To understand the meaning of the U.S. election results, it is worth looking back to the moment when everything changed for the Obama campaign. It was, without question, the moment when the economic crisis hit Wall Street.
Up to that point, things weren’t looking all that decisive for Barack Obama. The Democratic National Convention barely delivered a bump, while the appointment of Sarah Palin seemed to have shifted the momentum decisively over to John McCain.
Then, Fannie Mae and Freddie Mac failed, followed by insurance giant AIG, then Lehman Brothers. It was in this moment of economic vertigo that Obama found a new language. With tremendous clarity, he turned his campaign into a referendum into the deregulation and trickle down policies that have dominated mainstream economic discourse since Ronald Reagan. He said his opponent represented more of the same while he stood for a new direction, one that would rebuild the economy from the ground up, rather than the top down. Obama stayed on this message for the rest of the campaign and, as we just saw, it worked.
The question now is whether Obama will have the courage to take the ideas that won him this election and turn them into policy. Or, alternately, whether he will use the financial crisis to rationalize a move to what pundits call “the middle” (if there is one thing this election has proved, it is that the "peoples" middle is far to the left of its previously advertised address). Predictably, Obama is already coming under enormous pressure to break his election promises, particularly those relating to raising taxes on the wealthy and imposing real environmental regulations on polluters. All day on the business networks, we hear that, in light of the economic crisis, corporations need lower taxes, and fewer regulations—in other words, more of the same.
The new president’s only hope of resisting this campaign being waged by the elites is if the remarkable grassroots movement that carried him to victory can somehow stay energized, networked, mobilized—and most of all, critical. Now that the election has been won, this movement's new missions should be clear: loudly holding Obama to his campaign promises, and letting the Democrats know that there will be consequences for betrayal.
The first order of business—and one that cannot wait until inauguration—must be halting the robbery-in-progress known as the “economic bailout.” Author, Activist, Journalist, Naomi Klein, has spent the past month examining the loopholes and conflicts of interest embedded in the U.S. Treasury Department’s plans. She's just published feature articles in Rolling Stone, The New Trough, and her column in The Nation, Bush’s Final Pillage.
Both these pieces argue that the $700-billion “rescue plan” should be regarded as the Bush Administration’s final heist. Not only does it transfer billions of dollars of public wealth into the hands of politically connected corporations (a Bush specialty), but it passes on such an enormous debt burden to the next administration that it will make real investments in green infrastructure and universal health care close to impossible. If this final looting is not stopped (and yes, there is still time), we can forget about Obama making good on the more progressive aspects of his campaign platform, let alone the hope that he will offer the country some kind of grand Green New Deal.
Klein's best selling book, The Shock Doctrine details how terrible thefts have a habit of taking place during periods of dramatic political transition. When societies are changing quickly, the media and the people are naturally focused on big “P” politics—who gets the top appointments, what was said in the most recent speech. Meanwhile, safe from public scrutiny, far reaching pro-corporate policies are locked into place, dramatically restricting future possibilities for real change. Wonder where Cheney's been since the "collapse"... busy busy busy...
But it’s not too late to halt the robbery in progress, though it cannot wait until inauguration. Several great initiatives to shift the nature of the bailout are already underway, including bailoutmainstreet.com. I added my name to the “Call to Action: Time for a 21st Century Green America” and invite you to do the same.
Stopping the bailout profiteers is about more than money. It is about democracy. Specifically, it is about whether Americans will be able to afford the change they have just voted for so conclusively.
(lifted from Naomi Klein)
Showing posts with label Paulson. Show all posts
Showing posts with label Paulson. Show all posts
Thursday, November 06, 2008
Thursday, October 30, 2008
Paulson's Dirty Litle Secret
In an article recently, Joe Nocera the economic writer for the NYTimes, revealed what he calls "the dirty little secret of the banking industry"--namely, it has no intention of using the [government bailout] money to save small business. Its essential aim was to engineer a rapid consolidation of the American banking system by subsidizing a wave of takeovers of smaller financial firms by the most powerful banks." In other words, our money is being given to help the financial aristocracy consolidate their wealth and destroy our society.
Paulson, the former CEO of Goldman Sachs, wants to help his friends the speculative banks to acquire as many smaller, more stable savings banks as possible and is using his power to inject capital (our money) to force a new and hostile round of bank consolidation.
