Think you’ve got freedom of speech? Think you have the right to give an objective economic assessment of the economy or the credit worthiness of the U.S. Government to your clients? Think again! Don’t mess with Obama or disagree with his propaganda machine! And that machine says the economy is doing just fine, thank you, and if you disagree, the power of the President and the U.S. Government (through the DOJ) will be brought to bear on your ass!
The DOJ is expected to bring a “civil” suit against Standard and Poor’s because they have assigned “ratings” that aren’t always the best to government securities (like sub-prime mortgages and bonds, etc.).
The first question you might ask is why a civil suit and not criminal. That’s easy, because they (the DOJ) know they can’t meet the burden of proof a criminal case would require. Losing the case would be embarrassing; and kind-of prove S&Ps point.
No, better to go with a civil case where the burden of proof is much lower. Settle if you have to and declare that to be an admission of guilt. This is really only meant to send a message to S&P and the other agencies. Don’t #$@# with Obama!
This shit (what Obama and the DOJ is doing) is at best criminal, and really fascist. And by these terms, I mean heavy handed jack booted bullying and intimidation by the Federal Government.
On the criminal side it’s equivalent to organized crime telling a newspaper, “It would be a shame for yous newspaper to get all shot up, or burned down; or for yous editors or reporters to gets broken legs and all… I’m just sayin’ maybe yous shouldn’t reports alls the truth is all.”
On the fascist side, it’s like the government intimidating and shutting down opposition newspapers. It’s kind of what tyrants do to silence the opposition and accumulate power.
And what are the lapdogs in the Main Stream Media going to say? Here’s Reuters assessment. “The lawsuit itself may prove less significant than the message it sends. Filing a high-profile lawsuit against S&P tells the rating industry at large that the government is serious about holding rating agencies responsible, and that they must be much more careful.” — Jeffrey Manns, a law professor at George Washington University in Washington, D.C.
No Jeffrey (and by extent Reuters), the message isn’t about responsibility at all. It’s about NOT doing the responsible thing because that is not the message handed to Obama’s spoon fed propaganda machine (the MSM) which must not be questioned. You go against that message and we’ll hurt you! ^%$&er!
It’s amazing how much individual perspective plays into interpretation of events like this. What you see as intimidation by a tyrannical elite, I see as a (not vigorous enough) shove back against the intimidation of a fraudulent oligarchy. But that makes sense… You view the government as evil, and I view big finance as evil. The interesting question is, who should we be rooting for if we are *both* right?
>> It’s amazing how much individual perspective plays into interpretation of events like this.
Agreed…
>> What you see as intimidation by a tyrannical elite, I see as a (not vigorous enough) shove back against the intimidation of a fraudulent oligarchy.
Agreed…
>> But that makes sense… You view the government as evil, and I view big finance as evil.
Yes. I consider government to be a “necessary evil” as our founding fathers did. And I consider BIG government a tyrannical evil as our founding fathers did.
How Did We Form These Perspectives?
I can of course only speak from my own experience; and I’ve had what I would consider extensive experience in dealing with both.
I worked for big corporations for 20 years and while their motives weren’t pure, I never saw them (or at least all or even a majority of them) as evil or even corrupt. As a matter of fact most bent over backwards to be sure they followed the law, and professional ethics.
Exception 01: Enron. I worked for Enron for 10 years and knew Key Lay was a crook within about the first 6 months (which was more than a decade before the collapse). But even in that case it was a very small part of the company headed by Ken Lay. They were trying to build wealth by pushing paper (mostly having to do with the carbon credit mess). A large percentage of the company (the pipelines division that I worked for) were very honest, law abiding, and provided a great and essential service at a fair price. Those people bent over backwards to obey the law despite the ineptitude of the FERC they (we) faced on a daily basis.
It’s kind of funny, that what Ken Lay was trying to do back then is What Jeffery Immelt (of GE and Obama’s big buddy) has successfully done in the last few years. Jeffery Immelt is just Key Lay with better timing and better bought politicians.
