Jamie Dimon: The Face of America’s Free Market Politburo

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Sorry for the Jamie Dimon obsession today, but the extended article from his interview with the Financial Time is just as infuriating as his whining about “anti-American” banking rules. In this one, this so-called capitalist lays out his solution to mortgage woes: a Larry Summers figure should invite a bunch of public companies down to DC for a private meeting at which they’ll decide what the market will look like.

Meanwhile, the increasingly distant relationship between politicians and financial leaders has, Mr Dimon suggests, caused its own problems. In the 1990s, Larry Summers as Treasury secretary allegedly phoned a recalcitrant regulator and told her he had 13 bankers in his office who said proposed rules on derivatives could create economic chaos. Reformers saw this as supremely unhealthy. But a meeting between regulators, banks and investors could usher in a grand bargain over the future of mortgage finance, according to Mr Dimon.

“The right way … is to convene all the people involved in the markets, discuss all the plusses and minuses, talk about what you want, design a new mortgage market and go,” he says.

“We’re raring to go. If someone called me and said: ‘Come on down’, I’d get on an airplane and do it today. And so would every major bank.”

As it is, the various plans for mortgages – like other regulations – create overlap that ends up with an unworkable system, he says. “You could design several different types of mortgage market that would work but you can’t design a warthog – you can’t have it be non-recourse, pre-payable, fixed rate, 500 days to foreclose and think you can have a mortgage market. It’s got to work for investors, it’s got to work for everybody.”

Dimon (or the FT–this is a bit unclear) is advocating doing what Summers did when he forced Sheila Bair to back off her consideration of regulations on derivatives. Most people now believe that Bair was right in that dispute, that regulations would have limited the damage of our recent crash. But Dimon, it appears, would like to repeat the short-sighted decisions about regulation that got us into this mess.

And note how “all the people involved in the markets” for Dimon includes regulators, banksters, and investors, but no actual consumers?

Can’t let the riff raff into the Politburo.

Note, too, that Dimon’s promise that “all the major banks” would be at the table if called comes just a week after the banksters blew off Tom Miller and the other Attorneys General trying to give them a Get Out of Jail Free card for their mortgage servicing abuses.

On that note, Dimon whines that the crappy housing market has held back the banks’ recovery. That’s like saying, “If people would just recover from their radiation poisoning more quickly, the country would be better able to recover from having nuked them.” There’s no self-consciousness here, no admission that the woes of the banks (and the economy generally) stem from the banks having marketed of a bunch of shitpile put together using faulty securitization in the first place.

In a normal recovery, some of these issues would diminish in significance. A resurgent housing market would not only help bank profits and cushion the impact of regulation but stem the lawsuits that have engulfed the industry.

If mortgage-backed securities perform better, investors have little incentive to sue for the way banks mishandled their construction.

If only investors didn’t have good reason to sue, they wouldn’t sue.

Which sort of makes clear that when Dimon complains about double jeopardy, he is again bidding for an AG settlement that releases the banks from their other shitpile liability.

But we are not there. “My guess is the legacy litigation is going to go on for three to 10 years because every securitisation is different,” says Mr Dimon. “We are geared up and we’ve hired some top experts that do nothing but this. We’ve put away billions of dollars [in reserves against losses] already. It’s an unfortunate drag on the company but we’re still looking at the mortgage business as a very important business going forward and these are legacy problems that will have to work themselves out.”

One litigation issue that participants say should be settled is the foreclosure mess, where banks improperly processed the mechanism for repossessing homes of people not making their payments.

State attorneys-general want a big financial settlement, including help for struggling homeowners. Banks, though, will only pay up if they get a broad release from future litigation. “Obviously some errors were made regarding who signed off on files,” says Mr Dimon. “We are working hard to settle these matters. But you can’t settle something and be subject to double jeopardy – that’s the issue. But we’re willing to be punished for what we’ve done wrong.”

Dimon, of course, is pretending that robo-signing fraud was the only crime the banks committed here, and that the big banks don’t have a range of liabilities.

Altogether, this poor capitalist is whining and bitching that the government is not helping banks avoid the consequences of their past decisions.

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After Trading with the Enemy, JP Morgan Chase Whines for Regulators to Fight “Anti-American” Regulations

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Two and a half weeks ago, JP Morgan Chase signed an $88.3 million settlement with the government. JPMC traded with Iran, Sudan, Liberia, and Cuba, all in violation of Treasury’s various trade restrictions. When subpoenaed on the Sudan transfer, JPMC at first denied it had the documents in question. While I think many of these sanctions (particularly the Cuban ones) are silly, the settlement revealed that JPMC thought it was above rules designed to serve America’s self-interest.

