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Published on Saturday, March 7, 2009 by CommonDreams.org
The Bottomless Bailout
Does anybody in the federal government know or could know “who, what,
where and when” of the massive, complex, vertical, horizontal, global
collapse of Wall Street and its planetary tentacles in over 100
countries abroad? Step forward if you exist! Uncle Sam needs you!
Is the multi-million dollar bailout of this financial mess and house of cards, this phantom wealth mummy hitting air beyond the federal governments’ salvage capability?
It is relatively easy to announce hundreds of billions of dollars of corporate rescue programs here and hundreds of billions of dollars of guarantees of corporate recklessness there and trillions of dollars of assorted stimulus, loan availabilities and foreclosure prevention initiatives in all directions. Now comes the rubber hitting the road.
Where are the skilled people to be hired by the federal agencies—the administrators, field implementers, auditors, financial whizzes able to understand the complexity of greed and over-reach; the inspectors, prosecutors and contract negotiators to name a few categories?
In other words, how are a hurried President Obama and his deputies going to rapidly build up the infrastructure of the federal government itself to advance all these “public works” efficiently and to avoid expenditure disasters amidst a potential orgy of waste, fraud and abuse by the coast to coast recipients?
So many of the federal government’s functions have been contracted out to corporations and consulting firms under Clinton and the Bushes that there is a serious dearth of skilled civil servants. Moreover, Obama has indicated he wants this work done by an accountable government and not by Halliburton-type outside contractors at greater expense to taxpayers.
Knowing and doing have to go hand in hand. Some Congressional Committees have finally gotten around to asking the basic questions about what is actually going on inside companies like the giant financial conglomerate AIG. Since the Goliath’s near collapse in September, the federal government has committed $160 billion to keep it from splattering its reckless red ink over small businesses, municipalities, 401(k) plans, policyholders and of course the Fortune 500 big companies led by the omnipresent Goldman Sachs bank.
At a Senate hearing on March 5, 2009 to review yet another $30 billion in rescue funds, Senators from both parties demanded that the Federal Reserve make public the names of the parties benefiting from all this taxpayer largesse. These include the derivatives trading partners (eg credit default swappers) who have received tens of billions of these dollars passing from Washington through AIG to them.
Senators Chris Dodd, Richard Shelby and Jim Bunning went after Donald L. Kohn, the vice-chairman of the Fed board of governors who finally promised he would ask the other governors to reconsider their corporate privacy policy under these megabailouts. Don’t hold your breath!
Surprisingly, the Wall Street Journal editorial writers weighed in three days earlier about this fourth ever-sweeter rescue of AIG. in six months. In an editorial titled “AIG’s Black Box” the Journal thundered: “Perhaps someday the feds will even explain to taxpayers which AIG creditors had to be rescued and why…..try figuring out exactly who benefits when taxpayer money arrives at the insurance giant.”
Besides rebuilding the federal workforce and finding out what is going on inside casino capitalism begging for bailouts, the Obama Administration is wading into an administrative nightmare that could run through trillions of mis-directed dollars and not turn around a deep Recession plunging toward Depression.
When dealing with esoteric gambling chips called “derivatives” that are bets on bets on debts on debts, more than astute regulations and prosecutions are needed to punish, disgorge and deter present and future self-paid corporate crooks looting and draining other people’s pensions and savings. What is essential is that the federal surgeons have to know just where to apply their scalpel on the continuum spanning the big predators to the millions of direct and indirect victims.
So, during the next Congressional hearings featuring government witnesses from the Federal Reserve, the Treasury Department and the securities, insurance and banking regulatory agencies, the Senators should start with four direct questions:
Is the multi-million dollar bailout of this financial mess and house of cards, this phantom wealth mummy hitting air beyond the federal governments’ salvage capability?
It is relatively easy to announce hundreds of billions of dollars of corporate rescue programs here and hundreds of billions of dollars of guarantees of corporate recklessness there and trillions of dollars of assorted stimulus, loan availabilities and foreclosure prevention initiatives in all directions. Now comes the rubber hitting the road.
