Moyers & Company: On Crony Capitalism

did i mention how glad i am to see bill moyers back on the air...?

Moyers & Company Show 102: On Crony Capitalism from BillMoyers.com on Vimeo.

from alternet...

"Crony capitalism is about the aggressive and proactive use of political resources, lobbying, campaign contributions, influence-peddling of one type or another to gain something from the governmental process that wouldn't otherwise be achievable in the market. And as the time has progressed over the last two or three decades, I think it's gotten much worse. Money dominates politics."

Those are the words of former budget director for President Reagan, talking to Bill Moyers in this week's episode of Moyers & Company. Continuing to focus on the intersection of money and politics, Moyers' new program talks to Stockman about the financialization of the economy, re-regulating the big banks, the Fed's enabling of Wall Street, and how the banks buy influence with politicians to ensure favorable treatment.

“As a result,” Stockman says, “we have neither capitalism nor democracy. We have crony capitalism.”

He names names--Larry Summers and Tim Geithner, General Electric's Jeffrey Immelt, and more--who are deeply involved still in the Obama administration.

"If you have a former community organizer who was trained in the Saul Alinsky school of direct democracy, appointing the worst abuser, the worst abuser of crony capitalism, GE, who came in and begged for this bailout, to head his Jobs Council, when obviously GE's international corporation, they've been shifting jobs offshore for decades, then it becomes so obvious that we have a new kind of system, and that we have a real crisis."

Moyers also talks with Pulitzer Prize-winning New York Times business and finance reporter Gretchen Morgenson, who tells him, "You and I don't have a lobbyist and so we are not represented in this melee."

She continues, "There is no balance here. There's a drastic imbalance between the people who created the problem and the people who had to pay the problem and it has not been addressed."

When Moyers asks if a crisis like the one in 2008, the meltdown that nearly collapsed the financial system, could happen again, Morgenson replies, "It will happen again."

yes, it WILL happen again...

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A failed Obama presidency

harsh but pretty much right on...

President Obama Richly Deserves to Be Dumped

By now it should be obvious that the system, and the Democratic Party, run Obama, not the other way around. Under this arrangement, the president carries out his duties as pre-eminent party functionary—fundraising being at the top of his list of responsibilities—and defers on legislation, leaving it to corrupt Democratic barons such as Sen. Max Baucus (D., Mont.), devoted friend of the insurance, pharmaceutical, and banking crowd, and sworn enemy of reform.

[...]

Obama’s hypocrisy in Osawatomie, Kansas, set a new standard in deception. Among other things, his speech blamed “regulators who were supposed to warn us about the dangers of all this [the unfettered sales of bundled mortgages], but looked the other way or didn’t have the authority to look at all. It was wrong. It combined the breathtaking greed of a few with irresponsibility all across the system.”

What’s truly breathtaking is the president’s gall, his stunning contempt for political history and contemporary reality. Besides neglecting to mention Democratic complicity in the debacle of 2008, he failed to point out that derivatives trading remains largely unregulated while the Securities and Exchange Commission awaits “public comment on a detailed implementation plan” for future regulation. In other words, until the banking and brokerage lobbies have had their say with John Boehner, Max Baucus, and Secretary of the Treasury Tim Geithner. Meanwhile, the administration steadfastly opposes a restoration of the Glass-Steagall Act, the New Deal law that reduced outlandish speculation by separating commercial and investment banks. In 1999, it was Summers and Geithner, led by Bill Clinton’s Treasury Secretary Robert Rubin (much admired by Obama), who persuaded Congress to repeal this crucial impediment to Wall Street recklessness.

and, to my mind, the most damning indictment of all...

Barbara Ehrenreich, just after billionaire Michael Bloomberg and mayors of other cities cleared public spaces of Occupy Wall Street protesters [said]: “Where in all this was Obama? Why couldn’t he have picked up the phone and called the mayors of Portland and Oakland and said: ‘Go easy on these people. They represent the anger and aspirations of the majority.’ Would that have been so difficult?” Well, yes, particularly if your principal occupation is shaking down bankers and brokers for campaign donations on the Upper East Side of Manhattan.

just another nudge in the direction of rocky anderson (see previous post)...

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Stiglitz offers a teach-in at Occupy Wall Street

joseph stiglitz is one of my heroes... he's the one who should be leading the economic efforts of this country and not geithner...

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Why Obama keeps Geithner and why he's calling for a tax on millionaires... (Cue the progressive music) [UPDATE]

there's a lot of s*** hitting the fan with the publication of ron suskind's new book, Confidence Men: Wall Street, Washington, and the Education of a President... i've been reading various reviews and analyses but leave it to glenn to hit the nail on the head...

Geithner wasn't chosen and hasn't remained despite being "associated with the deregulatory policies of the past" and despite being the bankers' "man in Washington." He is empowered precisely because of those facts, as was pointed out even before Obama's inauguration. That Geithner and Summers were empowered after enabling the financial crisis through Wall Street subservience isn't a mystery; it's the explanation (And just by the way, replacing the word "despite" with the phrase "because of" is -- in general -- one of the most valuable tools for translating Washington propaganda into reality; here is an excellent example showing how that works, from the first paragraph of a New York Times article two weeks ago:

Documents found at the abandoned office of Libya’s former spymaster appear to provide new details of the close relations the Central Intelligence Agency shared with the Libyan intelligence service -- most notably suggesting that the Americans sent terrorism suspects at least eight times for questioning in Libya despite that country's reputation for torture.

