May 252011

Too Big To Jail?

Yes, of course, I watched with envy and admiration at HBO’s ability to craft a big budget star-studded, well-acted and dramatic dramatization of the weekend the US economy almost went kaput. They call it “,.”

It was a brilliant and engrossing docudrama focused on the BIG Men and some women in the banks and in government who tried to put Humpty Dumpty together again back up on the wall to prevent a total economic collapse. Based on the work of a New York Times reporter, it offered a skillfully-made narrative which, like most TV shows, showcased events but missed their deeper context and background.

We heard all the explanations, save one.

There was greed, ambition, ego and money lust. There were personal rivalries and ideological battles, parochial agendas and narrow self-interest. There was panic on the Street and in the halls of the mighty, In many ways, the program recycled and made the official narrative compelling viewing. BUT … what was missing was CRIME, that one word that sums up what really happened for those millions of Americans who have lost jobs and homes. Notice we never saw them or felt their pain and bewilderment. We were never shown how a shadow banking system emerged or how the finance industry worked with their counterparts in finance and insurance to transfer wealth from the poor and middle class to the superrich.

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Feb 112011

A myth has arisen that true conservatives are pro-war, and only “weak-kneed liberals” are anti-war.

The truth is very different, however.

For example, Ron Paul has very strong conservative credentials. Paul won the Presidential straw poll at the Conservative Political Action Conference last year. And yet Paul has repeatedly spoken out against the war in Iraq and all other unnecessary wars. See this and this.

Paul points out that the Founding Fathers disliked foreign intervention, and those who advocate military adventurism are imperialists … not conservative Americans.

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Dec 102010

Alan Greenspan, William Black, James Galbraith, Joseph Stiglitz, George Akerlof, Chris Whalen and many other economists and financial experts all say that the economy cannot truly recover unless those who committed fraud are prosecuted.

So we should be ecstatic that the Justice system is finally prosecuting fraud, right?

As the Washington Post notes:

At a news conference headlined by Attorney General Eric H. Holder, authorities unveiled “Operation Broken Trust,” a collection of unrelated criminal and civil cases involving Ponzi schemes, foreign currency frauds, investment scams and other market cons.

The announcement drew attention to President Obama’s Financial Fraud Enforcement Task Force, a group of agencies working to hold accountable people and companies accused of financial wrongdoing during difficult economic times. The task force has struggled to pursue high-profile prosecutions connected to the financial crisis of 2007-09.

Authorities said the operation involved 343 defendants facing criminal charges and 189 facing civil charges, though some will be counted in both categories. The cases represent more than $8.3 billion in investor losses and 120,000 victims.


“With this operation, the Financial Fraud Enforcement Task Force is sending a strong message,” Holder said. “To anyone operating or attempting to operate an investment scam: Cheating investors out of their earnings and savings is no longer a safe business plan. We will use every tool at our disposal to find you, to stop you and to bring you to justice.”

The schemes often targeted communities, churchgoers and the vulnerable, including the elderly, a blind man and the bereaved family of a recently deceased man, Holder and other law enforcement officials said.

That may sound impressive at first.

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Nov 132010

In case it’s not crystal clear, this isn’t the “Great Recession”.

It's really the Great Bank Robbery.

First, there was the threat of martial law if the $700 Billion Tarp bailout wasn’t passed. Specifically, Treasury Secretary Hank Paulson warned Congress that there would be martial law unless the Tarp bailouts were approved.

As I pointed out last October:

The New York Times wrote on July 16th:

In retrospect, Congress felt bullied by Mr. Paulson last year. Many of them fervently believed they should not prop up the banks that had led us to this crisis — yet they were pushed by Mr. Paulson and Mr. Bernanke into passing the $700 billion TARP, which was then used to bail out those very banks.

Congressmen Brad Sherman and Paul Kanjorski and Senator James Inhofe all say that the government warned of martial law if Tarp wasn’t passed:

Bait And Switch

Indeed, the Tarp Inspector General has said that Paulson misrepresented some fundamental aspects of Tarp.

And Paulson himself has said:

During the two weeks that Congress considered the [Tarp] legislation, market conditions worsened considerably. It was clear to me by the time the bill was signed on October 3rd that we needed to act quickly and forcefully, and that purchasing troubled assets—our initial focus—would take time to implement and would not be sufficient given the severity of the problem. In consultation with the Federal Reserve, I determined that the most timely, effective step to improve credit market conditions was to strengthen bank balance sheets quickly through direct purchases of equity in banks.

So Paulson knew "by the time the bill was signed" that it wouldn't be used for its advertised purpose - disposing of toxic assets - and would instead be used to give money directly to the big banks?

And see this and this.

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Nov 082010

Squeak, squeak.

So, we’ve made it through another election. Obama euphoria is gone, and control of the House of Representatives has gone to the opposition wing of the uniparty. The deficit-spenders and high taxers have been partly displaced by the cutters.

Or that’s what we’re supposed to believe. What can we expect?

