Surprise! The Man Who Screwed Us At the SEC Is B-A-C-K! Advising Goldman Sachs!!!

I can only report the facts as I know them (so I hope you'll excuse me somewhat). (Yes, I received my training from Joe Friday.) Matt Taibbi whispers sotto voce to the gathering crowd with a straight face that the "Ex-SEC chief" has been "reincarnated as Goldman Sachs policy adviser."

"Arthur Levitt Jr., the former chairman of the Securities and Exchange Commission, will advise the Goldman Sachs Group on public policy issues, the firm announced Tuesday." - The New York Times

Matt wants us to know.

Well, here's something amazing. It's like protocapitalist Buddhism: the endless life-cycle continues. Clinton's SEC chairman, the man who powdered his nose and fondled himself for years and years while companies like Goldman Sachs bilked America with one "Bullshit.com" IPO after another, is now going to work for... wait for it... Goldman, Sachs. Nothing like years of hideously ineffectual non-enforcement to attract those lucrative Wall Street job offers!

More to the point, Levitt was one of the key figures who helped usher in the Financial Services Modernization Act (repealing Glass-Steagall) and the Commodity Futures Modernization Act (deregulating derivatives).

Along with Bob Rubin, Larry Summers, and Alan Greenspan, Levitt helped convince Bill Clinton to make two of the most important bad decisions that led to this financial crisis. So it's really a relief to see that he's still around helping to liase between Goldman Sachs and the government.

That portends well for the rest of us, doncha think?

Oh yeah. I can hardly wait to see the next announcement. Suzan ___________

Criminals, Felons, Liars Arise Anew - Taxpayers Await Your Latest Orders! ($12.8 Trillion to Wall Street - So Far)

How did it get so easy for thugs and criminals like our friendly banksters (and perhaps even the solid citizens behind the Madoff scam) to put another ripoff into play whereby the taxpayers fund their latest schemes on top of the older and now boring ones (which no one even wanted to explain until forced to by the holding back of the rest of the bailout moolah)? (Please note the essay I published on April 6, 2009, for background on the latest one: Larry Summers' part-time lover gig.)

The Associated Press this week reports that “companies that spent hundreds of millions lobbying successfully for a tax break enacted in 2004 got a 22,000-percent return on that investment” — $100 billion in all.

David Sirota has the facts secreted away within this humorous essay. (Emphasis marks the spot that's hot.)

The Best Investment Money Can Buy! By David Sirota Feeling sorry for yourself? Struggling to get by? Wondering how you can get a bailout? Well, stop moping, because it’s not too late! I may not have Suze Orman’s verve or Billy Mays’ voice. But I’ve discovered a revolutionary risk-free investment plan straight from those who brought us the economic meltdown. So in this column-fomercial, I won’t waste your time with Ginsu knives or cash-for-timeshare schemes — I’m going to help make you rich beyond your wildest dreams! Look, we’ve all heard about Wall Street’s losses. But you probably didn’t hear about Corporate America’s newest sure thing: a path to financial freedom far more reliable than any decent-paying job. It’s something so old-fashioned that even amateur investors can understand it! It’s called graft — a surefire wealth creator that takes your investments, modifies laws, and delivers returns that the best stock trader could never dream of! This is the ShamWow of strategies, the Flowbee of economics, the Ronco of investing. Just look at the profits it generates! In the last decade, the financial industry’s $5 billion investment in campaign contributions and lobbyists resulted in deregulation, which delivered trillions to executives. And when the bubble burst, there was another boatload of free money! By Bloomberg News’ account, $12.8 trillion worth of taxpayer loans, grants and guarantees — all to Wall Street! But wait . . . there’s more! The Associated Press this week reports that “companies that spent hundreds of millions lobbying successfully for a tax break enacted in 2004 got a 22,000-percent return on that investment” — $100 billion in all. That could be you! Of course, the secret is investing heavily in specific political stocks. For example, the banking industry recently paid Rahm Emanuel $16 million for about two years of work. That investment was recently paid back when, as President Obama’s chief of staff, Emanuel led the January campaign to release another $350 billion in bank bailout funds. Turning a $16 million down payment into a $350 billion payout—that’s huge! Likewise, Goldman Sachs hired former Senate aide Mark Patterson as one of its lobbyists — an investment that proved a huge winner when Patterson became the Treasury Department’s chief of staff and the agency subsequently killed proposals to limit executive compensation at bailed-out banks. Cha-ching! And the hedge fund industry paid economist Larry Summers $5.2 million in 2008 for part-time work — an investment that hit pay dirt when Summers became Obama’s top economic aide and the administration resisted tough international hedge fund regulations that some G-20 countries wanted. Show me the money! That’s right, the surest way to make big cash is not to invest in people with proven business experience or in valuable entrepreneurial ventures, but in blue-chip members of Permanent Washington — career politicos and bureaucrats who inevitably get back into positions of power and payback! Now I know you think that I sound like the guy in the question-mark suit and that my plan seems like a scam. But it’s perfectly legal! So how much would you pay for this kind of opportunity? $100 trillion? $50 trillion? What if I said you could get all this for just a few billion in pocket change? Because that’s all it takes to start no-risk investing! It’s THAT easy! Why let the corporate guys make all the money off government? Why waste time working for companies that make stuff when you can buy the one company that simply prints cash? Order now and try my product! It’s not available in stores, but if you call within the next 15 minutes, we’ll throw in free congressional and White House phone directories valued at $49.95! Operators are standing by!

Sounds like a winner. Again. Suzan ________________________

Bill Moyers - Bill Black: "Intentional Fraud and a Moral Crisis" - CALL THE COPS!

Summary: The financial industry brought the economy to its knees, but how did they get away with it? With the nation wondering how to hold the bankers accountable, Bill Moyers sits down with William K. Black, the former senior regulator who cracked down on banks during the Savings and Loan crisis of the 1980's. Black offers his analysis of what went wrong and his critique of the bailout. William K. Black is Associate Professor of Economics and Law at the University of Missouri.

