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The Men We Trusted to Lead Us
Now he tells us. On Wednesday Federal Reserve Chairman Ben Bernanke referred to the nation’s unemployment rate as a “national crisis,” an obvious if depressing fact of life to the 25 million Americans who have been unsuccessfully attempting to find full-time employment.
Fed Chair Ben Bernanke in 2009 delivers a report on the economy to Congress. (AP / J. Scott Applewhite)
But to finally hear those words from the man George W. Bush and Barack Obama both appointed to lead us out of the great recession is a bracing reminder of how markedly the policies of both those presidents have failed: “We’ve had close to 10 percent unemployment now for a number of years, and of the people who are unemployed, about 45 percent have been unemployed for six months or more,” Bernanke said. “This is unheard of.”
But why is Bernanke just now discovering this after having overseen the Fed’s purchase of trillions in toxic mortgage-backed securities from the too-big-to-fail banks that sacrificed people’s homes in a giant Ponzi scheme? Why did he throw all of that money at the banks without getting anything back in the way of relief for the people the bankers swindled?
The housing meltdown, which has robbed Americans of a considerable portion of their net worth, has led to the continued depressed consumer confidence that is the prime cause of crisis-level unemployment. In another of his too-late-to-matter moments, Bernanke acknowledged that “strong housing policies to help the market recover” would “clearly be very useful,” but he failed to suggest any.
Bernanke, along with then-New York Fed President Timothy Geithner, helped implement the Bush strategy of saving the banks in the hope that their rising tide would lift our little boats. That remained the strategy when President Obama rewarded Geithner for having saved AIG and Citigroup by naming him treasury secretary in the incoming government.
With the Geithner appointment, and the even more disturbing selection of Lawrence Summers to be his top economic adviser, Obama sealed his own fate as president. By turning to those disciples of Clinton-era Treasury Secretary Robert Rubin, a prime enabler of Wall Street greed, the new president fatally betrayed his promise of hope.
If you still need confirmation of just how decisive a betrayal those appointments were, check out Ron Suskind’s new book, “Confidence Men,” a devastating insider account of the Obama White House that clearly identifies as the source of this president’s failure “Rubin’s B-Team,” Summers and Geithner, “two men whose actions had contributed to the very financial disaster they were hired to solve.” Suskind quotes then-Sen. Byron Dorgan, D-N.D., one of the few who dared stand up to the Wall Street lobbyists, as telling Obama, “I don’t understand how you could do this; you’ve picked the wrong people!”
Of course the Democrats from the Clinton era don’t bear all of the responsibility for the radical deregulation of the financial industry that ended the sensible restraints on greed installed by Franklin Roosevelt in response to the Great Depression. Indeed, the inspiration came from Republicans led by Phil Gramm, the then-senator from Texas who as head of the Banking Committee authored the legislation that Wall Street lobbyists had long pushed unsuccessfully.
The mayhem they wrought and the subsequent big-money rewards to Rubin and Gramm do not seem to have shocked this president or the leading contenders for the Republican presidential nomination. Rubin became chairman of Citigroup and was rewarded with $120 million while he guided the bank to the edge of bankruptcy. Gramm went to a leading position at the Swiss-based UBS, the continually troubled institution now in the midst of its latest scandal, involving fraudulent trading. In addition to a $45 billion direct TARP bailout, Citigroup got $99.5 billion, and Gramm’s UBS $77.2 billion from a $1.2 trillion secret Fed loan fund.
Gramm and Rubin were partners in what should be considered the crime of the century, speaking in moral and not legal terms since, as regards the financial world, the bad guys get to write the laws. Thanks to their efforts, which allowed the creation of the “too-big-to-fail banks” and a totally unregulated derivatives market in toxic home mortgage securities, we entered the Great Recession, but neither of its authors has ever been held seriously accountable for the enormous suffering he caused.
On the contrary, Gramm and Rubin’s “just free Wall Street to do its thing” ideology still dominates the economic policies of both major political parties. Rubin’s acolytes have controlled the Obama administration’s economic strategy of saving Wall Street by betraying Main Street, and Gramm, who recently endorsed his former student at Texas A&M, Rick Perry, for president, remains the free-market-mayhem guru for Republicans. On Election Day, whoever wins, we lose.
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Show AllR's amd D's were both overhwelmingly enthusiastic about Gramm Leech Bliley ... The D's voted for the act under the cover that it supposedly provided protections and benefits to consumers, communities, and the economy.
"Today I am pleased to sign into law, the Gramm-Leach-Bliley Act... The removal of barriers to competition will enhance the stability of our financial services system ... the Act grants financial services firms greater latitude to innovate, it also contains important safety and soundness protections. ...
.
