Economic populism is doing well right now for a reason. Whether it's the generation of overeducated temps being put to work doing stupid and pointless tasks, or families bankrupted by mortgages adn a falling real estate market, or massive poverty, or Mexicans thrown into poverty by NAFTA and coming over the border, what's going on is that political and business elites are cooperating in stealing from everyone else. It's really that simple.
For instance, corporate fraud is now only sort of illegal because of the Federalist Society's 30 year-long legal racket. A few weeks ago, three strict constructionist judges legalized corporate fraud. They found that the banks that advised Enron overtly aided in defrauding investors out of $40 billion and made money from the transactions, but that they owed nothing to Enron shareholders and so were not part of the suit.
A federal appeals panel ruled yesterday that a class-action lawsuit against investment banks over their role as advisers to Enron cannot go ahead, dealing a blow to shareholders who lost billions of dollars after the company collapsed in 2001.While shareholders can still pursue individual claims against the banks, the decision stymies any mass effort by shareholders to recoup $40 billion in losses from the Wall Street banks that had earned millions of dollars in banking fees from Enron.
"This is a devastating ruling for shareholders," said Thomas R. Ajamie, a Houston securities lawyer. "It's hard to believe that shareholders won't recovery money from an admitted fraud, but this U.S. Court of Appeals circuit has been more hostile to investors than other circuits have been."
In its opinion, a three-judge panel of the United States Court of Appeals for the Fifth Circuit in New Orleans, said: "Presuming plaintiffs' allegations to be true, Enron committed fraud by misstating its accounts, but the banks only aided and abetted that fraud by engaging in transactions to make it more plausible; they owed no duty to Enron's shareholders."
The suit was so clear-cut, and this ruling was so surprising, that several banks had already settled because they assumed they'd lose. The decision was just outrageous.
"Enron had a duty to its shareholders, but the banks did not," the opinion stated. "The transactions in which the banks engaged at most aided and abetted Enron's deceit by making its misrepresentations more plausible."
Over the next ten years, economic populism is going to be a strong part of the equation in our politics. The powers that be are gathering together to stop the renewal of Fast Track trade authority for Bush this summer, and you're going to watch a very anti-free trade Democratic Party. Party leaders were watching Ohio in 2006.
First the argument against plutocracy must be made, and some piece of neoliberal trade legislation must die. That's Free Trade. And then the rollbacks will begin. It needn't have happened this way for business elites, but they just had to have more and more and more, until there was nothing left for anyone else.
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