Are the US and EU governments now creating money out of thin air to save the banks that own the Federal Reserve? Right. None of these are owned by taxpayers: big banksters allowed only. Or that this fraud probably originated in the BIS*, which is the central bank of all central banks like the FED, and that our international hero, Henry Kissinger made Obama one of his first job offers after Harvard and that Timothy Geithner is Kissinger-trained, thus explaining his ingenuous inaction at the New York Fed where instead of being in charge of regulation (which he was), he claims he was never a regulator? (See Moyers-Black interview for specifics.) Surprise! I couldn't believe that the networks allowed Bill Moyers to use their airwaves to run his program last Friday night where he exposed every fraud of the financial chicanerists involved in the bailout/greatest financial disaster ever. I'm guessing that everyone's given up on an informed public who will be outraged enough to take some serious action. *The BIS is the most obscure arm of the Bretton-Woods International Financial architecture but its role is central. John Maynard Keynes wanted it closed down as it was used to launder money for the Nazis in World War II. Run by an inner elite representing the world's major central banks it controls most of the transferable money in the world. It uses that money to draw national governments into debt for the IMF. Or watch the unforgettable, fabulous William Black here. And don't miss the end of Bill's show where he interviews Glenn Greenwald and Amy Goodman. Delicious! - - - - - - - - - - - - (Excerpted transcript - emphasis marks inserted - Ed.) April 3, 2009 William K. Black suspects that it was more than greed and incompetence that brought down the U.S. financial sector and plunged the economy in recession — it was fraud. And he would know. When it comes to financial shenanigans, William K. Black, the former senior regulator who cracked down on banks during the savings and loan crisis of the 1980s, has seen pretty much everything. William K. Black tells Bill Moyers on the JOURNAL that the tool at the very center of mortgage collapse, creating triple-A rated bonds out of "liars' loans" — loans issued without verifying income, assets or employment — was a fraud, and the banks knew it. And while there is no law against liars' loans, Black points out that there are, "many laws against fraud, and liars' loans are fraudulent. [...] They involve deceit, which is the essence of fraud." Only the scale of the scandal is new. A single bank, IndyMac, lost more money than the entire Savings and Loan Crisis. The difference between now and then, explains Black, is a drastic reduction in regulation and oversight, "We now know what happens when you destroy regulation. You get the biggest financial calamity of anybody under the age of 80." Biography William K. Black, author of The Best Way To Rob a Bank is to Own One, teaches economics and law at the University of Missouri — Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied Ethics. Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and general counsel of the Federal Home Loan Bank of San Francisco, and senior deputy chief counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement. Black developed the concept of "control fraud" — frauds in which the CEO or head of state uses the entity as a "weapon." Control frauds cause greater financial losses than all other forms of property crime combined. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae's former senior management. - - - - - - - - - - - - BILL MOYERS: Welcome to the Journal. For months now, revelations of the wholesale greed and blatant transgressions of Wall Street have reminded us that "The Best Way to Rob a Bank Is to Own One." In fact, the man you're about to meet wrote a book with just that title. It was based upon his experience as a tough regulator during one of the darkest chapters in our financial history: the savings and loan scandal in the late 1980s. WILLIAM K. BLACK: These numbers as large as they are, vastly understate the problem of fraud. BILL MOYERS: Bill Black was in New York this week for a conference at the John Jay College of Criminal Justice where scholars and journalists gathered to ask the question, "How do they get away with it?" Well, no one has asked that question more often than Bill Black. The former Director of the Institute for Fraud Prevention now teaches Economics and Law at the University of Missouri, Kansas City. During the savings and loan crisis, it was Black who accused then-house speaker Jim Wright and five US Senators, including John Glenn and John McCain, of doing favors for the S&L's in exchange for contributions and other perks. The senators got off with a slap on the wrist, but so enraged was one of those bankers, Charles Keating — after whom the senate's so-called "Keating Five" were named — he sent a memo that read, in part, "get Black — kill him dead." Metaphorically, of course. Of course. Now Black is focused on an even greater scandal, and he spares no one — not even the President he worked hard to elect, Barack Obama. But his main targets are the Wall Street barons, heirs of an earlier generation whose scandalous rip-offs of wealth back in the 1930s earned them comparison to Al Capone and the mob, and the nickname "banksters." Bill Black, welcome to the Journal. WILLIAM K. BLACK: Thank you. BILL MOYERS: I was taken with your candor at the conference here in New York to hear you say that this crisis we're going through, this economic and financial meltdown is driven by fraud. What's your definition of fraud? WILLIAM K. BLACK: Fraud is deceit. And the essence of fraud is, "I create trust in you, and then I betray that trust, and get you to give me something of value." And as a result, there's no more effective acid against trust than fraud, especially fraud by top elites, and that's what we have. BILL MOYERS: In your book, you make it clear that calculated dishonesty by people in charge is at the heart of most large corporate failures and scandals, including, of course, the S&L, but is that true? Is that what you're saying here, that it was in the boardrooms and the CEO offices where this fraud began? WILLIAM K. BLACK: Absolutely. BILL MOYERS: How did they do it? What do you mean? WILLIAM K. BLACK: Well, the way that you do it is to make really bad loans, because they pay better. Then you grow extremely rapidly, in other words, you're a Ponzi-like scheme. And the third thing you do is we call it leverage. That just means borrowing a lot of money, and the combination creates a situation where you have guaranteed record profits in the early years. That makes you rich, through the bonuses that modern executive compensation has produced. It also makes it inevitable that there's going to be a disaster down the road. BILL MOYERS: So you're suggesting, saying that CEOs of some of these banks and mortgage firms in order to increase their own personal income, deliberately set out to make bad loans? WILLIAM K. BLACK: Yes. BILL MOYERS: How do they get away with it? I mean, what about their own checks and balances in the company? What about their accounting divisions? WILLIAM K. BLACK: All of those checks and balances report to the CEO, so if the CEO goes bad, all of the checks and balances are easily overcome. And the art form is not simply to defeat those internal controls, but to suborn them, to turn them into your greatest allies. And the bonus programs are exactly how you do that. BILL MOYERS: If I wanted to go looking for the parties to this, with a good bird dog, where would you send me? WILLIAM K. BLACK: Well, that's exactly what hasn't happened. We haven't looked, all right? The Bush Administration essentially got rid of regulation, so if nobody was looking, you were able to do this with impunity and that's exactly what happened. Where would you look? You'd look at the specialty lenders. The lenders that did almost all of their work in the sub-prime and what's called Alt-A, liars' loans. BILL MOYERS: Yeah. Liars' loans-- WILLIAM K. BLACK: Liars' loans. BILL MOYERS: Why did they call them liars' loans? WILLIAM K. BLACK: Because they were liars' loans. BILL MOYERS: And they knew it? WILLIAM K. BLACK: They knew it. They knew that they were frauds. WILLIAM K. BLACK: Liars' loans mean that we don't check. You tell us what your income is. You tell us what your job is. You tell us what your assets are, and we agree to believe you. We won't check on any of those things. And by the way, you get a better deal if you inflate your income and your job history and your assets. BILL MOYERS: You think they really said that to borrowers? WILLIAM K. BLACK: We know that they said that to borrowers. In fact, they were also called, in the trade, ninja loans. BILL MOYERS: Ninja? WILLIAM K. BLACK: Yeah, because no income verification, no job verification, no asset verification. BILL MOYERS: You're talking about significant American companies. WILLIAM K. BLACK: Huge! One company produced as many losses as the entire Savings and Loan debacle. BILL MOYERS: Which company? WILLIAM K. BLACK: IndyMac specialized in making liars' loans. In 2006 alone, it sold $80 billion dollars of liars' loans to other companies. $80 billion. BILL MOYERS: And was this happening exclusively in this sub-prime mortgage business? WILLIAM K. BLACK: No, and that's a big part of the story as well. Even prime loans began to have non-verification. Even Ronald Reagan, you know, said, "Trust, but verify." They just gutted the verification process. We know that will produce enormous fraud, under economic theory, criminology theory, and two thousand years of life experience. BILL MOYERS: Is it possible that these complex instruments were deliberately created so swindlers could exploit them? WILLIAM K. BLACK: Oh, absolutely. This stuff, the exotic stuff that you're talking about was created out of things like liars' loans, that were known to be extraordinarily bad. And now it was getting triple-A ratings. Now a triple-A rating is supposed to mean there is zero credit risk. So you take something that not only has significant, it has crushing risk. That's why it's toxic. And you create this fiction that it has zero risk. That itself, of course, is a fraudulent exercise. And again, there was nobody looking, during the Bush years. So finally, only a year ago, we started to have a Congressional investigation of some of these rating agencies, and it's scandalous what came out. What we know now is that the rating agencies never looked at a single loan file. When they finally did look, after the markets had completely collapsed, they found, and I'm quoting Fitch, the smallest of the rating agencies, "the results were disconcerting, in that there was the appearance of fraud in nearly every file we examined." BILL MOYERS: So if your assumption is correct, your evidence is sound, the bank, the lending company, created a fraud. And the ratings agency that is supposed to test the value of these assets knowingly entered into the fraud. Both parties are committing fraud by intention. WILLIAM K. BLACK: Right, and the investment banker that — we call it pooling — puts together these bad mortgages, these liars' loans, and creates the toxic waste of these derivatives. All of them do that. And then they sell it to the world and the world just thinks because it has a triple-A rating it must actually be safe. Well, instead, there are 60 and 80 percent losses on these things, because of course they, in reality, are toxic waste. BILL MOYERS: You're describing what Bernie Madoff did to a limited number of people. But you're saying it's systemic, a systemic Ponzi scheme. WILLIAM K. BLACK: Oh, Bernie was a piker. He doesn't even get into the front ranks of a Ponzi scheme... BILL MOYERS: But you're saying our system became a Ponzi scheme. WILLIAM K. BLACK: Our system... BILL MOYERS: Our financial system... WILLIAM K. BLACK: Became a Ponzi scheme. Everybody was buying a pig in the poke. But they were buying a pig in the poke with a pretty pink ribbon, and the pink ribbon said, "Triple-A." BILL MOYERS: Is there a law against liars' loans? WILLIAM K. BLACK: Not directly, but there, of course, many laws against fraud, and liars' loans are fraudulent. BILL MOYERS: Because . . . WILLIAM K. BLACK: Because they're not going to be repaid and because they had false representations. They involve deceit, which is the essence of fraud. BILL MOYERS: Why is it so hard to prosecute? Why hasn't anyone been brought to justice over this? WILLIAM K. BLACK: Because they didn't even begin to investigate the major lenders until the market had actually collapsed, which is completely contrary to what we did successfully in the Savings and Loan crisis, right? Even while the institutions were reporting they were the most profitable savings and loan in America, we knew they were frauds. And we were moving to close them down. Here, the Justice Department, even though it very appropriately warned, in 2004, that there was an epidemic . . . BILL MOYERS: Who did? WILLIAM K. BLACK: The FBI publicly warned, in September 2004 that there was an epidemic of mortgage fraud, that if it was allowed to continue it would produce a crisis at least as large as the Savings and Loan debacle. And that they were going to make sure that they didn't let that happen. So what goes wrong? After 9/11, the attacks, the Justice Department transfers 500 white-collar specialists in the FBI to national terrorism. Well, we can all understand that. But then, the Bush administration refused to replace the missing 500 agents. So even today, again, as you say, this crisis is 1000 times worse, perhaps, certainly 100 times worse, than the Savings and Loan crisis. There are one-fifth as many FBI agents as worked the Savings and Loan crisis. BILL MOYERS: You talk about the Bush administration. Of course, there's that famous photograph of some of the regulators in 2003, who come to a press conference with a chainsaw suggesting that they're going to slash, cut business loose from regulation, right? WILLIAM K. BLACK: Well, they succeeded. And in that picture, by the way, the other — three of the other guys with pruning shears are the... BILL MOYERS: That's right. WILLIAM K. BLACK: They're the trade representatives. They're the lobbyists for the bankers. And everybody's grinning. The government's working together with the industry to destroy regulation. Well, we now know what happens when you destroy regulation. You get the biggest financial calamity of anybody under the age of 80. BILL MOYERS: But I can point you to statements by Larry Summers, who was then Bill Clinton's Secretary of the Treasury, or the other Clinton Secretary of the Treasury, Rubin. I can point you to suspects in both parties, right? WILLIAM K. BLACK: There were two really big things, under the Clinton administration. One, they got rid of the law that came out of the real-world disasters of the Great Depression. We learned a lot of things in the Great Depression. And one is we had to separate what's called commercial banking from investment banking. That's the Glass-Steagall law. But we thought we were much smarter, supposedly. So we got rid of that law, and that was bipartisan. And the other thing is we passed a law, because there was a very good regulator, Brooksley Born, that everybody should know about and probably doesn't. She tried to do the right thing to regulate one of these exotic derivatives that you're talking about. We call them C.D.F.S. And Summers, Rubin, and Phil Gramm came together to say not only will we block this particular regulation. We will pass a law that says you can't regulate. And it's this type of derivative that is most