[R-G] [BillTottenWeblog] The Obama Bubble Agenda

[Bill Totten]

Bankrolling a Presidential Campaign

by Pam Martens

A CounterPunch Special Investigation (May 06 2008)


The Obama phenomenon has been likened to that of cults, celebrity
groupies and Messiah worshipers. But what we're actually witnessing is
ObamaMania (as in tulip mania), the third and final bubble orchestrated
and financed by the wonderful Wall Street folks who brought us the first
two: the Nasdaq/tech bubble and a subprime-mortgage-in-every-pot bubble.

To understand why Wall Street desperately needs this final bubble, we
need to first review how the first two bubbles were orchestrated and why.

In March of 2000, the Nasdaq stock market, hyped with spurious claims
for startup tech and dot.com companies, reached a peak of over 5,000.
Eight years later, it's trading in the 2,300 range and most of those
companies no longer exist. From peak to trough, Nasdaq transferred over
$4 trillion from the pockets of small mania-gripped investors to the
wealthy and elite market manipulators.

The highest monetary authority during those bubble days, Alan Greenspan,
chairman of the Federal Reserve, consistently told us that the market
was efficient and stock prices were being set by the judgment of
millions of "highly knowledgeable" investors.

Mr Greenspan was the wind beneath the wings of a carefully orchestrated
wealth transfer system known as "pump and dump" on Wall Street.  As
hundreds of court cases, internal emails, and insider testimony now
confirm, this bubble was no naturally occurring phenomenon any more than
the Obama bubble is.

First, Wall Street firms issued knowingly false research reports to
trumpet the growth prospects for the company and stock price; second,
they lined up big institutional clients who were instructed how and when
to buy at escalating prices to make the stock price skyrocket
(laddering); third, the firms instructed the hundreds of thousands of
stockbrokers serving the mom-and-pop market to advise their clients to
sit still as the stock price flew to the moon or else the broker would
have his commissions taken away (penalty bid). While the little folks'
money served as a prop under prices, the wealthy elite on Wall Street
and corporate insiders were allowed to sell at the top of the market
(pump-and-dump wealth transfer).

Why did people buy into this mania for brand new, untested companies
when there is a basic caveat that most people in this country know, that
is, the majority of all new businesses fail? Common sense failed and
mania prevailed because of massive hype pumped by big media, big public
relations, and shielded from regulation by big law firms, all eager to
collect their share of Wall Street's rigged cash cow.

The current housing bubble bust is just a freshly minted version of Wall
Street's real estate limited partnership frauds of the 1980s, but on a
grander scale. In the 1980s version, the firms packaged real estate into
limited partnerships and peddled it as secure investments to moms and
pops. The major underpinning of this wealth transfer mechanism was that
regulators turned a blind eye to the fact that the investments were
listed at the original face amount on the clients' brokerage statements
long after they had lost most of their value.

Today's real estate related securities (CDOs and SIVs) that are blowing
up around the globe are simply the above scheme with more billable hours
for corporate law firms.

Wall Street created an artificial demand for housing (a bubble) by
soliciting high interest rate mortgages (subprime) because they could be
bundled and quickly resold for big fees to yield-hungry hedge funds and
institutions. A major underpinning of this scheme was that Wall Street
secured an artificial rating of AAA from rating agencies that were paid
by Wall Street to provide the rating. When demand from institutions was
saturated, Wall Street kept the scheme going by hiding the debt off its
balance sheets and stuffed this long-term product into mom-and-pop money
markets, notwithstanding that money markets are required by law to hold
only short-term investments. To further perpetuate the bubble as long as
possible, Wall Street prevented pricing transparency by keeping the
trading off regulated exchanges and used unregulated over-the-counter
contracts instead. (All of this required lots of lobbyist hours in
Washington.)

But how could there be a genuine national housing price boom propelled
by massive consumer demand at the same time there was the largest income
and wealth disparity in the nation's history? Rational thought is no
match for manias.

That brings us to today's bubble. We are being asked to accept on its
face the notion that after more than two centuries of entrenched racism
in this country, which saw only five black members of the US Senate,
it's all being eradicated with some rousing stump speeches.

