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rrl308
03-20-2009, 01:36 AM
A Program of Financial Concentration
Was the Bailout Itself a Scam?
By PAUL CRAIG ROBERTS

Professor Michael Hudson (CounterPunch, March 18) is correct that the orchestrated outrage over the $165 million AIG bonuses is a diversion from the thousand times greater theft from taxpayers of the approximately $200 billion “bailout” of AIG. Nevertheless, it is a diversion that serves an important purpose. It has taught an inattentive American public that the elites run the government in their own private interests.

Americans are angry that AIG executives are paying themselves millions of dollars in bonuses after having cost the taxpayers an exorbitant sum. Senator Charles Grassley put a proper face on the anger when he suggested that the AIG executives “follow the Japanese example and resign or go commit suicide.”

Yet, Obama’s White House economist, Larry Summers, on whose watch as Treasury Secretary in the Clinton administration financial deregulation got out of control, invoked the “sanctity of contracts” in defense of the AIG bonuses.

But the Obama administration does not regard other contracts as sacred. Specifically: labor unions had to agree to give-backs in order for the auto companies to obtain federal help; CNN reports that “Veterans Affairs Secretary Eric Shinseki confirmed Tuesday [March 10] that the Obama administration is considering a controversial plan to make veterans pay for treatment of service-related injuries with private insurance”; the Washington Post reports that the Obama team has set its sights on downsizing Social Security and Medicare.

According to the Post, Obama said that “it is impossible to separate the country’s financial ills from the long-term need to rein in health-care costs, stabilize Social Security and prevent the Medicare program from bankrupting the government.”

After Washington’s trillion dollar bank bailouts and trillion dollar gratuitous wars for the sake of the military industry’s profits and Israeli territorial expansion, there is no money for Social Security and Medicare.

The US government breaks its contracts with US citizens on a daily basis, but AIG’s bonus contracts are sacrosanct. The Social Security contract was broken when the government decided to tax 85% of the benefits. It was broken again when the Clinton administration rigged the inflation measure in order to beat retirees out of their cost-of-living adjustments. To have any real Medicare coverage, a person has to give up part of his Social Security check to pay Medicare Part B premium and then take out a private supplemental policy. The true cost of Medicare to beneficiaries is about $6,000 annually in premiums, plus deductibles and the Medicare tax if the person is still earning.

Treasury Secretary Geithner, the fox in charge of the hen house, has resolved the problem for us. He is going to withhold $165 million (the amount of the AIG bonuses) from the next taxpayer payment to AIG of $30,000 million. If someone handed you $30,000 dollars, would you mind if they held back $165?

PR flaks have rechristened the bonus payments “retention payments” necessary if AIG is to retain crucial employees. This lie was shot down by New York Attorney General Andrew Cuomo, who informed the House Committee on Financial Services that the payments went to members of AIG’s Financial Products subsidiary, “the unit of AIG that was principally responsible for the firm’s meltdown.” As for retention, Cuomo pointed out that ”numerous individuals who received large ‘retention’ bonuses are no longer at the firm” .

Eliot Spitzer, the former New York Governor who was set-up in a sex scandal to prevent him investigating Wall Street’s financial gangsterism, pointed out on March 17 that the real scandal is the billions of taxpayer dollars paid to the counter-parties of AIG’s financial deals. These payments, Spitzer writes, are “a way to hide an enormous second round of cash to the same group that had received TARP money already.”

Goldman Sachs, for example, had already received a taxpayer cash infusion of $25 billion and was sitting on more than $100 billion in cash when the Wall Street firm received another $13 billion via the AIG bailout.

Moreover, in my opinion, most of the billions of dollars in AIG counter-party payments were unnecessary. They represent gravy paid to firms that had made risk-free bets, the non-payment of which constituted no threat to financial solvency.

