The worst President in US History
Too Strong? Nah…
We now have two months until we know what happens in the mid-term elections. If Democrats, liberals, progressives, independents and those who voted for the first time ever in ’08 show up on November 2nd, Obama’s party will retain control of the Senate and the House. It’s that simple. If you don’t show up, then the Republicans are likely to gain one or both chambers of Congress.
Of course, I have to say Obama and the Democratic leadership certainly aren’t helping the cause. the health care and the economic “reforms” that have been passed are shams(Don’t start arguing, this article isn’t about those so-called reforms and I don’t feel like getting bogged down in that minutia right now.) The end of combat operations in Iraq is a bright spot, well more like a lighter gray spot, but if you dig beneath the surface you discover that there are still 50,000 troops in Iraq purportedly there to “support” Iraqi armed forces with another 4,500 special forces there for “anti-terrorism” purposes. 4,500 highly trained killers is a pretty strong force especially when you consider that there are another 75,000+ mostly ex-special forces personnel working for much more money as private contractors also in Iraq. Am I missing something? I thought “combat operations in Iraq ended” back in 2003. Whatever, I’m just glad no one came out wearing a codpiece this time. The occupation still continues.
Noam Chomsky said that Obama is turning out to be either the third term of Bill Clinton or the third term of George W. Bush depending on your lever of optimism vs. pessimism. As a progressive, it does seem that Obama and the Democratic leadership are working for the exact same people BushCo was. The “clients” are definitely not liberals or progressives, as Rahm Emanuel and now Robert Gibbs have made abundantly clear. Don’t mind me though, I guess I’m just a member of the “professional left”, which in my case means that I’m freelance(code for unemployed with no unemployment insurance benefits despite paying double the FICA taxes).
Despite Obama’s and the leadership’s perceived weakness and their overt animosity toward progressives, my guess is that we’ll retain the House and probably the Senate by thin margins. Nate Silver’s, FIVETHIRTYEIGHT seems to agree. However, the degree to which that matters is up for debate. When we won huge margins after 2006 and after 2008 we did very little with them when compared to what should have been done. If fact, it seemed like we behaved as if we were still in the minority. After 2006, when we should have ended the war in Iraq which was the reason the electorate threw out the Republican majority, the Democratic leadership thought it would be smarter to triangulate and continue the atrocity in hopes of more political gains in the form of the Presidency in 2008. Thanks to the Obama campaign which actually won one of advertising’s most prestigious awards for Marketer of the Year we won even larger margins in Congress and the Presidency. The Obama campaign, or the iObama campaign as I call it because the usual winner of that advertising award tends to be Apple, was a thing of beauty that left just enough unsaid to make liberals and progressives think we would finally see a return to some form of sanity on policy issues ranging from trade and regulating the economy to health care to the end of two wars. Most serious progressives I know were slightly suspicious but we still held out HOPE for something like an FDR-style CHANGE. Clearly, the thinking went, that level of CHANGE was warranted. The feeling among young and old, first-time voters after 8 long years of the dumbest shit anyone had ever seen in the form of BushCo was near euphoria. Euphoria is fantastic when you’re selling iPads, but it’s awfully difficult to maintain. Now the euphoria among the first timers has definitely leached away. Virtually none of those first time ’08 voters showed up during the primary in June and a whole lot of liberals, progressives and Democrats failed to show up as well. If that trend continues this November, get ready for the new Republican majority with the added new fun feature – Tea Party overdrive!
Anyway, the real question is are Obama and the Democrats better than the the alternative of McCain and Palin? Probably. Bush and the Republicans very nearly destroyed this country. In fact, I’m not sure the jury is in on that yet. Of course, he started out after 40 years of disastrous free market idolatry had hollowed out our economy and eliminated our manufacturing base, off-shored most of our decent jobs and created the largest trade deficit since the end of the Ottoman Empire. Rampant laissez faire humbuggery has allowed a casino capitalism to develop that is actually worse then what existed before the Great Depression. All of this was done on a bipartisan basis with many of the worst changes coming under a Democratic President, Bill Clinton. Meanwhile, the number of foreclosures now is worse both in terms of real numbers and per capita then they were during the Great Depression. Unemployment, if measured using U6 numbers is approaching Great Depression levels, especially if one considers that many jobs considered full time now are for low wages. Wages, by the way, that have not effectively gone up since 1973.
