On the heels of my post about “Economic Terrorism”, I see this article by Matt Taibbi, (who I hold in high regard for his temperament, intelligence, and willingness to call assholes “ASSHOLES” to their face), describing the same thing, but from different angles, and in MUCH better depth and articulation. If you don’t understand what’s happening with the “Bailout”, you will after reading his article….maybe after you read it twice, it’s DEEP…..
Here’s a brief bit of it to give you the taste of what he’s onto…
People are pissed off about this financial crisis, and about this bailout, but they’re not pissed off enough. The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d’état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.
The crisis was the coup de grâce: Given virtually free rein over the economy, these same insiders first wrecked the financial world, then cunningly granted themselves nearly unlimited emergency powers to clean up their own mess. And so the gambling-addict leaders of companies like AIG end up not penniless and in jail, but with an Alien-style death grip on the Treasury and the Federal Reserve — “our partners in the government,” as Liddy put it with a shockingly casual matter-of-factness after the most recent bailout.
…..”They basically asked them to spend a day and check to see if they could raise the money privately.” The laughably short time span to complete the mammoth task made the answer a foregone conclusion. At the end of the day, the bankers came back and told the government officials, gee, we checked, but we can’t raise that much. And the bailout was on.
The state is now being asked not just to call off its regulators or give tax breaks or funnel a few contracts to connected companies; it is intervening directly in the economy, for the sole purpose of preserving the influence of the megafirms. In essence, Paulson used the bailout to transform the government into a giant bureaucracy of entitled assholedom, one that would socialize “toxic” risks but keep both the profits and the management of the bailed-out firms in private hands. Moreover, this whole process would be done in secret, away from the prying eyes of NASCAR dads, broke-ass liberals who read translations of French novels, subprime mortgage holders and other such financial losers.
None other than disgraced senator Ted Stevens was the poor sap who made the unpleasant discovery that if Congress didn’t like the Fed handing trillions of dollars to banks without any oversight, Congress could apparently go fuck itself — or so said the law. When Stevens asked the GAO about what authority Congress has to monitor the Fed, he got back a letter citing an obscure statute that nobody had ever heard of before: the Accounting and Auditing Act of 1950. The relevant section, 31 USC 714(b), dictated that congressional audits of the Federal Reserve may not include “deliberations, decisions and actions on monetary policy matters.” The exemption, as Foss notes, “basically includes everything.” According to the law, in other words, the Fed simply cannot be audited by Congress. Or by anyone else, for that matter.
Another member of Congress, who asked not to be named, offers his own theory about the TARP process. “I think basically if you knew Hank Paulson, you got the money,” he says.
I urge you to read this….because no matter how pissed off you are, it’s not enough. If people were angry in the amount that this crime requires, there would be no physical place these criminals could hide that would stop the crowds from finding and punishing them.
Yes, I mean that.
And by the way, Obama is NO Liberal, he’s helping these guys as we speak – read this for more info. I still like him and he’s GOT to be better than what we had, but a lot of people are making a mistake about who he is, and they need to look a little closer. HE never said he was anything other than what he’s turning out to be, it’s everyone else that’s putting that on him.
The public record shows Dodd authored an amendment that would have prevented “any bonus” being paid to top executives of firms getting bailout money. It was the White House and the Treasury Department that insisted Dodd’s amendment be watered down to apply only to bonuses paid under agreements signed in the past five weeks. Treasury Secretary Timothy Geithner has taken public responsibility for that.
The arrogance is unbelievable….and remember, the Federal Reserve is NOT a Federal institution, it’s group of private banks. Yeh, really. There’s some woofing around by the Fed on this ownership issue, (shocker) but it’s a privately owned set of institutions.
This woman has been in this for awhile now, and I believe she has it completely dialed in. This isn’t a buncha incompetent morons running looking for a solution, this is a bunch of VERY smart and competent people making off with the American public’s money in an unprecedented fashion. And you watch, the same people WILL be telling Obama that he can’t do any of the things he’s promised, because THERE WON’T BE ANY MONEY LEFT TO DO IT!!!
There are no bank heists in history comparable to this looting of the U.S. Treasury, it’s unbelievable that this is happening and no one seems to care.