Spitzer identifies a conflict of interest that could possibly be criminal self-dealing. According to reports, the AIG bailout decision involved Bush Treasury Secretary Henry Paulson, formerly of Goldman Sachs, Goldman Sachs CEO Lloyd Blankfein, Fed Chairman Ben Bernanke, and Timothy Geithner, former New York Federal Reserve president and currently Secretary of the Treasury. No doubt the incestuous relationships are the reason the original bailout deal had no oversight or transparency.

The Bush/Obama bailouts require serious investigation. Were these bailouts necessary, or were they a scam, like “weapons of mass destruction,” used to advance a private agenda behind a wall of fear? Recently I heard Harvard Law professor Elizabeth Warren, a member of a congressional bailout oversight panel, say on NPR that the US has far too many banks. Out of the financial crisis, she said, should come consolidation with the financial sector consisting of a few mega-banks. Was the whole point of the bailout to supply taxpayer money for a program of financial concentration?

http://www.counterpunch.org/roberts03192009.html

memyselfI
03-20-2009, 07:30 AM
The Bush/Obama bailouts require serious investigation. Were these bailouts necessary, or were they a scam, like “weapons of mass destruction,” used to advance a private agenda behind a wall of fear?

YES, yes, yes.

***SPRAYER
03-20-2009, 07:32 AM
I think the whole thing has been a dog and pony show.

BucEyedPea
03-20-2009, 07:35 AM
I agree with the Obama administration, I don't consider the contracts sacred either, because it's not their money. I find that unconscienable, a violation of public policy and property rights. If they were allowed to fail and file bankruptcy they wouldn't have gotten anything.

Amnorix
03-20-2009, 07:39 AM
http://yglesias.thinkprogress.org/wp-content/uploads/2008/10/tinfoil_hat.jpg

memyselfI
03-20-2009, 07:47 AM
http://yglesias.thinkprogress.org/wp-content/uploads/2008/10/tinfoil_hat.jpg

Yeah, that is what Bushbots used to say about PNAC.

petegz28
03-20-2009, 08:33 AM
Damn right it is a scam. How you can see it as any other way is beyond me? This was nothing more than the rich taking care of the rich ahead of the economic crash.

***SPRAYER
03-20-2009, 08:37 AM
http://www.thepeoplescube.com/red/richedit/upload/2k80acd9ebc2.jpg

banyon
03-20-2009, 09:09 AM
eazyb tells me it was absolutely necessary, somehow, and if we don't agree then we are idiots.

speak24
03-20-2009, 09:16 AM
:clap:

petegz28
03-20-2009, 09:16 AM
eazyb tells me it was absolutely necessary, somehow, and if we don't agree then we are idiots.

It may have been necessary to help AIG go under in an orderly manner, but not just hand over cash to the executives. But it isn't just AIG...there is a slew of companies that Paulson & Co. babied.

Saul Good
03-20-2009, 09:17 AM
eazyb tells me it was absolutely necessary, somehow, and if we don't agree then we are idiots.

Life is much more exciting when you only deal in extremes, absolutes, and extreme absolutes.

banyon
03-20-2009, 09:19 AM
It may have been necessary to help AIG go under in an orderly manner, but not just hand over cash to the executives. But it isn't just AIG...there is a slew of companies that Paulson & Co. babied.

They should've just been allowed to go bankrupt and then go into reorganization. That would've protected their customers and employees just fine. The only reason to do it the way we did it is so the shareholders and the people neck deep in this derivatives crap didn't lose their shirts like they do in a regular recession.

banyon
03-20-2009, 09:20 AM
Life is much more exciting when you only deal in extremes, absolutes, and extreme absolutes.

What's extreme about my position? The fact that it's shared by a super-majority of the public?

HonestChieffan
03-20-2009, 09:26 AM
The bailout was not so much the scam as the over the top rhetoric by Odrama on how bad things are/were/will be in his manipulative effort to get the porkulus passed then the follow up omnibus.

It was masterful work, the nonthinking public fell for it and bingo, we are on the way with programs and policies no one even read or talked about.

This entire thing is a brilliant piece of work. Create an issue that will support your solution, magnify it and use the issue to redirect the attention away from other efforts and programs that can be passed and immplemented while no one is watching. Even this AIG thing is a redirection and effort to keep peoples eye on the wrong ball.

