MSM finally admitting banker coup d'état
 

ROLLING STONE:

The Big Takeover
The global economic crisis isn't about money - it's about power. How Wall Street insiders are using the bailout to stage a revolution

MATT TAIBBI

Posted Mar 19, 2009 12:49 PM


It's over ? we're officially, royally f**ked. no empire can survive being rendered a permanent laughingstock, which is what happened as of a few weeks ago, when the buffoons who have been running things in this country finally went one step too far. It happened when Treasury Secretary Timothy Geithner was forced to admit that he was once again going to have to stuff billions of taxpayer dollars into a dying insurance giant called AIG, itself a profound symbol of our national decline ? a corporation that got rich insuring the concrete and steel of American industry in the country's heyday, only to destroy itself chasing phantom fortunes at the Wall Street card tables, like a dissolute nobleman gambling away the family estate in the waning days of the British Empire.

The latest bailout came as AIG admitted to having just posted the largest quarterly loss in American corporate history ? some $61.7 billion. In the final three months of last year, the company lost more than $27 million every hour. That's $465,000 a minute, a yearly income for a median American household every six seconds, roughly $7,750 a second. And all this happened at the end of eight straight years that America devoted to frantically chasing the shadow of a terrorist threat to no avail, eight years spent stopping every citizen at every airport to search every purse, bag, crotch and briefcase for juice boxes and explosive tubes of toothpaste. Yet in the end, our government had no mechanism for searching the balance sheets of companies that held life-or-death power over our society and was unable to spot holes in the national economy the size of Libya (whose entire GDP last year was smaller than AIG's 2008 losses).

So it's time to admit it: We're fools, protagonists in a kind of gruesome comedy about the marriage of greed and stupidity. And the worst part about it is that we're still in denial ? we still think this is some kind of unfortunate accident, not something that was created by the group of psychopaths on Wall Street whom we allowed to gang-rape the American Dream. When Geithner announced the new $30 billion bailout, the party line was that poor AIG was just a victim of a lot of shitty luck ? bad year for business, you know, what with the financial crisis and all. Edward Liddy, the company's CEO, actually compared it to catching a cold: "The marketplace is a pretty crummy place to be right now," he said. "When the world catches pneumonia, we get it too." In a pathetic attempt at name-dropping, he even whined that AIG was being "consumed by the same issues that are driving house prices down and 401K statements down and Warren Buffet's investment portfolio down."


Liddy made AIG sound like an orphan begging in a soup line, hungry and sick from being left out in someone else's financial weather. He conveniently forgot to mention that AIG had spent more than a decade systematically scheming to evade U.S. and international regulators, or that one of the causes of its "pneumonia" was making colossal, world-sinking $500 billion bets with money it didn't have, in a toxic and completely unregulated derivatives market.

Nor did anyone mention that when AIG finally got up from its seat at the Wall Street casino, broke and busted in the afterdawn light, it owed money all over town ? and that a huge chunk of your taxpayer dollars in this particular bailout scam will be going to pay off the other high rollers at its table. Or that this was a casino unique among all casinos, one where middle-class taxpayers cover the bets of billionaires.

People are pissed off about this financial crisis, and about this bailout, but they're not pissed off enough. The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d'état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.

The crisis was the coup de grâce: Given virtually free rein over the economy, these same insiders first wrecked the financial world, then cunningly granted themselves nearly unlimited emergency powers to clean up their own mess. And so the gambling-addict leaders of companies like AIG end up not penniless and in jail, but with an Alien-style death grip on the Treasury and the Federal Reserve ? "our partners in the government," as Liddy put it with a shockingly casual matter-of-factness after the most recent bailout.

The mistake most people make in looking at the financial crisis is thinking of it in terms of money, a habit that might lead you to look at the unfolding mess as a huge bonus-killing downer for the Wall Street class. But if you look at it in purely Machiavellian terms, what you see is a colossal power grab that threatens to turn the federal government into a kind of giant Enron ? a huge, impenetrable black box filled with self-dealing insiders whose scheme is the securing of individual profits at the expense of an ocean of unwitting involuntary shareholders, previously known as taxpayers.


Much more to read from this article below
http://www.rollingstone.com/news/sto...e_big_takeover

LA TIMES


http://www.latimes.com/business/la-f...,2707699.story
From the Los Angeles Times
In AIG flap, it's not just about bonuses anymore
Scrutiny of bailout terms expands as critics question federal officials' longtime ties to aid recipients.
By Tom Hamburger and Janet Hook

March 19, 2009

Reporting from Washington — The firestorm over American International Group is spreading beyond executive bonuses, with lawmakers and policy experts now questioning virtually all aspects of the taxpayer-financed rescue package for the insurance giant.