…..British Prime Minister Gordon Brown negotiated a similar bailout — only he extracted meaningful guarantees for taxpayers: voting rights at the banks, seats on their boards, 12 percent in annual dividend payments to the government, a suspension of dividend payments to shareholders, restrictions on executive bonuses, and a legal requirement that the banks lend money to homeowners and small businesses.
In sharp contrast, this is what U.S. taxpayers received: no controlling interest, no voting rights, no seats on the bank boards and just five percent in dividend payouts to the government, while shareholders continue to collect billions in dividends every quarter. What’s more, golden parachutes and bonuses already promised by the banks will still be paid out to executives — all before taxpayers are paid back.
Bailout……..ahhhh…….I feel SOOO much better, don’t you? Nothing like being bailed out to fill you with relief and a warm fuzzy feeling of being “taken care of”. Kinda like going to your Gramma’s house and getting a warm cup of chocolate on a cold snowy day…….
Except there’s an off note in this song, like a big fat drunk guy bellowing out “Skynyrd!!!” in the quiet part of the solo in a Vienna Boy’s Choir concert, or the bridesmaid firing off a huge wet fart fly at the “I do” part of the wedding, something not quite right, but still somehow you think it’s not the end of the world, just something a little off in the picture….
There’s an old saying that has various forms, but it usually goes something along the line of “if you want to understand something, just follow the money, and it all begins to make sense….”. And just like the Iraq war has never made much sense unless you figure out who’s getting paid and how it’s getting done, and WHAT’S been done with all that money, this thing doesn’t make a lot of sense.
So I started looking around, at first to try and get a sense of what exactly this “Bailout” was in “on the ground” terms, and then also to try and get a sense of how we got to this place…..here’s some interesting things I’ve bumped into so far. (I don’t pretend to be an expert, and things may change as more info becomes available, but these things are relevant and at least interesting…)
Here’s the original text as submitted by Paulson.
So as I understand it now, it will take the form of the Treasury buying the “bad” assets from the companies, in the same way that any other company might. So the companies would remain in place as is, and the Treasury (you the taxpayer) would now “own” the bad assets, for better or for worse. (One could imagine that’s mostly gonna be worse, since ownership of these assets was apparently enough to bring on financial Armageddon when these companies owned them.)
There’s something really important to keep your eye on here, and that is that the companies will remain essentially the same, with no taxpayer ownership except some shares in some cases, mostly without any responsibility to the taxpayer, (with the exception of a company that is TAKEN OVER completely by the government which will be few of them, like AIG). In all the other cases there will be no limit on Golden Parachutes, severance packages etc, in fact in most cases these executives will be able to stay in the companies, and they will continue to receive all the benefits and pay that they have been getting…..to go ahead and run these companies into the ground while receiving their massive “compensations”. And then have us the taxpayers save them. From themselves and their own bad choices. Again. Personal responsibility indeed…..
REALLY rich people who live lives most of us haven’t really seen even on film, being “saved” by regular and/or really POOR people, who HAVE seen that kind of life, every day in their own lives.
So why would we do this? Sink $700,000,000,000 (well over a trillion after it’s all in) into bad assets that were SO bad as to threaten the worst financial situation since the Great Depression, and not AT LEAST own the companies we’re saving? Well, some would have you believe it’s to save ourselves, and some think it’s a MASSIVE redistribution of public funds into private hands.Here’s Namoi Klein’s thoughts, how does this sit with you? (Watch at least through 2:35, farther if you can.)
That’s my personal take, it’s something nothing more than a huge money grab, with the added benefit of another massive money grab coming right behind it, especially if McCain wins, but probably even if he doesn’t.
It seems we really DO live in a welfare state, it’s just that it’s not the poor we’re helping, it’s the very very rich and the corporations they create to become rich……welfare state? Yeh, corporate welfare…..I guess welfare is good as long as it’s going to the folks who will never, ever ever need it……BAILOUT?…..handout. And on a scale that puts every social program to embarrassed shame as a money sink…..and even those will be up on the chopping block soon.
How about this quote from a recent article in the NYTimes? It’s very interesting that this info is out there and part of the public record, yet I have yet to see ANYONE mention this anywhere except in this article, when the main figure in the whole play is center stage…..now AND then.
