Wednesday, November 3, 2010

Greed Wins Big! USA Loses - Go Figure - Tim Geithner's Fairy Tales "Forecloses On Anyone Taking Him Seriously Ever Again" All Roads Lead To Ignorance?

So, I'm almost stunned. Almost. Except, of course, that I live in N.C. (where the whole country seems to be heading in a huge hurry) where the only Dems who triumphed (except for my favorites Brad Miller and Rick Glazier (who won by 24 votes!) in the Legislature - where it went Republicans for the first time in more than a century) were Blue Dogs - and not all of those. Bob Etheridge, who spoke a few unpleasant economic truths to NC ignorants during this election, got blown out of the water in a hail of 'thug dollars from those who wanted no talk of that ilk to spoil their victory dance, and joined the rest of us sitting on the curb staring at the gleeful, cheerfully blaring crowds in wonder. I could go on about the same history I've seen for the last three decades now bringing us to this pretty pass, but I'll let my buddy Jerome at Bad Attitudes speak for me today as I'm really too sad to get into what needs to be said now. Maybe tomorrow. When we get to consider the new flood of moolah being unleashed on the banksters so they can "get well" for the second time by Bernanke's QE2 (which our great-grandchildren will be paying off). Yep. Coming right up! (Emphasis marks added - Ed.)

In Vietnam when a soldier had screwed up as badly as the American electorate seems to be in the process of doing, he was said to have stepped on his own dick.

Well, what the hell. I have seen the country elect Nixon not once but twice — and the second time after Watergate. I have seen it elect Reagan, also twice. And George W. Bush once — after he lied us into an unnecessary war. Nothing should surprise me anymore.

And I’m not really surprised by what’s happening today. Just, once more, saddened. When will they ever learn? Never, that’s when. But still I voted. It isn’t quite Hobson’s choice. We can slow our descent.

To see how, and how far, we have slid already, read this from Harold Meyerson in the Washington Post. (To see Hobson himself, look below the excerpt.)

When the Tea Partyers get around to identifying how America has changed and to whose benefit, however, they get it almost all wrong. In the worldview of the American right — and the polling shows conclusively that that’s who the Tea Party is — the nation, misled by President Obama, has gone down the path to socialism.

In fact, far from venturing down that road, we’ve been stuck on the road to hyper-capitalism for three decades now. The Tea Partyers are right to be wary of income redistribution, but if they had even the slightest openness to empiricism, they’d see that the redistribution of the past 30 years has all been upward — radically upward

As the right sees it, America’s woes are traceable to the New Deal order that Franklin Roosevelt, working in the shadow of the even more sinister Woodrow Wilson, imposed on an unsuspecting people. In fact, the New Deal order produced the only three decades in American history — the ’50s, ’60s and ’70s — when economic security and opportunity were widely shared.

It was the only period in the American chronicle when unions were big and powerful enough to ensure that corporate revenue actually trickled down to workers. It marked the only time in American history when, courtesy originally of the GI Bill, the number of Americans going to college surged. It was the only time when taxes on the rich were really significantly higher than taxes on the rest of us.

It was the only time that the minimum wage kept pace (almost) with the cost of living. And it was the only time when most Americans felt confident enough about their economic prospects, and those of their nation, to support the taxes that built the postwar American infrastructure . . . .

Dean Baker nails Tim Geithner and speaks volumes about why we should be very concerned about what the administration will now do economically in response to their trouncing at the polls in The Guardian.
Timothy Geithner Forecloses on the Moratorium Debate

By refusing to halt foreclosures to sort out the mortgage mess, the Treasury Secretary again shows his favour to Wall Street According to recent estimates, the US has an inventory of 4 million unsold homes, with 600,000 foreclosed properties yet to be put on the market. Treasury Secretary Timothy Geithner is good at telling fairy tales. Geithner first became known to the general public in September of 2008. Back then, he was head of the New York Federal Reserve Board. He was part of the triumvirate, along with Federal Reserve Board chairman Ben Bernanke and then Treasury secretary Henry Paulson, who told congress that it had to pass the Tarp or the economy would collapse. This was an effective fairytale, since Congress quickly handed over $700bn to lend to the banks with few questions asked. Of course, the economy was not about to collapse, just the major Wall Street banks. To prevent the collapse of the banks, congress could have given the money – but with the sort of conditions that would ensure the financial sector would never be the same.