involved in the AIG scandal. AIG all by itself, cost the same as the entire Savings and Loan debacle. BILL MOYERS: What did AIG contribute? What did they do wrong? WILLIAM K. BLACK: They made bad loans. Their type of loan was to sell a guarantee, right? And they charged a lot of fees up front. So, they booked a lot of income. Paid enormous bonuses. The bonuses we're thinking about now, they're much smaller than these bonuses that were also the product of accounting fraud. And they got very, very rich. But, of course, then they had guaranteed this toxic waste. These liars' loans. Well, we've just gone through why those toxic waste, those liars' loans, are going to have enormous losses. And so, you have to pay the guarantee on those enormous losses. And you go bankrupt. Except that you don't in the modern world, because you've come to the United States, and the taxpayers play the fool. Under Secretary Geithner and under Secretary Paulson before him . . . we took $5 billion dollars, for example, in U.S. taxpayer money. And sent it to a huge Swiss Bank called UBS. At the same time that that bank was defrauding the taxpayers of America. And we were bringing a criminal case against them. We eventually get them to pay a $780 million fine, but wait, we gave them $5 billion. So, the taxpayers of America paid the fine of a Swiss Bank. And why are we bailing out somebody who that is defrauding us? BILL MOYERS: And why... WILLIAM K. BLACK: How mad is this? BILL MOYERS: What is your explanation for why the bankers who created this mess are still calling the shots? WILLIAM K. BLACK: Well, that, especially after what's just happened at G.M., that's... it's scandalous. BILL MOYERS: Why are they firing the president of G.M. and not firing the head of all these banks that are involved? WILLIAM K. BLACK: There are two reasons. One, they're much closer to the bankers. These are people from the banking industry. And they have a lot more sympathy. In fact, they're outright hostile to autoworkers, as you can see. They want to bash all of their contracts. But when they get to banking, they say, â€کcontracts, sacred.' But the other element of your question is we don't want to change the bankers, because if we do, if we put honest people in, who didn't cause the problem, their first job would be to find the scope of the problem. And that would destroy the cover up. BILL MOYERS: The cover up? WILLIAM K. BLACK: Sure. The cover up. BILL MOYERS: That's a serious charge. WILLIAM K. BLACK: Of course. BILL MOYERS: Who's covering up? WILLIAM K. BLACK: Geithner is charging, is covering up. Just like Paulson did before him. Geithner is publicly saying that it's going to take $2 trillion — a trillion is a thousand billion — $2 trillion taxpayer dollars to deal with this problem. But they're allowing all the banks to report that they're not only solvent, but fully capitalized. Both statements can't be true. It can't be that they need $2 trillion, because they have masses losses, and that they're fine. These are all people who have failed. Paulson failed, Geithner failed. They were all promoted because they failed, not because . . . BILL MOYERS: What do you mean? WILLIAM K. BLACK: Well, Geithner has, was one of our nation's top regulators, during the entire subprime scandal, that I just described. He took absolutely no effective action. He gave no warning. He did nothing in response to the FBI warning that there was an epidemic of fraud. All this pig in the poke stuff happened under him. So, in his phrase about legacy assets. Well he's a failed legacy regulator. BILL MOYERS: But he denies that he was a regulator. Let me show you some of his testimony before Congress. Take a look at this. TIMOTHY GEITHNER: I've never been a regulator, for better or worse. And I think you're right to say that we have to be very skeptical that regulation can solve all of these problems. We have parts of our system that are overwhelmed by regulation. Overwhelmed by regulation! It wasn't the absence of regulation that was the problem, it was despite the presence of regulation you've got huge risks that build up. WILLIAM K. BLACK: Well, he may be right that he never regulated, but his job was to regulate. That was his mission statement. BILL MOYERS: As? WILLIAM K. BLACK: As president of the Federal Reserve Bank of New York, which is responsible for regulating most of the largest bank holding companies in America. And he's completely wrong that we had too much regulation in some of these areas. I mean, he gives no details, obviously. But that's just plain wrong. BILL MOYERS: How is this happening? I mean why is it happening? WILLIAM K. BLACK: Until you get the facts, it's harder to blow all this up. And, of course, the entire strategy is to keep people from getting the facts. BILL MOYERS: What facts? WILLIAM K. BLACK: The facts about how bad the condition of the banks is. So, as long as I keep the old CEO who caused the problems, is he going to go vigorously around finding the problems? Finding the frauds? BILL MOYERS: You - WILLIAM K. BLACK: Taking away people's bonuses? BILL MOYERS: To hear you say this is unusual because you supported Barack Obama, during the campaign. But you're seeming disillusioned now. WILLIAM K. BLACK: Well, certainly in the financial sphere, I am. I think, first, the policies are substantively bad. Second, I think they completely lack integrity. Third, they violate the rule of law. This is being done just like Secretary Paulson did it. In violation of the law. We adopted a law after the Savings and Loan crisis, called the Prompt Corrective Action Law. And it requires them to close these institutions. And they're refusing to obey the law. BILL MOYERS: In other words, they could have closed these banks without nationalizing them? WILLIAM K. BLACK: Well, you do a receivership. No one -- Ronald Reagan did receiverships. Nobody called it nationalization. BILL MOYERS: And that's a law? WILLIAM K. BLACK: That's the law. BILL MOYERS: So, Paulson could have done this? Geithner could do this? WILLIAM K. BLACK: Not could. Was mandated-- BILL MOYERS: By the law. WILLIAM K. BLACK: By the law. BILL MOYERS: This law, you're talking about. WILLIAM K. BLACK: Yes. BILL MOYERS: What the reason they give for not doing it? WILLIAM K. BLACK: They ignore it. And nobody calls them on it. BILL MOYERS: Well, where's Congress? Where's the press? Where-- WILLIAM K. BLACK: Well, where's the Pecora investigation? BILL MOYERS: The what? WILLIAM K. BLACK: The Pecora investigation. The Great Depression, we said, "Hey, we have to learn the facts. What caused this disaster, so that we can take steps, like pass the Glass-Steagall law, that will prevent future disasters?" Where's our investigation? What would happen if after a plane crashes, we said, "Oh, we don't want to look in the past. We want to be forward looking. Many people might have been, you know, we don't want to pass blame. No. We have a nonpartisan, skilled inquiry. We spend lots of money on, get really bright people. And we find out, to the best of our ability, what caused every single major plane crash in America. And because of that, aviation has an extraordinarily good safety record. We ought to follow the same policies in the financial sphere. We have to find out what caused the disasters, or we will keep reliving them. And here, we've got a double tragedy. It isn't just that we are failing to learn from the mistakes of the past. We're failing to learn from the successes of the past. BILL MOYERS: What do you mean? WILLIAM K. BLACK: In the Savings and Loan debacle, we developed excellent ways for dealing with the frauds, and for dealing with the failed institutions. And for 15 years after the Savings and Loan crisis, didn't matter which party was in power, the U.S. Treasury Secretary would fly over to Tokyo and tell the Japanese, "You ought to do things the way we did in the Savings and Loan crisis, because it worked really well. Instead you're covering up the bank losses, because you know, you say you need confidence. And so, we have to lie to the people to create confidence. And it doesn't work. You will cause your recession to continue and continue." And the Japanese call it the lost decade. That was the result. So, now we get in trouble, and what do we do? We adopt the Japanese approach of lying about the assets. And you know what? It's working just as well as it did in Japan. BILL MOYERS: Yeah. Are you saying that Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong? WILLIAM K. BLACK: Absolutely. BILL MOYERS: You are. WILLIAM K. BLACK: Absolutely, because they are scared to death. All right? They're scared to death of a collapse. They're afraid that if they admit the truth, that many of the large banks are insolvent. They think Americans are a bunch of cowards, and that we'll run screaming to the exits. And we won't rely on deposit insurance. And, by the way, you can rely on deposit insurance. And it's foolishness. All right? Now, it may be worse than that. You can impute more cynical motives. But I think they are sincerely just panicked about, "We just can't let the big banks fail." That's wrong. BILL MOYERS: But what might happen, at this point, if in fact they keep from us the true health of the banks? WILLIAM K. BLACK: Well, then the banks will, as they did in Japan, either stay enormously weak, or Treasury will be forced to increasingly absurd giveaways of taxpayer money. We've seen how horrific AIG - and remember, they kept secrets from everyone. BILL MOYERS: A.I.G. did? WILLIAM K. BLACK: What we're doing with - no, Treasury and both administrations. The Bush administration and now the Obama administration kept secret from us what was being done with AIG. AIG was being used secretly to bail out favored banks like UBS and like Goldman Sachs. Secretary Paulson's firm, that he had come from being CEO. It got the largest amount of money. $12.9 billion. And they didn't want us to know that. And it was only Congressional pressure, and not Congressional pressure, by the way, on Geithner, but Congressional pressure on AIG. Where Congress said, "We will not give you a single penny more unless we know who received the money." And, you know, when he was Treasury Secretary, Paulson created a recommendation group to tell Treasury what they ought to do with AIG. And he put Goldman Sachs on it. BILL MOYERS: Even though Goldman Sachs had a big vested stake. WILLIAM K. BLACK: Massive stake. And even though he had just been CEO of Goldman Sachs before becoming Treasury Secretary. Now, in most stages in American history, that would be a scandal of such proportions that he wouldn't be allowed in civilized society. BILL MOYERS: Yeah, like a conflict of interest, it seems. WILLIAM K. BLACK: Massive conflict of interests. BILL MOYERS: So, how did he get away with it? WILLIAM K. BLACK: I don't know whether we've lost our capability of outrage. Or whether the cover up has been so successful that people just don't have the facts to react to it. BILL MOYERS: Who's going to get the facts? WILLIAM K. BLACK: We need some chairmen or chairwomen - BILL MOYERS: In Congress. WILLIAM K. BLACK: - in Congress, to hold the necessary hearings. And we can blast this out. But if you leave the failed CEOs in place, it isn't just that they're terrible business people, though they are. It isn't just that they lack integrity, though they do. Because they were engaged in these frauds. But they're not going to disclose the truth about the assets. BILL MOYERS: And we have to know that, in order to know what? WILLIAM K. BLACK: To know everything. To know who committed the frauds. Whose bonuses we should recover. How much the assets are worth. How much they should be sold for. Is the bank insolvent, such that we should resolve it in this way? It's the predicate, right? You need to know the facts to make intelligent decisions. And they're deliberately leaving in place the people that caused the problem, because they don't want the facts. And this is not new. The Reagan Administration's central priority, at all times, during the Savings and Loan crisis, was covering up the losses. BILL MOYERS: So, you're saying that people in power, political power, and financial power, act in concert when their own behinds are in the ringer, right? WILLIAM K. BLACK: That's right. And it's particularly a crisis that brings this out, because then the class of the banker says, "You've got to keep the information away from the public or everything will collapse. If they understand how bad it is, they'll run for the exits." BILL MOYERS: Yeah, and this week in New York, at this conference, you described this as more than a financial crisis. You called it a moral crisis. WILLIAM K. BLACK: Yes. BILL MOYERS: Why? WILLIAM K. BLACK: Because it is a fundamental lack of integrity. But also because, if you look back at crises, an economist who is also a presidential appointee, as a regulator in the Savings and Loan industry, right here in New York, Larry White, wrote a book about the Savings and Loan crisis. And he said, you know, one of the most interesting questions is why so few people engaged in fraud? Because objectively, you could have gotten away with it. But only about ten percent of the CEOs, engaged in fraud. So, 90 percent of them were restrained by ethics and integrity. So, far more than law or by F.B.I. agents, it's our integrity that often prevents the greatest abuses. And what we had in this crisis, instead of the Savings and Loan, is the most elite institutions in America engaging or facilitating fraud. BILL MOYERS: This wound that you say has been inflicted on American life. The loss of worker's income. And security and pensions and future happened, because of the misconduct of a relatively few, very well-heeled people, in very well-decorated corporate suites, right? WILLIAM K. BLACK: Right. BILL MOYERS: It was relatively a handful of people. WILLIAM K. BLACK: And their ideologies, which swept away regulation. So, in the example, regulation means that cheaters don't prosper. So, instead of being bad for capitalism, it's what saves capitalism. "Honest purveyors prosper" is what we want. And you need regulation and law enforcement to be able to do this. The tragedy of this crisis is it didn't need to happen at all. BILL MOYERS: When you wake in the middle of the night, thinking about your work, what do you make of that? What do you tell yourself? WILLIAM K. BLACK: There's a saying that we took great comfort in. It's actually by the Dutch, who were fighting this impossible war for independence against what was then the most powerful nation in the world, Spain. And their motto was, "It is not necessary to hope in order to persevere." Now, going forward, get rid of the people that have caused the problems. That's a pretty straightforward thing, as well. Why would we keep CEOs and CFOs and other senior officers, that caused the problems? That's facially nuts. That's our current system. So stop that current system. We're hiding the losses, instead of trying to find out the real losses. Stop that, because you need good information to make good decisions, right? Follow what works instead of what's failed. Start appointing people who have records of success, instead of records of failure. That would be another nice place to start. There are lots of things we can do. Even today, as late as it is. Even though they've had a terrible start to the administration. They could change, and they could change within weeks. And by the way, the folks who are the better regulators, they paid their taxes. So, you can get them through the vetting process a lot quicker. BILL MOYERS: William Black, thank you very much for being with me on the Journal. WILLIAM K. BLACK: Thank you so much.

