Wednesday, January 19, 2011

Since Tommy Franks Declared Dougie Feith to be the "Dumbest Fucking Person on the Planet," Right-Wingers Desperate to Seize the Title (What We Know)

(Stolen from that Well-Armed Lamb)

Contrary to the drivel being drooled by our evangelicals and right-wingers and teabaggers, this is not a nation determined to act on high moral purpose. Rather, it is a cartel, a syndicate, using the considerable military and economic power of a very powerful state to further enrich its already wealthy, corporate and individual.

And for that, we are damned.

Musings from the mysterious, munificent Montag the Magnificent (Reporter) at Belaboring the Obvious (emphasis marks and some editing inserted - Ed.):

Even since the moment . . . that Tommy Franks declared Dougie Feith to be the "dumbest fucking person on the planet," there have been right-wingers desperate to seize the title from Feith. Sean Hannity, in the midst of fierce right-wing competition, makes a grab for the gold ring:

HANNITY: There’s two things I said. I say why isn’t Iraq paying us back with oil, and paying every American family and their soldiers that lost loved ones or have injured soldiers — and why didn’t they pay for their own liberation? For the Kuwait oil minister — how short his memory is. You know, we have every right to go in there and frankly take all their oil and make them pay for the liberation, as these sheiks, etcetera etcetera, you know were living in hotels in London and New York, as Trump pointed out, and now they’re gouging us and saying ‘oh of course we can withstand [these prices].’
There's so much stupidity and rampant imperial ambition in this that it's not worth discussing, except to say that it's an attitude that the corporate right in this country is determined to fix firmly in the public mind.

For many decades, the object of such drivel has been to legitimize the notion that the United States deserves to profit mightily from the resources of the world. The object of military intervention around the world is not to secure "access" to resources, as so many in government and on the right have asserted.

No, hell, no. It's about controlling those resources - and their routes of transport - for maximum profit. The great believers in the "free market" were always able to buy those resources on the open market. That wasn't enough, however. That was, umm, too expensive, and limited profit.

Thus has it been ever since the end of WWII. BP needed our help to take Iran's oil and for our help in arranging the coup there, we got a cut. When the Arbenz government of Guatemala sought to buy back United Fruit land for peasants (but used the extremely cheap tax values established under prior dictatorships as the basis for repurchase) and applied a tiny tax on the export of bananas (because the Guatemalan government was broke, thanks to United Fruit), United Fruit arranged for a coup carried out by the CIA.

One of the things least mentioned about the CIA - even within the CIA - is that it has been used as a tool of American big business. More to the point, it has always been politicized to that end. It has always been there to protect the business interests of the U.S. We've been told for decades that the government, and its covert units, were "fighting" communism. Balderdash.

We've been doing any and every despicable thing necessary to make money for companies unable to make a profit without the help of the government and its military, and communism had absolutely nothing to do with it.

The 17th of this month is the anniversary of the assassination of another black man in the West's pursuit of power and profit - Patrice Lumumba. Lumumba was excoriated by the West for decrying colonialism, and for that crime, was executed by rebel forces in the Congo with the tacit approval and acquiescence of the CIA.

When he asked the West for economic aid and was rebuffed, he turned to the Soviet Union. For that, predictably, he was branded a communist by the U.S., and the CIA enabled his capture by rebels who beat him, tortured him and murdered him. Among those rebels was Mobutu Sese Seko, who systematically destroyed the Congo for personal gain, with the assistance and support of the United States.

Contrary to the drivel being drooled by our evangelicals and right-wingers and teabaggers, this is not a nation determined to act on high moral purpose. Rather, it is a cartel, a syndicate, using the considerable military and economic power of a very powerful state to further enrich its already wealthy, corporate and individual.

And for that, we are damned.

Montag . . . Why, exactly, is it . . . that the modern conservative pseudo-intellectual's solution to every small problem seems to involve genocide?

I guess some people see Generals Buck Turgidson and Jack D. Ripper as role models, not as the satirical allegorical figures they were intended to be . . . .

Speaking of further "enrich(ing) its already wealthy," the latest news from Tim Geithner about the bailout and possibility of continuing the TBTF syndrome:
Tim Geithner: Never Again, Until The Next Time

In a column now running on Bloomberg, I review the new Inspector General report on what exactly happened during the “Citi Bailout Weekend” of late November 2008.

The big question lurking in the background is how acutely we face a problem of Too Big To Fail (TBTF) today, i.e., the perception in the credit markets that very big banks will be supported in a crisis, therefore enabling these banks to borrow more cheaply during a boom - and thus enabling them to become larger and increasing their debt relative to equity (leverage).

According to the report, Treasury Secretary Tim Geithner now completely backs away from claims that the Dodd-Frank reform legislation ended TBTF. Standard and Poor’s appears to be on the right track with their latest revised Bank Ratings methodologypresuming that “potential government support” is, going forward, always available to megabanks.

