Why do we even bother with this nonsense:
Almost three years after Citigroup started to teeter, two of the executives who guided the bank into the center of the financial storm offered their regrets on Thursday to a federal committee examining the crisis and came under withering criticism from panel members.
Charles O. Prince III, Citigroup’s former chairman and chief executive, apologized for the billions of dollars of losses that caused the company he helped build to nearly collapse. Instead, the bank required three government rescues and some $45 billion in taxpayer aid.
“I’m sorry the financial crisis has had such a devastating impact for our country,” Mr. Prince told the commission. “I’m sorry about the millions of people, average Americans, who lost their homes. And I’m sorry that our management team, starting with me, like so many others could not see the unprecedented market collapse that lay before us.”
Robert E. Rubin, an influential Citigroup board member and adviser, also showed some contritionbut stopped short of accepting personal responsibility for the bank’s woes.
“We all bear responsibility for not recognizing this, and I deeply regret that,” Mr. Rubin said.
The congresscritters all act pissed off, the banksters act mostly contrite, and then we all agree that “mistakes were made” and “no one could have predicted,” while the same pricks are handing each other buckets of cash behind the scenes to avoid any regulation and the people who did predict this stuff aren’t invited to the hearings.
Congressional oversight hearings are like a show trial where everyone agrees all parties are guilty but no one ever gets executed. WTF is the point?
BR
I’m wondering…who should have been invited?
Maybe Roubini. Who else?
nutellaontoast
I love that this markey collapse is unprecedented. Yes, who could’ve predicted that a commodity which tripled in value in a 8 year period for no reason could not sustaint such prices…
jeffreyw
drinking game! take a drink at every mention of kabuki
Eric U.
The people that really did all the damage were betting that the bubble would burst. They just didn’t realize that you can’t bet that much money on a short position without taking the system down.
Thomas
Well said sir.
Violet
That’s one of the non-apology apologies that so popular these days: “I’m sorry if anyone was offended.” Never do they say, “I’m sorry for what I said.” They never accept responsibility.
Someone needs to create a weasel-o-meter for these kinds of apologies.
Taylor
Krugman. Stiglitz. Schiller. Dean Baker.
How am I doing?
Sad_Dem
Now that you’re sorry, how about you write off my mortgage and live in my neighborhood?
mclaren
@John Cole:
It’s that classic scene from Gangs of New York:
brendancalling
every single one of these CEOs should be shot. Lucy Parsons had a few words about that.
scav
@BR: The fact you can’t name many has more to say about the media than the situation. People were discussing it: I’ve been following stuff since at least ’05 and those were silly ol’ bloggers. Some hoped to make a mint, some were just appalled. To my mind, the serious bit isn’t that it wasn’t predicted: it is that it wasn’t even discussed as a possibility.
BR
@Taylor:
Both Krugman and Stiglitz, sadly, were only good on the financial crisis after it happened. They didn’t really see it significantly in advance like Roubini. (Not saying Roubini is the only guy – I just don’t know.)
licensed to kill time
Miss Citigroup regrets she’s unable to lunch today, Mister Cole.
BR
@scav:
Oh, I agree. I know a number of others who were saying this would happen. Even books written around 2005, such as one of my favorites (The Long Emergency), mentioned a near-term financial crash due to derivatives and a housing bubble.
But none of those folks are the kind of “big names” that could be called before congress.
Rosalita (Formerly GReynoldsCT00)
Too bad tarring and feathering went out of style
Short Bus Bully
People are still making money every day. With the market as volatile as it is it can’t be avoided.
THAT is why they hate regulations. THAT is what “unleashing business to its full potential” means; living in the crazy business cycle of boom/bust. The inside players can make boatloads on the boom part, and then they either bet short or just walk away with the profits on the bust cycle.
The one time they can’t make money? Heavily regulated (healthy) sectors of the economy that grow steadily or very slowly year after boring year.
The only problem is that the rest of the country wants a steady and safe economy for their retirement accounts, savings accounts, and mortgages. It really IS Wall St. versus everybody else.
ruemara
Is it wrong that if I could do so without consequence, I’d totally be kicking these guys in the nuts until they puke? And then break their nose? I just can’t stand it.