And even as of today we have Jeffrey Sachs, Director of the Earth Institute, Economics Professor, Columbia University, saying that "The Geithner-Summers Plan is Even Worse Than We Thought" - with facts and statistics for your viewing pleasure. Still think Timmy and Larry and Bobby are charming and persuasive?

Two weeks ago, I posted an article showing how the Geithner-Summers banking plan could potentially and unnecessarily transfer hundreds of billions of dollars of wealth from taxpayers to banks. The same basic arithmetic was later described by Joseph Stiglitz in the New York Times (April 1) and by Peyton Young in the Financial Times (April 1). In fact, the situation is even potentially more disastrous than we wrote. Insiders can easily game the system created by Geithner and Summers to cost up to a trillion dollars or more to the taxpayers. Here's how. Consider a toxic asset held by Citibank with a face value of $1 million, but with zero probability of any payout and therefore with a zero market value. An outside bidder would not pay anything for such an asset. All of the previous articles consider the case of true outside bidders. Suppose, however, that Citibank itself sets up a Citibank Public-Private Investment Fund (CPPIF) under the Geithner-Summers plan. The CPPIF will bid the full face value of $1 million for the worthless asset, because it can borrow $850K from the FDIC, and get $75K from the Treasury, to make the purchase! Citibank will only have to put in $75K of the total. Citibank thereby receives $1 million for the worthless asset, while the CPPIF ends up with an utterly worthless asset against $850K in debt to the FDIC. The CPPIF therefore quietly declares bankruptcy, while Citibank walks away with a cool $1 million. Citibank's net profit on the transaction is $925K (remember that the bank invested $75K in the CPPIF) and the taxpayers lose $925K. Since the total of toxic assets in the banking system exceeds $1 trillion, and perhaps reaches $2-3 trillion, the amount of potential rip-off in the Geithner-Summers plan is unconscionably large. The earlier criticisms of the Geithner-Summers plan showed that even outside bidders generally have the incentive to bid far too much for the toxic assets, since they too get a free ride from the government loans. But once we acknowledge the insider-bidding route, the potential to game the plan at the cost of the taxpayers becomes extraordinary. And the gaming of the system doesn't have to be as crude as Citibank setting up its own CPPIF. There are lots of ways that it can do this indirectly, for example, buying assets of other banks which in turn buy Citi's assets. Or other stakeholders in Citi, such as groups of bondholders and shareholders, could do the same. The sad part of all this is that there are now several much better ideas circulating among experts, but none of these seems to get the time of day from the Treasury. The best ideas are forms of corporate reorganization, in which a bank weighed down with toxic assets is divided into two banks - a "good bank" and a "bad bank" - with the bad bank left holding the toxic assets and the long-term debts, while owning the equity of the good bank. If the bad assets pay off better than is now feared, the bondholders get repaid and the current bank shares keep their value. If the bad assets in fact default heavily as is now expected, the bondholders and shareholders lose their investments. The key point of the good bank-bad bank plans is an orderly process to restore healthy banking functions (in the good bank) while divvying up the losses in a fair way among the banks' existing claimants. The taxpayer is not needed for that, except to cover the insured part of the banks' existing liabilities, specifically the banks' deposits and perhaps other short-term liabilities that are key to financial market liquidity.