Obama and the leadership seem unwilling to acknowledge these facts. There are policy changes that can be undertaken to fix most if not all of this mess. Of course, those are progressive policy changes which the White House seems to be allergic to. Instead of lifting the cap on Social Security, re-instating the wall between commercial banks and investment banks, enacting a Securities Turnover Excise Tax(STET) to curb speculation and eliminating tax loop holes for corporations we are actually left wondering(incredibly) if Bush’s misbegotten tax cuts on the richest people in the country will be allowed to expire! With more then 40 million people on food stamps and 50+ million on medicaid we are being told that weak, 1% GDP quarterly growth numbers means that the economy is recovering from this recession! It’s useful to realize that these anemic “growth” numbers over the last couple of quarters can easily be attributed to the actions of just the 6 large investment banks on Wall St who are literally gambling with 0% interest money from the Fed. Worse, this incredibly weak growth in GDP can actually be attributed to the BP oil spill and the added expenditure to pretend to clean that up!
So that’s where we stand before this mid-term election. An economy still in shambles(just look at today’s unemployment numbers) Once again we’re being told that we have to turn out to vote and that we must vote for the Democrats or else the Republicans will ruin everything. Assuming that there is indeed something left to ruin, I will turn out to vote like I have for the last 23 years. If the Democrats lose the House and/or the Senate, Obama’s chances for a 2nd term drop substantially. While I am disappointed in Obama and his reliance on hacks and Clinton retreads such as Emanuel, Geithner, Summers et al., I’m not ready to hand the country back to the likes of Sara Palin. Obama has not been all I had HOPEd for(yet?), but I know where the real blame lies.
Cross posted on the OJAIPOST
(The following is for Californian voters.)There are a couple of propositions that need attention(Yes on 19 and NO on 23) and voting against Elton Gallegly for Tim Allison for US House of Representatives of CA-24 will be a great pleasure. I hope you will turn out to vote too.
If you can think of no other reason to turn out in November, then simply show up to
Leagalize It
Tom Donohue, the president of the U.S. Chamber of Commerce
“It is generally not the practice of this country to change the laws after the game,” said Tom Donohue, the president of the U.S. Chamber of Commerce. “. . . Everybody is going to contribute to this clean up. We are all going to have to do it. We are going to have to get the money from the government and from the companies and we will figure out a way to do that.”
House Minority Leader John Boehner
“I think the people responsible in the oil spill–BP and the federal government–should take full responsibility for what’s happening there,” Boehner said at his weekly press conference this morning.
then he recants his statement.
So whats the story Boehner? You have stock in BP? Have you already lost some money and now want to try to regain it? You are a greedy son of a bitch… the entire GOP is full of people just like you. Pay for BPs mess, why don’t you give up all he money you and you family are worth if you feel that way. BP needs to pay us if they can’t because they file bankruptcy then HAVE ENGLAND PAY!
Also!! You will spend money on a wars, (oh by the way Iraq and Afghanistan is now up to a trillion Dollars), bail out to greedy banks that will take advantage of everyone, PAY FOR BPs mess… But say no to health care! Guess what guys the Government is here to keep us safe. That is why Fire, Police, military, roads, and so on is government funded! Health Care is to keep us the people safe, it should not be for profit for insurance companies…
Source Huffingtonpost
the brits are playing the USA on the 12th,
England you better lose, you owe us that! Remember the oil spill in the gulf!!! That you bastards still haven’t fixed. I have a good idea we will dunk you in the oil and then we will see how well you play.
“Political pressure is building on BP to slash its dividend or suspend it altogether until the well is capped and hundreds of miles of coastline have been cleaned up. Some investors worry the billions of dollars in liabilities could wipe the company out.”
My comment, hell yeah they should go out of business, they are messing with the wrong people… Clean up your fucken mess and then go home. but before they do that write the people a check. oh yeah Hayward should be living in a cardboard box! Now i have always been against off shore drilling, but I thought that their was some kinda safety device to prevent something like this. Like a really big shutoff valve. See they have to drill the hole first, then put a big pipe on the end of it, why doesn’t the big pipe have a shutoff valve on the base… Okay maybe it is hard to turn it, but we put a man on the moon. These rigs are towed out onto the Bering sea with big wave hitting them and all kinds of problems happening. Didn’t someone think yeah a valve would be good, then all they would have to do is figure out how to turn the valve, not cap a huge pipe! also then they could fix the pipe and still have the fucken oil after its all done.
I made the above photo really big so you can see what I’m talking about. See where the pipe is raping the ocean floor, valve right there! come on guys we are smarter then this!
Get this guys, she wants to phase out Social Security, Abolish IRS, EPS Department of Education…. Prohibition on alcohol!!! Scientogy-style Saunas for Prisoners, only one parent to work outside of the house!!
