Monday, November 30, 2009

Blame Larry Summers? (And Bobby Rubin & Timmeh?) New World Ordered

Deer in the headlights time? Too bad economics is such a bore for the average American. (I mean, when even Arianna gets it right . . . .)

You gotta give Mike Whitney points for going for the jugular early. He's been en pointe since the beginning of this financial/economic catastrophe (for the classes below the top 1%).

Because Summers is an industry rep whose primary task is to ensure the smooth transfer of public wealth to corporate plutocrats.
The bum. He doesn't spare any rich guy's feelings does he? And couldn't you argue that he makes quite a case for revolution? Yeah . . . I know. That's just silly in the apathetic USA. Until everyone is in a breadline (or worse). And it's going to happen - the reigning question being: "When?" One thought I've had over and over but never expressed publicly before is that when you evaluated the people running the country during the Cheney/Bush junta and looked for real intelligence you found yourself in a long, dark, spiral to Hell with Cheney being the point guy for brilliance (as well as a few other slugs with real academic credentials). The question today is has this judgment at the top of the leadership pyramid changed? (Sorry to run the whole (long) piece for those who like to breeze on to the next fun item, but it's important - really!) One wise commenter on this essay (signing in as Malcolm Martin) seems to have a unique perspective - at least since Marx - and I don't mean Groucho. (Emphasis marks added - Ed.)
The present public relations campaign touting “recovery” is a delaying device. It is meant to allow the men on the other side of the class divide time to prepare and position themselves as well they can for their survival. We should understand what they know: there will be no economic recovery! There is simply no rational economic reason for one to occur.

The capitalist economic system has experienced a completely natural life cycle. From the time of the collapse of feudalism and its birth in the Industrial Revolution, capitalism was always destined to become a dominant global force.

Globalization will be a historic marker as the zenith of its existence. But globalization robbed the system of the only thing that kept its fatal internal contradictions at bay — growth. Capitalism has conquered the planet, it has nowhere else to feed.

The time of its death is now at hand.

Skirmishes around the world are signs the two most powerful groups that capitalism creates are beginning to engage in a final battle for power. Marx called them the bourgeoisie, the ruling class, and the proletariat, the working class. It can be most simply described as the clash between the haves and the have nots, the wealthy and the people who must work to live.

The showdown has always been inevitable and it must destroy one class or the other. Then on the ruins of the old system, the class that prevails will reorganize society along the lines of their dictates. If the bourgeoisie remains on top it will not mean the restoration of capitalism to health and stability. It will mean the depopulation of the planet and the enslavement of man in a world described in the dystopian literature of Orwell, Huxley, and Atwood.

Workers, united across all artificial boundaries created by capitalism, whether nation, race, sex, or religion are the only hope now. This is the only force capable of staying the hand of the bourgeoisie and insuring the human experiment “shall not perish from the earth,” to borrow Lincoln’s phraseology. But right now there is admittedly no US political party or other formation which expresses the destiny of the working class to power and socialism.

Surely seems to be what's playing out internationally every day (see Michael Hart/Propagandee's Dubai Bye).
Soaring Unemployment and Double-dip Recession? Blame N.W.O. Larry
Mike Whitney Barack Obama's chief economic advisor, Lawrence Summers, is determined to sabotage a second round of stimulus. And, he's getting plenty of help, too. Congressional Democrats are dragging their feet because they're worried about the political backlash and midterm elections, the GOP deficit hawks are looking for a way they can derail the Obama agenda and reestablish their bone fides as fiscal conservatives, and the bailout-traumatized American people are simply opposed to anything that generates more red ink. Even Obama has joined the fray and started badmouthing stimulus stressing the importance of living within our means and trimming the deficits. So it looks like a done-deal; no more stimulus.

There's only one problem, without another blast of stimulus the economy is headed for the skids. Summers knows this because he is an extremely bright and competent economist. With Summers, the issue is loyalty, not intelligence. To prove this point, consider Summers comments in a Washington Post editorial September of 2008) where he explains what needs to be done to put the economy back on track:

"Indeed, in the current circumstances the case for fiscal stimulus - policy actions that increase short-term deficits - is stronger than ever before in my professional lifetime. Unemployment is almost certain to increase - probably to the highest levels in a generation. Monetary policy has little scope to stimulate the economy given how low interest rates already are and the problems in the financial system. Global experience with economic downturns caused by financial distress suggests that while they are of uncertain depth, they are almost always of long duration. The economic point here can be made straightforwardly: The more people who are unemployed, the more desirable it is that government takes steps to put them back to work by investing in infrastructure or energy or simply by providing tax cuts that allow families to avoid cutting back on their spending. ("A Bailout Is Just a Start", Lawrence Summers, Washington Post)

To repeat: "Monetary policy has little scope to stimulate the economy given how low interest rates already are and the problems in the financial system."


Zero-percent rates don't get any traction in a liquidity trap. That's why economists push for fiscal stimulus; jobs programs, state aid, and extended unemployment benefits. That's the only way to narrow the output gap and rev up economic activity. Summers doesn't even challenge the idea, in fact, he makes the case for fiscal stimulus. Of course, that was then, and now is, well, now. Here's another clip of Summers stirring up the masses at the Brookings Institute with his thundering Fidel Castro impersonation:

"Between 2000 and 2007 – a period of solid aggregate economic growth – the typical working-age household saw their income decline by nearly $2000. The decline in middle-class incomes even as the incomes of the top 1% skyrocketed has a number of causes, but one of them is surely rising asset prices and the fact that financial sector profits exploded to the point to where they represented 40% of all corporate profits in 2006.

Confidence today will be enhanced if we put measures in place that assure that the coming expansion will be more sustainable and fair in the distribution of benefits than its predecessor."

Larry Summers carrying-on about "distribution of benefits"? Huh? So how does the Redistributionist-in-Chief feel about stimulus now? Here's a clip from Thursday's Wall Street Journal:

"The White House is lukewarm about proposals by congressional Democrats to introduce broad legislation to create jobs, instead favoring targeted measures that would be less likely to inflate the deficit, administration officials said.

Mr. Obama is keen to avoid any measures suggestive of a second, big-ticket stimulus. With about half of the February stimulus spending spoken for, the measure has created about 640,000 jobs, fewer than the number of jobs lost in January alone."

There is no discussion of a package like a second stimulus, but we are working closely with Congress and consulting with outside experts to determine the right policies and the right steps," said White House deputy press secretary Jennifer Psaki. ("Weighing Jobs and Deficits", Elizabeth Williamson, Wall Street Journal)

Apparently, Summers has had time to rethink his populism and do a 180. Team Obama plans to create jobs by initiating tax credits and lending to small businesses. Sound familiar? In other words, the only way that millions of dejected workers will get any relief is if private industry can be enriched in the process. That's why "there is no discussion of a second stimulus." Because Summers is an industry rep whose primary task is to ensure the smooth transfer of public wealth to corporate plutocrats.

He even opposed the extension of unemployment benefits believing that greater hardship would push wages down even further. Here's an excerpt from Arianna Huffington at Huffington Post: "The problem for the White House and for the Democratic Party - and, most importantly, for the country - is that the administration's response on jobs is being led by Summers, who actually opposed the extension of unemployment benefits Obama just signed.

At this point you have to wonder what Obama's attachment to Summers and Geithner is. . . . Back in February, when the $787 billion economic stimulus bill was signed, Summers and company promised that it would keep the unemployment rate from going any higher than 8.5 percent.

With another 3.4 million jobs lost since then - and the official unemployment rate at 10.2 and rising - what does Summers say now?"

I think we got the Recovery Act right." ( "Will the Unemployment Disaster Be Obama's Katrina?" Arianna Huffington,

Indeed, from Summers point of view, the America Rescue and Recovery Act has worked out just dandy. The unions are getting walloped, 8 million people are out of work, the labor market is in the worst shape it's been since the Great Depression, and the blood-flow of stimulus is about to get choked-off sometime in the next two quarters. Hey, it's morning in America!