And if there are better plans like the above, why not have a real press conference (instead a make-believe one with insiders like Bob Schieffer on Meet the Press), and let them explain themselves.

Let them explain the hidden and not-so-hidden risks to the American taxpayer of the plan that they have put forward. Let them explain why they are so intent on saving the banks' bondholders, even the long-term unsecured creditors who clearly knew they were taking market risks in buying Citibank bonds. Let them work with their critics to fashion a less risky and less costly plan. So far Geithner and Summers tell us that their plan is the only option, but without a word of further explanation as to why

Read it all here (and weep anew). Suzan Just in - On cue the Associated Press reports that "The chief executive of Goldman Sachs Group Inc. on Tuesday called for new standards on how Wall Street executives are compensated and new regulation of large hedge funds and private equity funds." Another surprise. __________________________

How About a Brand New Start? (A Very Long One)

Who would have guessed that "W"'s retirement career was going to be in comedy? In his usual smirky "I know where the bones are buried, you don't and you couldn't do anything about it anyway if you did" brand of hit comedy at least. This would seem to be the new American Way based on the passes given to these smiling, murdering, serial liars - at least from the Press Conferences/TV appearances bestowed on their stunned, slavering audiences of the last week (although it momentarily gladdened my crushed heart that he got zero laughs for his best lines in Monday's, and had to fill in the last two empty rows for onlookers with interns due to lack of interest by his own people). I couldn't watch tonight's elephant ballet. I'm sure someone will tell me about it (hint: I don't want to know - I'm having chest pains already). Practice, smurf, practice. You will need it for the increasingly small number of admirers of torturers and liars who will be pressing up to you at your much-looked-forward-to, future, well-remunerated appearances before your fast friends and former moneylenders/supporters of criminality. I'm guessing the big crowds will be at the Goldman Sachs and Morgan Stanley appearances (although Bob Rubin will have to sit out the Citigroup one this year). They seem to have come out of their super-lending muck just fine - like Halliburton! Contribute millions - receive billions (in kickbacks/contracts); payback guaranteed (by the undone U.S. taxpayers who are all too glad to pay so they can get back to "American Idol" quickly). The huge numbers of innocents dying daily in the Gazan Holocaust (putting a strange, new twist on the word which was supposed to NEVER have to be said again because the Jews would never let it occur again), which is going on simultaneously with their Fond Reminiscences tour in front of friendly crowds is the one off note. I keep wondering (every day lately) how we would react if our homes were bombed because a foreign country was trying to assassinate/murder people (very bad guys) who might live next door. Somehow, even though it is precisely forbidden by the Geneva Conventions, I think Bush or Cheney would still be on TV explaining to a bumfuzzled Jim Lehrer how disappointed they were that the scheme didn't work out better, and that only a few people were killed in their search for the "bad guys;" that it was a moment of some regret (never a mistake for this Despicable Duo) for their administration (but it was really because they hadn't been more thoroughly annihilatory).

In what appeared to be a breakthrough for the Israeli military, Israeli and Palestinian media reported that Israel had killed a senior Hamas official in the bombing of his home. . . . The slain official, Said Siam, was the interior minister in Hamas-run Gaza, and was in charge of Security. Islamic Jihad radio said Mr. Siam’s brother and son had also been killed. In addition, the strike killed four members of a family next door, Gaza hospital officials said. . . . On the 20th day of fighting, Israeli ground forces pushed deeper into Gaza City and intensified shelling in both outlying neighborhoods and central districts, sending thousands of panicked residents fleeing from their homes, witnesses said. . . . The death toll among Palestinians rose to at least 1,076, according to Reuters, which quoted the Hamas-run Health Ministry in Gaza. At least 13 Israelis have been killed. The attacks have worsened the decades-long tensions between Israel and the United Nations. Israel views some branches of the United Nations as hostile and unfair, particularly the Relief and Works Agency, with its focus on helping Palestinians.

It must be A-Okay with the good people of our civilized western world (formerly staunch defenders of the Geneva Conventions' proscriptions on the premeditated killing of civilians - an exact parallel to Madeleine Albright's comment that half a million Iraqi innocents murdered seemed to be within reason to achieve the desired dominance goal) as I haven't noticed too many street demonstrations against the intensifying Gaza tragedy. (There was one very loud one of about 50 people staged in front of the Wachovia at Guilford College here in Greensboro when the bombing started. Kudos to the Quakers!) I always enjoy being schooled on current political realities. At Stop Me Before I Vote Again there is a very pointed essay to consider when you are congratulating yourself on getting rid of the Rethuglican "bad guys" for a very loooong time. You should stop here if you don't want to read a very amusing political dissection of our voting lives that runs a bit longish (enormously worthwhile though). (Emphasis marks were added and some editing was necessary - Ed.)

Every time liberals win an election . . . their intellectuals indulge in an odd, portentous imputation. They believe that the conservatives have lost in a very significant, very meaningful way, and that this loss is attributable to some dramatic failure in the conservatives' . . . constructs. They write well and often insightfully, but what it boils down to is that the conservatives have lost because they have bad cess in their heads, the poor things, and the bad cess has interacted with numinous forces to cause their defeat. It follows, then, in a scholarly . . . progression, that liberals have won because they have good stuff in their heads. The numinous forces have smiled. Needless to say, the conservative intellectuals indulge in the same game. However more of them get paid . . . they say "emergent" less often and they have a better understanding of their place in the food chain. They too elide a systemic critique, but more of them understand that's a job requirement. In the recent election, the victorious liberal candidate out-fundraised, out-organized, out-charmed and out-maneuvered everyone who got between him and the presidency. There was no epochal clash of ideologies. An enormously talented, very good looking man sailed right by a sad collection of mentally unbalanced hacks, in his own party. On paper, his policies were quite similar to theirs. He was, simply, the better politician. His conservative opponent had been delivered a bed shat in over eight years by Cheney-Bush and measured for him by Corporate Procrustes, who was determined to make sure it never fit, no matter how hard the poor sap abased himself. He had no principles left after a lifetime in politics, and no ideas with which to contest. So he offered up his self-regard. In the end, he became the useful idiot for a minor celebrity. No loss, none at all. Procrustes can work with Obama through the super yuppies from the Hamilton Project (motto: Your people, sir, is nothing but a great beast!). It was a farce. The heirs of John Kenneth Galbraith did not square off against the heirs of Russell Kirk. Just try to imagine any of the popular pundits so much as referencing them in support of an argument, never mind attempting to explicate their ideas. Al Gore offered more ideological content in his loss to George Bush. There should be a clue in that. Hip urban intellectuals swooned over a man who read Stendhal. No one else was moved. Gore was ridiculed and subjected to endlessly petty, ideologically empty calumnies in the media. His supporters dutifully tracked all of them down. He rewarded them by caving in a noisy and craven fashion. Any takers on a bet that Barack Obama has read Galbraith? But he wisely stuck to platitudes and to being good looking. He won and as has already been made abundantly clear, his supporters can expect no more in his victory than they got in Gore's loss. To drive it home to them, he's using Rick Warren in the same way George Bush used John Bolton at the United Nations: as a living, breathing insult. There is no crisis in American conservatism. The Republican Party has a human resources problem, a public relations problem and a brand identity problem. Talent is thin. They need to recruit. The brand needs to be adjusted to fit the needs of the organization in a way that does not alienate the consumers. The beshat bed left by Cheney-Bush has a new occupant already. Their revenue stream is secure. The managerial core is demoralized, but capable of seeing this through. It is a proud corporate concern with deep roots in the community. It can and will offer a robust, scalable nationwide management solution, with improved moral hygiene and fewer Big Gubmint calories than ever. If needed, and as needed, they can count on a hand up from their colleagues, offered for the good of the country, in the same spirit that got them the votes for the Iraq war, the continued funding of it, the Patriot Act, its extension, the slow sabotage of the factory farm schools, through NCLB, and their replacement with pay-to-play targeted training, the "self-regulating" financial services industry, the War on Drugs, the conversion of manufacturing to services, services to temping and temping to taking out loans for reeducation, etc. etc. A kindly hand, with many dimes in it to be displayed as tokens of managerial rivalry.