Where are the skilled people to be hired by the federal agencies—the administrators, field implementers, auditors, financial whizzes able to understand the complexity of greed and over-reach; the inspectors, prosecutors and contract negotiators to name a few categories?
In other words, how are a hurried President Obama and his deputies going to rapidly build up the infrastructure of the federal government itself to advance all these “public works” efficiently and to avoid expenditure disasters amidst a potential orgy of waste, fraud and abuse by the coast to coast recipients?
So many of the federal government’s functions have been contracted out to corporations and consulting firms under Clinton and the Bushes that there is a serious dearth of skilled civil servants. Moreover, Obama has indicated he wants this work done by an accountable government and not by Halliburton-type outside contractors at greater expense to taxpayers.
Knowing and doing have to go hand in hand. Some Congressional Committees have finally gotten around to asking the basic questions about what is actually going on inside companies like the giant financial conglomerate AIG. Since the Goliath’s near collapse in September, the federal government has committed $160 billion to keep it from splattering its reckless red ink over small businesses, municipalities, 401(k) plans, policyholders and of course the Fortune 500 big companies led by the omnipresent Goldman Sachs bank.
At a Senate hearing on March 5, 2009 to review yet another $30 billion in rescue funds, Senators from both parties demanded that the Federal Reserve make public the names of the parties benefiting from all this taxpayer largesse. These include the derivatives trading partners (eg credit default swappers) who have received tens of billions of these dollars passing from Washington through AIG to them.
Senators Chris Dodd, Richard Shelby and Jim Bunning went after Donald L. Kohn, the vice-chairman of the Fed board of governors who finally promised he would ask the other governors to reconsider their corporate privacy policy under these megabailouts. Don’t hold your breath!
Surprisingly, the Wall Street Journal editorial writers weighed in three days earlier about this fourth ever-sweeter rescue of AIG. in six months. In an editorial titled “AIG’s Black Box” the Journal thundered: “Perhaps someday the feds will even explain to taxpayers which AIG creditors had to be rescued and why…..try figuring out exactly who benefits when taxpayer money arrives at the insurance giant.”
Besides rebuilding the federal workforce and finding out what is going on inside casino capitalism begging for bailouts, the Obama Administration is wading into an administrative nightmare that could run through trillions of mis-directed dollars and not turn around a deep Recession plunging toward Depression.
When dealing with esoteric gambling chips called “derivatives” that are bets on bets on debts on debts, more than astute regulations and prosecutions are needed to punish, disgorge and deter present and future self-paid corporate crooks looting and draining other people’s pensions and savings. What is essential is that the federal surgeons have to know just where to apply their scalpel on the continuum spanning the big predators to the millions of direct and indirect victims.
So, during the next Congressional hearings featuring government witnesses from the Federal Reserve, the Treasury Department and the securities, insurance and banking regulatory agencies, the Senators should start with four direct questions:
1. Just what is it that you do NOT understand about what is going on inside this widening Wall Street mess?As one solid small town banker in Indiana put it recently: “If these big companies are too big to fail, then they’re too big.”
2. Why don’t you understand what you need to know?
3. How are you going to use your powers to achieve such understanding?
4. Finally, if these corporations like AIG are too big to fail, too secret to fail and overwhelmingly global in structure and operations, why aren’t you asking other governments to pitch in with their own rescue packages and tell you what they know?
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142 Comments so far
Show AllYes, he's a true, American hero.
dmia - ralph can't get elected because the country is full of dumb people like you.
Once again, thank you Ralph Nader -- !!!
All of our rules, regulations, laws have been dismantled by those
now walking off with our nation's Treasury, wealth, resources --
indeed, our people's government. What's new?
Fascism rewards the criminal. Time for another revolution!
"According to all myth, the female - not the male -- gives life"
The country got what it deserves: President George W. Brown.
Nader is too good for a stupid nation like the US, he's too intelligent, too honest and too practical. What the US deserves is a corporatist career criminal like Obama, who will drain the treasury out of every dime right into the coffers of banks and Wall Street conglomerates, instead of bailing out the real taxpayers who need help.
