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The Real Criminals are Neither Lynndie England nor the AIG Traders
Whenever a politician or commentator bloviates about the brokers at AIG who are getting bonuses, we should all be remembering Lynndie England and Charles Granger. AIG brokers are to the financial meltdown what England was to the Iraq war.
Certainly she did things that were deplorable. But she thought they were legal (England, operating under orders to "soften up terrorists," even thought she was helping defend our nation). And to the extent that John Yoo's memos were law, arguably her actions were legal (although the Bushies never wanted it tested, so threw them to the wolves).
But the important point is that the real criminals of the Iraq War were not those like Lynndie England: they were George W. Bush, Dick Cheney, and Donald Rumsfeld (and their neocon buddies).
Like Lynndie England, the brokers at AIG are the small fish. Sure they shouldn't have been doing what they did, and it's insane that they were compensated the way they were. And even worse is the fact that those compensation packages were worked out in September and October of last year by the Bush administration, and that that convenient little fact is almost always ignored by politicians and commentators in their faux populist outrage.
But the real criminals of the AIG mess - and the entire financial meltdown that was set up between 1999 and 2006 and crashed starting in 2007 - were Grover Norquist, Phil and Wendy Graham, Tom Delay, and, sadly, Bill Clinton.
The philosophy that it's possible to bomb people into democracy and torture them into being on our side drove the Bushies. It was wrong, flawed, and frankly insane, and we're paying a huge price for it.
Similarly, the philosophy that playing the game of business and investment without rules (the technical term is Laissez-faire Capitalism) has driven our government since the election of Ronald Reagan, and went on steroids during the last two years of the Clinton administration and throughout the Bush administration. It's equally wrong, flawed, and insane, and we're paying a multi-trillion dollar price for it not unlike we are for the war.
The intellectual forefathers and mothers of the insane conservative economic policies that have brought us to where we are include Ludwig Von Mises, Freidrich Von Hayeck, Milton Friedman, Alan Greenspan, Tom Freidman, Robert Rubin, Larry Summers, and Ayn Rand. Phil and Wendy Gramm pushed through the Gramm/Leach/Bliley Act (which allowed banks to get into the gambling business) and the Commodity Futures Moderinization Act (also known as "the Enron Loophole"), and Bill Clinton merrily signed them into law.
But just as it's inconvenient to hold the defense contractors and the senior politicians responsible for the Iraq debacle, and instead blame it on Lynndie England, our sound-bite corporate media prefer to focus on a few IAG traders, instead of the people who made what they did both possible and legal.
Instead of passing a 90 percent tax that is limited to the traders, let's be realistic. Ever since Ronald Reagan rolled back the top marginal income tax rate on millionaires and billionaires from 74 percent to 29 percent, our government has been disastrously in debt, sliding deeper each and every year (the so-called "Clinton surplus" was a mirage created with phony numbers, although it was still a hell of a lot better than what we have now).
David Stockman bragged, back during the Reagan administration, that the goal of Republicans was to rack up such a huge federal debt that Democrats would never be able to push forward the "socialist" programs that Americans want, like stable Social Security and single-payer national health care. He called it "starving the beast." Grover Norquist suggested it would force government to become so small it could be "drowned in a bathtub," leaving the corporations in charge. George W. Bush actually, finally, made it happen.
Thus here we are, ten-plus trillion dollars in debt, and trying to blame our problems on Lynndie England and a few traders at AIG.
Let's call out and name the real criminals, and get about the simple and straightforward solutions of putting our country back together.
Roll back the Reagan tax cuts that have done so much damage over the past 28 years. Pull out of insane trade agreements. Re-regulate banks so they're functionally public utilities again. Give oversight to the SEC on all forms of speculative investment and bring back the .25 percent STET tax on each unit of investment vehicle traded.
None of this is rocket science. From 1937 until Ronald Reagan began his wrecking-ball efforts at the stability and solidity of our nation's economy, we didn't have a single bank panic. Reagan dropped income tax rates and the almost immediate result was a bubble and crash in the stock market followed by the S&L crisis, which has been repeated over and over again with startling regularity ever since (just as they were during the 150 years preceding Roosevelt putting into place the regulatory structures and high marginal income tax rates of the New Deal that stabilized us).