We are asked to believe that those kindly white executives at all the
biggest Wall Street firms, which rank in the top twenty donors to the
Obama presidential campaign, after failing to achieve more than 3.5 per
cent black stockbrokers over thirty years, now want a black populist
president because they crave a level playing field for the American people.

The number one industry supporting the Obama presidential bid, by the
start of February - the crucial time in primary season according to the
widely respected, nonpartisan Center for Responsive Politics, was
"lawyers/law firms" (most on Wall Street's payroll), giving a total of
$11,246,596.

This presents three unique credibility problems for the yes-we-can-
little-choo-choo-that-could campaign: (1) these are not just
"lawyers/law firms"; the vast majority of these firms are also
registered lobbyists at the Federal level; (2) Senator Obama has made it
a core tenet of his campaign platform that the way he is gong to bring
the country hope and change is not taking money from federal lobbyists;
and (3) with the past seven ignoble years of lies and distortions fresh
in the minds of voters, building a candidacy based on half-truths is not
a sustainable strategy to secure the west wing from the right wing.

Yes, the other leading presidential candidates are taking money from
lawyers/law firms/lobbyists, but Senator Obama is the only one rallying
with the populist cry that he isn't. That makes it not only a legitimate
but a necessary line of inquiry.

The Obama campaign's populist bubble is underpinned by what, on the
surface, seems to be a real snoozer of a story. It all centers around
business classification codes developed by the US government and used by
the Center for Responsive Politics to classify contributions. Here's how
the Center explained its classifications in 2003:

"The codes used for business groups follow the general guidelines of the
Standard Industrial Classification (SIC) codes initially designed by the
Office of Management and Budget and later replaced by the North American
Industry Classification System (NAICS) ..."

The Akin Gump law firm is a prime example of how something as mundane as
a business classification code can be gamed for political advantage.
According to the Center for Responsive Politics, Akin Gump ranks third
among all Federal lobbyists, raking in $205,225,000 to lobby our elected
officials in Washington from 1998 through 2007. The firm is listed as a
registered federal lobbyist with the House of Representatives and the
Senate; the firm held lobbying retainer contracts for more than 100
corporate clients in 2007. But when its non-registered law partners, the
people who own this business and profit from its lobbying operations,
give to the Obama campaign, the contribution is classified as coming
from a law firm, not a lobbyist.

The same holds true for Greenberg Traurig, the law firm that employed
the criminally inclined lobbyist, Jack Abramoff. Greenberg Traurig ranks
ninth among all lobbyists for the same period, with lobbying revenues of
$96,708,249. Its partners and employee donations to the Obama campaign
of $70,650  by February 1 -  again at that strategic time - appear not
under lobbyist but the classification lawyers/law firms, as do thirty
other corporate law firm/lobbyists.

Additionally, looking at Public Citizen's list of bundlers for the Obama
campaign (people soliciting donations from others), 27 are employed by
law firms registered as federal lobbyists. The total sum raised by
bundlers for Obama from these 27 firms till February 1:  $2,650,000.
(There are also dozens of high powered bundlers from Wall Street working
the Armani-suit and red-suspenders cocktail circuits, like Bruce Heyman,
managing director at Goldman Sachs; J Michael Schell, vice chairman of
Global Banking at Citigroup; Louis Susman, managing director, Citigroup;
Robert Wolf, CEO, UBS Americas.  Each raised over $200,000 for the Obama
campaign.)

Senator Obama's premise and credibility of not taking money from federal
lobbyists hangs on a carefully crafted distinction: he is taking money,
lots of it, from owners and employees of firms registered as federal
lobbyists but not the actual individual lobbyists.

But is that dealing honestly with the American people? According to the
website of Akin Gump, it takes a village to deliver a capital to the
corporations:

"The public law and policy practice [lobbying] at Akin Gump is
integrated throughout the firm's offices in the United States and
abroad. As part of a full-service law firm, the group is able to draw
upon the experience of members of other Akin Gump practices - including
bankruptcy, communications, corporate, energy, environmental, labor and
employment, health care, intellectual property, international, real
estate, tax and trade regulation - that may have substantive, day-to-day
experience with the issues that lie at the heart of a client's
situation. This is the internal component of Akin Gump's team-based
approach: matching the needs of clients with the appropriate area of
experience in the firm ... Akin Gump has a broad range of active
representations before every major committee of Congress and executive
branch department and agency."