Read "Web of Debt," by Ellen Hodgson Brown, who says that the banks hold derivatives in an amount now estimated at $180 trillion -- three times the GDP of the planet! See also www.webofdebt.com. The banks will collapse...It is time to Federalize the Fed and take from the private banks the authority to create money out of thin air when people and the government take out loans. The authority to create money belongs with the people, i.e., Congress, as stated in the Constitution.
Ellen Brown states in a recent article, “Sustainable Government: Banking for a “New” New Deal,” December 8, 2008:
“Not only are banks merely pretending to have the money they lend to us, but today they are shamelessly demanding that we bail them out of their own imprudent gambling debts so they can continue to lend us money they don’t have.”
Absolutely Web of Debt and check her website www.webofdebt.com . The data is there, but very few people understand it. Her works make it very possible to get a handle on this massive system--which is now completely out of control.
Nader's Bottomless Hypocrisy....
Nader is invested Heavily, right Now, in Cisco Systems....
Cisco CORPORATION has an 85% monopoly market share in routers.
With $8.5 Billion in stock outstanding
A Financial Pyramid Scheme w/ Watered Down Stock
And they pay their employees with non-qualified stock options.
Audited by Price WaterHouse
One Cisco director, James Gibbons is on Lockheed's Board of Directors
Where they are audited by Ernst Young, who, with Price WaterHouse
are 2 key distributors of Cisco services & products????
And Price WaterHouse audited WHO ELSE? GOLDMAN SACHS!!!
AND
Fidelity Magellan where Nader keeps most of the rest of his portfolio, FM is invested in Lockheed, Boeing, Wal-Mart, Raytheon and worse
Cisco pays NO Federal Income tax and
Is/has bid against Lockheed for a contract with Naval Destroyers.
These corporations Nader is tied to, invested in, who might they bank with? Their billions flow to and from which banks?
Ralph Nader
Corporations, Investments, Millions,
Portfolios Price
Water
House
Goldman SAchs
Ernst Young......
A portfolio to die for if you want to make money, and it does, hand over ifst, but it could not be dirtier, more tied to the major corporations, their auditors, and of course their banks.
Nader & Cisco are a public marriage which repulses many, not just I,
Before this post I searched for evidence of divestment and found naught.
Google "Cisco Systems Watered Stock Pyramid Analysis"
It is technical, And Nader is Featured throughout, and then throughout....
Yes Bottomless Hypocrisy....
Joe.
Can you tell me what is wrong with Nader's message. Even if what you are saying is true, Nader is not against corporations and banks. He is against corrupt corporations and corrupt banks. He is not out to destroy the system but he is out to reform it.
Did he earn a single penny by dishonest means?? What do want from him to do?
You didn't say!. Do you want him to live in a commune and burry his money in the
ground.?? Did anyone expect what is happening now. It is too late to pull money from the stock market right now. Why are you devoting your energy to discredit him and his message?? There are hundreds of corrupt banksters and coporatists that you can direct your attention to instead of Nader!! Who are you shilling for??!
Good point. I think azjoe's post shows hypocrisy----just not Nader's hypocrisy. Many who post here worship Nader, but then they despise Obama because of his perceived ties to big money....
The same tired and distorted views posted again and again and again and again by the same source. The guy calls himself AZJoe and lives in Los Angeles so why should he not be confused about other things as well...If one takes the trouble to search for Ralph Nader's portfolio one finds quite a different picture than this poster paints. Note the absence of links to his claims and the ignoring of the links myself and others have posted in the past showing a more accurate picture of those investments.
Reading the almost paranoid way Joe notes that this firm is tied to that firm which is doing business with this other firm whose board member is over here doing this while also doing that says nothing at all about Nader and rather a lot about that poster and his belief system. Attention craving for sure, political pundit not so very much.
"Most people would sooner die than think, in fact they do so." Bertrand Russell
No... more like, they despise Obama because he increasingly (and, alas, belatedly) perceived as a warmonger and, therefore, a huge posuer.