Exception 02: Merrill Lynch. I’ll say this for the Enron guys, at least they got their hands dirty enough to get indicted. My experience with ML was the higher ups would find a vulnerable employee (or contractor) and put pressure on them to bend the rule or break the law. That way if it worked they got the benefit and if it didn’t they had a scapegoat. The pressure was never explicit or traceable; but it was always clear “Do this or lose your job. We’ll find/invent an excuse.” I was in a position to tell them to go to hell… but I thought about all those guys in the same boat with mortgages and families to support… A horrible thought.
Still they were the exception to the rule of the honest people (even in management) I dealt with in Corporate America.
Now, on the other hand my opinion of big government as evil comes from a lot of personal experience with government over most of my life. And I have rarely dealt with any aspect of it that wasn’t incompetent, bureaucratic, and/or corrupt.
And I have to admit my opinion was formed early and often. You spend your childhood and teen years watching your parents (and later siblings) have to fend off assault after assault from government bureaucrats and you’ll take it personally and develop a hatred for them, and their system. These thugs mostly came from the EPA (Environmental Protection Agency) and the Texas state equivalent agency, and the Texas Workforce Commission. These guys were little more than shake down artist.
After college, when I worked in the Energy industry, I discovered things were the same (though on a much bigger scale) in the business world. Government bureaucrats justifying their jobs and doing their best to thwart those that produced. I have seen few agencies more inept that the FERC (Federal Energy Regulatory Commission). And later my exposer to the SEC (Security and Exchange Commission), the (Army Core of Engineers), and again the EPA just reinforced everything I already knew.
Thus my opinion is formed by what I would call the 90/10 rule. My experience with big business has been 90/10 positive and my experience with government has been 90/10 negative.
Out of curiosity (and if you have the inclination), how did you form your perspective against big finance (or is it business in general)?
>> The interesting question is, who should we be rooting for if we are *both* right?
Then it won’t matter; we’ll just reach hell in a hand basket a few minutes earlier than expected.
This is indeed an interesting case. The collusion between business and government is so normal that when we see this sort of thing happening, we take notice.
The real weight of this suit, as I understand it, is that if S&P admits wrongdoing, private investors could sue it into bankruptcy.
From what I’ve read (and I’ve actually read a lot about the whole 2008 collapse), there were several big players, including S&P, who did selfish, stupid things that almost ruined our economy. From a moral standpoint, they (and others) deserve punishment for lying about the status of various investments. From a legal standpoint, it’s murky.
The First Amendment argument, however, is false. It should not protect a ratings firm if it defrauded investors by ignoring its own standards. That’s lying to make a profit, not giving an opinion to express yourself. So I think your suggestion that the gov’t lawsuit is “fascist” is off the mark. It’s more accurate to say that what S&P (and other Wall Street players) did was, at best, shifty, at worst, sociopathic and damaging to the nation, and the only force we have that can threaten them is the gov’t.
From what I’ve read over the last couple of years, it seems likely that S&P misled investors by claiming its rating process was independent and objective, when it was in the back pocket of the investment banks it was supposed to be honestly evaluating.
All that said, I actually agree with Lynn that is a bold revenge move. What I disagree with is that it’s 100% evil. If it can be proved in court that S&P colluded with investment banks to defraud investors, they should be punished to the fullest extent of the law.
Does it matter if that’s a civil case, and not criminal? I don’t think so, from a moral standpoint. We got Capone through tax evasion, not murder, bribery, and drug dealing. He deserved to be in jail, and that was the easiest way to put him there. If S&P indeed did what the DoJ claims, they deserve to be dismantled, and have a better company take its place.
>> This is indeed an interesting case. The collusion between business and government is so normal that when we see this sort of thing happening, we take notice.
You say that; and while I think there is some (a small amount) of that, I don’t think it’s the rule.
For my whole 20+ years of work experience (from the son of a farmer to a programmer for large Energy and Financial companies) I have always seen an adversarial relationship. And that has been business trying to get things done or produce a product/service and government putting up barriers with the intent of either justifying their existence or seeking some kind of payoff before allowing things to progress.
