Is Larry Summers Taking Kickbacks? (Again?)

A month after they invested in Summers’ former company, all three banks came out of the stress test much better than anyone expected—thanks to the fact that the banks themselves were allowed to help decide how bad their problems were. (Citigroup “negotiated” down its financial hole from $35 billion to $5.5 billion.)

You really don't want to hear more about Larry Summers' morality/irony quotient, do you? Read "Is Larry Summers Taking Kickbacks From the Banks He’s Bailing Out?" And try not to hit the ceiling too hard.

Last month, a little-known company where Summers served on the board of directors received a $42 million investment from a group of investors, including three banks that Summers, Obama’s effective “economy czar,” has been doling out billions in bailout money to: Goldman Sachs, Citigroup and Morgan Stanley. The banks invested into the small startup company Revolution Money, right at the time when Summers was administering the “stress test” to these same banks. A month after they invested in Summers’ former company, all three banks came out of the stress test much better than anyone expected—thanks to the fact that the banks themselves were allowed to help decide how bad their problems were. (Citigroup “negotiated” down its financial hole from $35 billion to $5.5 billion.) The fact that the banks invested in the company just a few months after Summers resigned suggests the appearance of corruption, because it suggests to other firms that if you hire Summers onto your board, large banks will want to invest as a favor to a politically connected director. Last month, it was revealed that Summers, whom President Obama appointed to essentially run the economy from his perch in the National Economic Council, earned nearly $8 million in 2008 from Wall Street banks, some of which, like Goldman Sachs and Citigroup, were now receiving tens of billions of taxpayer funds from the same Summers. It turns out now that those two banks have continued paying into Summers-related businesses. According to filings obtained for this story, Summers first joined the board of directors of Revolution Money back in 2006 (when it was called GratisCard), the same year that Summers was forced to resign as president of Harvard after his disastrous tenure. Revolution Money/GratisCard was a startup headed by former AOL chief Steve Case. Revolution Money billed itself as the Next Big Thing in online payment, “PayPal meets MasterCard,” according to their own pitch. In September 2007, Revolution Money announced that it had raised $50 million from a group of investors including Citigroup, Morgan Stanley and Deutsche Bank. Some found the investment strange even then, because normally big banks don’t get involved in seeding small startups—that’s the domain of venture capitalists, not mega-banks. Especially not in September 2007, when these same megabanks were Chernobyling their way into full-fledged balance-sheet meltdown. What seems clear is that at least part of Revolution Money’s success in raising funds was due to their star-studded board of directors—which included not only Larry Summers, but also the notorious Frank Raines, the former Fannie Mae chief whom Time Magazine named to its “25 People to Blame for the Financial Crisis” list. Raines is still a board member. Over the next year and a half, Revolution Money didn’t quite live up to its promise of competing with PayPal or Visa/MasterCard. At least some of this could be attributed to the difficulty of starting up an online credit card company in the middle of a triple-cluster credit crunch, banking crisis and recession. But there is also evidence that the company wasn’t run well. Another one of Steve Case’s “Revolution” brand startups, Revolution Health (which also features a star-studded board of directors including Carly Fiorina, Colin Powell and several future Obama administration officials), essentially folded when it was sold to Everyday Health last September and merged into that company’s operations. In spite of all of this, on April 6, 2009, Revolution Money announced the happy news: it had just successfully raised $42 million in the most difficult market since the 1930s. The investors? Goldman Sachs, Citigroup and Morgan Stanley—bankrupt institutions that Larry Summers was transferring billions in bailout funds to. At the very same time that these three megabanks were pouring millions into Summers’ former company, Obama’s economic team, starring Summers, was subjecting these same banks to the stress test to decide how deep in shit these same banks really were. The banks wanted the government to fudge the results for obvious reasons—who wants the world to know how deep of a hole you’ve dug for yourself? When the stress test results were finally released, the banks all came out with glowing reports that beat expectations and caused plenty of skepticism. In an interview for this article, William Black, a former bank regulator who exposed the $160 billion savings and loan scandal and its ties to powerful U.S. senators, remarked: “Summers wasn’t hired [by Revolution Money] for his expertise, because he doesn’t have relevant expertise in this kind of credit card operation.” “He’s not a techie. He doesn’t have business expertise,” Black said. “So this is solely someone hired for the name and contacts, because he’s politically active and politically connected. And that’s made all the more clear by the fact that Frank Raines was put on the board at a time when he was pushed out in disgrace from Fannie Mae. Why? Because of his political connections.” And it worked, as the recent investment shows. “That’s the pattern of this entity,” said Black, “which hasn’t been doing well financially and desperately needs to get money from others, and has been able to get money from banks at a time when [these same banks] largely stopped lending to productive enterprises. But with this politically connected entity [Revolution Money], they’re happy to dump money.” According to a company spokesperson, Summers resigned from the board of directors at Revolution Money this past January, just three months before the banks invested. On one of Revolution Money’s main Web sites, Revolution Money Exchange, you could still see Summers’ name still listed as a director when this story was filed. (Oddly, company filings obtained for this article show that Summers wasn’t even on Revolution Money’s board of directors in 2007-08, even though both he and Revolution Money repeatedly stated that he was on the board, and only served on GratisCard’s board in 2006.) Whatever the case, Summers was pushing Revolution Money as recently as last September in an interview with Portfolio magazine: “I’ve enjoyed being involved with a number of smaller companies such as the Revolution Money venture, which has a potentially very exciting credit-card technology, using credit and debit technology, using the Internet that, in a sense, brings together bricks and clicks by providing both a capacity for regular retail transactions and also for online.” Whether or not Summers has a personal interest in the company, it still stinks that a company where the head of the National Economic Council served on the board until just a few months ago subsequently received millions in investment funds from banks that Summers bailed out. Taxpayer dollars went into these banks, and from the banks into the Summers-connected firm, a firm he was hired onto precisely because his connections could bring in this kind of money. His involvement wasn’t just incidental. If you look at the press releases, Larry Summers’ name is always touted as part of the selling point. One press release in 2007 refers to Summers as “legendary.” Moreover, Summers’ longtime chief of staff, Marne Levine, who also served as Summers’ chief of staff when he was in Treasury under Clinton and again at Harvard, joined Summers at Revolution Money, serving as “Director of Product Management.” Black pointed out another sleazy aspect of Revolution Money’s pitch: it proudly boasted in late 2007 that it would make it easier than ever for people with low credit ratings to find access to lines of credit. In other words, Revolution Money billed itself as the ultimate ghetto loan shark. That same 2007 press release that boasted of the “legendary” Larry Summers also said: “Unlike most bank credit card issuers who are limited to a narrow scope of credit approval guidelines specific to their bank, RevolutionCard seamlessly utilizes multiple partners to achieve unparalleled consumer approval rates.” Nineteen months later, Summers, now in control of the economy, appeared on “Meet The Press” and declared: “We need to do things to stop the marketing of credit in ways that addicts people to it and so that our households are again saving, and families are again preparing to send their kids to college, for their retirement and so forth.” So once again, Summers creates a problem that the rich profit from, then is put in charge of “fixing” it after vulnerable Americans have been picked clean. Whether or not the three bailed-out banks’ investment in Revolution Money last month represents some kind of bribe or kickback or even the appearance of corruption is almost secondary, because shameless cronyism is the problem, and it’s the reason why America is in such a horrible mess today. “Polite society was supposed to impose social pressures to make sure this wasn’t tolerated,” Black said. “Like the old phrase about hogs being slaughtered. But now the hogs get even wealthier, even fatter.” Everything about Summers, from his horrible track record in the developing world in the 1990s to the sleaze and plunder he’s overseeing in the White House should make us terrified. Hell, he even looks like some old Batman villain: Summers, whose trademark bullfrog neck was enough of a distraction before Obama brought him into the White House, has seen his gelatinous layers of neck-fat swell up like an amphibian guarding its eggs ever since he took control of the economy. Get this monster out of the White House now, before he devours us all.

I didn't think you really wanted to read that on a restful Sunday. Suzan ___________

Saturday Fun & How Markets Really Work (Yes, Manipulation City!)

Do you understand how financial markets really work? No? Don't you remember any of your economics training? What? You didn't have any? Oh Boy! Or Girl!

I hope it's not just now occurring to you that there's a pretty good reason why the Wall Street crowd are adept at bailing out (at taxpayer expense) their bad bets after they made millions as the market skyrocketed and plunged. After all, how smart (or is it fairer to say "connected?") do you really have to be to figure out how to make money as the market goes in both directions? And today(!) you are getting your big chance for a moment of enlightenment as Stephen Lendman at Global Research runs a tutorial for you (for free!). (Emphasis marks are added for your further enjoyment - Ed.)

Oh, and keep these words in minds: "Financial stability for whom?"