Alternatively, it could have allowed the collapse, and then rushed in with the liquidity to bring the financial system back to life. But the Geithner fairytale did the trick. Terrified members of congress tripped over each other to make sure that they got the money to the banks as quickly as possible.

Now, Geithner has a new fairytale. This time, it is that if the government imposes a foreclosure moratorium, it will lead to chaos in the housing market and jeopardise the health of the recovery.

For the gullible, which includes most of the Washington policy elite, this assertion is probably sufficient to quash any interest in a foreclosure moratorium. But those capable of thinking for themselves may ask how Geithner could have reached this conclusion. The point of a foreclosure moratorium would be to ensure that proper procedures are being followed. We know that this is not the case at present. There have been several outstanding stories in the media about law firms that specialise in filing documents for short-order foreclosures. They hire anyone they can find to sign legal documents assuring that the papers have been properly reviewed and are in order. In some cases, this has led to the wrong house being foreclosed. People who are current on their mortgage – or who, in one case, did not even have a mortgagehave been foreclosed by this process. The more common problem would be the assignment of improper fees and penalties to mortgage holders. Or, in many cases, foreclosures have probably occurred where the servicer did not actually possess the necessary legal documents. A moratorium would give regulators the time needed to review servicers' processes and ensure that they have a system in place that follows the law and will not be subject to abuse. This is the same logic as the Obama administration used when it imposed a moratorium on deepsea drilling following the BP oil spill. No one can seriously dispute that there is a real problem. Three of the largest servicers, Bank of America, JP Morgan and Ally Financial have already imposed their own moratorium to get their procedures in order. This is just a question of whether we should have regulators oversee the process or "trust the banks". If the argument for a moratorium is straightforward, it is difficult to see any basis for Geithner's disaster fairytale. If there were a moratorium in place for two to four months, then banks would stop adding to their inventory of foreclosed properties. But most banks already have a huge inventory of unsold properties. Presumably, they would just sell homes out of this inventory. This "shadow inventory" of foreclosed homes that were being held off the market has been widely talked about by real estate analysts for at least two years. It is difficult to see the harm if it stops growing for a period of time. Of course, it actually was Obama administration policy to try to slow the process of foreclosure. This has repeatedly been given as a main purpose of its Hamp programme, the idea being that this would give the housing market more time to settle down. Now, we have Geithner issuing warnings of Armageddon if a foreclosure moratorium slows down the foreclosure process. It doesn't make sense to both push a policy intended to slow the foreclosure process and then oppose a policy precisely because it would slow the process. While this is clearly inconsistent, there has been a consistent pattern to Geithner's positions throughout this crisis. Support for the Tarp, support for Hamp and opposition to a foreclosure moratorium are all positions that benefit the Wall Street banks. I'm just saying.

David Sirota says if you cannot figure out how people can purposely vote to put themselves on the ash heap of history, you have no idea about the ignorance that now prevails among the lower classes in the USA. We're No. 1!!! My last thoughts, however, always revolve around the questions, "Are most of us that stoopid? Or has the corporaticrazed MSM just made us think so?"

After last night's election, I rest my case. From It's the Stupidity, Stupid (emphasis marks added - Ed.):

Two new academic studies suggest all roads lead to ignorance.

The first, by Harvard's Michael Norton and Duke's Dan Ariely, finds that Americans grossly underestimate how much inequality our economy produces. Among the survey respondents, the vast majority said they believe the richest 20 percent own 59 percent of the wealth, when, in fact, that quintile owns 84 percent of the wealth. In other words, in spite of the data, many believe our system produces the moderate equality we desire, which means many see efforts to better spread wealth as a confiscatory overreach.