So the only collusion I see is what I read about, like General Motors, Solyndra types and General Electric and from your perspective Halliburton; but again these are exceptions.
I forget who you work for (and you don’t need to name names) but is there a lot of collusion there?
>> The real weight of this suit, as I understand it, is that if S&P admits wrongdoing, private investors could sue it into bankruptcy.
I’ve heard the same thing.
>> From what I’ve read (and I’ve actually read a lot about the whole 2008 collapse), there were several big players, including S&P, who did selfish, stupid things that almost ruined our economy. From a moral standpoint, they (and others) deserve punishment for lying about the status of various investments. From a legal standpoint, it’s murky.
I’ve read a lot about it to and it comes down to they (S&P) missed the housing bubble… just like 95% of the rest of the big heads in Washington and New York said everything was OK until it collapsed. But being naive and wrong along with everybody else isn’t lying or criminal.
This whole “great recession” was caused by lending lots of money to lots of people who were not credit worthy. This was mainly caused by government (Dems and GOP) wanting to increase the number of people who owned their own homes. So they made money to do that available very, very, cheap AND guaranteed those loans. The banks are complicit in that they said; hey if you’re going to guarantee those loans we’ll make them and they created some shady (variable rate) loans by which to increase their profits. The whole thing worked until those who weren’t credit worthy discovered they couldn’t sell their house for more or even what they had paid for it. Then when it collapsed, the government bailed out the guys who didn’t see that coming.
From the beginning, had the government simply allowed market forces to work; everything would have been fine. People who shouldn’t be borrowing 100s of thousands of dollars wouldn’t have got the money causing the whole snowball effect. And even after the collapse, the idiots who had invested in those risky loans should have gone bankrupt instead of us bailing them out.
>> The First Amendment argument, however, is false. It should not protect a ratings firm if it defrauded investors by ignoring its own standards.
Where the First Amendment comes in is in that S&P is really being punished for what they are saying today. “Spending and printing money won’t work so we’re going to downgrade your credit rating.” The government (Obama and DOJ) just went back and found something else they could punish them with. It just happened to be that they were wrong about the housing bubble… it could have been anything.
But I don’t think being wrong about a economic issue is a crime; especially when the politicians pushing the punishment not only didn’t see it coming either but are mostly responsible for it.
>> That’s lying to make a profit, not giving an opinion to express yourself.
And if they did that; they committed fraud (a criminal offense) and should be prosecuted for it. And if the government thought they could prove that, they would. But that’s not what is happening.
>> So I think your suggestion that the gov’t lawsuit is “fascist” is off the mark.
I don’t know if fascist is the right word; though tyrannical is. This is no different than the dictators threatening those who are not doing their bidding. And it’s just one step away from what dictators do next.
That is really what this is all about.
>> It’s more accurate to say that what S&P (and other Wall Street players) did was, at best, shifty, at worst, sociopathic and damaging to the nation, and the only force we have that can threaten them is the gov’t.
Then prosecute the guilty for the crime they committed.
>> From what I’ve read over the last couple of years, it seems likely that S&P misled investors by claiming its rating process was independent and objective, when it was in the back pocket of the investment banks it was supposed to be honestly evaluating.
Again, that should be proven in a court of law. Let those who have been wronged sue for the right reason.
>> All that said, I actually agree with Lynn that is a bold revenge move.
Thank you. But that is a really, really, bad thing. You’re OK with it now because your guy is in power and he is after someone you don’t like. Tomorrow (though you seem to think the opposition is dead for good), if could be you they go after for revenge; ignoring the rule of law just like they are now.
>> What I disagree with is that it’s 100% evil. If it can be proved in court that S&P colluded with investment banks to defraud investors, they should be punished to the fullest extent of the law.
If agree 100%. If they committed a crime they should be prosecuted. If the crime can be proven in a court of law they should be found guilty. If they are found guilty, they should be punished to the full extent of the law. Look at how much we agree on!