Which is why I find MOTU Jamie Dimon’s wail for help fighting “anti-American” regulations so distasteful.

The United States should consider pulling out of the Basel group of global regulators, Jamie Dimon, chief executive of JPMorgan Chase, said in an interview with the Financial Times.

[snip]

“I’m very close to thinking the U.S. shouldn’t be in Basel anymore. I would not have agreed to rules that are blatantly anti-American,” he said in the interview.

“Our regulators should go there and say: ‘If it’s not in the interests of the U.S., we’re not doing it’.”

Dimon is complaining because Basel’s rules require more reserves from the very largest banks–including JPMC–to hold 9.5% of reserves, as opposed to the 7% required from smaller banks. Just three of the eight banks with higher reserve requirements are from the US. The Basel rules also treat “covered bonds”–a European product–differently from mortgage backed securities with a GSE guarantee.

I’m particularly amused with the way Dimon describes “global financial firms” to be in the best interest of the US.

“I think any American president, secretary of Treasury, regulator or other leader would want strong, healthy global financial firms and not think that somehow we should give up that position in the world and that would be good for your country.”

Bank of America’s global status right now risks putting the US at great risk, because the bank is insolvent but regulators have a tough time unwinding it because of that global reach. We know that because a bunch of global financial firms crashed the economy just a few years ago.

There’s one more ugly irony about Dimon’s wail. His concern, he says, is that because of these rules, Asian banks will pick up market share in the US.

He’s saying this, of course, at a time when Obama is about to push through a trade deal with Korea–one that will ultimately cause American manufacturers to lose market share in the US–in significant part so JPMC and Goldman Sachs can spread their toxic finance to Korea. That is, he’s whining about competing on an uneven playing field with Asian banks at the same time as the government is helping his company get preferential access to Korea’s finance market.

Jamie Dimon wants to pretend he is both a free market capitalist and a good American. But his whining and the actions his bank have taken suggest he’s neither of those things.

Update: In the longer account of this interview, Dimon whines even more about how poor American banks won’t be able to compete against Asian and European banks.

In his office, looking relaxed in white shirt with two buttons undone, Mr Dimon is still exercised about what he sees as a “miscarriage of justice”. US policymakers, he says, have sold their banks down the river – the Yangtze river. “There are plenty of countries out there that are happy with the changes being implemented in the US. They realise that they can be huge beneficiaries of this. I’m talking about China, India, Singapore, Japan. I wouldn’t want to see, 20 years from now, the US asking, ‘what happened? How come the winners in the marketplace are all outside the US?’”

[snip]

Derivatives dealt off exchanges will need to use clearing houses – which Mr Dimon supports – and will be subject to margin rules governing how much collateral they have to supply.

These he does not like, particularly if, as currently framed, they apply to JPMorgan’s overseas businesses too. He fears British, French and German competitors might not be subject to the same standards and will gain market share.

Update: Yves Smith debunks Dimon’s jingoism.

Dimon manages to play yet another jingoistic card, acting as if Basel III singles out US banks when a majority of the financial firms subject to the most stringent rules are outside the US. And he raises the truly bizarre specter of “Asian” hordes invading the US. Huh? Does he mean HSBC? I presume not, that’s a UK bank. The only Asian bank in the top 10 is Mitsubishi UFJ, and the Japanese are not likely to be in aggressive expansion mode (they’ve never gotten the knack institutionally of hiring and managing good top level foreigners; I know of a very few Japanese executives who have figured it out and did a good job when they were posted in the US, but as soon as they were rotated back to Japan, their successors made a hash of what they had put in place).

The Chinese are even less likely to move in near term (long term is a completely different matter). First, the Chinese were apparently interested in investing in US players in the crisis and were rebuffed. But having worked repeatedly with foreign banks in the US, building a denovo operation (or using small acquisitions as a platform) is a completely different kettle of fish. And going from the Chinese market of heavy state control and limited product scope to the US is like saying a drayage company can operate a supersonic plane because both are in the transportation business. I’ve seen what a hard time foreign banks have had in the US with a vastly lesser skill gap (one they closed over a period of decades). The Chinese are too far behind skill-wise to constitute a threat in the US until they can acquire the skills via a major acquisition (and that was not the scenario Dimon was hinting at).

