You are hereWall Street
By Dave Lindorff
The accounting profession might seem like the last place that you’d find serious political hanky-panky going on, and it’s probably not on very many people’s A-list of fun subjects to read about, but the Financial Accounting Standards Board, a quasi-governmental body that has statutory authority to regulate and establish the rules by which public companies, including banks, do their books, has just caved in to pressure from those banks and from the large number of members of Congress who pocket huge piles of campaign swag and perks from those banks and other public companies, and gravely undermined the integrity of corporate balance sheets.
The bank stress tests currently underway are “a complete sham,” says William Black, a former senior bank regulator and S&L prosecutor, and currently an Associate Professor of Economics and Law at the University of Missouri - Kansas City. “It’s a Potemkin model. Built to fool people.” Like many others, Black believes the “worst case scenario” used in the stress test don’t go far enough.
America is devolving into a third-world nation. And if we do not immediately halt our elite’s rapacious looting of the public treasury we will be left with trillions in debts, which can never be repaid, and widespread human misery which we will be helpless to ameliorate. Our anemic democracy will be replaced with a robust national police state. The elite will withdraw into heavily guarded gated communities where they will have access to security, goods and services that cannot be afforded by the rest of us. Tens of millions of people, brutally controlled, will live in perpetual poverty. This is the inevitable result of unchecked corporate capitalism. The stimulus and bailout plans are not about saving us. They are about saving them. We can resist, which means street protests, disruptions of the system and demonstrations, or become serfs.
What to make of Spitzer's public re-emergence? As he appears on the Today show this morning, Justin Frank, psychiatrist and author of Bush on the Couch, asks who could know better about the failure of self-regulation than someone with a sexual addiction?
“All the cops are criminals and all the sinners saints.” -Mick Jagger
Five years after Time magazine declared him “The Crusader of the Year,” Eliot Spitzer was known simply and infamously as “Client #9.” The man dedicated to public service was equally dedicated to private servicing – and the link between these two parts provided him with a leg up, as it were, on being able to spot others’ delinquent behavior far more successfully than public servants less delinquent than himself.
Spitzer was felled by his own arrogance and sexual hunger, yet it may have been precisely the qualities that drove his private life that enabled him to recognize more than anyone the damage that arrogant, greedy financial institutions were doing to our nation.
Obama's War on Labor
by Stephen Lendman
Voters expecting change keep getting rude reminders of what kind, none they can believe in reiterated again on March 30 in Obama's remarks to the auto giants. While stating "We cannot....must not (and) will not let (this) industry vanish," he laid down a clear marker. Labor, not business, is targeted. More on that below.
"We (won't) excuse poor decisions," he said. "We cannot make the survival of our auto industry dependent on an unending flow of taxpayer dollars." In rejecting their aid request, he added: "These companies - and this industry - must ultimately stand on their own, not as wards of the state....What we are asking is difficult. It will require hard choices by the companies. (Their plan doesn't go) far enough to warrant the substantial new investments these companies are requesting."
'A Failure to Communicate'? Administration Tries to Explain Financial Crisis
New Treasury Web site 'Decodes' Complicated Economic Terms
By Matthew Jaffe | ABCNews
With the nation's recession nearing a year-and-a-half in duration, critics from Capitol Hill to Main Street say the Obama administration has not succeeded in helping the general public understand how the financial crisis occurred and what the government is doing to solve it.
"To even help people understand what is going on, they haven't done a good job," said professor George Lakoff a linguistics professor at the University of California-Berkeley. "They haven't been able to explain what the problems are."
"They need to find a way for people to understand it," he said. "That is extremely urgent."
Analysts warn that if the administration, specifically the Treasury Department, cannot better communicate its programs to the general public, then it runs the risk of a lack of understanding fueling public outrage as hundreds of billions of taxpayer dollars get dished out.