Republican President Dwight D. Eisenhower embraced a 91 percent top marginal tax rate on millionaires and billionaires and strong regulation of banks, including the STET tax, and the nation prospered.
It's time to return to sanity and quit swatting at the little guys, while the real criminals and thieves walk away with our nation and our wealth.
- Posted in
86 Comments so far
Show AllPopulist Anger and Moral Hazard for Dummies
(AV) A lot of folks who in better times had little interest in the dismal science of economics now feel the need to learn something about it. As the pain spreads from those in the construction and manufacturing industries to those who formerly felt secure, if underpaid, in their academic and government sector jobs, the ‘need to know’ expands.
A recent national election promised greater ‘transparency’ but we are told that if we knew where our children’s money went, we might respond ‘inappropriately’ by dumping the stocks of those financial institutions ‘too big to fail’ who have been the benefactors of our progeny’s largesse.
A lot of you will not read, no matter how often you are reminded, the people who did not get jobs working for Obusha (Paul Krugman, Robert Reich, James Galbraith, to name three) but will instead rely on more traditional sources such as Fox News, NPR, CNBC, etc. Younger people will have an advantage here because they know to get news at Comedy Central where Jon Stewart provides a more cogent expiation than the other main stream outlets.
So to assist those who will continue their attempts to divine the future from the tiny little tea leaves provided by the conventional outlets, we will define two of the terms you are likely to hear often.
‘Moral hazard’ is any action taken by the government or quasi-government institution such as the Federal Reserve that would have the consequence of helping out those most in need, which coincidentally are the same people who have been the primary victims of the fraudulent and criminal activities of those who buy the commercials on those conventional news outlets. Under no circumstances will ‘moral hazard’ be spoken of when the architects and enablers of that fraud are put in charge of handing out our kids’ money to their former (and future) cronies.
‘Populist anger’ is something to be viewed as dangerous, particularly when elected representatives of powerful corporations respond to it, even if that response is tepid, ineffectual and mostly used as a diversion of public attention from much larger and ongoing theft. Our Congress, as Will Rogers would undoubtedly continue to say, is the best that money can buy. Even the appearance of response to the larger public, the opinions of which in better times are so much more easily molded, is a matter of grave concern. This could lead to ‘class warfare’ which was always a code phrase, designed to have one meaning for the ‘middle class’ and another for those who truly matter.
To review, the ‘middle class’ was formerly a group who served as a buffer between the wealthy and the suffering, but as the lines between the buffering and the suffering have diffused, the former obfuscating definition passes into disuse.
Are you following this so far? Now it’s time to use our two phrases in a sentence, as in ‘There is a grave moral hazard in allowing populist anger to threaten the sanctity of a contract.’ While this is a perfectly acceptable use for the moment, we are obliged to caution readers that the word ‘contract’ only applies to theft from working people by the extremely wealthy that has been reduced to writing, not to written agreements by the extremely wealthy to pay working people for their labor, as in ‘union contract’.
Beautiful. Thanks for that.
Indeed.
I have a close friend at Citi, and he, despite losing much of his net worth and the growing likelihood he will have to sell his house to pay for kids' college, still cites Milton Friedman and basic libertarian tenets as sound, whilst endorsing the notion that Clinton's encouraging Fannie Mae Freddie Mac to loosen their mortgage standards to promote minority ownership as the sole cause of the crisis.
This is a triple-degreed, licensed, long-time trading pro. He still thinks greedy poor people brought it all down, and that only the pros can fix the mess.
No clue that economic theory ceases to apply to a mob, and that their (collective as the financial class) actions have directly formed that mob--
But why not? The most effective mind-control device ever (TV) tells us it is so.
Get ready.
There's a looong way to go, and no telling what will happen for sure if the public finally realizes the scope.
Surely this is known, and measures are being taken to prevent it...or put it down violently if need be.
I'm afraid the crisis is engineered, to spark unrest and provide the final justification of the police state.
Good morning to you all, anyway. Off to the garden, where the only thing that makes sense anymore is happening. Peace--
Why would your friend from Citi sell his house to send his kids to college.
If the kids join the miltary they will have a job with benefits and be eligible for retirement in 20 years. At the rate Obama is sinking the economy, college grads will be competing with experienced people for jobs without benefits.