Among other issues, critics are asking why AIG was allowed to use federal bailout money to repay $13 billion in debt obligations to Wall Street powerhouse Goldman Sachs, as well as debts to foreign banks.

Prominent Republicans, joined by some Democrats, suggested that the answer could be found in longtime ties linking Washington to Wall Street.

Former Treasury Secretary Henry M. Paulson was once chief executive of Goldman Sachs, for example, while AIG's chief executive, Edward M. Liddy, was a member of Goldman's board. The Treasury official who is in charge of the bailout, Neel Kashkari, is a former Goldman executive.

"Look at where the money went: Goldman Sachs, Paulson's firm, foreign banks," Sen. Jim Webb (D-Va.) said Wednesday. "AIG gave more money to foreign banks than we gave in loans to the auto industry."

"The real outrage over the AIG bailout isn't executive bonuses, it's that billions in taxpayer funds intended for AIG have been passed through to benefit foreign banks and Wall Street behemoths like Goldman Sachs," former House Speaker Newt Gingrich wrote in an e-mail letter to conservatives Wednesday morning.

Gingrich and Republicans on Capitol Hill unleashed their anger on the current Treasury Secretary, Timothy F. Geithner, saying he bore responsibility for being overly generous in providing aid to failed companies like AIG.

Two outspoken House Republicans -- Darrell Issa of California and Connie Mack of Florida -- called for Geithner's resignation, saying the AIG bonus controversy on top of existing doubts about the bailout made such a move necessary.

Other Republicans, including the ranking member of the Senate Banking Committee, Alabama's Richard C. Shelby, offered caustic criticism of Geithner but stopped short of calling for his resignation.

In his weekly e-mail, Gingrich accused Geithner of being disingenuous in saying he inherited the current mess.

"The truth is that Secretary Geithner didn't inherit the policy of throwing billions of taxpayer dollars at failing companies -- he helped create it," Gingrich wrote. "Even before he was Treasury secretary -- when he was still head of the New York Federal Reserve -- Geithner was so deeply involved in the government's bailout of Bear Stearns, its takeover of Fannie Mae and Freddie Mac, and its bailout of AIG."

Too connected?

Democrats, meanwhile, heaped the blame on decisions made during the Bush administration. With Geithner at his side Wednesday, before boarding his Marine One helicopter to start a trip to California, President Obama told reporters at the White House, "I have complete confidence in Tim Geithner and my entire economic team. . . . You know, he is making the right moves in terms of playing a bad hand."

Still, some critics on the left -- including organized labor officials and prominent House Democrats -- suggested that bailout decision-making to date had been sullied by a Wall Street bias afflicting both the current Treasury secretary and his predecessor.

"AIG was too well-connected to fail," said Rep. Brad Sherman (D-Sherman Oaks) during a contentious House hearing in which AIG's Liddy was grilled by lawmakers.

Goldman Sachs became the subject of controversy this week when AIG revealed that it had given the company $13 billion in taxpayer bailout money to repay its collateralized debt obligations.

Goldman spokesman Michael DuVally says that figure is too high and that the correct number is closer to $8 billion. He dismissed suggestions that Goldman played a role in designing the bailout terms, or its bonus provisions.

While Goldman is healthy and has said it does not need bailout funds, it did accept taxpayer-funded payments from AIG.

"The government made a policy decision to support AIG as a way to contain systemic risk," DuVally said. "We were entitled to additional collateral under the trading agreements that we had with AIG."

Since the bailout for AIG was authorized in September, the once-successful insurance giant has passed along about 30% of the $170 billion it received from taxpayers to Goldman, Deutsche Bank, Merrill Lynch and other entities, including municipalities.

One of the largest amounts -- $11 billion -- went to the Societe Generale Group, a Paris banking and financial services company. The funds paid to those firms were released to make whole the buyers of AIG credit insurance.

The decision to make the across-the-board payments at 100% of the original value has drawn criticism since Sunday, when AIG reluctantly released the list of companies that had received taxpayer aid.

One prominent economist said he thought the Wall Street pedigree of decision makers in the Bush and Obama administration had hampered their judgment.

"They were far too sympathetic to the needs of the bankers and in the process have not accomplished the cleanup that needed to be effected," said Peter Morici, an economist at the University of Maryland who is an outspoken critic of the bailout. "That is why we are in the mess that we are in."

Morici suggested that the taxpayer obligations to AIG could have been limited had the Treasury split off the company's poorly performing units from those parts of the insurance conglomerate that were profitable, selling the profitable divisions and providing taxpayer support to the problem parts of the firm.

No 'haircut'

On Capitol Hill, lawmakers talked boundlessly Wednesday about the bonuses and the outrage they created. But some were beginning to look beyond the controversy over bonuses to broader questions about the AIG bailout and how it got structured.

"It's not just about the bonuses," said Sen. John Ensign (R-Nev.). "It's that so much money went overseas. Why did money go out the door without a haircut?"

