Taxpayers Used Hard and Put Away Wet?

You knew it would come out eventually, didn't you? Unfortunately many people knew about it all along (and made out well financially ("Thank you, taxpayers!"), thus the rising stock market last spring), but paid off the media not to advertise/broadcast/practice real journalism and tell you. Our bestest friend in economics reporting, Mike Whitney, has no qualms about pointing the finger though. (Emphasis marks were inserted and some editing performed for clarity's sake - Ed.)

"Mr. Nocera says that almost everyone he’s ever spoken to in Hank Paulson’s old Treasury Department agrees that without the immediate panic caused by the Lehman default, the government would never have agreed to make the loans needed to save A.I.G., a company it knew very little about. In effect, the Lehman bankruptcy caused the government to panic, which in turn caused it to save the firm it really had to save to prevent catastrophe. In retrospect, if you had to choose one firm to throw under the bus to save everyone else, you would choose Lehman . . . it is quite likely that the financial crisis would have been even worse had Lehman been rescued. Although nobody realized it at the time, Lehman Brothers had to die for the rest of Wall Street to live. ("Lehman Had to Die So Global Finance Could Live", Sept 14, 2009, New York Times)"

So, according to the muddled logic of the NY Times, everything worked out for the best so there's no need to hold anyone accountable. (Tell that to the 7 million people who have lost their jobs since the beginning of the meltdown) This latest bit of spin is pure cover-your-ass journalism, an attempt to rewrite history and absolve the guilty parties. The fact is, Paulson and Bernanke deliberately created the crisis in order to jam their widely-reviled TARP policy down the public's throat.

The Times thinks the public should be grateful for that because, otherwise, the crooked insurance giant, AIG, would not have been bailed out and Goldman Sachs and other Wall Street heavies would not have been paid off. This tells us everything we need to know about the Gray Lady's true loyalties.

The reason panic spread through the markets after Lehman filed for bankruptcy, was because the Reserve Primary Fund, which had lent Lehman $785 million (and received short-term notes called commercial paper) couldn't keep up with the rapid pace of withdrawals from worried clients. The sudden erosion of trust triggered a run on the money markets. Here's an excerpt from a Bloomberg article, "Sleep-At-Night-Money Lost in Lehman Lesson Missing $63 Billion": "On Tuesday, Sept. 16, the run on Reserve Primary continued. Between the time of Lehman’s Chapter 11 announcement and 3 p.m. on Tuesday, investors asked for $39.9 billion, more than half of the fund’s assets, according to Crane Data. Reserve’s trustees instructed employees to sell the Lehman debt, according to the SEC.

They couldn’t find a buyer.

Read about the rest of your future economic history's origins by clicking on the link (or at least the continuing story of stealth in the night by your friends the Rethugli-Cons just before Bush/Cheney exited from view). Suzan __________________________