He can throw all the bones he wants to pacify the voice of dissent- but it still SUCKS that his reign will mean more war, more war, more war.
Right, he's the one who got us into those wars. Give me a break! He's looking for a way out of Afghanistan and he's getting us out of Iraq. What is wrong with you people?
What is wrong with us people,madcow? Well, where to start? I do not claim to speak for all of "us", but for me:
Looking for a way out of Afghanistan might begin by removing military rather than increasing the numbers of armed men and women there. Afghanistan, or any nation plagued with poverty, ignorance and religious intolerance cannot be saved by killing folks, that has been proven to increase the numbers of hostiles not reduce them. Do you believe otherwise?
Getting out of Iraq by leaving an estimated 50,000 troops there for an indefinite period of time and calling them a "peacekeeping force" rather than an occupying one doesnt do it for me. Why does it placate you?
As to the increasing antipathy towards our new administration from "us people" ( funny, I get the distinct impression that it should be We the People) perhaps the explanation lies in the growing impression of Barack Obama as a great orator who is locked into a system that has been proven, time and again, to be working against the best interests of the majority of Americans, and the planet itself. He is just another corporatist in a position of power.
Obama seems to be one who will spend four or eight years giving eloquent speeches and, when he retires to a life of luxury earned by doing the bidding of those who were in power when he entered the Oval Office, remained in power while he lived in the White House, and will be still in power when he steps down. Maybe "us" people are looking for better. The real question, madcow, is why arent you?
Afghanistan:
The 17,000 troops going to Afghanistan are meant to stabilize the situation which is getting out of control. It's not limited to just more troops either---the humanitarian mission is also escalating. The government is democratically elected, and the majority is NOT opposed to our presence. If we up and leave then the undemocratic Taliban come back and 90% of the people there don't want that.
Iraq:
The 50,000 are NOT there indefinitely! They will all be removed by the SOFA deadline in 2011. End of story.
My sense is that people are so cynical about our leaders that they just assume that everything they say is a lie. I challenge anyone to show me one lie that Obama has told us. And I don't mean his changing his FISA vote---that wasn't a lie, it was a vote that was changed when the bill was changed.
Those who refuse to learn from the past are doomed to repeat it.
The old CCCP had one hundred thousand troops in Afghanistan and failed miserably, why do you pin your hopes on seventeen thousand?
You claim to speak for the majority of Afghans, what gives you that authority? The largest tribe there, Pashtuns, want us out. Most Afghans are never heard from but one might assume, given the history of that region and the normal reaction of citizens to occupying armies, we are unwelcome as hell.
The government is a joke, Kharsai is only the mayor of Kabul, and almost never leaves that city, and has no authority elsewhere.
The fifty thousand troops in Iraq are there, and I have no expectations as to a timetable for their withdrawal. Fool me once shame on you, fool me twice shame on me.
One lie of Obama....I will alter the structure of NAFTA...err no I wont, only kidding. Want a dozen more?
No, I don't claim to speak for anyone but myself. The Asia Foundation has been doing extensive polling of the Afghani people since 2006. The 90% figure was from an Amy Goodman article.
http://asiafoundation.org/publications/pdf/418
When has this president tried to fool you about anything? Like I said before, you're basing your judgements on a general distrust of politicians.
And you'll have to do better than the NAFTA example. I know he wants to change NAFTA---show me the link where he said he wont change it. Do you expect him to have everything done in the first two months?
And yes, I want the dozen more lies. With links. No outsiders thinking they see a loophole, or who question his honesty---I want the lies to be actually stated by him, please.
Speaking about hypocrisy Obama is up to his neck in Dirty Coal money and advocating it above any sustainable solution. Obama is in bed with military industrial cash thus his rational for covert war in Pakistan, and troop escalations in Afghanistan and the interminable occupation of Iraq which will still have US Troops long after Obama leaves office and start collecting 500,000K for corporate speaking engagements like his pathetic mentor Clinton. Obama is paying off his corporate paymaster with the fleecing of our money to pay corporate executives without oversight and accountability. Obama is maintaining Bushes subversive agenda on Government wireless attacks without warrant. Obama spends our money like a drunken sailor - kick backs for his corporate brethren. Yes the bottomless hypocrisy of Joe another twit from the Apologetic Wing of the Corporate Democrat Party.