To put an even finer point on his argument he concludes with:

I see two organized entities vying for control of a system of production: an industrial state forcibly converting to a services state, while maintaining the organizational structure of the the industrial state. One entity is arguably better than the other in the sense that it takes a narrowly conservationist approach to maintaining the system. The people who "identify" with that call themselves liberals. The other entity takes a more immediately extractive approach. The people who identify with that call themselves conservatives. Cognitive dissonance works well for both groups of people. They consistently find reasons to maintain their identification, even when faced by the reality that neither entity views them as anything better than nuisancy labor. Their intellectuals perpetuate that and provide "content" to keep the defensive dissonance healthy, with health defined as the organizational needs of the system of production. Some intellectuals do that for free. Labor remains obedient.

One persuasive commenter said: "Re: Conservatism. All they need is a new daddy figure to lead them back onto the true path, someone who will give them the moral clarity that the current crop failed to project - or perhaps projected a little too clearly. As for the liberals, they shouldn't get too cocky. Obama was just Plan B, after all." One final comment to put the whole outsourcing argument to bed: "you say we are converting to a services state. What's next, when services - legal, accounting, etc. - are being outsourced?" There's even some incredibly fun poetry included among these political gems. From my best friend just Juan Moment comes this very passionate idea/plea(emphasis marks were added and some editing was necessary - Ed.):

Just like Afghani men in many cases are joining the Taliban, not due to their firm belief in the Taliban's extreme Islamic dogma, but to enlist with the only force out there that is fighting the invaders that killed their loved ones, so will Hamas be strengthened by USrael's despicable attacks on Gaza's civilian population. The way those fanatic Zionist assholes see it, the more civilians die in the onslaught the better, it means more enraged Palestinians, more olive groves and houses that can be annexed while whimpering about the raging Palestinians. However, with all our focus on Gaza, it's also worth remembering that our troops, US and allied forces around the world are just as barbaric as the IDF's henchmen. Looking at the numbers quoted in the Uruknet article, 1500 civilians killed in 8 months in Afghanistan, pretty much in the same fashion as their Muslim brothers in Palestine, leaves one in no doubt that our own governments, people we elected, are just as guilty as Livni or say, Shaul Mofaz, the Israeli Minister for Palestinian deaths. One has to wonder if the Allies' strategic planning in Afghanistan isn't in line with Israel's strategy - antagonize the civilian population in order to create the conflict needed to justify ones presence. So whilst I understand that people could do with a stiff drink in times like these, it should not be to help us forget our frustrations and to numb the anger, but to warm us up for the cold outside, where we will have to march till our feet start bleeding. Lets not succumb to the feeling of hopelessness and our insignificance. We are not powerless, quite the opposite, WE are the power, we are the people. Should enough of us make a stand, putting for a change our money where our mouths and keyboards are, marching hand in hand by the tens of millions against the system, show enough courage to engage in civil disobedience and withholding war taxes, we will make a difference. 10 million people giving $100 ea, and there is a billion dollars to fight this insanity. And when the money runs out in three months time, we do it all over again, until those fuckers learn that we are serious. We, not Rudd or Obama, have to get the snowball rolling. Those two soggy face washers won’t, that much is clear from their telltale silence on the war crimes committed by our alleged ally. But how? I hear you ask. How can us plebs make a difference? Easy, all it takes is a conscience and a few spare minutes every so often. Short of traveling to Palestine ourselves to oppose in Rachel Corrie’s spirit the atrocious crimes committed against nearly helpless people, we can do our bit from wherever we are, in multiple different ways. Donate to any organization that is dedicated to easing the Palestinian suffering, whilst at the same time boycotting any goods and services coming from Israel, or firms associated and in business with Israel. Let’s not kid ourselves, we all bear in one way or another some responsibility for the misery that exists across the developing world. Our consumer choices play an intrinsic role in the lives of many desperate people. They remain faceless to us, and yet we influence their livelihoods every day we go shopping. As we blindly spend our monies, it escapes us that by buying thoughtless we are squandering our enormous power. Not as one lone shopper who tries to make a difference, but collectively, as an ever growing number of people who are fed up with the way the system churns out victims. There are ways you and I can convey our message of disgust to the Israeli government slash establishment. Changing our consumer habits, making sure that no hard-earned cent of ours is making its way to this in large parts morally corrupt nation. Let your wallets and purses do the talking, speak out with your cheque books and credit cards. If we want our voices to be heard, we must first stop whispering, turn on our megaphones. So, to start up, send your English-language article or Letter to the Editor of as many media outlets as fits in your e-mail composer's To: field. Once you’ve send your letter to the editors, join the global Consumer BDS movement and Boycott, Divest and Sanction for Palestine. Find out about which companies to boycott, such as Johnson & Johnson and the Arsenal Football Club. Next time you buy shampoo or baby products, read the label. Anything produced in Israel will have a barcode on it that starts with the three digits 729. Read about which western brands and labels not to buy, like Maggi, Coca Cola or Nestle products. I know it's hard, but it can be done. We all can do it. Write a letter to those firms' Customer Care departments and let them know that you have stopped buying their products as they help to prop up or are in cahoots with the Israeli apartheid state. Also, make sure you check out this list of products from illegal settlements in occupied Palestinian territory. And most importantly, please give generously to: The Plant an Olive Tree campaign The Free Gaza Movement or any other worthwhile cause you identify. Should you be able to afford it, make it a regular donation, regardless of when a new ceasefire will be negotiated. Without ever having been there myself, the images available tell the story - the damage inflicted on Palestine's people and infrastructure is so severe, that aid of any kind will be needed for decades to come. The Palestinian suffering will eventually disappear again from the media radar, it always does, until the next shocking incident brings it all back into the headlines. But the suffering there is not temporary like our news cycles, or shall I say attention span, it is ever present and seemingly permanent. In order for us to really make a difference, we best make any efforts of ours a longer-term commitment. Write, march donate, sponsor, purchase, participate, just do something. Remember - people, united, can never be defeated. Any old way, no more time to waste, the people in Gaza and Afghanistan are counting on us, desperately.

As for myself, why not use this time of great awakening to the last eight years (at least) of Made-off ripoffs to make a truly new start in the building of our democratic institutions?

"In the eight years since George W. Bush took office, nearly every component of the U.S. economy has deteriorated. The nation’s budget deficits, trade deficits, and debt have reached record levels. Unemployment and inflation are up, and household savings are down. Nearly 4 million manufacturing jobs have disappeared and, not coincidentally, 5 million more Americans have no health insurance. Consumer debt has almost doubled, and nearly one fifth of American homeowners are likely to owe more in mortgage debt than their homes are actually worth. Meanwhile, as we have reported previously, the final price for the war in Iraq is expected to reach at least $3 trillion."

Frank Rich shows us how.