But, as we noted earlier, Summers is a superb economist, so maybe there is an economic reason for his opposition to more stimulus. Could it have to do with the output gap? Since Lehman Bros. collapsed, the output gap which is the difference between an economy’s actual output and its potential output) has been at record lows. That means that there is not sufficient demand to take up the slack in the economy. The only way to resolve that problem (when the Fed is in a liquidity trap and consumers are slashing spending) is to get money into the hands of people who will spend it. That means more government spending, thus, more stimulus.

But how much more? Here's economist Robert Skidelsky with an answer:"But how large must such a stimulus be? The United States Congressional Budget Office (CBO) estimates that American output will be roughly 7% below its potential in the next two years, making this the worst recession since World War II. American unemployment is projected to peak at 9.4% towards the end of 2009 or the beginning of 2010, and is expected to remain above 7% at least until the end of 2011.

The US government has pledged $787 billion in economic stimulus, or about 7% of GDP. Superficially this looks about right to close the output gap – if it is spent this year . But it is in fact a three year-program. Some $584 billion is allocated for 2009-2010, leaving perhaps $300 billion of extra money for this year. Even so, it is not clear how much of that will be spent.

. . . A double round of stimulus packages is needed to counteract the real prospect of a double-dip recession.

The time to start worrying about inflation is when the recovery is entrenched. To pay back the debt without strain, we need a booming economy. Talk of government spending cuts is premature. ‘A boom not a slump is the right time for austerity at the Treasury’ said Keynes. He was right." ("Is Stimulus Still Necessary?" Robert Skidelsky, Project Syndicate)

Surely, Summers made the same calculations as Skidelsky, but decided to go with a smaller stimulus package for political reasons. Fair enough. He was probably afraid that a larger bill wouldn't get through Congress. That's reasonable, but it doesn't change the fact that more stimulus is needed now. The White House should be preparing itself for a major public relations campaign spearheaded by President Persuasion, the charismatic orator who could charm a hungry dog off a meat-wagon. But there's no PR campaign on the drawing board at all; just more blabber about cutting deficits and reducing long-term government spending (. . . an attack on Social Security).

So as soon as this stimulus-injection wears off, the economy will slip into a coma once again.

Here's Paul Krugman breaking it all down:

"Second estimate of third-quarter GDP out; growth rate marked down to 2.8%.

This is really quite grim. At this growth rate it’s far from clear that we’re doing anything to reduce the output gap — the gap between what the economy could produce and what it’s actually producing. Correspondingly, there’s no reason now for even a bit of optimism on unemployment.

When the 3.5% advance number came out, I took to warning people that even if the economy continued to grow at that rate, we wouldn’t see anything like full employment until late in Sarah Palin’s second term. Given the latest number, the date at which we can expect to see a return to full employment is . . never.

And that’s if growth continues at this rate. The odds are good that growth will slow down next year: the stimulus has already had its peak effect on growth and will turn into a net drag in the second half, the inventory bounce — which was a major factor in 3rd quarter growth, such as it was — will fade out. Basically, we may be in a technical recovery, but we’re not recovering. (Paul Krugman, "Gee, that’s De Pressing" The Conscience of a Liberal, New York Times.)

There's no recovery.

Figure it out. Bank profits went up last quarter, but lending went down significantly. Now, that's a neat trick. How did they manage that?

They did it with the money they're getting from the Fed. Bernanke has provided broken banks and other financial institutions with trillions of dollars that are being diverted into high-risk assets, carry trades (with the zero-rate dollar as the funding currency) and speculative derivatives bets.

The same bubble that just blew up a year ago has been reflated thanks to Bernanke's largesse and gigantic re-leveraging. Main Street is in a Depression, but Wall Street is doin' just fine.

Even so, there is no sign of inflation anywhere and the government is able to borrow capital at record low costs. Last week 3-month Treasuries went negative while the 2-year T-bill has fallen off a cliff. Why? Because Bernanke ended the guarantee on money markets so investors are fleeing to safety again. Ordinary retail investors who can't do bigtime cross-border currency transactions or High Frequency Trading, need a place to hide. Hence, USTs. They're forking over their money to Uncle Sam for under 1 percent interest. It's highway robbery. At the same time, consumer credit is shrinking, bank lending is down, and 1 out of 4 homeowners is upside-down. Money is not moving and the economy is on a ventilator. We need more stimulus.

But there won't be another round of stimulus because Summers and his sniveling companion Geithner won't allow it. They have other plans. Oh yeah, Wall Street and the banking Goliaths will still get as much monetary stimulus as they need (under the phony moniker of "quantitative easing", liquidity swaps, or excess reserves) But as for the working slob - nada, zippo, zilch.

Summers assignment is to bring the broader economy to its knees; to crush big labor by keeping unemployment high, to force state and local and governments to privatize more public assets and services, and to generate as much human misery as possible. In short, Summers is laying the groundwork for structural adjustment within the US, a policy which reflects his ongoing commitment to multinational corporations and neoliberalism. It's the shock doctrine redux.

These people are monsters.

I cannot comment further. Suzan __________________

Sunday, November 29, 2009

"Crazy, Irrational Beliefs of" Americans (Leaders)

A raving American journalist (lunatic) has spoken as clearly as he possibly can about the US aims in the Mideast (and other close environs), which he knows everything about from his deep political connections, and Charlie Rose treats him as an intelligence guru. My thanks go out to Glenn Greenwald for this brilliant dissection that I've been thinking about rendering (but would never have been anywhere so pithy) since seeing FriedBrain last week on Cholly Rose's festival of economic/political know-nothings. (Emphasis marks added - Ed.)

Tom Friedman, The New York Times, today: Major Hasan may have been mentally unbalanced - I assume anyone who shoots up innocent people is.
Tom Friedman, The Charlie Rose Show, May 30, 2003:
ROSE: Now that the war is over, and there's some difficulty with the peace, was it worth doing?

FRIEDMAN: I think it was unquestionably worth doing, Charlie. I think that, looking back, I now certainly feel I understand more what the war was about . . . . What we needed to do was go over to that part of the world, I'm afraid, and burst that bubble. We needed to go over there basically, and take out a very big stick, right in the heart of that world, and burst that bubble. . . . And what they needed to see was American boys and girls going from house to house, from Basra to Baghdad, and basically saying: which part of this sentence do you understand? You don't think we care about our open society? . . . . Well, Suck. On. This. That, Charlie, was what this war was about. We could have hit Saudi Arabia. It was part of that bubble. Could have hit Pakistan. We hit Iraq because we could. That's the real truth. Tom Friedman, NPR's Talk of the Nation, September 23, 2003 (via NEXIS): That's what I believe ultimately this war was about. And guess what? People there got the message, OK, in the neighborhood. This is a rough neighborhood, and sometimes it takes a 2-by-4 across the side of the head to get that message. Tom Friedman can declare with a straight face that "anyone who shoots up innocent people is . . . mentally imbalanced" without seeing how clearly that applies to himself and those who think like he does. It's that self-absorbed disconnect - seeing Hasan's murder of American soldiers as an act of consummate evil and sickness while refusing to see our own acts in a similar light - that shapes most of our warped political discourse. And note the morality on display here: Hasan attacks soldiers on a military base of a country that has spent the last decade screaming to the world that "we're at war!!," and that's a deranged and evil act, while Friedman cheers for an unprovoked war that killed hundreds of thousands of innocent civilians and displaced millions more - all justified by sick power fantasies, lame Mafia dialogue, and cravings more appropriate for a porno film than a civilized foreign policy - and he's the arbiter of Western reason and sanity. But even worse is the glaring dishonesty driving everything Friedman writes here. Our perpetual war cheerleader today laments that there is a "Narrative" plaguing the Muslim world that is a "cocktail of half-truths, propaganda and outright lies about America." These crazy, stupid, irrational Muslims seem to believe "that America has declared war on Islam, as part of a grand 'American-Crusader-Zionist conspiracy' to keep Muslims down," when the reality is that "U.S. foreign policy has been largely dedicated to rescuing Muslims or trying to help free them from tyranny." They see devastating attacks launched by the U.S. and Israel collectively on six Muslim countries in the last decade (including Gaza) - all of which Friedman (along with his fellow Muslim-condemning NYT colleague) supported, naturally - and those Muslims simply refuse to understand why they deserved it and why it was all for their own Good. According to Friedman, these benighted Muslims simply refuse to see the truth: that our two post-9/11 wars were "primarily to destroy two tyrannical regimes - the Taliban and the Baathists - and to work with Afghans and Iraqis to build a different kind of politics." Six months into the war, Friedman proudly proclaimed that "the real truth" was that we invaded Iraq to take out our "big stick" and tell them to "Suck On This," to take a 2-by-4 across their heads, and that we attacked them "because we could."