Is this real? I can’t believe that anyone would vote for her.
How messed up can you be?
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VENICE, La. (AP) — Professor Peter Lutz is listed in BP’s 2009 response plan for a Gulf of Mexico oil spill as a national wildlife expert. He died in 2005.
Under the heading “sensitive biological resources,” the plan lists marine mammals including walruses, sea otters, sea lions and seals. None lives anywhere near the Gulf.
The names and phone numbers of several Texas A&M University marine life specialists are wrong. So are the numbers for marine mammal stranding network offices in Louisiana and Florida, which are no longer in service.
BP PLC’s 582-page regional spill plan for the Gulf, and its 52-page, site-specific plan for the Deepwater Horizon rig are riddled with omissions and glaring errors, according to an Associated Press analysis that details how BP officials have pretty much been making it up as they go along. The lengthy plans approved by the federal government last year before BP drilled its ill-fated well vastly understate the dangers posed by an uncontrolled leak and vastly overstate the company’s preparedness to deal with one.
“BP Exploration and Production Inc. has the capability to respond, to the maximum extent practicable, to a worst case discharge, or a substantial threat of such a discharge, resulting from the activities proposed in our Exploration Plan,” the oil giant stated in its Deepwater Horizon plan.
In the spill scenarios detailed in the documents, fish, marine mammals and birds escape serious harm; beaches remain pristine; water quality is only a temporary problem. And those are the projections for a leak about 10 times worse than what has been calculated for the ongoing disaster.
Billy Nungesser, president of Plaquemines Parish, La., says there are “3,000 acres (of wetlands) where life as we know it is dead, and we continue to lose precious marshland every day.”
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There are other wildly false assumptions. BP’s proposed method to calculate spill volume based on the darkness of the oil sheen is way off. The internationally accepted formula would produce estimates 100 times higher.
The Gulf’s loop current, which is projected to help eventually send oil hundreds of miles around Florida’s southern tip and up the Atlantic coast, isn’t mentioned in either plan.
The website listed for Marine Spill Response Corp. – one of two firms that BP relies on for equipment to clean a spill – links to a defunct Japanese-language page.
In early May, at least 80 Louisiana state prisoners were trained to clean birds by listening to a presentation and watching a video. It was a work force never envisioned in the plans, which contain no detailed references to how birds will be cleansed of oil.
And while BP officials and the federal government have insisted that they have attacked the problem as if it were a much larger spill, that isn’t apparent from the constantly evolving nature of the response.
This week, after BP reported the seemingly good news that a containment cap installed on the wellhead was funneling some of the gushing crude to a tanker on the surface, BP introduced a whole new new set of plans mostly aimed at capturing more oil.
The latest incarnation calls for building a larger cap, using a special incinerator to burn off some of the recaptured oil and bringing in a floating platform to process the oil being sucked away from the gushing well.
In other words, the on-the-fly planning continues.
—
Some examples of how BP’s plans have fallen short:
- Beaches where oil washed up within weeks of a spill were supposed to be safe from contamination because BP promised it could marshal more than enough boats to scoop up all the oil before any deepwater spill could reach shore – a claim that in retrospect seems absurd.
“The vessels in question maintain the necessary spill containment and recovery equipment to respond effectively,” one of the documents says.
BP asserts that the combined response could skim, suck up or otherwise remove 20 million gallons of oil each day from the water. But that is about how much has leaked in the past six weeks – and the slick now covers about 3,300 square miles, according to Hans Graber, director of the University of Miami’s satellite sensing facility. Only a small fraction of the spill has been successfully skimmed. Plus, an undetermined portion of the spill has sunk to the bottom of the Gulf or is suspended somewhere in between.
The plan uses computer modeling to project a 21 percent chance of oil reaching the Louisiana coast within a month of a spill. In reality, an oily sheen reached the Mississippi River delta just nine days after the April 20 explosion. Heavy globs soon followed. Other locales where oil washed up within weeks of the explosion were characterized in BP’s regional plan as safely out of the way of any oil danger.
- BP’s site plan regarding birds, sea turtles or endangered marine mammals (“no adverse impacts”) also have proved far too optimistic.
While the exact toll on the Gulf’s wildlife may never be known, the effects clearly have been devastating.
More than 400 oiled birds have been treated, while dozens have been found dead and covered in crude, mainly in Louisiana but also in Mississippi, Alabama and Florida. On remote islands teeming with birds, a visible patina of oil taints pelicans, gulls, terns and herons, as captured in AP photos that depict one of the more gut-wrenching aspects of the spill’s impact. Such scenes are no longer unusual; the response plans anticipate nothing on this scale.