Nocera cites an employee-only conference call held October 17 by a top executive of JPMorgan Chase, the beneficiary of $25 billion in public funds. Nocera explains that he obtained the call-in number and was able to listen to a recording of the proceedings, unbeknownst to the executive, whom he declines to name.
Asked by one of the participants whether the $25 billion in federal funding will "change our strategic lending policy," the executive replies: "What we do think, it will help us to be a little bit more active on the acquisition side or opportunistic side for some banks who are still struggling."
Referring to JPMorgan's recent government-backed acquisition of two large competitors, the executive continues: "And I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Stearns mergers. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way, and obviously depending on whether recession turns into depression or what happens in the future, you know, we have that as a backstop."
As Nocera notes: "Read that answer as many times as you want--you are not going to find a single word in there about making loans to help the American economy."
Later in the conference call the same executive states that they will tighten credit and actually SHRINK loaning which will drive up the rates for loans... and their profits.
Paulson and other Treasury officials have made public statements calling on the banks that receive public funds to use them to increase their lending activities. That, however, is pure propaganda. The bailout program imposes no lending requirements on the banks in return for government cash.
The wealth consolidation is already starting to appear, early this month, (in a nearly unnoticed move) Paulson put in place a new tax break worth billions of dollars to his friends, allowing the acquiring bank to immediately write-off any losses on the books of the banks they take over. This will in fact, encourage bank mergers.
We already know the credit crisis bailout has prompted the takeover of Bear Stearns and Washington Mutual by JPMorgan, Merrill Lynch by Bank of America, Wachovia by Wells Fargo but last Friday, National City Bank was aggressively acquired by PNC ( a Pittsburg-based financial giant)
The Wall Street Journal on Saturday called the acquisition of National City a "strong-arm sale", but also provides a taste of what is to come. Paulson and his Treasury Department sealed the fate of the Cleveland-based National City bank by denying them any government bailout. But then it then Pittsburgh-based PNC $7.7 billion from to help takeover National City. Now PNC can write off all the debt of National City with Paulson's new tax write-off on mergers.
All of the claims that were made to justify the bank bailout seem to be as truthful as the lies BushCo gave for invading Iraq. President Bush, Federal Reserve Chairman Ben Bernanke and Paulson told the Democratic congressional leadership and Barack Obama that the bailout had to be passed, and passed immediately, despite massive popular opposition. Those who opposed the plan were denounced for jeopardizing the well being of the American people.
Though this time, several Republican leaders, like Jim Sensenbrenner, held out for and additional $150B in earmarks—but more importantly, they now are on record as opposing the bill so when Americans finally realize this deception... these Congressmen will look like Russ Feingold did after the Patriot Act was exposed— as heroes of the people!
What a sham, what a clever move in a well- constructed plan to topple our rights and freedom.
In a nationally televised speech delivered September 24, in advance of the congressional vote on the bailout plan, Bush said it would "help American consumers and businessmen get credit to meet their daily needs and create jobs." If the bailout was not passed, he warned, "More banks could fail, including some in your community. The stock market would drop even more, which would reduce the value of your retirement account.... More businesses would close their doors, and millions of Americans could lose their jobs ... ultimately, our country could experience a long and painful recession."
One month after his bailout was enacted... and all of the dire developments he said the bailout would fix--banks and businesses disappearing, the stock market plunging, unemployment skyrocketing- are happening with accelerating speed.
While Obama talks about the need for all Americans to "come together" in a spirit of "shared sacrifice" what he doesn't want to say--is that this bailout is sucking any and all money he might have used for his social programs.--meaning drastic cuts in Medicare, Medicaid, Social Security in addition to not affording universal healthcare, better schools and infrastructure.
But so too, would McCain find this "crisis" will also make it impossible for him to give the wealthy tax cuts and bailout plans he's been touting.... The darker side being... his handlers may actually push the tax cuts through and accelerate the collapse of our nation.
As Naomi Klein theorized in her book "The Shock Doctrine, the "economic rescue" plan is a scheme to plunder society for the benefit of the financial aristocracy. The American ruling elite, utilizing its domination of the state and the two-party political system, is exploiting a crisis of its own making to carry through an economic agenda, long in preparation, that could not be imposed under normal conditions.