In his 2003 explanation with Charlie Rose, did he even mention what he now claims was the war's "primary" purpose: "to destroy two tyrannical regimes . . . and to work with Afghans and Iraqis to build a different kind of politics"? No. In a very rare moment of candor for this rank war-loving propagandist, he announced very clearly the real purpose of the war, only for him to now turn around and accuse Muslims of being blind and hateful because they heard his message loud and clear, and because they don't express enough gratitude for all the gracious Freedom Bombs we've dropped - and continue to drop - on their homes, their villages, their families, their children and their society. Apparently, they heard deranged, chest-beating bellowing like this from America's Top Foreign Policy Expert and took it seriously . . .

UPDATE II: George Orwell, in describing "political speech and writing in our time," perfectly captured what Tom Friedman does and who he is - along with most of our most prominent establishment political writers (see the last comment here).

Read on and decide for yourself whether FriedBrain deserves just to be ignored from now on (and run out of the "leadership" group he so humbly represents on the MSM) or worse. Suzan P.S. Speaking of brilliance - don't miss Driftglass' ineradicable treatment of this strange and deadly phenomenon. ___________________

Saturday, November 28, 2009

Ravaging Frauds, Timmeh's Testimony and Goldman Sachs' Special Deal

Frauds Running Amok? (Too many to keep up with?) Seems the "tea-party"-ers are hardly the Little Rascals' tea party set. Unless your definition of tea party provides for no party and darn little tea for you. This article reveals the empathy level of the group that believes your best response to a critical health care problem, if you are poor, is to die quickly. The doctors they are currently trotting out as expert naysayers to the health care bill currently being negotiated in Congress belong to a fraternity formerly associated with the John Birch Society. Remember them? No? You will.

Yet despite the lab coats and the official-sounding name, the docs of the AAPS are hardly part of mainstream medical society. Think Glenn Beck with an MD.

The group (which did not return calls for comment for this story) has been around since 1943. Some of its former leaders were John Birchers, and its political philosophy comes straight out of Ayn Rand. Its general counsel is Andrew Schlafly, son of the legendary conservative activist Phyllis.

The AAPS statement of principles declares that it is "evil" and "immoral" for physicians to participate in Medicare and Medicaid, and its journal is a repository for quackery. Its website features claims that tobacco taxes harm public health and electronic medical records are a form of "data control" like that employed by the East German secret police. An article on the AAPS website speculated that Barack Obama may have won the presidency by hypnotizing voters, especially cohorts known to be susceptible to "neurolinguistic programming" — that is, according to the writer, young people, educated people, and possibly Jews.

For decades the AAPS has opposed any attempt — real or imagined — to expand the government's role in health care. Its last big moment in the spotlight came in 1993, when it sued Hillary Clinton to stop "socialized medicine," prompting a trial court to order the then first lady to disclose the participants of her health care task force. The organization requires members to sign a "declaration of independence" agreeing to stop participating with any third-party payers — meaning not only government programs like Medicare, but private insurers, too. Basically AAPS doctors believe that medicine should be a cash-and-carry business.

This free-market fundamentalism has made the AAPS a natural ally for big corporations. Documents released as a result of the tobacco litigation the 1990s and early 2000s show that Philip Morris officials worked with AAPS executive director Jane Orient to help the company's "junk science" campaign that attacked indoor smoking bans.

. . . For the AAPS journal, however, this is tame stuff. The publication's archives present a kind of alternate-universe scientific world, in which abortion causes breast cancer and vaccines cause autism, but HIV does not cause AIDS. Cutting carbon emissions represents a grave threat to global health (because environmental regulation would make people poorer and, consequently, sicker). In 2005, the journal erroneously claimed that illegal immigration had caused a leprosy epidemic in the US, a claim that was reported as fact in more mainstream outlets such as Lou Dobbs' show.

. . . Once in a while, an AAPS member has let slip that their opposition to health care reform doesn't stem purely from medical concerns. In July, Florida neurosurgeon and AAPS member David McKalip circulated on a tea-party listserv a photo of Obama dressed in Papua New Guinean tribal garb with a bone through his nose, captioned "Obamacare: Coming soon to a clinic near you." News of the photo, first reported by Talking Points Memo, forced McKalip to apologize publicly and step down as president-elect of the Pinellas County Medical Association. He claimed afterward that he would stay out of politics for a while, but a few weeks later, he spoke at a tea party in south Florida and, on October 16, appeared on the Glenn Beck show with another AAPS member for a special on health care reform.

Do yourself a favor and read the rest here.

The data on Little Timmeh's Rocking Weekend with those gorgeous guys (but no Lassie) from the Fed continue to gush in. But are the most affected players (taxpayers left holding the bills) even listening?

The Fed has gone hog wild in extending credit (through repos, for instance) with supervised institutions. It has taken all kinds of dodgy collateral at all kinds of dodgy valuations. That certainly involves taking a long term credit exposure. (Spare me any protests that there is no credit risk here because these repos are collateralized. Given the quality of the collateral, and the counterparties, there is an appreciable probability that the Fed will suffer a credit loss on these deals.) And if the Fed’s actions were a response to an existential event, which is the gravamen of its defense of its actions, such prissiness over protocol appears decidedly inappropriate – making this explanation exceedingly implausible.

. . . Further thought: Given that the CDS were so far underwater to AIG, if the government had guaranteed them, the likelihood that the Fed would have become a creditor to the banks on the other sides of the deals was exceedingly remote. That is, it was highly unlikely that the Fed would have been exposed to default losses on these deals, meaning that the “credit relationship” was a fiction. (Besides, at the time, were most of the counterparties even under Fed supervision? Most were foreign banks, and even the US counterparties, with the exception of Wachovia, were investment banks that I do not believe were under direct Fed supervision, except perhaps as Treasury primary dealers, rather than as banks.)

Second, “there was a lack of statutory authority of the Federal Reserve to provide such a guarantee.” Please, again. There are a variety of structures that effectively create guarantees. For instance, if the Fed could see its way clear to setting up and capitalizing a special purpose vehicle (SPV) to buy the CDOs, it could have set up and capitalized an SPV, and then novated the deals to the SPV. If it was concerns about counterparty risk that made the banks so insistent on receiving collateral payments, this structure would have allayed their concerns – and required no cash to go out the door.