You have to give them credit, its working. And the social engineers are having their way with us.

Saul Good
03-20-2009, 09:29 AM
What's extreme about my position? The fact that it's shared by a super-majority of the public?

I was referring to his position, not yours.

petegz28
03-20-2009, 09:31 AM
The bailout was not so much the scam as the over the top rhetoric by Odrama on how bad things are/were/will be in his manipulative effort to get the porkulus passed then the follow up omnibus.

It was masterful work, the nonthinking public fell for it and bingo, we are on the way with programs and policies no one even read or talked about.

This entire thing is a brilliant piece of work. Create an issue that will support your solution, magnify it and use the issue to redirect the attention away from other efforts and programs that can be passed and immplemented while no one is watching. Even this AIG thing is a redirection and effort to keep peoples eye on the wrong ball.

You have to give them credit, its working. And the social engineers are having their way with us.

I hate to have to keep point this out to some of you but the AIG bailouts started well before Obama was even elected let alone in office. Perhaps that slipped your mind? I am not an Obama supporter but you need to place blame where it belongs. And that is on Hank Paulson and the Bush Admin.

banyon
03-20-2009, 09:32 AM
I was referring to his position, not yours.

Oh, my apologies. Apparently my quills were set off prematurely.

banyon
03-20-2009, 09:33 AM
The bailout was not so much the scam as the over the top rhetoric by Odrama on how bad things are/were/will be in his manipulative effort to get the porkulus passed then the follow up omnibus.

It was masterful work, the nonthinking public fell for it and bingo, we are on the way with programs and policies no one even read or talked about.

This entire thing is a brilliant piece of work. Create an issue that will support your solution, magnify it and use the issue to redirect the attention away from other efforts and programs that can be passed and immplemented while no one is watching. Even this AIG thing is a redirection and effort to keep peoples eye on the wrong ball.

You have to give them credit, its working. And the social engineers are having their way with us.


The bank bailout was Bush's bill, not Obama's. Is your memory really that terrible that you can't even remember what happened a few months ago?

Chiefnj2
03-20-2009, 09:35 AM
The bailout was another example of piss poor media coverage. Everyone was running around reporting that it had to be done immediately or the economy was doomed. I don't recall any news agency willing to stand back a minute, take a deep breath and make sure it was necessary, or to make sure proper safeguards were in place. It was like the news response to the Iraq war - believe everything the government is saying and ask no questions.

Saul Good
03-20-2009, 09:36 AM
Oh, my apologies. Apparently my quills were set off prematurely.

No problem. I'll earn them soon enough.

KILLER_CLOWN
03-20-2009, 09:43 AM
Stimulus? Bailout? What is the difference? If you're going to be bailing out the rich, then you need to see the inside of Leavenworth on a daily basis.

HonestChieffan
03-20-2009, 09:43 AM
I am sorry Banyon, I forget sometimes that Bush is president. Damn him for the stimulus fiasco. And How on earth did Geitner keep his job when Odrama came to office. We need to get Bush out of there cause he is ruining Odram'as efforts.

banyon
03-20-2009, 09:50 AM
I am sorry Banyon, I forget sometimes that Bush is president. Damn him for the stimulus fiasco. And How on earth did Geitner keep his job when Odrama came to office. We need to get Bush out of there cause he is ruining Odram'as efforts.

Are you brain damaged? Geitner didn't "keep his job". He was Obama's nominee to replace Paulson.

And no, the bailout bill was passed on October 3, 2008. Obama has fixed a couple of the problems with the "no strings attached" that Bush passed, but not enough has been done IMO, with a bill we shouldn't have passed in the first place.

petegz28
03-20-2009, 09:59 AM
I am sorry Banyon, I forget sometimes that Bush is president. Damn him for the stimulus fiasco. And How on earth did Geitner keep his job when Odrama came to office. We need to get Bush out of there cause he is ruining Odram'as efforts.