Wall Street's mantra is that markets move randomly and reflect the collective wisdom of investors. The truth is quite opposite. The government's visible hand and insiders control markets and manipulate them up or down for profit - all of them, including stocks, bonds, commodities and currencies. It's financial fraud or what former high-level Wall Street insider and former Assistant HUD Secretary Catherine Austin Fitts calls "pump and dump," defined as "artificially inflating the price of a stock or other security through promotion, in order to sell at the inflated price," then profit more on the downside by short-selling. "This practice is illegal under securities law, yet it is particularly common," and in today's volatile markets likely ongoing daily. Why? Because the profits are enormous, in good and bad times, and when carried to extremes like now, Fitts calls it "pump(ing) and dump(ing) of the entire American economy," duping the public, fleecing trillions from them, and it's more than just "a process designed to wipe out the middle class. This is genocide (by other means) - a much more subtle and lethal version than ever before perpetrated by the scoundrels of our history texts." Fitts explains that much more than market manipulation goes on. She describes a "financial coup d'etat, including fraudulent housing (and other bubbles), pump and dump schemes, naked short selling, precious metals price suppression, and active intervention in the markets by the government and central bank" along with insiders. It's a government-business partnership for enormous profits through "legislation, contracts, regulation (or lack of it), financing, (and) subsidies." More still overall by rigging the game for the powerful, while at the same time harming the public so cleverly that few understand what's happening. Market Rigging Mechanisms - The Plunge Protection Team On March 18, 1989, Ronald Reagan's Executive Order 12631 created the Working Group on Financial Markets (WGFM) commonly known as the Plunge Protection Team (PPT). It consisted of the following officials or their designees: -- the President; -- the Treasury Secretary as chairman; -- the Fed chairman; -- the SEC chairman; and -- the Commodity Futures Trading Commission chairman. Under Sec. 2, its "Purposes and Functions" were stated as follows: (2) "Recognizing the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation's financial markets and maintaining investor confidence, the Working Group shall identify and consider: (1) the major issues raised by the numerous studies on the events (pertaining to the) October 19, 1987 (market crash and consider) recommendations that have the potential to achieve the goals noted above; and (2)....governmental (and other) actions under existing laws and regulations....that are appropriate to carry out these recommendations." In August 2005, Canada-based Sprott Asset Management (SAM) principals John Embry and Andrew Hepburn headlined their report on the US government's "surreptitious" market interventions: "Move Over, Adam Smith - The Visible Hand of Uncle Sam" to prevent "destabilizing stock market declines. Comprising key government agencies, stock exchanges and large Wall Street firms," this group "is significant because the government has never admitted to private-sector membership in the Working Group," nor is it hinting that manipulation works both ways - to stop or create panic. "Current mythology holds that (equity) prices rise and fall on the basis of market forces alone. Such sentiments appear to be seriously mistaken....And as official rhetoric continues to toe the free market line, manipulation has become increasingly apparent....with the active participation of selected investment banks and brokerage houses" - the Wall Street giants. In 2004, Texas Hedge Report principals Steven McIntyre and Todd Stein said "Almost every floor trader on the NYSE, NYMEX, CBOT and CME will admit to having seen the PPT in action in one form or another over the years" - violating the traditional notion that markets move randomly and reflect popular sentiment. Worse still, according to SAM principals Embry and Hepburn, "the government's unwillingness to disclose its activities has rendered it very difficult to have a debate on the merits of such a policy," if there are any. Further, "virtually no one ever mentions government intervention publicly....Our primary concern is that what apparently started as a stopgap measure may have morphed into a serious moral hazard situation." Worst of all, if government and Wall Street collude to pump and dump markets, individuals and small investment firms can get trampled, and that's exactly what happened in late 2008 and early 2009, with much more to come as the greatest economic crisis since the Great Depression plays out over many more months. That said, the PPT might more aptly be called the PPDT - The Plunge Protection/Destruction Team, depending on which way it moves markets at any time. Investors beware. Manipulating markets is commonplace and as old as investing. Only the tools are more sophisticated and amounts involved greater. In her book, "Morgan: American Financier," Jean Strouse explained his role in the Panic of 1907, the result of stock market and real estate speculation that caused a market crash, bank runs, and hysteria. To restore confidence, JP Morgan and the Treasury Secretary organized a group of financiers to transfer funds to troubled banks and buy stocks. At the time, rumors were rampant that they orchestrated the panic for speculative profits and their main goals: -- the 1908 National Monetary Commission to stabilize financial markets as a precursor to the Federal Reserve; and -- the 1910 Jekyll Island meeting where powerful financial figures met in secret for nine days and created the private banking cartel Federal Reserve System, later congressionally established on December 23, 1913 and signed into law by Woodrow Wilson. Morgan died early that year but profited hugely from the 1907 Panic. It let him expand his steel empire by buying the Tennessee Coal and Iron Company for about $45 million, an asset thought to be worth around $700 million. Today, similar schemes are more than ever common in the wake of the global economic crisis creating opportunities to buy assets cheap by bankers flush with bailout cash. Aided by PPT market rigging, it's simpler than ever. Wharton Professor Itay Goldstein and Said Business School and Lincoln College, Oxford University Professor Alexander Guembel discussed price manipulation in their paper titled "Manipulation and the Allocational Role of Prices." They showed how traders effect prices on the downside through "bear raids," and concluded: "We basically describe a theory of how bear raid manipulation works....What we show here is that by selling (a stock or more effectively short-selling it), you have a real effect on the firm. The connection with real value is the new thing....This is the crucial element," but they claim the process only works on the downside, not driving shares up. In fact, high-volume program trading, analyst recommendations, positive or negative media reports, and other devices do it both ways. Also key is that a company's stock price and true worth can be highly divergent. In other words, healthy or sick firms may be way-over or under-valued depending on market and economic conditions and how manipulative traders wish to price them, short or longer term. The idea that equity prices reflect true value or that markets move randomly (up or down) is rubbish. They never have and more than ever don't now. The Exchange Stabilization Fund (ESF) The 1934 Gold Reserve Act created the US Treasury's ESF. Section 7 of the 1944 Bretton Woods Agreements made its operations permanent. As originally established, the Treasury ran the Fund outside of congressional oversight "to keep sharp swings in the dollar's exchange rate from (disrupting) financial markets" through manipulation. Its operations now include stabilizing foreign currencies, extending credit lines to foreign governments, and last September to guaranteeing money market funds against losses for up to $50 billion. In 1995, the Clinton administration used the fund to provide Mexico a $20 billion credit line to stabilize the peso at a time of economic crisis, and earlier administrations extended loans or credit lines to China, Brazil, Ecuador, Iceland and Liberia. The Treasury's web site also states that: "By law, the Secretary has considerable discretion in the use of ESF resources. The legal basis of the ESF is the Gold Reserve Act of 1934. As amended in the late 1970s....the Secretary (per) approval of the President, may deal in gold, foreign exchange, and other instruments of credit and securities." In other words, ESF is a slush fund for whatever purposes the Treasury wishes, including ones it may not wish to disclose, such as manipulating markets, directing funds to the IMF and providing them with strings to borrowers as the Treasury's site explains: "....Treasury has often linked the availability of ESF financing to a borrower's use of the credit facilities of the IMF, both to support the IMF's role and to strengthen assurances that there will be timely repayment of ESF financing." The Counterparty Risk Management Policy Group (CRMPG) Established in 1999 in the wake of the Long Term Capital Management (LTCM) crisis, it manipulates markets to benefit giant Wall Street firms and high-level insiders. According to one account, it was to curb future crises by: -- letting giant financial institutions collude through large-scale program trading to move markets up or down as they wish; -- bailing out its members in financial trouble; and -- manipulating markets short or longer-term with government approval at the expense of small investors none the wiser and often getting trampled. In August 2008, CRMPG III issued a report titled "Containing Systemic Risk: The Road to Reform." It was deceptive on its face in stating that CRMPG "was designed to focus its primary attention on the steps that must be taken by the private sector to reduce the frequency and/or severity of future financial shocks while recognizing that such future shocks are inevitable, in part because it is literally impossible to anticipate the specific timing and triggers of such events." In fact, the "private sector" creates "financial shocks" to open markets, remove competition, and consolidate for greater power by buying damaged assets cheap. Financial history has numerous examples of preying on the weak, crushing competition, socializing risks, privatizing profits, redistributing wealth upward to a financial oligarchy, creating "tollbooth economies" in debt bondage according to Michael Hudson, and overall getting a "free lunch" at the public's expense. CRMPG explains financial excesses and crises this way: "At the end of the day, (their) root cause....on both the upside and the downside of the cycle is collective human behavior: unbridled optimism on the upside and fear on the downside, all in a setting in which it is literally impossible to anticipate when optimism gives rise to fear or fear gives rise to optimism...." "What is needed, therefore, is a form of private initiative that will complement official oversight in encouraging industry-wide practices that will help mitigate systemic risk. The recommendations of the Report have been framed with that objective in mind." In other words, let foxes guard the henhouse to keep inventing new ways to extract gains (a "free lunch") in increasingly larger amounts - "in the interest of helping to contain systemic risk factors and promote greater stability." Or as Orwell might have said: instability is stability, creating systemic risk is containing it, sloping playing fields are level ones, extracting the greatest profit is sharing it, and what benefits the few helps everyone. Michel Chossudovsky explains that: "triggering market collapse(s) can be a very profitable undertaking. (Evidence suggests) that the Security and Exchange Commission (SEC) regulators have created an environment which supports speculative transactions (through) futures, options, index funds, derivative securities (and short-selling), etc. (that) make money when the stock market crumbles....foreknowledge and inside information (create golden profit opportunities for) powerful speculators" able to move markets up or down with the public none the wiser. As a result, concentrated wealth and "financial power resulting from market manipulation is unprecedented" with small investors' savings, IRAs, pensions, 401ks, and futures being decimated from it. Deconstructing So-Called "Green Shoots" Daily the corporate media trumpet them to lull the unwary into believing the global economic crisis is ebbing and recovery is on the way. Not according to longtime market analyst Bob Chapman who calls green shoots "Poison Ivy" and economist Nouriel Roubini saying they're "yellow weeds" at a time there's lots more pain ahead. For many months and in a recent commentary he refers to "the worst financial crisis, economic crisis and recession since the Great Depression....the consensus is now becoming optimistic again and says that we are going to go from minus 6 percent growth to positive growth in the second half of the year....my views are much more bearish....The problems of the financial system are severe. Many banks are still insolvent." We're "piling public debt on top of private debt to socialize the losses; and at some point the back of (the) government('s) balance sheet is going to break, and if that happens, it's going to be a disaster." Short of that, he, Chapman, and others see the risks going forward as daunting. As for the recent stock market rise, they both call it a "sucker's rally" that will reverse as the US economy keeps contracting and the financial system suffers unexpected or manipulated shocks. Highly respected market analyst Louise Yamada agrees. As Randall Forsyth reported in the May 25 issue of Barron's Up and Down Wall Street column: "It is almost uncanny the degree to which 2002-08 has tracked 1932-38, 'Yamada writes in her latest note to clients.' " Her "Alternate Hypothesis" compares this structural bear market to 1929-42: -- "the dot-com collapse parallels the Great Crash and its aftermath," followed by the 2003-07 recovery, similar to 1933-37; -- then the late 2008 - early March 2009 collapse tracks a similar 1937-38 trajectory, after which a strong rally followed much like today; -- then in November 1938, the market dropped 22% followed by a 26% rise and a series of further ups and downs - down 28%, up 23%, down 16%, up 13%, and a final 29% decline ending in 1942; -- from the 1938 high ("analogous to where we are now," she says), stock prices fell 41% to a final bottom. Are we at one today as market touts claim? No according to Yamada - top-ranked among her peers in 2001, 2002, 2003 and 2004 when she worked at Citigroup's Smith Barney division. Since 2005, she's headed her own independent research company. She says structural bear markets typically last 13 - 16 years so this one has a long way to go before "complet(ing) the repair process." She calls the current rebound "a bungee jump," very typical of bear markets. Numerous ones occurred during the Great Depression, 8 alone from 1929 - 1932, some deceptively strong. Expect market manipulators today to produce similar price action going forward - to enrich themselves while trampling on the unwary, well-advised to protect their dollars from becoming quarters or dimes. Stephen Lendman is a Research Associate of the Centre for Research on Globalization.

