You are hereEconomy
At one point last week, the price of a barrel of crude oil -- which had risen as high as $147 last July and, with the global economic meltdown, hit a low of $32 in 2009 -- rebounded above $51. Prices at the local gas pump are expected to rise as well in the coming weeks. However, given a worldwide falloff in oil use, these price jumps may not hold for long. Still, cheap or not, oil and natural gas (as well as coal) are what drives global civilization, and that's clearly not going to change any time soon.
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.
[When Truman tried this he was nearly impeached and the Supreme Court stopped it. -- DS]
By John Byrne, RAW STORY
Judiciary Committee Announces Plan to Fight Fraud and Protect Taxpayers | Press Release
March 20, 2009
WASHINGTON (DC) – Today, House Judiciary Committee Chairman John Conyers, Jr.(D-Mich.) announced that the Committee will consider a variety of initiatives to increase vigilance and accountability of taxpayer dollars by preventing and combating fraud, including misuse of taxpayer funds that have been, or will be, expended as part of the government’s economic recovery activities since the Fall of 2008. Hearings are expected to occur during the week of March 30, 2009.
Initiatives under consideration by the Committee as part of this review are expected to include:
- Ensuring effective investigation and prosecution, including effective and severe penalties, for fraud committed in the expenditure of economic stimulus funding
The U.S. Department of the Treasury and the Department of Housing and Urban Development has launched a new website for consumers seeking information about the Obama Administration's Making Home Affordable loan modification and refinancing program. MakingHomeAffordable.gov offers features including interactive self-assessment tools that will empower borrowers to determine if they're eligible to participate and calculate the monthly mortgage payment reductions they could stand to realize under the Making Home Affordable program.
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.
David Walker: Plan B Move to Vancouver
Former Comptroller General for the United States says that he believes things can be turned around economically with a lot of work, or Plan B move to Vancouver.
Wall Street's Economic Crimes Against Humanity
By refusing to consider the consequences of their actions, those who created the financial crisis exemplify the banality of evil, writes Shoshana Zuboff
By Shoshana Zuboff | Business Week
As in war, that emotional distance made it easier to operate in one's own narrow interests, without the usual feelings of empathy that alert us to the pain of others and define us as human. The narcissistic business model provided the modern day "circumstances" that enabled individuals to ignore the poisonous consequences of their choices. This paved the way for a full-scale administrative economic massacre.
The financiers at AIG were awarded millions in bonuses because their contracts were based on the transactions they completed, not the consequences of those transactions. A 32-year-old mortgage broker told me: "I figured my job was to get the transaction done ... Whatever came after the transaction - that was on him, not me." A long list of business executives have reaped sumptuous rewards even though they fractured the world's economy, destroyed trillions of dollars in value, and disfigured millions of lives.
By Dave Lindorff
Six months after the failed Bush administration effort to "rescue" the US financial system, and after two months of failed efforts by his own new administration, at an expense to the American public of several trillion dollars and counting, the Obama administration is announcing plans to blow another $1 trillion in a massive taxpayer giveaway to investors who will be subsidized in an effort to get them to buy the so-called toxic assets on the books of the nation's biggest banks.
The problem with this plan is that its goal--getting these zombie banks to start lending again--is not going to work.
The Real AIG Scandal, Continued!The Transfer of $12.9 Billion from AIG to Goldman Looks Fishier and Fishier
The AIG scandal is getting ever-more disturbing. Goldman Sachs' public conference call explaining its trading relationship and exposure with AIG established once again that Goldman knows how to protect itself. According to Goldman, even if AIG had failed, Goldman's losses would have been minimal.
How did Goldman protect itself? Sensing AIG's weakening capital position through 2006 and 2007, Goldman demanded more collateral from AIG and covered outstanding risk with instruments from other firms.
A block from my apartment, on a still largely mom-and-pop, relatively low-slung stretch of Broadway, two spanking new apartment towers rose just as the good times were ending for New York. As I pass the tower on the west side of Broadway each morning, one of its massive ground-floor windows displays the same eternal message in white letters against a bright red background: "Locate yourself at the center of the fastest expanding portion of the affluent Upper West Side."
Successive windows assure any potential renter that this retail space (10,586 square feet available! 110 feet of frontage! 30 foot ceilings! Multiple configurations possible!) is conveniently located only "steps from the 96th Street subway station, servicing 11 million riders annually."