When queried about this, Massie Ritsch, communications director at the
Center for Responsive Politics, says: "The wall between a firm's legal
practice and its lobbying shop can be low - the work of an attorney and
a lobbyist trying to influence regulations and laws can be so
intertwined. So, if anything, the influence of the lobbying industry in
presidential campaigns is undercounted".

Those critical thinkers over at the Black Agenda Report for the Journal
of African American Political Thought and Action have zeroed in on the
making of the Obama bubble:

"The 2008 Obama presidential run may be the most slickly orchestrated
marketing machine in memory. That's not a good thing. Marketing is not
even distantly related to democracy or civic empowerment. Marketing is
about creating emotional, even irrational bonds between your product and
your target audience".

And slick it is. According to the Obama campaign's financial filings
with the Federal Election Commission (FEC) and aggregated at the Center
for Responsive Politics, the Obama campaign has spent over $52 million
on media, strategy consultants, image building, marketing research and
telemarketing.

The money has gone to firms like GMMB, whose website says its "goal is
to change minds and change hearts, win in the court of public opinion
and win votes" using "the power of branding - with principles rooted in
commercial marketing", and Elevation Limited, which targets the Hispanic
population and has "a combined experience of well over fifty years in
developing and implementing advertising and marketing solutions for
Fortune 500 companies, political candidates, government agencies".

Their client list includes the Department of Homeland Security. There's
also the Birmingham, Alabama, based The Parker Group which promises:
"Valid research results are assured given our extensive experience with
testing, scripting, skip logic, question rotation and quota control ...
In-house list management and maintenance services encompass
sophisticated geo-coding, mapping and scrubbing applications". Is it any
wonder America's brains are scrambled?

The Wall Street plan for the Obama-bubble presidency is that of the
cleanup crew for the housing bubble: sweep all the corruption and
losses, would-be indictments, perp walks and prosecutions under the rug
and get on with an unprecedented taxpayer bailout of Wall Street. (The
corporate law firms have piled on to funding the plan because most were
up to their eyeballs in writing prospectuses or providing legal opinions
for what has turned out to be bogus AAA securities. Lawsuits naming the
Wall Street firms will, no doubt, shortly begin adding the law firms
that rendered the legal guidance to issue the securities.) Who better to
sell this agenda to the millions of duped mortgage holders and
foreclosed homeowners in minority communities across America than our
first, beloved, black president of hope and change?

Why do Wall Street and the corporate law firms think they will find a
President Obama to be accommodating? As the Black Agenda Report notes,
"Evidently, the giant insurance companies, the airlines, oil companies,
Wall Street, military contractors and others had closely examined and
vetted Barack Obama and found him pleasing".

That vetting included his remarkable "yes" vote on the Class Action
Fairness Act of 2005, a five-year effort by 475 lobbyists, despite
appeals from the NAACP and every other major civil rights group. Thanks
to the passage of that legislation, when defrauded homeowners of the
housing bubble and defrauded investors of the bundled mortgages try to
fight back through the class-action vehicle, they will find a new layer
of corporate-friendly hurdles.

I personally admire Senator Obama.  I want to believe Senator Obama is
not a party to the scheme. But corporate interests have had plenty of
time to do their vetting.  Democracy demands no less of we, the people.

[This is the second of two parts. The first ran yesterday. Editors.]

Pam Martens worked on Wall Street for 21 years; she has no securities
position, long or short, in any company mentioned in this article. She
writes on public interest issues from New Hampshire. She can be reached
at pamk741 at aol.com.

http://www.counterpunch.org/martens05062008.html


TO POST A COMMENT, OR TO READ COMMENTS POSTED BY OTHERS, please click
on the word "comment" highlighted at the end of the version of this
essay posted at http://billtotten.blogspot.com/