None of these things are happening. None of these things will happen. Because the only purpose of what is happening is to shut S&P up today and right now about today’s problems that Obama doesn’t like. That’s it. So this justice you seem to think the DOJ is seeking and will achieve was never in the plan.
So here is my prediction, and we’ll see if I’m right. The government will settle because that was their plan all along. For now they will milk it for publicity for a few months, and then offer a settlement they know will be accepted (because it will be cheaper). They will then use settlement as propaganda proof of S&Ps guilt and a victory for the people. In the meantime they will have successfully shut up and bullied S&P concerning the folly of the government’s current policies and will have successfully bullied others into silence who may have exposed the truth.
The two real tragedies in all this are:
1) When you don’t stand up to the bully, it just encourages the bully to continue his abuse against you and others. So we’ve got a lot more of this to come over the next four years (and maybe beyond).
2) The other check that should prevent this is a free press. Because the press agrees with the government concerning the nature of business the government gets a free pass to continue this abuse of power.
>> Does it matter if that’s a civil case, and not criminal? I don’t think so, from a moral standpoint.
It matters from a moral standpoint AND a results standpoint. This is one of the few cases wher the initial intentions of the left (the DOJ) will actually affect the results.
>> We got Capone through tax evasion, not murder, bribery, and drug dealing. He deserved to be in jail, and that was the easiest way to put him there.
Capone was ALSO guilty of tax evasion and the government could prove it. That is not the case here. I’m not saying that S&P is innocent but guilt dam sure can’t be proven (or it would have already have happened).
>> If S&P indeed did what the DoJ claims, they deserve to be dismantled, and have a better company take its place.
Yes, but we should follow the rule of law; and the DOJ has no interest in doing that.
>So the only collusion I see is what I read about, like General Motors, Solyndra types and General Electric and from your perspective Halliburton; but again these are exceptions.
The collusion is hidden in plain sight, and please, stop assuming my perspective. You just see the liberal part. I’m not a cartoon character.
We have legislation that is written by lobbyists who are paid by corporations who want to shape the legislation that regulates their industries. Corporate leaders are chosen to become senators and gov’t officials, who run the oversight of their former industries, and later become lobbyists when they leave office.
We’re a corrupt nation. Not as bad as China, but it’s not representative government. The collusion is at the big and powerful level — not small business, not farmers, not store owners. Those are the suckers paying the bills while getting very little influence (except when sucked up to, symbolically, at election time).
>I forget who you work for (and you don’t need to name names) but is there a lot of collusion there?
All of Japan is run by maybe six mega-corporations, a la Blade Runner. The government is just kabuki theater, with new actors every few years.
We’re heading that way.
Think about the choices we had in 2012. Really think. Are we a free people? Can we really elect whomever we want? Hypothetically, sure. Theoretically, surely not. When certain industries donate millions to both candidates, that’s not free speech. That’s palm greasing and drowning out the little guy’s voice with a megaphone.
>But being naive and wrong along with everybody else isn’t lying or criminal.
If that’s all they were, then they’ll be fine. What I suspect, and what the DoJ will try to prove, is that they were in collusion with investment bankers. And that is lying and criminal. We’ll see how it shakes out.
>But that is a really, really, bad thing. You’re OK with it now because your guy is in power and he is after someone you don’t like.
No. I don’t consider Obama my guy (or my enemy or my anything). I’m really not that attached to government, in my personal and world view. You have a much stronger attachment to it than I do. My people are my friends, my employer, my dentist.
>Tomorrow (though you seem to think the opposition is dead for good), if could be you they go after for revenge; ignoring the rule of law just like they are now.
I don’t think the opposition is dead — I think it’s current leadership is dead. They’ll be replaced. Bye bye Rove and Palin. Hello Jindal and Rubio.
Back to the topic. The DoJ is not ignoring the rule of law. They’re following it. We’ll see how it shakes out.
>Where the First Amendment comes in is in that S&P is really being punished for what they are saying today.
I was talking about how the S&P defended themselves from previous lawsuit attempts, by various states. They claimed First Amendment protection for evaluations of investments, which is ludicrous.
