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Tomgram: Steve Fraser, Locked into the Bailout State

Tomgram: Steve Fraser, Locked into the Bailout State | TomDispatch.com

Sometimes it's the small gesture that defines the end of an age. Richard Fuld, CEO of Lehman Brothers, the single financial firm the Bush administration allowed to collapse into bankruptcy in what may someday be thought of as the slow-motion Crash of '09, made one of those gestures recently. Just to be clear, we're talking about a man who, between 1993 and 2007, took home a tidy $466 million in pay. (That's no misprint, though it's a pay level that it would take factories of workers cumulative lifetimes to reach.) Then, in 2008, the year his firm would collapse, Fuld was awarded another $22 million in what was called "retirement pay."

But that's the big picture. Here's the small one that catches our shape-shifting moment perfectly. Fuld was recently outed for "selling" his wife their jointly held $14 million, 3.3 acre Florida beach-front mansion -- one of five houses the two of them owned, including their 8-bedroom main domicile in Greenwich, Connecticut -- and the lovely touch is the selling price: $100. That's right, one hundred bucks "in a possible attempt," writes the British Times, "to move assets beyond the reach of infuriated investors of the collapsed bank." Smooth move, Dick! Just petty and sleazy enough for a $488 million man.

Tracking the Stimulus from Bill to Building

ShovelWatch is a joint project of the non-profit investigative outfit ProPublica, the morning news program The Takeaway and WNYC, New York’s flagship public radio station.

With investigative reporting, interactive features, and (not least) help from you, ShovelWatch.org will be tracking the stimulus bill dollars as they travel from Congress to your neighborhood. With your help, ShovelWatch.org will make sure that one of the biggest, fastest appropriations ever has a big, fast army to track whether it is well spent.

How the Wall Street Bailout Plan Works

Once upon a time a man appeared in a village and announced to the villagers that he would buy monkeys for $10 each.

The villagers, seeing that there were many monkeys around, went out to the forest and started catching them.

The man bought thousands at $10 and, as supply started to diminish, the villagers stopped their effort. He next announced that he would now buy monkeys at $20 each. This renewed the efforts of the villagers and they started catching monkeys again.

Soon the supply diminished even further and people started going back to their farms. The offer increased to $25 each and the supply of monkeys became so scarce it was an effort to even find a monkey, let alone catch it!

Congressman Gary Ackerman (D-NY) Scolds SEC Officials at Hearing

Congressman Gary Ackerman (D-NY) Scolds SEC Officials at Hearing

5:05 mins.

The Value of ‘Other People’s Money’

The Value of ‘Other People’s Money’
By Melvin I. Urofsky | NYTimes

Some things never change. When President Obama spoke last week of “shameful” bonuses for bankers and the financial community’s “irresponsibility,” he echoed charges leveled nearly a century ago by Louis D. Brandeis.

Brandeis, a commercial lawyer, leading reformer and future Supreme Court justice, described a dangerous combination of avarice, lack of accountability and poor oversight in “Other People’s Money, and How the Bankers Use It,” one of the best-known exposés of the Progressive era.

General Motors to Invest $1 Billion in Brazil Operations -- Money to Come from U.S. Rescue Program

General Motors to Invest $1 Billion in Brazil Operations -- Money to Come from U.S. Rescue Program
By Russ Dallen | Latin American Herald Tribune

SAO PAULO -- General Motors plans to invest $1 billion in Brazil to avoid the kind of problems the U.S. automaker is facing in its home market, said the beleaguered car maker.

According to the president of GM Brazil-Mercosur, Jaime Ardila, the funding will come from the package of financial aid that the manufacturer will receive from the U.S. government and will be used to "complete the renovation of the line of products up to 2012."

"It wouldn't be logical to withdraw the investment from where we're growing, and our goal is to protect investments in emerging markets," he said in a statement published by the business daily Gazeta Mercantil.

Rachel Maddow Interviews Paul Krugman and Elizabeth Warren

Rachel Maddow Interviews Paul Krugman and Elizabeth Warren

7:29 mins.

Rep. Dennis Kucinich Explains Our Current Economic Situation

Rep. Dennis Kucinich Explains Our Current Economic Situation

1:00:02 mins.

Courtesy of CSpanJunkie.org

TARP Shortchanged Taxpayers by $78 Billion, Watchdog Panel Says

TARP Shortchanged Taxpayers by $78 Billion, Watchdog Panel Says
By Mark Pittman and Bob Ivry | Bloomberg

U.S. taxpayers are being shortchanged by about $78 billion through the Treasury Department’s bank bailout, the panel overseeing the program said.