Dude, what do you not get? AIG started gettin bailed out last September. Bush was in office then.....damn man it is people like you that give conservatives a bad rap.

HonestChieffan
03-20-2009, 10:00 AM
Are you brain damaged? Geitner didn't "keep his job". He was Obama's nominee to replace Paulson.

And no, the bailout bill was passed on October 3, 2008. Obama has fixed a couple of the problems with the "no strings attached" that Bush passed, but not enough has been done IMO, with a bill we shouldn't have passed in the first place.

NO NO NO...you cannot have it both ways. Either we blame Bush and keep the focus on Bush or we deal with reality. As Reagan said, There you go again.....

But if you insist, we can look at this factually but its not going to go well for Obama if we do that. Id be surprised if you really want to deal with Obama's picks, the issues they have had, the job Geitner has done, the misstatements by Dodd, then Geitner saying he didnt know, then saying well maybe we knew and we did talk to Dodd....Oh heavens, if we had only read the bill but we had to get it passed before the entire country and yes the world was in peril...

You let us know. Is it Bush's fault and should we maintain that tactic, or should we be focused on the real stuff. It's your call.

Brock
03-20-2009, 10:00 AM
The bailout was another example of piss poor media coverage. Everyone was running around reporting that it had to be done immediately or the economy was doomed.

Even if that's true, nobody outside of Washington and corporate boardrooms was in favor of this.

petegz28
03-20-2009, 10:06 AM
NO NO NO...you cannot have it both ways. Either we blame Bush and keep the focus on Bush or we deal with reality. As Reagan said, There you go again.....

But if you insist, we can look at this factually but its not going to go well for Obama if we do that. Id be surprised if you really want to deal with Obama's picks, the issues they have had, the job Geitner has done, the misstatements by Dodd, then Geitner saying he didnt know, then saying well maybe we knew and we did talk to Dodd....Oh heavens, if we had only read the bill but we had to get it passed before the entire country and yes the world was in peril...

You let us know. Is it Bush's fault and should we maintain that tactic, or should we be focused on the real stuff. It's your call.


All of that has nothing to do with the fact that the AIG bailouts started with Paulson under the Bush Admin.

banyon
03-20-2009, 10:12 AM
NO NO NO...you cannot have it both ways. Either we blame Bush and keep the focus on Bush or we deal with reality. As Reagan said, There you go again.....

But if you insist, we can look at this factually but its not going to go well for Obama if we do that. Id be surprised if you really want to deal with Obama's picks, the issues they have had, the job Geitner has done, the misstatements by Dodd, then Geitner saying he didnt know, then saying well maybe we knew and we did talk to Dodd....Oh heavens, if we had only read the bill but we had to get it passed before the entire country and yes the world was in peril...

You let us know. Is it Bush's fault and should we maintain that tactic, or should we be focused on the real stuff. It's your call.

Have what both ways? I've criticized this bill ever since its passage was originally contemplated. I criticized Bush for signing it, and I criticize Obama for not amending or reforming it adequately. I don't see any inconsistency with that. Perhaps you could point it out with a bit less vagueness?

Also, as pete pointed out, it doesn't change the rote facts of when a historical event occurred.

HonestChieffan
03-20-2009, 10:17 AM
Im on board now.

I have work to do today so I wont be around but Ill be blaming Bush in my mind for this thing. If George hadnt been such a screw up, Geitner wouldn't be in a pickle and Dodd would still be an esteemed Senator with a spotless record. And all this fuss over the stimulus bill and the flagrant disregard for managing how the taxpayers money would never have come up if Bush hadnt been involved.

Damn it George!

petegz28
03-20-2009, 10:19 AM
Im on board now.

I have work to do today so I wont be around but Ill be blaming Bush in my mind for this thing. If George hadnt been such a screw up, Geitner wouldn't be in a pickle and Dodd would still be an esteemed Senator with a spotless record. And all this fuss over the stimulus bill and the flagrant disregard for managing how the taxpayers money would never have come up if Bush hadnt been involved.

Damn it George!