"This is a very real concern and I have seen it firsthand," said Scott Talbott, vice president at the Financial Services Roundtable. "What happens is the average person focuses on one concept like 'Treasury bailing out bad banks' and then they stop listening. This incomplete conclusion leads to anger and frustration. These reactions are understandable, but if Treasury increases the public's understanding of its actions, the level of anger and frustration will decrease."
Last Wednesday, the front page of the Wall Street Journal pulled no punches. The lead headline was: "Global Slump Seen Deepening." ("The outlook for the global economy worsened on the eve of a summit of the world's 20 biggest economic powers…") A chart just beneath that headline, labeled "Gloomier Outlook" and showing World Bank economic projections, was nothing short of dramatic. The graph line for world trade simply plunged off a visual cliff and, like an arrow heading for a target, went straight down. The last paragraph of the piece quoted World Bank President Robert Zoellick this way: "In London, Washington, and Paris, people talk of bonuses or no bonuses. In parts of Africa, South Asia, and Latin America, the struggle is for food or no food."
The Obama administration is engineering its new bailout initiatives in a way that it believes will allow firms benefiting from the programs to avoid restrictions imposed by Congress, including limits on lavish executive pay, according to government officials.
Administration officials have concluded that this approach is vital for persuading firms to participate in programs funded by the $700 billion financial rescue package.
Bank bailout cost nearly doubles, agency says | MSNBC
Congressional Budget Office: Taxpayers will pay $1.67 billion more
Bailing out the financial sector will cost taxpayers $167 billion more than originally anticipated, according to a Congressional Budget Office estimate.
The original figure in January was $189 billion, but it is now $356 billion — $152 billion more for 2009 and $15 billion more next year, the CBO says in its March report updating the budget and economic outlook.
The CBO raised its projection because yields have increased on securities issued by the bailed-out financial institutions under the $700 billion Troubled Asset Relief Program.
That means there will be an increase in the cost of the subsidy from the U.S. Treasury's purchase of preferred stock, asset guarantees and loans to automakers, the CBO said.
The Smooth Criminal Transition from Bush/Cheney to Obama
Corrupt new administration deepens and expands systemic criminalization and war agenda
by Larry Chin | Global Researcher.CA
To sober, clear-eyed observers of history and political deception, the ascension of Barack Obama held the promise for unprecedented new dangers: a revitalized New World Order, led by the Anglo-American empire’s neoliberal criminal faction and an iconic, deceptive new facilitator; and a continuation of Bush/Cheney criminality and war, under smarter and much more effective management.
Now, just months into their tenure, the Barack Obama administration has more than fulfilled the promises he made to his elite constituency, deepening the mass destruction of Bush/Cheney, while charming its victims all over the world into enjoying their own demise.
View the show here.
BILL MOYERS: Yeah. Are you saying that Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong?
WILLIAM K. BLACK: Absolutely.
BILL MOYERS: You are....
...WILLIAM K. BLACK: I don't know whether we've lost our capability of outrage. Or whether the cover up has been so successful that people just don't have the facts to react to it.
BILL MOYERS: Who's going to get the facts?
WILLIAM K. BLACK: We need some chairmen or chairwomen--
BILL MOYERS: In Congress.
WILLIAM K. BLACK: --in Congress, to hold the necessary hearings. And we can blast this out. But if you leave the failed CEOs in place, it isn't just that they're terrible business people, though they are. It isn't just that they lack integrity, though they do. Because they were engaged in these frauds. But they're not going to disclose the truth about the assets.
The "dirty little secret" that Geithner is going to great degrees to obscure from the public is very simple. There are only at most perhaps five US banks that are the source of the toxic poison causing such dislocation in the world financial system. What Geithner is desperately trying to protect is that reality. The heart of the present problem, and the reason ordinary loan losses are not the problem as in prior bank crises, is a variety of exotic financial derivatives, most especially credit default swaps....This is what must be put into bankruptcy receivership, or nationalization. Every hour the Obama administration delays that, and refuses to demand a full independent government audit of the true solvency or insolvency of these five or so banks, costs to the US and to the world economy will inevitably snowball as derivatives losses explode.
