I guess it's about time (past time in my estimation - way past) for Elly to start the spitzing (schvitzing?) anew
It all appears, once again, to be the same insiders protecting themselves against sharing the pain and risk of their own bad adventure. The payments to AIG's counterparties are justified with an appeal to the sanctity of contract. If AIG's contracts turned out to be shaky, the theory goes, then the whole edifice of the financial system would collapse.
But wait a moment, aren't we in the midst of reopening contracts all over the place to share the burden of this crisis? From raising taxes—income taxes to sales taxes—to properly reopening labor contracts, we are all being asked to pitch in and carry our share of the burden. Workers around the country are being asked to take pay cuts and accept shorter work weeks so that colleagues won't be laid off. Why can't Wall Street royalty shoulder some of the burden? Why did Goldman have to get back 100 cents on the dollar? Didn't we already give Goldman a $25 billion capital infusion, and aren't they sitting on more than $100 billion in cash? Haven't we been told recently that they are beginning to come back to fiscal stability? If that is so, couldn't they have accepted a discount, and couldn't they have agreed to certain conditions before the AIG dollars—that is, our dollars—flowed?
The appearance that this was all an inside job is overwhelming. AIG was nothing more than a conduit for huge capital flows to the same old suspects, with no reason or explanation.now that the public is incensed over the pittance thrown away on the AIG bonuses (in light of all the billions tossed into the banksters' maws) h/t to Rude Pundit. As I mentioned long ago, Goldman Sachs, et al. made off with the spoils while AIG draws the fire (h/t to Melina via Jill at C&L). (Emphasis marks inserted - Ed.)
Elliot Spitzer is back and he(')s talking. The thought of this, no doubt, brings a small shiver to the boardrooms of some of the perps walking around trying to figure out how to hide the money this week. Today Edward Liddy testified that there have been death threats made to or about executives who received bonuses, so no names will be put on the record, but these anonymous players must know that the jig is up in the land of easy-money. Isn't what to do a no-brainer for these great Americans?
Spitzer may be as "disgraced" as any anonymous sex loving Republican loser, but America is known for its great second acts, and we may be witnessing the curtain rising on Spitzer's.
Today in Slate Elliot Spitzer has a short op-ed that speaks volumes about what is going on, and indirectly, if you follow the money, what happened to him. Plainly stated, Spitzer brings the AIG Ponzi Scheme one step closer to the revered establishment when he explains how the bailout money was funneled straight into the top players, with Goldman Sachs being the name that comes up again and again. These top players already got bailout money, and Goldman is looking at zero losses at this point, while regular Americans are being asked to make concessions or just plain losing everything. Here are the biggest financial entities in the world, making billions on what appears to have been nothing but air traded back and forth, and having gutted the American people, they are walking away with 100% return to their stockholders. In return AIG seems to think that it's appropriate to pay themselves bonuses with the leftover funds. This leaves AIG still a wobbly shell with no plan of how to go forward, and the threat of the collapse of all of the world's financial markets still up in the air. So, what was all that bailout money for? Apparently to make sure that no one at Goldman or the other few top firms in the hand-out-line lost anything!
The relationship between AIG and Goldman goes back long enough that one would think that Goldman would know, having bought so much of this "insurance" or whatever it was, whether the "products" were . . . er . . . real or feasible at all. Indeed, Goldman and AIG almost merged a few years ago, but Spitzer notes that the unknown black hole of AIG's business practices were probably what prevented it. Still, that didn't stop the incestuous dealings; it almost makes one think that this whole thing was a setup.
This is country that Spitzer is familiar with; he has been a terrible liability to entities that, under the Bush administration, were allowed to literally gut the country and its citizens. All of this seems to have been part of the Bush Administration's own Ponzi Scheme, which figured that the illusion of an ownership society, terrified of the "terraism" and steeped in the me, me, me, culture would look the other way while they finished clearing out the vault. Beyond that, it's clear that the media-hyped housing bubble encouraged the house-flip mentality and the idea that anyone could be rich. The idea of the lottery dropping on our own heads made us more protective of the rich, because we might one day be one . . . or look, we could be one with no money down, if we could just balance that on this, and flip that house!!
Every week came a new offer from our bank or credit card to just put the enclosed check into the bank for a $50,000 loan, unsecured and with a low APR!! Who would know that those same banks would go out of their way to cause a day or week default by changing the cycle or stopping refusing cards that went over-limit, in order to charge fees and raise the rates. Who could know that the fine print on all those little fliers talking about privacy rights and how they are selling all of our information, also said that by-the-way the interest rate is now 25% and the minimum payment has tripled! Default on that and likely AIG has sold insurance to your lending institution that should repay them for making the bad loan in the first place . . . no money down mortgages? No problem . . . its the same story. This is the ownership society and we all need to own alot of stuff. It is . . what did he say? . . . uniquely American!