In Louisiana’s Barataria Bay, a dead sea turtle caked in reddish-brown oil lay splayed out with dragonflies buzzing by. More than 200 lifeless turtles and several dolphins also have washed ashore. So have countless fish.
There weren’t supposed to be any coastline problems because the site was far offshore. “Due to the distance to shore (48 miles) and the response capabilities that would be implemented, no significant adverse impacts are expected,” the site plan says.
But that distance has failed to protect precious resources. And last week, a group of environmental research center scientists released a computer model that suggested oil could ride ocean currents around Florida and up to North Carolina by summer.
- Perhaps the starkest example of BP’s planning failures: The company has insisted that the size of the leak doesn’t matter because it has been reacting to a worst-case scenario all along.
Yet each step of the way, as the estimated size of the daily leak has grown from 42,000 gallons to 210,000 gallons to perhaps 1.8 million gallons, BP has been forced to scramble – to create potential solutions on the fly, to add more boats, more boom, more skimmers, more workers. And containment domes, top kills, top hats.
—
While a disaster as devastating as a major oil spill will create some problems that can’t be solved in advance, or even foreseen, BP’s plans do not anticipate even the most obvious issues, and use mountains of words to dismiss problems that have proven overwhelming.
In responses to lengthy lists of questions from AP, officials for BP and the Interior Department, which oversees oil rig regulator Minerals Management Service, appear to concede there were problems with the two oil spill response plans.
“Many of the questions you raise are exactly those questions that will be examined and answered by the presidential commission as well as other investigations into BP’s oil spill,” said Kendra Barkoff, spokeswoman for Interior Secretary Ken Salazar. She added that Salazar has undertaken transformational reforms of MMS.
Said BP spokesman Daren Beaudo from Robert, La.: “We expect that a complete review of the regional response plans and planning process will take place as part of the overall incident investigation so that we can determine what worked well and what needs improvement. Thus far we have implemented the largest spill response in history and many, many elements of it have worked well. However, we are greatly disappointed that oil has made landfall and impacted shorelines and marshes. The situation we are dealing with is clearly complex, unprecedented and will offer us much to learn from.”
A key failure of the plan’s cleanup provisions was the scarcity of boom – floating lines of plastic or absorbent material placed around sensitive areas to deflect oil.
From the start, local officials all along the Gulf Coast have complained about a lack of supplies, particularly the heavier, so-called ocean boom. But even BP says in its regional plan that boom isn’t effective in seas more than three to four feet; waves in the Gulf are often bigger. And even in calmer waters, oil has swamped vital wildlife breeding grounds in places supposedly sequestered by multiple layers of boom.
The BP plans speak of thorough resources for all; there’s no talk of a need to share. Still, Alabama Gov. Bob Riley said his shores were left vulnerable by Coast Guard decisions to shift boom to Louisiana when the oil threatened landfall there.
Meanwhile, in Louisiana’s Plaquemines Parish, Nungesser and others have complained that miles of the boom now in the water were not properly anchored. AP reporters saw evidence he was right – some lines of boom were so broken up they hardly impeded the slick’s push to shore.
Some out-of-state contractors who didn’t know local waters placed boom where tides and currents made sure it didn’t work properly. And yet disorganization has dogged efforts to use local boats. In Venice, La., near where the Mississippi River empties into the Gulf, a large group of charter captains have been known to spend their days sitting around at the marina, earning $2,000 a day without ever attacking the oil.
But perhaps the most glaring error in BP’s plans involves Lutz, the professor, one of several dozen experts recommended as resources to be contacted in the event of a spill.
Lutz is listed as a go-to wildlife specialist at the University of Miami. But Lutz, an eminent sea turtle expert, left Miami almost 20 years ago to chair the marine biology department at Florida Atlantic University in Boca Raton. He died four years before the plan was published.
Source Huffingtonpost.com
Okay I have always and always will be a moveon.org supporter, I love them with all my heart. But i had to send this little email….
“Why is it that all you are doing is scheduling a Candle light oil spill vigil at night? Are you trying not to bother BP? Let them keep move on with business as usual? I am a supported of Moveon.org and would like to see a stronger reaction to this. What about a blocking off the streets right before the British bastards clock out for the day. Make them stay and figure this thing out… Or a just a FIX THE F’ING PIPE PROTEST. Something, something more then just light a candle when they are closed campaign…. “
Okay maybe a little tough on them but I feel that you have to be at times. Love Ya Moveon.org
If you can attend a Vigil then click on moveon.org
Meg Whitman, the billionaire former eBay chief executive, easily won the Republican primary for California governor while former Hewlett-Packard Co. CEO Carly Fiorina was nominated to challenge Democratic Sen. Barbara Boxer in the fall.