Forget the bonuses: AIG can't repay its loans, GAO says
By Kevin G. Hall | McClatchy Newspapers
Lost in all the shouting over the $165 million in bonuses paid to executives of disgraced insurer American International Group was this sober message delivered to Congress on Wednesday by a government watchdog: AIG's ability repay its $170 billion in loans from taxpayers has eroded significantly.
Testifying before Congress, Orice Williams, the director of the Government Accountability Office's financial markets division, said that AIG has had only limited success in restructuring itself, despite more than $170 billion in federal aid in four separate bailouts since last September.
As a Goldman Sachs lobbyist, Mark Patterson once worked against a bill to curb executive compensation. The legislation's sponsor: Barack Obama.
On Wednesday afternoon, as President Barack Obama was leaving the White House for a town hall meeting in California, he spoke for 15 minutes to reporters about the AIG controversy. Responding to the rising rage over the $165 million or so in bonuses paid to executives at the bailed-out insurance firm, Obama noted that he was quickly developing policies to prevent future AIG-like catastrophes. And he slammed Wall Street's culture of "excess greed, excess compensation, excess risk taking." To demonstrate that he's committed to battling such greed, the president cited his work in the Senate to rein in executive compensation. Noting that he and Rep. Barney Frank (D-Mass.) had each introduced legislation on this front in 2007, Obama declared that "there were some people who attacked us, saying government has no business doing that."
It's over — we're officially, royally fucked. no empire can survive being rendered a permanent laughingstock, which is what happened as of a few weeks ago, when the buffoons who have been running things in this country finally went one step too far. It happened when Treasury Secretary Timothy Geithner was forced to admit that he was once again going to have to stuff billions of taxpayer dollars into a dying insurance giant called AIG, itself a profound symbol of our national decline — a corporation that got rich insuring the concrete and steel of American industry in the country's heyday, only to destroy itself chasing phantom fortunes at the Wall Street card tables, like a dissolute nobleman gambling away the family estate in the waning days of the British Empire.
Jobless rate at 11.2% for veterans of Iraq, Afghanistan
By Gregg Zoroya | USA TODAY
The economic downturn is hitting Iraq and Afghanistan veterans harder than other workers — one in nine are now out of work — and may be encouraging some troops to remain in the service, according to Labor Department records and military officials.
The 11.2% jobless rate for veterans who served in Iraq and Afghanistan and who are 18 and older rose 4 percentage points in the past year. That's significantly higher than the corresponding 8.8% rate for non-veterans in the same age group, says Labor Department economist Jim Walker.
Army records show the service has hit 152% of its re-enlistment goal this year. "Obviously the economy plays a big role in people's decisions," says Lt. Col. Christopher Garver, an Army spokesman.
With Washington carrying out war, occupation and intervention on expanding fronts, the anti-war movement is more necessary than ever. It is needed by the workers and oppressed people abroad who are the direct targets of the Pentagon and also by the masses of people in the U.S. who will pay for these military operations and have to carry them out.
The anti-war struggle is developing in the midst of the most severe economic crisis in generations. This creates a new situation for the movement and raises two burning questions: what should be the character of the movement and what should be the relationship of the struggle against the war to the struggle against the economic crisis?
Much Bigger Deficits Seen in Budget Office Forecast
By David Stout | NYTimes
President Obama’s budget proposals, if carried out, would produce a staggering $9.3 trillion in total deficits over the next decade, much more than the White House has predicted, the Congressional Budget Office said on Friday.
The office’s estimates of deficits in the fiscal years 2010 through 2019 “exceed those anticipated by the administration by $2.3 trillion.”
The deficits under the Obama plan would be $4.9 trillion more than the projected deficits if there were no changes in current laws and policies — what the nonpartisan budget office calls its baseline assumption.
A.I.G. Sues U.S. for Return of $306 Million in Tax Payments
By Lynnley Browning | NY Times
While the American International Group comes under fire from Congress over executive bonuses, it is quietly fighting the federal government for the return of $306 million in tax payments, some related to deals that were conducted through offshore tax havens.
A.I.G. sued the government last month in a bid to force it to return the payments, which stemmed in large part from its use of aggressive tax deals, some involving entities controlled by the company’s financial products unit in the Cayman Islands, Ireland, the Dutch Antilles and other offshore havens.