Note how the paragraph instantly transforms from misleading nonsense into obvious truth simply by changing "despite" to "because of"; this repeatedly is an effective instrument for deciphering propaganda -- e.g., the U.S. continues to brutalize people in the Muslim world "despite" the fact that doing so produces more Terrorism and thus ensures Endless War.)

glenn also refers to the same matt taibbi piece i referenced in an earlier post...

I remember following Obama on the campaign trail and hearing all sorts of promises before union-heavy crowds. He said he would raise the minimum wage every year; he said he would fight free-trade agreements. He also talked about repealing the Bush tax cuts and ending tax breaks for companies that move jobs overseas.

It's not just that he hasn't done those things. The more important thing is that the people he's surrounded himself with are not labor people, but stooges from Wall Street.

glenn continues...

That's why -- after 2 1/2 years -- we suddenly see an outburst of "fighting for jobs" and, now, a call to raise taxes on the rich. He does that precisely because everyone -- especially the rich -- knows it will not and cannot happen. We're now formally in (re-)election season, so it's time again to haul out the progressive music. ... [N]one of this presages an actual change in how the government functions or, especially, on whose behalf it labors. That's precisely why he feels free to advocate such things without alienating his funding base. It's still the government of Tim Geithner and his bosses/owners; election season (combined with rising elite fear of social unrest) just requires a bit more pretense to obscure that fact.

glenn concludes his post with this all-too-sadly-true cartoon...



[UPDATE and BUMPED]

check out this reuters headline...

Obama deficit plan aimed at Democratic base

[...]

"I will not support any plan that puts all the burden on closing our deficit on ordinary Americans," Obama said. "We are not going to have a one-sided deal that hurts the folks who are most vulnerable."

With polls showing most Americans unhappy with his economic leadership, Obama's re-election hopes could hinge on his ability to convince voters that Republicans represent the rich, not the middle class. That was the main theme of his remarks on Monday, in which he repeatedly said all Americans must pay their "fair share" of taxes.

so, what am i supposed to do now...? after falling in love, accepting a proposal for marriage only to find that i hooked up with a spouse-beater and then taking my licks until i finally decided to leave the two-faced creep, do i now convince myself that it was all a misunderstanding and meekly return home...?

words ain't gonna bring me back, sweetie... trust me...

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We are dealing with shameless demagogy - the financial End Time has arrived

michael hudson in counterpunch via alternet...

We are dealing with shameless demagogy. The financial End Time has arrived, but Mr. Obama’s happy-talk pretends that “two years” will get us through the current debt-induced depression. The Republican plan is to make more Congressional and Senate gains in 2012 as Mr. Obama’s former supporters “vote with their backsides” and stay home, as they did earlier this month. So “two years” means forever in politician-talk. Why vote for a politician who promises “change” but is merely an exclamation mark for the Bush-Cheney policies from Afghanistan and Iraq to Wall Street’s Democratic Leadership Council on the party’s right wing? One of its leaders, after all, was Mr. Obama’s Senate mentor, Joe Lieberman.

The second pretense is that cutting taxes for the super-rich is necessary to win Republican support for including the middle class in the tax cuts. It is as if the Democrats never won a plurality in Congress. (One remembers George W. Bush with his mere 50+%, pushing forward his extremist policies on the logic that: “I’ve got capital, and I’m using it.” What he had, of course, was Democratic Leadership Committee support.) The pretense is “to create jobs,” evidently to be headed by employment of shipyard workers to build yachts for the nouveau riches and sheriff’s deputies to foreclose on the ten million Americans whose mortgage payments have fallen into arrears.

hudson engages in a re-naming exercise that is sadly appropriate...

The National Commission on Fiscal Responsibility and Reform might better be called the New Class War Commission to Scale Back Social Security and Medicare Payments to Labor in Order to Leave more Tax Revenue Available to Give Away to the Super-Rich.

and sums up the situation in a most sobering fashion...

Mr. Obama’s appointees are turning the U.S. economy into a Permanent Emergency, a Perpetual Ponzi Scheme requiring injections of more and more Quantitative Easing to to rescue “the economy” (Mr. Obama’s euphemism for creditors at the top of the economic pyramid) from being pushed into insolvency. Mr. Bernanke’s helicopter flies only over Wall Street. It does not drop monetary relief on the population at large.

naturally, being a u.s. citizen, i am focused more on what's happening in my own country... however, as someone who also spends a great deal of time outside the u.s., i can state with certainty that this same scenario - the super-rich elites looting every last molecule of the world's natural and financial resources - is being played out in every country i have had the pleasure of visiting...

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The core driver of modern capitalist society is fraud... Someone has to go to jail...

from tyler durden at zero hedge...

The evident conclusion is that the core driver of modern capitalist society is fraud at its very core, and nothing short of a massive revolutionary overhaul of the political system, which is the number one defender of the status quo courtesy of very lucrative bribes and kickbacks originating from the same rotten Wall Street that day after day is uncovered to be nothing but a sham filled with toxic assets, used to collateralize an ever growing wall of liquidity (think you Bernanke).

dylan ratigan talks with eliot spitzer on msnbc about lehman brothers...

dylan ratigan...