Here's the first part (the FRBNY is the Federal Reserve Bank - New York (Timmeh's former home)) and don't forget the quotable Hank Greenberg's role in the AIG mess (emphasis marks added - Ed):

Krugman is bashing Timmy! Geithner for his role in the AIG bailout. This poses something of a dilemma for yours truly. My sentiments parallel those of Henry Kissinger during the Iran-Iraq War: too bad they both can’t lose. All snark aside, the SIGTARP report that has put Timmy! (oh, that was snarky–sorry) on the hotseat raises some questions that have been totally ignored over the debate over whether the Fed should have sent Goldman, et al., to the barber shop to get a haircut on the valuations of their swaps with AIG. The indisputable fact is that billions of cash went out the door to Goldman et al as a result of Fed’s actions. The Fed took ownership of the CDOs underlying the swaps that AIG had entered with the banks, and effectively paid the banks 100 cents on the dollar. That is, they ensured that the CDO hedges were perfect (belying the old trader adage that the only perfect hedge is in a Japanese garden). The question is, therefore, what were the alternatives? The alternative that has garnered all the attention is that the Fed should have paid less than 100 cents on the dollar. But that’s not the only alternative. Hank Greenburg has suggested that the Fed should have simply guaranteed the swaps, thereby vitiating the need to provide any collateral payments. (I made a similar suggestion in an earlier post on AIG).The SIGTARP report states clearly (p. 14) that this alternative was considered, but dismissed. The ostensible reasons for the rejection seem very dubious, indeed. First, “FRBNY told SIGTARP that a perceived downside of this structure from FRBNY’s perspective was that it could involve FRBNY in long-term credit relationships with supervised institutions.” Please. The Fed has gone hog wild in extending credit (through repos, for instance) with supervised institutions. It has taken all kinds of dodgy collateral at all kinds of dodgy valuations. That certainly involves taking a long term credit exposure. (Spare me any protests that there is no credit risk here because these repos are collateralized. Given the quality of the collateral, and the counterparties, there is an appreciable probability that the Fed will suffer a credit loss on these deals.) And if the Fed’s actions were a response to an existential event, which is the gravamen of its defense of its actions, such prissiness over protocol appears decidedly inappropriate – making this explanation exceedingly implausible. Further thought: Given that the CDS were so far underwater to AIG, if the government had guaranteed them, the likelihood that the Fed would have become a creditor to the banks on the other sides of the deals was exceedingly remote. That is, it was highly unlikely that the Fed would have been exposed to default losses on these deals, meaning that the “credit relationship” was a fiction. (Besides, at the time, were most of the counterparties even under Fed supervision? Most were foreign banks, and even the US counterparties, with the exception of Wachovia, were investment banks that I do not believe were under direct Fed supervision, except perhaps as Treasury primary dealers, rather than as banks.) Second, “there was a lack of statutory authority of the Federal Reserve to provide such a guarantee.” Please, again. There are a variety of structures that effectively create guarantees. For instance, if the Fed could see its way clear to setting up and capitalizing a special purpose vehicle (SPV) to buy the CDOs, it could have set up and capitalized an SPV, and then novated the deals to the SPV. If it was concerns about counterparty risk that made the banks so insistent on receiving collateral payments, this structure would have allayed their concerns – and required no cash to go out the door. . . . To conclude: given the availability of another alternative to buying out the banks at 100 percent of par, that would not have required a cash payment, and the weak justifications for avoiding that option, make it highly likely that the AIG bailout was structured in part to provide liquidity to major banks (and perhaps, but not conclusively, one particular bank). Which makes the Fed’s – and Geithner’s – denial that the financial health of these firms was an irrelevance highly dubious, not to say, a lie.
Read on, please. One particularly knowledgeable reporter ("Thank you!") provides us with these links: The Special Inspector General's Report on the A.I.G. Bailout (SIGTARP) November 24, 2009 1:57 AM Goldman/AIG Conspiracy Theories: There’s a Reason They Won’t Go Away Suzan _______________________

Tuesday, November 24, 2009

US Have Been HoodWinked? Secrets of the Empire Revealed

Remember those Congressional hearings with Alan Greenspan speaking in subhuman tones and commentators acting bewildered later as they tried to parse his encantations? I do. I also remember thinking that anyone acting like he had must be trying to hide something. And he certainly looked like the creepiest magician I had ever seen.

Even the faith of snake handlers is not as devout as Greenspan’s. Unfortunately, however, he was able to hitch our nation’s economic well-being to his own absurdist ideological fancy. The guy who was lionized as the smartest, most- stable economic thinker in the land essentially turns out to have been a quasi-religious nut. . . .

WILLIAM BLACK : But the bigger part of the problem, in many ways, is that they have such an ideology about the market and its ability to deal with all problems that has no basis in reality, has been exposed in this crisis as completely fictional, and yet they can’t give it up. I mean, think of yourself as one of these professors who’s been trained in the Milton Friedmanish views, and you’re in your fifties, and you’ve been saying — you know, everything you’ve said in your career is wrong. Everything you’ve learned in your career is wrong. All of your areas of expertise are wrong. Are you going to admit that? “Hi, I’ve been misleading you, and I’m sorry I caused this disaster. And by the way, I have no meaningful skills or experience.”

I had a friend tell me back in 2002 that he found out Wall street was a bunch of people that took undergraduate liberal arts and then got an MBA after their family connections put them in jobs there. The meat of a business education is in undergraduate work. Kind of like making a peanut butter sandwich without the bread.

The government would immediately outlaw it, but what the people of the US should do is sell their stocks, take the check to the bank and get the cash. Force these banks to deliver the cash, which they can’t do. You have no idea the rampage I have been on for a year over the fact these banks weren’t closed and that their insolvency was covered up. This thing was allowed to fester because Citi was broke. There is no telling what went on between AIG and its counterparties, but it clearly wasn’t the actions of an insurer. That branch of AIG should have been taken out of the conglomerate and put into bankruptcy. Goldman stuffs $1 million an employee in their pockets while the rest of us get the bill. I did simple math on GE the other day and it is clear that despite actions to keep them solvent, they had repurchased a sizable percentage of the corporate stock during the past year. The proportion of the per shares isn’t even close. I have been telling people for years the stock market is a pool of fraud and Wall Street/Ivy League misinformation and people in general have been too interested in making an easy buck than realizing they are getting scalped.

In How the Servant Became a Predator, one of our best economists who happens also to be a famous regulator (who was instrumental in bringing the Savings and Loan fiasco of the 80's to a decent, public-serving conclusion), William K. Black, banishes the mist that clings to the idea of the free market as he "explains how the finance economy preys on the real economy instead of serving it. He shows how both have become dysfunctional and warns that we must not neglect the real economy — the source of our jobs, our incomes, and the creator of goods and services — as we focus on financial reform."

What exactly is the function of the financial sector in our society? Simply this: Its sole function is supplying capital efficiently to aid the real economy. The financial sector is a tool to help those that make real tools, not an end in itself. But five fatal flaws in the financial sector’s current structure have created a monster that drains the real economy, promotes fraud and corruption, threatens democracy, and causes recurrent, intensifying crises.
Read on please for the best economic/financial insight in our times. When Amy Goodman interviewed John Perkins, the present day come-to-Jesus former "Economic Hit Man" about his new book Hoodwinked: An Economic Hit Man Reveals Why the World Financial Markets Imploded — and What We Need to Do to Remake Them, he lays out the scenario that our wealthy industrialist friends (now all located overseas - where the money drowns them in a gusher of cheap labor) used to lead us to our own come-to-Jesus moment. Or should that be "Jebus?" (And how long do you think it took a smart guy like Obama to see the light here?) (I've also wondered for a very long time how long it will take them to announce that Social Security has been black-opped?) (Emphasis marks added - Ed.)

Welcome, John. Well, for starters, though we’ve discussed this before, what exactly does an “economic hit man” mean?

JOHN PERKINS: Well, Amy, I think it’s fair to say that we economic hit men have managed to create the world’s first truly global empire. And it’s basically a secret empire.

We do it in many ways, but principally, we identify a country that has resources that corporations covet, like oil, arrange a huge loan to that country from the World Bank or one of its sisters. The money never actually goes to the country; it goes to our own corporations to build the infrastructure projects in that country that help a few very wealthy people, but don’t benefit the majority of the people, who are too poor to buy electricity or have cars to drive on the highways. And yet, they’re left holding a huge debt that they can’t repay.

So we go back at some point and say, “You know, you can’t pay your debts. Give us a pound of flesh. Sell your oil real cheap to our oil companies. Vote with us on the next critical UN vote. Allow us to build a military base in your backyard.” Something along these lines.

And when we fail — as I talk in my books, I failed with Jaime Roldos, president of Ecuador, Omar Torrijos of Panama — the Jackals go in and either overthrow or assassinate these leaders. And if the Jackals fail, as they did in Iraq, then we send in the military.

AMY GOODMAN: And what personal experience do you have to prove this?