Have a relaxing weekend (if you can). Suzan ______________________

First Crime(s)? Nail Cheney/Bush Junta & Two Countries' Depth Of Corruption

Remember the private meeting held in April of 2001 that gathered all the major oil companies and their enablers such as Halliburton/KBR to the Bush administration's bosom to discuss gods-know-what? Because no one from any other group, including any public-interest or consumer group was allowed to attend this meeting, the case can now be made fairly easily that a prosecutable crime took place which can be directly attributed to Dick Cheney - our Dick. As if - and you thought he was so smart. (Emphasis marks added - Ed.)

The Bushies have fought hard to keep the notes from this meeting, and more importantly, the names of the individuals who attended, secret. There is no longer any reason to do so, and the White House could easily make them public. What they would show, I think, is that the administration was planning a war of aggression, and was planning to gin up some incident, probably in the no-fly zone, to claim we had been attacked. But if they were dividing up the oil fields in advance, that indicates a war crime. A big one.

Cheney was sued by many of these left-out groups, and a very friendly judiciary ruled that as these secretive matters were "national security" untouchables, they were legal. Not.

Of course, that wasn’t true. According to Wikipedia, “In the Summer of 2003 a partial disclosure of these materials was made by the Commerce Department. This resulted in the release of documents, maps, and charts, dated March 2001, of Iraq’s, Saudi Arabia’s and United Arab Emirates’ oil fields, pipelines, refineries, tanker terminals and development projects. That case eventually went to the Supreme Court and the ruling was to send the case back to the Court of Appeals.” There was much speculation at the time that Cheney, who was one of many neocons who signed the PNAC letter in 1998 urging Pres. Clinton to attack Iraq, was divvying up the oil fields of Iraq. It appears now that was what he was up to, sort of. Remember, this is nearly five months before 9/11. Bush and Cheney had only been in office for 12 weeks or so. The task force was virtually the first thing they did. It appears that even then, they were planning to attack Iraq under some pretense or another. They were convinced that if they did so, Saddam would set fire to his oil fields. With no 9/11 hysteria to give them cover, they had to come up with a plausible excuse to attack and make a case for a brief, successful war. Part of that would be that Iraq’s oil would pay for the war. Wolfowitz and others were mumbling about that even before Bush took office. Going in with the oil fields ablaze would look bad — unless they could say, hey, we knew this would happen, and we have a plan. What was probably offered to the oil companies was long-term leases in return for paying to fix the oil wells and pay off the war expenses out of the first profits. The oil companies would then have years of profits, which would probably be shared with the puppet regime we put in power after Saddam. This is, of course, speculation, but it fits the few facts that have become public. . . . The attacks on 9/11 gave them an excuse to attack Iraq, and the mess that followed, they continue to claim, came because Iraq was behind the attacks on NYC and DC. We now know, of course, that wasn’t true. Neither was the WMD argument, but those arguments were mere pretexts. We may never know what the real reason was, but I suspect it was really a crusade, a chance to become heroes and “spread democracy” to an area that was a huge thorn in the side of everyone in the oil industry, including both Bush and Cheney. But planning an unprovoked war is a war crime, no matter what your motive. All we need is the list of attendees and a flock of subpoenas. I doubt that oil execs are keen on going to jail to save Bush and Cheney. Everything that followed, including torture, Abu Ghraib, over 4,000 service deaths, hundreds of thousands of dead civilians, rape, murder, etc., is an outgrowth of that meeting. Get the list, nail Cheney and Bush.

John Pilger is kind enough to fill us in on what is capsizing Britain's economic empire presently, but not to worry - the Bank of London received its bailout dollars already. (At approximately the same time Goldman (Government) Sachs did.)

The theft of public money by members of parliament, including government ministers, has given Britons a rare glimpse inside the tent of power and privilege. It is rare because not one political reporter or commentator, those who fill tombstones of column inches and dominate broadcast journalism, revealed a shred of this scandal. It was left to a public relations man to sell the “leak”.

Why?The answer lies in a deeper corruption, which tales of tax evasion and phantom mortgages touch upon but also conceal. Since Margaret Thatcher, British parliamentary democracy has been progressively destroyed as the two main parties have converged into a single-ideology business state, each with almost identical social, economic and foreign policies.

This “project” was completed by Tony Blair and Gordon Brown, inspired by the political monoculture of the United States. That so many Labour and Tory politicians are now revealed as personally crooked is no more than a metaphor for the anti-democratic system they have forged together.Their accomplices have been those journalists who report Parliament as "lobby correspondents" and their editors, who have “played the game” wilfully, and have deluded the public (and sometimes themselves) that vital, democratic differences exist between the parties.

Media-designed opinion polls based on absurdly small samplings, along with a tsunami of comment on personalities and their specious crises, have reduced the “national conversation” to a series of media events, in which the withdrawal of popular consent – as the historically low electoral turnouts under Blair demonstrated – has been abused as apathy.

Having fixed the boundaries of political debate and possibility, self-important paladins, notably liberals, promoted the naked emperor Blair and championed his “values” that would allow “the mind [to] range in search of a better Britain”. And when the bloodstains showed, they ran for cover. All of it had been, as Larry David once described an erstwhile crony, “a babbling brook of bullshit”.

How contrite their former heroes now seem. On 17 May, the Leader of the House of Commons, Harriet Harman, who is alleged to have spent £10,000 of taxpayers’ money on “media training”, called on MPs to “rebuild cross-party trust”. The unintended irony of her words recalls one of her first acts as social security secretary more than a decade ago – cutting the benefits of single mothers. This was spun and reported as if there was a “revolt” among Labour backbenchers, which was false. None of Blair’s new female MPs, who had been elected “to end male-dominated, Conservative policies”, spoke up against this attack on the poorest of poor women. All voted for it.

The same was true of the lawless attack on Iraq in 2003, behind which the cross-party Establishment and the political media rallied. Andrew Marr stood in Downing Street and excitedly told BBC viewers that Blair had “said they would be able to take Baghdad without a bloodbath, and that in the end the Iraqis would be celebrating. And on both of those points he has been proved conclusively right.”

When Blair’s army finally retreated from Basra in May, it left behind, according to scholarly estimates, more than a million people dead, a majority of stricken, sick children, a contaminated water supply, a crippled energy grid and four million refugees.

As for the “celebrating” Iraqis, the vast majority, say Whitehall’s own surveys, want the invader out. And when Blair finally departed the House of Commons, MPs gave him a standing ovation – they who had refused to hold a vote on his criminal invasion or even to set up an inquiry into its lies, which almost three-quarters of the British population wanted.

Such venality goes far beyond the greed of the uppity Hazel Blears.“Normalising the unthinkable”, Edward Herman’s phrase from his essay The Banality of Evil, about the division of labour in state crime, is applicable here. On 18 May, the Guardian devoted the top of one page to a report headlined, “Blair awarded $1m prize for international relations work”. This prize, announced in Israel soon after the Gaza massacre, was for his “cultural and social impact on the world”. You looked in vain for evidence of a spoof or some recognition of the truth.

. . . This was the same Blair who committed the same crime – deliberately planning the invasion of a country, “the supreme international crime” – for which the Nazi foreign minister Joachim von Ribbentrop was hanged at Nuremberg after proof of his guilt was located in German cabinet documents.