>I’m not saying that S&P is innocent but guilt dam sure can’t be proven (or it would have already have happened).
You keep saying that like it’s a fact, when it’s clearly an opinion. I respect your opinions, but I need facts before I’m convinced. We just don’t know enough yet to say. Federal lawsuits don’t happen quickly or (usually) frivolously.
My general impression is that the DoJ has been a weak law enforcement body for the last decade, as has the FAA, FDA, and other departments that are really important. I fear us slipping into a corporate oligarchy as much as you fear us slipping into socialism. I really don’t want either, but it may be inevitable — or we’re already there, and I’m just not seeing it yet. Entirely possible.
>> You just see the liberal part.
It defines who you are at your core.
>> All of Japan is run by maybe six mega-corporations…
I meant do they collude here in the U.S.?
>> Are we a free people?
We’re not, but in my opinion it has very little to do with industry or it’s collusion with government. That (and again I don’t think it’s as extensive as you do) is a symptom of THE problem which is a government that is out of control.
>> And that is lying and criminal.
You keep debating this point in “criminal” terms when criminal prosecution isn’t even on the table.
>> What I suspect, and what the DoJ will try to prove, is that they were in collusion with investment bankers. And that is lying and criminal. We’ll see how it shakes out.
There’s that word “criminal” again; but no criminal charges and case is forthcoming.
We’ll see. If you’re right, there will be a DOJ trial. If I’m right there won’t.
>> No. I don’t consider Obama my guy
You voted for him… you own him.
Who isn’t your guy is S&P and you’re OK with bending the rules (I was ignoring the rule of law) to get them. My point is next time… conservatives will be bending the rules to go after a group you support and you won’t be so understanding. Call it karma or reaping what you sew.
>> You have a much stronger attachment to it than I do…
LOL… I’m on the verge of ditching “my” entire party as a bunch of *&^%less idiots. I believe that all they do is slow down are steady dash to hell… and have a much stronger attachment? Any less of an attachment and I’d be marching on the Republican Headquarters with a torch and pitchfork.
>> Bye bye Rove
It’s funny that you can’t stand Rove, but his PAC just launched an initiative to do exactly what you want the Republicans to do. Shift left on social issues.
>> Hello Jindal and Rubio.
Just as funny, because both of these guys have had extensive Tea Party support; that you can’t stand.
>> They claimed First Amendment protection for evaluations of investments, which is ludicrous.
So they don’t have a First Amendment right to analyze and evaluate investments? Do they have the right to do movie reviews?
I think you mean to say they don’t have the right to mislead or in other words commit fraud… a criminal action… that I say should be handled criminally.
>> My general impression is that the DoJ has been a weak law enforcement body for the last decade…
Yeah… they dam sure ignore voter fraud, and black thugs intimidating voters outside the polls. But that has more to do with Eric Holder being a racist.
All these government agencies should simply enforce the laws… not use the courts (especially civil) to bully and intimidate.
>> I fear us slipping into a corporate oligarchy…
If you had battled government agencies like I have for the past 20+ years, I doubt you would have such a fear. They are not friend to business; unless that business is corrupt.
Socialism? We’re not there yet, but the steady march continues.
>LOL… I’m on the verge of ditching “my” entire party as a bunch of *&^%less idiots. I believe that all they do is slow down are steady dash to hell… and have a much stronger attachment? Any less of an attachment and I’d be marching on the Republican Headquarters with a torch and pitchfork.
Just realized a misunderstanding here.
I didn’t mean you’re attached to the GOP. I meant you’re attached to politics. It’s at the core of your thoughts and identity. I’m not saying it’s *everything*, but it’s a bigger % of your mindshare than it is of mine.
I’m also not saying that’s a bad thing. Your writing has made me think about politics, which I didn’t think of so much before. I was basically a Republican for 20 years because Dad was, not because I thought deeply about the issues. Our back and forth has helped me realize I’m definitely a social liberal, and ultimately ambivalent about the rest — I can see legitimate points to both party’s positions on economic issues, so I end up in the middle. Which you hate.