JOHN PERKINS: Well, I was there. You know, I was with Jaime Roldos in Ecuador. I was the guy — one of the guys who was supposed to corrupt him, bring him around, and Omar Torrijos of Panama and many others. When I failed with those two gentlemen, the Jackals went in and assassinated both of them. And I was there; I was in those front lines. My official title was chief economist of Charles T. Main. I had about three dozen employees working for me and did this for ten years, and finally saw the light.

But I think what’s — you know, what’s really important about all this is that in this period of time, since the 1970s, and really beginning very strongly in the 1980s, we’ve created what I consider a mutant, viral form of capitalism. Earlier on the program, you showed the statistics of 37 percent of the people in the survey not believing that capitalism is working. I don’t think the failure is capitalism. I think it’s the specific kind of capitalism that we’ve developed in the last thirty or forty years, particularly beginning with the time of Reagan and Milton Friedman’s economic theories, which stress that the only goal of business is to maximize profit, regardless of the social and environmental costs, and not to regulate businesses at all—regulation is bad, all forms—and to privatize everything, so that everything is run by private business. And this mutant form of capitalism, which I think is really a predatory form of capitalism, has created an extremely unstable, unsustainable, unjust and very, very dangerous world.

AMY GOODMAN: You talk about the robber barons, the modern day robber barons. Who do you mean?

JOHN PERKINS: So many of them. You know, we’ve seen them recently on Wall Street, the people from Goldman Sachs and Citigroup and so many other organizations, people like Jack Welch, who is a former CEO of General Electric. And as I lecture at business schools and MBA programs, Jack Welch is often held up as this idol. Jack Welch laid off a quarter of GE’s employees. You know, he said he was making the company meaner and leaner—he certainly was making it meaner—gave himself huge raises and bonuses at the same time, turned General Electric essentially from a manufacturing company into a financial services company, which really was one of the leaders in taking us down this course today that we’re on of a failed economic system.

And we truly have a failed economic system at this point. It’s deep. You know, one of the reasons I wrote Hoodwinked is because I saw a lot of books coming out that deal with what I consider triage. What do you do with AIG? What do you do with General Electric? What do you do about the immediate problems with Wall Street? But the problem is much, much deeper. There’s a cancer beneath all that. And this is this very basics of our current economic system. And we must delve down and root out that cancer and move into something much better.

I have a two-year-old grandson. And as I look at this baby, you know, I think, what’s this world going to look like in six decades, when he’s my age? If we stay the course, it will be horrible. But we have this opportunity now, and I think this economic turmoil that we’re in today is teaching us that we must change. We have a failed system. We must create something better. And we must realize that my grandson can’t possibly hope to inherit a sustainable, just and peaceful world, unless every child growing up in Ethiopia and in Bolivia and in Indonesia and in Israel and Palestine has that same expectation. Everybody is listening to For the first time in history, we’re really living on a very, very tiny, highly integrated planet, and we’re all communicating with each other.Democracy Now! all around the world. We’re all talking on the cell phone and by internet. We really get it. We’re a very, very small community, and we need to recognize that.

AMY GOODMAN: John Perkins, you have an interesting theory about what happened in Honduras, the coup that just took place there. What do you think?

JOHN PERKINS: Well, I don’t think it’s a theory. You know, I think it’s—I was in Panama at the time that the coup took place. And, you know, the democratic—


JOHN PERKINS: Yeah. The democratically elected president, Zelaya, had called for a new constitution to replace the old one that was really set up by the oligarchy in favor of the very, very, very wealthy and the international companies. He also called for a 60 percent increase in the bottom wage rate, which had a huge impact on Dole and Chiquita, two of the biggest employers in that company. They, along with a number of companies that have sweatshops in Honduras, strongly objected, very much the same way that they had objected to Aristide in Haiti, when he did something similar, and called in the military. The general in charge of the military was a graduate of our School of the Americas, this, you know, school that’s famous for creating dictators, and they overthrew Zelaya. It was a classic CIA-sponsored type of coup, very similar to what United Fruit had done in Guatemala in the early ’50s. And, of course, United Fruit became Chiquita.

So you had this—you know, this strong relationship and got rid of this democratically elected president, because he was drawing a line in the sand. We had seen ten countries in Latin America bring in new presidents who are instituting very significant reforms in favor of the people, in favor of using local resources to help the people pull themselves up by the bootstraps, and I think the corporatocracy decided to draw a line in the sand in Honduras.

AMY GOODMAN: Iran and the swirling clouds?

JOHN PERKINS: You know, I think Iran today — Iran is this example of where we went in and overthrew a democratically elected president, Mosaddeq, in the early ’50s, and we’ve seen terrible blowback from that ever since. It’s, you know, not only in Iran, but it impacted the whole Middle East. If we had supported that president, who simply wanted to use more of his oil money, his country’s oil money, to help the poor people—we strongly objected. We overthrew him in a coup and replaced him with the Shah. So we’ve seen the blowback that comes out of that. And this has led to this situation that we’re in today.

And the swirling clouds, to me, are the big corporations. So, in the past, you had roughly 200 countries on the planet, which a few had a lot of power — the United Kingdom, the Soviet Union, the United States. But today the geopolitics might better be envisioned as the same roughly 200 countries with these huge swirling clouds that are the big corporations. And they are really calling the shots all over the planet. They know no national boundaries. They don’t listen to any specific set of laws. They strike deals with the Chinese and the Taiwanese and the Tibetans and the Israelis and the Arab nations. Whoever has the markets or the resources, they cut deal with — deals with. And as we’ve seen in our most recent election here in the United States, we bring in a president who is very diametrically different from the former president, and yet the corporations are still calling the shots.

Which takes us back, Amy, to the fact that we, the people, must create the change. This has always been the case. And this is a clarion call for us at this point now in history, that we must get out there. We’ve got to get behind Obama and all the other politicians. We’ve got to force the corporations to change their goal, get away from this goal of maximizing profits regardless of social and environmental costs, and instead say, “Yeah, it’s OK. Make profits, but only within a context of creating a sustainable, just and peaceful world,” only within the context of creating a world that my grandson will want to inherit, and that means every child on the planet will want to inherit it, because I think it’s really important that we understand today we cannot have homeland security unless we understand that the whole planet is our homeland. Our homeland is now no longer defined by the Rio Grande and the Canadian border. It is — we are one — one human species living on a very fragile planet.

AMY GOODMAN: What is the burden of the melting glaciers?

JOHN PERKINS: The melting—you know, I was in Tibet a couple of years ago, and I stood there with these nomads and looked at this glacier that had been down at the road a decade or so before, now it’s way back a mile away. And these glaciers up in the Himalayas feed the five largest rivers in the world. They provide water to China and to India. And as these glaciers melt, the water is drying up. The glaciers are melting because of global warming, because of us. And what we have to understand is the huge consequences. If these five rivers no longer can feed water to the Chinese and the Indians, these people are going to die of thirst. And before they die of thirst, they’ll become very rebellious.

We have to understand that one of the root causes of terrorism — I don’t even like the word “terrorism,” because I don’t think it really is — it’s a whole bunch of diverse groups all over the world. But in every—practically every case, it results from starvation, from desperation. I’ve met a lot of terrorists. I’ve interviewed them for books. I’ve never met one who wanted to be a terrorist. These are farmers who have been driven off their farmlands by oil companies or hydroelectric projects, or they’re fishermen, like the Somali pirates, who can no longer make a living fishing, because their waters have been fished dry or destroyed by nuclear waste from US military vessels. I have not met anyone who wanted to be a terrorist. They’re desperate people. If we want to get rid of terrorism, we must get rid of the root causes, that cancer that is destroying our whole system.

AMY GOODMAN: The new rules you propose for business and government?

JOHN PERKINS: Well, you know, we all know that getting rid of the rules that protected us from another recession has helped to bring on this current recession, you know, things like Glass-Steagall and the banking laws and so forth. We need to implement a lot of those again.

But I think we also need another whole new set of laws that says businesses must be — look at being environmentally and socially responsible. For a hundred years after United States became the United States, no corporation was allowed to get a charter unless it could prove that it served the public interest. And charters came up for renewal every ten years or so. They didn’t get a renewal unless they could prove they served the public interest. That all changed with a Supreme Court ruling that made corporations equivalent to individuals in the late 1880s, and then John D. Rockefeller stepped in and really took things—made things go out of hand.