Barack Obama's chief economic adviser, Larry Summers, received hundreds of thousands of dollars in speaking fees last year from firms that have direct financial interests before the government or are intimately involved in the White House's bank relief programs.
The White House released late Friday the personal financial disclosure forms of many high-ranking administration officials. The document provided for Summers, who serves as one of the president's closest confidants, underscores just how close some of these officials are to the industry over which they now have oversight.
Among the firms that paid Summers large amounts in speaking fees include J.P. Morgan Chase. That bank offered the former Harvard president and Treasury Secretary $67,500 for a February 1, 2008 engagement. It has received $25 billion in government bailout funds.
Treasury Secretary Tim Geithner has called for "sweeping regulation" of the financial community, beginning a discussion of how we restructure the banking system—in and out of the shadows—as we emerge from what Robert Kuttner calls the Great Collapse. Literally trillions have already been committed in loans, guarantees, swaps, direct equity to stave off a complete financial collapse, even as the real economy declines.
But before we decide on the salvation, we need a public probe of the fall. What caused the Great Collapse? We need a grand inquest—either a special congressional committee or an independent commission like the 9/11 Commission armed with subpoena power—to expose misbegotten policies, malpractices, and mistaken ideas that allowed the wizards of Wall Street to transport us over the cliff.
...Greider thinks, "People at large, I don't care whether they're middle class or upper class or working poor or union, non-union, have to find ways to come together themselves, perhaps in very small groups at first, and talk about their own stuff. Their experiences, their ideas their convictions, their aspirations for the country, themselves, their families, and then broaden out a bit, laterally. And have more people in the discussion. They don't have to become a giant organization, but they have to convince themselves that they're citizens..."That's kind of the mystery of democracy. People get power if they believe they're entitled to power."
Too Big to Fail or Too Dumb to Survive
By John Cooper
Unfortunately, the efforts to save weak banks by forcing them to merge with larger ones is worsening the "too big to fail" problem. Government agencies and policies failed to protect and in some cases contributed to the financial crisis. It is not clear that the reforms the Administration is requesting of Congress will be affective in preventing future crises.
Russian President Dmitry Medvedev urged international leaders on Tuesday to discuss the creation of a modern currency system, speaking ahead of a G20 meeting set to focus on a new financial architecture.
"The current system is not ideal," Medvedev said at a joint news conference with German Chancellor Angela Merkel in Berlin.
"We cannot develop in the next 10 years if we do not create a new infrastructure including new (currency) systems... We should think about creating a new currency system," he said.
Geithner’s ‘Dirty Little Secret’: The Entire Global Financial System is at Risk
When the Solution to the Financial Crisis becomes the Cause
by F. William Engdahl | GlobalResearch.ca
US Treasury Secretary Tim Geithner has unveiled his long-awaited plan to put the US banking system back in order. In doing so, he has refused to tell the ‘dirty little secret’ of the present financial crisis. By refusing to do so, he is trying to save de facto bankrupt US banks that threaten to bring the entire global system down in a new more devastating phase of wealth destruction.
Cassano, who lives in London, made more than $300 million running the infamous Financial Products Division of AIG where he, with about a dozen others, committed AIG to insure what turned out to be more than a trillion dollars worth of junk quality loans held by banks. "He is the golden boy of the casino," said Rep. Speier. "They basically took peoples' hard earned money and threw it away, gambled it and lost everything. And he must be held accountable for the fraud, for the dereliction of his duty, and for the havoc that he's wrought on America."..."This is the other very important issue underneath the AIG scandal," said Blum. "All of these contracts were moved offshore for the express purpose of getting out from under regulation and tax evasion."..."AIG was insuring junk and it was the AIG insurance that made the junk marketable," said tax law expert Jack Blum. "American taxpayers have been put on the hook for this insurance junk."
The FBI and federal prosecutors are reportedly closing in on the AIG executive whose suspect investments cost the insurance giant hundreds of billions of dollars. The government is investigating whether or not 54-year old Brooklyn-native Joseph Cassano committed criminal fraud in virtually bankrupting the company.