Last February, Britain’s “Justice” Secretary, Jack Straw, blocked publication of crucial cabinet minutes from March 2003 about the planning of the invasion of Iraq, even though the Information Commissioner, Richard Thomas, has ordered their release. For Blair, the unthinkable is both normalised and celebrated.“How our corrupt MPs are playing into the hands of extremists,” said the cover of last week’s New Statesman. But is not their support for the epic crime in Iraq already extremism? And for the murderous imperial adventure in Afghanistan? And for the government’s collusion with torture?

It is as if our public language has finally become Orwellian. Using totalitarian laws approved by a majority of MPs, the police have set up secretive units to combat democratic dissent they call “extremism”. Their de facto partners are “security” journalists, a recent breed of state or “lobby” propagandist.

And for your added enjoyment for this weekend's reading pleasure, Jim Hightower enlightens us about the recent outbreaks of corruption's pestilence and disease (from our betters).

America’s pot-pie threat lurks in an ingredient that today’s producers of frozen foods don’t list on their packages: salmonella.

In just one salmonella outbreak in 2007, the Banquet brand of pies sickened an estimated 15,000 people in 41 states.The true culprit in such poisonings, however, is not the little deadly bug, but the twin killers of corporate globalization and greed.

Giant food corporations, scavenging the globe in a constant search for ever-cheaper ingredients to put in their processed edibles, are resorting to low-wage, high-pollution nations that have practically no food-safety laws, much less any safety enforcement.

Consider the case of ConAgra Foods, a massive conglomerate that sells 100 million pot pies a year under its Banquet label. Each pie contains 25 ingredients sourced from all over the world — often from subcontractors who don’t report their sources. Until the 2007 salmonella contamination of its pies, ConAgra did not even require suppliers to test for pathogens, nor did it do its own tests. Since poisoning one’s customers turned out to be a bad strategy for earning repeat business, the conglomerate now runs spot checks — but even when it detects contamination in a pie, it has not been able to determine which ingredient is the bad one. ___________________________

The following recipients of President Obama’s bailout billions rank among his top 20 contributors to his 2008 presidential election campaign, according to Open Secrets. Goldman Sachs: $955,473 Citigroup: $653,468 JP Morgan Chase & Co.: $646,058 Morgan Stanley: $485,823 Bank of America: $274,493 Wachovia: $214,151 Lehman Brothers: $276,088 AIG: $112,170

No surprises? Surprise! Suzan ______________________

Robert Zoellick Warns of Social Unrest & Who Will Stand Up To America and Israel?

Robert Zoellick, President of the World Bank warns today of social unrest.*

No joke. He also "warned of the destabilising effects of unemployment."

Good for him. At least one world leader has his eye on the ball.

The head of the World Bank has warned that the global economic crisis could lead to serious social upheaval.

"If we do not take measures, there is a risk of a serious human and social crisis with very serious political implications," Robert Zoellick said.

. . . Mr Zoellick suggested governments should start preparing for high levels of unemployment.

"In my opinion, in this context, nobody really knows what is going to happen and the best one can do is be ready for any eventuality," Mr Zoellick said in an interview with Spain's El Pais newspaper.

. . . The World Bank has previously warned of a "human catastrophe" in the world's poorest countries unless more is done to tackle the global economic crisis. It said an extra 53 million people are at risk of extreme poverty.

On another continent, a continually evolving (and surprising) Paul Craig Roberts finally asks "Who will Stand Up To America and Israel?"

I'm guessing the answer is: No one.

“Obama Calls on World to ‘Stand Up To’ North Korea” read the headline. The United States, Obama said, was determined to protect “the peace and security of the world.” Shades of doublespeak, doublethink, 1984.

North Korea is a small place. China alone could snuff it out in a few minutes. Yet, the president of the US thinks that nothing less than the entire world is a match for North Korea. We are witnessing the Washington gangsters construct yet another threat like Slobodan Milosevic, Osama bin Laden, Saddam Hussein, John Walker Lindh, Hamdi, Padilla, Sami Al-Arian, Hamas, Mahkmoud Ahmadinejad, and the hapless detainees demonized by the US Secretary of Defense Rumsfeld as “the 700 most dangerous terrorists on the face of the earth,” who were tortured for six years at Gitmo only to be quietly released.

Just another mistake, sorry. The military/security complex that rules America, together with the Israel Lobby and the financial banksters, needs a long list of dangerous enemies to keep the taxpayers’ money flowing into its coffers. The Homeland Security lobby is dependent on endless threats to convince Americans that they must forego civil liberty in order to be safe and secure.

The real question is who is going to stand up to the American and Israeli governments? Who is going to protect Americans’ and Israelis’ civil liberties, especially those of Israeli dissenters and Israel’s Arab citizens?

Who is going to protect Palestinians, Iraqis, Afghans, Lebanese, Iranians, and Syrians from Americans and Israelis?

Not Obama, and not the right-wing brownshirts that today rule Israel.

Obama’s notion that it takes the entire world to stand up to N. Korea is mind-boggling, but this mind-boggling idea pales in comparison to Obama’s guarantee that America will protect “the peace and security of the world.”

Is this the same America that bombed Serbia, including Chinese diplomatic offices and civilian passenger trains, and pried Kosovo loose from Serbia and gave it to a gang of Muslin drug lords, lending them NATO troops to protect their operation?

Is this the same America that is responsible for approximately one million dead Iraqis, leaving orphans and widows everywhere and making refugees out of one-firth of the Iraqi population?

Is this the same America that blocked the rest of the world from condemning Israel for its murderous attack on Lebanese civilians in 2006 and on Gazans most recently, the same America that has covered up for Israel’s theft of Palestine over the past 60 years, a theft that has produced four million Palestinian refugees driven by Israeli violence and terror from their homes and villages?

Is this the same America that is conducting military exercises in former constituent parts of Russia and ringing Russia with missile bases?

Is this the same America that has bombed Afghanistan into rubble with massive civilian casualties?

Is this the same America that has started a horrific new war in Pakistan, a war that in its first few days has produced one million refugees?

“The peace and security of the world”? Whose world?

On his return from his consultation with Obama in Washington, the brownshirted Israeli prime minister Benjamin Netanyahu declared that it was Israel’s responsibility to “eliminate” the “nuclear threat” from Iran. What nuclear threat?

The US intelligence agencies are unanimous in their conclusion that Iran has had no nuclear weapons program since 2003. The inspectors of the International Atomic Energy Agency report that there is no sign of a nuclear weapons program in Iran.

Who is Iran bombing? How many refugees is Iran sending fleeing for their lives?Who is North Korea bombing?The two great murderous, refugee-producing countries are the US and Israel. Between them, they have murdered and dislocated millions of people who were a threat to no one.

No countries on earth rival the US and Israel for barbaric murderous violence.

But Obama gives assurances that the US will protect “the peace and security of the world.” And the brownshirt Netanyahu assures the world that Israel will save it from the “Iranian threat.”

Where is the media? Why aren’t people laughing their heads off?

Suzan

* Please contribute if you can. _______________________

Drop Out Now - Beat the Rush As Geithner's Swindles Trump You

And people ask how possibly can Goldman (Government) Sachs, et al., already be able to "pay back" the loans? ______________ ** If you can afford a small donation to this site's ability to continue, please consider it today. You have my sincere "Thanks!" ______________ As "the US dollar is not Russia’s basic reserve currency anymore" . . . and the "euro-based share of reserve assets of Russia’s Central Bank increased to the level of 47.5 percent as of January 1, 2009 and exceeded the investments in dollar assets, which made up 41.5 percent" . . . "the dollar has thus lost the status of the basic reserve currency for the Russian Central Bank, the annual report, which the bank provided to the State Duma, said."

The situation was totally different at the beginning of the previous year: 47 percent of investments were made in US dollars, while the euro investments were evaluated at 42 percent.

. . . The report also said that the reserve currency assets of the Russian Central Bank were cut by $56.6 billion. The losses mostly occurred at the end of the year, when the Central Bank was forced to conduct massive interventions to curb the run of traders who rushed to buy up foreign currencies.

As this incredibly important report (remember the earlier Russia/Georgia nuclear hand-waving brouhaha?) is totally meaningless bulldrivel to most readers, let's get a slightly clearer view of the world's current economic plight informing these events from one of our best sources, Andy Kroll at Tom's Dispatch (emphasis marks added - Ed). (Read it all at the link.)

Here's a snapshot in words of Treasury Secretary Tim Geithner when he was still president of the New York Federal Reserve Bank from a recent portrait in the New York Times: "He ate lunch with senior executives from Citigroup, Goldman Sachs and Morgan Stanley at the Four Seasons restaurant or in their corporate dining rooms. He attended casual dinners at the homes of executives like Jamie Dimon, a member of the New York Fed board and the chief of JPMorgan Chase. Mr. Geithner was particularly close to executives of Citigroup, the largest bank under his supervision. Robert E. Rubin, a senior Citi executive and a former Treasury secretary, was Mr. Geithner's mentor from his years in the Clinton administration, and the two kept in close touch in New York." Small world, don't you think? This catches something of the lifestyle of Wall Street's rich and financially powerful as well as those who "regulate" them. It's no longer news that the revolving door from Wall Street to Washington and back now spins endlessly. Hence, the increasingly popular moniker "Government Sachs." "Crony capitalism" was once a term applied to the powerful oligarchs of "emerging economies" or - a term not heard so much these days - banana republics. Now, however, as economist Simon Johnson has written, the U.S. is beginning to look startlingly more like one of those "emerging economies" in meltdown. And overseeing the response to the crisis are, of course, representatives of the same crony capitalists and oligarchs who helped create it. Not surprisingly, the "solution" to the crash of '08 crafted by former Goldman Sachs chairman Henry Paulson, Jr. - Rubin held the same job before going to Treasury in the Clinton years - and former New York Fed chief Tim Geithner (who made Mark Patterson, a former Sachs lobbyist, his chief of staff and kept on Sachs alum Neel Kashkari to lead the bailout effort) is clearly meant to staunch the wounds of their world, not ours.