PeakVT
“We all bear responsibility for not recognizing this, and I deeply regret that,”
Regret what? Bearing responsibility? Or missing a great shorting opportunity?
Asshole.
taylormattd
Anyone else getting distracted by the “Perfect Abs” ads? Can’t take my eyes off that guy, lol.
Little Dreamer
__
Okay, perhaps I’m out of line here, but as a barely educated college drop out with an IQ in the low to mid 120’s, I could see that there was trouble brewing – how come the people in the business couldn’t see it? This line is utter bullshit! They knew and they just don’t want anyone else to know they knew.
I was reading reports of speculating that was creating an overinflated market back in late 2004. WTF?
Osprey
You answered your own question. It’s all for show.
@ruemara:
I’d be doing a lot worse. If this was China, these guys would’ve been executed by now, if not sooner.
The Moar You Know
The solution is contained in your question. Start the executin’ and you’d see these hearings get deadly serious. Might even get some honest answers for once.
Linda Featheringill
The very rich are different from you and me . . . . .
catclub
@PeakVT: #18
When I bear the responsibility for a car accident I pay for the repairs. Or go to jail for dangerous driving.
Deeply regretting is essentially the opposite of bearing responsibility.
Little Dreamer
@catclub:
__
Absolutely!
beltane
The main problem is that when Americans do go out and grab their pitchforks, it is only so they can go after other Americans who are poorer than themselves. Upper caste Americans are safe no matter what they do; the government either cannot or will not go after them, and the media is quite happy to deflect popular rage onto topics such as Tiger Woods’ sex life.
I recommend reading Marc Bloch’s classic work Feudal Society, it provides a very detailed analysis of how easy it was to push a class of free peasantry into serfdom over the span of a few generations.
Perhaps our grandchildren will be expected to bow to these people in the streets. Noble blood and all of that.
Face
The higher-ups were too busy counting their money to notice the housing bubble, the CDS mess, and demise of The Chappelle Show.
Mnemosyne
@Short Bus Bully:
Well, they still make money in that kind of market. They just don’t make the obscene, gambling-fueled amounts that they can make in a boom-and-bust market. And nobody in finance wants to only make 5% a year every year when they could either make 25% in a single year or flame out spectacularly with no middle ground. That would be boooring.
BR
@beltane:
It’s similar to what Derek Jensen says about violence in our society:
We’ve had two great examples this week: the Wikileaks video and the NOLA post-Katrina shootings.
Maybe the same thing is true when it comes to money. Steal from a bank or someone rich and it’s a big deal…if you’re poor. The other way around, not so much.
Liz
Hate. Sic the tea partiers on these people.
Frank Chow
The point is to spend taxpayers time and money wisely…
EconWatcher
I’m mostly a fan of Krugman. But one thing bothers me: While he correctly called the housing bubble, he was also calling for keeping interest rates low, which obviously contributed (with other factors) to the disaster. Now, when he’s diagnosing the disaster, he downplays the role of artificially low interest rates. Is that really his disinterested opinion?
Still, he was of course more right than most, earlier than most.
Scott
In a way, it’s encouraging that they at least realize that people are pissed at them.
It wasn’t that long ago that their only reaction to getting quizzed about the economic collapse was “I don’t care, stop talking to me, and give me my fucking bonus.”
Bob K
OT – When I first saw this picture I thought, “Dick’s really let himself go since leaving office.” Then I read further and realized that the “Fairly Unbalanced” tag line for Faux Nooz is right on the money. Wanna bet he had Rush, Glenn’s, Sean’s, Coulter’s etc. AND Atlas Shrugged on his bookshelf? Thankfully though he planted 36 devices not one went off.
http://tpmmuckraker.talkingpointsmemo.com/2010/04/prosecutor_east_tx_man_distributed_pipe_bombs_beca.php?ref=fpblg
tc125231
@BR: That is not correct.
In fact, listening to Krugman caused me to make moves that caused me to sell my house at what turned out to be the best price (despite real estate agent counsel to the contrary) before the second, more serious price drop, and reduced my losses on my 401K by approximately 40%.