This is funny, no more hiding behind their puppets! What’s the future or the W, or Reagan puppets going to do now? The corporations are just running for office. The Supreme Court should just rule that the corporation itself can run for public office now (See http://ismskism.wordpress.com/2010/01/21/say-buy-buy-to-american-democracy/)…. I wonder how much the Governor of California earns? What about a Senator? I am sure it is much less then what these women make in a day. Why are they Running? Jerry brown HELP!
Bush “You have the shirt right, but change your jeans next time” Perry “I wanta be just like you”
The Trail Blazers blog over at the Dallas Morning News reports:
The Bill White campaign requested the governor’s (Rick Perry) official work calendar for this year and the open records request showed that Perry performed no scheduled state work on 24 of 72 business days. That’s one-third of the work week without phone calls or meetings. The calendar covered January, March, April and most of May. The February record has not yet been released.
Yeah President material from President Bush! Really are you all that lazy? See I run my own Business here is Texas…. Its a small Business pays the bills my wife an I can get out a few times a month. We are happy not to be under the thumb of a large corp that will use you up and shit you out….. Believe me we were there not to long ago, anyways I would like to take a day off now and again. But if I was gone 1/3 of the time my business will fail. We would not be able to pay our bills and the loves of my life would suffer. The loves being my wife and kids. See Perry you need to treat the people like your loves. To protect them, do something about these property taxes we pay, or maybe do something for the rising number of uninsured people here in Texas (texas has the highest in 2009, click to see gallup poll, 2010 to be seen), not take days on end off… I’m Sure we are going to see Perry 2012 stickers soon enough. and i will start vomiting in my mouth every time I see them… Could be worst, thank god there is no George Bush III!! oh crap Jed….
Book Review
The Evils of Monetarism:
It’s ‘Globalization,’ Stupid! by Harley Schlanger
Too Big To Fail: The Inside Story of How Wall Street and Washington Fought To Save the Financial System—and Themselves
by Andrew Ross Sorkin New York: Viking, 2009 539 pages, hardcover, $32.95
On the Brink: Inside the Race To Stop the Collapse of the Global Financial System by Henry M. Paulson, Jr. New York: Hachette Book Group,
2010 453 pages, hardcover, $28.99
They are sticking with their story! The swindlers and thieves among the world’s leading bankers from the City of London and Wall Street, and the charlatans in university economics departments and think tanks who provide academic rationales for their corruption, insist that the post-Bretton Woods free-market system of “globalization” is just fine, thank you, and would function perfectly, if it were not for continued interference by government.
You can read their sophistical arguments daily in the major press, and hear them spout off endlessly in the electronic media. And now, through a proliferation of books on the “greatest financial crisis since the Great Depression,” we are being bombarded with their self- congratulatory paeans, as they wax on about how they have “saved civilization.”
What nonsense!
As physical production continues to ratchet down- wards at an accelerating rate, unemployment remains at
April 16, 2010 EIR
the highest levels in 80 years, and home and com- mercial foreclosure rates are skyrocketing, these self-proclaimed saviors are creating mountainous levels of debt which will never be paid off, through a continued bailout of worthless paper assets, which remain on the books of financial institutions, instead of placing those
institutions into bank- ruptcy reorganiza- tion.
The debt, then, becomes the excuse for demanding Hitler- style fascist austerity, as in President Obama’s so-called health-care bill, as human lives are being sacrificed as “useless eaters,” just as they were in Nazi Germany, to provide whatever minimal income stream can be squeezed out, to service the growing debt.
They Should Have Listened to LaRouche
Books such as the two which are the subject of this review, Too Big To Fail, by Andrew Ross Sorkin of the New York Times, and On the Brink, by former Treasury Secretary Henry M. Paulson, Jr., should be sold as fic- tion, because, in spite of the “facts” that are presented by the authors, it is clear that they still have no clue as to the insanity of the financial-monetary system which they claim, in their books, has been saved, by the pro- cess of endless bailouts.
At the outset, let me note that, had these authors, and any of those self-styled “Masters of the Universe” with whom they collaborate, paid attention to the volumi- nous writings and accurate forecasts of economist Lyndon LaRouche, there would have been no reason to write these books, as the continuing crisis they purport to cover would never have happened.