And it goes without saying that Dimon made clear that he believe that what is good for banks is good for the US, when that has been demonstrably false for at least the last decade.

What’s striking about Dimon’s comments is how brazen they are. He’s not making clever, narrowly accurate but substantively misleading comments. Much of what he says and implies is unadulterated bunk. The fact that he peddles this tripe shows how confident he is that his message will go unchallenged. And that in turn reveals that he is secure in his belief that the banks have won the war; all he is caviling about is the speed of the mop-up operation.

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Cops, Security Guards, and Prisoners

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I decided to compare these numbers after I read this story about an Iraqi veteran patrolling a suburban VA golf course, armed with a Glock, mace, and handcuffs, making $16/hour (h/t Balloon Juice):

Total cops in the US (2009): 883,600; median wage (2008): $51,410

Total security guards (2009): 1,028,830; median wage: $23,820

Total prisoners (2009): 1,613,740

Welcome to NeoFeudalism, where we keep cutting middle class, union jobs paying police to protect our common good, and instead pay poorly-paid highly armed private security guards to patrol golf courses.

And if that security guard job doesn’t work for our veterans, there’s always the other option: prison.

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Happy Labor Day, You Zeroes!

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I’m a bit slow in revving up today; I’ve changed my main Farmer’s Market day from Saturday to Friday (not actually a good crowd-avoidance strategy before a 3-day weekend, as it turns out) and it has thrown my rhythm a bit.

So while I’ve been learning how this year’s big rains make for a bunch of obstinate, undersized lambs, here’s what the rest of the world has learned.

Zero net jobs created last month. Or rather, whatever jobs are being created are being more than offset by government cuts, AKA austerity.

That news came the day after the auto companies reported their sales–showing that American companies, led last month by Chrysler, continue to take at least temporary advantage of Japanese supply problems. Nevertheless, rather than convincing the Administration to shift more money into manufacturing, it is instead pushing another trade deal that would continue to make it harder for American manufacturing to compete.

The Administration also seems to be taking the wrong message from its investments in alternative energy. True, one the companies that received energy investment credits went under this week (largely because it competes with an industry China has already heavily pushed). But backing off of ozone standards doesn’t make it any easier for energy and environmental companies to invest and thrive–it just kills Americans and makes big polluters lazy.

One of the problems with the economy is that workers are working for too little. And one solution Obama will roll out next week asks the unemployed, instead, to work for free (in the name of “training.”

Finally, the original bond vigilante, Bill Gross, called for a focus on growth, not debts, today. Yet even now, SuperCongress is planning out how to cut! cut! cut! by November.

The White House has forecast that unemployment will continue at this level until the election and beyond. Not only is that going to make it very hard for Obama to beat candidate Perry. But it means whole segments of the population–particularly the young–will be losing a key chunk of their career path to the government’s continued inability to do anything about jobs.

So Happy Labor Day weekend, everyone!

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At What Point Does T-Mobile CEO Get Dinged for False Advertising?

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[Youtube]3KmfXupi9cg[/Youtube]

The CEO of T-Mobile thinks the government, in suing to stop its merger with AT&T, simply didn’t understand how merging with AT&T would benefit customers. (h/t mistermix)

By now you have heard the news that the Department of Justice (DOJ) has filed a lawsuit to block the AT&T and T-Mobile merger in U.S. District Court. We were surprised by this sudden announcement, and DT will join AT&T in challenging the DOJ’s case in court.

DT and AT&T believe the DOJ has failed to acknowledge the significant consumer benefits of this deal. DT remains convinced that bringing together these two world-class businesses would create significant benefits for customers and the country.

I’d really like someone to sue T-Mobile for false statements. Either the filings they have and will submit are false, or this ad campaign is (my vote). But somebody’s not telling the truth.

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How Are Americans Feeling about Their Own Circumstances Now, David Plouffe?

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Perhaps I’m getting tiresome with this point, but sorry, I’m going to make it again.

Two months ago, David Plouffe dismissed the possibility that the unemployment rate would have any effect on Obama’s reelection chances. He (correctly) noted that people judged the President’s performance on the economy by their assessment of how the economy is doing for them.

Problem is, he claimed that people’s perception of how they were doing was improving.

The average American does not view the economy through the prism of GDP or unemployment rates or even monthly jobs numbers.