Yes... but aren't his wife's arms lovely ;)
My wife's arms aren't lovely.
If they can send Martha Stewart to prison, they can send some of these Wall Street clowns there, too.
Here is the problem..Everybody in DC is dirty, everybody earmarks, everybody joins in the porkfest.......it is ridiculous
I wonder when we see the first foreclosure victim take REVENGE on one or the other of these WALL STREET CRIMINALS, Congress members and other criminal executives. Where the law fails to protect the public against ruthless greed and criminal practices of bankers, brokers and their political cronies, disfranchised and irate individuals will take extreme measures to get even. And who would shed a tear?
There was a time when traitors, conspirators and subversive elements faced quick corporal punishment. Many were hanged on the spot. The people of America have to think back of their constitutional roots and deal decisively with a whole class of subjects who have ruined America. The most disgusting aspect of the misery they have brought over the US is, that MOST ARE STILL PROFITEERING right here right now from bailouts, stock fluctuations and future financial turmoil. These are the REAL TERRORISTS America needs to fight.
But maybe times need to get even worse before people wake up to the biggest fraud and crime the country and the world has seen.
If Nader had not been such a stubborn ass and insisted on running for President, we might not have gotten the cretin Bush and his evil VP Cheney and the rest of the thugs in that Administration.
Thanks Ralph, be proud of your stupidity and do tell us about what is wrong now. You helped cause it, schmuck!
I'm sorry, but your argument carries no weight. Bush didn't win in 2000---he stole the election in Florida; and if Nader wasn't on the ballot, Jeb Bush would've made sure Bush "won" anyway. Nader wasn't a factor. It was the counting of the ballots and the scrubbing of the rolls.
madcow said it all, or almost all. He omitted the fact that it is your line of reasoning that is stupid, not Nader exercising his constitutionally guaranteed right to run for office.
"Most people would sooner die than think, in fact they do so." Bertrand Russell
I love how the American is an innocent bystander in what happens, never taking responsibility for his or her own ignorance--always blaming the other guy. The majority of the American reflect the ignorance and corruption it gets in government; it is not apart from it. So why blame Nader for voter stupidity. Look around you, there are still a lot of citizens who support the policies of the past administration, and who didn't vote for Obama. Ralph didn't spoil anything WE did! No one is responsible for the ignorance of another, he or she is. Strive to transform yourself and not the world. It's a futile endeavor anyway. They will only resist and resent you more. Face it.
How about incentive-izing the recovery of waste/fraud/abuse/bailout scamming.
Thousands of forensic accountants and unemployed stockbrokers stalking the insiders for a % of the loot.
New jobs for tar-and-feather teams, too.
awegweiser:
Wow thanks for being a real asswipe for your ad hominems about Nader! FYI:
It's people such as you who always misconstrue the political aspirations of Nader. Unlike you (and your ilk), Nader didn't sit on his ass bemoaning the state of this nation and its problems, he had the balls to do something about it!
Mate, chill out. If it wasn't for people like Nader, who would call the shots and quotes? You? Get real!!! You are just a little fledgling, shitting your own nest. Grow up and give the man a break....and some applause, for doing and saying what needs to be done and said. And it's not somebody called Mr Wegweiser, is it?
Perhaps it is time to sail away,yachtie....
Global Financial Meltdown: Forces beyond our control? Or the biggest Sting ever?
http://www.rudemacedon.ca/greatest-sting-ever.html
Green Island
If the banks are nationalized, the government will become the owner of the banks’ good and bad assets and it will have to assume the banks’ contractual obligations towards their creditors, investors, and account holders. In particular, any contractual guarantees given by the banks to the owners of now-worthless risky “innovative” financial vaporware will become de facto contractual obligations of the government towards these owners.