This report comes just short of suggesting this is by no means an accident but instead one of the greatest crimes ever perpetrated by a group of people, and enabled by the US government.

eliot spitzer...

There is no doubt civil cases will be brought. We had a failure of CEO, the CFO, the accountants, and indeed the regulators, the Fed and the Treasury, that were inside these banks, and the question has to be asked: where were they.

ratigan and spitzer make a very clear case in very simple language that there has been a massive con perpetrated on the american people... intuitively,we knew this was happening and it's high time the truth comes out...

Visit msnbc.com for breaking news, world news, and news about the economy

mike whitney at the smirking chimp via alternet...

This story isn't going away. Someone has to go to jail. It's clear that Geithner acted as the "chief facilitator" of industrial scale securities flim-flam which led directly to the Great Crash of '08. He needs to be held accountable for his actions.

the united states has been bending to the greedy scams of its super-rich elites and their bankster buddies for a long, long time... let's get this party going and start seeing some rule of law and accountability...

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Spitzer: The Rx has been wrong from the beginning

and THIS, dear friends, is precisely WHY spitzer had to be taken out...

eliot spitzer in an interview on democracy now...

[I]t wasn’t that the Fed was asleep at the switch; they were actually complicit. And by that, what I mean is that the Chairman, Ben Bernanke, and Tim Geithner, when he was the president of the New York Fed, actually built and participated in creating the structure that now has collapsed. And that, I think, is what is so problematic to so many of us. They are now claiming credit for having taken trillions of our tax dollars and given those dollars back to the banks to return them to solvency, when the initial bankruptcy and the initial illiquidity and the initial crisis was very much a consequence of the very policies they put in place.

Stepping back for a moment, we have a major crisis in this nation, and that crisis is jobs. That crisis is that we are seeing the elimination of the middle-class job foundation that permits most Americans to do better year after year after year. The reality is median family income has been stagnant for forty years, and the policies of what I call financialization, which is major banks trading assets back and forth, the Wall Street banks, such as Goldman, which is rightly a lightning rod right now for much of what’s going on, buying and selling, playing with tax dollars in proprietary trading—they make huge money, nothing is added to the economy, jobs are sent overseas. All of this going on simultaneously. That is what our economy has become.

And Ben Bernanke and Tim Geithner were the architects of this. And now they are saying, “Didn’t we do a good job six months ago giving money to the banks?” No. Go back two, three, five years. Where were they? Tim Geithner, over and over, bailed out the banks. He was, as president of the New York Fed, the overseer of the institution that collapsed. And so, it’s akin to going to a doctor who has said, “I have a great technique for you: I’m going to bleed you,” and he bleeds you, and he gets you more and more sick and sick and sick. Then when you’re about to die, he puts a tourniquet on you and says, “Gee, I’m good.” No, your prescriptions have been wrong since the beginning.

you simply CAN'T have a truth-teller in a position of power, not in this country, not at this time...

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Free and benefit screenings of Michael Moore's film...? AWESOME...!

god, i LOVE it when somebody's so committed they will shell out not only for what they believe it but also to directly reach some of the folks that might never have the chance to experience a documentary that's all about THEM...

"CAPITALISM: A LOVE STORY" FREE SCREENINGS:

Las Vegas, Nevada
Thursday, Oct. 1st, 7:00 p.m.
Cinemark Orleans
4600 W Tropicana Blvd.
Las Vegas, NV 89103

Phoenix, Arizona
Thursday, Oct.1st, 7:00 p.m.
Harkins Christown
1620 W Monte Bello
Phoenix, AZ 85015

Fresno, California
Thursday, Oct. 1st, 7:30 p.m.
Edwards Stadium
250 Paseo Del Centro
Fresno, CA 93720

Saginaw, Michigan
Thursday, Oct. 1st, 7:00 p.m.
Goodrich Saginaw 8 Theater
3250 Kabobel Dr.
Saginaw, MI 48604

Raleigh/Durham, North Carolina
Thursday, Oct. 1st, 7:30 p.m.
Regal North Hills Stadium 14
4150 Main at North Hills St.
Raleigh, NC 27609

Tampa / St. Petersburg, Florida
Thursday, Oct. 1st, 7:30 p.m.
Muvico Starlight
1800 Highwood Preserve Parkway
Tampa, FL 33647

Elkhart, Indiana
Thursday, Oct. 1st, 7:00 p.m.
Carmike Encore Park 14
2701 Cassopolis Street
Elkhart, IN 46514

Baltimore, Maryland
Thursday, October 1st, 7:30 p.m.
The Charles Theatre
1711 North Charles Street
Baltimore, MD 21201

Cleveland, Ohio Thursday, Oct. 1st, 7:30 p.m.
AMC Westwood Town Center
21653 Center Ridge Road
Rocky River, OH 44116

Peoria, Illinois
Thursday, Oct. 1st, 7:00PM
Willow Knolls 14 Theatre
4100 W Willow Knolls Drive
Peoria, IL 61615

"CAPITALISM: A LOVE STORY" BENEFIT SCREENINGS:

Miami, Florida
Thursday, Oct. 1st, 7:30 p.m.
Sunrise Intracoastal
3701 NE 163rd Street
North Miami Beach, FL 33160
Benefiting: Take Back the Land

Madison, Wisconsin
Thursday, October 1st, 7:00 p.m.
Sundance Cinemas 608
430 N. Midvale Blvd.
Madison, WI 53705
Benefiting: Madison Association of Worker Cooperatives / Union Cab / Isthmus Engineering

