Louise Story on how the ‘big fish’ of the financial crisis got away

Since the U.S. financial picture turned so dark in 2008, nearly $11 trillion in household wealth has vanished, and about 4 million families have lost their homes to foreclosure.  It’s understandable that people want someone, anyone, to be held accountable.

Need to Know turned to Louise Story, a colleague of Joe Nocera’s at The New York Times, to answer some of the questions raised by Nocera’s reporting on the financial crisis, and how none of the major executives responsible for the subprime mortgage mess have been prosecuted.

 
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Comments

  • Tmagee

    What a tools. Really, man she sniffed this story. Horrible and well scripted. Come on who was she protecting.

  • http://www.facebook.com/profile.php?id=590328588 Mitchell Dean Diaz

    And the federal deficit is how much? Egregious, premeditated, criminal acts, scott free, while regular Americans and future generations are asked to foot the bill–and nobody seems to care. “There is a club, and you and I are not in it” (George Carlin). It’s time to re-regulate–all of it.

  • http://www.facebook.com/profile.php?id=590328588 Mitchell Dean Diaz

    And the federal deficit is how much? Egregious, premeditated, criminal acts, scott free, while regular Americans and future generations are asked to foot the bill–and nobody seems to care. “There is a club, and you and I are not in it” (George Carlin). It’s time to re-regulate–all of it.

  • Jerrymerchant

    The purpose, standards, and requirements of all government officials. Help stop all corruptions, Freedom and equal justice for all !!!

    Original Supreme Court Decisions of The 14th Amendment/Citizenship Clause
    Posted by Jerry aka AW on February 21, 2011 at 1:49pm
    View My Blog
    As years go by Legislature pervert the original citizenship clause of the 14th amendment for the benefit of private interest, but based on statements made during the congressional debate over the amendment. Senator Jacob M. Howard of Michigan- The author of the citizenship clause- Describe the clause as exclusing american indians who maintain their tribal ties and “Persons born in the united states who are forigners, aliens,who belong to the families of ambassador’s or forign minister”. Howard further stated the term jurisdiction meant.”the same jurisdiction in extent and quality as applies to every citizen of the united states now (1866)” and that the united states possessed a “Full and complete jurisdiction” over the person describe in the amendment…

    According to the Preamble of the United States Constitution of America, The United States Constituion of America Article-1, section-8, and the 14th Amendment.
    To make laws and corporations in america is to tax american citizens, Therefore, the requriements to make laws and corporations in america is to provide for the common defense and promote the general welfare of america citizens evenly.

    This Note revisits the legislative reading of the Fourteenth Amendment by articulating the theory of legislative discretion implicit within the text of the amendment. The Framers of the amendment, as well as judges and commentators of the era, expected courts to review acts of Congress under the deferential standard laid out by Chief Justice Marshall in McCulloch v. Maryland.(14) The amendment grants Congress the power to enforce its provisions by “appropriate” legislation, a word that called to their minds the Chief Justice’s canonical opinion. In upholding Congress’s power to charter a national bank, Marshall laid out the text through which nineteenth-century courts would review the constitutionality of an act of Congress: “Let the end be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the constitution, are constitutional.”(15) Congressmen, judges, and legal commentators regularly drew on these words–often verbatim–as setting the standard by which courts would review an act of Congress.(16) In drafting Section 5 of the Fourteenth Amendment, the Republicans borrowed explicitly from McCulloch in granting Congress the power to enforce the provisions of the amendment by appropriate legislation.(17)

    Under the McCulloch standard, Congress enjoyed interpretive discretion that extended not only to the means but also to the constitutional ends themselves. Modern commentators have read John Marshall’s reminder that “it is a constitution we are expounding”(18) as a warrant for judicial license.(19) However, in McCulloch, those words licensed not judicial freedom, but judicial deference to the plausible interpretive acts of Congress. To take McCulloch seriously is to understand why the Supreme Court, after Marbury v. Madison,(20) struck down only one other act of Congress prior to the Civil War.(21) In contrast to Boerne’s neat but implausible distinction between the power to remedy and the power to define constitutional violations, McCulloch recognized that congressional legislation would inevitably shape constitutional meaning.