They say that nationalization will "wipe the shareholders", etc., etc., but there is no nationalization law prescribing anything like that. On the contrary, nationalizing the banks will allow congress demoblicans to protect their trillionaire friends while uttering all kinds of pompous declarations about the government’s “solemn duty to honor” the “contractual commitments” that the “glorious 2009 act of nationalization” entailed, as otherwise “the markets will lose all confidence in the USA government”, bla bla bla.
Indeed, if we ignore small-fry investors, pension funds etc., the owners of worthless financial vaporware who truly matter to demoblicans are greedy domestic and foreign trillionaires who invested in the financial vaporware with full knowledge of its risks. These trillionaires will lose humongous amounts of money and hence will lose much, if not most, of their economic and political power, if the “financial system” is not “saved” by the taxpayers.
That’s why the trillionaires have mobilized from very early on a mighty armada of bribed economists, journalists, and politicians and ordered them to call wolf about the cataclysms that will ensue if the “financial system” fails. “Saving the financial system” is indeed the obfuscating phrase invented by these bribed economists, journalists, and politicians to try saving this neo-feudal class of trillionaires that is “essential“ to what “America stands for” and to “how things should be after we help them out”, as the “radical” Paul Krugman has put it in print repeatedly.
As you may remember, in the middle ages whenever the feudal class created a mess they rescued themselves for the “sake of the country” by taxing the hell out of the serfs and the bourgeois, but now with “the triumph of liberty” all of that has changed… yeah right!
But there is no need to save the trillionaires, regardless of how much money they have given to bribed economists, journalists, and politicians; and regardless of whether the flow of bribes may stop if the trillionaires fail for good.
The banks should be allowed to go through an orderly bankruptcy that preserve their real-economy presence and protect the savings of their non-reckless customers up to say 200k per account and up to say 1 million total net worth per person (IRS-declared), where a sliding scale could be used that reflect how "aggressive" the interest-gathering strategy chosen by each account holder was and the extent to which the account holder chose risky “lucrative” financial-speculation products over investments in actual production. The necessary paper trail is available…
One should fire everybody in the *failed* banks' upper management (because they failed, duh!) except for whistle blowers and those essential to day-to-day operations, for those managing customer accounts, and for those having expertise in evaluating loans applications by companies that produce actual goods, be they trinkets, essential insurance products, etc.
Social criteria like protecting pensions could also be used by simply dividing the amount invested by each pension by the number of people the pension represents in order to determine what the pension can get in terms of protection and for which individual accounts (since pension-holders who chose especially reckless financial-speculation products should be protected less).
So it’s not time to nationalize the losses of this self-anointed neo-feudal class of trillionaires masters of the universe. Rather, it’s time to shut down their failed banks, let the greediest investors bite the dust, claw back any bailout money given so far to them and the banks, and use this and more money to jump start directly the flow of credit into the economy after “nationalizing” (hiring back!) the banks’ existing experts in locating, evaluating, financing, and following-through worthy entrepreneurial ventures in real production and giving them new institutional backing and responsibilities.
This crisis must teach harsh lessons to the most reckless of investors and bankers, and spare those investors and bankers who tried the hardest to stay away from the greedy madness of the last 30 years, even if only for moral reasons.
Who determines what the "worthy entrepreneurial ventures in real production" will be? Congress? What if they vote for ventures that produce products nobody wants to buy? Should the government send stimulus checks to people to buy only these products?
When I go to the store, I like to buy what I want, at prices I can afford. If the store doesn't have what I want at the right price, then I go somewhere else. Sometimes, though, I'm not even sure what I want until I walk past it on the shelves, and think, yeah, that would be great for dinner -- good thing Congress still hasn't messed it up by creating one of those "worthy entrepreneurial venture" lists!
If the numbers in Nader's book (Crashing the Party) are nearly correct, he never 'stole' any votes in his run for President (in 2000). Only 38% were registered Democrat, so he got more 'come out to vote,' republican and others than he did 'steal' any Democratic votes - just to settle that charge he gets so much. Always an insightful view on U.S. politics; too bad he isn't in Obama's cabinet. And, erplus - sounds like a pretty good solution to me!