"Will be" competing?
College grads already compete for jobs with no benefits with much more experienced people. Or with younger, prettier people.
Marketers (what the heck IS that, anyway) & high-tech people are out of work like crazy.
People are being laid off from jobs where they have 15, 20 and 25 years of experience. The decks are being cleared. For what? That part's not certain.
These are disturbing times.
That tiny little plot of land to garden is looking more and more essential.
"This is a triple-degreed, licensed, long-time trading pro. He still thinks greedy poor people brought it all down, and that only the pros can fix the mess."
They did, damn it. Especially those welfare cheats, costing us two or three billion dollars a year. Cut 'em off!
According to The Budget for Fiscal Year 2008, Historical Tables, total outlays for Means Tested Entitlements in 2006 were $354.3 billion. This was 2.7% of GDP and
Includes Medicaid, food stamps, family support assistance (AFDC), supplemental security income (SSI), child nutrition programs, refundable portions of earned income tax credits (EITC and HITC) and child tax credit, welfare contingency fund, child care entitlement to States, temporary assistance to needy families, foster care and adoption assistance, State children’s health insurance and veterans pensions.
http://polecolaw.newsvine.com/_news/2008/01/08/1212663-how-much-does-welfare-cost
Wow. All that assistance to the needy, for only 1/4 of our military budget!
No kidding. It enrages me when I see the talking heads, media or government, complaining about how we just cannot afford these damned entitlement programs. We need bombs, man, not health insurance for kids. Bombs. Its all a matter of priorities you understand.
ekaton
Thanks for doing the research on that.
ekaton
No problem, Ekaton. One must spread the word about our national disgrace if we seek to tweak any consciences.
2.7% of our GDP for the neediest, all the rest for our least in need.
"There's a looong way to go, and no telling what will happen for sure if the public finally realizes the scope."
Especially in light of the fact that the COMMERCIAL real estate bubble hasn't yet popped.
ekaton
Obama zealously promoted the first unconditional financial industry bailout last September and has continued to enable casino capitalism. Obama therefore owns the bailout blunder. Any moron should know that if you give finance professionals money with no strings attached, altruism will follow. Is Obama a moron, or just corrupt?
Obama and Geithner occassionally mention things like "needing closer government supervision of banks that are too big to fail". Neither has mentioned breaking up banks and insurers so we don't have companies that are too big to fail. The drug companies have seen the corporate welfare light. Each week we see a new merger announced that will create drug companies that are too big to fail. Obama's economic policies are creating a feeding frenzy for corporations focussed on maximizing the amount of unconditional taxpayer dollars they can soak up.
I always thought the high tax argument was one of preventing a royalty class, which would in turn destroy democracy, as it was on it's way by the Robber Barons, and reinstated by Reagan.
I think we need to take back this argument and am glad to hear Thom doing so virtually daily on his show.
"Concentrated weath destroys democracy", must overwrite the current right wing mantra that "Socialism destroys democracy".
Socialism enhances democracy.
Hey folks, this ain’t rocket science - we put the RICHFILTH ANIMALS on a leash before and we can do it again - it’s spelled Roosevelt Legacy:
- 90% tax on earned income over $6mn/annum.
- 53% tax on unearned income.
- 50+% tax on mega-estates (Mr. Walton/Gates et al)
- 35% tax on Corporate Profits - no loopholes.
- Glass-Steagall Act restored.
- Full support for the Wagner Act and repeal of Taft-Hartley.
- Elimination of Corporate Super-Citizenship by Statute.
Pots & Pans in the STREETS TIME. Shut it down. Ain’t no Dem gonna save you from the Boogey Man now. The Monsters are treating us like ever 3rd world country we ever destroyed. We are on the Menu now, not the diners anymore. As others have learned before us, we can only save ourselves. Or not at all.
(repost)
I'm not so sure about estate taxes. If we do tax super high work income at 90% and capital income at over 50%, how many people will even be left with estates the size of Bill Gates? And whats is the current estate tax set at?
According to the IRS the estate tax, as currently constituted, affects only 2% of the wealthiest Americans....
So of the 2-5% of Americans that are wealthy, it only affects 2% of them? If that's the case, then tax the hell out of em.
My bad, zmann, I meant to note that it affects the top 2% of us all....but of course those are exactly the ones in the best position to influence the tax codes....
