U.S. Treasury Secretary Paulson hasn’t clearly explained why the U.S. needs to bail out the Wall Street millionaires, and he has even gone on record saying that the $700 billion figure in the bailout package is completely arbitrary. He has further admitted that the $700 billion number is “not based on any particular data point”. In other words he doesn’t have a clue.
In an era when election promises in the billions or tens of billions face scrutiny by panels of accountants and politicians trying to figure out “Where all this new money is going to come from”, the now trillions that have been devoted to the sub-prime “crisis” are being agreed and forwarded with only minimal accountability requirements and no clear mandate for its use or preparations for the effect it might have on U.S. inflation.
I place the word crisis above in quotes because over a year ago Wall Street insiders were already tracing what was then only a looming sub-prime catastrophe to the doorstep of one of the clear winners in this process—Goldman-Sachs. The role of this symbol of global financial aristocracy in designing and legitimizing the investment products that have been the primary cause of the U.S.’s financial cess pool was clearly outlined in a NY Times piece by Ben Stein on December 7, 2007 (“The Long and the Short of it at Goldman Sachs”). In the piece Stein notes that:
“My pal, colleague and alter ego, the financial manager Phil DeMuth, culled data from a financial Web site, ABAlert.com (for “asset-backed alert”), that Goldman Sachs was one of the top 10 sellers of CMO’s for the last two and a half years. From the evidence I see, Goldman was doing this for years. It might have sold very roughly $100 billion of the stuff in that period, according to ABAlert. Goldman was doing it on a scale of billions even when Henry M. Paulson Jr., the current Treasury secretary, led the firm.”
Stein goes on to underline a very important point:
“Should Henry M. Paulson Jr., who formerly ran a firm that engaged in this kind of conduct, be serving as Treasury secretary? Should there not be some inquiry into what the invisible government of Goldman (and the rest of Wall Street) did to create this disaster, which has caught up with some Wall Street firms but not the nimble Goldman?
When the Depression got under way, the government created the Temporary National Economic Committee to study just what had happened on the Street to get the tragedy going. Maybe it’s time for an investigation of just what Wall Street and Goldman did to make money as they pumped this mortgage mess into the economic system, and sometimes were seemingly on both sides of the deal.”
Of course no such committee is planned or would ever find anything to trace back to the Kings of Wall Street. That this piece could appear in the Times over a year ago and still have no effect whatsoever on the media in general’s approach to Paulson’s credibility is further testament to the extent that Goldman and others in big finance control so much of the public information space. More recently the Times reported that Lloyd C. Blankfein, Goldman Chairman and Chief Executive Officer, was also the main advisor to Paulson and Bernanke on the AIG bailout—a company Goldman has a $20 billion stake in. One wonders just who that AIG bailout will really be benefiting.
Paulson therefore has been instrumental in overseeing and ensuring that his former firm has remained profitable throughout this “crisis”. You can be sure as well that one of the great unanswered questions about this whole thieving mess—namely how these very questionable investment products managed to garner AAA ratings from the world’s credit agencies in the first place—was also largely on the basis of them having come from Goldman,Sachs and likely with commensurate backroom pressure for stellar ratings assignments.
In the event that you’re questioning whether or not Goldman has come out smelling so rosy after all that’s gone on in the past 24-months, look no further than Warren Buffet’s recent purchase of $5 billion in Goldman stock. Buffett is simultaneously advising Obama to support the deal while he himself is investing in the company that stands to make the most off the deal.
Note too that we are not spared the “Goldman touch” in Canada either. Mark Carney, Canada’s new and beloved head of the Bank of Canada, also spent 13 years climbing the ladders of the financial aristocracy in Goldman’s gilded halls, and you can be sure where his primary loyalties lie as he describes how Canada should be reacting to this crisis.
And as all this plays out, where are Obama the Change Agent and McCain the Maverick? After the initial bailout defeat they quickly jumped in to tow the bankers’ line and tell the public to rest assured that they support the bailout. Obviously this is because they know that in the short term it will stave off the unrest and uncertainty that neither has any interest in inheriting as a legacy of their Presidency.
What McCain might do, however, is potentially try to tap into the groundswell of populist anti-bailout sentiment that has emerged from main street America by reversing his position. It would run against his 26-year history of supporting the financial sector deregulation that facilitated the investor abuse leading to this crisis, but it could also help him outflank the disappointing Obama.
For Obama the Profound, and Obama the Man of Real Change, this is a telling remark on his true courage and true allegiances, despite any rhetoric to the contrary about how he stands up for “ordinary Americans” and “substantive change”. Like most public leaders he has his own destiny and his own legacy front and center and is not in any way demonstrating himself to be a man who will bring anything new to Washington.
The Obama campaign’s top spokesman pushing this deal is none other than Roger Altman, who Bloomberg News reports is simultaneously “advising a group of investors who are trying to prevent their shares from being diluted in the U.S. takeover of American International Group Inc.”—that is, who have a direct financial interest in the current iteration of the bailout. There’s nothing like this type of crisis to lay bare a man like Obama’s true colours, and more than anything this has exposed him as a man of the system—just another big finance lackey.
Good luck therefore developing decent healthcare programs or buttressing your social security system, our friends down south. Your futures and your children’s futures have just been stolen by the furtive few who run your country and most others as well, and who have mastered the funnelling of public dollars into private hands and social management through obfuscation and untruth.
In the event that there are some of you believing what some members of the financial community have been claiming about all of this being caused by Democrats forcing banks to lend to the poor who couldn’t really afford it, remember that this so-called “collapse” was triggered by the massive defaulting and foreclosures going on with people’s home mortgages, and that the number one cause of people declaring bankruptcy in the U.S. is still medical bills.
Remember also that the banks spend billions each year marketing credit cards and other forms of debt to already over-loaded U.S. (and Canadian) consumers. Canadians are now debt leveraged far more than average citizens in the Uk but only just below where the U.S. levels now stand.
Ordinary people everywhere, not just in the U.S., need to stand up and take notice of what has transpired these past weeks and months. If ever there was a threat to our freedom and our livelihoods, if ever there was a need for vigilance and courage in the face of injustice, the events surrounding bank bailouts demand to be held up for the true thefts that they are and the Wall Street scions responsible for them sent to the trenches where they belong.
We all need to question how it can be that the people and their political leaders in what is supposed to be the most powerful nation in the world can be exposed to be so powerless in the face of global financial interests. It will be telling to witness if U.S. lawmakers have the courage to regulate the financial sector post-crisis so that it cannot use this as an excuse to raise interest rates beyond reasonability in order to maintain their shareholder dividends at everyone else’s expense.