Get your facts straight. For what it’s worth, Krugman’s blog has recently published links to his articles on the subject before the financial collapse.
beltane
@Liz: Sic the tea partiers on them? Ha. It is the crowd with deep pockets who are funding the tea partiers. Their purpose is to keep us in line, not scare the bankers.
BR
@tc125231:
No denying that he did. Maybe what I should have said is that he wasn’t as dire as many others (when being dire about it was probably appropriate). Of course a lot of those other guys are perma-bears, so who knows if they just got lucky.
Little Dreamer
@BR:
Premise five is fucking scary:
__
So what this is basically stating is that we still live in that “3/5’s of a person” society for those who are not white male landowners or their preferred social gal pals, and the more land/assets you own, the more your life is worth? The bill of rights was a farce?
scav
@beltane: well, they may be feeding in part or total the mad dog, but that doesn’t mean it always sits when they tell it to.
BR
@Little Dreamer:
(Coal mining, among other things, just came to mind.)
Derek Jensen is one of those guys that is usually called a “radical” or an “activist” maybe to dismiss him as a nut, but when I watched some of his talks, not only were they entertaining (and very non-linear), but he was basically right about things that we as a society don’t really want to admit he’s right about.
His talk on these topics was awesome (a lot of it is about environmental issues, but also society in general):
http://video.google.com/videoplay?docid=8649250863235826256
beltane
@scav: Only when the multi-millionaire Glenn Beck declares a jihad against other multi-millionaires will I even begin to contemplate that the teabaggers could serve any remotely useful purpose.
Edwin
From the bankers, to the Pope, to corrupt senators, no one leaves office these days just because they were caught doing something illegal. They have to be forced out, and there’s no one to do the forcing.
Liz
@beltane:
Yeah. I know. It’s just this is what the tp’ers are supposed to be pissed at. argh.
Comrade Dread
I suspect you know.
It’s to let Congressional weasels look tough and score politcal points by making it look like they’re doing something to punish the people who caused their constituents misery.
It’s to let the CEOs do their non-apologies and image control.
It’s mainly to try and defuse any true populist anger and revolt and maintain the status quo. Otherwise they might all end up against a wall facing a populist firing squad.
No, but if you call and let them know you might have problems making your payments, they’d probably be happy to help you by accelerating foreclosure procedures so you won’t have to worry about making that payment the following month. Or you know, canceling any other credit lines you might have with them even if all of your accounts are in good standing and you haven’t missed a payment in 10 years.
Assholes.
jl
Getting video eye-bites for ads for the midterms? That is the point, perhaps?
Zifnab
@Short Bus Bully:
Yup. This.
I’ve never seen a business thrive on a wildly fluctuating balance sheet. I’ve never seen a household sit well when the homeowner didn’t know the value of the next paycheck.
It’s an old saying that markets crave stability – stocks generally go up when you can predict the future accurately and reduce risk. Ironic that the marketeers want absolutely none of it. When you’re Goldman Sachs, massive volatility is where all the money is at.
Mnemosyne
@Little Dreamer:
Pretty much, yeah. We got into a daylong discussion about the Civil War over at Pandagon and a lot of us started drawing the parallels between the Southern-style low-wage/non-union/”right to work” economy and the way the Republicans have been taken over by the Southerners. Just because legal slavery ended doesn’t mean that the Southern economy successfully transitioned to being wage-based.
Republicans have been pushing that economic style since at least Reagan’s time: deregulation, union-busting, keeping wages low, ignoring workplace safety, making it easy for employers to fire people on a whim, not enforcing civil rights laws.
Zifnab
@Comrade Dread: One more reason why the smartest underwater home owners were the ones that just picked up and walked away.
Fuck the credit market before it can fuck you.
D-Chance.
WTF is the point?
Well… this.
Anton Sirius
It’s a post-hippy animated classic featuring the music of Harry Nilsson. But that’s not important right now.
J.A.F. Rusty Shackleford
Frank O’Hara lived in the city. Citibank’s executives were forced to make bad loans to minorities by Barney Frank. Like the sex abuse crisis with the Catholic Church, the financial crisis on Wall Street was caused by homosexuals. Citibank is setting in place a mechanism that will prevent future crises by only allowing men who actively participate in procreation to make housing loans. This is a smart policy.