But we need to go back to an understanding that corporations are there to serve us. When I went to business school, I was taught that a good CEO takes care of the long-term interests of the corporation—the employees, the customers, the general economy—not just there to make short-term profits. And we really need to get back to that, to an understanding. I think we need laws and rules that say that corporations must be aiming toward creating a sustainable and just and peaceful world. We simply have to do that. These are our main controlling organizations today, and they must be answerable to what’s best in the public interest, not just the interests of a few very wealthy, powerful people.

But we've known this.

The question is where is the leadership to act on this knowledge on our behalf?

Thank you "R" and "T" for your generosity at this very tough time of year.

Suzan _____________________

Saturday, November 21, 2009

"A Recovery for Some" Single Women Suffer Most

Now we’re learning that unmarried women are among those being crushed by the epidemic of joblessness. As the Center for American Progress has noted, “The high unemployment rate of unmarried women, and particularly the 1.3 million unemployed female heads of household who are primary breadwinners for their families, is devastating to their financial circumstances and standard of living.”
As an employed, older woman I was particularly drawn to Bob Herbert's column last week on the plight of single, unemployed women. (For some dark, arcane reason.) Read it if you have the time, it will enlighten your day, especially if you are someone with a job that has not been affected by the last decade's job drought. I think it very fair to "to wonder why the president and his party have not been focused like fanatics on job creation from the first day he took office." I'll have an essay in a few days about why the bonuses were pushed through at this time precisely in order to allow those at the top of the begging pyramid to take their unearned wealth out of the country before the coming double dip. After that, prayer will be the main jobs program for many of us. (Emphasis marks added - Ed.) (On a personal note, my birthday is Monday and if you have a few spare coins that you might want to donate to a needy person, I would appreciate your generosity. There are many well-run charities that would also appreciate your thoughtfulness. My favorites when I had money to donate to good causes were CARE, the Salvation Army, UNICEF, Disabled Veterans . . . and I'm sure you have your own.) Thank you from someone hoping for the best but facing a very dire holiday season. Suzan _____________________________________

A Recovery for Some


President Obama’s strongest supporters during the presidential campaign were the young, the black and the poor — and they are among those who are being hammered unmercifully in this long and cruel economic downturn that the financial elites are telling us is over.

If the elites are correct, if the Great Recession really is over, then these core supporters of the president are being left far, far behind — as are blue-collar workers of every ethnic and political persuasion. Nobody wants to talk seriously about class in America, but the elites are smiling and perusing their stock portfolios while the checklist of Americans locked in depressionlike circumstances just grows and grows: construction and manufacturing workers, young men without college degrees (especially young black and Hispanic men), teenagers, and those who were already poor when the recession began.

The economic environment for all of these groups is an absolute and utter disaster.

Now we’re learning that unmarried women are among those being crushed by the epidemic of joblessness. As the Center for American Progress has noted, “The high unemployment rate of unmarried women, and particularly the 1.3 million unemployed female heads of household who are primary breadwinners for their families, is devastating to their financial circumstances and standard of living.”

Mr. Obama announced this week that he would convene a jobs summit at the White House next month to explore ways of putting Americans back to work. It remains to be seen whether the summit will yield anything substantial. But it’s fair to wonder why the president and his party have not been focused like fanatics on job creation from the first day he took office.

It was the financial elites who took the economy down, and it was ordinary working people, the longtime natural constituents of the Democratic Party, who were buried in the rubble. Mr. Obama and the Democrats have been unconscionably slow in riding to the rescue of those millions of Americans struggling with the curse of joblessness.

We’ve been hearing that there are six unemployed workers for every job opening in the U.S., but even that terrible figure is deceptive. There are 25 unemployed construction workers for every job opening in their field, and more than a dozen for every opening in the durable goods industries, according to the Center for Labor Market Studies at Northeastern University in Boston.

This was not a normal recession, and we are not on the cusp of anything like a normal recovery. The unemployment rate for black Americans is 15.7 percent. The underemployment rate for blacks in September (the latest month for which figures are available) was a gut-wrenching 23.8 percent and for Hispanics an even worse 25.1 percent. The poverty rate for black children is almost 35 percent.

Wall Street can boast about recovery all it wants, much of America remains trapped in economic hell.

It will take a monumental leadership effort by the administration and Congress to spark the kind of changes necessary to transform this wretched employment landscape. Ross Eisenbrey of the Economic Policy Institute has written: “By itself, the private sector is unable to create jobs in the numbers the United States needs to obtain a robust, full economic recovery.”

If that’s true, and I have long believed it to be the case, then we need to rethink our entire approach to employment. Conventional efforts to kick-start economic growth are dwarfed by the vast scale of the problem. Bold new efforts — creative efforts — are needed.

A recent survey for the policy institute found that one in four families had been hit by a job loss during the past year and 44 percent had suffered either the loss of a job or a reduction in wages or hours worked. Economic insecurity has spread like a debilitating virus through scores of millions of American families.

What kind of recovery are we talking about if blue-collar workers, and men and women without college degrees, and large percentages of ethnic minorities and the young and the poor are not part of it? And how can any recovery be sustained if economic insecurity is a permanent feature of even middle-class life?

The financial elites have flourished in recent decades to a great extent because they have had government on their side, with the politicians working diligently to ensure that rules, regulations and tax policies established an environment in which the elites could thrive. For ordinary Americans, it has been a different story, with jobs shipped overseas by the millions and wages remaining stagnant, with labor unions under constant assault and labor standards weakened, with the safety net shredded and the message sent out to workers everywhere: You’re on your own.

We’ll get a chance to see at President Obama’s employment summit whether anything much has changed.

A Beach Bum whom I read regularly puts this moment into a rather unique perspective.

I can handle(s) many things: wars, financial collapse, plagues, and the strange fascination many people have for well dressed trailer trash pushing an overpriced intellectually empty book but dammit I have my limits.

Happy Holidays to you and yours. Drive safely. Suzan __________________________________

Friday, November 20, 2009

The 15 Biggest Congressional Recipients Of Wall Street Campaign Cash

So, you were perhaps wondering why that nice new health care insurance reform bill put together by your progressive representatives in Congress did not have a single thing in it that will benefit you? Me too. And the fact that there is no protection at all for the regular taxpayer-on-the-street in any of the financial bills? No? (And tears are now streaming down my face. Again.) But I'm not afraid to report the facts. In which we find out that it's OUR representatives who are in on the take as deeply as the Rethugs. (Yes, it's true that these people ceased being my reps years ago when they let my section of the working population go down (deep down) the outsource river. But still.) The oddest part about these incredible figures is that they cannot be the actual totals. You just know they have accepted lots more in favors, gifts and trips from this dripping-with-largesse ilk. And such a clean-cut bunch. Look at those nice pictures. Bet you can't wait to vote for them again. Ah yes, and herein we learn another reason why David Fucking Brooks' heart thumps hard for John Thune. And why you were actually correct to be a little bit suspicious of Chris Dodd's latest ideas for fixing the bankster frauds. It's also clear now why Kirsten Gillibrand had to be a better choice for Senator from New York than Caroline Kennedy. And the real capitalists are out on the corner supplying the needed drugs (according to Bill Moyers and David Simon).

The 15 Biggest Congressional Recipients Of Wall Street Campaign Cash

November 17, 2009

We took a look at the Center for Responsive Politics's database,, to see which members of Congress have so far received Wall Street money for the 2010 election cycle. The answers may surprise you. Reforming Wall Street is a hot topic on Capitol Hill these days. Congress is currently weighing two financial reform bills that would, to varying degrees, reshape the way the financial system is regulated. Still, Wall Street's influence in Washington appears to be as strong as ever. After all, it was just last spring that Senator Dick Durbin, frustrated by pushback on bankruptcy reform, denounced the financial sector's influence on the Senate: the banks, he said, "they frankly own the place." The Center for Responsive Politics, a research group that tracks money in politics, reports that financial industries - the finance, insurance and real estate sectors, specifically - have been one of the biggest benefactors to Congress over the past two decades:

"The finance, insurance and real estate sector has given $2.3 billion to candidates, leadership PACs and party committees since 1989, which eclipses every other sector. Nineteen percent of total contributions from the employees and political action committees across all sectors came from the financial sector."