    The McCulloch theory rests upon three propositions. First, a constitution designates only the broad outlines of its important objects.(22) Second, the public welfare requires Congress to have wide latitude in choosing the means by which it is to pursue such objects.(23) And third, a court will only strike down an act of Congress if there is a clear opposition between the constitutional text and the law.(24) If these principles are accepted, then Boerne’s claim that Congress has no independent discretion in reading the text cannot be correct. Where the Constitution’s text speaks in terms of broad principles, Congress may legislate under those broad terms. And a court may deny that action only when the law cannot be reconciled with the constitutional text. Under McCulloch, Congress’s discretion goes well beyond the mere ability to select the means to judicially defined ends. At least that is what the Framers of the Fourteenth Amendment understood McCulloch to mean.

    The Reconstruction Congress demonstrated its understanding in enacting the Civil Rights Act of 1866, just weeks before it considered Section 5. The Enforcement Clause of the Thirteenth Amendment–the textual predecessor of Section 5–granted Congress the power to enforce the amendment’s substantive guarantees against slavery by “appropriate legislation.”(25) The substance of the amendment prohibited slavery, yet under the Enforcement Clause the Republicans claimed the authority to enact the Civil Rights Act, which protected against state infringement a range of civil liberties, such as the rights of contract and property and the right to sue in court. To justify such power, congressional Republicans invoked “the celebrated case of McCulloch vs. The State of Maryland” as allowing Congress to read the amendment not simply to prohibit slavery, but to guarantee the “maintenance of freedom to the citizen.”(26) The legislators who passed the Civil Rights Act introduced this same view into the Fourteenth Amendment.(27) They recognized that the privileges and immunities “are not and cannot be fully defined in their entire extent and precise nature,” yet the Republicans would rely upon Congress’s power “to pass laws which are appropriate to the attainment of the great object of the amendment.”(28) So long as Congress pursued an end plausibly within the Constitution, and did so by means not prohibited, the Court would sustain legislative interpretations of the act.

    The Reconstruction Court invoked this tradition in interpreting Congress’s power under Section 5 of the Fourteenth Amendment. In its first construction of that clause, in Ex parte Virginia,(29) the Court described Congress’s power in words that tracked McCulloch: “Whatever legislation is appropriate, that is, adapted to carry out the objects the amendments have in view, whatever tends to enforce submission to the prohibitions they contain … if not prohibited, is brought within the domain of congressional power.”(30) Although that language lay dormant for nearly a century, the Court of the civil rights era revived it during the voting rights cases of the 1960s, according Congress substantial discretion to go beyond the Court’s reading of the Civil War amendments in order to protect civil liberties.(31) The Boerne Court itself honored the McCulloch reading, quoting Ex parte Virginia(32) at the beginning of its inquiry and devoting a section of the opinion to affirming its consonance with the voting rights precedents.(33) But the Court honored McCulloch more in the breach than in the observance. While McCulloch may remain in name the standard by which the Court reviews congressional acts under the Fourteenth Amendment, Boerne’s holding casts the law away from those constitutional moorings.

    Although numerous modern commentators have recognized McCulloch as the appropriate standard for the interpretation of Section 5 legislation, none has looked closely at what that theory meant to the Framers of the amendment.(34) This Note seeks to remedy that defect by articulating the McCulloch theory of judicial review implicit in the text of the Fourteenth Amendment. Part II argues that Boerne’s historical analysis provides an unsatisfactory account of the original understanding of Section 5. The Boerne Court limited its inquiry to the legislative debates and found that the rejection of an earlier version of the amendment signaled a strong desire to limit Congress’s discretion in shaping constitutional meaning.(35) This Part argues that the alterations in the text invited judicial enforcement and introduced the “state action” requirement but did not change Congress’s ability to provide plausible substance to those guarantees. The Fourteenth Amendment remained a grant of power to Congress, the scope of which must be determined in light of McCulloch v. Maryland.

    Part III explores how the Framers of the Fourteenth Amendment understood the McCulloch theory of judicial review. From its issuance, commentators and judges looked to the case for guidance in reviewing acts of Congress. Judges cited it frequently, and each time they found that it confirmed Congress’s assertion of power. Section III.A explores the “original understanding” of McCulloch, looking first to the case itself and then to the work of its earliest interpreters. The great constitutional treatises of the early nineteenth century by Justice Joseph Story and Chancellor James Kent read McCulloch as the authoritative text on congressional power. The Supreme Court relied upon it throughout the antebellum era, and by the 1860s, judges recognized McCulloch as the definitive and canonical exposition of congressional power.

