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Geithner's Plan: Like an Oil Spill
The economy's drowning in bad assets; trillions of dollars worth. The Treasury proposes renaming that bad stuff "legacy assets" and hopes to drive up the price by paying private investors to buy them. Go ahead and buy -- the Treasury says -- the taxpayer will take the hit if those toxic assets turn out to be, well, toxic.
Like Exxon, which has gone in for a major publicity make-over, pushing renewable energy in advertising even as it funds global warming denial, Geithner's hoping to persuade investors to engage in a whole new round of protected gambling, the very phenomenon that got us into this mess in the first place. Those "complex derivatives" aren't bad, just undervalued, he claims, victims of public panic. Treasury's willing to push a few cheap hits in the hope that a little free dope will get the hedge funders addicted again.
There's just one catch: those derivatives are bad: bad bets upon bad bets, based on cost-free betting. Traders gambled, reaped the profits in transaction fees and walked away. Kind of like Exxon: profiteering off the good days and reaping the private gain from public resources, and throwing back the cost of environmental clean up on public tax payers.
The same commanders are at the helm. As Frank Rich and others have reported, Larry Summers can't admit fault: he helped torpedo the regulation of derivatives while he was in the Clinton administration.
It's kind of like Alaska. Years after the Exxon Valdez belched guck all over the Alaska coast, ruining a fishing industry and bankcrupting a people, the financial industry's flooded our economy with garbage, and we're going to let the ships captains control the clean up?
Ask the Alaskans how well that worked. Not so bad for Exxon, less well for the people and the planet.
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Show AllThe economy's drowning in bad assets; trillions of dollars worth. The Treasury renames that bad stuff "legacy assets" and hopes to drive up their price by paying private investors to buy them. Go ahead and buy -- the Treasury says -- the government will take the hit if those toxic assets turn out to be, well, toxic.
Sad and angry to say but Obama and his team of economic Fifth Columnists is telling average Americans "Fuck you!" There's no other way to put it. The Swindling Class will be saved at any and all costs and the rest of you can lie down in the gutter and die. "Legacy Assets"! Hey, Barack, Tim and Larry . . . DRINK SEA WATER!
Sioux Rose
MORDECHAI: Your analogy made me think of a parallel with how toxic waste is being dealt with. Some of the metals exposed to varied levels of radiation at nuclear power plants (metallic parts that have become dangerous and need to be replaced) are now being smelted into non-exposed metals, with the assumption that this "power in numbers" will make the stain of toxicity disappear. The products created are everyday, ordinary things like toasters. It's the same way with our waterways, too, as polluters dump heavy chemicals into many rivers and streams with the assumption that the "good water" will absorb and thus dispense with the toxic stuff. Now they are essentially unleashing "bad" (let's call it radioactive) money, that born from derivatives into our currency stream with the same rationale: that with so much out there, this stuff couldn't possibly create too much damage or dangerous levels of permutation.
I have always taken Dr. Seuss for a spiritual teacher/shaman. In what some might take for a "nonsense" book like "Cat in the Hat," he teaches a fundament of spiritual truth: once you make a mess (spots) you cannot just make it disappear. You have to own it, take responsiblity, and clean it up. Looks like Dr. Seuss was lost on our illustrious "treasury boys," and those who seem to think spreading damage around makes it all go away.
Is it really necessary for the middle class and working poor to pay taxes to the wealthy to make war on them? Yes apparently it is!
It's time for a National STRIKE ! It doesn't have to be a loud strike. It can be a quiet strike. Withold your excellence at work! Eliminate unnecessary purchases ! Quietly and personally make an obvious economic thud! Send a quiet message now!
Geithner works for Obama, Laura; is it too difficult to utter the O word in the same sentence as legalized gaming while using other peoples hard earned cash to place their bets?
An economic Exxon Valdez is a good analogy, especially with the benefit of looking back at the outcome versus the promises made at the time. One popular theme today is that now is not the time for pointing fingers or playing the "blame game." When will be the time? If Timmy's re-pump and re-dump plan is successful, then the theme will be that "we're looking forward" and now is not the time to dwell on the past. The past will be sufficiently bad that everyone will be happy to forget it.
But if Timmy's Plan works, it will work for Wall Street. We will continue to struggle in a downsized economy, now with pensions, health care and social security all on life support. We will continue to be told there's no money for butter; it has all been spent on guns and paying interest on that mountain of debt. Wall Street's next big thing will most likely be centered in Asia.