(The Act will) benefit American communities by preserving and strengthening community reinvestment ... I fully expect our regulators to work together to protect the integrity of our financial system ...The bill also promotes the safety and soundness of our financial system .... Gramm-Leach-Bliley Act is a major achievement, historic legislation that will benefit American consumers, communities, and businesses of all sizes."
-William J Clinton (exerpts from his signing statement)
re: "(The Act will) benefit American communities by preserving and strengthening community reinvestment ... I fully expect our regulators to work together to protect the integrity of our financial system ...The bill also promotes the safety and soundness of our financial system .... Gramm-Leach-Bliley Act is a major achievement, historic legislation that will benefit American consumers, communities, and businesses of all sizes."
Sickening. It has achieved the exact opposite on all fronts (except for enriching giant multinationals and hedge-fund managers). Breaking down the barriers between commercial and investment banking presents not only a strongly implied conflict of interests, it's a certain recipe for insider trading, and the worst types of behind-the-scenes market manipulations and con-games.
Our legislators are all (or mostly all) such corporate shills!
"Unhappy events [...] have retaught us two simple truths about the liberty of a democratic people. The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic State itself. That, in its essence, is fascism — ownership of government by an individual, by a group or by any other controlling private power.
"The second truth is that the liberty of a democracy is not safe if its business system does not provide employment and produce and distribute goods in such a way as to sustain an acceptable standard of living. Both lessons hit home. Among us today a concentration of private power without equal in history is growing."
—FDR
"On Election Day, whoever wins, we lose." Sounds like a line from the 60's Simon and Garfunkle song. Yep, that's how the game is now rigged and has been for a very long time. The political system is Plutocracy/oligopoly, Corporatism/Fascism, Imperialism WTF! In the end its KLEPTOMANIA in DC. The looting of the once great late state of America is well underway and nothing short of an armed rebellion or Revolution will stop it now. The foxes are inside eating the chickens one by one and spitting their bones in our faces. We the 99% of us are seated on the outside looking in at this and shaking our heads.
re: "We the 99% of us are seated on the outside looking in at this and shaking our heads."
And shaking the last change from our pockets.
"On Election Day, whoever wins, we lose."
Only as long as people keep voting (R) or (D) as if there were no third (or fourth, or even fifth) choice on the ballot. When the country wises up, Republicans and Democrats will be like royalty after the French Revolution--and just as deserving of their fate.
The Fed has one ultimate purpose. Profit for its shareholders.
The rest is window dressing.
Long live the occupation of Wall St!
...and may the -economic royalists- all end up hoisted by their own petards!
Not just for its shareholders but for the financial wing of the Powers That Be generally. It is obviously not there to help the common people but to juke the stats to justify whatever the large banks think they need.
The only way to Save the housing market is for people to be employed - and that means an economy based on the average person Making Things of Value.
Wall street used to make up less than 10% of GDP - it was a means to an end - deliver credit and liquidity to the economy -
Now Wall Street is the End Product itself at well over 40% of GDP - and it creates no true wealth. So in actuality our GDP of 15 tril is a lie that's quite obvious on Main Street.
The only way out of this mess is to 1. break up the financial terrorists at the major banks and the various Federal Reserves around the world. 2. Implement decent tariffs and quit handing out tax breaks for companies outsourcing jobs to slave labor countries.
Short of armegeddeon or the return of guillatine justice it ain't gonna happen.
"On Election Day, whoever wins, we lose."
Scheer certainly nailed that -- Wall Street owns both parties outright.
Which is why I'll be working for the Green Party. (Futile perhaps but at least one can breathe outside the charade factory.)
I did get a chuckle when Perry threatened to have Bernanke lynched for treason.
Texas style 'justice' indeed. If Perry should get into the White House, who better than Phil Gramm to run the Fed?
Wall Street's dream election would probably be Romney versus Obama. Talk about having the dice loaded. (Perry might have a little too much hair on his knuckles to reside in Wall Street's comfort zone.)
"Bernanke, along with then-New York Fed President Timothy Geithner, helped implement the Bush strategy of saving the banks in the hope that their rising tide would lift our little boats."
In 2008, at the height of the meltdown, Paul Craig Roberts was adamant that the only correct way to bail out the banks was to bail out the homeowners, and thus the banks via the homeowner bailouts. It was immediately clear that *neither* political party would do that, and that they would support only the banks. Frankly, that made it easy to *not* vote for either McCain or Obama in 2008. Little seems to have changed since then. It's still a criminal extortion mob running the show, worldwide. It is clearer and clearer that this mob absolutely must be broken completely, a change unlikely to occur without catastrophe now. Wise people will prepare for that as best as they can. Among other things, that means, *don't* trust all your retirement to Wall Street if you're retired, seriously ...