And while campaign contributions don't equate to wrongdoing, it's worth noting that, while lawmakers ponder reforming the financial sector, the industry's campaign contributions have remained strong:

"Even with a number of large financial institutions folding or merging since last fall, the sector has still given more to federal candidates and party committees than any other sector this year at $78.2 million. Current lawmakers have brought in $661.6 million from the sector through their candidate committees and leadership PACs, with Democrats collecting 53 percent of that."

We took a look at the Center for Responsive Politics's database,, to see which members of Congress have so far received Wall Street money for the 2010 election cycle. The answers may surprise you. Check out our slideshow of the top 15 recipients and choose which politician may be taking too much money from Wall Street. #15 Barney Frank (D-MA) - $387,749 Massachusetts Representative Barney Frank has received $387,749 in contributions from the financial sector. Frank, who is Chairman of the House Financial Services Committee, received more donations from hedge funds than any other House member. #14 Carolyn Maloney (D-NY) - $396,750 New York Democratic Representative Carolyn Maloney has received $396,750 in contributions from the financial sector. She is a member of the House Financial Services Committee, and she sits on three subcommittees: Capital Markets, Insurance, and Government Sponsored Enterprises; Financial Institutions and Consumer Credit; and Domestic Monetary Policy and Technology. #13 Ron Wyden (D-OR) - $404,750 Oregon Senator Ron Wyden has received $404,750 in contributions from the financial sector. He sits on the Senate Finance Committee. #12 John Thune (R-SD) - $407,950 South Dakota Republican Senator John Thune has received $407,950 in contributions from the financial sector. He sits on the Committee on Commerce, Science & Transportation, as well as the Committee on Small Business and Entrepreneurship. Citigroup and the American Bankers Association are two of his top donors. #11 Jim Himes (D-CT) - $430,123 Connecticut Representative Jim Himes, a Democrat, has received $430,123 in financial sector contributions. He is a member of the House Financial Services Committee, and sits on two subcommittees: the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises and the Subcommittee on Housing and Community Opportunity. He counts Credit Suisse and Citigroup among his top contributors. #10 Richard Shelby (R-AL) - $502,150 Republican Senator Richard Shelby of Alabama has received $502,150 in contributions form the financial sector. He's the ranking member of the Senate Banking Committee. # 9 Blanche Lincoln (D-AR) - $515,000 Arkansas Democratic Senator Blanche Lincoln has received contributions worth $515,000 from the financial sector. She's a member of the Senate Finance Committee. #8 Eric Cantor (R-VA) - $516,197 Virginia Representative Eric Cantor, the Republican Whip, has received $516,197 in contributions from the financial sector. # 7 Arlen Specter (D-PA) - $552,175 Senator Arlen Specter, who in April switched from the Republican to the Democratic Party, has received contributions from the financial sector in the amount of $552,175. # 6 Mark Kirk (R-IL) - $557,375 Representative Mark Kirk, an Illinois Republican, has received $557,375 in contributions from the financial sector. He's a member of the Appropriations Committee. # 5 Michael Bennet (D-CO) - $612,804 Democratic Senator Michael Bennet of Colorado has been the recipient of $612,804 in contributions from the financial sector. He is a member of the Senate Banking Committee. # 4 Chris Dodd (D-CT) - $752,698 Senator Chris Dodd, Democrat of Connecticut and Chairman of the Senate Banking Committee, has received $752,698 in contributions from the financial sector. He's received more from the mortgage banking and brokerage industry than any other congressperson, and Citigroup, AIG, Merrill Lynch, Goldman Sachs, Credit Suisse, and Morgan Stanley have been among his biggest donors. # 3 Harry Reid (D-NV) - $1,038,210 Senate Majority Leader Harry Reid has received $1,038,210 in contributions from the financial sector. He received more from the securities and investment industry than any other except law, and he was the recipient of more money form the credit card industry than any other member of Congress. # 2 Kirsten Gillibrand (D-NY) - $1,173,400 New York Democratic Senator Kirsten Gillibrand has received $1,173,400 in financial-sector contributions. She received more from the commercial banking industry than any other member of Congress, and some of her biggest contributions from political action committees came from JP Morgan, Morgan Stanley, and Deutsche Bank. # 1 Chuck Shumer (D-NY) - $2,167,300 New York Senator Chuck Schumer has received $2,167,300 in contributions from the financial sector. A member of the Senate Banking Committee and the Senate Finance Committee, Senator Schumer received more contributions from the hedge fund, private equity, and securities and investment industries than any other member of congress. Credit Swisse, JP Morgan, UBS, and New York Life Insurance are among his biggest donors.

So from now on, whenever anyone is chosen for anything in D.C., we would be smart to ask, "How much more will they be making now?" (And what was that quote about "not getting mad?") Cynical Suzan __________________________

Monday, November 16, 2009

The Bugi-Men Will GET You! (The REAL Bogie-Men) "It Is What It Is"

From a new source, Yes! magazine (by way of Information Clearing House), we learn from our favorite ex-economic hit man, John Perkins, whom we should really fear (everyday, from now on). This most important (of our time possibly) essay puts me in mind of a piece I wrote (several years ago) about the soldiers at Ft. Bragg, North Carolina, who were returning to the War on Iraq, and their favorite saying that seemed to them to make what they were going off to do (once again) within reason (if you can believe that any reason is involved).

"It is what it is."

I may be the only person left in this hemisphere who still gasps (every time) when I consider the meaning of that sentence. And if you don't think that it has crossed official minds that the upcoming trial at the site of the World Trade Center might ignite some of these same issues . . . you may be alone in your thinking.

One other point that Mr. Perkins makes so eloquently - the only ones who really benefit from these real terrorist policies? The ones who had no problem exacting their multi-billion-dollar tribute (and grinning right in our faces as they preached the "value of the free market") after the last world economic catastrophe. (Emphasis marks added - Ed.)

The "terrorists" I have found in Andean caves and desert villages are people whose families were forced off their farms by oil companies, hydroelectric dams, or "free trade" agreements, whose children are starving, and who want nothing more than to return to their families with food, seeds, and deeds to lands they can cultivate.

Poverty, Global Trade Justice, and the Roots of Terrorism

To combat terrorism, we should address the root causes of poverty, says former "economic hit man" John Perkins.

The following is adapted from Hoodwinked: An Economic Hitman Reveals Why the World Financial Markets Imploded — and What We Need to Do to Remake Them. Random House, 2009.

Go to your local book store, or buy the book online.

November 15, 2009

Navy Seal snipers rescued an American cargo ship captain unharmed and killed three Somali pirates in a daring operation in the Indian Ocean on Sunday, ending a five-day standoff between United States naval forces and a small band of brigands in a covered orange lifeboat off the Horn of Africa.

The New York Times published that article in April 2009. The very words "pirates," "daring operation," "standoff," and "brigands" were typical of the U.S. media; they made it sound as though white-hated cowboys had ridden to the rescue of a town besieged by Billy the Kid and his gang. Having lived in that part of the world as an economic hit man, I knew there was another side to what had happened. I wondered why no one was asking about the causes of piracy.

I recalled my visits with the Bugi people when I was sent to the Indonesian island of Sulawesi in the early 1970s. The Bugi had been infamous pirates since the time of the East India companies in the 1600s and 1700s. Their ferocity inspired returning European sailors to discipline their disobedient children with threats that "the bugiman will get you." In the 1970s, we feared that they would attack our oil tankers as they passed through the vital Strait of Malacca.

I sat with one of their elders on the Sulawesi shore one afternoon. We watched his people build a sailing galleon, known as a prahu, much as they had for centuries. Like a gigantic beached whale, it was high and dry, propped upright by rows of gnarled stakes that resembled roots sprouting from its hull.

