The Good, The Bad And The Alarmingly Authoritarian

The supply of opportunities, much less inclination to praise federal judges being well short of abundant, today’s decision by U.S. District Judge Jed Rakoff all but ordering Citigroup and the Securities and Exchange Commission to take the sorry excuse for a settlement they had reached over Citigroup’s misbehavior leading up to the financial holocaust, and fold it several ways and put it where the moon don’t shine made for a red letter day indeed.

The judge not only refused the settlement deal and ordered the participants to go to trial, he spoke for a beleaguered, defrauded and righteously pissed off nation when he declared the regulators had no business keeping details of the bankers’ transgressions private, and that neither the paltry penalty assigned nor the absence of a requirement to admit guilt struck him as fair or aromatically inoffensive.

He demanded on all our behalf, “the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives,” and fairly thundered, “In much of the world, propaganda reigns, and truth is confined to secretive, fearful whispers. Even in our nation, apologists for suppressing or obscuring the truth may always be found. But the SEC, of all agencies, has a duty, inherent in its statutory mission, to see that the truth emerges; and if it fails to do so, this court must not, in the name of deference or convenience, grant judicial enforcement to the agency’s contrivances.”

Right on, to put it mildly.

He also leaned hard into the SEC for their feckless regulating, all but assailing them as ridiculous regulatory wusses, saying, “The SEC’s longstanding policy – hallowed by history, but not by reason – of allowing defendants to enter into consent judgments without admitting or denying the underlying allegations, deprives the court of even the most minimal assurance that the substantial injunctive relief it is being asked to impose has any basis in fact.”

The SEC’s virtual slap on the wrist with a feather duster was intended punishment for Citigroup defrauding investors with a steaming pile of collateralized debt obligations (CDO’s) that ripped investors off by 700 million dollars. The judge rightly observed that allowing Citigroup to settle free of an admission of liability would have limited those who were swindled to recovering only 95 million of that 700 million lost in private claims.

For today’s decision, and for earlier decisions putting the kabosh on similarly funky settlements by the SEC, in particular one with Bank of America in which regulators did little more than send the bank to bed without dessert, a statue in his likeness should be erected in Zuccotti Park as a hero of the 99%.  If steel, stone or wood are unavailable as materials, Zig Zag papers will surely do.

As for the bad category, that would be Congressman Barney Frank’s decision to retire from congress. There isn’t much wittiness in Congress, congressional wits less an endangered species than one all but extinct except for Congresman Frank. So the announcement of his decision to retire is a blow not only to those who favor bon mots over the heavily chewed cud that is normal political speak, but to Democrats who prefer our political warriors to eviscerate, disembowel and trepan rather than conciliate, triangulate and temporize.  Barney knows his way around a rhetorical rib spreader, thank God.

Two matters of alarming authoritarianism have come to the fore over several days. The first admittedly is minor relatively speaking, but creepy nonetheless. It is the notorious case of the tweeting high school student attending a Youth in Government program in Kansas, who tweeted in the presence of a speaking Governor Sam Brownback:  “Just made mean comments at gov. brownback and told him he sucked, in person (hash)heblowsalot.”

Leaving aside that the incident alluded to by the student never actually happened, but was a fiction created simply for yucks, what in Allah’s name is going on when such whimsical first amendment speech results in a call from the governor’s office, a summoning to the principal’s office for reprimand and a demand the girl apologize to the apparently aggrieved simp of a governator? Which is more alarmingly pitiful, the fact that the governor’s office monitors all interactions on social media for mention of the governor’s name, or that such mention elicits attempts at retribution for 18 year old putative Kansan insurrectionists I’m not sure.

It certainly smacks of being observed 24 hours a day and detected misbehavin’ by the Orwellian telescreen. This isn’t to underestimate in any way the perils of 18 year old girls, who caused a fair amount of trouble for me when I was their approximate age. However, to the Governor and his all seeing apparatchiks, it is appropriate to say, “Lighten up, Francis.”

The second case of alarming authoritarianism is more serious by several orders, and one about which I will be writing at length at a later date. It is the witches’ brew of legislation called the National Defense Authorization Act, the bastard child of John McCain and Lindsey Graham and inexplicably Carl Levin that would:

1) Explicitly authorize the federal government to indefinitely imprison without charge or trial American citizens and others picked up inside and outside the United States;

(2) Mandate military detention of some civilians who would otherwise be outside of military control, including civilians picked up within the United States itself; and

(3) Transfer to the Department of Defense core prosecutorial, investigative, law enforcement, penal, and custodial authority and responsibility now held by the Department of Justice.

That it would even occur to members of the United States congress to concoct such an un-American affront to freedom and sanity in itself is beyond comprehending. But any chance of passage of such a law so redolent of fascistic methods should scare the wits and resident bejesus out of sentient Americans everywhere. While a measure known as the Udall Amendment has been introduced to strip the law of its menacing provisions, the fate of this legislation should be monitored by citizens with a vigilance nothing short of that employed by Governor Brownback’s office monitoring girlish tweets.

If this bill in its original form, or anything like it threatens to pass or actually does, Americans should pour into the streets in numbers that make Occupy Wall Street resemble a neighborhood pot luck.

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