Kroll details below the history of "just what an instrument of Wall Street their rolling bailout program has really been."

The Greatest Swindle Ever Sold

How the Financial Bailout Scams Taxpayers, Subsidizes Wall Street, and Props Up Our Broken Financial System By Andy Kroll On October 3rd, as the spreading economic meltdown threatened to topple financial behemoths like American International Group (AIG) and Bank of America and plunged global markets into freefall, the U.S. government responded with the largest bailout in American history. The Emergency Economic Stabilization Act of 2008, better known as the Troubled Asset Relief Program (TARP), authorized the use of $700 billion to stabilize the nation's failing financial systems and restore the flow of credit in the economy. The legislation's guidelines for crafting the rescue plan were clear: the TARP should protect home values and consumer savings, help citizens keep their homes, and create jobs. Above all, with the government poised to invest hundreds of billions of taxpayer dollars in various financial institutions, the legislation urged the bailout's architects to maximize returns to the American people. That $700 billion bailout has since grown into a more than $12 trillion commitment by the U.S. government and the Federal Reserve. About $1.1 trillion of that is taxpayer money - the TARP money and an additional $400 billion rescue of mortgage companies Fannie Mae and Freddie Mac. The TARP now includes 12 separate programs, and recipients range from megabanks like Citigroup and JPMorgan Chase to automakers Chrysler and General Motors. Seven months in, the bailout's impact is unclear. The Treasury Department has used the recent "stress test" results it applied to 19 of the nation's largest banks to suggest that the worst might be over; yet the International Monetary Fund as well as economists like New York University professor and economist Nouriel Roubini and New York Times columnist Paul Krugman predict greater losses in U.S. markets, rising unemployment, and generally tougher economic times ahead. What cannot be disputed, however, is the financial bailout's biggest loser: the American taxpayer. The U.S. government, led by the Treasury Department, has done little, if anything, to maximize returns on its trillion-dollar, taxpayer-funded investment. So far, the bailout has favored rescued financial institutions by subsidizing their losses to the tune of $356 billion, shying away from much-needed management changes and - with the exception of the automakers - letting companies take taxpayer money without a coherent plan for how they might return to viability. The bailout's perks have been no less favorable for private investors who are now picking over the economy's still-smoking rubble at the taxpayers' expense. The newer bailout programs rolled out by Treasury Secretary Timothy Geithner give private equity firms, hedge funds, and other private investors significant leverage to buy "toxic" or distressed assets, while leaving taxpayers stuck with the lion's share of the risk and potential losses. Given the lack of transparency and accountability, don't expect taxpayers to be able to object too much. After all, remarkably little is known about how TARP recipients have used the government aid received. Nonetheless, recent government reports, Congressional testimony, and commentaries offer those patient enough to pore over hundreds of pages of material glimpses of just how Wall Street friendly the bailout actually is. Here, then, based on the most definitive data and analyses available, are six of the most blatant and alarming ways taxpayers have been scammed by the government's $1.1-trillion, publicly-funded bailout. 1. By overpaying for its TARP investments, the Treasury Department provided bailout recipients with generous subsidies at the taxpayer's expense. When the Treasury Department ditched its initial plan to buy up "toxic" assets and instead invest directly in financial institutions, then-Treasury Secretary Henry Paulson, Jr. assured Americans that they'd get a fair deal. "This is an investment, not an expenditure, and there is no reason to expect this program will cost taxpayers anything," he said in October 2008. Yet the Congressional Oversight Panel (COP), a five-person group tasked with ensuring that the Treasury Department acts in the public's best interest, concluded in its monthly report for February that the department had significantly overpaid by tens of billions of dollars for its investments. For the 10 largest TARP investments made in 2008, totaling $184.2 billion, Treasury received on average only $66 worth of assets for every $100 invested. Based on that shortfall, the panel calculated that Treasury had received only $176 billion in assets for its $254 billion investment, leaving a $78 billion hole in taxpayer pockets. Not all investors subsidized the struggling banks so heavily while investing in them. The COP report notes that private investors received much closer to fair market value in investments made at the time of the early TARP transactions. When, for instance, Berkshire Hathaway invested $5 billion in Goldman Sachs in September, the Omaha-based company received securities worth $110 for each $100 invested. And when Mitsubishi invested in Morgan Stanley that same month, it received securities worth $91 for every $100 invested. As of May 15th, according to the Ethisphere TARP Index, which tracks the government's bailout investments, its various investments had depreciated in value by almost $147.7 billion. In other words, TARP's losses come out to almost $1,300 per American taxpaying household. 2. As the government has no real oversight over bailout funds, taxpayers remain in the dark about how their money has been used and if it has made any difference. While the Treasury Department can make TARP recipients report on just how they spend their government bailout funds, it has chosen not to do so. As a result, it's unclear whether institutions receiving such funds are using that money to increase lending - which would, in turn, boost the economy - or merely to fill in holes in their balance sheets. Neil M. Barofsky, the special inspector general for TARP, summed the situation up this way in his office's April quarterly report to Congress: "The American people have a right to know how their tax dollars are being used, particularly as billions of dollars are going to institutions for which banking is certainly not part of the institution's core business and may be little more than a way to gain access to the low-cost capital provided under TARP." This lack of transparency makes the bailout process highly susceptible to fraud and corruption. Barofsky's report stated that 20 separate criminal investigations were already underway involving corporate fraud, insider trading, and public corruption. He also told the Financial Times that his office was investigating whether banks manipulated their books to secure bailout funds. "I hope we don't find a single bank that's cooked its books to try to get money, but I don't think that's going to be the case." Economist Dean Baker, co-director of the Center for Economic and Policy Research in Washington, suggested to TomDispatch in an interview that the opaque and complicated nature of the bailout may not be entirely unintentional, given the difficulties it raises for anyone wanting to follow the trail of taxpayer dollars from the government to the banks. "[Government officials] see this all as a Three Card Monte, moving everything around really quickly so the public won't understand that this really is an elaborate way to subsidize the banks," Baker says, adding that the public "won't realize we gave money away to some of the richest people." 3. The bailout's newer programs heavily favor the private sector, giving investors an opportunity to earn lucrative profits and leaving taxpayers with most of the risk. Under Treasury Secretary Geithner, the Treasury Department has greatly expanded the financial bailout to troubling new programs like the Public-Private Investment Program (PPIP) and the Term Asset-Backed-Securities Loan Facility (TALF). The PPIP, for example, encourages private investors to buy "toxic" or risky assets on the books of struggling banks. Doing so, we're told, will get banks lending again because the burdensome assets won't weigh them down. Unfortunately, the incentives the Treasury Department is offering to get private investors to participate are so generous that the government - and, by extension, American taxpayers - are left with all the downside. Joseph Stiglitz, the Nobel-prize winning economist, described the PPIP program in a New York Times op-ed this way: "Consider an asset that has a 50-50 chance of being worth either zero or $200 in a year's time. The average 'value' of the asset is $100. Ignoring interest, this is what the asset would sell for in a competitive market. It is what the asset is 'worth.' Under the plan by Treasury Secretary Timothy Geithner, the government would provide about 92 percent of the money to buy the asset but would stand to receive only 50 percent of any gains, and would absorb almost all of the losses. Some partnership! "Assume that one of the public-private partnerships the Treasury has promised to create is willing to pay $150 for the asset. That's 50 percent more than its true value, and the bank is more than happy to sell. So the private partner puts up $12, and the government supplies the rest -- $12 in 'equity' plus $126 in the form of a guaranteed loan. "If, in a year's time, it turns out that the true value of the asset is zero, the private partner loses the $12, and the government loses $138. If the true value is $200, the government and the private partner split the $74 that's left over after paying back the $126 loan. In that rosy scenario, the private partner more than triples his $12 investment. But the taxpayer, having risked $138, gains a mere $37." Worse still, the PPIP can be easily manipulated for private gain. As economist Jeffrey Sachs has described it, a bank with worthless toxic assets on its books could actually set up its own public-private fund to bid on those assets. Since no true bidder would pay for a worthless asset, the bank's public-private fund would win the bid, essentially using government money for the purchase. All the public-private fund would then have to do is quietly declare bankruptcy and disappear, leaving the bank to make off with the government money it received. With the PPIP deals set to begin in the coming months, time will tell whether private investors actually take advantage of the program's flaws in this fashion. The Treasury Department's TALF program offers equally enticing possibilities for potential bailout profiteers, providing investors with a chance to double, triple, or even quadruple their investments. And like the PPIP, if the deal goes bad, taxpayers absorb most of the losses. "It beats any financing that the private sector could ever come up with," a Wall Street trader commented in a recent Fortune magazine story. "I almost want to say it is irresponsible." 4. The government has no coherent plan for returning failing financial institutions to profitability and maximizing returns on taxpayers' investments. Compare the treatment of the auto industry and the financial sector, and a troubling double standard emerges: As a condition for taking bailout aid, the government required Chrysler and General Motors to present detailed plans on how the companies would return to profitability. Yet the Treasury Department attached minimal conditions to the billions injected into the largest bailed-out financial institutions. Moreover, neither Geithner nor Lawrence Summers, one of President Barack Obama's top economic advisors, nor the president himself has articulated any substantive plan or vision for how the bailout will help these institutions recover and, hopefully, maximize taxpayers' investment returns. The Congressional Oversight Panel highlighted the absence of such a comprehensive plan in its January report. Three months into the bailout, the Treasury Department "has not yet explained its strategy," the report stated. "Treasury has identified its goals and announced its programs, but it has not yet explained how the programs chosen constitute a coherent plan to achieve those goals." Today, the department's endgame for the bailout still remains vague. Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, wrote in the Financial Times in May that the government's response to the financial meltdown has been "ad hoc, resulting in inequitable outcomes among firms, creditors, and investors." Rather than perpetually prop up banks with endless taxpayer funds, Hoenig suggests that the government should allow banks to fail. Only then, he believes, can crippled financial institutions and systems be fixed. "Because we still have far to go in this crisis, there remains time to define a clear process for resolving large institutional failure. Without one, the consequences will involve a series of short-term events and far more uncertainty for the global economy in the long run." The healthier and more profitable bailout recipients are once financial markets rebound, the more taxpayers will earn on their investments. Without a plan, however, banks may limp back to viability while taxpayers lose their investments or even absorb further losses. 5. The bailout's focus on Wall Street mega-banks ignores smaller banks serving millions of American taxpayers that face an equally uncertain future. The government may not have a long-term strategy for its trillion-dollar bailout, but its guiding principle, however misguided, is clear: What's good for Wall Street will be best for the rest of the country. On the day the mega-bank stress tests were officially released, another set of stress-test results came out to much less fanfare. In its quarterly report on the health of individual banks and the banking industry as a whole, Institutional Risk Analytics (IRA), a respected financial services organization, found that the stress levels among more than 7,500 FDIC-reporting banks nationwide had risen dramatically. For 1,575 of the banks, net incomes had turned negative due to decreased lending and less risk-taking. The conclusion IRA drew was telling: "Our overall observation is that U.S. policy makers may very well have been distracted by focusing on 19 large stress test banks designed to save Wall Street and the world's central bank bondholders, this while a trend is emerging of a going concern viability crash taking shape under the radar." The report concluded with a question: "Has the time come to shift the policy focus away from the things that we love, namely big zombie banks, to tackle things that are truly hurting us?" 6. The bailout encourages the very behaviors that created the economic crisis in the first place instead of overhauling our broken financial system and helping the individuals most affected by the crisis. As Joseph Stiglitz explained in the New York Times, one major cause of the economic crisis was bank overleveraging. "[U]sing relatively little capital of their own," he wrote, "[banks] borrowed heavily to buy extremely risky real estate assets. In the process, they used overly complex instruments like collateralized debt obligations." Financial institutions engaged in overleveraging in pursuit of the lucrative profits such deals promised - even if those profits came with staggering levels of risk. Sound familiar? It should, because in the PPIP and TALF bailout programs the Treasury Department has essentially replicated the very overleveraged, risky, complex system that got us into this mess in the first place: in other words, the government hopes to repair our financial system by using the flawed practices that caused this crisis. Then there are the institutions deemed "too big to fail." These financial giants - among them AIG, Citigroup, and Bank of America - have been kept afloat by billions of dollars in bottomless bailout aid. Yet reinforcing the notion that any institution is "too big to fail" is dangerous to the economy. When a company like AIG grows so large that it becomes "too big to fail," the risk it carries is systemic, meaning failure could drag down the entire economy. The government should force "too big to fail" institutions to slim down to a safer, more modest size; instead, the Treasury Department continues to subsidize these financial giants, reinforcing their place in our economy. Of even greater concern is the message the bailout sends to banks and lenders - namely, that the risky investments that crippled the economy are fair game in the future. After all, if banks fail and teeter at the edge of collapse, the government promises to be there with a taxpayer-funded, potentially profitable safety net. The handling of the bailout makes at least one thing clear, however: It's not your health that the government is focused on, it's theirs - the very banks and lenders whose convoluted financial systems provided the underpinnings for staggering salaries and bonuses while bringing our economy to the brink of another Great Depression.