It's time to get back to what we had with Dwight D Eisenhower with those high tax rates for the rich and super rich, cutting the Pentagon budget, and we could even nationalize the banks to make sure the deposits of the rich and super rich are secure to make sure they wouldn't lose their money and we and our government would get ours.
AD
Sorry, it's FASCISIM for the US and they have the rains of power in their hands, don't think for a moment that they are about to hand it back after everything they've done to get the power and wealth. The average person is just a unit and digit in the expense column and will be placed according to their monetary value in the profit column. Anyone falling short of increasing their wealth will be replaced according to long standing fascist tradition....for details how they treat dissidents read the historical account of Stalin, Mussolini, Hitler and all other fascist dictator states and then you will have a better idea how we are going to be treated in our new political and cultural reality. It ain't pretty, honey!
I agree with much of Thom Hartmann's analysis of who the real (bipartisan) culprits are behind America's ongoing wars and financial crisis, but feel his analogy - "Like Lynndie England, the brokers at AIG are the small fish" - is overdrawn.
Lynndie England never profited personally from her Abu Ghraib criminal behavior, nor did the US military/national security establishment that employed her at the time benefit collectively (either economically or in terms of political power) from England's reprehensible misconduct. The masters of the universe at AIG who dreamed up the international credit default swap insurance scam however raked in billions in pure gravy for over seven years, until their house of cards came tumbling down in the waning lame duck months of the Bush regime.
Last time I looked, those individuals at AIG who made their nut by practicing 21st Century alchemy still are all set to take the money and run. And even though AIG as a corporate entity is now pretty much an empty sack, it sure looks like AIG and its billionare "trading partners" in the credit default swap "market" they created and churned (completely outside government oversight) are about to have their bad free enterprise bets honored and paid off by the federal treasury at public expense.
England and Graner personally paid a steep penalty, and the new president has expressly disavowed the official policies of the Bush administration that caused them to behave the way they did. In contrast, AIG's top executives and brokers are keeping their performance and retention bonuses, and Obama, Geithner, and Summers appear poised to bail out the very corporate wrongdoing that caused the global financial meltdown in the first place.
Thus, the analogy does not fit. The AIG guys are not small fish.
Bill from Saginaw
Bill from Saginaw sez: "... those individuals at AIG who made their nut by practicing 21st Century alchemy still are all set to take the money and run."
***
It's worse than you think, Bill. They're actually going to take the money and STAY.
And the mechanisms are in place.
Just think about the fact that OBushma lite has NOT mentioned letting Patriot Act lapse or retract Pres. Sec Dir #51. Nobody even mentions repeal of the Military Commissions Act.
....And all that 'housing' with barb wire around it, built by KBR is sitting empty - just waiting for any of the lower class proles who complain.(and maybe some who don't).
Yep time for everyone to read (or re-read) "The Iron Heel" by Jack London.
available for free download at Project Gutneberg:
http://www.gutenberg.org/wiki/Main_Page
And gol-dern, I thought Obama was 'for the people'! (%{ As soon as you attempt to push for reining in the corp. beast let's just see if ol' Obama starts sweating. He looks a lil nervous already, and we're just getting started. I like to give him the benefit of not pre-judging, but so far he's been pretty lame (the worst appointments and then defending their poor actions). Consistent with his record, however. Geithner is another ditto-head from the famed "Chicago school of economics" which is described above... trained by Summers and Rubin (Citi-corp fame). Look up Geithner's bio in wikipedia. Tsk Tsk. Well I never voted for O, so to those who haven't supported Kucinich or Nader - had enough yet? No? - ok... here we go! Enjoy!
"...playing the game of business and investment without rules..."
What part of the Federal Reserve controlling the money supply constitutes this game without rules? The Fed prints money out of thin air to centrally plan the economy. That money is forced on the people by legal tender laws and constitutes a part of almost every transaction in the game: Buyer, Seller, and Fiat dollars.
Hayek (not Hayeck, as per the author's typo, part of his Google keyword insertion gone bad) won the Nobel Prize in economics for his work on the need to eliminate the central bank and allow alternative currencies. Lumping him together with Alan Greenspan, the head of the Fed central banksters, is ignorant at best and intellectually dishonest at worst.