San Francisco, California
Thursday, Oct. 1st, 7:30 p.m.
Embarcadero Center Cinema
One Embarcadero Center, Promenade
San Francisco, CA 94111
Benefiting: US Federation of Worker Cooperatives

Chicago, Illinois
Thursday, Oct. 1st, 8:00 p.m.
Kerasotes City North
2600 N. Western Ave.
Chicago, IL 60647
Benefiting: United Electrical, Radio and Machine Workers of America

Grass Valley, California
Thursday, Oct. 1st, 7:30 p.m.
Del Oro Theatre
165 Mill Street
Grass Valley, CA 95945
Benefiting: KVMR-FM

Boulder, Colo. (past screening)
Tuesday, Sept. 29th, 8:00 p.m.
Boulder Theater
2032 14th Street.
Boulder, CO 80302
Benefiting: Present Tense Films

here's moore talking about why he's doing this...

To kick off the national release of "Capitalism: A Love Story," I've asked the studio to offer a number of screenings in the nation's hardest hit cities -- the ones with the highest unemployment rates and highest foreclosure rates -- where those who've lost their jobs or who are in foreclosure (or have already been evicted) may attend my film free of charge. They've agreed, and so tonight (Thursday), the night before our opening day, ten cities will grant you free admission if you have fallen on hard times. The list of theaters and cities is below. You don't need to bring any "proof" of your situation -- just show up -- it's the honor system, no questions asked.

Of course, a free movie ain't much when what you really need is a job or a place to live. And that's not going to change until the party that controls both the Congress and the White House wakes up and realizes the American people put them in charge to fix the mess created by the previous administration. For that to happen requires the active involvement of each of us. And, as I show in this movie, it's going to also require us to challenge some fundamental assumptions about an economic system that currently allows the wealthiest ONE PERCENT in this country to have more financial wealth than the bottom 95% combined. That concentration of money and power in the hands of so few people is, I believe, at the core of so many of our problems.

So, if you're going through tough times and you live in one of the areas below, please be my guest tonight, on the eve of my new film's opening. Seating will be on a first come, first served basis.

Also, in another five cities tonight, I have made the film available to local groups to hold benefit screenings to raise money for their local organizations -- organizations which are working toward a day when a filmmaker doesn't have to offer free screenings to people who've been put through the wringer. If you live in any of these areas (see below for the list of benefit premieres tonight), please come out and support the good work of these grassroots groups.

you go, michael moore...!

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Michael Moore on his latest movie

i won't have a chance to see this until i get back to the u.s. in late november but i think i need to put it on my "must-see" list...

moore on "capitalism: a love story"...

I'm gonna show you the stuff the nightly news will rarely show you. Ever meet a pilot for American Airlines on food stamps because his pay's been cut so low? Ever meet a judge who gets kickbacks for sending innocent kids to a private prison? Ever meet someone from the Wall Street Journal who bluntly states on camera that he doesn't much care for democracy and that capitalism should be our only ruling concern?

You'll meet all these guys in "Capitalism." You'll also meet a whistleblower who, with documents in hand, tells us about the million-dollar-plus sweetheart loans he approved for the head of Senate Banking Committee -- the very committee that was supposed to be regulating his lending institution! You'll hear from a bank regulator why Timothy Geithner has no business being our Treasury Secretary. And you'll learn, from the woman who heads up the congressional commission charged with keeping an eye on the bailout money, how Alan Greenspan & Co. schemed and connived the public into putting up their inflated valued homes as collateral -- thus causing the biggest foreclosure epidemic in our history.

There is now a foreclosure filed in the U.S. once every seven-and-half SECONDS.

None of this is an accident, and I name the names others seem to be afraid to name, the men who have ransacked the pensions of working people and plundered the future of our kids and grandkids. Somehow they thought they were going to get away with this, that we'd believe their Big Lie that this crash was caused by a bunch of low-income people who took out loans they couldn't afford. Much of the mainstream media bought this storyline. No wonder Wall Street thought they could pull this off.

Jeez, I guess they forgot about me and my crew. You'd think we would've made a better impression on these wealthy thieves by now. Guess not.

i seriously doubt if there's going to be one thing that will bring down the house of horrors we've been living in for so many years that our handlers are so massively invested in propping up, but each hammer blow - and several of those blows have been delivered at michael moore's hands - is just one more crack at toppling the walls...

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Three big banks now hold $3 of every $10 on deposit in the U.S. while the little fish continue to die off

the "too big to fail" banks are, gosh and golly sports fans, now even BIGGER thanks to the strategy pursued by those who supposedly have the common good of the citizenry at heart... HA...!

check the stats in the last paragraph...

When the credit crisis struck last year, federal regulators pumped tens of billions of dollars into the nation's leading financial institutions because the banks were so big that officials feared their failure would ruin the entire financial system.

The crisis may be turning out very well for many of the behemoths that dominate U.S. finance. A series of federally arranged mergers safely landed troubled banks on the decks of more stable firms. And it allowed the survivors to emerge from the turmoil with strengthened market positions, giving them even greater control over consumer lending and more potential to profit.