Three days after the world learned that $50 billion may have disappeared in Bernie Madoff’s Ponzi scheme, The Times led its front page of Dec. 14 with the revelation of another $50 billion rip-off. This time the vanished loot belonged to American taxpayers. That was our collective contribution to the $117 billion spent (as of mid-2008) on Iraq reconstruction — a sinkhole of corruption, cronyism, incompetence and outright theft that epitomized Bush management at home and abroad. The source for this news was a near-final draft of an as-yet-unpublished 513-page federal history of this nation-building fiasco. The document was assembled by the Office of the Special Inspector General for Iraq Reconstruction — led by a Bush appointee, no less. It pinpoints, among other transgressions, a governmental Ponzi scheme concocted to bamboozle Americans into believing they were accruing steady dividends on their investment in a “new” Iraq. The report quotes no less an authority than Colin Powell on how the scam worked. Back in 2003, Powell said, the Defense Department just “kept inventing numbers of Iraqi security forces — the number would jump 20,000 a week! ‘We now have 80,000, we now have 100,000, we now have 120,000.’ ” Those of us who questioned these astonishing numbers were dismissed as fools, much like those who begged in vain to get the Securities and Exchange Commission to challenge Madoff’s math. What’s most remarkable about the Times article, however, is how little stir it caused. When, in 1971, The Times got its hands on the Pentagon Papers, the internal federal history of the Vietnam disaster, the revelations caused a national uproar. But after eight years of battering by Bush, the nation has been rendered half-catatonic. The Iraq Pentagon Papers sank with barely a trace. After all, next to big-ticket administration horrors like Abu Ghraib, Guantánamo and the politicized hiring and firing at Alberto Gonzales’s Justice Department, the wreckage of Iraq reconstruction is what Ralph Kramden of “The Honeymooners” would dismiss as “a mere bag of shells.” The $50 billion also pales next to other sums that remain unaccounted for in the Bush era, from the $345 billion in lost tax revenue due to unpoliced offshore corporate tax havens to the far-from-transparent disposition of some $350 billion in Wall Street bailout money. In the old Pat Moynihan phrase, the Bush years have “defined deviancy down” in terms of how low a standard of ethical behavior we now tolerate as the norm from public officials. Not even a good old-fashioned sex scandal could get our outrage going again. Indeed, a juicy one erupted last year in the Interior Department, where the inspector general found that officials “had used cocaine and marijuana, and had sexual relationships with oil and gas company representatives.” Two officials tasked with marketing oil on behalf of American taxpayers got so blotto at a daytime golf event sponsored by Shell that they became too incapacitated to drive and had to be put up by the oil company. Back in the day, an oil-fueled scandal in that one department alone could mesmerize a nation and earn Warren Harding a permanent ranking among our all-time worst presidents. But while the scandals at Bush’s Interior resemble Teapot Dome — and also encompass millions of dollars in lost federal oil and gas royalties — they barely registered beyond the Beltway. Even late-night comics yawned when The Washington Post administered a coup de grâce last week, reporting that Interior Secretary Dirk Kempthorne spent $235,000 from taxpayers to redo his office bathroom (monogrammed towels included). It took 110 pages for the Center for Public Integrity, a nonpartisan research organization, to compile the CliffsNotes inventory of the Bush wreckage last month. It found “125 systematic failures across the breadth of the federal government.” That accounting is conservative. There are still too many unanswered questions. Just a short list is staggering. Who put that bogus “uranium from Africa” into the crucial prewar State of the Union address after the C.I.A. removed it from previous Bush speeches? How high up were the authorities who ordered and condoned torture and then let the “rotten apples” at the bottom of the military heap take the fall? Who orchestrated the Pentagon’s elaborate P.R. efforts to cover up Pat Tillman’s death by “friendly fire” in Afghanistan? And, for extra credit, whatever did happen to Bush’s records from the Texas Air National Guard?

Dawn Johnsen, a well-versed law professor and Constitutional scholar, was chosen by Obama to run the Office of Legal Counsel in the Department of Justice: the perfect place to begin this process of rectification. Please read the rest of this excruciatingly researched essay here. Suzan _______________________________

Is the Bloodbath Over Yet? Who Are You Gonna Believe? The Press or Your Lying Eyes?

Still time to vote for D R I F T G L A S S for Best Individual Blogger and BLUEGAL for Best Liberal Blogger! Click on the image above and vote for your favorites. - - - - - - - -

Everyone apologizing for Bush and Cheney's past behavior as they bow off the international (but never the national) stage are working overtime to make us think that all their actions (and especially the illegal ones) are the result of their "just wanting to keep us safe." Nice try. I'm sure no one (like the old Roverer himself) could have thought that one up alone. Poor them. Poor us. So, the U.S. didn't have another 9/11 (but we didn't really need one as the first one was more than sufficient to achieve their aims), but someone is having one now in Gaza, aren't they? And as one commenter said recently at one of the sites aptly covering the Gaza mayhem - makes you wonder what's happening in Iraq and Afghanistan that we aren't getting even a hint about now what with the news so focused on the "morally just" (for the Israelis) bloodbath in Gaza? Click here for more: Linglong Thought Exchange: Turn on the megaphones And just who is supplying all those nifty missiles to those bloody, starving people? Juan Cole, one of the best reporters anywhere on these issues, addresses the long term implications of all these clever moves (emphasis marks were added and some editing was necessary - Ed.):

In 1996, Israeli jets bombed a UN building where civilians had taken refuge at Cana/ Qana in south Lebanon, killing 102 persons; in the place where Jesus is said to have made water into wine, Israeli bombs wrought a different sort of transformation. In the distant, picturesque port of Hamburg, a young graduate student studying traditional architecture of Aleppo saw footage like this on the news [graphic]. He was consumed with anguish and the desire for revenge. As soon as operation Grapes of Wrath had begun the week before, he had written out a martyrdom will, indicating his willingness to die avenging the victims, killed in that operation - with airplanes and bombs that were a free gift from the United States. His name was Muhammad Atta. Five years later he piloted American Airlines 11 into the World Trade Center.

Could this be not only the way Israel "solves" the Gaza problem (and finalizes the stealing of the natural gas off their coast), but also the way to do the Cheney/Bush junta one final big favor and avert the public glance from the other ongoing wars until after the inauguration festivities? And who else benefits? Don't you just hate it when someone messes up your party? (Did I hear off in the distance the echo of the phrase "all-out war all the time?") I've about lost my last hope for change from the "new" guys.

The invasion was mapped out months ago, right down to the bullet points that were passed out to friends in the media. Nothing was left to chance. That said, the public relations campaign was on full display over the weekend when Israeli ground troops and armored divisions swept into Gaza unopposed. CNN had a coterie of ardent Zionists on hand to justify the invasion in a carefully scripted analysis of developments. Retired Brigadier Gen. David Grange accompanied the blatantly pro-Israel Wolf Blitzer saying that the IDF had been "lured" into Gaza by Hamas so that Hamas could execute its plan for "urban warfare." Utter nonsense. Grange implied that the subsequent slaughter of civilians was the work of Hamas, not Israel. Even by CNN's abysmal standards, this is a new low.

And they thought Bush wasn't smart.