On July 25, 2007, as the first signs of the “credit crunch” were becoming visible, LaRouche opened a webcast with a warning that should have been included by these authors, if they were seriously attempting to provide insight into what the nation, and the world, has been forced to suffer over the last several years.
He began: “[T]he world monetary financial system is actually now currently in the process of disintegrat- ing. There’s nothing mysterious about this; I’ve talked about it for some time, it’s been in progress, it’s not abating. What’s listed as stock values and market values in the financial markets internationally is bunk! These are purely fictitious beliefs. There’s no truth to it; the fakery is enormous. There is no possibility of a non-col- lapse of the present financial system—none. It’s fin- ished, now! The present financial system can not con- tinue to exist under any circumstances, under any Presidency, under any leadership. . . . Only a fundamen- tal and sudden change in the world monetary financial system will prevent a general, immediate chain-reac- tion type of collapse.”
Within days after this warning, LaRouche specified precisely what he meant by a “fundamental and sudden change,” with his drafting of the Homeowner and Bank Protection Act (HBPA). Had this legislation, which was endorsed by local and state governments throughout the United States, been passed by Congress, more than 2.5 million families would still be in their homes. Fur- ther, the banking system, as a whole, would have been put through a Franklin Roosevelt-style bankruptcy re- organization, freezing trillions of dollars of worthless assets, to be written down, or written off entirely, later, and there would never have been the atrocity known as a bank “too big to fail.”
In addition to the HBPA, which would have protected the legitimate functions of banks, an utterance of hun- dreds of billions of dollars of productive credit, by the U.S. Congress, focused initially on job creation in pro-
ductive infrastructure, including, but not limited to, high- speed rail construction, nuclear power production, and water and power management, would have reversed the 45-plus years’ collapse of physical goods production and employment, and initiated a real economic recovery.
It’s Called ‘Physical Economy’
What the financial wizards, whose thoughts and ac- tions are chronicled in Sorkin’s book, have not yet grasped, is that an economy is not about money, but about the production and distribution of the physical goods needed, today, to sustain a global population of more than 6.8 billion, while, at the same time, investing in the future, in areas which will allow for the scientific and technological progress needed to provide for the next several generations.
Physical economy is the subject of LaRouche’s life work, centered around his assimilation of the crucial discoveries of scientists and physical economists of the past, such as Johannes Kepler, Gottfried Leibniz, and Bernhard Riemann, and his advancement of their work, through his own unique discoveries about the American System of economics. It was this system, introduced by Benjamin Franklin and his protégé Alexander Hamil- ton, and revived by John Quincy Adams and Abraham Lincoln, which allowed the United States to break suc- cessfully from the monetarist system of the British Empire, to establish our nation as the world’s leading industrial-agricultural producer, and the model for the unprecedented physical economic development of na- tions such as Germany, France, and Japan, at the end of the 19th Century.
Under the mis-leadership of pro-British traitors, from Teddy Roosevelt and Woodrow Wilson, to Calvin Coolidge and Herbert Hoover, the American System of physical-economy was replaced by a typical imperial, speculative, bubble economy in the 1920s, which popped, causing the Great Depression. The City of London bankers and their Wall Street allies, such as the Harriman family, backed the coup that placed Hitler in power in Germany, to accelerate the looting of the German people, to pay the debt allegedly owed to the British and American bankers.
Fortunately for the U.S., Franklin Roosevelt re- jected fascism as a solution, and moved quickly to re- verse the speculative, free-market policies which led to the Depression, imposing instead, bankruptcy reorgani- zation, on the day of his Inauguration, and using legis- lation, especially the Glass-Steagall banking regulation
32 Economics
EIR April 16, 2010
creative commons/Ikradionews White House/Pete Souza
The assumptions of officials such as Federal Reserve chairman Ben Bernanke (left), and former New York Federal Reserve president (and current Treasury Secretary) Timothy Geithner (right, with Larry Summers looking on), that led to the meltdown of the financial system, were repeatedly, devastatingly wrong.
bill, to return the U.S. to an economy based on infra- structure development (called “internal improvements,” under our early, anti-British, anti-monetarist leaders), and investment in energy-intensive forms of agro-in- dustrial production.
FDR’s American System approach was again re- versed, by the same London-centered financial forces, to some extent, after FDR’s death, and then with a ven- geance, following the British assassination of President Kennedy. In the subsequent five decades, we have seen an all-out assault against physical production and a reg- ulated system, in favor of what is known as “globaliza- tion,” a radical free-market, deregulated monetary system, where increasingly bizarre and worthless “fi- nancial instruments” have become the main product of the so-called economy.