Well, if Paulson never asked for the money in the first place.....

banyon
03-20-2009, 10:20 AM
Im on board now.

I have work to do today so I wont be around but Ill be blaming Bush in my mind for this thing. If George hadnt been such a screw up, Geitner wouldn't be in a pickle and Dodd would still be an esteemed Senator with a spotless record. And all this fuss over the stimulus bill and the flagrant disregard for managing how the taxpayers money would never have come up if Bush hadnt been involved.

Damn it George!

Well since no one in this thread said anything even remotely resembling this, I suppose it would be just as well if you carried on this dialogue with yourself in your own head.

HonestChieffan
03-20-2009, 10:24 AM
Well since no one in this thread said anything even remotely resembling this, I suppose it would be just as well if you carried on this dialogue with yourself in your own head.

Didn't you say it was Bush's fault?

KC Dan
03-20-2009, 10:27 AM
Well, if Paulson never asked for the money in the first place.....
The problem with this line of thought is that Paulson, Bush and the other previous administration idiots don't craft the law or vote it into effect. The congress is DIRECTLY responsible for this bailout mess without conditions being put into effect on recipients. Not Bush, not Paulson, - congress. If my 13 yr old asks for money for something and I investigate the need and it isn't needed or I need to put a condition on him for receiving it - I precondition it or I say NO!

I am positive that financial support was definately needed from our gov't but it was not needed without preconditions or the world was going to end. Especially, the second or third time the two administrations went demanding it...

HonestChieffan
03-20-2009, 10:32 AM
The problem with this line of thought is that Paulson, Bush and the other previous administration idiots don't craft the law or vote it into effect. The congress is DIRECTLY responsible for this bailout mess without conditions being put into effect on recipients. Not Bush, not Paulson, - congress. If my 13 yr old asks for money for something and I investigate the need and it isn't needed or I need to put a condition on him for receiving it - I precondition it or I say NO!

I am positive that financial support was definately needed from our gov't but it was not needed without preconditions or the world was going to end. Especially, the second or third time the two administrations went demanding it...

Be Careful. You may raise a child who understands values and all that. In the process you will have stifled his creativity, probably create angst and suppress his or her willingness to express themselves, and develop some understanding of the value of work and the dollar. ....Keep up the good work!

banyon
03-20-2009, 10:32 AM
Didn't you say it was Bush's fault?

No, I corrected your paragraph about what an ingenious scheme of Obama's this was to create this or whatever.

HonestChieffan
03-20-2009, 10:39 AM
The bank bailout was Bush's bill, not Obama's. Is your memory really that terrible that you can't even remember what happened a few months ago?

Ok....like i said, Im on board. Its Bush's doing, the bastard.

petegz28
03-20-2009, 12:34 PM
The problem with this line of thought is that Paulson, Bush and the other previous administration idiots don't craft the law or vote it into effect. The congress is DIRECTLY responsible for this bailout mess without conditions being put into effect on recipients. Not Bush, not Paulson, - congress. If my 13 yr old asks for money for something and I investigate the need and it isn't needed or I need to put a condition on him for receiving it - I precondition it or I say NO!

I am positive that financial support was definately needed from our gov't but it was not needed without preconditions or the world was going to end. Especially, the second or third time the two administrations went demanding it...

Ah, ok so now we are selectively placing blame.....right.

KC Dan
03-20-2009, 12:38 PM
Ah, ok so now we are selectively placing blame.....right.
Absolutely not. They are all to blame and they haven't a clue how to stop the bleeding. That's the biggest problem now. Everyone wants a scapegoat. There isn't one just a scapegroup - all of them, politicians (both sides), greedy lobbyists, greedy execs and an administration that just doesn't give a crap as long as they can redistribute wealth.

Ebolapox
03-20-2009, 12:42 PM
What's extreme about my position? The fact that it's shared by a super-majority of the public?

I believe it's been proven as a fact that a super-majority of the public are, in fact, drooling blithering idiots. they voted for bush (twice), obama, and any politician that will spoon-feed them whatever they want to hear while ignoring the fact that their assholes are bleeding profusely.

bkkcoh
03-20-2009, 01:43 PM
Im on board now.

