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CounterPunch Print Edition Exclusive!

Silent Coup

In the past 4 years 22 universities across the U.S. have quietly taken the CIA’s dollars and agreed to become spy-factories for student spooks. David Price breaks the story, identifies the campuses, details secret faculty protests and charts the strategy for resistance. The U.S.’s warlord clients in Afghanistan now produce 90 per cent of the world’s opium. Peter Lee reports how the U.S. sponsors widening drug plagues in Iran and Russia. Get your new edition today by subscribing online or calling 1-800-840-3683 Contributions to CounterPunch are tax-deductible. Click here to make a donation. If you find our site useful please: Subscribe Now! CounterPunch books and t-shirts make great presents.

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Today's Stories

February 8, 2010

Pam Martens
Wall Street's Killer Instinct Spells Death Knell for Jobs

Heather Gray
The Cruel Insanity of Obama's Agriculture Export Plan

Paul Craig Roberts
Blood Lust and Bragging Rights

Franklin Spinney
Mark-to-Market Pentagon Style

Ralph Nader
Institutionalizing Howard Zinn

Ellen Brown
The World's Greatest Insurance Heist

Sasha Kramer
Hope Rising from the Ashes of Port au Prince

Richard Morse
Who's in Charge of This Country?

Fred Gardner
LaGuardia and the Truth About Marijuana

Binoy Kampmark
Trouble at The Lancet

Michael Winship
Lobbyists Retreat, But Never Surrender

David Michael Green
Just Give Us Some Truth Now

Charles R. Larson
Socialist Blizzard Hits DC

Website of the Day
Markets! Finance!! Scandal!!!

February 5 - 7, 2010

Alexander Cockburn
The Left: Downhill From Greensboro

Paul Craig Roberts
The Free Market Fetish

Forrest Hylton
The Culture of Cocaine

Joanne Mariner
"If You Were in Secret Prisons...:" The Trial of Aafia Siddiqui

Bill Quigley
Haiti, Still Starving 23 Days Later

Jeffrey St. Clair
Vigilante Justice in the Land of Enchantment

Todd Gordon / Jeffrey R. Webber Consolidating the Coup in Honduras

Joseph Nevins
Bottled Water Syndrome: the Drinking Water Profiteers

Mike Miller
What Do Grassroots Organizers Actually Do When They Organize?

Mark Weisbrot
Why Washington "Cares" About Honduras and Haiti

Alison Weir
The NYT's Ethan Bronner's Conflict With Impartiality

David Swanson
Top 10 Problems with America Assassinating Americans

Missy Beattie
Recall Notices

Jonathan Cook
How Israel Stole $2 Billion From Palestinian Workers

Richard Morse
Will Clinton Roll With His Pre-Quake Friends in Haiti?

David Ker Thomson
Sects and the City

Benjamin Dangl
Beer Battles

Cal Winslow
Healthcare Workers Savor a Victory

Jim Goodman
Fear of the Organic

Michael Dickinson
What Not to Wear or Say in Turkey

Bouthaina Shaaban
The Arab Community ... the International Community

Don Monkerud
Justice Thomas in Hiding

Ananya Mukherjee-Reed
The Olympics That Will Not Be Televised

Doug Bevington
The Rebirth of Environmentalism

Stephen Martin
Globalization Burning

Charles R. Larson
The Nigerian 419 Scam

David Yearsley
At Last, the Sackbutt Gets Its Due

Kim Nicolini
"Up in the Air:"
a Landscape of Impossible Options

Poets' Basement
Marlin and Farrelly

Website of the Day
CIA Watched as Missionaries Shot Down in Peru

February 4, 2010

Barbara Rhine
Keep What You Have, But Leave the Rest

Barry Lando
Master of Treachery: Kissinger on Iraq

David Macaray
Black Lung Rising

Shamus Cooke
China's Wage Rates for U.S. Workers

P. Sainath
India's Farm Suicides: a 12-Year Saga

Christopher Brauchli
Sammy the Mouth Alito: Chucking Precedent at the Surpeme Court

Ramzy Baroud
Will Israel Target Gaza or Lebanon First?