Just an off-topic note - I thought it would be a more productive use of blogging time to start commenting on a conservative blog instead of on CD. You know, open a dialogue.
I joined Free Republic and wrote one comment on a story about "Obama's not supporting Israel enough." I wasn't abusive or extreme; I just wrote about how much support Israel receives from U.S. already.
Today I returned to Free Republic and tried to post another comment. My "posting privileges have been revoked."
I guess it's harder to reach these people than I thought.
LOL that's sad, but not surprising.
I have been doing that for 4 years--and no dialog is possible.
Those folks just make racist insults and talk about getting some.
And I have been banned there almost as often as I have been banned on THIS conservative site!
I had the occasion to debate Jim Robinson, who owns Free Republic, some years ago on a website far.far away. After a rather spirited debate on several far ranging subjects we returned to the close mindedness and angst shown differing opinions there. His closing remarks, to justify the entire tone and tenor of that web site, was that he stood to make over $250,000 that year from that site. His entire justification in fact.
You should have told him to donate it to charity like a good little conservative would do.
Townhall.com is the same way; they will remove post, but I have not lost posting priviledges yet. I find it hard to post on the conservative websites due to overt nastiness, disrespect, especially towards women and just about anyone who doesn't agree with them. Dialogue is not what they want; they want agreement only and it appears, will entertain nothing else.
This C.D. blog will do the same thing to you, if you dare to criticize certain golden calves.
Try talking with your neighbors, instead!!
Hartmann has certainly identified the real criminals.
Why are their asses not in jail with their heads covered with hoods and electrodes attached to their testicles?
(Rhetorical question, obviously.)
the in the past false but now real state of increasing scarcity means that the winners win,---and they are winning!!!, and the losers die...
Not really,
For example, during periods of drought many plants go to seed. The plants die and the seeds "wait" for normal times to sprout and grow. We, the poor and middle class, are becoming rapidly accostumed to scarcity; the rich are not. They consume vast amounts with their giant carbon footprints. They find it more difficult to downsize, scrimp and save than we do. In addition, THEY are the parasites that feed on the poor and middle class. If we can curtail our habits for 4 or 5 years thereby creating a massive economic drought for the rich, we would succeed in considerably reducing their government influence and corruption. We are the tough seeds that will survive. Frugality is Freedom!
Sioux Rose
AGG: It is rich indeed to exalt simplicity and thus live without want. Without desires to be manipulated, the individual liberates him/herself from the corporate consumer nexus.
Sioux and the dweeb you are responding to,
Frugality must include the expense of a computer and internet hookup, though, right? So as to enable the neo puritanism of denial of self. I love it.
So spare us your overwrought guilt, Jesus loves you, lives with Elvis, self righteous b.s.
[ _____ T h e __ R E A L __ C R I M I N A L S _____ ]
Are literally insane, as psychopaths ( and wanna be ones ) that run our gov't and other powerful institutions ( into the slime of our demise ), see in today's CD America Is in Need of a Moral Bailout, at time stamp npwr.luv March 23rd, 2009 12:27 pm and npwr.luv March 23rd, 2009 12:43 pm :
http://www.commondreams.org/view/2009/03/23-0
Our "leaders" criminality is hidden under the cloak of apparent respectibility, just like the "greatest" serial murderers of ALL TIME were so convincing -- they are charismatic and very clever in blending in -- so as to obtain those hollow victories and manipulative control over others -- that feed their psychopathic addiction.
"We have not so much failed institutions, but that the people in power have failed to retain their balanced human characteristics, so greed and manipulation ( of " lessor beings " ) takes over their minds as a psychopathic disease."
Namaste
I thank Thom Hartman for all his work but I must highlight what I see as an obvious flaw in his argument. The politicians did all this hatchet work on the USA economy at the bidding of the Uberich. It is a symbiotic relationship with both parties equally culpable.
Exactly. It's a money and influence loop. The voters are conveniently left out. As a matter of fact, the laws were changed over the past fifty years so corporate boards and CEOs could rule a corporation without consulting or getting approval from the common stock owners which are amusingly called shareholders. Dictatorship came to the corporations. They then fitted our government with the same business model. It's a sick joke. But it's real. We do not live in a democracy. We live in a cleptocratic plutocracy.
as I said before: follow the money.