In a rare moment of honesty, the New York Times divulged the real motive behind the bombardment and invasion of Gaza. In Ethan Bronner's article, "Israel Weighs Goal: Ending Hamas Rule, Rocket fire or Both," Israeli Vice Premier Haim Ramon said, "We need to reach a situation in which we do not allow Hamas to govern. That is the most important thing. If the war ends in a draw, as expected, and Israel refrains from reoccupying Gaza, Hamas will gain diplomatic recognition. . . . No matter what you call it, Hamas will obtain legitimacy.” According to the Times: "In addition, any truce would probably include an increase in commercial traffic from Israel and Egypt into Gaza, which is Hamas’ central demand: to end the economic boycott and border closing it has been facing. To build up the Gaza economy under Hamas, Israeli leaders say, would be to build up Hamas. Yet withholding the commerce would continue to leave 1.5 million Gazans living in despair." If Israel wants to prevent Hamas from "obtaining legitimacy," then the real objective of the invasion is to either severely undermine or topple the regime. All the talk about the qassam rockets and the so-called "Hamas infrastructure," (the new phrase that is supposed to indicate a threat to Israeli security) is merely a diversion. What really worries Israel is the prospect that Obama will "sit down with his enemies" - as he promised during the presidential campaign - and conduct talks with Hamas. That would put the ball in Israel's court and force them to make concessions. But Israel does not want to make concessions. They would rather start a war and change the facts on the ground so they can head-off any attempt by Obama to restart peace process. Just days ago, Obama advisor, Zbigniew Brzezinski, said in a televised interview, that the last eight years proves that resolving the Palestinian/Israeli conflict is critical to US interests in the region. He added that the recent fighting shows that the two parties cannot achieve peace without US involvement. Brzezinski's comments suggest that, at the very least, the Obama camp is considering low-level (secret?) talks with Hamas representatives. Every day that Hamas abstains from violence; its legitimacy as a political party grows and the prospect of direct negotiations becomes more likely. This is Israel's worst nightmare, not because Hamas constitutes a real threat to Israeli security, but because Israel wants to install its own puppet regime and unilaterally impose its own terms for a final settlement. Neither Ehud Olmert or any of the candidates for prime minister have any intention of getting bogged down in another 8 years of fruitless banter like Oslo where plans for settlement expansion had to be concealed behind an elaborate public relations smokescreen. No way. The Israeli leadership would rather skip the pretense altogether and pursue their territorial aims openly as they have under Bush. And the goal is the same as always; to integrate the occupied territories into Greater Israel and leave the Palestinians trapped in bantustans. Negotiations just make that harder. Ariel Sharon's senior advisor, Dov Weisglass, clarified Israel's position three years ago when he admitted, "The disengagement [from Gaza] is actually formaldehyde. It supplies the amount of formaldehyde that is necessary so that there will not be a political process with the Palestinians. . . this whole package that is called the Palestinian state has been removed from our agenda indefinitely." "Formaldehyde;" that says it all. The point of the Israeli withdrawal from Gaza was to silence critics and to make it appear as though the Palestinians had achieved some type of statehood. It was a complete sham. Sharon believed that disengagement would stop foreign leaders from badgering him to sit down with the Palestinians and work out a mutually-acceptable agreement. He never expected that elections would throw a wrench in his plans and raise the credibility of Hamas to the extent that it has today. In the last two years, Hamas hasn't launched one suicide mission in Israel, which shows that it has abandoned the armed struggle and can be trusted to negotiate on its people's behalf. That scares Israel, which is why they initiated hostilities. Now, they need to seal the deal by either removing Hamas before Obama is sworn in or face pressure from the new administration for dialogue. Meanwhile, Israeli troop movements indicate that a plan may be in place to divide Gaza into three parts, thus making it impossible for Hamas to rule. The UK Guardian confirms that the invasion was really about regime change not rockets or Hamas infrastructure. . . . Dan Gillerman, Israel's ambassador to the UN until a few months ago, was brought in by the Foreign Ministry to help lead the diplomatic and PR campaign. He said that the diplomatic and political groundwork has been under way for months. "This was something that was planned long ahead," he said. "I was recruited by the foreign minister to coordinate Israel's efforts and I have never seen all parts of a very complex machinery - whether it is the Foreign Ministry, the Defence Ministry, the prime minister's office, the police or the army - work in such coordination, being effective in sending out the message." In briefings in Jerusalem and London, Brussels and New York, the same core messages were repeated: that Israel had no choice but to attack in response to the barrage of Hamas rockets; that the coming attack would be on "the infrastructure of terror" in Gaza and the targets principally Hamas fighters; that civilians would die, but it was because Hamas hides its fighters and weapons factories among ordinary people.

Read more about the scam here. Glenn Greenwald tells us clearly that shamelessly "Both Parties Cheerlead Still More Loudly for Israel's 'War.'"

World concern over, and opposition to, the Israeli war in Gaza is rapidly mounting: International pressure intensified sharply on Israel on Thursday, the 13th day of its Gaza assault, after the United Nations suspended food aid deliveries, the International Committee of the Red Cross accused the Israelis of knowingly blocking assistance to the injured, and a top Vatican official defended comments in which he compared Gaza to a concentration camp. The Israelis have deliberately made it impossible to know the full extent of the carnage and humanitarian disasters because they continue to prevent journalists from entering Gaza even in the face of a now week-old Israeli Supreme Court order compelling them to do so. According to Palestinian sources, there are now 700 dead Palestinians - at least 200 of them children - and well over 1,000 wounded. Those numbers are not seriously doubted by anyone. By comparison, a total of 10 Israelis have died - 10 - almost all of them by "friendly fire." The unusually worded Red Cross condemnation of Israel was prompted by its discovery, after finally being allowed into Gaza, of starving Palestinian children laying next to corpses, with ambulances blocked for days by the IDF. Even with the relative "restraint" Israel is excercising (the damage it could cause is obviously much greater), this is not so much of a war as it is a completely one-sided massacre. As a result, much of the world is urging an end to the war and acting to forge a cease-fire -- except the United States. Here, blind and unequivocal support for the Israeli attack is actually increasing almost as fast as the Palestinian body count piles up. Apparently, it isn't enough that we supply the very bombs being dropped on the Palestinians and use our U.N. veto power to prevent any U.N. action to stop the war or even to urge its cessation. The U.S. Congress wants to involve the U.S. further still in Israel's war. This afternoon, the Democratic-led U.S. Senate did just that by enacting - via a cowardly voice vote - a completely one-sided, non-binding resolution that expresses unequivocal support for the Israeli war, and heaps all the blame for the conflict on Hamas and none of it on Israel. Harry Reid - who jointly sponsored the Resolution with GOP Leader Mitch McConnell - proudly proclaimed: "When we pass this resolution, the United States Senate will strengthen our historic bond with the state of Israel." On its website, AIPAC is already patting the U.S. Senate on its head for "for conveying America's unequivocal and steadfast support for Israel's right to self-defense." . . . ThinkProgress noted yesterday that Democrats took the lead in drafting the Resolution because they did not want to be "out-hawked by the Republicans," though it's hardly unusual for Democrats to march in lockstep with Republicans on Israel more than any other issue. It's hard to overstate how one-sided this resolution is. It "expresses vigorous support and unwavering commitment to the welfare, security, and survival of the State of Israel as a Jewish and democratic state with secure borders." Why should the U.S. maintain an "unwavering commitment to the welfare" of a foreign country? It "lays blame both for the breaking of the 'calm' and for subsequent civilian casualties in Gaza precisely where blame belongs, that is, on Hamas." It repeatedly mentions the various sins of Hamas - from rockets to suicide attacks - but does not mention a single syllable of criticism for Israel. In the world of the U.S. Congress, neither the 4-decade occupation of Palestinian land nor the devastating blockade of Gaza nor the ongoing expansion of Israeli settlements even exist. That may not be mentioned. Whatever the motives, for America to blindly support Israel's self-destructive and unjustified behavior does not serve Israeli interests and -- most importantly -- does not serve America's. Blind support isn't "friendship," nor is enabling someone else's destructive behavior. It's subservience. And few things are as harmful or as unjust as the cowardly, lockstep behavior of both major American political parties when it comes to Israel. . . . This righteous fury is a constant phenomenon in the Israeli, and before that Zionist, dispossession of Palestine. Every act whether it was ethnic cleansing, occupation, massacre or destruction was always portrayed as morally just and as a pure act of self-defense reluctantly perpetrated by Israel in its war against the worst kind of human beings. In his excellent volume The Returns of Zionism: Myths, Politics and Scholarship in Israel, Gabi Piterberg explores the ideological origins and historical progression of this righteous fury. Today in Israel, from Left to Right, from Likud to Kadima, from the academia to the media, one can hear this righteous fury of a state that is more busy than any other state in the world in destroying and dispossessing an indigenous population. It is crucial to explore the ideological origins of this attitude and derive the necessary political conclusions from its prevalence. This righteous fury shields the society and politicians in Israel from any external rebuke or criticism. But far worse, it is translated always into destructive policies against the Palestinians. With no internal mechanism of criticism and no external pressure, every Palestinian becomes a potential target of this fury. Given the firepower of the Jewish state it can inevitably only end in more massive killings, massacres and ethnic cleansing. The self-righteousness is a powerful act of self-denial and justification. It explains why the Israeli Jewish society would not be moved by words of wisdom, logical persuasion or diplomatic dialogue. And if one does not want to endorse violence as the means of opposing it, there is only one way forward: challenging head-on this righteousness as an evil ideology meant to cover human atrocities. Another name for this ideology is Zionism and an international rebuke for Zionism, not just for particular Israeli policies, is the only way of countering this self-righteousness ("Israel's Righteous Fury and its Victims in Gaza" Ilan Pappe). It wouldn't make a bit of difference if Hamas surrendered tomorrow and handed over all its weapons to Israel, because the problem isn't Hamas; it's Zionism, the deeply-flawed ideology which leads to bombing children in their homes while clinging to victimhood. Ideas have consequences. Gaza proves it.

Read the rest of Glenn's fine essay here. On a related note, MediaBloodHound has the details on the very interesting story of how the Associated Press (AP) caused to vanish into thin air the tough questioning by its reporter of the U.S. State Department regarding Gaza. Suzan ______________________________