I've said this exact thing before. Now. When does the march start? Or are you newly entranced at today's wondrous consumer confidence data indicating that the recession is almost over and we'll be back to high times by the end of 2009? Suzan _____________________

Battle for the Soul of America? "Manufactured Terrorist Threat"

Is it possible that a fearful "W's" Christian millenarian belief (if you can believe he had any in anything except his own and his family's aggrandisement) in Gog and Magog brought us to financial/personal/countrywide Armageddon? Donald Rumsfeld certainly banked on it. Batocchio at Vagabond Scholar provides a stellar listing of sources on Cheney's Gambit, (the real one) which seems to be playing out as the Dostoyevskian battle for the soul of America.

When Dick Cheney and the rest of the chipper Cheney clan make a media appearance, the only real question is whether they'll try out any new lies or stick with their favorites. McClatchy provides a great fact-checking of Dick Cheney's speech this past Thursday.

Joe Quinn at Sign of the Times (SOTT.net) also goes into telling detail about the impetus for the numerous unquestioned Cheney appearances. (Emphasis marks added - Ed.)

Like most normal people, by the 100th day of the Obama administration I had hoped that Bush-era freaks like Dick Cheney would have respectfully withdrawn from public view and ultimately (and ideally) ended up parked in an old people's home where staff would joyfully beat them twice a day. But alas, like a recurring nightmare, Mr. Cheney at least seems unwilling to spare us his disturbing presence just yet. Reading his recent rants on Obama's (now reversed) plans to release more prisoner abuse photos and roll back illegal wiretapping and close Gitmo etc, we get the impression that behind Cheney's anger lies fear (I'm generously presuming that there actually is something more to old snarly face than pure primal anger). But what could provoke fear in man whose idea of private conflict resolution is to try and blow your face off with his shotgun? While Dick is undoubtedly frustrated at the thought of an end to the vicarious pleasure he surely derives from his personal (if indirect) involvement in the waterboarding, sodomising or plain ol' beating to death of innocent people, not to mention an end to his personal assassination squad, the many degrees of separation between an order from the office of the VP and the 'enhanced interrogation' room where the 'fun' takes place ensure that Cheney need not fear any jail time for his 'enhanced misdemeanors' (especially under the increasingly pusillanimous Obama aka 'Judas Goat'). Like so many political debates of the last, say, 2000 years, the debate on the merits of torture in attempting to extract accurate information from an alleged suspect in the war on terror is hubris. In 2002 the Bush administration was gearing up to launch an illegal invasion and occupation of Iraq for profit (and Israel). The CIA at that point was tasked with providing justification in the form of 'evidence' that Saddam had links to "al-qaeda". Under the direction of the office of the VP and the Sec of Defense, the CIA began torturing individuals that they had picked up in random sweeps of Afghanistan and Pakistan (and later Iraq after the invasion). To seasoned sadists like Cheney and high level members of the CIA it was clear that far from being a reliable way to extract accurate information from a prisoner, torture was much better suited to forcing a prisoner to state something that was not true - prisoners like Ibn al-Shaykh al-Libi (who coincidentally appears to have been suicided recently in prison in Libya) and Abu Zubaydah who remains in Gitmo to this day. Al-Libi was reportedly tortured many times, including water boarding, in Egypt and later in Libya. He was also locked in a 20 inch high "coffin" for 17 hours and then beaten for 15 minutes before he finally found sufficient inspiration and the 'right answer' about those "links between Iraq and al-Qaeda". In the case of Abu Zubaydah, despite the fact that shortly after his capture by FBI and CIA agents in Pakistan in 2002 he was deemed schizophrenic, he was treated to no less than 85 water boarding sessions. As a result of their torture, both of these men felt obliged to finally agree that there were indeed links between al-Qaeda and Iraq. Al-Libi later recanted but not before his confession was used as evidence by Colin Powell in his infamous March 2003 speech at the UN. It's hard not to connect al-Libi's recent death in prison with the release of the Bush era torture memos and prospect that the Obama administration may have been planning to expose more unsavory details concerning prisoner abuse leading to greater public awareness about the real reason for it - the creation of evidence for an invasion of Iraq. There is also the likelihood that Libyan leader General Gaddafi was growing anxious that his complicity in the US' war on terror would be made public as Newsweek recently reported:

"Al-Libi had recently been identified by defense lawyers in the U.S. as a prime potential witness in any upcoming trials of top terror suspects, either in revamped military commissions or in U.S. federal courts. Brent Mickum, a U.S. lawyer who represents Abu Zubaydah, says he had recently begun efforts through intermediaries to arrange to talk to Libi. "The timing of this is weird," Mickum says."

"Weird timing"?? Yeah, very weird timing, You could almost say it was so weird that it renders the idea that al-Libi died of an illness or committed unassisted suicide totally laughable, especially given that, according to Reuters, a Human Rights Watch researcher saw him on April 27th at which time he appeared to be in good health but reluctant to talk, saying only: "Where were you when I was being tortured in American prisons?" What needs to be understood (and frankly it's amazing that so many people appear to be unable to do so) is that the US-led war on terrorism was (and remains) a war based solely on the desire by US, British and Israeli warmongers to expand their influence and empire. In order to sell their immoral war to the people therefore, 'moral' justification for it had be manufactured, reality had to be "created" as an unnamed Washington Neocon infamously quipped a few years ago. That 'reality' included the creation of a "terrorist threat" at home and abroad. At home it was sufficient for US politicians to repeatedly invoke 9/11 and to issue regular "terror threat" alerts. From time to time however they employed the same tactics used abroad and recruited mentally unstable individuals to flesh out their perverted "homegrown terrorist" reality.