All politicians (and that includes every president) are nothing but two-bit actors in this play. It's all an elaborate puppet show and you never get to see the puppeteers.
Progressive economist and Nobel prize winner, Paul Krugman, today lambasted Obama and Geithner's latest plan to save banks as nothing more than a "bet" to insure funding elites with sweetheart deals to insure a win/win situation for their investments. Krugman tells us this,
"The Geithner scheme would offer a one-way bet [to investors]: if asset values go up, the investors profit, but if they go down, the investors can walk away from their debt."
Let me say that again, in Krugman's view, "investors can walk away form their debt" if their investment fails to yield profits. Nice little ancillary benefit for wealthy elites who Obama represents with unbridled devotion. I guess that means that if Obama's latest plan fails, we the people will pick up the tab again, and might further expect another massive bail out, of the two bail outs that PREVIOUSLY failed. Is there an end game anywhere in sight?
Krugman notes that the plan originally is the brain child of Henry Paulson the former Geithner mentor and Fed Chairman under (guess who) George Bush, jr. Ring a bell? Or just another shallow article by the author absent of facts that challenge his political orthodoxy?
Source:
www.reuters.com/article/GCA-CreditCrisis/idUSTRE52M4SS20090323
This article by Chris Hedges tells the difference between authentic progressivism and the pretenders like our esteemed apologist,
http://www.commondreams.org/view/2009/03/23-0
Or this CD article just posted:
http://www.commondreams.org/headline/2009/03/23-7
In Krugmann's own words,
http://www.commondreams.org/view/2009/03/23-2
No wonder the pigs on wall street like it so much; More money for the rich, more taxes for us and more poverty for most of us. Yep, that's the ticket for a happy wall street.
I like the enablers for getting Bush through all of this, including Yoo; Rove; McKinnon and the media for laying out the red carpet. Even the self-proclaimed "Progressives" like Olbermann and Maddow aren't speaking the truth. Thank God for John Stewart.
thong-girl
Thom Hartman is part of the problem. Last time I checked he supported the democratic party that is now giving away taxpayer money to the failing corporations. Much of the anger is misplaced. It is the Congress and the President who are responsible. Why blame the corporations? They are just doing what is normal under Capitalism. If the voters/taxpayers want to give all of the money away, so be it. 97% of the voters support the current system.
In the end, it is always the voters who must accept responsibility for the government they get. Maybe if Hartman had used the airways to expose the evils of capitalism, things would be a bit better. I stopped listening to his radio program because of his unquestioning support of the democratic party. Who did Hartman support in the last election?
Hartmann is indeed a registered democrat, but he is also an intelligent, well spoken progressive with a vast command of historical fact. I found him the only worthwhile voice on Air America Radio. That there are millions of Americans who support the Democratic Party is true, as well as sad. That this is an ongoing problem of education on our part seems obvious.
Where to start...
Supporting the Democratic Party is not the problem - if they are a problem, and until there is a viable alternative, they need to be changed by member involvement and movement, not abandoned.
I don't think the blame is being directed at corporations. I think it is rightfully being directed at the policies that were stripped away which once kept uncontrolled Capitalism in check, preventing the bubble-burst cycles. Corporations are, as you imply, only doing what they are allowed and supposed to do - it's the ridiculous policies (or the removal of the sane ones) that favor corporations and not the people, which need to be addressed.
"97% of the voters support the current system. " Which system is that? And where do you get your pulse of 97% of voters? I saw a huge majority wanting change in a progressive direction. One which is far and away different from the "current system". All I've seen on the financial system front is the appointment and catering to of the policies of the past (e.g. free trade), which are based on myth.
Voters do not own their own elections, so they cannot be fully responsible for the result. The fact that our representatives need to raise $20K/day to get re-elected, alone indicates it's not a simple matter of the voter voting for the best candidate. The system ignores, misrepresents, or never hears from those candidates that an entirely voter-owned election process would promote.
I agree that the scandal with the trader bonuses is not the most important issue, but the complicity of the Obama administration is important. It showed who Obama sides with when he prevented the stimulus bill from stopping the bonuses, and even now he is trying to prevent Congress's new bill from cutting into the bonuses too much. Obama is just as much for the rich capitalists as Bush was.