In fact, those terms very rarely pass their lips. So it’s a very one-dimensional view. They view the economy through their own personal prism. You see, people’s — people’s attitude towards their own personal financial situation has actually improved over time. You know, they’re still concerned about the long-term economic future of the country, but it’s things like “My sister was unemployed for six months and was living in my basement and now she has a job.” There’s a — a “help wanted” sign. You know, the local diner was a little busier this week. Home Depot was a little busier. These are the ways people talk about the economy. [my emphasis]

Only, people’s impression of the economy isn’t improving over time. In fact, they’re pretty pessimistic about the economy.

The Conference Board Consumer Confidence Index®, which had improved slightly in July, plummeted in August. The Index now stands at 44.5 (1985=100), down from 59.2 in July. The Present Situation Index decreased to 33.3 from 35.7. The Expectations Index decreased to 51.9 from 74.9 last month.

[snip]

Says Lynn Franco, Director of The Conference Board Consumer Research Center: “Consumer confidence deteriorated sharply in August, as consumers grew significantly more pessimistic about the short-term outlook. The index is now at its lowest level in more than two years (April 2009, 40.8).

[snip]

Consumers’ short-term outlook deteriorated sharply in August. Those expecting business conditions to improve over the next six months decreased to 11.8 percent from 17.9 percent, while those expecting business conditions to worsen surged to 24.6 percent from 16.1 percent. Consumers were also more pessimistic about the outlook for the job market. Those anticipating more jobs in the months ahead decreased to 11.4 percent from 16.9 percent, while those expecting fewer jobs increased to 31.5 percent from 22.2 percent. The proportion of consumers anticipating an increase in their incomes declined to 14.3 percent from 15.9 percent.

I take no glee in this crappy report. but I do think it’s a pretty accurate read of how people feel about their own personal circumstances and I do agree with Plouffe that this is the economic measure people make when considering whom to vote for.

So I really hope Plouffe stops trying to claim things are great when they really aren’t.

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The Auto Industry and America’s Future

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I wanted to point to four different discussions as a way to situate a larger discussion of where the auto industry is at:

The automotive industry is driving the recovery (such as it is)

As the LAT argues–most compellingly with this graphic–the rebound in auto manufacturing in this country is one of the best pieces of news in our economy today.

It actually points to both automotive sales–with dealers doing good business–and an increase in manufacturing in this country. Those are two different things.

The story points to a GM dealer with stores in three states talking about his business.

“I have been adding dozens of employees for sales and sales support,” said Mike Bowsher, who owns Chevrolet and Buick dealerships in Atlanta; Nashville, Tenn.; and Orlando, Fla. “The economy is crazy, but our retail business is still growing and getting better.”

There are likely a couple of things going on. First, remember that GM and Chrysler closed a lot of dealers during their restructuring. I’ve long argued that was a necessary step because American brand dealers were cannibalizing each others’ sales. We would expect those that remain–like Bowsher’s dealers–to be doing better as a result. And US brands (including Ford) also did well during the post-earthquake period when Toyota and Honda had shortages due.

But then there’s the manufacturing side, where LAT notes a number of manufacturers are expanding here.

And it’s not just the Big Three American manufacturers that are thriving. Nissan, VW and other foreign-based firms are expanding in the United States, putting billions of dollars into building and refurbishing plants. Start-ups Tesla Motors in Palo Alto, Fisker Automotive in Anaheim and Coda Automotive in L.A. are hiring and spending hundreds of millions of dollars designing and launching electric and hybrid vehicles.

We’ve got an entire new segment–electric vehicles–expanding into viable production runs at the same time as we’re seeing transplants open new factories. Transplants are coming here, in part, to minimize the disruption of volatility in currency exchange. But I would expect it to become easier to justify opening plants in this country now that the Japanese earthquake showed the fragility of existing supply chains. Also note that US wages are more competitive internationally.

If only our country had done something meaningful to bring down the costs corporations pay on health care, we’d probably see a lot more manufacturing opening here.

And while I’m skeptical of David Shulman’s claim that the automotive turnaround will single-handedly keep us out of a double dip–after all, the beleaguered middle class drives the volume in car sales…

The health of the U.S. economy is so dependent on autos that economists such as UCLA’s David Shulman are watching car sales to assess whether the nation’s recovery will accelerate or stall.

“If you see a 13-million-unit sales rate in the fourth quarter, that would help a lot,” said Shulman, senior economist at the UCLA Anderson Forecast. “It would be very hard to see how the U.S. would go into recession with cars selling at that rate.”