Spitzer was questioning this back in February 2008 when he wrote his Valentine to predatory lenders in the Washington Post. He detailed that Attorneys General across the country had entered into litigation in an attempt to protect the people of their states from predatory lending. The response from the federal government was astounding!
Greg Palast reveals that (click for podcast!):
What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.
Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.
. . .
In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.
But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation. Now, they will say that they fought the consumer protection laws to actually protect the consumers and assure that they could get credit in the future. But actually, Americans could get credit; just credit that they were able to handle and could, by reasonable standards, pay back. This was just more of the same in hindsight. Looking back that all that the Bush administration has done, the beginnings of this disaster looks almost quaint, and not like an institutionalized foray into the dirty underside of criminal activity. There were quotas passed by the government as to who got the loans and the focus was on certain populations who would be helped into homeownership even if they couldn't maintain the credit. It was treated as some sort of fulfillment of the American Dream for people to own something, but really had more to do with the insurance on the loans than the people involved. The American dream is dead, as we well know, but what it was, way back then, was that people could afford to own a house and put their kids in college!
AIG sold insurance to the biggest entities in the financial world to cover the proliferation of bad loans. This insurance became so common that it was impossible that the lions of finance didn't somehow have an inkling that something was wrong. Didn't Goldman and the rest of these huge firms know something about the stability of an impossible business plan? Hadn't Goldman gone over everything in their bid to merge? And what of the government and their mandating of certain loans that were bound to go bad. There were people involved in these things, and its not like regular people understand the ins and outs of the financial industry. They rely on brokers to explain it to them. But these brokers were being forced to see a certain product to an unqualified population. How could they? Why would they? Those are questions for another time.
Spitzer has been fighting these guys and asking questions all along. Coincidentally, right after the WSJ editorial appeared on Valentine's Day 2008, Spitzer was caught up in what was an extremely unusual sting. So unusual is an investigation like this that it seems almost like it was a set-up; and considering where it all came from and how it all came down, it might well have been.
It seems that Spitzer's bank was investigating expenses under the auspices of the newer Homeland Security laws of the Bush administration. Greg Palast wrote about this compellingly, and in light of how the whole thing is shaking out now, and what Spitzer said back then about this financial mess and what he tried to DO about it, Palast had a pretty good early grasp on what had gone down. So now, with Spitzer poking his head up from the underground of "healing his family," at this most compelling of moments, its probably worthwhile for Americans to screw their heads on straight and forget the details of the hooker, and look at what Spitzer was working on when he was taken down. We might all find ourselves wanting to thank the egotistical crime fighter who can(')t keep it in his pants.
I am no apologist for breaking the law, and usually its the highest and mightiest that fall the hardest. But when the mainstream is showing us the shiny object, we must resist the temptation to succumb to our base natures and try to see the bigger picture. There was never a real case against Elliot Spitzer, and no charges were filed. The release of embarrassing personal information was at the discretion of the Bush Administration's Justice Department.
Why was this information released? It wasn't that he was a crusader against such crimes, because many who have been caught were exactly the same and their information has been kept quiet. It wasn't that the press is all so great in their investigative journalism, either . . . because we know they're loathe to get off their asses if they can just read a talking point; as is evidenced by the reportage on this case.
Not all crimes lead to federal bust or even public exposure. It’s up to something called “prosecutorial discretion.”
Funny thing, this ‘discretion.’ For example, Senator David Vitter, Republican of Louisiana, paid Washington DC prostitutes to put him in diapers (ewww!), yet the Senator was not exposed by the US prosecutors busting the pimp-ring that pampered him.
Naming and shaming and ruining Spitzer – rarely done in these cases - was made at the ‘discretion’ of Bush’s Justice Department.
Or maybe we should say, 'indiscretion.'Bush's Justice Department.
Its clear to me that all things being equal, this was at the very least, not a transsexual streetwalker a la Hugh Grant, and it was all very ho-hum and quiet. So, whatever the problem that leads to this sort of behavior, I don't want to know about it...its personal, so just walk on by . . . nothing to see here.
H/t to Batocchio for this latest essay from Spitz (and more!).
Thursday, March 19, 2009
I guess it's about time (past time in my estimation - way past) for Elly to start the spitzing (schvitzing?) anew