J.P. Morgan Chase, an amalgam of some of Wall Street's most storied institutions, now holds more than $1 of every $10 on deposit in this country. So does Bank of America, scarred by its acquisition of Merrill Lynch and partly government-owned as a result of the crisis, as does Wells Fargo, the biggest West Coast bank. Those three banks, plus government-rescued and -owned Citigroup, now issue one of every two mortgages and about two of every three credit cards, federal data show.

leapin' lizards, batman...! that essentially means that you and i are now officially wholly-owned subsidiaries of the banksters...

meanwhile, the smaller fish continue to die off...

Regulators seized 45 firms during the first half of the year. In the past two months they have closed 36 more, including regional powerhouses Colonial Bank of Alabama and Guaranty Bank of Texas. The FDIC said Thursday that it counted 416 banks at risk of failing as of the end of June, a 36 percent increase from the first quarter. As with the cost of failures, the number was the highest since the early 1990s, when regulators were dealing with the aftermath of the savings and loan crisis and excessive lending for commercial development.

In recent quarters, the failures have forced the FDIC to spend more money than it collects. Banks use money from depositors to make loans. As a result, when a bank fails, much of the depositors' money is no longer in the vaults, and some of it is tied up in loans that will never be repaid. The FDIC was created by Congress to replace the missing money -- up to $250,000 in each account, under current rules.

The insurance fund held $45.2 billion at the end of June 2008. It held $13 billion at the end of March. The agency has warned that the balance could reach zero by the end of the year.

oh, but never fear... between you and i and our deep pockets, the treasury can always print more money to hand out...

Should the FDIC need even more money, the agency can borrow from the Treasury Department, then repay the government with fees collected from banks in years to come.

and what about the economic recovery that all the punditocracy is crowing about...? not so much...

[I]n an indication that the industry has not turned the corner, the share of troubled loans increased even more quickly. A trend that began with distressed mortgage lending has long since spread to other categories including credit card lending, loans to small businesses, and -- now deteriorating most rapidly -- loans for commercial real estate development.

kinda warms your heart, doesn't it...? in the mad dash of our controllers and handlers to preserve the status quo - the status quo of the super-rich and powerful elites, that is - we've ended up not only preserving the status quo, we've significantly bolstered it... heckuva job, tim... heckuva job, ben... heckuva job, larry... heckuva job, hank...

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When stocks rise on Wall Street, how does that benefit the average schmoe struggling with unemployment?

it doesn't...

Wall St rises on resources, banks, data

U.S. stocks extended gains on Monday, pushing major indexes up 1 percent as investors snapped up shares of natural resource companies and banks after fresh data pointed to signs of economic stabilization.

before we look at unemployment, let's look at what's happening with rental and homeowner vacancy rates...

In Kansas City, rental vacancy rates rose from 11.9% to 15% over the past year; homeowner vacancy rates nearly doubled, up from 2.1% to 3.8%. Comparatively, the average homeowner vacancy rate in the country's 75 largest metro areas improved slightly from 3% to 2.7%, while the rental vacancy rate edged up to 10.2% from 10% a year ago.

Kansas City isn't the only metro where rental and homeowner vacancy rates are rising in tandem. Second on our list is the San Francisco-Oakland metro, where high prices are pushing Bay Area residents out of the region. Third is Tucson, Ariz., where the aftermath of the housing boom has left a glut of inventory. The pair's predicament illustrates both sides of the vacancy coin.

[...]

Miami, which ranks No. 8, owns a whopping 12.7% rental vacancy rate, up from 11.4% a year ago; residential towers built in the final stages of the boom now stand as empty monuments to an over-hyped market downtown. Homeowner vacancy stands at 5.6%, up from 3.8% last year, thanks mostly to a spate of foreclosures. According to Trulia.com, 40% of the homes available in Miami's city limits are foreclosures.

now, how about that unemployment...

The U.S. unemployment rate may not peak until the second half of 2010, even as the broader economy shows signs of improvement, U.S. Treasury Secretary Timothy Geithner said.

[...]

Lawrence Summers, director of the White House National Economic Council, said that while the economy will resume growth in the second half of the year, the job picture “will be serious for some time to come.”

and what's going to make things all better...?

Much of the economic recovery will depend on the housing market, [former Fed Chairman Alan] Greenspan said.

oh, well then...

note to you average schmoes struggling with unemployment... the tradesters and banksters may be kissing the recession goodbye but, for the time being, you can kiss your ass goodbye...

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Is this maybe why Spitzer was set up for a fall...?

spitzer seems to be talking pretty straight to me, something that was certainly not a quality that endeared him to the powerful moneyed elites who saw to it that he went down...

here he's talking about the federal reserve bank of new york in slate magazine...

[I]s it any wonder that the N.Y. Fed has been complicit in the single greatest bailout of poorly managed banks in history? Any wonder that it has given—with virtually no strings attached—practically the entire contents of the Treasury to the very banks whose inability to manage risk has brought our economy to its knees? Any wonder that not a single CEO or senior executive of a major bank has been removed as a condition of hundreds of billions of direct cash and guarantees? Any wonder that, despite its fundamental responsibility to preserve the integrity of the banking system, it sat quietly on the sidelines as the leverage beneath the banks exploded and the capital underlying their investments shrank?