I do think it fair to assess the role of the automotive industry in what little recovery we’ve got.

Battery factories driving the manufacturing industry

Which brings us to this excellent article from yesterday’s NYT Magazine. It tells the story I wish Obama had told when he visited Johnson Controls a few weeks back: the Administration’s investments in battery factories in the stimulus bill are coming on-line and they offer perhaps the single best piece of good news in the economy.

It talks about how the US fell behind in this and other critical manufacturing segments.

The semiconductor industry, for example, led to the LED-lighting and solar-panel industries, both of which are mostly based in Asia now. “The battery is another fascinating example,” [Harvard Professor Gary] Pisano told me. “The center of gravity is Asia. But why?” If you go back to the 1960s, he says, the American consumer-electronics companies decided they were better off in Japan, and then Korea, where costs were lower. “And then you have to ask: Who had the incentives to make batteries smaller or more powerful or last longer? Not the car industry. The consumer-electronics industry did.” This explains why the U.S. is now playing catch-up with lithium-ion batteries. It also underscores the vulnerability of an economy with a shrinking manufacturing sector. “When one industry moves,” Pisano says, “there can be other industries in the future that follow it that you couldn’t even anticipate.”

It talks about how we’re having to do what developing countries have always done to catch up: copycat existing technology (even though, as is the case here, our superior research universities led the development of the technology).

Its battery technology was developed at M.I.T., and for the last several years, the company had been making its lithium-ion cells in factories in Korea and China. When I asked Jason Forcier, the head of A123’s automotive division, why the company went to Asia to make its products, Forcier said he had no choice. “That’s where the supply base was,” he said. “That’s where the know-how was — it was nonexistent in the U.S.”

Repatriating a high-tech manufacturing plant to the United States is not simply a matter of hiring the local talent. It requires good-old foreign know-how. “We call it ‘copy exact,’ ” Forcier said. “We bought a company in Korea that had the technology around this type of battery and had developed the manufacturing process there. We basically brought that here, copied it exactly and scaled it up.” A123 also brought a team of six Korean engineers to help transfer the technology to the U.S. and sent a team of Americans to Korea to learn.

Read more →

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Eric Cantor’s Nuclear Failure

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As I noted last week, the VA earthquake last week happened in Eric Cantor’s district, just miles from a nuclear power plant. I reported then that the plant had lost power and switched to backup diesel generators.

But it turns out that switchover didn’t happen without a hitch. One of four generators failed to start.

The Nuclear Regulatory Commission initially reported that the plant’s emergency safeguards worked just fine as diesel generators automatically kicked in to keep nuclear rods and spent fuel safe in storage facilities and cool water ponds.

But it did not happen without a minor snag.

According to the incident report published hours after the quake, one of North Anna’s four power generators didn’t start properly, as it had been designed to. It was taken off line, and power from another generator off site was routed through to make the system fully operational. Following inspections of the facility and its sensitive parts, both reactors were brought back online.

Perhaps this is why they sent all non-emergency personnel home from the plant.

Now, it turns out that Eric Cantor is just as interested in using a potential disaster affecting his own constituents as an excuse to cut government as he was with the residents of Joplin, MO. As he did when a tornado wiped out Joplin, Cantor insisted that any federal aid be tied to cuts elsewhere in the federal budget.

“There is an appropriate federal role in incidents like this,” the Republican said after touring the damage in his district. “Obviously, the problem is that people in Virginia don’t have earthquake insurance.”

The next step will be for Virginia Gov. Bob McDonnell (R) to decide whether to make an appeal for federal aid, Cantor said. The House Majority Leader would support such an effort but would look to offset the cost elsewhere in the federal budget.

“All of us know that the federal government is busy spending money it doesn’t have,” Cantor said in Culpeper, where the quake damaged some buildings along a busy shopping thoroughfare.

Who knows what will get cut? USGS, as Cantor backed doing earlier this year? Emergency warning systems? Inspections to ensure that nuclear plant backup generators work properly in case of an emergency (and after Fukushima, how is it that those inspections haven’t already been done)?

Eventually, though, between refusing to keep up America’s infrastructure and cutting the things that help keep Eric Cantor’s constituents safe, Cantor’s anti-government radicalism will eventually lead to a preventable disaster.