To listen to the generalities of those who will take over one half the legislative branch in January, you might expect attempts at massive spending cuts — massive enough that the deficit will shrink dramatically despite the big tax cuts they also say they have in mind.

We should be so fortunate. But there’s reason for skepticism. When pressed for details, the opposition’s message is underwhelming. In interviews election night several members of the opposition did little more than pledge an across-the-board cut in discretionary spending.

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Nov 012010

The judicial fall out from the health care has begun. A federal judge in Michigan has ruled the Obamacare legislation, which forces individuals by Congressional mandate to purchase health care, Constitutional:

President Barack Obama won the first round in the legal battle over the healthcare reform act after a federal judge in Michigan ruled that the law’s “individual mandate” requiring people to buy health insurance is constitutional.

But Judge George Steeh ruled that “the Commerce Clause affords Congress broad power to regulate even purely local matters that have substantial economic effects,” finding that “by choosing to forgo insurance plaintiffs are making an economic decision to try to pay for healthcare services later, out of pocket, rather than now through the purchase of insurance, collectively shifting billions of dollars, $43 billion in 2008, onto other market participants,” according to court documents.

“In 2014, the Act will bar insurers from refusing to cover individuals with pre-existing conditions and from setting eligibility rules based on health status or claims experience. At that time, all Americans will be insurable. Without the minimum coverage provision, there would be an incentive for some individuals to wait to purchase health insurance until they needed care, knowing that insurance would be available at all times,” Steeh wrote. “The uninsured, like plaintiffs, benefit from the ‘guaranteed issue’ provision in the Act, which enables them to become insured even when they are already sick. This benefit makes imposing the minimum coverage provision appropriate.

Source: Med City News

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Oct 182010

Things are seldom what they seem.

Dinesh D’Souza has the bizarre idea that Barack Obama’s presidency can be best understood by realizing that “Incredibly, the U.S. is being ruled according to the dreams of a Luo tribesman of the 1950s [that is, Obama’s late estranged Kenyan father]. This philandering, inebriated African socialist, who raged against the world for denying him the realization of his anticolonial ambitions, is now setting the nation’s agenda through the reincarnation of his dreams in his son.”

D’Souza needs to get out more. Specifically he should have a talk with Timothy Carney and Charlie Gasparino, whose books demonstrate beyond question that the best phrase to sum up Obama’s presidency is not “African anticolonial socialist” but “American Progressive corporatist.” Carney’s 2009 book is titled Obamanomics: How Barack Obama Is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists, and Union Bosses. Gasparino’s just-published book is called Bought and Paid For: The Unholy Alliance Between Barack Obama and Wall Street. Neither writer could be mistaken for a left-winger.

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Oct 082010

Charlie McGrath argues that we are One Nation Under Duress and makes some excellent points for why our corrupt political system is an enabler for Wall Street, why our economy is going down the tubes, and how the global trade war is getting into full swing:

The only people that win in this current system is Wall Street. Period.

All you need to do is look at who’s winning right now, who’s winning in this country right now. Are you winning? Are you better off than you were two years ago, four years ago, six, eight years ago. Are you better off in this system that we have now? The answer is absolutely not. Even if you don’t know it. Even if you’re making the exact same amount of money you made last year. Even if you’re making more than you were last year, the value of your money has been eroded. The value of your future potential has been stolen from you in the form of quantitative easing and in the form of bailouts.

We are on the precipice of the world turning their back on the U.S.

If you don’t believe me, read the IMF story. It points out exactly what a lot of people have been saying, which is the Western economies are in depression – plain and simple. There’s no recovery. There’s no “V” shape or “W” shape. There is only despair heading down the road.

You’ve got to understand. This isn’t for you. This isn’t for your future. It is for corporatocracy’s future. They’re going to pass laws and legislation that benefit them, while on the other hand telling you a pack of lies.

Consmer spending habits are starting to tick back up because people are buying the lies that we can spend our way out of this…

Just when you feel safe, just when you think that something is happening good in this economy is when the bottom is going to fall out and reality is going to smack you in the face like a ten pound sledgehammer. And I’m telling you something – it’s coming soon. There’s no more papering it over.

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Oct 042010

Long ago, before economic models developed their current levels of sophistication, it used to be that the goal of a government's economic policy was to bring prosperity to its citizens; in other words, to raise the general level of material comfort, while at the same time reducing the amount of toil required to attain that end.

However, due to the blather spouted by modern economists, success is no longer measured in those terms. Instead, governments simply look to pump up nominal levels of gross domestic product (GDP), while simultaneously catering to the needs of entrenched political classes. As exports feed directly into GDP, currency devaluation has been widely used as a means to boost exports and therefore achieve “prosperity.” In this model, selling is an end unto itself. There is no focus whatsoever paid to the obviously negative consequences of currency debasement: diminished purchasing power and lowered living standards.

Way back in the 20th century, a nation’s currency was viewed much as a company’s stock price. The reliability, competitiveness, and growth of a national economy usually translated into a strong currency. This system made sense.

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