Suzan Mazur
The Peer Review Prison

Harry Clark
The Invention of the Jewish People

Andy Worthington
Swiss Take Two Gitmo Uighurs

Website of the Day
Selective Compassion

February 3, 2010

Paul Craig Roberts
The Crisis is Not Over

Kathleen Christison
Zionism Laid Bare

Franklin Spinney
The Pentagon Goes Intellectually AWOL

Dean Baker
No Way Out: Roadblocks on the Way to Recovery

Marc Levy
No Medal Jacket

Kathy Kelly
Banning the Homeless in Colorado Springs

Gareth Porter
Talking with the Taliban: US and Karzai Clash

Joshua Frank
Blackwash: How the Coal Ash Industry Manipulated EPA Reports

Rannie Amiri
Saada War Rages On

Gregory Vickrey
Short-Changing the Health Care Debate ... For Now

Website of the Day
Mt. Reagan?

February 2, 2010

Michael Hudson
The Bernanke Disaster

Boadiba
Boadiba's Earthquake Diary

Chris Floyd
War, Budgets and Blind Ambition

Paul A. Passavant
The Symbolic Politics of the GOP: State of the Union or Civil War?

Mike Whitney
Bair's Damning Testimony

John Ross
Who's Who in Mexico's Narco Wars?

Jonathan Cook
Israel is Criminalizing Dissent

Susan Galleymore
Wasting Good Waste

Dave Lindorff
Talk Now With the Taliban

Tolu Olorunda
Words as Weapons

Ron Jacobs
I See Hawks and Earthworms

Website of the Day
Cop Watch: Guerrilla Video Primer

February 1, 2010

Michael Hudson
Obama's Junk Economics

Stan Goff
The Murderous Mystique of JSOC: How Secret Becomes Special

Patrick Cockburn
The Case Against Tony Blair

Saul Landau
Universal Disorientation: the Modern Media and Haiti

Dr. Carol Paris, MD
Staying When They Tell You to Leave
: What I've Learned Doing Civil Disobedience for Single Payer

Marshall Auerback
A Proposal for Genuine Financial Reform

Harvey Wasserman
Will Obama Guarantee a New Nuclear Reactor War?

Johanna Berrigan
Destruction, Hope and Faith in Port au Prince

Peter Gelderloos
More Wood for the Fire

David Michael Green
An Ugly Week for the Human Race (and Other Living Things)

Martha Rosenberg
If You Liked Bovine Growth Hormone, You'll Love Beta Agonists

Kevin Zeese
Health Care: a Better Idea

Alan Farago
Where Nature Saves the World ... From Us

Website of the Day
Demolishing Flint

January 29 - 31, 2010

Alexander Cockburn
The Oldest Game in Washington

Daniel Ellsberg
A Memory of Howard Zinn

Bill Quigley
Hell and Hope in Haiti

Franklin Spinney
Turning Sun Tzu on His Head: the Eikenberry Cables and the Escalation in Afghanistan

Jeffrey St. Clair
Showdown in the Malheur Marshes

Steve Early
The Night They Drove Old Labor Down

Joe Bageant
The Annotated Obama

P. Sainath
Memories of Maharaj

Jordan Flaherty
The New Politics of Post-Katrina New Orleans

Joshua Frank
Why the Stimulus Falls Short: an Interview with Doug Henwood

Winslow T. Wheeler
The New Pentagon Budget: Spending Even More, Buying Even Less

Brian M. Downing
Negotiating an Afghan Agreement?

Wajahat Ali
Dissent as Democracy: an Interview with Howard Zinn

William Loren Katz
Changing History: Howard Zinn, John Hope Franklin and Ivan Van Sertima

Dave Lindorff
SOTU Whoppers: Obama's Fog Machine

Jim Goodman
The Political Capital is Gone, Now What About Political Will?

