Peter Morici: "Goldman Sachs is like a criminal enterprise.” JP Morgan and other Food Stamp Empires.

cobbland

Peter Morici (professor of International Business at University of Maryland), “Goldman Sachs is like a criminal enterprise.”


http://www.rhsmith.umd.edu/faculty/pmorici/cv_pmorici.htm
http://www.rhsmith.umd.edu/directory/peter-morici
https://twitter.com/PMorici1

“One Justice Department for JP Morgan and Goldman Sachs and the other Justice Department for the rest of the country. Look at how often those guys are in court, it’s like the Mob.

***The interview takes place within the first 8 minutes of the podcast (from September 13, 2013):(From the 3 minute mark)***
http://chicago.cbslocal.com/audio/981-noon-business-hour/wbbm-noon-business-hour-9-13/

***The audio has been removed from CBS for some reason, but is still available on iTunes (look for the podcast on 9-13-13)***
https://itunes.apple.com/us/podcast/noon-business-hour/id400255033


Related:

JPMorgan in tentative $13 billion deal with U.S. Justice Department: source
By Aruna Viswanatha

WASHINGTON | Sat Oct 19, 2013 6:13pm EDT


(Reuters) - JPMorgan Chase & Co has reached a tentative $13 billion agreement with the U.S. Justice Department to settle government agency investigations into bad mortgage loans the bank sold to investors before the financial crisis, a source said on Saturday.

The tentative deal does not release the bank from criminal liability for some of the mortgages it packaged into bonds and sold to investors, a factor that had been a major sticking point in the discussions, the source said.
As part of the deal, the bank will likely cooperate in criminal inquiries into certain individuals involved in the conduct at issue, the source, who declined to be identified, said.

Officials at JPMorgan and the Justice Department declined to comment.

Another source close to the discussions characterized a deal as likely, but cautioned that parts of the agreement are still being hammered out, and the settlement could conceivably fall apart.

The record settlement could help resolve many of the legal troubles the New York bank is facing. Earlier this month JPMorgan disclosed it had stockpiled $23 billion in reserves for settlements and other legal expenses to help cover the myriad investigations into its conduct before and after the financial crisis.

The deal is being hammered out by some of the most senior officials at the Department of Justice and the largest U.S. bank. Attorney General Eric Holder and JPMorgan Chief Executive Jamie Dimon spoke on the phone on Friday night to finalize the broad outlines of the broad deal, the first source said.

The bank's general counsel Stephen Cutler and Associate Attorney General Tony West are negotiating a statement of facts that will be part of a final agreement, the source said.

Long considered one of the best-managed banks, JPMorgan has stumbled in recent years, with run-ins with multiple federal regulators as well as authorities in several states and foreign countries over issues ranging from multibillion-dollar trading losses and poor risk controls to probes into whether it manipulated a power market.

In September, as the Justice Department prepared to sue the bank over mortgage securities that the bank sold in the run-up to the financial crisis, JPMorgan tried to reach a broader settlement with DOJ and other federal and state agencies to resolve claims over its mortgage-related liabilities stemming from the bust in house prices.

Dimon went to Washington to meet with Holder on September 25, and discussed an $11 billion settlement at that point.
Some of the problems relate to mortgage bank Washington Mutual and investment bank Bear Stearns, two failing firms that JPMorgan took over in 2008.

The bank and the Justice Department have been discussing a broad deal that would resolve not only the inquiry into mortgage bonds it sold to investors between 2005 to 2007 that were backed by subprime and other risky residential mortgages, but also similar lawsuits from the Federal Housing Finance Agency, the National Credit Union Administration, the state of New York and others.

The broader settlement is a product of a government working group created nearly two years ago to investigate misconduct in the residential mortgage-backed securities market that contributed to the financial crisis. Officials from the Justice Department, the New York Attorney General and others helped to lead the group.

Reuters reported late Friday that JPMorgan and FHFA had reached a tentative $4 billion deal. That agreement is expected to be part of the larger $13 billion settlement.

(additional reporting by David Henry and Karen Freifeld in New York)

(Reporting by Aruna Viswanatha; Editing by Doina Chiacu and Gunna Dickson)
http://www.reuters.com/article/2013/10/19/us-jpmorgan-settlement-idUSBRE99I09020131019

cobbland

A woman displays her EBT card at the Anacostia Farmer's Market in Washington D.C.. (Rod Lamkey Jr., The Washington Times / Landov)
JP Morgan’s Food Stamp Empire
Oct 1, 2012 4:45 AM EDT
How the welfare state became a profit center.
http://www.thedailybeast.com/articles/2012/10/01/jp-morgan-s-food-stamp-empire.html

Food Stamp Corporate Welfare

If you think the SNAP food stamps debate is about poor people’s need to eat, you’re wrong. It’s about big corporations’ need to profit. “Xerox, JPMorgan Chase and eFunds Corporation have all successfully turned poverty into a profit center.” So have Coca Cola, Kroger, Wal-Mart, Kelloggs and a large slice of the rest of the Fortune 500 corporations.