I do not mean to suggest that any of these board members intentionally discharged their duties with the specific goal of benefitting themselves. Rather, what we have seen is disastrous groupthink, a way of looking at the world from the perspective of Wall Street and Wall Street alone. That failure has brought the world economy to the edge of unraveling. And some of Geithner's early missteps betrayed an inability to get beyond this tunnel vision, such as the idea that the banks need to be first in line to be paid and to be paid in full. We can only hope that Geithner, who, to his credit, did try to raise some of the regulatory issues that mattered while he was at the Fed, is no longer in the mental prison of Lower Manhattan and will have more success now that he has a board of one—President Obama.

Perhaps it is time to calculate what these board members have been paid by their banks in salary and bonuses over the years and seek to have them return it to the public as small compensation for their failed oversight of the N.Y. Fed. And more fundamentally, perhaps it is time to take a hard look at the governing structure and supposed independence of this institution that actually controls the use of our tax dollars and, heaven help us, the fate of our economy.

it's not only time, it's way, way, WAY past time...

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Summers, Paulson, Rubin, Geithner, Bernanke, Liddy, and Blankfein are schizoid

chris hedges, writing on truthdig via alternet...

Our elites are imploding. Their fraud and corruption are slowly being exposed as the disparity between their words and our reality becomes wider and more apparent. The rage that is bubbling up across the country will have to be countered by the elite with less subtle forms of control. But unless we grasp the "societal play of forces that operates beneath the surface of political forms" we will be cursed with a more ruthless form of corporate power, one that does away with artifice and the seduction of a consumer society and instead wields power through naked repression.

[...]

"The idea that virility consists in the maximum degree of endurance long ago became a screen-image for masochism that, as psychology has demonstrated, aligns itself all too easily with sadism." [Theodor Adorno, "Education After Auschwitz"]

Sadism is as much a part of popular culture as it is of corporate culture. It dominates pornography, runs like an electric current through reality television and trash-talk programs and is at the core of the compliant, corporate collective. Corporatism is about crushing the capacity for moral choice. And it has its logical fruition in Abu Ghraib, the wars in Iraq and Afghanistan and our lack of compassion for the homeless, our poor, the mentally ill, the unemployed and the sick.

[...]

The corporate state holds up as our ideal what Adorno called "the manipulative character." The manipulative character has superb organizational skills and the inability to have authentic human experiences. He or she is an emotional cripple and driven by an overvalued realism. The manipulative character is a systems manager. He or she exclusively trained to sustain the corporate structure, which is why our elites are wasting mind-blowing amounts of our money on corporations like Goldman Sachs and AIG. "He makes a cult of action, activity, of so-called efficiency as such which reappears in the advertising image of the active person," Adorno wrote of this personality type. These manipulative characters, people like Lawrence Summers, Henry Paulson, Robert Rubin, Ben Bernanke, Timothy Geithner, AIG's Edward Liddy and Goldman Sachs CEO Lloyd Blankfein, along with most of our ruling class, have used corporate money and power to determine the narrow parameters of the debate in our classrooms, on the airwaves and in the halls of Congress while they looted the country.

"It is especially difficult to fight against it," warned Adorno, "because those manipulative people, who actually are incapable of true experience, for that very reason manifest an unresponsiveness that associates them with certain mentally ill or psychotic characters, namely schizoids."

interesting... i've had a lifelong aversion to corporate types of the sort that adorno describes, for most of the same reasons he outlines... i've found most of them to be the sort of people that i simply wouldn't consider having as friends...

in addition, i've noticed that there's an entire sub-category of such individuals i would characterize as " 'manipulative character' wannabes"... these are the people who set out to be the summers, paulson, rubin, geithner types but couldn't quite cut it... you can seem them walking the corridors of organizations everywhere, semi-brain dead, but still pledging fealty to the system that rejected them...

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What is likely to happen under the Geithner plan and what should be considered instead

informed insight and a set of reasonable (although undoubtedly bald-faced heresy to the banksters and super-rich elites) proposals...

james galbraith in washington monthly via alternet...

The most likely scenario, should the Geithner plan go through, is a combination of looting, fraud, and a renewed speculation in volatile commodity markets such as oil. Ultimately the losses fall on the public anyway, since deposits are largely insured. There is no chance that the banks will simply resume normal long-term lending. To whom would they lend? For what? Against what collateral? And if banks are recapitalized without changing their management, why should we expect them to change the behavior that caused the insolvency in the first place?

The oddest thing about the Geithner program is its failure to act as though the financial crisis is a true crisis -- an integrated, long-term economic threat -- rather than merely a couple of related but temporary problems, one in banking and the other in jobs. In banking, the dominant metaphor is of plumbing: there is a blockage to be cleared. Take a plunger to the toxic assets, it is said, and credit conditions will return to normal. This, then, will make the recession essentially normal, validating the stimulus package. Solve these two problems, and the crisis will end. That's the thinking.

But the plumbing metaphor is misleading. Credit is not a flow. It is not something that can be forced downstream by clearing a pipe. Credit is a contract. It requires a borrower as well as a lender, a customer as well as a bank. And the borrower must meet two conditions. One is creditworthiness, meaning a secure income and, usually, a house with equity in it. Asset prices therefore matter. With a chronic oversupply of houses, prices fall, collateral disappears, and even if borrowers are willing they can't qualify for loans. The other requirement is a willingness to borrow, motivated by what Keynes called the "animal spirits" of entrepreneurial enthusiasm. In a slump, such optimism is scarce. Even if people have collateral, they want the security of cash. And it is precisely because they want cash that they will not deplete their reserves by plunking down a payment on a new car.