    The Reconstruction Congress would invoke these works, and the McCulloch decision itself, in drafting the Fourteenth Amendment. Section III.B returns to the congressional debates themselves to show how the McCulloch theory of congressional power found its way into the text. The drafters of the amendment drew on McCulloch and the Civil Rights Act of 1866 as precedents for the discretion later Congresses would enjoy under the Fourteenth Amendment. Both within Congress and before the states, the ratification debates read the Fourteenth Amendment as primarily a grant of power to Congress to legislate under McCulloch. Section III.C shows how the Supreme Court brought this same understanding to its early interpretation of the Fourteenth Amendment. Against the background of the Reconstruction Court’s struggle to balance constitutional innovation with the federal structure, two themes emerge: The Fourteenth Amendment was a story about congressional power, and Congress would enjoy substantial interpretive discretion in legislating that content.

    Part IV concludes by briefly examining the issues raised by the McCulloch theory outlined in this Note. Even if the argument from original understanding is convincing, is such a vision of judicial deference to congressional action desirable? This Part argues that allowing both the judiciary and the legislature to compete with the states in expanding the zone of liberty reflects the best traditions of our constitutional government and might increase the democratic legitimacy of “substantive due process.” Rather than threatening the federalist balance, granting Congress an increased role in protecting national liberties holds true to a federalism that recognizes a national government of enumerated and limited powers.

  • Jerrymerchant

    SUPREME COURT OF THE UNITED STATES

    ——————————————————————————–

    17 U.S. 316

    McCulloch v. Maryland
    ERROR TO THE COURT OF APPEALS OF THE STATE OF MARYLAND

    ——————————————————————————–

    Argued: — Decided:

    ——————————————————————————–

    Congress has power to incorporate a bank.

    The Act of the 10th of April, 1816, ch. 44, to “incorporate the subscribers to the Bank of the United States” is a law made in pursuance of the Constitution.

    The Government of the Union, though limited in its powers, is supreme within its sphere of action, and its laws, when made in pursuance of the Constitution, form the supreme law of the land.

    There is nothing in the Constitution of the United States similar to the Articles of Confederation, which exclude incidental or implied powers.

    If the end be legitimate, and within the scope of the Constitution, all the means which are appropriate, which are plainly adapted to that end, and which are not prohibited, may constitutionally be employed to carry it into effect.

    The power of establishing a corporation is not a distinct sovereign power or end of Government, but only the means of carrying into effect other powers which are sovereign. Whenever it becomes an appropriate means of exercising any of the powers given by the Constitution to the Government of the Union, it may be exercised by that Government.

    If a certain means to carry into effect of any of the powers expressly given by the Constitution to the Government of the Union be an appropriate measure, not prohibited by the Constitution, the degree of its necessity is a question of legislative discretion, not of judicial cognizance.

    The Bank of the United States has, constitutionally, a right to establish its branches or offices of discount and deposit within any state.

    The State within which such branch may be established cannot, without violating the Constitution, tax that branch.

    The State governments have no right to tax any of the constitutional means employed by the Government of the Union to execute its constitutional powers.

    The States have no power, by taxation or otherwise, to retard, impede, burthen, or in any manner control the operations of the constitutional laws enacted by Congress to carry into effect the powers vested in the national Government.

    This principle does not extend to a tax paid by the real property of the Bank of the United States in common with the other real property in a particular state, nor to a tax imposed on the proprietary interest which the citizens of that State may hold in this institution, in common with other property of the same description throughout the State.

    This was an action of debt, brought by the defendant in error, John James, who sued as well for himself as for the State of Maryland, in the County Court of Baltimore County, in the said State, against the plaintiff in error, McCulloch, to recover certain penalties, under the act of the Legislature of Maryland hereafter mentioned. Judgment being rendered against the plaintiff in error, upon the following statement of facts agreed and submitted to the court by the parties, was affirmed by the Court of Appeals of the State of Maryland, the highest court of law of said State, and the cause was brought by writ of error to this Court.