The Treasury, when it was headed by Secretary Henry Paulson, received bank assets worth about $176 billion in exchange for capital purchases of $254 billion under the Troubled Asset Relief Program, the Congressional Oversight Panel said in a report today.

Sen. Bernie Sanders (I-VT) Calls for Criminal Investigation into Bailout Crisis

Sen. Bernie Sanders (I-VT) Calls for Criminal Investigation into Bailout Crisis

7:47 mins. - Senator Sanders starts at 3:00 mins.

Kucinich: We Should Be Going From Golden Parachutes To Golden Handcuffs!

Kucinich: We Should Be Going From Golden Parachutes To Golden Handcuffs!
In this video, Rep. Kucinich calls the bailouts what they are: frauds on the American taxpayers.

7:27 mins.

Follow the Money: Are Taxpayers on the Hook for Hundreds of Billions of Dollars for a Credit Crisis that Was Overblown?

(NOTE: This article appears in the current issue of the magazine Treasury & Risk)

By Dave Lindorff

Key members of Congress were stunned to hear Federal Reserve Board Chairman Ben Bernanke and Treasury Secretary Hank Paulson say on Sept. 18 in a closed-door meeting on Capitol Hill that the country was “days away” from a complete financial meltdown—one that could lead to Depression-like runs on banks, widespread violence and ultimately even to a possible declaration of martial law. It was a vision of Armageddon, but, of course, 10 days later, the House rejected a Wall Street bailout package sent over by Paulson, only to pass one in a more limited form—the Emergency Economic Stabilization Act—a week later that gave Paulson less power and only half the money he wanted.

Report: Over 8 in 10 Corporations Have Tax Havens

Report: Over 8 in 10 corporations have tax havens

Eighty-three of the nation's 100 largest corporations, including Citigroup, Bank of America and News Corp., had subsidiaries in offshore tax havens in 2007, and some of the companies received federal bailout funding, a government watchdog said Friday.

The Government Accountability Office released a report that said Bank of America Inc., Citigroup Inc. and Morgan Stanley all had more than 100 units in countries that maintain low or no taxes. The three financial institutions were included in the $700 billion financial bailout approved by Congress.

Insurance giant American International Group Inc., which has received about $150 billion in bailout money, had 18 subsidiaries. JPMorgan Chase & Co. had 50 units and Wells Fargo & Co. had 18; both financial institutions received government bailout money.

Banks in Need of Even More Bailout Money

Banks in Need of Even More Bailout Money
By Edmund L. Andrews and Eric Dash | NYTimes.com

Even before word came on Tuesday that Citigroup might split into pieces to shore up its finances, an unpleasant message was moving through Congress and President-elect Barack Obama’s transition team: the banks need more taxpayer money.

In all likelihood, a lot more money.

Mr. Obama seems to know it; a week before his swearing-in, he is lobbying Congress to release the other half of the financial industry bailout fund. Democratic leaders in Congress seem to know it, too; they are urging their rank and file to act quickly to release the rescue money. And Ben S. Bernanke, the chairman of the Federal Reserve, certainly knows it.

Only Rats Get Fat as Misdirected Bailout and Stimulus Funds go Down the Rat Hole

By Dave Lindorff

Congress should do now what it should have done back in the fall: kill the Wall Street bailout program.

After wasting $350 billion on a program that was misrepresented from the outset, and investing hundreds of billions of dollars in failing financial institutions that it could have bought outright for less than it was investing in them (AIG was worth only a few billion dollars in total at the time that the government bailed the company out with an initial investment of $85 billion and Citicorp today is worth less than the $45 billion the government has invested in that failing firm), the Treasury Department, now acting at the direction not of the Bush administration and outgoing Treasurer Hank Paulson, but the Obama administration, is asking for the other half of the Troubled Assets Relief Fund (TARP).

Capitalist Fools

Capitalist Fools
By Joseph Stiglitz | Vanity Fair

Behind the debate over remaking U.S. financial policy will be a debate over who’s to blame. It’s crucial to get the history right, writes a Nobel-laureate economist, identifying five key mistakes—under Reagan, Clinton, and Bush II—and one national delusion.

There will come a moment when the most urgent threats posed by the credit crisis have eased and the larger task before us will be to chart a direction for the economic steps ahead. This will be a dangerous moment. Behind the debates over future policy is a debate over history—a debate over the causes of our current situation. The battle for the past will determine the battle for the present. So it’s crucial to get the history straight.