The first consequence of Bernie and Timmy's excellent adventure will be the bubble being blown in our currency. They say not to worry, that they can quickly remove that excess liquidity from the economy before it trickles down into the real economy. Great. So, they admit up front that their plan doesn't actually include you, but should it trickle down and cause inflation, guess who inflation is going to get squeezed out of? For those of you who don't remember the 80s, that was the whole game. The squeezing resulted in a permanent downsizing of American prosperity, a fact that was masked by the wealth created for some by substituting American labor with Chinese.
We will be paying for the rest of our lives for this spill. The captain of the ship and its owners are going to be just fine.
If only Vegas adopted the G-man's plan:
The casino takes $100 from all guests, then hands it over to the high-rollers so they can play at the "special" tables, which may or may not pay-off better than the regular ones. If the high-rollers win, they will then loan the guests back some of their money at 30%; if they lose, the casino will demand another $100 from all guests to re-finance the high-rollers because, without them, the guests are told, the entire casino system will fail.
Meanwhile, while the casino bosses are busy collecting money from the guests, some of the high-rollers sneak into the count-room and steal everything in the vault, and then proceed to lose half of it and deposit the other half in 83 offshore accounts. When the theft is discovered, the casino bosses demand yet another $100 from each guest, explaining that the high-rollers have assured them that the money magically vanished, and that they have promised to win it all back at the special tables next time around.
When the high-rollers then lose all the guests' money again, the angry guests start a blog and write really nasty stuff about the high-rollers, who never read said blogs because they don't have Internet access on their new Gulf Stream jets...
Sioux Rose
FRANK: An analogy that puts the debacle/theft into perspective. Thank you.
For sure! Frank is an expert at putting things into perspective.
Good one!
what will truly help obama politically is to have his minions propose more and more proposals "to save the financial system" that are transparently outrageous in their trying to save the ultra-rich who are financially exposed to trillions in toxic investments.
and the left should welcome geithner's proposal as a great teaching moment regarding the fortunes the demoblicans are truly trying to save.
lazy leftists should stop proposing personnel to obama and finally make the effort to find out and publicize the names of the billionaires whom the demoblicans are trying to save with our taxpayer money.
this is a once-in-a-lifetime chance offered to americans to learn who are the billionaires that wag the usa dog and to rebel against them and their bribed politicians, journalists, and economists.
the idiotic left should stop complaining about "WS and the banks" and ask the american people if they really want to bail out this or that individual billionaire.
the billions that geithner wants now are not "for the failed banks", they are meant to save the ultra-rich !
even publicizing crude macro-economic data about how many trillions in toxic assets are in the hands of say the richest 0.1% would be very game-changing as it would make it impossible for the demoblicans to continue saying that they are acting for the public good.
demoblicans blackmail americans by crying wolf about "saving the financial system" but they won't be able to blackmail anybody anymore if they are compelled to cry wolf about "saving the billionaires".
even conservatives will find it hard to defend spending trillions in "welfare programs" for gambling billionaires.
only once the citizenry will start saying that it does not want to pay for the financial gambling follies of the richest 0.1%, etc., it will become feasible for obama to go against the billionaires, since at that point taking him out won’t be worthwhile for the billionaires.
I wish that were true. However, I believe the media works overtime to keep those names out of view. But, Hey, let's start with about 540 in congress and the senate. List the staff resumes from all the corporations inside political staffs and PACs. Next list the relatives in Corporations. Next the top 30 people under each of the Forbes 400 and THEIR family members in politics. There is a lot more nepotisim going around than is commonly assumed; all perfectly legal of course. You will find the press connection there. After you have said list and the goods of bribery, scandal, mayhem, grand larceny, etc. among the elite you will get a visit from the CIA. Then you'll realize that discretion is the better part of valor. It's a power, money and influence loop and by now you have to almost be born into it to belong. We aren't included. We are 99.99%. So the culprits and crooks and their families and toadies come to about 30,000 people. Amazing, isn't it?
Let's just list the names of the individuals who own the Federal Reserve. Anybody have them? Descendants of the Rothschilds and JP Morgan, who else? Let's get those names published so that people can come to their homes with pitchforks and tar and feather them all.
Giethner's plan and Summers' plan is Obama's plan. Admit it, Laura. Your man is the man responsible for the mess.
Obama has to truly become Lincoln as he uses these scoundrals to clean up their mess. Its like cleaning your own outhouse. Obama should remind them of what they have done every day - by pointing out the historical facts.
