curtailing what he calls Wall Street greed a focus of his campaign. He also has questioned whether Clinton, a former New York senator, can effectively police many of the same people and companies who have paid her and her husband large sums for speeches and in campaign contributions. In the second Democratic presidential debate, she struggled to explain her ties to Wall Street donors...
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