What were the critical decisions that led to the crisis? Mistakes were made at every fork in the road—we had what engineers call a “system failure,” when not a single decision but a cascade of decisions produce a tragic result. Let’s look at five key moments.

Time for Obama and Us to Face the Economic and Political Music

By Dave Lindorff

The real cost of the Bush Administration’s trillion-dollar bailout of Wall Street is becoming painfully apparent as the incoming Obama administration attempts desperately to make a case for its own $800-billion economic stimulus package, while warning about “trillion dollar deficits as far as the eye can see.”

On its own merits, all other considerations aside, with the economy slipping into a sinkhole, President-elect Barack Obama’s call for $800 million in stimulus spending should be a slam dunk for Congress. The problem is, Congress already caved in a hurry and approved nearly that same amount--$700 billion—in a matter of days when Bush’s Treasury Secretary Hank Paulson and his Federal Reserve Board Chair Ben Bernanke said they needed the money to prevent a collapse of the financial industry, as the nation’s biggest banks, investment banks and insurance companies teetered on the brink of insolvency last fall.

TARP This: Paulson's Bailout Plan Riddled With Deception

TARP This: Paulson's Bailout Plan Riddled With Deception
How a Program To Save The Economy Ended Up Enriching Big Banks
by Danny Schechter | CommonDreams.org

Talk about crazy making. How do we believe anything Hank Paulson says?

First, he needed $700 Billion, and fast, to buy up troubled assets or the skies would fall and we would be pressed to impose martial law. He found an appropriate acronym, TARP, to manage the money with a skeletal staff of 28 headed up by one of his former protégés at Goldman Sachs.

So Far, So Good,

But then he had himself a rethink, realizing that no one has a clue about how to price troubled assets considered practically worthless. So he had to a make a shift, "in the light of new facts," even though Congress never authorized the shift.

U.S. Economy: The Philosopher's Stone

U.S. Economy: The Philosopher's Stone

10 mins.

Great Trauma As a Great Teacher: Peering Into the New Year

Great Trauma As a Great Teacher: Peering Into the New Year
By Bernard Weiner, The Crisis Papers

Psychiatrists will attest that it is during emotional depression that great strides can be made in radical alteration of behavior and philosophy. Trauma, in other words, can be a great teacher. Everything is stirred-up, topsy-turvy, and thus can rise to the surface and become manifest and workable. In such a tumultuous time, clinical depression can be, and must be, dealt with creatively.

Isn’t it Finally Time to Enact a Basic Income Guarantee?

Isn’t it Finally Time to Enact a Basic Income Guarantee?
by Richard C. Cook | GlobalResearch.ca

The lack of individual and family income security in the midst of a highly-developed economy is a travesty under any circumstances, but the basic contradiction of “poverty in the midst of plenty” that has plagued the world since the start of the Industrial Revolution is becoming much worse in the early years of the 21st century as the Recession of 2008 picks up speed.

Winston Churchill spoke on the subject when giving the Romanes Lecture at Oxford University on June 19, 1930, a few months after the crash of the U.S. stock market that started the Great Depression. He said:

Tomgram: Steve Fraser, Empire of Depression

Tomgram: Steve Fraser, Empire of Depression

If you want to catch something of the fears and hopes of Americans right now, go to News.Google.com and try searching for a few words. For instance, put in "FDR" -- the well-known initials of the man who was president four times and took America through the Great Depression and all but the last months of World War II -- and endless screens of references pop up.

For the GOP, the Economic Meltdown May Have Happened Just a Wee Bit Early

For the GOP, the Economic Meltdown May Have Happened Just a Wee Bit Early
By Bernard Weiner, The Crisis Papers

Most likely, we'll never find out what really happened inside the CheneyBush
Administration until after January 20, when ethically-motivated insiders feel
they can spill some beans without violating their oaths of loyalty, but here's
my surmising:

I think key officials inside the Administration knew that the financial
system was swirling inside the economic toilet bowl and would eventuate in a
massive meltdown; after all, there were numerous economists, inside and outside the
government, who more than a year ago were warning about the housing bubble
getting ready to burst, with disastrous impact on the availability of credit.
But, in this scenario, the CheneyBush higher-ups believed that, with luck, denial
and a helluva lot of deficit financing, they could delay the inevitable

A Car Dealer Explains Why the Bailout is a Raw Deal

By Dave Lindorff

A brief conversation I had earlier this week with a car dealership executive while standing in a post office line demonstrated simply both why the bank deregulation and consolidation process of the past two decades has been a screw job for ordinary people, and why the Washington bailout has been both a taxpayer rip-off and a failure (if it was even intended to work!).