By Margaret Kimberley

“Discussions about government spending are inherently bogus because the elephant in the room, big business, is absent.”

The federal and state governments operate under a system which is of the corporations, by the corporations, and for the corporations. Ordinary governmental functions which could easily be carried out with public money are instead privatized, depriving the public sector of revenue and jobs and making the neediest citizens unnecessarily dependent on the private sector. Governmental largesse on behalf of big business is focused primarily on poor people, the group most at the mercy of the system. Corporations collect child support payments and then imprison the poor people who can’t pay. While imprisoned, another corporation provides what passes for medical care. The crime is a perfect one.

When the Republicans demanded cuts to the Supplemental Nutrition Assistance Program (SNAP), better known as food stamps, the debate revolved around human need versus the call for fiscal austerity. Scarcely anyone mentioned that JPMorgan Chase, Xerox and eFunds Corporation make millions of dollars off of this system meant to help the poor.

It all came to light on October 12th, when many SNAP recipients in the states of Alabama, California, Georgia, Iowa, Illinois, Louisiana, Maine, Massachusetts, Maryland, Mississippi, New Jersey, Oklahoma, Pennsylvania, Texas and Virginia were unable to make purchases with their Electronic Benefits Transfer (EBT) cards because of a computer system malfunction at Xerox.

It may at first have seemed odd for a Fortune 500 corporation to have anything to do with the SNAP program, but Xerox, JPMorgan Chase and eFunds Corporation have all successfully turned poverty into a profit center. Food stamps were once literally stamps until the 1996 welfare reform act required all state SNAP benefits to be digitized. At that point JPMorgan, Xerox and eFunds were quite literally in the money. Only the state of Montana administers its own SNAP program. Every other state pays one of these three corporations millions of dollars in fees to do what they could do themselves. Since 2007, Florida has paid JP Morgan $90 million, Pennsylvania’s seven-year contract totaled $112 million and New York’s seven-year contract totaled $126 million.

“Every policy decision in state capitols and Washington DC is made with the needs of big business in mind.”

Food stamps are not the only government program that is administered by private corporations. WIC payments and child support collections are also moneymakers for Xerox and the rest of the financial services industry.

Like so many other debates in America, discussions about government spending are inherently bogus because the elephant in the room, big business, is absent. Millions of Americans are angry because food stamp recipients can use their benefits to buy junk food but don’t realize that they are able to do so because corporate America wouldn’t have it any other way.

Coca Cola, Kroger, Walmart, Kelloggs and other corporations have all lobbied the United States Department of Agriculture and congress to prevent any measures being put in place that would restrict SNAP use to healthy food choices. It isn’t difficult to understand why this is the case. They want to make as much money as possible and won’t abide anything that impedes their ability to keep turning huge profits. In just one year, nine Walmart Supercenters in Massachusetts received more than $33 million in SNAP revenues, which is more than four times the amount of SNAP benefits received at all farmers’ markets nationwide.

The recent congressional fracas about food stamp expenditures was like the shutdown debate, all for show. The Republican right wing advocates the most extreme anti-government positions in order to satisfy their base. Democrats rightly complain about cruelty to the poor but while the drama goes on the real welfare cheats keep cashing in, unlikely to be disadvantaged by either side after the dust settles.

If Americans knew that tasks easily carried out by their states were contracted out to big business, they would be very angry. That explains why no one tells them the truth. Governors, state legislators, and members of Congress are unlikely to expose their own timidity and corruption and the corporate media do as little reporting on serious issues as they can possibly get away with.

It is no exaggeration to say that every policy decision in state capitols and Washington DC is made with the needs of big business in mind. Wars against drugs and dead beat dads may resonate with the public, but the end result always includes a means of increasing corporate profits.

No matter what happens after the shut down kabuki theater ends, Walmart will not lose one penny of its food stamp revenues. No one on Capitol Hill will mess with the 1%. The business of America is still business.

Margaret Kimberley's Freedom Rider column appears weekly in BAR, and is widely reprinted elsewhere. She maintains a frequently updated blog as well as at http://freedomrider.blogspot.com. Ms. Kimberley lives in New York City, and can be reached via e-Mail at Margaret.Kimberley(at)BlackAgendaReport.com.

http://www.informationclearinghouse.info/article36595.htm

***Worth Reading***

FOOD
STAMPS
Follow the Money
Are Corporations Profiting from Hungry Americans?
Michele Simon
http://www.eatdrinkpolitics.com/wp-content/uploads/FoodStampsFollowtheMoneySimon.pdf