Robert Johnson

Roosevelt Institute Senior Fellow and Director of the Project on Global Finance
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Recent Posts by Robert Johnson

  • BP Bashing and Obsequious Officials on Finance

    Jun 17, 2010Robert Johnson

    robert-johnsonAs I read the article below I can only wonder what forces of fundraising and deference stopped our national leaders from "taking the hide off" of Wall Street's leaders after they did a multi-trillion dollar "financial spill" onto the world economy in 2008.

    robert-johnsonAs I read the article below I can only wonder what forces of fundraising and deference stopped our national leaders from "taking the hide off" of Wall Street's leaders after they did a multi-trillion dollar "financial spill" onto the world economy in 2008. Instead, they tiptoed to this very moment to avoid strong legislative reform and looked helpless amidst a monster bonus pool sent to the bailout beneficiaries. We were all told we were too rash, or that we could not let Wall Street collapse or they would take us down with them. We were scolded by JPM's CEO Jamie Dimon, for trying to vilify finance. Dimon is a man who has been applauded in the mainstream media as "winning the crisis," whatever that means when the rest of us who lost trillions, homes, jobs and more.

    In my book, we had reckless spillovers in finance that are the perfect analogue to these awful oil spills. A 40 percent climb in the debt/GDP ratio, massive unemployment around the world and all of the tangible damage that financial sector sycophants want to pretend "just happened" and it was no one's fault. Yes, is was someone's fault and those someones should have suffered the dilution of their stockholdings, writedown of their credit, firing of management, bonus curtailment and clawbacks, thorough examination and recapitalization, and yes, some vilification that is more than warranted.

    It is good to see they are responding to the oil mess on Capitol Hill. Maybe our elected representatives can muster the courage to take on finance next time. After all, Mr. Dimon told his daughter that we should expect crises like 2008 every 5 to 7 years. While watching the justifiable BP bashing, one can clearly feel how the pandering to finance has an oily feel. Slick operators on Capitol Hill will never live down a second obsequious performance. Or will they?

    From Anderson Coooper's AC360 blog, "Democrat: Lawmakers going to take Hayward's 'hide off'":

    Democratic lawmakers will try to build the case of a corporate culture which chose riskier, cheaper methods over safety concerns as they grill BP CEO Tony Hayward on Capitol Hill Thursday.

    "Members are angry. Members are frustrated," Rep. Bart Stupak, D-Michigan, told CNN's Dana Bash. "They're going to take his hide off, as they should."

    Stupak, who chairs the House Energy and Commerce Subcommittee on Oversight and Investigations, outlined evidence his committee has put together from thousands of pages of internal BP documents.

    Read the full article here.

    Rob Johnson is a Senior Fellow and the Director of the Project on Global Finance at the Roosevelt Institute.

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  • When Fools Rush In: 1937 Revisited

    Jun 15, 2010Robert Johnson

    robert-johnsonHistory repeating itself? Larry Elliot, economic editor at The Guardian, reminds us that on the question of the deficit, "Roosevelt heeded the same sort of warnings we are hearing today - a big mistake." He goes on:

    robert-johnsonHistory repeating itself? Larry Elliot, economic editor at The Guardian, reminds us that on the question of the deficit, "Roosevelt heeded the same sort of warnings we are hearing today - a big mistake." He goes on:

    The Germans are doing it. The Greeks, the Spanish and the Portuguese believe they have no choice but to do it. George Osborne believes it is his patriotic duty to do it. Around the world, cutting budget deficits has become the priority for policymakers fearful that rising debt levels will leave them at the mercy of capricious financial markets.

    Mervyn King has applauded the return of fiscal conservatism. So has the Organisation for Economic Co-operation and Development. Two months after they urged that budgetary support be maintained until recovery was fully entrenched, finance ministers and central bank governors from the G20 said they welcomed the plans announced by some countries to begin deficit cutting without delay.

    Budget deficits are certainly high across the G20 and beyond. But they are high primarily because of the severity of the worst recession since the second world war and because of the action taken collectively by governments to prevent that recession turning into something far, far worse.