Judith Scherr
Sending in the Marines: a Q & A with the State Dept. on Haiti

Kerry Kennedy / Monika Kalra Varma
Human Rights and Haiti

Anthony Papa
The Ordeal of Cameron Douglas: Punished for Being an Addict

David Macaray
A Man for All Seasons

Roger Burbach
Indigenous Challenges to Ecuador's Neo-Liberal Model

Belén Fernández
Police Perform Halftime Show at Zelaya Airport Farewell

Nikolas Kozloff
Chávez and Earthquakes

Dr. Susan Block
Defending the G-Spot: Yes, Virginia, It Does Exist

Windy Cooler
Salinger and Zinn: Dead Together, But Read Together?

Charles R. Larson
The Last Cargo Cult: Econ. 101 with Mike Daisey

Mikita Brottman
Theaters of Death: Losing it at the Movies

David Yearsley
Fancy Footwork

Lorenzo Wolff
The Stoic Soul of Bill Withers

David Rovics
He Fades Away: the Life and Music of Alistair Hulett

Poets' Basement
Cirino, Holt and Farrelly

Website of the Weekend
Arrest Blair

January 28, 2010

Bill Quigley
Haitians are Helping Haitians

Peter Hallward
The Fourth Invasion: Securing Disaster in Haiti

Tanya Golash-Boza
Struggling for Dignity and Survival in Haiti

Shamus Cooke
Taxing the Rich Wins in Oregon

Dave Lindorff
In Liberty County Jail

Ray McGovern
Obama Put Politics First on Afghanistan

Uri Weiss
Distorting the Basic Law: Apartheid at the Israeli High Court

Thomas M. Power
Logging for Electricity?

Cecil Brown
The Greensboro Sit-In and Obama

Wajahat Ali
Muslims Helping Haiti

Harvey Wasserman
The Late, Great Howard Zinn

Website of the Day
Hayduke, Take a Walk on the Wild Side

January 27, 2010

Daniel Kovalik
Obama's War for Oil in Colombia

Paul Craig Roberts
Rule by the Rich

Dean Baker
We Won't Get Tarped Again!

Uri Avnery
The Two-Headed Monster

Sasha Kramer
Fear Slows Aid Efforts in Haiti

Vijay Prashad
Plan of Death in Haiti

Nikolas Kozloff
Hugo and the Shockwave: the U.S., Latin America and Haiti

Mark Weisbrot
Haiti: Where Security Kills

Jonathan Cook
Holocaust Day Invited Raises Storm in Israel

Bob Fitrakis /
Harvey Wasserman

Et Tu, ACLU?

Binoy Kampmark
Gordon Ramsay in India

Website of the Day
White House Die In

January 26, 2010

Michael Hudson
Myths of Recovery

Joan Roelofs
It's the Whole System

Patrick Cockburn
The Hanging of the Henchman

Mike Roselle
Photographing Mountain Top Removal: an Interview with Antrim Caskey

Brian M. Downing
Return of the Trust Busters

David Macaray
Big Brother is Alive and Well ... and He's Signing Your Paycheck!

Bouthaina Shaaban
Haiti -- Gaza: Varieties of Compassion

Kevin Zeese
Remodeling the Antiwar Movement

Richard Morse
The Press Only Likes Fresh Blood and the Blood in Haiti is Drying

Fidel Castro
We Send Doctors, Not Soldiers

Farzana Versey
Making Haiti: Survival, Charity Tourism and the Marketplace

Jonathan Cook
Israel's "Army-Owned" University

Website of the Day
Bagram: an Annotated Prisoners List

January 25, 2010

Michael Hudson
Will Obama Put Muscle Into the White House's New Populist Play?

Anthony DiMaggio
Supremely Swindled

JoAnn Wypijewski
Judges' Shock Ruling Okays Fantasist's "Repressed Memories" Fraud

Nadia Hijab
Aiding Yemen

Robert Jensen
Great Television, Bad Journalism: Media Failures on Haiti

John Maxwell
Boojum Hunting in the Caribbean

Richard Morse
Tweets From Port au Prince: We are Far From Normal

Marilyn Langlois
Standing Shoulder-to-Shoulder in Haiti

Dan Bacher
Has Obama Sold Out to Big Ag?