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Jamie Dimon’s Company Fined $88.3 Million for Trading with the Enemy

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That’s not the technical term for violating economic sanctions against Cuba, Sudan, Iran, and Liberia (and FWIW I think the sanctions against Cuba are stupid).

Nevertheless, that’s basically what the sanctions JP Morgan Chase just admitted to violating amount to.

The big dollar amounts involve $178.5 million in wire transfers with Cubans.

JPMC processed 1,711 wire transfers totaling approximately $178.5 million between December 12, 2005, and March 31, 2006, involving Cuban persons in apparent violation of the CACR.

But the more interesting violation came when JPMC refused to turn over some documents relating to Khartoum until the government told the bank they knew JPMC had the documents.

The apparent violation of the RPPR occurred between November 8, 2010, and March 1, 2011. On October 13, 2010, OFAC issued JPMC an administrative subpoena pursuant to section 501.602 of the RPPR directing JPMC to provide certain specified documents related to a specific wire transfer referencing “Khartoum.” In response to this subpoena and a subsequent communication, JPMC compliance management failed to produce several responsive documents in JPMC’s possession, and repeatedly stated that JPMC had no additional responsive documents. OFAC ultimately provided JPMC with a list of multiple responsive documents that OFAC had reason to believe were in JPMC’s possession based on communications with a third-party financial institution. This prompted JPMC to correct its prior statements that the bank possessed no additional responsive documents and to produce more than 20 responsive documents. JPMC did not voluntarily self-disclose the apparent violation of the RPPR to OFAC. The base penalty for this apparent violation was $250,000.

And in spite of that apparent obstruction, TurboTax Timmeh Geithner’s agency still treated Jamie Dimon’s disloyal company leniently because of what they called JPMC’s “substantial cooperation.”

OFAC mitigated the total potential penalty based on JPMC’s substantial cooperation,

According to Bloomberg’s count, the Fed lent this disloyal company $68.6B after banksters like Jamie Dimon crashed the economy.

During and after the period JPMC took that money, it financed trade with Iran, tried to hide the Khartoum deal, and financed more trade with Sudan (though it sent money to Cuba and sent Iran 32,000 ounces of gold, now worth $55 million, before taking our money, in 2006). Some of this trading with the enemy was reported internally to “JPMC management and supervisory personnel;” at least some of this wasn’t the work of rogue employees.

This is the kind of MOTU that Obama considers an ally.

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Paul Kanjorski: Government Can’t Control Multinationals Anymore

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I confess. When I read Zach Carter’s account of his interview with Paul Kanjorski, my first response was to wonder why HuffPo had decided an interview with the former Congressman would make for the (admittedly very fascinating) article that resulted.

Turns out the reason is Bank of America’s woes; as one of the champions of breaking up the banks in Dodd-Frank, this ought to be an “I told you so” moment for Kanjorski, because had we already broken BoA up, it would have forestalled some of the difficulties we’re likely to experience in the near term.

And Kanjorski did address that, intimating that regulators who had left the Administration, like Sheila Bair, had been willing to entertain taking such step, but those who remain (Carter notes that Tim Geithner recently decided to stick around) basically made an agreement with the banks not to use Dodd-Frank’s authority to break them up.

But Kanjorski framed all this within the larger question of whether multinational companies have simply become too big for mere governments to control anymore.

“Because [corporations] have become so international and global in nature, it’s highly questionable whether governments can actually control corporations to a sufficient degree to prevent them from controlling governments,” said Kanjorski,

And he then demonstrated that principle in his discussion of discussions about a tax holiday, which would allow tax cheating corporations to bring money back into the US but only pay cut rate taxes.

“I’m not saying we shouldn’t adjust our tax code otherwise — there are thing we need to do there — but to give them a free ride, what are you encouraging? The next guy who doesn’t like the law will just do the same thing,” Kanjorski said of the proposed tax holiday. “The reality is, why should we be bargaining with super-national corporations who are actually acting against our interest in avoidance of what our law is? We are impotent to get them to respond.”

This takes the argument of Treasure Islands–that corporations are using secrecy havens to avoid taxes–to the level where a former senior legislator of the world’s economic powerhouse admitting to impotence in the face of the corporations because of their size and multinational status.

And he notes something often forgotten in DC: that these are no longer American companies, and their interests do not coincide with our interests.

Of course, that’s not necessarily going to help us, given that Kanjorski’s watching from the private sector as top financial regulators still do act as if these multinationals’ interests coincide with ours.

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