Have we heard enough yet for the hearings and trials to commence? No? If not, why not? Where are the true leaders? Suzan __________________________

Workers Played for Fools! The greatest single attack on American workers since the Great Depression (GM On Chopping Block)

On Obama's Chopping Block: It's The Turn of General Motors By Shamus Cooke Global Research, May 22, 2009 The alarm bells should be ringing day and night about what's being prepared at General Motors — the ripple effects could produce tidal waves. The Obama administration has made no secret about its plans for GM: the Chrysler bankruptcy was the “test case,” and now Obama's Wall Street buddies inside the Auto Task Force plan to replicate it. The vast implications of the Chrysler bankruptcy went unnoticed by the mainstream media, concerned as it was with the convenient hype provided by Swine Flu. The real swine, however, are those preparing the greatest single attack on American workers since the Great Depression, the precedent of which will reverberate loudly through business-labor relations in the country — that is, if workers at GM and its parts suppliers don't put a stop to it. Why was Chrysler so important? Most significant was the fact that workers were scared into accepting large wage and benefit reductions. They were told by the U.A.W. “leaders” that, unless workers conceded to accepting the wages and benefits of non-union workers, bankruptcy would be unavoidable. The workers conceded, and the very next day it was announced that the company was headed towards bankruptcy. It is unimaginable that Gettlefinger and the other U.A.W. leaders did not know this was coming, since they spend considerable time back-slapping with Obama. This is but one of a long list of treacheries provided by a Gettlefinger-led U.A.W. and his obsession with making GM a better “global competitor.” Just as in 2007, autoworkers were scared into making drastic concessions to “save jobs,” and soon thereafter jobs were slashed by the thousands. Now, the U.A.W.-owned healthcare fund called VEBA is likely to emerge as the majority share owner of Chrysler, a company whose stock is basically worthless and whose future is cloudy at best. And although the U.A.W. is the majority owner, they will have only one voice on the GM board, ensuring that they'll be entirely ignored. Applying this type of “restructuring” to GM is hard to imagine. GM is a global conglomerate with factories and suppliers all over the world — a monster when compared to puny Chrysler. The new sell-out labor contract being negotiated between Gettlefinger and Obama on 5/21/09 has yet to be released to the public, though the results have already been leaked, and they would be crushing for GM workers, in a “...deal that would cut [GM's] labor costs by more than $1 billion a year and reduce its $20 billion pledge to the United Auto Workers to cover health-care obligations [by ten billion]...” (Wall Street Journal, May 19, 2009). Not only this, but 20,000 more GM jobs would be cut. Dealerships and suppliers all over the world would close as well, producing immediate job losses in the hundreds of thousands, and indirect job losses that are impossible to calculate. Also, GM will likely be split into two companies: one that will build cars with cheap labor for the world marketplace and the other consisting of factories and machinery that will be sold for scrap metal. Instead of this tremendous productive power being used to create a much more rational mass transit system, the company is downsizing itself, laying off thousands of workers and filling landfills. After all is said in done, the U.A.W. would have a 39 percent ownership stake in GM, giving Gettlefinger an ownership perspective, with a stake in forcing additional cuts on his members to increase share prices and keep the company competitive. Logic like this is unavoidable if one cannot look beyond the narrow horizons of the market economy, where one can only win on the world marketplace if they race fastest to the bottom. What was Obama's reaction to the incredible hardship his labor policy will inevitably produce on workers? This pain was entirely ignored, and instead, Obama attempted to smear a cheap “progressive” gloss over his right-wing labor policies by holding a press conference to gloat over the future of fuel efficient vehicles and electric cars. Gettlefinger himself shamelessly attended the event, while he and some short-sighted environmentalists fawned over Obama's every word. No mention was made how Americans would be able to afford these new fuel efficient cars. And this is the crux of the matter: Obama's autoworker precedent will encourage other companies to destroy union contracts via bankruptcy; the stage is being set for a colossal attack on the American working class. Already wage cuts are being implemented throughout the U.S., alongside massive unemployment — Obama's technique is simply a way to hasten the process, so that the speed and scope of the recession is equally matched by reductions in wages and benefits. The economic crisis has put corporations into “fight or flight” mode. In order for them to stay “viable” on the world market, they are slashing wages and benefits, led by Obama and the Wall Street insiders among his administration. It will take a U.A.W. rank and file upsurge to repel these attacks, aided by workers everywhere, since labor in general now faces incredible challenges. They could demand the nationalization of the auto industry so that workers would be bailed out, not the banks. Then these companies could be retooled in order to produce not only mass transit vehicles but an alternative energy infrastructure that could both save jobs and help save the planet from global warming. Obama cannot be “pressured” into doing the right thing. He's surrounded himself with people representing the big corporations and banks, entities that are intrinsically anti-worker. The Democratic Party must also be tossed aside, since their total silence on this most important of issues is one of utter complicity. Labor must now, more than ever, take an independent stance in defending their interests. The fate of the labor movement hangs in the balance. Shamus Cooke is a social service worker, trade unionist, and writer for Workers Action. He can be reached at shamuscook@yahoo.com.

But pay this no mind too. There are no coincidences (in this new "global" world of "terrorists" at every turn). Is the code RED light blinking yet? Suzan __________________________

Is Obama Morphing Into Our TV Commentator Hero Dick Cheney?

Today Paul Krugman outs Obama's TV-ready, feel-good health care "public option" publicity tour.

On Monday, just a week after the White House photo-op, The Washington Post reported that Blue Cross Blue Shield of North Carolina was preparing to run a series of ads attacking the public option. The planning for this ad campaign must have begun quite some time ago.

Which is no surprise to those of us here in NC. They are the real patriots. Just ask them.

Back during the Democratic primary campaign, Mr. Obama argued that the Clintons had failed in their 1993 attempt to reform health care because they had been insufficiently inclusive. He promised instead to gather all the stakeholders, including the insurance companies, around a “big table.” And that May 11 event was, of course, intended precisely to show this big-table strategy in action. But what if interest groups showed up at the big table, then blocked reform? Back then, Mr. Obama assured voters that he would get tough: “If those insurance companies and drug companies start trying to run ads with Harry and Louise, I’ll run my own ads as president. I’ll get on television and say ‘Harry and Louise are lying.’ ” The question now is whether he really meant it. The medical-industrial complex has called the president’s bluff. It polished its image by showing up at the big table and promising cooperation, then promptly went back to doing all it can to block real change. The insurers and the drug companies are, in effect, betting that Mr. Obama will be afraid to call them out on their duplicity. It’s up to Mr. Obama to prove them wrong.

Paul Craig Roberts says we're "Watching Obama Morph Into Dick Cheney." Considering Roberts' background in government, we need to be paying close attention. He certainly knows how things have morphed since Reagan's great transformation from TV show huckster into "The Greatest President the Rightwingnuts Ever Had."

The people’s good will toward Obama and the expectations they had for him were sufficient for Obama to end the gratuitous wars and enact major reforms. But Obama has deserted the people for the interests. He is relying on his non-threatening demeanor and rhetoric to convince the people that change is underway. The change that we are witnessing is in Obama, not in policies. Obama is morphing into Dick Cheney. Obama has not been in office four months and already a book could be written about his broken promises. Obama said he would close the torture prison, Guantanamo, and abolish the kangaroo courts known as military tribunals. But now he says he is going to reform the tribunals and continue the process, but without confessions obtained with torture. Getting behind Obama’s validation of the Bush/Cheney policy, House Democrats pulled the budget funding that was to be used for closing Guantanamo. The policy of kidnapping people (usually on the basis of disinformation supplied by their enemies) and whisking them off to Third World prisons to be interrogated is to be continued. Again, Obama has substituted a "reform" for his promise to abolish an illegal policy. Rendition, Obama says, has also been reformed and will no longer involve torture. How would anyone know? Is Obama going to assign a U.S. government agent to watch over the treatment given to disappeared people by Third World thugs? Given the proclivity of American police to brutalize U.S. citizens, nothing can save the victims of rendition from torture. Obama has defended the Bush/Cheney warrantless wiretapping program run by the National Security Agency and broadened the government’s legal argument that "sovereign immunity" protects government officials from prosecution and civil suits when they violate U.S. law and constitutional protections of citizens. Obama’s Justice Department has taken up the defense of Donald Rumsfeld against a case brought by detainees whose rights Rumsfeld violated. In a signing statement this month, Obama abandoned his promise to protect whistleblowers who give information of executive branch illegality to Congress. Obama is making even more expansive claims of executive power than Bush. As Bruce Fein puts it: "In principle, President Obama is maintaining that victims of constitutional wrongdoing by the U.S. government should be denied a remedy in order to prevent the American people and the world at large from learning of the lawlessness perpetrated in the name of national security and exacting political and legal accountability." Obama, in other words, is committed to covering up the Bush regime’s crimes and to ensuring that his own regime can continue to operate in the same illegal and unconstitutional ways. Obama is fighting the release of the latest batch of horrific torture photos that have come to light. Obama claims that release of the photos would anger insurgents and cause them to kill our troops. That, of course, is nonsense. Those resisting occupation of their land by U.S. troops and NATO mercenaries are already dedicated to killing our troops, and they know that Americans torture whomever they capture. Obama is fighting the release of the photos because he knows the barbaric image that the photos present of the U.S. military will undermine the public’s support for the wars that enrich the military/security complex, appease the Israel Lobby, and repay the campaign contributions that elect the U.S. government. As for bringing the troops home from Iraq, this promise, too, has been reformed. To the consternation of his supporters, Obama is leaving 50,000 U.S. soldiers in Iraq. The others are being sent to Afghanistan and to Pakistan, where on Obama’s watch war has broken out big time with already one million refugees from the indiscriminate bombing of civilians. Meanwhile, war with Iran remains a possibility, and at Washington’s insistence, NATO is conducting war games on former Soviet territory, thus laying the groundwork for future enrichment of the U.S. military/security complex. The steeply rising U.S. unemployment rate will provide the needed troops for Obama’s expanding wars. Obama can give a great speech without mangling the language. He can smile and make people believe his rhetoric. The world, or much of it, seems to be content with the soft words that now drape Dick Cheney’s policies in pursuit of executive supremacy and U.S. hegemony. Paul Craig Roberts wrote the Kemp-Roth bill and was assistant secretary of the Treasury in the Reagan administration. He was associate editor of the Wall Street Journal editorial page and contributing editor of National Review.