I have work to do today so I wont be around but Ill be blaming Bush in my mind for this thing. If George hadnt been such a screw up, Geitner wouldn't be in a pickle and Dodd would still be an esteemed Senator with a spotless record. And all this fuss over the stimulus bill and the flagrant disregard for managing how the taxpayers money would never have come up if Bush hadnt been involved.

Damn it George!


Granted it is the place of the president to sign bills into law and he should be somewhat respnsible for knowing what is in the bill. That isn't the case. There is no way the bills are structured to know what is the very detail of the bills, especially when they are a thousand pages or longer, like this one was.

The congress is responsible for putting the final content in the bills. There is equal blame to go around in this. Who deserves, I am not sure, but both deserve some.

There were questions of Dodd's ethics issues (http://www.google.com/search?sourceid=navclient&ie=UTF-8&rlz=1T4RNWN_enUS231US231&q=senator+dodd+ethics) for a long time.

petegz28
03-20-2009, 01:44 PM
Absolutely not. They are all to blame and they haven't a clue how to stop the bleeding. That's the biggest problem now. Everyone wants a scapegoat. There isn't one just a scapegroup - all of them, politicians (both sides), greedy lobbyists, greedy execs and an administration that just doesn't give a crap as long as they can redistribute wealth.

See you bought into their BS. They DO know how to stop the bleeding. But it involves letting the rich go down witht he ship.

KC Dan
03-20-2009, 01:49 PM
See you bought into their BS. They DO know how to stop the bleeding. But it involves letting the rich go down witht he ship.
with our money.....

petegz28
03-20-2009, 01:55 PM
with our money.....

I don't think you got the point. If they did what they know they should have done, the tax payers never would have been involved and a lot of companies would be bankrupt. And that is what should have happened. But as classic as government could ever be, the did what they knew was the wrong thing by ****ing the tax payer to keep the rich, rich.

KC Dan
03-20-2009, 03:33 PM
I don't think you got the point. If they did what they know they should have done, the tax payers never would have been involved and a lot of companies would be bankrupt. And that is what should have happened. But as classic as government could ever be, the did what they knew was the wrong thing by ****ing the tax payer to keep the rich, rich.
Agreed, agreed, agreed. I do get it and I am 1000% with you on this. Please do not misunderstand what I said previously. For you good & propoer articulation:

petegz28
03-20-2009, 04:27 PM
Agreed, agreed, agreed. I do get it and I am 1000% with you on this. Please do not misunderstand what I said previously. For you good & propoer articulation:

I'll take her!!!

Stewie
03-20-2009, 05:12 PM
I've said it several times before and I'll say it again... the big, corrupt banks run this country. THEY HAVE TO! They set it up this way under FDR and it continues today. The banks float gov't bonds and now buy gov't debt. It ain't rocket science.

Jenson71
03-21-2009, 11:12 AM
The bailout was another example of piss poor media coverage. Everyone was running around reporting that it had to be done immediately or the economy was doomed. I don't recall any news agency willing to stand back a minute, take a deep breath and make sure it was necessary, or to make sure proper safeguards were in place. It was like the news response to the Iraq war - believe everything the government is saying and ask no questions.

That was what Paulson and Bernanke said to Congress: We need money immediately or the economy will collapse.

No Congressman is going to hear the top bankers, the top economists in the country say that and do nothing. It seemed absolutely essential.

wild1
03-21-2009, 11:17 AM
I definitely think a major part of it was a dishonest attempt by the government to get their hooks in deep on the financial system.

The 'emergency' bailout last October of course was a sham. They've forced many major companies to take all this money because the money comes with strings and the government will basically then control them.

When the banks did what was smart with the money which was shore up the bottom line - instead of what the government wanted them to do, which was make further poor investments - they act surprised.

Either these people are the biggest idiots in history, or it's just act 2 in this political theatre to have the government take over the financial system.