    As things stand, a second Great Depression has been averted, but growth has ranged from the weak in Europe to the unspectacular in the United States. Banks are not lending. Unemployment is running at near double-digit levels in the US and the eurozone. The determination to cut budget deficits in these circumstances does not show that policymakers of probity and integrity have replaced the irresponsible spendthrifts of 2008 and 2009. It shows that the lunatics are back in charge of the asylum.

    Read full article here.

    Rob Johnson is a Senior Fellow and the Director of the Project on Global Finance at the Roosevelt Institute.

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  • Buying the Rules

    Jun 11, 2010Robert Johnson

    If you want to know how the final finreg bill will be devised, you will want to read the latest on the Open Secrets blog. From "Financial Reform Bill to Be Finalized by Members Who Benefit from Wall Street Cash":

    Democratic and Republican leadership in both the House and Senate have named 43 individuals to a conference committee tasked with hammering out the final version of the Congress' financial regulatory reform legislation.

    If you want to know how the final finreg bill will be devised, you will want to read the latest on the Open Secrets blog. From "Financial Reform Bill to Be Finalized by Members Who Benefit from Wall Street Cash":

    Democratic and Republican leadership in both the House and Senate have named 43 individuals to a conference committee tasked with hammering out the final version of the Congress' financial regulatory reform legislation.

    These members comprise just 8 percent of Congress, but the group has been far more likely to benefit from Wall Street's cash.

    Out of every $100 that Wall Street interests have contributed to sitting members of Congress over the years, $16 has gone to a member of the financial reform conference committee, the Center for Responsive Politics has found.

    Since 1989, all political action committees and individual employees of companies classified by the Center as part of the finance, insurance and real estate sector (FIRE) have contributed more than $695 million to the campaign committees and leadership PACs of current members of the 111th Congress.

    More than $112 million from these interests has benefited the Democrats and Republicans named to the conference committee, which will reconcile differences between the Wall Street reform measures passed by the House and Senate.

    Among specific interest groups within the FIRE sector, commercial banks were found to have given about $18 to a member of the conference committee out of every $100 donated to all current members of Congress.

    Securities and investment interests have given $1 out of every $5 to a member of the conference committee, the Center for Responsive Politics found.

    And people and political action committees associated with credit and finance companies have given nearly $1 out of every $4 donated to members of the conference committee.

    Click here to read full text.

    Rob Johnson is a Senior Fellow and the Director of the Project on Global Finance at the Roosevelt Institute.

     

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  • A most serious question of representation

    Jun 2, 2010Robert Johnson

    question-mark-150Brad Delong asks a few pertinent questions about the sinister calm in our nation's capital as jobless Americans suffer:

    question-mark-150Brad Delong asks a few pertinent questions about the sinister calm in our nation's capital as jobless Americans suffer:

    "Have decades of widening wealth inequality created a chattering class of reporters, pundits and lobbyists who've lost their connection to mainstream America? Has the collapse of the union movement removed not only labor's political muscle but its beating heart from the consciousness of the powerful? Has this recession, which has reduced hiring more than it has increased layoffs, left the kind of people who converse with the powerful in Washington secure in their jobs and thus communicating calm while the unemployed are engulfed in panic? Are we passively watching an unrepresented underclass of the long-term unemployed created before our eyes?"

    Click here to read full article.

    Rob Johnson is a Senior Fellow and the Director of the Project on Global Finance at the Roosevelt Institute.

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  • Matt Taibbi takes on David Brooks over populism

    Jan 27, 2010Robert Johnson

    What are we supposed to think of David Brooks when 99.8 percent of the population is mad at the banks and he tries to reframe it as some sick deviance called "populism"?  All of the MBAs at Columbia and the hedge fund managers, and the PhD economists are now suddenly populists and have come off of their moorings? David Brooks just cannot seem to look power in the eye without sucking up.

    Taibbi reams him out and he deserves it. Click here to read article.

    What are we supposed to think of David Brooks when 99.8 percent of the population is mad at the banks and he tries to reframe it as some sick deviance called "populism"?  All of the MBAs at Columbia and the hedge fund managers, and the PhD economists are now suddenly populists and have come off of their moorings? David Brooks just cannot seem to look power in the eye without sucking up.

    Taibbi reams him out and he deserves it. Click here to read article.

    Rob Johnson is a Senior Fellow and the Director of the Project on Global Finance at the Roosevelt Institute.

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