The result will be at least greater economic hardship for ordinary Americans but possibly herald the death of Democracy. The few newly consolidated mega-banks will have near absolute market control to set interest rates and provide credit to workers, students, families and small businesses. The government is organizing a restructuring of the financial system that will enable a handful of mega-banks to have ultimate power over society.
How is this not unlike the same aristocratic elite plotting the wealth consolidation and overthrow of our government in 1933 during the last economic collapse?
This time, it seems they may well have succeeded.
Paulson, the former CEO of Goldman Sachs, wants to help his friends the speculative banks to acquire as many smaller, more stable savings banks as possible and is using his power to inject capital (our money) to force a new and hostile round of bank consolidation.
Nocera cites an employee-only conference call held October 17 by a top executive of JPMorgan Chase, the beneficiary of $25 billion in public funds. Nocera explains that he obtained the call-in number and was able to listen to a recording of the proceedings, unbeknownst to the executive, whom he declines to name.
Asked by one of the participants whether the $25 billion in federal funding will "change our strategic lending policy," the executive replies: "What we do think, it will help us to be a little bit more active on the acquisition side or opportunistic side for some banks who are still struggling."
Referring to JPMorgan's recent government-backed acquisition of two large competitors, the executive continues: "And I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Stearns mergers. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way, and obviously depending on whether recession turns into depression or what happens in the future, you know, we have that as a backstop."
As Nocera notes: "Read that answer as many times as you want--you are not going to find a single word in there about making loans to help the American economy."
Later in the conference call the same executive states that they will tighten credit and actually SHRINK loaning which will drive up the rates for loans... and their profits.
Paulson and other Treasury officials have made public statements calling on the banks that receive public funds to use them to increase their lending activities. That, however, is pure propaganda. The bailout program imposes no lending requirements on the banks in return for government cash.
The wealth consolidation is already starting to appear, early this month, (in a nearly unnoticed move) Paulson put in place a new tax break worth billions of dollars to his friends, allowing the acquiring bank to immediately write-off any losses on the books of the banks they take over. This will in fact, encourage bank mergers.
We already know the credit crisis bailout has prompted the takeover of Bear Stearns and Washington Mutual by JPMorgan, Merrill Lynch by Bank of America, Wachovia by Wells Fargo but last Friday, National City Bank was aggressively acquired by PNC ( a Pittsburg-based financial giant)
The Wall Street Journal on Saturday called the acquisition of National City a "strong-arm sale", but also provides a taste of what is to come. Paulson and his Treasury Department sealed the fate of the Cleveland-based National City bank by denying them any government bailout. But then it then Pittsburgh-based PNC $7.7 billion from to help takeover National City. Now PNC can write off all the debt of National City with Paulson's new tax write-off on mergers.
All of the claims that were made to justify the bank bailout seem to be as truthful as the lies BushCo gave for invading Iraq. President Bush, Federal Reserve Chairman Ben Bernanke and Paulson told the Democratic congressional leadership and Barack Obama that the bailout had to be passed, and passed immediately, despite massive popular opposition. Those who opposed the plan were denounced for jeopardizing the well being of the American people.
Though this time, several Republican leaders, like Jim Sensenbrenner, held out for and additional $150B in earmarks—but more importantly, they now are on record as opposing the bill so when Americans finally realize this deception... these Congressmen will look like Russ Feingold did after the Patriot Act was exposed— as heroes of the people!
What a sham, what a clever move in a well- constructed plan to topple our rights and freedom.
In a nationally televised speech delivered September 24, in advance of the congressional vote on the bailout plan, Bush said it would "help American consumers and businessmen get credit to meet their daily needs and create jobs." If the bailout was not passed, he warned, "More banks could fail, including some in your community. The stock market would drop even more, which would reduce the value of your retirement account.... More businesses would close their doors, and millions of Americans could lose their jobs ... ultimately, our country could experience a long and painful recession."
One month after his bailout was enacted... and all of the dire developments he said the bailout would fix--banks and businesses disappearing, the stock market plunging, unemployment skyrocketing- are happening with accelerating speed.
While Obama talks about the need for all Americans to "come together" in a spirit of "shared sacrifice" what he doesn't want to say--is that this bailout is sucking any and all money he might have used for his social programs.--meaning drastic cuts in Medicare, Medicaid, Social Security in addition to not affording universal healthcare, better schools and infrastructure.