For those who may not be well-read on this case/subject…
There is a real good article on NewsMax by Todd Beamon laying out the charges, those affected, the laws being used and how, and the case that this is a case of revenge by the DOJ.
I think it does a good job of presenting the different positions; gathering quotes and positions from Eric Holder, the DOJ, Reuters, the Wall Street Journal, and others. But you’ll have to be the judge of that.
Some Charge Revenge From Downgrade as DOJ Sues S&P Over Bond Ratings
Disclaimer: NewsMax is a conservative news publication and website.
>It defines who you are at your core.
Thank you, Sorting Hat, but I prefer Slytherin to Hufflepuff.
>I meant do they collude here in the U.S.?
They’re our #1 debt holder, I believe. Maybe #2 after China. So yes, we’re all in this soup together.
>Who isn’t your guy is S&P and you’re OK with bending the rules (I was ignoring the rule of law) to get them.
Which rule has been bent?
>Any less of an attachment and I’d be marching on the Republican Headquarters with a torch and pitchfork.
They’re all you’ve got. Admit it. You’re like a boyfriend who won’t leave her, no matter how bad she treats you.
>It’s funny that you can’t stand Rove, but his PAC just launched an initiative…
Don’t care. The GOP needs to find younger, smarter people. If Rove really runs the rebirth, it’ll fail. It’ll only appeal to people who already vote GOP. That’s a dying demographic.
>Just as funny, because both of these guys have had extensive Tea Party support; that you can’t stand.
Again, don’t care. If the GOP swings left socially (ie, goes mainstream), that’s good enough for me. The Tea Party movement, Koch bros, and Donald Trump can claim all the glory they want. Don’t care.
>So they don’t have a First Amendment right to analyze and evaluate investments?
Not deceitfully. That’s what the emails the DoJ got imply — that they kept calling junk investments good, because they cared about blowback from investment banks more than their duty to be honest with investors who followed their advice.
>> Which rule has been bent?
The process of suing civilly because you don’t have a criminal case. It’s highly unorthodox and uses a civil statute that is rarely if ever used in this type of case.
>> They’re all you’ve got.
For now. But I may eventually decide nothing is better than what I’ve got. (see below)
>> Admit it. You’re like a boyfriend who won’t leave her, no matter how bad she treats you.
That scenario generally assumes a little nooky every now and then. I haven’t gotten any in years… so this %$#@* is about to find herself kicked to the curb; to use the modern vernacular.
>> That’s what the emails the DoJ got imply — that they kept calling junk investments good, because they cared about blowback from investment banks more than their duty to be honest with investors who followed their advice.
And yet that advice matched exactly the advice of every other investment firm (not being sued) AND the advice of the politicians who are currently behind the DOJ suing them over the advice they gave…
It’s like a lawyer suing you for bad legal advise you gave your client that you got from him. Only a jury of idiots would go for that; which (based on the sad state of our judicial system) gives the DOJ a 50/50 shot.
>The process of suing civilly because you don’t have a criminal case.
That’s always an option. It’s how what’s-his-name went after OJ when the criminal trial failed. I don’t see that as bending a rule. It’s just choosing the path that’s most likely to work.
>That scenario generally assumes a little nooky every now and then. I haven’t gotten any in years…
Oh now, come on. You’ve got Perry, Cornyn, and Cruz. Just because they repeatedly snatch defeat from the jaws of victory on presidential races doesn’t mean the GOP has failed entirely. They seem to do well at the state level.
>And yet that advice matched exactly the advice of every other investment firm (not being sued)
Sigh. I’ve been reading the WSJ. Have you?
“The government’s case relies heavily on emails and other communications that allegedly show S&P officials knew the housing market was collapsing but dragged their feet on downgrading hundreds of securities because executives worried the firm would lose business and anger clients.”
That’s the case. If true, the S&P, who is paid for evaluations of investments, defrauded investors, and they deserve punishment. Whether that’s civil or criminal or Jack Reacher beating them up, I don’t care.