This is exactly the conclusion of 13 Bankers. We should worry greatly about the implications.

Read the article. Seriously, read it slowly and remember who (Robert Rubin) moved to Citibank (Citigroup) from being Treasury Secretary and helped cause the conditions that made it such an excellent rescue candidate (emphasis marks added - Ed.).

`Citi Weekend' Shows Too-Big-to-Fail Endures By Simon Johnson Bloomberg Opinion Democrats like to say that the Dodd-Frank financial overhaul legislation ended the problem of too big to fail because large failing financial institutions can now be wound down in an orderly manner. Republicans, including those now running the House Financial Services Committee, dispute that the Dodd-Frank resolution framework is workable and insist that if big banks get into trouble on their watch that they will be allowed to go bankrupt. Last week’s report by Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, suggests that the views of both sides are likely at odds with future financial realities.

The report, titled “Extraordinary Financial Assistance Provided to Citigroup Inc.,” focuses on the “Citi weekend” in November 2008 when the bank received additional financial assistance from the government - just weeks after the U.S. had injected capital into all the big banks in the first wave of TARP bailouts. The report reveals fresh details about who made the key decisions and on what basis.

The most interesting quotes are from Tim Geithner, who was both president of the Federal Reserve Bank of New York and President Barack Obama’s pick as Treasury Secretary (his nomination, announced that Monday, was leaked to the market the previous Friday.)

Geithner is refreshingly frank that too big to fail hasn’t necessarily been ended.

‘Just Don’t Know’

“In the future we may have to do exceptional things again if we face a shock that large,” he said, according to the report. “You just don’t know what’s systemic and what’s not until you know the nature of the shock.”

Dodd-Frank supposedly gives any administration better tools but if you look closely at the details - highlighted in the Treasury letter attached to the report - you see most of the emphasis is on the resolution authority that allows the government to close financial institutions.

But this doesn’t apply to our largest global banks; there is nothing in the Dodd-Frank authority that applies to the overseas operations of a Citigroup, JPMorgan Chase or Goldman Sachs. So if a big global bank were to fail, it would set off a scramble for assets today just like it did when Lehman Brothers collapsed in September 2008 - or would have if Citigroup had gone under the following November.

‘Gut Instinct’

This is also a major problem for the “just let ‘em go bankrupt” philosophy. There is no framework for cross-border bankruptcy, in the sense of clear rules about who gets compensated with what kind of assets. The courts can presumably sort it out, but it would take many years and cost billions of dollars in legal and other fees. As a result, if a large bank is on the brink of failing, everyone will assume the worst around the world and run for the doors.

Barofsky’s report points out that government decision making on the Citigroup bailout was ad hoc and largely motivated by “gut instinct” about what the consequences might be. Then-Treasury Secretary Henry Paulson was characteristically blunt at the time: “If Citi isn’t systemic, I don’t know what is.”

Sheila Bair, head of the Federal Deposit Insurance Corp., and other FDIC officials deferred to the judgment of Geithner and his team.

In a crisis there are no objective criteria, thus no way to know the full consequences; just a great deal of fear about what the failure of a large financial institution would do.

Like Physics

Size isn’t paramount, but it does matter a lot. If someone tells you that Earth is about to be hit by a meteor, and also tells you its density, impact velocity and impact angle, you then should have one question: How big is it? (You can plug in the parameters online to see for yourself.)

In this scenario, bigger isn’t better; it’s worse. It’s the same with banks - as seen during the Citigroup weekend. The bank was huge. It was very highly leveraged. It was profoundly global. There was no legal authority that could handle orderly resolution. All of this is still true today, as the report makes clear.

Or perhaps the situation is worse.

“The government’s actions with respect to Citigroup undoubtedly contributed to the increased moral hazard that has been a direct byproduct of TARP,” Barofsky wrote.

As of last January, a senior New York Fed official still viewed Citigroup as too big to fail, and told the special inspector general that if history repeats itself, there is “no question we would do it again (with) a similar or different program,” according to the report.

Next Time

Or we could also make the biggest banks smaller - ideally, small enough to fail. This was the proposal of the Brown-Kaufman amendment to Dodd-Frank, which died on the Senate floor, largely because of opposition from Geithner and the Treasury Department.

So we’ll do nothing, it seems, except let these massive banks become bigger and even less well managed.

Until next time, the people who run the country will again face the same choice as in November 2008: provide an unsavory bailout for management, shareholders and creditors that rewards failure and stupidity, or run the risk of causing a second Great Depression.

If the big banks get large enough, we’ll become like Ireland today - saving those institutions will ruin us fiscally, destroy the dollar as a haven currency, and end financial life as we know it.

(Simon Johnson, co-author of “13 Bankers: The Wall Street Takeover and the Next Financial Meltdown,” is a professor at MIT’s Sloan School of Management and a Bloomberg News columnist.)

Suzan ___________________

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