James L. Secor
The Mental Paralysis of the Left

Jayne Lyn Stahl
Putting the "Pro" Back Into Progressive

Website of the Day
Glenn Beck's "Revolution Holocaust"

January 22/24, 2010

Alexander Cockburn
The Great Leap Sideways

Russell Feingold
The Supremes Have Opened the Floodgates

Ralph Nader
The Supremes Bow to King Corporation

Christopher Ketcham
Freedom of Speech for a Fiction

Manuel Garcia, Jr
Corporate Personhood and Political Free Speech

Paul Craig Roberts
How Wall Street Destroyed Health Care

Jeffrey St. Clair
Poison Letters

Nikolas Kozloff
A Thorn in the Side of the U.S. Military in Haiti

Jean Damu
Haiti: Blood, Sweat and Baseball

Mitchel Cohen
Haiti and Toxic Waste

Paul Buccheit
The Tragedy of Haiti ... and Us

Conn Hallinan
Something About Yemen

Steven Higgs
The Mystery of the Eli Lilly Rider

Rob Stone, MD
Face Time With Rahm on Health Care

Saul Landau /
Nelson P. Valdes

The Preventive Coup

Ron Jacobs
Just Walk Away From the Democrats

Vijay Prashad
The Killings in Bengal

P. Sainath
India: Self-Slaughter Every 30 Minutes

M. Shahid Alam
Inviting David Brooks to My Class

George Wuerthner
Why Grass-Fed Beef Won't Save the Planet

Missy Comley Beattie
Could a Woman Who Posed Nude Get Elected?

Jean Sabaté
Russia's Ruined Far East Metropolis

Shamus Cooke
Company Unionism

Stephen Fleischman
The Founding Fathers and the Luck of the Draw

Michael Donnelly
Gitmo Closes

David Michael Green
How to Wreck a Presidency

Michael Dickinson
Art on Trial in the Capital of Culture

Charles R. Larson
In the Aftermath of 9/11

David Yearsley
From the Liberace Museum to Persian aub Zam Zam

Lorenzo Wolff
Catching Ziggy on the Lower East Side

Poets' Basement
Ahmad and Corseri

Website of the Day
Hitler Finds Out Scott Brown Won Mass. Senate Seat

 

January 21, 2010

Paul Craig Roberts
Security Fools

Alan Farago
Fat Tires in the Everglades

Richard Morse
Earthquake in the Red Zone

Stewart J. Lawrence
The Prospects for Comprehensive Immigration Reform

Harvey Wasserman
The Weimar Democrats

Carl Finamore
Class Clowns

Ramzy Baroud
Iran and Latin America: the Press Stirs the Pot

Marshall Auerback
Obama Still Doesn't Get It

Fawzia Afzal-Khan
Pakistan Love Story

Adam Federman
Did Commercial-ization Kill the Bees?

Website of the Day
How Free Market Theory Destroyed the Free Market

January 20, 2010

Alexander Cockburn
A Richly Deserved Humiliation

James Bovard
How the Patriot Act Perpetuates Official Robberies

Mary Lynn Cramer
Class and Party Differences in Massachusetts

Dean Baker
Making the Banks Pay

Uri Avnery
The Turkish Incident

Kathy Kelly
Tough Minds and Tender Hearts

Jeb Sprague
Haiti's Classquake

Ron Jacobs
Revolution Not a Tea Party

John V. Walsh
Why I Voted for the Republican in Massachusetts

Bouthaina Shaaban
A Wise Strategy for Obama

Gail Dines
The Ideal Partner?

Website of the Day
Water Insecurity in the Colorado Basin

January 19, 2010

Michael Hudson
Wall Street's Power Grab

John Maxwell
No, Mister, You Can't Share My Pain

Stephen Soldz
The Guantánamo Suicides

Richard Morse
Tweets from Port au Prince: "A Hungry Man is an Angry Man..."