"The bonuses are just a tiny percentage of the money. It's the easiest things to get people outraged about."

Republicans made a point of bashing Geithner and his role, including meetings that he had with AIG and Goldman before he was Treasury secretary. Democrats laid responsibility on Paulson, President Bush's Treasury secretary.

The furor over the AIG bonus payments -- including questions about why Geithner didn't know about them earlier -- could create trouble for the Treasury secretary as he prepares for the rollout in the next week or so of an ambitious public-private partnership to buy $1 trillion of toxic assets from banks.

Asked where he thought Geithner would be a year from now, Webb declined to comment. But he did say that the Obama administration's hands were not entirely clean. "They have to accept some responsibility," Webb said.

Sen. John Cornyn (R-Texas) said it was hard to judge the motives of the architects of the AIG deal because the proceedings and decision making were cloaked in secrecy.

"It could be self dealing of the good-old-boy system," Cornyn said. "It may have been on the up-and-up. But we don't know because it wasn't transparent."

[email protected]

[email protected]

Times staff writer Ralph Vartabedian contributed to this report.

The whole situation is a disgrace on every level.

Give enough rope to greedy capitalists and he will hang himself and his nation.


COMMUNISM! THE TIME IS NOW!

"Capital is dead labor, which, vampire-like, lives only by sucking living labor, and lives the more, the more labor it sucks. "

"For the bureaucrat, the world is a mere object to be manipulated by him. "

"In a higher phase of communist society... only then can the narrow horizon of bourgeois right be fully left behind and society inscribe on its banners: from each according to his ability, to each according to his needs. "

-Karl Marx

Here's the correct link for the Rolling Stone article. Everyone should read it, some great shit

http://www.rollingstone.com/politics...big_takeover/1

If the Democrats and Republicans really cared they would have just given the cash to the people to buy cigarettes, whiskey, PORN and Chevrolets with.

Last October when the Democrats and Republicans voted for this, they did even though 90% of Americans wanted NO bailout.

http://www.iht.com/articles/2008/10/...a/02voters.php
International Herald Tribune - Oct 2, 2008
Before the House rejected the bailout on Monday, 90 percent of those who called and sent e-mail messages opposed the bailout, said a spokesman, Sean Brown. ...

Awesome article :)

im a little surprised.

WELL PUT :thumbsup

Another one coming out of the woodwork

Fluke? Credit crisis was a heist

Thanks to a complicit Congress, the reins were systematically loosened on the looters of the financial industry. And they're still at it, looking for new plunder.

[Related content: AIG, Congress, Federal Reserve, financial crisis, Jim Jubak]
By Jim Jubak

It was no accident.

The folks in power in Washington and on Wall Street want to pretend that the current global financial crisis -- you know, the one that reduced household net worth in the United States by $11.2 trillion in 2008, according to the Federal Reserve -- was an accident caused by some unfortunate confluence of greed and asleep-at-the-switch regulators.

What we're now living through, though, is the result of a conscious, planned looting of the world economy. Its roots stretch back decades. And it wouldn't have been possible without the contrivances of the bought-and-paid-for folks who sit in Congress.

Of course, just because the plan blew up on the looters, taking off a financial finger here and a portfolio hand there, you shouldn't have any illusion that they've retired. In fact, in the "solutions" now being proposed -- by Congress -- to fix the global and U.S. financial systems, you can see the looters at work as hard as ever.
Blaming the regulators
The smoke screen -- the official explanation of the global crash -- was on full display at a March 5 hearing led by Sens. Chris Dodd, D-Conn., and Richard Shelby, R-Ala., respectively the chairman and ranking minority member of the Senate Banking Committee, into the $170 billion morass that is American International Group (AIG, news, msgs). Served up on the grill were Eric Dinallo, the supervisor of insurance for New York state, and Scott Polakoff, the acting director of the federal Office of Thrift Supervision.

"Are you trying to evade your responsibility?" Shelby thundered at Dinallo, who was responsible for regulating AIG's insurance business, headquartered in New York.

More below
http://articles.moneycentral.msn.com...s-a-heist.aspx

The Rolling Stone article was a really good read. I recommend everyone sit down and soak it in. :2 cents:

Where's all the tinfoil hat pictures now?

Wow that is a whole lot of stupid.......... Rolling Stone??? There was nothing in High Times worth quoting?

Haven't any of you watched the zeitgeist movies?

This is only the beginning.

Only the beginning of the crusade by closet Marxists like yourself and leftists radicals of all stripes to try and manipulate this crisis to achieve their longstanding goals of destroying our society and economic system?

I can only hope that if useful idiots like you succeed in your efforts that you will be the first to reap the harvest you have sown. :321GFY

:1orglaugh You really are a ignorant fool aren't you?