Exactly - considering the banks took mortgages and leveraged them 100's to 1 with the creation of Derivitives it's obvious that saving the homeowner and thus the banks isn't the plan.
Why bail out a bank when bailing out the homeowner bails out the banks at the same time but for pennys on the dollar.
Forced Austerity is the plan - if they 'saved' the banks they couldn't force Austerity on We The People.
Seaglass: The rest of us think that we're on the outside but are really on the inside shaking our heads waiting for our turn to be eaten. When the Polipac-men get hungry enough they'll eat us all then continue to feed on the rest of the world.
"On Election Day, whoever wins, we lose." The thought is revolting.
"The Men We Trusted to Lead Us"
Begs the question, why do we need leaders?
Direct democracy
It's true that most of the officials mentioned are reprehensible failures. But ultimately and more fundamentally, they are functionaries in what is now an indisputably failed system that can be described as right wing, free market cult type capitalism. Functionaries get paid for functioning in an existing system whether that system is a failure or not. You could replace all of the functionaries but if you don't change the system you would merely end up with a new set of reprehensible and/or criminal losers. And just as when an animal is wounded it continues to defend itself in the wild as best it can until and unless it succumbs to its injuries and dies, system functionaries continue to work within and defend a failed system until it is completely dead. When its completely dead, they don't get paid anymore!
If the stock market and/or the US dollar collapse the US system could be history sooner rather than later. But alternatively, the US failure following The Ronald Reagan disaster and the associated (eventual) bursting of the debt bubbles could drag on for decades; there could theoretically be mass unemployment, poverty etc. in the US for 50, even possibly 100 years before China and other creditors finally turn out the lights and shut the whole thing down completely. Or, it could be over a lot sooner if there are numerous riots and/or massive protests and/or massive boycotts. Historically, some systems have changed violently while others have changed peacefully. The bottom line is, right now nobody really knows when or how the system will be completely dead. It is known that it can not survive in the long run.
The main point, ultimately the only crucial point is: the system needs to be changed. Functionaries have to have new functions within a changed system. The laws have to be changed. The unemployed can not be completely responsible for unemployment and the poor can not be completely responsible for poverty as they are now in the States. The theories behind the system and the laws need to be changed. Far right “predatory” capitalism has to go.
So writers (and everyone) should avoid getting hung up on personalities and other specifics of functionaries who are just filling their assigned roles in a now failed system. Instead, what are needed are discussions about how the system can be changed and, even more importantly, about what will be the actual changes. To say the least those subjects are not easy (so its no surprise you see thousands of attacks on functionaries for every article that seriously and competently discusses a new system and/or ways that a new system can be initiated.) At high traffic sites such as Fluff Post (Huffington Post) all you ever see are the attacks on functionaries, and you will very rarely if ever see any serious discussion of how the system can be changed or what the changes should be.
Changing may be difficult but it’s certainly not supposed to be next to impossible. When Scandinavians were confronted with a roughly similar situation about 120 years ago (large scale unemployment and poverty) they developed and implemented social democracy in two or three decades. That system has proven to be a far better system (and a system far more resistant to collapse) than the far right capitalism. In general, the more characteristics common to social democracy a country has, the more successful it is here in 2011.
It seems that globalism, by causing far right capitalism to collapse in various ways, sped a discovery that was going to be made sooner or later regardless: that ultimately, far right capitalism has no long term future. By contrast, as of now, social democracy has been damaged by globalism but not to the point of failure and therefore not to the point where it too has to be radically changed. It seems likely as of right now that, even if the Euro and the European Union collapse due to too much dabbling by Europeans in American style right wing economics, the European and other countries with the most characteristics common to social democracy (and the least involvement in and dependence on right wing economics) will not be very devastated and will instead continue on relatively prosperously.
Tremaine: Your post is well-argued and lays out a number of logical sequences; however, what IS missing is a key factor that will massively alter the calculus: that of global climate change. So much depends upon the current basis for agriculture, water delivery, a certain stability with weather-related perturbations popping up here or there. When these destabilizing events become the rule, rather than exception, when crops fail, when costs of seeking oil rise and lead to risks that literally compromise world health (BP disaster in the Gulf, Fukushima in Japan), then arguing economies decoupled from the bankrupt state of nature (in too many places), misses something vital that's in plain sight. And it must be considered.
China's pollution problems are dramatic, and oil (the cheap sort) is running low.
Business as usual does NOT have another 100 years to get its act together. Crisis can lead to creative, inventive, unprecedented action... that is, if the Disaster Capitalists don't manage to co-opt each one and use it to further their own well GUARDED objectives.
I for one have a good amount of faith that social democracy can handle climate change and even oil running out. (But true, if the Earth is doomed there isn’t going to be any system that can handle that.)