Björn Kumm
The Tragedy of Toussaint L'Ouverture

Gary Leupp
Blowback of the Drones

Eric Toussaint /
Sophie Perchellet
Haiti's Odious Debt

Nikolas Kozloff
Chile's New Right

Benjamin Dangl
Profiting From Haiti's Misery: If the Marines Don't Kill You, the Loans Will

Dave Lindorff
The Blackout on Cuban Aid to Haiti

Robert Roth
The Politics of an Earthquake

Website of the Day
Break Up the Big Banks--ASAP

January 18, 2010

Petra Bartosiewicz
The Intelligence Factory: How America Makes Its Enemies Disappear

Nelson P. Valdés
The Rescue Operation's Priorities in Haiti

Bill Quigley
Why the U.S. Owes Haiti Billions

Richard Morse
I See No Evidence of a Government Presence Here: Tweets from Port au Prince

Tolu Olorunda
More Than Aid, Haiti Needs Allies

John Ross
The Silence of the Sub

Manuel Garcia, Jr. The Murder of Masoud Alimohammadi: Assassinating the Iranian H-Bomb

Ralph Nader
Privatizing Everything

Franklin Lamb
How McCain was Greeted in Lebanon

Frederick B. Hudson
Plucking the Chords of Change

Website of the Day
Senator Centerfold

January 15-17, 2010

Alexander Cockburn
Bum Rap for Harry, Not for Bubba Bill

Richard Morse
The Streets are Now Haiti's Living Room, Bedroom and Morgue

Bill Quigley
Ten Things the U.S. Can and Should Do for Haiti

Patrick Cockburn
Crushing Haiti, Now as Always

Jeffrey St. Clair
On the Firing Line

Anthony DiMaggio
Remaking an American Myth: Haiti, U.S. Aid and Humanitarian Relief

Tom Reeves
Haiti, Where America Never Learns

Daniel Wolff
Haiti's Ongoing Emergency

Alan Nasser
Obama's Latest Ruse: the Bank Tax

Saul Landau /
Nelson P. Valdes

A Coup in Honduras ... So Twentieth Century!

Andrew Oxford
Afghanistan's Soft-Spoken Rebel

Michael Donnelly
Big Greens and Real Greens: Biodiversity in the Age of Big Money Environmentalism

Russell Mokhiber
Democrats Going Down in Flames

Darwin Bond-Graham
The Green Drillers

Missy Beattie
War Dealer

David Ker Thomson
The Attention Economy

Gary Leupp
War on Yemen

Ron Jacobs
The Untold Story of Afghanistan

Clifton Ross
Nicaragua Now: Living the Farce

Jordan Flaherty
Her Crime? Sex Work in New Orleans

Marshall Auerback
Why Placating the Tea Baggers Protects the Status Quo

Marjorie Cohn
Keeping Same Sex Marriage in the Dark

Joe Bageant
Bass Boats and Queer Marriage

Tariq Ali
Remembering Daniel Bensaîd

Jayne Lyn Stahl
Too Soon to Fail?

Charles R. Larson
Iran at the Seams

Kim Nicolini
Vampires in Hard Times

David Yearsley
Histories of Western Music, From Grout to Kleinzahler

Poets' Basement
Garcia and Bryan

Website of the Weekend
Green Tags: Words That Stick

Support Haiti Action

January 14, 2010

Ashley Smith
The Incapacitation of Haiti: Before and After the Quake

Harvey Wasserman
Hard Core Green: How to Kick Corporate Butt

Dean Baker
The Case for Bernanke: a Really Bad Joke

Brian Cloughley
Selective Compassion

Brock L. Bevan
One Night in Sana'a: Parties, French Girls and Security in Yemen

Don Monkerud
The Health Insurance Monopoly

Winslow T. Wheeler
More Pentagon Spending

Gideon Levy
Only Shrinks Can Explain Israel's Behavior

Adam Federman
The Exxon Clause

James McEnteer
This Week in Stupid

Brian Concannon Jr
Working with the Haitian Government

Website of the Day
Protest at Wall Street

January 13, 2010

Patrick Haenni /
Sami Amghar
The Myth of Muslim Conquest

Jonathan Cook
The Iron Dome

Cecil Brown
Knocking on Woods: What Tiger Woods Jokes Tell Us About the American Character

Steven Higgs
Mercury and the "Environmental Soup"

Paul de Rooij
A People's Cartoon History of Gaza

Richard Forno
What Happens When They Change Targets?