    It is admitted by the parties in this cause, by their counsel, that there was passed, on the 10th day of April, 1816, by the Congress of the United States, an act entitled, “an act to incorporate the subscribers to the Bank of the United States;” and that there was passed on the 11th day of February, 1818, by the General Assembly of Maryland, an act, entitled, “an act to impose a tax on all banks, or branches thereof, in the State of Maryland, not chartered by the legislature,” [p318] which said acts are made part of this Statement, and it is agreed, may be read from the statute books in which they are respectively printed. It is further admitted that the President, directors and company of the Bank of the United States, incorporated by the act of Congress aforesaid, did organize themselves, and go into full operation, in the City of Philadelphia, in the State of Pennsylvania, in pursuance of the said act, and that they did on the ___ day of _____ 1817, establish a branch of the said bank, or an office of discount and deposit, in the City of Baltimore, in the State of Maryland, which has, from that time until the first day of May 1818, ever since transacted and carried on business as a bank, or office of discount and deposit, and as a branch of the said Bank of the United States, by issuing bank notes and discounting promissory notes, and performing other operations usual and customary for banks to do and perform, under the authority and by the direction of the said President, directors and company of the Bank of the United States, established at Philadelphia as aforesaid. It is further admitted that the said President, directors and company of the said bank had no authority to establish the said branch, or office of discount and deposit, at the City of Baltimore, from the State of Maryland, otherwise than the said State having adopted the Constitution of the United States and composing one of the States of the Union. It is further admitted that James William McCulloch, the defendant below, being the cashier of the said branch, or office of discount and [p319] deposit did, on the several days set forth in the declaration in this cause, issue the said respective bank notes therein described, from the said branch or office, to a certain George Williams, in the City of Baltimore, in part payment of a promissory note of the said Williams, discounted by the said branch or office, which said respective bank notes were not, nor was either of them, so issued on stamped paper in the manner prescribed by the act of assembly aforesaid. It is further admitted that the said President, directors and company of the Bank of the United States, and the said branch, or office of discount and deposit have not, nor has either of them, paid in advance, or otherwise, the sum of $15,000, to the Treasurer of the Western Shore, for the use of the State of Maryland, before the issuing of the said notes, or any of them, nor since those periods. And it is further admitted that the Treasurer of the Western Shore of Maryland, under the direction of the Governor and Council of the said State, was ready, and offered to deliver to the said President, directors and company of the said bank, and to the said branch, or office of discount and deposit, stamped paper of the kind and denomination required and described in the said act of assembly.

    The question submitted to the Court for their decision in this case is as to the validity of the said act of the General Assembly of Maryland on the ground of its being repugnant to the Constitution of the United States and the act of Congress aforesaid, or to one of them. Upon the foregoing statement of facts and the pleadings in this cause (all errors in [p320] which are hereby agreed to be mutually released), if the Court should be of opinion that the plaintiffs are entitled to recover, then judgment, it is agreed, shall be entered for the plaintiffs for $2,500 and costs of suit. B ut if the Court should be of opinion that the plaintiffs are not entitled to recover upon the statement and pleadings aforesaid, then judgment of non pros shall be entered, with costs to the defendant.

    It is agreed that either party may appeal from the decision of the County Court to the Court of Appeals, and from the decision of the Court of Appeals to the Supreme Court of the United States, according to the modes and usages of law, and have the same benefit of this statement of facts in the same manner as could be had if a jury had been sworn and impanneled in this cause and a special verdict had been found, or these facts had appeared and been stated in an exception taken to the opinion of the Court, and the Court’s direction to the jury thereon.

    Copy of the act of the Legislature of the State of Maryland, referred to in the preceding Statement.

