Who can we bank on, who can we trust, as the crisis sharpens?
Washington seems tethered at the hip to Wall Street and does it’s bidding.
Can it possibly be true that the Congress can’t walk and chew gum at the same time? This question is prompted by the announcement that financial reform is being pushed back as health care becomes the priority.
This makes me nervous for two reasons. First, it portends a long drawn out legislative battle on health care reform with more time for industry lobbyists and the Congress-persons and Senate persons on their payrolls to compromise away or wreck the change we so deeply need.
Second, it confirms that the lobbyists for financial institutions-the people responsible for the collapse of our economy have been scheming and wrangling to gut the reforms that could stop anther economic breakdown. Reviving this industry without restructuring and re-regulating it just guarantees another disaster down the line.
Bear in mind that that disaster is already underway despite what you may be reading about “green shoots” and signs that a turnaround is coming because unemployment didn’t go down as much as expected-only 500,000 plus a month.
In fact, many observers see a deeper crash still coming with a depression quietly deepening, even if most us cling to our perennial optimism and trust in the change-maker we can believe in. The Telegraph’s Ambrose Evan-Pritchard, who unfortunately has been more prescient than wrong, whines:
Those of us who still question whether the world has purged its toxins are reduced to the same tiny band of moaning Druids from early 2007, when we shook our heads in disbelief as the carry trade swept Iceland to fresh madness and bankers laughed off sub-prime rot at Bear Stearns. We learned then to thicken our skins with walnut juice, lie down in dark rooms, and dissent from Goldman Sachs.
You may recall Dennis Kucinich asking his colleagues aloud if he was in the Congress of the United States or the “board room of Goldman Sachs” as if the former is a wholly owned subsidiary of the latter. Or perhaps, there was a merger between the two in the sense that Wall Street may be down but by more means out. It is “clawing back” its influence with a new lobbying surge which is allowing Goldman and the big banks to pay back their TARP Money and get out from under the spectre of new regulations, compensation limits and the like.
The Empire inside the Empire is striking back.
Meanwhile we still live with a fog of misinformation, disinformation and no information. Basic information about monies from the Federal Reserve to Banks and financial institution has not been disclosed. Bear in mind the Banks control the Fed-and free marketers ran the economy, not the government.
Writes Bob Chapman of International Forecaster:
Not one banking or Wall Street executive owned up to what really happened to cause the crisis. They are totally lacking in honesty, integrity and decency. As it now stands we’ll never know the true inside story of what really went on. We have seen no civil or criminal charges against any of these crooks. Not even investigations. Whatever happened to RICO. Over the past 25 years our financial industry has descended into darkness and corruption and the people who caused it are getting away scott free.
Wow, what an indictment! Example: do we really know the purpose or the TARP program that gave money to banks that apparently didn’t need it, but didn’t say no. (The other side of giving loans to borrowers who couldn’t afford them?)
The Ritholtz blog suggests:
It was $700 billion dollar pile of money in search of a justification for its existence.
Most people still look at TARP the wrong way. When trying to discern what the true basis of it was, we eliminated what made no sense whatsoever, and what was left were a few strange ideas. When you eliminate the impossible, what’s left, no matter how improbable, becomes the best explanation.
What was that explanation? In Bailout Nation, we discuss the possibility that The TARP was all a giant ruse, a Hank Paulson engineered scam to cover up the simple fact that CitiGroup (C) was teetering on the brink of implosion. A loan just to Citi alone would have been problematic, went this line of brilliant reasoning, so instead, we gave money to all the big banks.
Oh, that explains it.
Shamus Cooke writes on Global Research: “History will likely show that these bailouts involved the largest transfer of wealth ever – from the working class to that small group of billionaires who own the corporations. This fact is recognized by most people now and is such common knowledge that even the mainstream media feels comfortable discussing it. . . matter-of-factly.
These corporations have also exerted tremendous influence in other realms of politics, working towards destroying Obama’s campaign promises of health care, job creation, civil liberties, the Employee Free Choice Act, peace, etc.
In each case, the promised reform was gutted of its essence, and “compromise” versions of the bills are now being discussed: instead of universal health care, we will likely be universally mandated to purchase health insurance; instead of “job creation” we are told that the stimulus has “saved jobs” (contrary to the evidence); while troops are “drawing down” from Iraq, the war in Afghanistan/Pakistan is being escalated; instead of allowing workers to organize unions easier, a compromise version [of the] ” Employee Free Choice Act, minus card check – seems more politically “pragmatic,” etc.”
At the heart of the crisis is the plight of homeowners who we know were defrauded in large numbers, victims like the Madoff investors. Yet the former are getting reimbursed to some degree, the latter are not. Bills to help them have been killed with Matt Renner on Truthout reporting:
A new analysis from a government watchdog group shows senators who killed off a consumer-friendly change in law aimed at addressing the foreclosure crisis received more money in campaign contributions from the industries their vote aided. Senators who voted against the consumer-friendly amendment received $3.98 million from the financial industry during the 2008 election cycle, while proponents of the bill received $2.65 million.
Could this be more corruption? Of course , but they call it politics as usual. And, that’s not the worst of it, is that foreclosures are still rising and now affecting non-subprime lenders with little relief in sight.
Back to the banks: I have been reading complex web posts showing how the stress tests of banks were rigged and more may be needed. I have been reading about how the unemployment figures under-count folks out of work with the real numbers probably doubled, with minorities possibly tripled. I have been reading essays arguing that the notion that the government is “saving jobs” is not quantifiable with no statistical back up.
I have been following the campaign to get the Federal Reserve Bank to disclose its showering of money on financial institutions – something it refuses to do.
Who can we trust and bank on? The President wants to give us confidence but seems to be playing a confidence game. The Banks are dissembling when they are not lying. The most trenchant critics – may they be wrong – believe a total collapse is in the offing,
And the rest of us, mostly puzzled and paralyzed, unable to comprehend the severity of the situation, the billions, no make that trillions, gone. How do we make sense of the game playing in State Governments like those in California and New York a caricature of responsibility. The jobs are going and the Banksters are still going for it, sucking up what they can in a race to the bottom.
Who can we trust? Who Can We Bank on? You tell me.
Mediachannel’s News Dissector Danny Schechter is making a film based on his book PLUNDER: Investigating Our Economic Calamity (newsdissector.com/plunder) Comments to Dissector@mediachannel.org