I was chatting with the guy standing behind me who works at one of the 14 dealerships in a Philadelphia-area regional family-owned chain of GM dealerships called Bergey’s. Noting that a number of big dealers like Knopf (a Chrysler Dealer) and McGarrity’s (Ford) had been closing, I asked this Bergey’s manager if the problem was that the banks had frozen lending, making it hard for people to buy new cars.

Citizens’ Economic Stimulus Plan: Stop Paying Credit Card Debt

[Get a second opinion before trying this. It will not be done without consequences that the article below fails to mention. But it is an idea worth considering. --DS]

By Richard C. Cook, Global Research

Now to the Wall Street bailouts, the plan for the government to purchase preferred shares in banks, and the takeovers of Fannie Mae, Freddie Mac, and AIG, may be added the intention announced last night that the government will throw another $20 billion at Citibank, the nation’s largest financial institution.

The announcement came after Citibank’s stock fell 60 percent last week to $3.77 a share. Of course it won’t help the 50,000 people Citibank is laying off, but, what the hey, no plan is perfect.

Blaming 'the Stupids' for the Financial Disaster

Blaming 'the Stupids' for the Financial Disaster
Thomas Friedman’s Sermon From the Mount of the NYT Op-Ed Page
by Danny Schechter | Common Dreams.org

“The ones at the top have walked away with vast fortunes, while the humble taxpayer pays to clean up after them."

The Stupids are back. You remember—that fictional family who appear in series of books portrayed as incompetent to the point of confusing the most simple concepts and tasks. The books were themselves denounced as irresponsible and inspired films which were dismissed as stupid plus.

Lurching Toward Gomorrah: More Signs of An Unstoppable Economic Meltdown

Lurching Toward Gomorrah: More Signs of An Unstoppable Economic Meltdown
by Stephen Lendman

Crisis denialists are still around but are slowly and grudgingly giving way to the reality that global capitalism is in serious crisis as recession lurches toward depression in a continuing downward spiral.

Nearly every new data release confirm it. On November 19, housing starts and permits hit record lows, according to the Commerce Department. At an annual 791,000 rate last month, they were the lowest they've been since number tracking began in 1959 and are down 4.5% from a revised 828,000 September reading.

Building permits were also worrisome at an annual 708,000 rate (down from 805,000 in September), breaking the previous 709,000 March 1975 low figure.

Citizens’ Economic Stimulus Plan: Stop Paying Credit Card Debt

Citizens’ Economic Stimulus Plan: Stop Paying Credit Card Debt
by Richard C. Cook

Now to the Wall Street bailouts, the plan for the government to purchase preferred shares in banks, and the takeovers of Fannie Mae, Freddie Mac, and AIG, may be added the intention announced last night that the government will throw another $20 billion at Citibank, the nation’s largest financial institution.

The announcement came after Citibank’s stock fell 60 percent last week to $3.77 a share. Of course it won’t help the 50,000 people Citibank is laying off, but, what the hey, no plan is perfect.

Government Bailout Hits $8.5 Trillion

Government bailout hits $8.5 trillion
By Kathleen Pender | SFGate.com

Graphic: Table of Bailout Funds Committed and Expended So Far

The federal government committed an additional $800 billion to two new loan programs on Tuesday, bringing its cumulative commitment to financial rescue initiatives to a staggering $8.5 trillion, according to Bloomberg News.

That sum represents almost 60 percent of the nation's estimated gross domestic product.

The Real Cost of the "Bailout": Are We Getting Our Money's Worth?

The Real Cost of the "Bailout": Are We Getting Our Money's Worth?
By Kevin Zeese | OpEdNews.com

$7.76 Trillion.

That is what Bloomberg reports has been committed on behalf of the American taxpayer to bailout America’s finance system. This includes spending by the Treasury, Federal Reserve and FDIC.

  • The amount is equal to half the value of everything produced in the United States last year.
  • It is $24,000 for every man, woman and child in America, that is nearly $100,000 for a family of four.
  • It's nine times what the U.S. has spent so far on wars in Iraq and Afghanistan.
  • It is enough money to pay off more than half the country's mortgages, but bankruptcies have continued despite the bailout.

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