By Dave Lindorff
The actions of Obama's Chief Financial Adviser Larry Summers and his Treasury Secretary Tim Geithner in permitting the payment of $165 million in bonuses to AIG executives (Summers, according to the Wall Street Journal, actually pressed Sen. Chris Dodd, D-CT, to secretly remove a bar to the payment of such bonuses from the bailout bill) and storm of public outrage that has followed public disclosure of those payments, provides President Obama, whose administration is stumbling badly on many fronts, to turn things around and avoid political disaster.
He should promptly demand Geithner's and Summers' resignations, and should also fire the CEO of AIG, Edward Liddy (as 80% owner of AIG, the US has the power to do that anytime). It would also be a good idea at the same time to fire the CEOs of all the leading banks that are at this point surviving on government bailouts.
In his opening statement today, Chairman of the House Ways and Means Subcommittee on Oversight, Rep. John Lewis (D-GA) said it was “shameful” and “a disgrace” that a number of private corporations who received a portion of the billions in capital infusion through the controversial Troubled Asset Relief Program (TARP) owe back taxes. Two of the firms owe over $100 million each. The Oversight Subcommittee researched 23 of the top TARP recipients out of the 470 companies that received federal support. Chairman Lewis suggested a complete review of the tax status of these companies might be very revealing.
The Iraqi government has more than $70 billion in hard cash reserves thanks to two years worth of oil sales, Iraqi Finance Minister Baqer Jaber Solagh says.
Solagh said during the last two years, Iraq has managed to save $44 billion with the Central Bank (OTCPK:CBSU), along with up to $30 billion in a Finance Ministry-administered fund, the newspaper Azzaman reported Wednesday.
The Finance minister credited a temporary increase in the cost of oil for the size of the financial reserves.
Solagh said Iraq has been averaging 1.9 million gallons of exported oil a day and is working toward increasing export production.
The Iraqi official told Azzaman that without the hard cash reserves, 94 percent of which are made up of oil revenues, Iraq would be struggling amid the ongoing economic crisis.
Tomgram: Robert Eshelman, The Other War on Workers | TomDispatch.com
A.I.G. is, of course, back in the news -- and how! Not that it was ever too far off the radar screen. Having received yet one more massive infusion of federal tax dollars, as everyone from here to hell now knows, the insurance giant handed out yet another round of lucrative bonuses. Over the last year, company management has doled out about $1 billion in such payments, roughly half to employees in the financial products subsidiary that concocted the type of high-risk, highly-leveraged deals in derivatives which helped send the company, and Wall Street, and most of the rest of us into steep decline last year.
Here are the costs for the stimulus as seen this afternoon, 3/18/2009, on MSNBC-TV:
AIG: $180 Billion:
On Average, at least:
1 Person: $590
Family of 4 $2,400
$2.3 Trillion to Stimulate Economy:
On Average, at least:
1 Person: $7,600
Family of 4 $30,300
I say "at least" because it doesn't include interest, as far as I know, or as reported.
The Federal Reserve said today that it will deploy an additional $1.2 trillion to try to lower interest rates and stimulate the economy, an aggressive move aimed at containing the recession.
The central bank will increase its purchases of mortgage-backed securities by $750 billion, on top of a previously announced $500 billion. It also will double its purchases of debt in Fannie Mae and Freddie Mac to $200 billion. Those steps are intended to lower mortgage rates. The announcement of the previous purchases pushed mortgage rates down a full percentage point.
By Dave Lindorff
For years, advocates of open government, mostly on the left, but also on the right, have railed against the growing secrecy of the US government. But the focus, particularly of left critics, has been on the Intelligence budget, a $40+ billion “black box” that is completely protected from public and even congressional scrutiny, and on large swaths of the Pentagon budget, which are kept hidden allegedly for “national security” reasons.
For the most part, the American public has adopted an ovine attitude towards such secrecy, assuming that the “government knows best.”
Now, however, with the economic crisis, and the collapse of AIG, Citibank, Bank of America, Merrill Lynch, Bear Stearns, Lehman Brothers, General Motors, Chrysler and other leading US firms, and with bailouts that are putting taxpayers on the hook to the tune of trillions of dollars, the people are waking up, or at least are starting to get restless in their slumber.
Political science majors can be forgiven for recycling Karl Marx's prediction, made 160 years ago, that capitalism would sow the seeds of its own destruction by widening the gap between workers and "capitalists." Since the end of the Cold War and the defeat of communism 20 years ago, boardroom-authorized CEO emoluments in the Fortune 100 have gone from 40 times to 300 times factory-floor wages.