But so too, would McCain find this "crisis" will also make it impossible for him to give the wealthy tax cuts and bailout plans he's been touting.... The darker side being... his handlers may actually push the tax cuts through and accelerate the collapse of our nation.
As Naomi Klein theorized in her book "The Shock Doctrine, the "economic rescue" plan is a scheme to plunder society for the benefit of the financial aristocracy. The American ruling elite, utilizing its domination of the state and the two-party political system, is exploiting a crisis of its own making to carry through an economic agenda, long in preparation, that could not be imposed under normal conditions.
The result will be at least greater economic hardship for ordinary Americans but possibly herald the death of Democracy. The few newly consolidated mega-banks will have near absolute market control to set interest rates and provide credit to workers, students, families and small businesses. The government is organizing a restructuring of the financial system that will enable a handful of mega-banks to have ultimate power over society.
How is this not unlike the same aristocratic elite plotting the wealth consolidation and overthrow of our government in 1933 during the last economic collapse?
This time, it seems they may well have succeeded.
Thursday, September 25, 2008
Disaster Capitalism
We’re seeing another very dramatic example of the Economic Shock-Thearapy right now with this extortionist kind of tactic playing out in Washington. BushCo says “Sign this blank check, or we’re all going down, Wall Street, your savings pensions and 401ks—you know, The Sky is Falling!!!”
Just like the days following 9/11 when BushCo pushed through the USA Patriot Act and forced Congress to vote on a (still hot from the duplicator machines) 597 page rewrite of the Constitution before noon that day! I think most every American can agree there are many parts of that "book" that turned out to not be in the best interests of freedom and democracy. But in his rhetoric, Bush said 'yer either with us or against us' and barring our own Russ Feingold it passed nearly unanimously.
Well here we are at the autumn of the Bush residency... and here again we're facing another "sky is falling—pass this by friday" shock doctrine. The game is the same, use fear to keep the flock in line. Scare America into doing the wrong thing because its their ONLY choice... and its gotta happen by tomorrow- or else!
So what is this Economic Shock-Therapy? Milton Friedman coined it as a way to bring about radical economic changes that would normally be highly controversial—Disaster Capitalism. Following a disaster, the citizens are softened up and rally behind perceived leadership. Precisely the time to slip-in radical changes (like torture, spying, wars, deregulation and consolidation) wrapped in the form of a security blanket (or flag).
Naome Klein has written a book detailing many historic examples of this technique and its use. The Shock Doctrine gives perhaps the blueprints for todays financial shock treatment delivered by Bush's Treasury Secretary Henry Paulson.
It’s interesting who Treasury Secretary Henry Paulson is, he served as an assistant to Richard Nixon’s assistant, Watergate "plumber" John Ehrlichman. From there he moved right to Goldman Sachs, where he became the head of it.
BusinessWeek magazine ran an article just after Paulson was appointed by Bush in 2006, Mr Risk Goes to Washington, It says, “Think of Paulson as Mr. Risk. He’s one of the key architects of a more daring Wall Street, where securities firms are taking greater and greater chances in [their] pursuit of profits. By some key measures, the securities industry is more leveraged now than it was at the height of the 1990s boom." When Paulson took over Goldman Sachs in 1999, they had $20 billion in high-risk gambles—When he left, they had $100 billion.
Henry Paulson isn't speaking for Main Street, he's bailing out his colleagues for some of the very debts that he himself accumulated.
Last night the pResident addressed the nation urging Congress and the citizens to immediately accept and implement his Economic Plan. A plan he said his economic advisors have been working on for weeks. Well Folks, its all of three pages long.
Paulson said that he thought it would be presumptuous to put in clauses calling for regulation. But this is absolute nonsense. Section 2 of the same document talks about how they have the right to hire contractors to administer this huge operation, and we know that that means contracting with some of the very firms who are going to be bailed out. And then it says that it would be—they would be contracting them without regard to any other provision of law regarding public contracts.
Hello??? What are we, Iraq? This document grants complete immunity from oversight and prosecution that the contractors have in Iraq, if not more. Basically what they are saying is that Paulson can contract with private companies AND exempt those companies from the existing law. No conflict of interest, no whistleblowing, in fact way to prosecute them if we learn in six months that they've broken every law on the books.