Obama's Latest No Banker Left Behind Scheme
By Stephen Lendman
On Wall Street, that is. So hyped by advance fanfare, Timothy Geithner unveiled his Public-Private Investment Program (PPIP) on March 23, the latest in a growing alphabet soup of handouts topping $12.5 trillion and counting - so much in so many forms, in "gov-speak" language, with so many changing and moving parts, it's hard for experts to keep up let alone the public, except to sense something is very wrong. They're being fleeced by a finance Ponzi scheme, sheer flimflam, and here's how from what we know:
- $400 billion in taking over Fannie and Freddie;
- $42 billion for the auto giants; billions more coming for their suppliers;
- approaching $200 billion for AIG with more coming on request;
- $350 billion to Citigroup in handouts and loan guarantees;
- tens of billions to other banks, including $87 billion to JP Morgan Chase for bad Lehman Brothers trades;
“Credit as a Public Utility: The Solution to the Economic Crisis”
A Video in Six Parts | Written and Produced by Richard C. Cook
Part One of Six Parts: Credit As A Public Utility: The Solution to the Economic Crisis
Early U.S. statesmen, such as Benjamin Franklin, Thomas Jefferson, James Madison, and Andrew Jackson worked to free the nation from control by the bankers who had been behind the establishment of the First and Second Banks of the United States. During the Civil War, President Abraham Lincoln implemented a true democratic currency by spending Greenbacks directly into circulation without borrowing from the banks. These measures allowed the U.S. to develop for much of the 19th century largely free from bankers’ control. By the end of the century, this had changed, and the bankers were taking over.
Global investors ponder implications of US dollar collapse
By Alex Lantier | WSWS
The very fact that Barron's is imagining such a scenario indicates the power of the objective tensions building up inside world capitalism. It is considering a situation in which major US creditors such as China refuse to lend to the US government, forcing Washington to cut spending. The result would be a truly explosive social situation, as the US government told the population it no longer had money to fund social spending, after trillions of dollars had already been handed out to the banks and the super-rich.
The world bourgeoisie is beginning to consider the consequences of the huge deficit spending and money-printing operations that the Obama administration is using to fund its bailouts of Wall Street and major banks. As these policies increasingly raise questions about the value of the US dollar, commentators are in particular pondering the desirability and implications of a diminished international role for the American currency.
At his March 24 press conference, President Obama made his first public comment on recent Chinese proposals for an international currency overseen by the International Monetary Fund. Obama said: "As far as confidence in the US economy or the dollar, I would just point out that the dollar is extraordinarily strong right now. And the reason the dollar is strong right now is because investors consider the United States the strongest economy in the world, with the most stable political system in the world. So you don't have to take my word for it."
On Monday, Lawrence Summers, the head of the National Economic Council, responded to criticisms of the Obama administration’s plan to subsidize private purchases of toxic assets. “I don’t know of any economist,” he declared, “who doesn’t believe that better functioning capital markets in which assets can be traded are a good idea.”
Leave aside for a moment the question of whether a market in which buyers have to be bribed to participate can really be described as “better functioning.” Even so, Mr. Summers needs to get out more. Quite a few economists have reconsidered their favorable opinion of capital markets and asset trading in the light of the current crisis.
BILL MOYERS: Yeah, the corporate state is here.
WILLIAM GREIDER: The corporate state is here. And I'd say, let's not argue over that. The fact is, if the Congress goes down the road I see them going down, they will institutionalize the corporate state in a way that will be severely damaging to any possibility of restoring democracy. And I want people to grab their pitch forks, yes, and be unruly. Get in the streets. Be as noisy and as nonviolently provocative as you can be. And stop the politicians from going down that road. And let me add a lot of politicians need that to be able to stand up. Our President needs that to be able to stand up.
For years best-selling author William Greider sounded the alarm about Washington's unholy alliance with Wall Street and the failure of the Federal Reserve and other regulators to take preventive measures to avoid disaster. Now, he offers some suggestions to the question everyone is asking: "What do we do now?"