Scandinavian countries and Germany are absolute leaders in pollution control and reduction achieved through lesser and smarter use of energy. For example, the great majority of houses and buildings are very, very well insulated from the cold. And there are smart heating technologies in widespread use, notably radiant heating or under floor heating; see http://en.wikipedia.org/wiki/Underfloor_heating
Just as importantly, the Scandinavian and closely related countries are leaders in the green energy production. As examples, there are a lot of windmills used for power in Denmark and there are a lot of solar panels being used in Germany.
Meanwhile, a hundred years ago, the US corporations had plenty of money to develop the oil industry. They made the investments and developed the oil industry. Now, because they are little more than hoarders and looters, they refuse to invest in and develop solar, wind, hydro etc. Right wing economics is not reliable or dependable.
A social democratic government is a backstop for corporations which refuse to do the right and the smart things. That type of government has the power to stop corporations from doing wrong and it has the resources to promote corporations to do right. Specifically for example, governments with social democracy characteristics can and do promote green energy in various ways. They can and do:
(a) Engage in green energy research and development,
(b) Subsidize companies to produce green energy technology and products and
(c) Reserve the right and have the resources and the power to produce green energy technology and products themselves (so they can make up for the private sector failing to develop it efficiently and/or effectively).
Right wing governments assume the private sector will efficiently and effectively handle the inevitable transition from oil to green and they are badly mistaken.
China is sort of everything at once; they are all over the map in their rush to become the world's dominant economic power. On the one hand, right now China is polluting on a truly large scale. On the other hand, they are leaders in solar, hydro, and even wind power. China, as is fairly well known, is trying to "catch up" to the leaders in wealth and prosperity as rapidly as possible. They expect to be able to reduce pollution once the green energy systems have achieved full economies of scale. The timing and by how much China will be reducing pollution quantities remains to be seen of course.
Scandinavian-style Social Democracy, German-style green energy production (specifically their success with solar) and French-style agribusiness/farming techniques — These are the models I believe Americans MUST adopt if we are to survive as a nation in the upcoming century.
Democratic Eco-Socialism for the USA!!! This IS the answer!
Cheers, and excellent, important exchange tremaine and SR...
Tremaine: You are correct about the European models AND American industrialists deciding NOT to invest in the future. It's a mindset that's stuck in the past down to the glory days following WWII... isn't that when and where the "brand" of American exceptionalism was essentially born?
Yogananda pointed out, in at least one lecture delivered at the U.N, a belief that is very strong among the Indigenous seers, mystics, shamans, etc... and it's this idea that HOW we live has a direct bearing on the invisible forces that REGULATE the natural world. When there's too much violence, too much investment directed at senseless aggression, the "grid" breaks down; or as the poet put it: The Center will not (cannot) hold.
When I speak as a Cassandra, I speak from the understanding of this long-established esoteric principle (and tradition). It goes back to the times of Atlantis, is spoken forf by Plato, as well as in the Biblical explanation for the Great Flood. It's written all through the Law of Karma, and modern, allegedly sophisticated intellectuals disregard its wisdom at their (and our) peril.
So while the mechanics for going green certainly do exist, and while what's thus far missing is the fiscal and political muscle to engender those drives... there is also the matter of violence. Our nation, as I've personally written about often enough in this forum (with MANY examples, the evidence of which cannot be countered) is instead inculcating in its citizens a sense that war, aggression, hatred, and violence ARE the norms! Think of 5 year olds with assault video games, for starters. The "war on terror," the rousing of fear, the surveillance state, etc. It's Joseph McCarthy's dream, returned to haunt U.S.
In any case, I appreciate the discourse here, and as always, am glad to see Salusa chime in. Salusa and Hero are 2 posters who have an easy grasp of holistic views.Neither is stuck in a "camp" of black or white, and therefore both evidence fine minds capable of processing a great deal of information. Thanks to their commitment to Truth and a better society, they share their enlightened synthesis of ideas in this forum. And we are all made the better for it...
I am GRATEFUL for honest voices who genuinely care about this nation. As for the authoritarians who too often erupt the dialog, like bulldozers aimed at a forest, their karma will catch up with them. Let us pray, WE not get caught in the ensuing maelstrom... although from the perspective of the soul, eternity affords many future chances to work things through. Let there be LIGHT... here.
Two of the most well-informed, well-stated, and thought-provoking posts I have ever seen. Thank you, tremaine.
The Germans did not outsource their Industrial base to China, and they now admit that bringing in all those immigrants was a mistake..Maybe Slick Willie can tell us about the Millions of new jobs he promised us when he signed off on Nafta.
get logical, public doesn't have monetary system, which belong to private families
monetary system determines who is the slave and who is the master