...in times of crisis, when people are panicked, we’ve seen again and again the right push through radical pro-corporate policies, what they call “free market reforms,” precisely because it is in a crisis where the space for debate rapidly closes, and you can invoke this state of emergency to say we have no choice.
They’re getting this—they’re lobbying for this huge bailout, obviously, but this bailout is a kind of a time bomb, because it’s all these bad debts, and they are going to explode on the next administration. I mean, we know that the Bush administration has already left the next administration with huge debt and deficit problems. They’ve just exploded those, expanded them. And what that means is that whoever the next president is is going to be inheriting this economic crisis that is being exacerbated by this bailout.
Welcome to Disaster Capitalism -
and the next installment of The Shock Doctrine.
Just like the days following 9/11 when BushCo pushed through the USA Patriot Act and forced Congress to vote on a (still hot from the duplicator machines) 597 page rewrite of the Constitution before noon that day! I think most every American can agree there are many parts of that "book" that turned out to not be in the best interests of freedom and democracy. But in his rhetoric, Bush said 'yer either with us or against us' and barring our own Russ Feingold it passed nearly unanimously.Well here we are at the autumn of the Bush residency... and here again we're facing another "sky is falling—pass this by friday" shock doctrine. The game is the same, use fear to keep the flock in line. Scare America into doing the wrong thing because its their ONLY choice... and its gotta happen by tomorrow- or else!
So what is this Economic Shock-Therapy? Milton Friedman coined it as a way to bring about radical economic changes that would normally be highly controversial—Disaster Capitalism. Following a disaster, the citizens are softened up and rally behind perceived leadership. Precisely the time to slip-in radical changes (like torture, spying, wars, deregulation and consolidation) wrapped in the form of a security blanket (or flag).
Naome Klein has written a book detailing many historic examples of this technique and its use. The Shock Doctrine gives perhaps the blueprints for todays financial shock treatment delivered by Bush's Treasury Secretary Henry Paulson.
It’s interesting who Treasury Secretary Henry Paulson is, he served as an assistant to Richard Nixon’s assistant, Watergate "plumber" John Ehrlichman. From there he moved right to Goldman Sachs, where he became the head of it.
BusinessWeek magazine ran an article just after Paulson was appointed by Bush in 2006, Mr Risk Goes to Washington, It says, “Think of Paulson as Mr. Risk. He’s one of the key architects of a more daring Wall Street, where securities firms are taking greater and greater chances in [their] pursuit of profits. By some key measures, the securities industry is more leveraged now than it was at the height of the 1990s boom." When Paulson took over Goldman Sachs in 1999, they had $20 billion in high-risk gambles—When he left, they had $100 billion.
Henry Paulson isn't speaking for Main Street, he's bailing out his colleagues for some of the very debts that he himself accumulated.
Last night the pResident addressed the nation urging Congress and the citizens to immediately accept and implement his Economic Plan. A plan he said his economic advisors have been working on for weeks. Well Folks, its all of three pages long.
Paulson said that he thought it would be presumptuous to put in clauses calling for regulation. But this is absolute nonsense. Section 2 of the same document talks about how they have the right to hire contractors to administer this huge operation, and we know that that means contracting with some of the very firms who are going to be bailed out. And then it says that it would be—they would be contracting them without regard to any other provision of law regarding public contracts.
Hello??? What are we, Iraq? This document grants complete immunity from oversight and prosecution that the contractors have in Iraq, if not more. Basically what they are saying is that Paulson can contract with private companies AND exempt those companies from the existing law. No conflict of interest, no whistleblowing, in fact way to prosecute them if we learn in six months that they've broken every law on the books.
...in times of crisis, when people are panicked, we’ve seen again and again the right push through radical pro-corporate policies, what they call “free market reforms,” precisely because it is in a crisis where the space for debate rapidly closes, and you can invoke this state of emergency to say we have no choice.
They’re getting this—they’re lobbying for this huge bailout, obviously, but this bailout is a kind of a time bomb, because it’s all these bad debts, and they are going to explode on the next administration. I mean, we know that the Bush administration has already left the next administration with huge debt and deficit problems. They’ve just exploded those, expanded them. And what that means is that whoever the next president is is going to be inheriting this economic crisis that is being exacerbated by this bailout.
Welcome to Disaster Capitalism -
and the next installment of The Shock Doctrine.
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