He must be able to say No to these guys. And every $ taken away from shoring up the toxic asset will be victory for Obama.
Is there or will there be transparancy to view this score? Obama has said he is willing to supply transparancy. The demand for transparancy lies with the media on all of our behalf. Simple supply + demand equation.
toophat for you!
Larry Summers, from the article, is one of the Villains in Naomi Klein's book, THE SHOCK DOCTRINE. So it is worrisome to see him still holding the ring of financial power politically in the Obama administration. Obama somehow overlooked far, far better people to tap this bastard, but why? Who put him up to this? Is it that old saw about keeping your enemies close? Or something more sinister? Or just going along to get along, as we all do?
And ex-Fed-gangster Geithner's "plan" is simply a Swindle on all American citizens, a con benefitting only the banksters and hedge funders like Mitt Romney and the other criminal bastards of his ilk (Madoff)- the very parties that created the crisis.
But there are too many DC-beltway/Wall Streeter/International Banking players that belong to the old gangs, and they will not give up their power and privileges without a fight to the death. Maybe literally. Because it means the death of the system they have designed to benefit themselves. Witness the fight the insurance companies are giving against simple Medicare for All.
Nationalize the banks and the Fed... if there can be literally Trillions of dollars for banksters, then there Really Are Trillions of dollars to fix REAL problems affecting Nature and Humanity. But depraved capitalistic economists (such as Friedmanites) give those problems no importance, giving life itself no monetary value whatsoever, especially compared with saving the banksters at any cost.
If trillions can be provided by the Fed, then there really IS no crisis, except the one precipitated and perpetuated by rightwing fascist Capitalistic bastards, who even now blame it All on the 'lazy good-for-nothing' poor, and 8-week-old Prez Obama, and will try to use this crisis to grind people into the dust ("we can't afford it..." they will now say... yeah, not in 'their version' of the world! - see THE SHOCK DOCTRINE!)
It is just as the exact-same Perps used the excuse of 9/11 to perpetrate their Cons, Felonies, Hijacks, Illegal Wars and High Crimes on Americans and the Constitution. Why do you think they are called CON-Server-tives? And why do you think their public-face leader and main spokes-toady is a Junkie Con-man/ Huckster/ Carny Barker/ Lying Anal Cyst, name of Rush?
NO SHOCK DOCTRINE FOR THE PEOPLE OF AMERICA! Force Obama to give Repugnan-trashcans and Demo BlowDogs the Shove and Go Full Socialism. Even call it philosophically-Christian Socialism to avoid the Commie-nism label. Remember, in the American 'Fifties, one person could support a whole family and community, a goodly number per person. From the 'Eighties and growing more and more egregious until this day, that person got all greedy and wanted all for itself- no support for others, a social breakdown that finally points to the "freedom" of "Full Libertarian" Somalia, where you'd better be a warlord (CEOs already consider themselves thus).
It was the enabling Reaganite Greed Disease, the thinking that 'money' the wealthy thought they 'made' was by divine right all theirs. An error in perspective that was convenient to use as permission to practice unbridled greed by those who were in positions to grab. Rationality, logic, reasonableness, fairness, justness, public-mindedness, the common good, altruism, compassion and empathy were All Lost -especially these last years under Sneering George and the Big Dick - their despicable administration's blowback consequences now come home to roost.
The metamorphosis of the Republicans, and the Democrap-publicans such as the DLC, into the parties of unbridled selfishness was spearheaded by an Actual Corporate Shill- Reagan- that the wealthy got elected president in a Con-paign/Class War Against a Government Of, By and For the People - i.e. borderline treasonous. A con-paign/class war still carried on in Reagan's name by such moral slugs as Newt Gingrich.
Let us finally get back to the task of building an ever-more perfecting union of the people and their lives and labor. Reject the Shock Doctrine of the CEOs and their toady economists and the bastard banksters who have grabbed the economy of this country by the throat, nearly killed it with their blind greed, and are now extorting the nation for more - especially watch out for those like Summers and Geithner and Bernanke, some of the very people that got us into the mess.
It is time to take this nation back from the sorry-ass 'heroes' of the ultra-right, time to get back into circulation the money and credits the wealthy have stolen with their foisting of indebtedness upon the people of the entire nation, all for the benefit of the few... time to take from the little King Georges, from those who have piled to the skies the loot from their debt enslavement of us all. And time for a new system of commonweal, of natural good, of first doing no harm.
Or merely straight-out tell all the children you meet that you just don't give a shit about them or their futures.