So, what happens now is this: Citibank stops lending to non-straight-white-males > the economy booms under the command of these titans of society > Americans realize that all problems are rooted in Barney Frank > America returns to it’s glory days, embodied by the South, circa 1850’s.
What we’ll have is a country rising from the flames like a Phoenix. Phoenix is a city in Arizona. The man who was usurped for the Presidency by a foreign-born agent is Arizonan and the woman who was his running mate will be the next President of the United States. Alice was also a person from Phoenix and she worked with Flo and Vera at Mel’s Diner. Mel Sharples was a Citizen who actively participated in the economy and only those like him should be allowed to elect representatives.
Vera, by the way, was a lesbian.
bayville
Well, a good thing Rubin has been discredited and ostracized, eh?
Splitting Image
@Short Bus Bully:
Bullseye. This is a very accurate summation of the problem.
Conservatism used to be about stodgy old men making money the slow, boring, “old-fashioned” way. Not any more.
TuiMel
What is the point? I have to comfort myself that “the point” is the public record. The team that “saved the world” or whatever the cover of Time trumpeted, has lost luster in the public mind, IMO. Greenspan’s confessions last fall has tarnished his brand. I think Rubin’s brand is damaged. This is not satisfying to me, but I think it serves to change reputations (albeit slowly and after damage is done) and is around for historians or for future confirmation hearings, if any.
I also think it can serve to sow skepticism toward certain conventional wisdom / ideology. If only our public memory were longer…
jl
rusty @50:
Nice work. Has the ‘full steam ahead drive’ of a locomotive crossed with a pile driver. Has a relentless flow leaving the strong impression of some kind of logic, interrupted at appropriate intevals for a quick glance into complete insanity. You are an artist. Keep up the good work.
eemom
strongly disagree that we shouldn’t bother with hearings like these. At the very least the shit is being aired publicly for anyone who is paying attention. That is not my preferred solution but it’s better than nothing. In a sane world it might even produce results.
scav
@beltane: wasn’t saying they were useful, just saying nobody may be in charge.
PurpleGirl
@Liz: Nope. The teapartiers wanted to be bankers or at least be like them. The may hate the government bail out (or claim to) but they love them some corporations and CEOs.
Little Dreamer
@Mnemosyne:
__
Well, I see your point, but, I’m not willing to admit that it’s etched in stone. I just can’t go there. I still have some semblance of hope that good prevails in the end.
I have an interesting history as the child of a millionaire who grew up hating every moneyed interest my parents chased and hunted down for their own private ownership. I became someone who makes little and uses little. I realized that greed was evil from the time I was too young to count my age on two hands. I once started to write a book about my life (just for self discovery purposes) and I described the money that my parents had as the only child they actually nurtured. The rest of us (and especially me as the youngest, most inconvenient, probably accidentally conceived child) they ignored pretty much.
I can’t accept that evil wins in the end, I just can’t concede defeat.
Malaclypse
@BR:
Tanta, were she still alive. That would have been a thing of beauty.
More seriously, CR, Krugman, Yves Smith, just off the top of my head.
eemom
now when people try to find a shred of coherence, much less consistency, in the teaparty “mission” — THAT is one for the WTF Is The Point books.
It actually amazes me that anyone engages in such exercise. These people are ignorant dupes, plain and simple. Their guiding principles are nothing more than fear, fury and hatred. They’re sheep mindlessly bleating whatever is taught to them by their slaughterers.
Little Dreamer
@PurpleGirl:
They secretly fantasize that someday the owners of those corporations are going to realize how deserving they are and start handing them some of that shiny gold (trickle down is a mental illness, I think) and give the poor uneducated redneck the opportunity to stick it to someone further down the line (that is what this all is, isn’t it? Everyone* wants to be a winner who can shit on the those beneath them one day?)
*Everyone – not exactly everyone, but a good portion of society who have no empathy for those who have less advantages.
Little Dreamer
@eemom:
__
Don’t forget greed, they hate social programs because it gives money to people they believe aren’t deserving.
Svensker
@J.A.F. Rusty Shackleford:
Wow.
Or should I be worried that I was able to follow it…?