By Dave Lindorff
George Santayana once famously said, “Those who cannot learn from history are doomed to repeat it.” But what about those who don’t just ignore history, but who hire and take counsel from those who committed historic follies in the past?
Back in November 1999, Congress passed legislation pushed by then Sen. Phil Gramm (R-TX), rescinding the Depression-era Glass-Steagall Act. The measure, backed by the Clinton administration, and overwhelmingly passed by the Senate (90-8) and the House (362-57), opened the way for banks to merge with investment banks and insurance companies, and led directly to the current financial cataclysm.
AIG is chump change -- let's find corporate America's hidden billions
It's time to reform offshore banking, and see what untaxed wealth big business is hiding in overseas tax shelters.
By Joe Conason | Salon
The popular urge to claw back the bogus bonuses paid by American International Group is irresistible and fully justified, but should the Treasury someday retrieve every single bonus dollar, that total of $165 million will make no difference to anyone except a few disgruntled traders. From the jaded perspective of the financiers, the uproar over the AIG bonuses may provide a welcome distraction from far more important (and lucrative) abuses in the world's offshore tax havens.
Bail Out Working People - NOT the Banks!
Join us on May 9 in San Francisco for a
TEACH-IN & MASS MOBILIZATION PLANNING MEETING
Learn about what is happening in the labor movement and in our communities to fight for the interests of working people.
By Dave Lindorff
Wait a minute! Did I hear correctly? Did Treasury Secretary and former New York Federal Reserve Bank screw-up Tim Geithner really tell a House Financial Services Committee today that he needed “new powers” to allow the federal government to take control of non-bank financial corporations whose actions threaten the financial system or the economy and “break them up”?
The subject under discussion at the hearing was AIG, and Geithner and Fed Chairman Ben Bernanke, under attack for those AIG “bonus payments” to executives, were trying to talk tough about the evil insurance giant.
But aren’t the powers that Geithner is calling for exactly the powers that he and Bernanke already have in the case of the banking industry?
Yes they are.
Obama Economic Program Increases America's Bondage to Wall Street Billionaires: It’s Time for a New Monetary System
Obama Economic Program Increases America's Bondage to Wall Street Billionaires: It’s Time for a New Monetary System
by Richard C. Cook
This article previews the author’s new six-part video series scheduled for release April 2: “Credit as a Public Utility: The Solution to the Economic Crisis.”
The Obama administration is spending hundreds of billions of dollars trying to persuade the banking system to restart lending. Federal Reserve Chairman Ben Bernanke plans to create hundreds of billions more of new bank reserves by purchasing mortgage-related debt. With Bernanke and Treasury Secretary Timothy Geithner working together, “the initiative will seek to entice private investors, including big hedge funds, to participate by offering billions of dollars in low-interest loans to finance the purchases. The government will share the risks if the assets fall further in price.” (Martin Crutsinger, AP) Finally, President Obama is taking over the distinction of being the biggest Keynesian in history with a fiscal year 2009 deficit of $1.75 trillion.
The cancer of debt grows by the day. According to Michael Hodges’ famed “Grandfather Economic Report”: “America has become more a debt ‘junkie’ than ever before, with total debt of $57 trillion, and the highest debt ratio in history. That's $186, 717 per man, woman and child.”
"Down the Memory Hole," Alan Greenspan Style
by Stephen Lendman
He's back and in denial in a March 11 Wall Street Journal op-ed headlined: "The Fed Didn't Cause the Housing Bubble." He lied, the way he did throughout his career and for 18.5 years as Fed chairman. How else could he have kept the job, be knighted in the UK for his "contribution to global economic stability, wisdom and skill," then afterwards be extolled by the Money Trust he enriched.
So now he's preserving his "legacy" by expunging its dark side the way Orwell described in 1984 - "down the memory hole," a convenient slot for "any document....due for destruction," politically inconvenient truths to be erased to preserve only sanitized versions for the public. It's called historical revisionism, but even some on the right aren't convinced.