Many events in Washington, on Wall Street and elsewhere around the country have led to what has been called the most serious financial crisis since the 1930s. But decisions made at a brief meeting on April 28, 2004, explain why the problems could spin out of control. The agency’s failure to follow through on those decisions also explains why Washington regulators did not see what was coming.
On that bright spring afternoon, the five members of the Securities and Exchange Commission met in a basement hearing room to consider an urgent plea by the big investment banks.
They wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The exemption would unshackle billions of dollars held in reserve as a cushion against losses on their investments. Those funds could then flow up to the parent company, enabling it to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.
The five investment banks led the charge,including Goldman Sachs, which was headed by Henry M. Paulson Jr. Two years later, he left to become Treasury secretary.
The main Treasury guy now was one of the guys begging to be able to do the things that allowed this whole thing to happen, just 4 years ago, and now he’s the guy begging for and demanding the bailout…..and we’re all gonna go up in a ball of smoking worthless paper if he doesn’t get what he wants? Have you see this guy’s stern demanding lecturing finger-pointing performances on Capitol Hill and in front of the news cameras? Talk about some doom and gloom and and “Gimme what I want or you’re fucked” hysterics….he’s basically throwing adult version of a shitfit tantrum…..
Except HE STARTED THIS CRAP!!
How about this scenario……
All the investment bank heads get together and say, “How the hell can we get MORE money out of our positions at these giant paper-pushing firms (they don’t produce anything you know, they just make paper engage in a weird kind of incestuous inter-breeding that makes more worthless paper, on paper), and make our bonuses even bigger, and demand even higher pay for the spectacular job we’re doing generating shareholder profit, and then when the whole thing goes to shit as it inevitably will because we’re essentially building a house on top other water and saying that lilly pads will be a great foundation for this new awesome house, we’ll just get our boy Bush to put one of us in as Treasury head, run around screaming the sky is falling, and then basically get even more money thrown at us to pay off our part in this debacle, and walk away scot free, still getting paid and cashed out and whatever could be wrong with that?”
How do I get THAT job?
Now I just gotta say….what could possibly be MORE criminal than this, except for maybe starting a war behind the same kind of premise, (funneling public money to the seriously hardcore rich), except with the war you have the extra unholy twist that you sacrifice our innocent young people to get that one done….(I agree that’s worse, but you’ll take my point I think).
Anyway….I just thought since apparently the NYTimes doesn’t have the power or the readership to get this info out to the press and the general public at large, I’d help them out here on my blog.
And oh yeh, you don’t live in the country you’ve always thought you did, and you haven’t for a long time…you actually DO live in a country where this kind of bald faced rip-off actually has happened……but I’ll bet you’re beginning to figure that out….you are, aren’t you?
I forgot to add the little thing about how they got this thing to pass – here’s the list of pork – so far….
PORK BARREL EARMARKS ADDED THAT HAVE NOTHING TO DO WITH WALL STREET
$109 million for Nascar race track builders.
$200,000 a year for the manufacturers of wooden arrows for children.
$192 million for rum producers in Puerto Rico and the Virgin Islands.
$19 billion over two years for companies who do research.
$478 million for film and television producers over 10 years.
$62 billion for 24 million households excluded from the alternative minimum tax this year.
$17 billion for alternative energy producers.
$8 billion for Americans affected by hurricanes and floods
So now it appears that the guys who drove these things into the ground are going to be receiving 10% ($70 Billion, with a B) of the public’s money, for ruining their economy and screwing millions out of billions of their investments.
Again, where do I sign up for THAT job, I think I could do it as well as they did….in fact, so could my dog.
The level of arrogance here is SOOOOO high that it can’t be seriously referenced to humans, and can only be referencing demons, or Bush, or aliens.
Financial workers at Wall Street’s top banks are to receive pay deals worth more than $70bn (£40bn), a substantial proportion of which is expected to be paid in discretionary bonuses, for their work so far this year – despite plunging the global financial system into its worst crisis since the 1929 stock market crash, the Guardian has learned.
Staff at six banks including Goldman Sachs and Citigroup are in line to pick up the payouts despite being the beneficiaries of a $700bn bail-out from the US government that has already prompted criticism. The government’s cash has been poured in on the condition that excessive executive pay would be curbed.