Little Dreamer
@Zifnab:
I’m amazed that on my paper route, an area roughly one mile square, I can count at least 4 or 5 homes that are sitting empty with weeds growing almost two feet high. The number of “for sale” and rental signs I see regularly (and hardly any movement on those properties) is quite extensive.
Robert Waldmann
One big step towards the catastrophe was the commodity futures modernization act largley written by Phil Gramm (negative) and signed into law by Bill Clinton in 2000. Unlike his successor Larry Summers*, Rubin opposed that bill.
One of his first acts when arriving in Washington was to ask [my anonymous source] to look into the feasibility of a Tobin tax (as in the favorite policy of the no-global left).
He is a banker. Friedrich Engels was a capitalist. He isn’t Friedrich Engels but he isn’t Phil Gramm either.
* I should note that Larry Summers was my PhD supervisor. One of the many many ways in which Bill Clinton and I are different is that Summers always gave me excellent advice.
MTiffany
I think the point is that the only justice left is that dispensed by an angry mob. Heads on pikes. Excuse me, bankster heads on pikes. But that’s so unlikely, no one is predicting that. (Although I for one am not ashamed to say that I’d shed no tears for those people if that were to happen. But I am at least ashamed to admit that I probably would giggle. A lot.)
scav
@Malaclypse: Tanta in front of congress. Makes one long for an afterlife with direct dial.
mapaghimagsik
@Little Dreamer:
I think that’s why “Who are you better than” was such an interesting read.
Pangloss
But… but… but…. uh…. government can’t do anything right…. er… so…. so…. we should have let Enron bail out these companies!
Did I get that right?
ThatLeftTurnInABQ
@BR:
In addition to the names floated above, I’d nominate William Buiter, who coined the memorable phrase “cognitive regulatory capture”. And no list of pre-crisis cassandras would be complete without Raghuram G. Rajan who was the IMF chief economist when he let everybody have a glimpse into the abyss at the 2005 Jackson Hole conference (pdf of his paper here). Guest blogger Richard Alford over at Yves Smith’s place penned an appropriately titled post on this subject: Was it “Nobody Saw It Coming” or “Everybody Who Saw It Coming Was a Nobody”?
J.A.F. Rusty Shackleford
@jl:
@Svensker:
What can I say? I was inspired.
Malaclypse
@scav: She could kick the congresscritters in the junk with steel-toed bunny slippers.
Anne Laurie
The point? It’s the long-form version of the old joke about a carful of drunks who tell the state trooper “Nobody wuz drivin’, Ossiffer… we wuz all inna back, singing!”
Chuck Butcher
People warning of the dangers of the over heated market weren’t just the few smart pros. Someone who comments here, Ron Beasley, ran Middle Earth Journal and was well ahead of the curve. But then, he wasn’t a professor or banker or anything other than a photographer and engineer who paid attention. Nowadays Ron is at Newshoggers.
Mnemosyne
@Little Dreamer:
Oh, I still have hope of that. I’m just pointing out that I think a cultural meme has spread that people don’t quite realize the origins of. I’m a firm believer that if you understand why something is happening, it’s easier to change people’s minds. Once you understand that it’s an artifact of a very specific culture, you can (hopefully) make some headway in changing the culture.
Which makes me one of those annoying “but if they just understood things they would see it my way” liberals but, hey, I am what I am.
muddy
There was an episode of Frontline a couple of months ago about this, and they knew about the problem back in the Clinton administration. It was all Greenspan and Rubin and Larry Summers (he just has an evil face) and they drowned out the call to regulate this bullshit. No, no don’t play straight! We are making money! Shhh…
Now I’m having a brain cramp and can’t remember the name of the heroicwoman in charge of that agency that wanted to regulate this stuff, who I damn well out to remember because she was the only straight one in the bunch.
Not in 2005, in the 90’s, for the gods’ sake. More people need to watch Frontline and I need a better memory for names.
Waynski
I think Eddie Murphy said it best in Trading Places, “seems the best way to get back at rich people is to turn them into poor people. You didn’t like it much Louis.”
We should strip them of every single thing they own and force them to work 16 hours a day for minimum wage picking tomatoes in 100 degree heat. And we should start with Dick Fucking Fuld from Lehman.