The credit flow metaphor implies that people came flocking to the new-car showrooms last November and were turned away because there were no loans to be had. This is not true -- what happened was that people stopped coming in. And they stopped coming in because, suddenly, they felt poor.

Strapped and afraid, people want to be in cash. This is what economists call the liquidity trap. And it gets worse: in these conditions, the normal estimates for multipliers -- the bang for the buck -- may be too high. Government spending on goods and services always increases total spending directly; a dollar of public spending is a dollar of GDP. But if the workers simply save their extra income, or use it to pay debt, that's the end of the line: there is no further effect. For tax cuts (especially for the middle class and up), the new funds are mostly saved or used to pay down debt. Debt reduction may help lay a foundation for better times later on, but it doesn't help now. With smaller multipliers, the public spending package would need to be even larger, in order to fill in all the holes in total demand. Thus financial crisis makes the real crisis worse, and the failure of the bank plan practically assures that the stimulus also will be too small.

In short, if we are in a true collapse of finance, our models will not serve.

[...]

That being so, what must now be done? The first thing we need, in the wake of the recovery bill, is more recovery bills. The next efforts should be larger, reflecting the true scale of the emergency. There should be open-ended support for state and local governments, public utilities, transit authorities, public hospitals, schools, and universities for the duration, and generous support for public capital investment in the short and long term. To the extent possible, all the resources being released from the private residential and commercial construction industries should be absorbed into public building projects. There should be comprehensive foreclosure relief, through a moratorium followed by restructuring or by conversion-to-rental, except in cases of speculative investment and borrower fraud.

[...]

Second, we should offset the violent drop in the wealth of the elderly population as a whole. ... For an increasing number of the elderly, Social Security and Medicare wealth are all they have.

That means that the entitlement reformers have it backward: instead of cutting Social Security benefits, we should increase them, especially for those at the bottom of the benefit scale. Indeed, in this crisis, precisely because it is universal and efficient, Social Security is an economic recovery ace in the hole. Increasing benefits is a simple, direct, progressive, and highly efficient way to prevent poverty and sustain purchasing power for this vulnerable population. I would also argue for lowering the age of eligibility for Medicare to (say) fifty-five, to permit workers to retire earlier and to free firms from the burden of managing health plans for older workers.

[...]

Third, we will soon need a jobs program to put the unemployed to work quickly. Infrastructure spending can help, but major building projects can take years to gear up, and they can, for the most part, provide jobs only for those who have the requisite skills. So the federal government should sponsor projects that employ people to do what they do best, including art, letters, drama, dance, music, scientific research, teaching, conservation, and the nonprofit sector, including community organizing -- why not?

Finally, a payroll tax holiday would help restore the purchasing power of working families, as well as make it easier for employers to keep them on the payroll. This is a particularly potent suggestion, because it is large and immediate. And if growth resumes rapidly, it can also be scaled back. There is no error in doing too much that cannot easily be repaired, by doing a bit less.

oh, and about those banksters and super-rich elites...

As these measures take effect, the government must take control of insolvent banks, however large, and get on with the business of reorganizing, re-regulating, decapitating, and recapitalizing them. Depositors should be insured fully to prevent runs, and private risk capital (common and preferred equity and subordinated debt) should take the first loss. Effective compensation limits should be enforced -- it is a good thing that they will encourage those at the top to retire.

good riddance, i say...

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O.H.! M.Y.! G.O.D.! What fresh Geithner hell is this...?

now we're offering FINANCING TO PURCHASE TRASH...? please make the bad man stop...!!

U.S. offers financing to woo buyers of toxic assets

The United States offered on Monday financing for private investors to help cleanse banks of up to $1 trillion in toxic assets that are blocking lending and worsening a deep U.S. recession.

Markets rallied on the news, in contrast to a disappointed reaction last month to the bare outline of Treasury Secretary Timothy Geithner's proposed public-private partnerships.

Questions remained about how the toxic assets would be priced and the stakes are high for Geithner as he seeks to convince investors he has a viable plan to get credit flowing again.

check the following quotes to which i have added my own emphasis...

"If the U.S. authorities actually succeed in buying up to $1 trillion of 'toxic assets', it would be considered a significant step," said Mamoru Yamazaki, chief economist with RBS Securities in Tokyo.

"However, the markets will be disappointed if the programs do not move forward due to problems regarding how the asset value is measured."

translation: "if the assets are valued correctly, they'll be worthless and, since everybody ALREADY knows they're worthless, if they're over-valued, nobody's going to touch the shitpile anyway...

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Michael Parenti on global financiers' view of the current U.S. economy: "We've destroyed the social democracy"

i've said all along that the goal of the super-rich elites was to completely gut any semblance of social contract, whether it be in the u.s. or anywhere else in the world, and, for the most part, they've done a damn good job...

In 1978, a number of these financiers came out and said, “This country is just heading for a social democracy, and we don’t want that.” I mean, they used the term “social democracy.” They’re aware of these things. A few months ago in The New Yorker, there was an article about how Republicans had a loss for issues, and one of them said, “Well, the reason we’re at a loss is because we’ve accomplished all we wanted to. We’ve destroyed the social democracy.” And that’s their goal.