The ‘Crash’ Occurred Before 2007
The sophistical trick that underlies the writing of economic “journalists,” such as Sorkin, and fraudsters such as the mega-speculator and former Goldman Sachs CEO Paulson, is that they argue that the “wealth” pro- duced by these “financial instruments” is real, and is the basis of a strong economy. Instead of viewing the de- tachment of investment from physical economy, to purely speculative churning of financial instruments, as a net loss for the real economy, they look only at the monetary profits which can come from the building of a
April 16, 2010 EIR
bubble, as a plus for the economy. Although they, at times, accurately portray the
manic and dangerous tactics of policymakers to manip- ulate the “market,” to save their firms, their careers, and their personal portfolios—for example, both books are full of stories of CEOs who acknowledge that what they are carrying on their books, for their own accounts and their clients, and trading with their counterparties, is “crap” (see below)—they argue that there is nothing in- trinsically wrong with the systemic shift, from the pro- duction of goods, to proliferation of instruments of “risk,” such as collateralized debt obligations (CDOs) and credit default swaps (CDS), and such hyperinfla- tionary, non-productive investments as those typified by currency speculation in the “carry trade.”
Given that he has spent the last years studying the disintegration of this system of “financial innovation,” from his perch as “Dealbook” editor of the New York Times, Sorkin’s book must qualify as an outright fraud. His opening statement of the problem shows that he had to be “in” on the game, as it is impossible that he could believe the absurdity of the explanations offered by himself, or the players involved.
Sorkin writes that, by 2008, Wall Street had gone from “celebrating its most profitable age to finding itself on the brink of an epochal devastation. . . . As the unraveling began, many on Wall Street confronted a market unlike any they have ever encountered—one
but the dicing and slicing of mort- gages from home purchases into the now-notorious MBS—then, using them as leverage for short-term bor- rowing to purchase even more exotic, unregulated financial derivatives, while arguing that the short-term speculative profits derived from this practice represented real economic growth. Both authors argue, fool- ishly, that the collapse of manufactur- ing and productive jobs—which, in reality, has been ongoing since the mid-1960s—was a mere side effect of the popping of the housing bubble, and these jobs will ultimately come back, thanks to the bailouts!
Thus, in spite of massive evi- dence, presented in these two books, of the insanity of the post-industrial, speculative casino economy, and the criminal lunacy of creating trillions
gripped by fear and disorder that no invisible hand could tame. They were forced to make the most crucial decisions of their careers, perhaps of their lives, in the context of a confusing rush of rumors and policy shifts, all based on numbers that were little more than the best guesses. Some made wise choices, some got lucky, and still others lived to regret their decisions. In many cases, it’s still too early to tell whether they made the right choices.”
How dramatic! Lest the reader get caught up in what one reviewer described as an authentic modern tragedy, the “fall of the Titans,” examine, instead, the fallacious implied assumption that the “most profitable age” of Wall Street was actually “profitable,” and good for Americans! Even as he takes us through repeated ex- amples of how insane the trading practices at leading banks were, and how the assumptions of officials such as Federal Reserve chairman Ben Bernanke, and former New York Federal Reserve president (and current Trea- sury Secretary) Timothy Geithner, were repeatedly, devastatingly wrong, the assumption is that there was nothing wrong with the system—just a dose of over- exuberance related to the housing market, and the sub- sequent failure to price assets properly, such as mort- gage-backed securities (MBS).
Contrary to the assertions of both Sorkin and Paul- son, the problem was never caused by housing per se,
of dollars of new debt to bail out the bankers and finan- ciers who created history’s greatest Ponzi scheme, nei- ther Sorkin nor Paulson ever question its underlying legitimacy!
‘So I’m the Schmuck?’
An astute reader can, if sufficiently motivated, find massive evidence of the hypocrisy of the leading play- ers in both of these books, though that is clearly not the intention of either author. One such example is the be- lated admission, before a Congressional committee, by former Fed chair Alan Greenspan, who deserves much of the blame, as architect and chief cheerleader for the disastrous policies imposed since his tenure began, at the time of the October 1987 stock market crash, that there was a “flaw in our system.”