    An act to impose a tax on all banks or branches thereof, in the

    State of Maryland not chartered by the legislature

    Be it enacted by the General Assembly of Maryland that if any bank has established or shall, without authority from the State first had and obtained establish any branch, office of discount and [p321] deposit, or office of pay and receipt in any part of this State, it shall not be lawful for the said branch, office of discount and deposit, or office of pay and receipt to issue notes, in any manner, of any other denomination than five, ten, twenty, fifty, one hundred, five hundred and one thousand dollars, and no note shall be issued except upon stamped paper of the following denominations; that is to say, every five dollar note shall be upon a stamp of ten cents; every ten dollar note, upon a stamp of twenty cents; every twenty dollar note, upon a stamp of thirty cents; every fifty dollar note, upon a stamp of fifty cents; every one hundred dollar note, upon a stamp of one dollar; every five hundred dollar note, upon a stamp of ten dollars; and every thousand dollar note, upon a stamp of twenty dollars; which paper shall be furnished by the Treasurer of the Western Shore, under the direction of the Governor and Council, to be paid for upon delivery; provided always that any institution of the above description may relieve itself from the operation of the provisions aforesaid by paying annually, in advance, to the Treasurer of the Western Shore, for the use of State, the sum of $15,000.

    And be it enacted that the President, cashier, each of the directors and officers of every institution established or to be established as aforesaid, offending against the provisions aforesaid shall forfeit a sum of $500 for each and every offence, and every person having any agency in circulating any note aforesaid, not stamped as aforesaid directed, shall forfeit a sum not exceeding $100, [p322] every penalty aforesaid to be recovered by indictment or action of debt in the county court of the county where the offence shall be committed, one-half to the informer and the other half to the use of the State.

    And be it enacted that this act shall be in full force and effect from and after the first day of May next. [p400]

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  • Jerrymerchant

    I`ve been studying constitutional law, the actions of individuals in government positions, and private corporations for many years. everything they do defeats the purpose of the revolutionary war, and the civil war which took the powers of taxation out of the hands of private corporations… Help gain financial & moral support to do what we must do. Support the people`s powers PEOPLE`S GOVERNMENT v. PRIVATE CORPORATIONS !!! Thank You Jerry Merchant (516) 805-6058, 11Grant Street Hempstead, N.Y. 11550

    Our Responsibilities & Obligations Is To Fight for Our Freedom By Jerry Merchant
    Posted by Jerry aka AW on April 5, 2011 at 11:17am
    View My Blog

    The Constitution of the United States says that we, the people, have certain basic rights and obligations, and that these rights and obligations are to be protected and implemented by the governing bodies.

    It is the responsibility of the people to make sure that these governing bodies do not breach their responsibilities to protect and act in the interest of the general welfare , which means the welfare of all the citizens.

    One thing we must always remember is that life is God’s gift , and freedom is our responsibility.

    So when private corporations are allowed to violate their responsibility to promote the general welfare, as is being done in Hempstead, it creates chaos throughout the community and the nation.

    If you remember, when Dr. Martin Luther King spoke, he said that when one person or corporation violates the law, it trickles down and injures the entire country.

    For centuries, our nation’s greatest leaders, such as Dr.King, Malcolm X, Nat Turner, Frederick Douglass, Sojourner Truth, Gabriel Prosser, Denmark Vesey, Medgar Evers, and many others, gave their lives by fighting for freedom, not only for themselves, but for all those, such as us, who came after them.

    Now today it is our responsibility to uphold this sacred duty and fight, not only for our rights, but for our brothers and sisters who come tomorrow.

    Today in Hempstead, corporations are violating the rights of the people by not promoting the general welfare of the community. In fact, they are acting against the general welfare of our community.

    We must accept our responsibility to stand together to preserve our freedoms and our lives.

    If we want freedom, it is our responsibility to get out there and fight for it. It is our obligation. We can’t just sit back and let these corporations violate the law and the Constitution which all American’s inherited, and that means us.

    God made us one people ane we have to learn to live together as one. The law and the Constitution are on our side. We must unite and stand up and organize peacefully to protect our rights and our liberty.

    We must do it not only for ourselves, but for all those who come after us
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  • Jakrusamerican

    Although there may have been some infractions of the law, the larger problem causing the 2007/8 economic collapse resides in deregulating the financial services industry in 1999  (S900) leaving few laws to break. “Starve the Beast” “small government” policies woefully underfunded regulating agencies, which had far too few investigators to adequately perform needed oversight. Banking lobbyists pleaded with lawmakers for over 60 years to remove constraining regulations that prevent them from making greater profits, and in took less than a decade for the entire system to collapse under the weight of its own debauchery.