Dr. Trudy Bond
Psychologists in an Age of Torture

Daniel Drennan
A Black Panther in Beirut

Martha Rosenberg
The "Good Cancer" Spin

Brenda Baletti, Gilson Rego and Antonio Sena
Battle in Amazonia

Website of the Day
Haiti Aid: Artists for Peace and Justice

January 12, 2010

Bill Salganik
The Myth of "Cadillac" Health Plans

Uri Avnery
The Quiet American Goes to Yemen

Dean Baker
Big Bank Theory

Dan Kovalik
Chiquita Lauded for Human Rights Abuses

Raza Naeem
Yemen's Memories of Revolution and Resistance

George Wuerthner
Up in Smoke: Why Biomass Wood Energy is Not the Answer

Dave Lindorff
Looking for Those Green Shoots

David Macaray
I am Blacker Than Rod Blagojevich

Tolu Olorunda
Bono Bombs, Again

Patrick Bond
Copenhagen Inside-Out

Website of the Day
Unfortunate Checkout Aisle Juxtapositions: Tiger and Abdulmutallab

January 11, 2010

Patrick Cockburn
Only Fools Rush Into Yemen

Gareth Porter
Potemkin Tunnels: Iran Uses Fear of Secret Nuclear Sites to Avert Attacks

John Ross
Mexico Welcomes 2010 With Bombs and Riots

Gregory V. Button
TVA Health Assessment Report on Coal Ash Raises Troubling Questions About the Agency

Ralph Nader
The Last of the Prairie Populists: Losing Byron Dorgan

Tom Barry
Not Systemic Failure, Failed System

Mikita Brottman
The Healing Powers of Facebook

David Michael Green Lost in the White House

David Swanson
Obama as the Secret Decider

Kevin Zeese
The Baucus 8 Are Free

Website of the Day
Solitary Watch: News From a Nation in Lockdown

February 8, 2010

This Trend is Not Your Friend

Wall Street's Killer Instinct Spells Death Knell for Jobs

By PAM MARTENS

I think it’s time to take Wall Street literally: they’ve made it abundantly clear they have an insatiable appetite for killing things: the housing market, the financial system, the economy, reform legislation, the next generation’s future.

Wall Street is so steeped in destruction that the symbols of death are everywhere.  Wall Street calls the big newspaper ads they take out to herald the launch of their market offerings a “tombstone.” (To understand how appropriate that is, consider the billions in bond and stock offerings they raise for Big Tobacco.)  What does Wall Street call the completion of a buy or sell order: an “execution.” (Think of how many derivative trades they “executed” for the now crippled, life support patients Fannie Mae, Freddie Mac and AIG; or the off balance sheet vehicles they created for Enron, WorldCom, and dozens of now bankrupt companies.)

Wall Street calls an order to complete a trade without any reduction in quantity a “fill or kill.”  This could just as reasonably be called a “fill or cancel” order but it’s so much more fun for the thundering herd to race around a trading floor screaming “kill it, kill it!”

What is the benefit to Wall Street in killing things or bringing the share price of companies to near worthless?  Tails they win; heads you lose.  Wall Street can and does make enormous profits on bets that share prices will decline (shorting), that companies will disappear (credit default swaps), that the economy will crater (interest rate swaps).  And there’s a slogan on Wall Street: the trend is your friend.  When it’s clear the bull is lying in the center of the ring (think Lehman’s death and the Merrill Lynch shotgun wedding on September 15, 2008), Wall Street moves its bets to the downside. 

No one has their jive aligned with their agenda any better than Citigroup’s traders.  When they set out to inflict pain on the European bond market in 2004, they labeled the trade “Dr. Evil.”  Citi also created a structured finance vehicle that greased the skids for the collapse of Italian dairy giant Parmalat, dubbed Buconero, Italian for “Black Hole.”