Dave Paulson
WTF indeed! It’s just a minor sideshow for the satirical tragedy that is the United States Congress. They’re all in the pockets of the big-money lobbies, and nothing’s going to change until the people take back control.
Madeline
@muddy: Brooksley Born. Not 100% I’ve spelled it correctly.
ExtremismInTheDefenseOfLiberty
What strikes me about this description, which I take to be very accurate, is that it applies to a lot of what goes on in congress, it’s not just about what goes on around the financial issues. I am one of those who has come to believe that congress is just broken as an institution, which is pretty damning, considering that congress has never exactly had a reputation for respectability.
My impression right now is that congress has successfully increased its access to the piggy banks, increased the opportunities for corruption, while at the same time aiding and abetting the shift to a more powerful executive that can be blamed for just about everything, thereby taking attention away from their malfeasances and making the president a fall guy for the dysfunctions of congress. It’s a great scam, and these guys are masters at it.
I am not quite ready to join the Tea Party, but I am more and more in favor of sweeping congressional reforms, starting with the elimination of the filibuster as we know it. As far as I am concerned, the filibuster is now just another tool for legislators to abuse the process, while hiding behind a self righteous “Mr. Smith Goes to Washington” veil of do-goodiness.
Congress should reclaim its true power, change its rules to be able to weild that power effectively, and clean up its act, and I will vote for any candidate to congressional office who runs on a platform of genuine reform, REP or DEM. Or Green, or Purple, or IND, or whatever. As long as the candidate is not just a nutcase in sheep’s clothing. Which he probably will be.
Aw, fuck.
DougL (frmrly: Conservatively Liberal)
I was lucky enough to have a great teacher for my American Government class in high school who explained this process clearly and concisely. What’s “the point”?
Because it makes the public feel like their reps are trying to do something to solve the problem.
Our teacher explained this with the following example:
Let’s say planes are crashing and the public is becoming alarmed that it isn’t safe to fly any more. They demand action and the action our reps respond with is to convene hearings on the matter. The public may want immediate action but they can be made to understand that acting precipitously could create more problems and not impact the problem. The reps take some initial actions to defuse public anger, say grounding certain planes in this case, and then they let the hearings drag out forever which also allows the public to cool off (which the large majority will after enough time passes and there is the general perception that something is being done in Washington D.C.).
When the hearings produce their report a year or two later, people have moved on and it is largely ignored. The report could say anything (or nothing) and it would still be heralded by the reps as “We fixed the problem!”.
Problem solved.
muddy
@Madeline:
Thank you Madeline, for the prompt. I was sitting here thinking the 2 names started with the same letter, and weren’t they D, no they were F… it’s hard to be old.
Everybody should see that episode, it was really good. It did creep me out to see that Larry Summers had just as evil a face way back then. Usually people are better able to conceal their nastiness until a later age when their face sticks that way.
I’ve written her name on a piece of paper here so I can memorize it, she sure should have gotten some big award for crying, “Fire” even though no one listened.
BruceFromOhio
What this tells me is, most importantly, it took the Prince family three fucking tries to get it right.
Why these sorry capitalists aren’t in chains in cells is a testament to the strength of free-market economics.
Church Lady
What’s the point? Congressional assholes get to preen and feign outrage while the C-SPAN camerals roll to preserve the moments that the public doesn’t watch. You have a problem with that???
Silver Owl
They all get paid the big bucks and get perks erupting out of all of their orifices to be dumber than a sack of broken hammers.
Explain to me why these people expect and even demand respect for their ill earned titles and do a piss poor job? The one thing they were suppose to do, understand people in their roles as investors, customers and employees and they could NOT do it.
brantl
The thing that bothers me the most about this is that nobody laughs right in the face of the people that are running around saying, “Who could have predicted this?”. Really? REALLY?
They built a ponzi scheme of serpentine debt insurance (CDOs backing CDOs), and set up mortgage styles that only inflated housing prices unnaturally, and forwarded policies that depressed wages NATIONWIDE. What could possibly go wrong with that?
They need somebody laughing in their faces, saying, “You’re not to f*cking bright, are you?”, and it needs to happen daily. These assholes set up something that is on the order of the TItanic deliberately sailing directly at the iceberg, and no one calls them out on it. What ridiculous bullshit.