And if you listen to them now, I mean, it’s fascinating and outrageous. They’re talking about doing nothing, just putting a cap on all spending, that the market is in a stage of correction. They use terms like “correction” or “adjustment.” They don’t mind recessions. Recessions are fine. It allows them to buy up smaller companies at bargain prices. It disciplines labor. It humiliates and beats back people. And this, I think, is what we’re facing. And I’m infuriated by the Republicans in the Congress and the way they’re going at this. The only passion they show is to protect the tax cuts for the super rich. That seems to be the only interest they have.

[...]

Well, I argue that one of the functions of a capitalist state is to defend capitalism from itself, to defend capitalism from the capitalists. It was Marx—dare we mention him? I hear he’s coming back in style. It was Marx who said one capitalist will kill many other capitalists, that the system begins to consume itself. We see that with Bernard Madoff and the like.

And it’s not merely because of a number of wicked personalities, because these personalities are brought to the fore. Those are the people who get the rewards. Those are the people who—yes, and what we need are drastic sets of regulations, and there hasn’t been enough talk. We just got a vague reference to it here, Geithner referencing and saying, well, it’s going to be a little bit of a different camp, a little more responsible, accountable maybe. But as far as actual regulations, we haven’t seen it.

The free market does not work. It’s not free. It’s not really a market; it’s a plunder. And it has to be done away with.

i completely agree...

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An excellent question from Think Progress

Why Are AIG’s Contracts Sacrosanct But Not Union Workers’ Contracts?

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Obama stirs from his stupor and slaps Geithner's hand

and about fucking time too...

President Obama vowed to try to stop the faltering insurance giant American International Group from paying out hundreds of millions of dollars in bonuses to executives, as the administration scrambled to avert a populist backlash against banks and Wall Street that could complicate Mr. Obama’s economic recovery agenda.

“In the last six months, A.I.G. has received substantial sums from the U.S. Treasury,” Mr. Obama said. He added that he had asked Treasury Secretary Timothy F. Geithner “to use that leverage and pursue every single legal avenue to block these bonuses and make the American taxpayers whole.”

"populist backlash" is putting it mildly... i think obama had a vision of people with torches, rakes, and hoes storming the white house... also, "trying to stop" ain't good enough... in 12-step language, "trying" is "lying"...

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Bailouts to pay AIG bonuses...? This shit must cease...!

"...the firm is contractually obligated to pay them..."

hello...? a case can be made under legal precedent that the conditions that necessitated an unprecedented $170B bailout in the first place also create the conditions under which such contracts can be voided...

A.I.G. Planning Huge Bonuses After $170 Billion Bailout

The American International Group, which has received more than $170 billion in taxpayer bailout money from the Treasury and Federal Reserve, plans to pay about $165 million in bonuses by Sunday to executives in the same business unit that brought the company to the brink of collapse last year.

Word of the bonuses last week stirred such deep consternation inside the Obama administration that Treasury Secretary Timothy F. Geithner told the firm they were unacceptable and demanded they be renegotiated, a senior administration official said. But the bonuses will go forward because lawyers said the firm was contractually obligated to pay them.

The payments to A.I.G.’s financial products unit are in addition to $121 million in previously scheduled bonuses for the company’s senior executives and 6,400 employees across the sprawling corporation. Mr. Geithner last week pressured A.I.G. to cut the $9.6 million going to the top 50 executives in half and tie the rest to performance.

what a bunch of crap...

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THIRD bailout for Citi - how disgusting is this...?

why don't they skip the middleman and just deposit the cash directly into the bank accounts of the board members and the senior executives... this smoke and mirrors shit is enough to gag a maggot...

The Treasury Department reached a deal late Thursday to take a stake of 30 to 40 percent in Citigroup as part of a third bailout of the embattled bank, according to several people close to the deal.

Vikram S. Pandit, the chief executive, will remain at the helm, but Citigroup will have to shake up its board so that it has a majority of independent directors, a move that federal regulators had already been pursuing.

Under the terms of the deal, the Treasury Department has agreed to convert up to $25 billion of its preferred stock investment in Citigroup into common stock.

It will convert its stake to the extent that Citigroup can persuade private investors, including several big foreign government investment funds, to do so alongside the government, two people close to the deal said.

The Treasury Department will match the private investors’ conversions dollar-for-dollar. That accounts for uncertainty in how big the government’s stake will be.

mish offers his usually trenchant perceptions on this travesty...

With all due respect Mr. President, Tim Geithner and Ben Bernanke are offering the same policies as President Bush and Secretary Paulson. Those policies are to bail out banks regardless of cost to taxpayers. Mr. President, it's hard enough to overlook Geithner's tax indiscretions. Mr. President, it is harder still, if not impossible, to ignore the fact that neither Geithner nor Bernanke saw this coming. Yet amazingly they are both cock sure of the solution. Even more amazing is the fact that [the] solution changes every day.

With all due respect Mr. President, Geithner and Bernanke are a huge part of the problem, and no part of the solution and the sooner you realize that the better off this nation will be

[...]

With all due respect Mr. President, you and Congress want to force banks to lend when banks (by not lending) are acting responsibly for the first time in a decade. Mr, President can you please tell us who banks are supposed to lend to? Do we need any more Home Depots? Pizza Huts? Strip malls? Nail salons? Auto dealerships? What Mr. President? What? And why should banks be lending when unemployment is rising and lending risks right along with it?

not much i can add to that...

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