Until a President comes along with a genuine will to deal with the truly rapacious nature of Wall Street, these destructive forces will continue.

President Obama’s latest Wall Street reform plan to bar commercial banks from owning private equity funds or hedge funds and banning proprietary trading for the benefit of their own firm constitutes needed reform toward unrigging the markets.  But the proposal neglects Wall Street’s most serious threat to the economy.  It’s the commercial banks’ ownership of investment banks and brokerage firms that’s killing innovation and job growth in America.  The longer we wait to deal with this issue, the more the national debt will balloon as the government is forced to indefinitely add job stimulus money and sustenance funds for the growing number of unemployed.

As currently structured, Wall Street investment banks have no incentive to bring viable companies to market.  Wall Street makes the same huge fees for putting lipstick on a pig and dumping it on the public as they do for launching solid companies with real job growth potential. Over the past decade, trillions of dollars of investors’ life savings have been misallocated to bogus business models.  Those companies are now worthless or are trading for pennies on the Pink Sheets, the graveyard for investment banks’ misfired ideas. 

The Pink Sheets provide quotes on these stocks to broker dealers.  It’s not responsible for the legitimacy of the companies and, in fact, warns investors on its web site that these “are small companies with limited operating histories or are economically distressed…Investors should avoid the OTC [over the counter] market unless they can afford a complete loss of their investment.”  In many cases, this is far more disclosure than licensed brokers at the “venerable” firms told their clients when the companies first went public at fat share prices.

A study done by Tyler Shumway and Vincent A. Warther for the University of Michigan Business School and University of Chicago Graduate School of Business found that between 1972 through 1995, 4,188 companies were delisted by Nasdaq, the stock exchange that facilitated the boom and bust in dotcoms and tech start ups in the late 90s. After delisting, many ended up on the Pink Sheets.  In March 2000, the Nasdaq index stood at 5,048.  Today, a decade later, it’s still down 58 percent from its peak.

It's time for Congress to open its eyes to the reality that this massive decline in Nasdaq is telling us Wall Street is not bringing enough good companies to market.  And the mergers Wall Street has put together, typically traded on the New York Stock Exchange, have created Frankenbanks and debt-laden conglomerates too bloated to figure out their own balance sheet let alone create new jobs.  Two poster children come to mind: AOL-TimeWarner and Citibank-Travelers-Smith Barney-Salomon, a/k/a Citigroup. 

Investment banks that arrange these initial public offerings of new companies or merge together existing ones are now located within the “too big to fail,” publicly traded commercial banks.   But they used to be private partnerships and put their own money at risk when bringing a new company to market.  When their own money was at risk, there was a far greater due diligence done to ensure the company would be viable.  That’s gone now.  There’s no incentive to be vigilant. It’s OPM: other people’s money to throw down on the casino table.

To fully understand the new structure of Wall Street, it helps to reflect back to August 1995 when the FDA told us that a cigarette was really a nicotine delivery system in drag and Big Tobacco was manipulating “nicotine delivery at each stage of production.”  People were being hooked on something very harmful to their well being while a colluding industry lied and lobbied. 

Insiders on Wall Street call their retail brokerage firms, now also dangerously merged with commercial banks, a “distribution” system.  The investment banks create the toxic product, the brokers distribute it to the public under an enshrined carrot and stick system that is virtually identical at every major firm.  That is, the internal research department puts out a buy recommendation.  The brokers’ local manager holds a sales meeting and pushes the firm’s latest offerings. The brokers’ commission system dramatically favors risky products that the firm is pumping out over safer investments.

There is absolutely no system that rewards a broker for how well his clients’ portfolio performs.  The broker’s ability to have secretarial help, the size of his or her office, gaining the title of Vice President on the business card, the annual bonus, even being taken out to lunch by the Branch Manager, is dependent solely on how much money the broker makes for the firm.