Greenspan, who at the height of the speculative bubble was nearly universally proclaimed to be the “guru” or the “maestro” (except, of course, by La- Rouche, who repeatedly exposed him as a faker), said of his once-beloved “financial innovations,” which he had promoted with a vengeance, that “. . . some of the complexities of some of the instruments that were going into CDOs bewilders me. I didn’t understand what they were doing or how they actually got the type of returns out of the mezzanines and the various tranches of the CDO that they did. And I figured if I didn’t understand
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it, and I had access to a couple hundred Ph.D.s, how the rest of the world is going to understand it sort of bewil- dered me.”
These “complexities” never interfered, however, with traders at Lehman Brothers, Merrill Lynch, Gold- man Sachs, and Morgan Stanley, just to name a few, who were buying and selling these instruments for their own profit, while filling up the portfolios of their unsus- pecting clients with this garbage, benefiting from the churning of the markets that they caused.
Following the government takeover of Fannie Mae and Freddie Mac in a vain effort to halt the collapse of the market for mortgage-backed securities (MBS), the collapse of Bear Stearns, and with Lehman and Merrill heading into the dump by September 2008, a “sudden,” momentary honesty emerged among the principals, which is chronicled by both authors, and shows that they knew all along that their high stock valuations and super-profits were based on fraud.
After all, when in history had any sane investment banker accepted leverage rates of 30.7 to 1, which was the valuation at Lehman, or 26.9 to 1 at Merrill, with the “1” representing the value of the firms’ overpriced assets? Sorkin reports that, “the CEOs of the firms that sold these products had no better comprehension of it all.” Instead of mark-to-market accounting, by which the value of an asset is determined by the price it would get if sold, “banks valued their illiquid investments simply at the price they paid for them, rather than venture to estimate what they might be worth on any given day.”
The arbitrary nature of who was to be bailed out, and who would be allowed to fail, i.e., whose worthless assets would be guaranteed by the Federal govern- ment—and whose not—was too much for the anguished CEO of Lehman Brothers, Richard Fuld, who responded when told that Lehman would not be bailed out, “So I’m the schmuck?”
‘Free Money’
Of Merrill Lynch, which claimed its CDO exposure was “nearly fully hedged,” Sorkin writes that as “market condition worsened, it became clear that the metrics they were using had no grounding in reality.” AIG, which sold a new form of “risk insurance” called credit default swaps (CDS) manufactured by their financial products division in London, concluded from their computer models that these devices “seemed fool- proof.” The holders of such swaps—mostly banks and investment firms—could expect, according to Sorkin,
April 16, 2010 EIR
“to receive millions of dollars in premiums a year. It was like free money.”
AIG has already received over $180 billion in Fed- eral bailout funds, in addition to untold billions more in loan guarantees, and is lining up for yet-another bail- out. Its counterparty exposure in notional derivatives stood at over $2.7 trillion when the bailout began. Lloyd Blankfein, who replaced Paulson as CEO of Goldman Sachs, said of AIG, that it was “marking to make-be- lieve”; while James Lee, a J.P. Morgan Chase official involved in the review of AIG’s books, is quoted asking, “Who is going to buy this shit?”
The answer is, that the American people, and their children and grandchildren are buying this “shit,” as the bailout continues. The question which should be posed is: “free money” for whom?
Sorkin, whose book contains page after page of such raw material, which would be of great value for a Pecora Commission, to prosecute the swindlers who have, in- stead, been the beneficiaries of the largesse of both the Bush and the Obama administrations, nevertheless fails, because of his acceptance of the axioms of global- ization and the post-industrial economic paradigm. His failure, therefore, to treat what he has chronicled as real crimes against the American people, sadly deserves for his book the subtitle, “Too Big To Read,” as it ultimately leads the reader nowhere.
It would be a much better use of time—and money— for one wishing to reverse the collapse of our nation’s, and the world’s, economy, to spend time at La- RouchePAC.com, and study the webcasts and writings of Lyndon LaRouche, to become a knowledgeable ad- herent of the American System of physical economy. One can begin with LaRouche’s answer to the fifth ques- tion from his March 13, 2010 webcast, and his follow- up discussion of that answer, posted as the “Special Weekly Update” on April 1, 2010 [in last week’s EIR].
As for former Secretary Paulson, it is hard to believe that he could have been as self-deluded as he presents himself. Typical is his description of his state of mind after another one of his “weekends at Bernie’s” in the Autumn of 2008, as he and his fellow superheroes, Ber- nanke and Geithner, crafted one bailout after another, to prevent “a meltdown” and to “save” the system: “Per- haps I should have foreseen the problems ahead, but for the moment that night, as I fell asleep, I just felt good.”
That is more than can be said for the rest of us, who will likely spend many sleepless nights undoing the damage done by these criminals.