That, however, is not the full story of 2010. Because this now-ascendant economic view relies on misperceptions about inequality, we are still left to wonder: What accounts for those misperceptions?

Some of it undoubtedly stems from debt's illusions. In a country of overused MasterCards, we are surrounded by luxury cars, McMansions and flat-screen TVs purchased on credit. Such ubiquitous bling feigns a widespread prosperity that doesn't really exist.

Some of it is also televisual iconography. In the media's fun-house mirror we see a news world populated exclusively by six- and seven-figure salaried journalists - as if that wealth is a societal norm. Meanwhile, on the entertainment side, our beloved sitcom families trick us into thinking our nation is less stratified than it is: We were led to believe the super-rich Huxtables epitomized the middle-class just like we are now asked to regard Modern Family's affluence in the same way.

But, as insidious as artificial aesthetics are, the most powerful factor in our economic illiteracy is found in the other new academic report - the one examining our innate denial reflex.

As Northwestern University's David Gal and Derek Rucker recently documented in a paper titled "When in Doubt, Shout!", many Americans respond to convention-challenging facts not by reevaluating their worldview. Shaken by an assault on their assumptions, many become more adamant in defense of wrongheaded ideas.

So, for instance, we may be aware that our broken economy is creating destructive inequality; we may know the neighbor's opulence is underwritten by loans; we may understand that Brian Williams' multi-million-dollar NBC salary is uncommon; and we may appreciate that seemingly average 30 Rock characters make above-average salaries. We may get all this, and we may even see the connection between our personal financial struggles and Census figures showing inequality at a record high.

But many of us nonetheless react by more passionately insisting our economic system sows equality -- and worse, by embracing a free-market-worshiping politics aimed at halting systemic change. This means the current crisis is deeper than we imagine. In a past recession, we could all at least concede that the challenge was "the economy, stupid." Now, though, we can't even agree on that truism. Our problem is the stupidity, stupid - and solving that will take far more than an election.

(David Sirota is the author of the best-selling books Hostile Takeover and The Uprising. He hosts the morning show on AM760 in Colorado and blogs at

Just to add a little insight to the financial entanglement that brought us last night's passion play (emphasis marks added - Ed.) ~

First Amendment Alliance Takes Aim at Jack Conway, Michael Bennet, et al.

Since this election will likely be the last time we'll get to see some donors before they buy their candidates' office, I took a closer look at the First Amendment Alliance, an organization that has spent hundreds of thousands of dollars to oppose Jack Conway and Michael Bennet, among others. It seems Rand Paul has some powerful buddies across the nation who are willing to spend a lot of money to get him elected, along with his buddy Ken Buck. Here are some of the big names.

From the 9/30/2010 IRS Filing:

Brian Kimbrough - Pace Data Corporation (FL) $20,000 Clayton Williams - Clayton Williams Energy (TX) $100,000 Russel D. Gordy - Self-Employed (TX) $150,000 Cotulla, LP - (TX) $25,000 Chisos, Ltd - (NM) $25,000 Denny Snelson's Pumping Unit Service, LP - (TX) $20,000 The Anschutz Corporation - (CO) $50,000 Melange Associates, Inc. - (CO) $25,000 Cordilera Energy Partners III, LLC - (CO) $20,000 Robert S. Boswell - Laramie Energy II, LLC (CO) $25,000 Robert L. Zorich - EnCap Investments, LP (TX) $25,000 Earl G. Rodman, Jr. - Rodman Petroleum (TX) $100,000 Thomas A. Petrie - Bank of America Vice Chairman - (CO) $25,000 Bob J. Perry - Perry Homes (TX) - $50,000 Pace Data Corporation - (FL) - $20,000

From the Pre-General FEC Report - 10/1/2010 to 10/13/2010: Aghorn Energy, Inc. (TX) - $100,000 William J. Barrett (CO) - $25,000 Jonathan C. Farber - Lime Rock Partners, Managing Director (CT) - $100,000 TESSCO Energy Services, Inc. (TX) $20,000

There are numerous other contributions under $20,000 that I didn't list as well. Altogether, the First Amendment Alliance has taken in $1.4 million from January 1st to October 13th. While some of it comes from the large corporations like Bank of America and The Anschutz Corporation (Phil Anschutz of Comcast and numerous other media outlets), it also comes from smaller businesses like Danny Snelson's Pumping Unit Service, but most donors have a common theme: They're either from the energy sector or the financial sector, with Anschutz and Perry as standouts. They're stolid Republicans with an agenda, and that agenda includes installing their puppets into the next Senate.