If you want to challenge the system as corrupt, the courthouse doors are closed to you.  Wall Street enforces its own private justice system called mandatory arbitration.  The public is not allowed to have a peek, after all it’s private justice, so there is no disinfecting sunshine on this cabal.

The only way a system this riddled with conflicts of interest and contempt toward its own customers' interests could have survived this long was by grabbing that huge depositor base of money from the commercial banks and then trading it into oblivion. The newest patsy in this grand bank heist is the taxpayer who is replenishing the empty vaults.

With each new $100 billion job creation program from the government, we acknowledge that Wall Street isn't creating companies that create jobs. According to the Labor Department, 9.3 million Americans could not find work as of January and millions more are involuntarily working part-time or too discouraged to look for work.

So if Wall Street is not properly allocating capital to viable companies, it’s not rewarding its shareholders or customers, remind me again why taxpayers are spending trillions to save it?

The February 15, 1999 cover of Time magazine lauded Federal Reserve Chairman Alan Greenspan, Treasury Secretary Robert Rubin, and Deputy Treasury Secretary Lawrence Summers as The Committee to Save the World.  We now know this was really The Committee to Slave the World.  The economic challenges the world now confronts were of their making; together, of course, with some well placed Washington and Wall Street cronies.

Greenspan has a B.S., M.A. and Ph.D. in Economics from New York University; Rubin has a B.A. in Economics from Harvard and a law degree from Yale.  Summers has a B.S. from M.I.T. and a Ph.D. from Harvard.  Despite these 7 degrees from some of the finest institutions of learning in the country, we are asked to believe that there was not one ounce of common sense that suggested to these men that repealing the depression era investor protection legislation known as the Glass-Steagall Act that prevented the combination of commercial banks with investment banks and brokerage firms would end up killing jobs, the financial system and the economy.  (Were we not looking at men who profited greatly from that bad decision, we might be less skeptical.)

There has been this intellectual dishonesty and revisionist history suggesting no one could have seen this coming. Not only did lots of people see it coming but on June 25 and June 26, 1998 a steady stream of public-minded citizens walked through the stately doors of the Federal Reserve Bank of New York and testified that repealing the Glass-Steagall Act and allowing commercial banks to merge with Wall Street firms was a preposterously bad idea and would lead to economic ruin.  Why is our President turning to Summers and Rubin for advice instead of the people who got it right?

President Obama has now anointed Neal Wolin to join the New Committee to Save the World along with himself and former Fed Chair Paul Volcker.  Who is Neal Wolin? He was confirmed as Deputy Secretary of the Treasury on May 19, 2009.

In the Clinton administration, Wolin was general counsel to Lawrence Summers, a key proponent of repealing the Glass-Steagall Act.  According to the New York Times, Mr. Summers earned $5.2 million in 2008 working one day a week for the hedge fund, D.E. Shaw & Company, while simultaneously advising Obama.  After leaving government, Wolin worked for Hartford Financial Services Group Inc. for eight years. According to BusinessWeek, if you add up Wolin’s cash compensation, restricted stock awards, options, and other compensation, he made $3.4 million his last year at Hartford in 2008. 
Robert Scheer wrote the following about Wolin at the San Francisco Chronicle on November 19, 2009:

“Wolin, Geithner and Summers were all proteges of Robert Rubin, who, as Clinton's treasury secretary, was the grand author of the strategy of freeing Wall Street firms from their Depression-era constraints. It was Wolin who, at Rubin's behest, became a key force in drafting the Gramm-Leach-Bliley Act, which ended the barrier between investment and commercial banks and insurance companies, thus permitting the new financial behemoths to become too big to fail. Two stunning examples of such giants that had to be rescued with public funds are Citigroup bank, where Rubin went to ‘earn’ $120 million after leaving the Clinton White House, and the Hartford Insurance Co., where Wolin landed after he left Treasury.” 

Mr. President, it’s time to clear out the fat cats and deliver on that message of hope and change.

Pam Martens worked on Wall Street for 21 years; she has no security position, long or short, in any company mentioned in this article.  She writes on public interest issues from New Hampshire.  She can be reached at pamk741@aol.com

 

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