I have trouble believing he is still smiling considering all he's been doing to ensure no "hope" for real change (not yet anyway). Suzan _______________________

Easy Bets With Other Folks' Cash

Chan Akya (a pseudonym) in the Asia Times predicts the first G-8 bankruptcy. You won't like his other predictions either, but you probably should consider them seriously (emphasis marks added - Ed). My family is still looking down on me for my advice last year to sell their stocks while they could, store food, put in a garden and hunker down. So take this golden opportunity (before the bottom drops out) to listen to Yves Montand sing about better days (not to mention the free art exhibit for your added pleasure). (Donations are also very much needed at this time.)

When you give someone US$1 billion as an interest-free loan, with an uncertain payback period and no interest costs, do you think they will: a. Settle all their outstanding debts and start earning money to repay this new facility? b. Invest in some safe securities to eke out a secure return? c. Bet the whole thing on red? If you answered "c", then congratulations - you are now eligible to become a banker in the United States. The unsaid part of the current global rally in risk assets is that the process is being driven almost exclusively by financial institutions that are currently in the intensive care unit of the US Treasury. Be it the tightening of credit spreads for high-yield bonds or the rising prices of commercial mortgage-backed securities, the sole buyers inevitably tend to be the very financial institutions whose holdings of these securities in 2007 jeopardized the entire financial system. It is not the hedge fund villains who have ridden back from their dirty past to ramp up their purchases of distressed securities, bonds and equities; rather these hedge funds are still going bust at regular intervals. There are many examples of silly behavior in global markets as I write this: 1. US and European stocks are pretty much where they started the year, give or take a few points, despite macroeconomic data getting steadily worse 2. Significant jumps in the stock prices of various emerging market countries, including those in Asia, in the last few weeks 3. Credit spreads of the world's most leveraged companies have tightened dramatically since the beginning of the year, despite rising corporate defaults 4. Some of the most beaten-up parts of the securitization market including residential and commercial mortgage-backed securities (RMBS/CMBS) have shown some improvement in recent weeks even as property sales/price data gets progressively worse 5. Banks have raised new capital (including for example Bank of America's $13.2 billion common equity issued this week) from the sale of common equity to the public. My basic premise is that it is in understanding the dynamics of point No 5 above that the rest of the market moves make any sense. In other words, I contend here that financial institutions globally are misrepresenting economic data for their own short-term selfish ends. Making such contentions is no easy task. What is the evidence: firstly, we have to "prove" that a crime is taking place to then allege that the perpetrator also happens to be the main beneficiary of such an event. To do that, let us examine some of the most recent data that underpins the markets over the long term: a. The European Union recorded the sharpest economic decline in its history for the first quarter of this year, led down by Germany's awful figures for the quarter b. Figures for the month of April appear no better, highlighting likely declines in the quarters to come for Europe c. US indicators on gross domestic product growth, unemployment and new investment all continue to flash red as I write this; only the color-blind could possibly see any green shoots in this data d. Japan stunned with an annualized 15% decline in its economy, shrinking an amazing 4% in just the first quarter of this year e. Granted, some of this was due to inventory declines, but the overall trend is abysmal even after taking into account all the government stimulus spending being stored up. Why then are investors persisting with this course of action that adds risks? Many theories have been propounded, but a clear framing of the future outlook would help to understand the sheer "courage" that is involved in buying such assets now. To make things easier, I have used a modified decision tree wherein the basic trend has been used as the title, with financial market consequences being highlighted below each such possible trend. Such an approach is provided below: 1. Green Shoots of economic recovery are for real (hahahahahaha, but let's take these bubble-spewers at face value for now; or else read "Truth is too hard to handle"). a. This could only be due to the US and European consumer spending money on borrowed time; yet again b. Over the short-term that would argue for buying risky assets such as stocks and high-yield bonds and going short US Treasuries c. Inflation will rise inevitably, so buy physical commodities including gold d. Go short anything near the government bond curve including US Treasuries and German Bunds, among others. 2. We are into a Great Depression a. The monetization of the debt cycle would have failed for this outcome to percolate to the masses in Europe and the US b. Financial institutions in Group of Eight leading industrialized countries cannot raise any capital from the public c. Forget about stocks, high-yield bonds that will fall in price dramatically just as soon you buy them for your retirement account d. Buy some government bonds, but only of countries that can service their future debt obligations (that is, avoid the likes of the US and pretty much all of Europe) e. You will need to have some stuff that has real economic value rather than the worthless IOUs issued by G-8 governments, so buy some gold f. This might also be a good cue to buy some weapons and ammunition. 3. We will have a Y-shaped recovery (see How about a Y-shaped recovery, Asia Times Online, February 23, 2008.) a. The US and Europe are toast, but emerging markets will do well b. Financial institutions in G-8 countries cannot raise any capital from the public

c. Buy emerging market equities and bonds, sell everything else d. As most emerging market currencies are quite funky and don't really fit into your wallets, you will need some gold for your travels. What the average reader thinks for himself is one thing; what he is being told by the financial media at large (and G-8 financial media in particular) is altogether a different matter. Whilst I would normally lean towards the school of an incipient economic recovery after a couple of years of any economic bust, a number of factors conspire to deny any such notion in my mind at the moment: 1. This is very much a crisis caused by excess leverage in the US (and, less so, in Europe). Until the leverage is washed out, there is no chance of any economic recovery;

2. Governments have engaged in widespread monetization of such leverage, rather than addressing the core event itself. This has the effect of actually making the future even more uncertain. For example, General Motors or Chrysler as private companies would have entered bankruptcy many months ago; but thanks to government intervention now re-emerge as worker-owned companies that couldn't possibly get bank financing down the road (due to the destruction of creditors' rights by the Obama administration).

Ergo, this is money wasted by the government at great cost to the average US taxpayer: not exactly the recipe for an economic recovery.

3. Then there is the question of bank funding. Most analysts point to a funding gap of around US$20 trillion for the G-8 banking system by 2011, made worse by the reduced velocity of money (that is, a lower money multiplier). This problem has not been addressed, and most likely will not be; unless banks can pledge more useless collateral with their central banks and in effect get "free" funding;

4. Export-driven markets are toast, be it China or Germany or Japan. All these countries will have to reinvest in their domestic markets: some to fruitful results (China) but others to no avail (Japan). Whatever they do, it is clear what they will NOT do - that is, they will not buy more US sovereign and state-guaranteed debt;

5. Many of the weaker emerging market countries are facing funding pressures; particularly those in Eastern Europe. The resulting increase in defaults promises to fell the rest of the European banking system that hasn't already fallen victim to the US financial collapse. This will also divert more resources from the International Monetary Fund and so on, to the expense of the G-8;

6. Increased strategic risks: think Pakistan's ongoing fights with the Taliban, Iran's nuclear weapons program, Russia's anger with the North Atlantic Treaty Organization over Georgia as just a few examples of what could go wrong in the very, very near future. Based on all this, it is clear to me that the only people who could possibly believe that risky assets such as high-yield bonds and common stocks are a good buy are either the people who currently own them (and therefore will post profits when they rise in price) or those that need to get out of their positions (that is, sell their bond positions or raise new equity). In most cases, the answer is "both of the above", namely US and European banks who are loading up on some securities to cause artificial shortages that in turn help to raise prices of the rest of their books. These institutions have the benefit of knowing that a good trade gets them out of jail, but bad trades only result in more government assistance being lavished on them.

They aren't playing with their own money, but rather with yours. When you are only ever going to lose other people's money, the rules change and an entirely different "game" takes hold. That is what you are seeing now; until the final blows of economic data help to chase these fake rallies out of the market. When that happens, the biggest losers will be the people who own these risky assets like high-yield corporate bonds in the US (or Europe) and stocks of banks across G-8. What should the average investor do amidst all this game theory around them? Neither a lender or borrower be; neither a buyer or seller be. Close your positions on these financial assets, buy some physical commodities, sit back and watch the fun.

Health warning: As with the last time I wrote such an article on financial markets, the same warning holds for this article. Unlike my colleagues at Asia Times Online such as David Goldman and Julian Delasantellis, I remain a pseudonymous contributor to these pages; therefore following my advice should be considered significantly risky.

Riskier than what we're already doing? Ponder that for a moment. Suzan _____________________