In 2012, I doubt we'll have access to this kind of information. The First Amendment Alliance has a 501(c)(4) called the First Amendment Alliance Education Fund, so I imagine the next round will funnel money through that instead of the 527. This is the true story of this midterm election. Forget about what you think about Democrats or Obama for a minute, and realize that if these candidates win, there will be no campaign finance reform, no disclosure, and the closing act will belong to Corporations United, Large and Small. We, the people will not matter one whit.

George Monbiot is a very intelligent commentator to whom you might want to give a few moments of your valuable time. You may learn something.

For the Conservatives, this is not a financial crisis but a long-awaited opportunity. In a classic example of 'disaster capitalism', the cuts are being used to reshape the economy in the interests of business – and to trash the public sector.

We've been staring at the wrong list. In an effort to guess what will hit us tomorrow, we've been trying to understand the first phase of the British government's assault on the public sector: its bonfire of the quangos. Almost all the public bodies charged with protecting the environment, animal welfare and consumers have been either hobbled or killed. But that's only half the story. Look again, and this time make a list of the quangos which survived.

If the government's aim had been to destroy useless or damaging public bodies, it would have started with the Commonwealth Development Corporation. It was set up to relieve poverty in developing countries, but when New Labour tried, and failed, to privatise it, the CDC completely changed its mission. Now it pours money into lucrative corporate ventures, while massively enriching its own directors. Private Eye discovered that in 2007 this quango paid its chief executive just over a million pounds. The magazine has also shown how the CDC has become entangled in a series of corruption cases. Uncut. Unreformed. The same goes for the Export Credit Guarantee Department. The ECGD effectively subsidises private corporations, by underwriting the investments they make abroad. At one point, 42% of its budget was spent on propping up BAE's weapons sales. It also pours money into drilling for oil in fragile environments. A recent court case showed how it has underwritten contracts obtained with the help of bribery. Uncut. Unreformed.

The Sea Fish Industry Authority exists "to help improve profitability for the seafood industry". Although it is a public body, all but one of its 11 directors work for either the fishing industry or food companies. They seek to "promote the consumption of seafood", to "champion the industry in public debates" and to "influence the regulatory process" in the industry's favour. Uncut. Unreformed.

Can you see the pattern yet? Public bodies whose purpose is to hold corporations to account are being swept away. Public bodies whose purpose is to help boost corporate profits, regardless of the consequences for people and the environment, have sailed through unharmed. What the two lists suggest is that the economic crisis is the disaster the Conservatives have been praying for. The government's programme of cuts looks like a classic example of disaster capitalism: using a crisis to re-shape the economy in the interests of business.

In her book The Shock Doctrine, Naomi Klein shows how disaster capitalism was conceived by the extreme neoliberals at the University of Chicago. These people believed that the public sphere should be eliminated, that business should be free to do as it wants, and almost all tax and social spending should be stopped. They believed that total personal freedom in a completely free market produces a perfect economy and perfect relationships.

It was a utopian system as fanatical as any developed by a religious cult. And it was profoundly unpopular. For a long time its only supporters were the heads of multinational corporations and a few wackos in the US government.

In a democracy under normal conditions, those who were harmed by abandoning public provision would outvote those who gained from it. So the Chicago programme couldn't be imposed in these circumstances. As the Chicago School's guru, Milton Friedman, explained, "only a crisis – actual or perceived – produces real change".

After a crisis has struck, he added later, "a new administration has some six to nine months in which to achieve major changes; if it does not act decisively during that period, it will not have another such opportunity."