Dozens of men hustled about it, working with adzes, hatchets, and hand drills. I expressed the concerns of my government to him, intimating that we would retaliate if the oil lanes were threatened.

The "terrorists" I have found in Andean caves and desert villages are people whose families were forced off their farms by oil companies, hydroelectric dams, or "free trade" agreements, whose children are starving, and who want nothing more than to return to their families with food, seeds, and deeds to lands they can cultivate.

The old man glared at me. "We were not pirates in the old days," he said, his bushy white hair bobbing indignantly. "We only fought to defend our lands against Europeans who came to steal our spices. If we attack your ships today, it is because they take the trade away from us; your ‘stink ships' foul our waters with oil, destroying our fish and starving our children." Then he shrugged. "Now, we're at a loss." His smile was disarming. "How can a handful of people in wooden sailing ships fight off America's submarines, airplanes, bombs, and missiles?"

A few days after the rescue, the Times ran an editorial entitled "Fighting Piracy in Somalia" that concluded:

Yet left to its own devices, Somalia can only become more noxious, spreading violence to its East African neighbors, breeding more extremism and making shipping through the Gulf of Aden ever more dangerous and costly. Various approaches are being discussed, such as working through Somalia's powerful clans to reconstitute first local and then regional and national institutions. These must be urgently explored.

Nowhere did the Times - or any of the other media outlets that I read, heard, or saw - attempt to analyze the roots of the problem in Somalia. Debates abounded about whether to arm ships' crews and send more Navy vessels to the region. There was that vague reference to reconstituting regional and national institutions, but what exactly did the author mean by that? Institutions that would truly help, like free hospitals, schools, and soup kitchens? Or local militias, prisons, and Gestapo-style police forces?

The pirates were fishermen whose livelihoods had been destroyed. They were fathers whose children were hungry. Ending piracy would require helping them live sustainable, dignified lives. Could journalists not understand this? Had none of them visited the slums of Mogadishu?

Finally, NPR's Morning Edition on May 6 aired a report from Gwen Thompkins; she interviewed a pirate who went by the name Abshir Abdullahi Abdi. "We understand what we're doing is wrong," Abdi explained. "But hunger is more important than any other thing."

Thompkins commented, "Fishing villages in the area have been devastated by illegal trawlers and waste dumping from industrialized nations. Coral reefs are reportedly dead. Lobster and tuna have vanished. Malnutrition is high."

You might think we would have learned from Vietnam, Iraq, the "Black Hawk down" incident in Somalia back in 1993, and other such forays, that military responses seldom discourage insurgencies. In fact, they often do the opposite; foreign intervention is likely to infuriate local populations, motivate them to support the rebels, and result in an escalation of resistance activities. That was the way it happened during the American Revolution, Latin America's wars for independence from Spain, and in colonial Africa, Indochina, Soviet-occupied Afghanistan, and so many other places.

Blaming pirates and other desperate people for our problems is a distraction we cannot afford if we truly want to find a solution to the crises confronting us. These incidents are symptoms of our failed economic model. They are to our society the equivalent of a heart attack to an individual. We send in Navy Seals to rescue the hostages, as we would hire doctors to perform a coronary artery bypass. But it is essential to admit that both are reactions to an underlying problem. The patient needs to address the reasons his or her heart failed in the first place, such as smoking, diet, and lack of exercise. The same is true for piracy and all forms of terrorism.

Our children's futures are interlocked with the futures of children born in the fishing villages of Somalia, the mountains of Burma (Myanmar), and the jungles of Colombia. When we forget that fact, when we see those children as remote, as somehow disconnected from our lives, as merely the offspring of pirates, guerrillas, or drug runners, we point the gun at our own progeny as well as at the desperate fathers and mothers in lands that seem so far away but in reality are our next door neighbors.

Every time I read about the actions we take to protect ourselves from so-called terrorists, I have to wonder at the narrow-mindedness of our strategy. Although I have met such people in Bolivia, Ecuador, Egypt, Guatemala, Indonesia, Iran, and Nicaragua, I have never met one who wanted to take up a gun. I know there are crazed men and women who kill because they cannot stop themselves, serial killers, and mass-murderers. I am certain that members of Al Qaeda, the Taliban, and other such groups are driven by fanaticism, but such extremists are able to recruit sizable numbers of followers only from populations that feel oppressed or destitute. The "terrorists" I have found in Andean caves and desert villages are people whose families were forced off their farms by oil companies, hydroelectric dams, or "free trade" agreements, whose children are starving, and who want nothing more than to return to their families with food, seeds, and deeds to lands they can cultivate.

In Mexico, many of the guerrillas and narcotraffickers once owned farms where they grew corn. They lost their livelihoods when the North American Free Trade Agreement (NAFTA) gave subsidized U.S. producers an unfair price advantage. Here is how the Organic Consumers Organization, a nonprofit that represents more than 850,000 members, subscribers, and volunteers, describes it:

Since NAFTA came into effect on January 1, 1994, U.S. corn exports to Mexico have almost doubled to some 6 million metric tons in 2002. NAFTA eliminated quotas limiting corn imports . . . but allowed U.S. subsidy programs to remain in place - promoting dumping of corn into Mexico by U.S. agribusiness at below the cost of production. . . . The price paid to farmers in Mexico for corn fell by over 70 percent. . .

The passage above exposes the dark side of "free trade" policies. U.S. presidents and our Congress have implemented regulations that prohibited other countries from imposing tariffs on U.S. goods or subsidizing locally grown produce that might compete with our agribusinesses while permitting us to maintain our own import barriers and subsidies, thus giving U.S. corporations an unfair advantage.

"Free trade" is a euphemism; it prohibits others from enjoying the benefits offered to the multinationals. It does not, however, regulate against the pollution that is melting glaciers, the land grabs, and the sweatshops. Father Miguel d'Escoto Brockmann, a Nicaraguan priest who ministered to Sandinista guerrillas and is now president of the U.N. General Assembly, has a firsthand appreciation for such euphemisms and the power of words used to sway public perceptions. "Terrorism is not really an ‘ism,' " he told me. "There's no connection between the Sandinistas who fought the Contras and Al Qaeda, or between Colombia's FARC and fishermen turned pirates in Africa and Asia. Yet they are all called ‘terrorists.' That's just a convenient way for your government to convince the world that there is another enemy ‘ism' out there, like communism used to be. It diverts attention from the very real problems."

Our narrow-minded attitudes and the policies that result from them foment violence, rebellions, and wars. In the long run, almost no one benefits from attacking the people we label as "terrorists." With one glaring exception: the corporatocracy.

Those who own and run the companies that build ships, missiles, and armored vehicles; make guns, uniforms, and bulletproof vests; distribute food, soft drinks, and ammunition; provide insurance, medicines, and toilet paper; construct ports, airstrips, and housing; and reconstruct devastated villages, factories, schools, and hospitals - they, and only they, are the big winners.

The rest of us are hoodwinked by that one, loaded word: terrorist.

The current economic collapse has awakened us to the importance of regulating and reigning in the people who control the businesses that benefit from the misuse of words like terrorism and who perpetrate other scams. We recognize today that white-collared executives are not a special, incorruptible breed. Like the rest of us, they require rules. Yet it is not enough for us to reestablish regulations that separate investment banks from commercial banks and insurance companies, reinstate anti-usury laws, and impose guidelines to ensure that consumers are not burdened by credit they cannot afford. We cannot simply return to solutions that worked before. Only by adopting new strategies that promote global environmental and social responsibility will we safeguard the future.

John Perkins adapted this excerpt of Hoodwinked: An Economic Hitman Reveals Why the World Financial Markets Imploded—and What We Need to Do to Remake Them for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions.

John is also the author of Confessions of an Economic Hit Man, The World is as You Dream It: Shamanic Teachings from the Amazon and Andes, and Spirit of the Shuar.

As David Michael Green says 20 Years From Now You Will Lie to Your Children.

Suzan ___________________