The first such opportunity was provided by General Pinochet's coup in Chile. The coup was plotted by two factions: the generals and a group of economists trained at the University of Chicago and funded by the CIA.

Their ideas had already been comprehensively rejected by the electorate, but now the electorate was irrelevant: Pinochet used the crisis he had created to imprison, torture or kill anyone who dissented.

The Chicago School policies – privatisation, deregulation, massive tax and spending cuts – were catastrophic. Inflation rose to 375% in 1974; the highest rate on earth. Even so, Friedman insisted that the programme was not going far or fast enough. On a visit to Chile in 1975 he persuaded Pinochet to hit much harder. The result was a massive increase in unemployment and the near-eradication of the middle class. But the very rich became much richer, and the corporations, scarcely taxed, deregulated and fattened on privatised assets, became much more powerful.

By 1982, Friedman's prescriptions had caused a spectacular economic crash. Unemployment hit 30%; debt exploded. Pinochet sacked the Chicago economists and started re-nationalising stricken companies, whereupon the economy began to recover. Chile's so-called economic miracle began only after Friedman's doctrines were abandoned.

The Chicago School's catastrophic programme pushed almost half the population below the poverty line and left Chile with one of the world's highest rates of inequality. But all this was spun by the corporate media as a great success. With the help of successive US governments, similar programmes were imposed on dozens of countries in which crises ensured that the population was unable to resist. Other Latin American dictators copied Pinochet's economic policies, with the help of mass disappearances, torture and killings.

The poor world's debt crisis was used by the IMF and the World Bank to impose Chicago School programmes on countries that had no option but to accept their help. The US hit Iraq with economic shock and awe – privatisation, a flat tax, massive deregulation – even as the bombs were still falling.

After Hurricane Katrina wrecked New Orleans, Friedman described it as "an opportunity to radically reform the educational system". His disciples immediately moved in, sweeping away public schools while the residents were picking up the pieces of their lives, replacing them with private charter schools. Our crisis is less extreme, so, in the UK, the shock doctrine cannot be so widely applied.

But, as David Blanchflower warned yesterday, there's a strong possibility that the cuts programme will precipitate a bigger crisis: "it's a terrible, terrible mistake. The sensible thing to do is to spread [the cuts] over a long time." That's another feature of disaster capitalism: it exacerbates the crises on which it thrives, creating its own opportunities.

So we shouldn't wonder that 35 corporate executives wrote to the Telegraph yesterday, arguing, just as Milton Friedman used to do, for a short, sharp shock, before the window of opportunity closes. The policy might hit their profits for a while, but when we stagger out of our shelters to assess the damage, we'll discover that we have emerged into a different world, run for their benefit, not ours. (A fully referenced version of this article can be found on George Monbiot's website.)

Yeah. Let it shine. It's all we've got left. Suzan __________________


Jack Jodell said...

The plutocrats flexed their muscles last night and immersed us all in a reactionary shitslide that will definitely lead to the destruction of the middle class. This is no longer the country of fair play and opportunity for all. I am definitely now an American dissident.

Suzan said...

Thanks for saying it, Jack!

You have just joined a very large group.

All of my friends anyway.

Love ya,


I am definitely now an American dissident.

Beach Bum said...

David Sirota says if you cannot figure out how people can purposely vote to put themselves on the ash heap of history, you have no idea about the ignorance that now prevails among the lower classes in the USA.

I work on the night shift with two fairly decent guys but their general ignorance and dog-pack patriotic mentality is enough to drive me crazy at times.

A local radio host here in Columbia likes to mention something called the "Cycle of Democracy" all the time and how the uneducated liberal masses will destroy the US. Truthfully, its the conservative Marching Morons that will send the US to the ash heap but not before making the puppet masters very rich. I just hope the Chinese are kind to us when they take over.

Suzan, drop back by my place, I left a comment for you and can send you a scary but VERY true story.

Suzan said...

Well, all righty, baby.

I've just had a few toys of the puppet masters tell me this AM at my local McDonalds that "They won!"

As if.

But it will take a while before they understand.

Love ya,