June 25, 2009
Like many people, I found out about Matt Taibbi as a result of his frequent appearances on HBO’s Real Time with Bill Maher. Last spring, Matt appeared on Real Time to discuss his research into the global economic crisis and the resulting scheme of numerous bailouts engineered in response to each sub-crisis of this economic catastrophe. My March 26 piece: “Understanding The Creepy Bailouts“, quoted from Matt’s fantastic article for Rolling Stone magazine, entitled: “The Big Takeover”. (At that time, the “Big Takeover” link led to the complete article. Rolling Stone now provides only abbreviated versions of its published articles on line.) One important theme of Matt’s commentary was evident in this passage:
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.
Matt has a unique way of discussing the extremely complicated, technical issues involved in the financial crisis, by breaking them down into understandable, plain-language points. Unfortunately, most mainstream journalists lack either the understanding or the courage (or both) to discuss our financial predicament in such a frank, informative manner. Take for example: Fareed Zakaria’s discussion of the economic catastrophe as it appeared in Newsweek under the title “The Capitalist Manifesto”. Nobody could to a better job of ripping that thing to shreds than Matt Taibbi himself. With his June 24 blog entry, he did just that:
Zakaria works hard to tell the crisis story minus these outrageous details. Then he goes on to argue that, basically, nothing should be done. We mostly just need a “gut check”; we, all of us, need to rediscover that little voice in all of us that says, “if it doesn’t feel right, we shouldn’t be doing it.” I mean, that is actually what he wrote. No one needs to go to jail, we don’t need to worry about who’s to blame, we just need, you know, do a better job using our trusty moral compasses to navigate the seas of life. It’s classic Zakaria in the sense that he attacks ugly political phenomena with tired cliches and hack pablum until you’re almost too bored to keep your eyes open, then in the end reduces it all to a dumbed-down t-shirt that carries us forward to another cycle of political inaction: Laissez-faire capitalism doesn’t rip off people, people rip off people!
Matt’s previous blog entry on June 18, focused on one of my favorite subjects: the hideous monster we have come to know as Goldman Sachs. I had written a piece about that entity on May 21, discussing how Paul Farrell of MarketWatch and John Crudele of the New York Post had been voicing the same suspicions I had been harboring about Goldman. After reading Matt Taibbi’s June 18 article, I enthusiastically sent the link to my friends. This stuff was just too good! Matt was laying it on the line in a way few others had the courage or the skill to do. I doubt whether many in the mainstream media will follow his lead. Here is one of the highlights from that piece:
Any way you slice it, Goldman was responsible for putting tens of billions of toxic mortgages on the market, resulting in mass foreclosures, mass depletion of retirement funds, and a monstrously over-leveraged financial system that we will now all be bailing out for the next half-century or so. All of this so that Goldman could make a few billion bucks acting as the middleman in all of these deadly transactions.
If that weren’t enough, Matt pointed out that the upcoming issue of Rolling Stone would feature another of his reports — this one focused exclusively on Goldman Sachs. That issue (#1082-83, with the Jonas Brothers on the cover) is now on the newsstands. Matt’s article: “The Wall Street Bubble Machine” is best explained in the subtitle:
From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression — And they’re about to do it again.
In case you are wondering how they’re going to do it again . . . Matt reports that it will be by way of the “Cap and Trade” program. Goldman has already positioned itself to serve as one of our government’s premier carbon credit pimps. Matt offered this explanation:
Goldman is ahead of the headlines again, just waiting for someone to make it rain in the right spot. Will this market be bigger than the energy-futures market?
“Oh, it’ll dwarf it,” says a former staffer on the House energy committee.
Matt’s “bottom line” paragraph at the conclusion of the essay underscores what I believe are America’s biggest problems: “lobbying” and “campaign contributions” (our tradition of legalized graft). Our government is not just one of laws . . . it is one of loopholes, exemptions and waivers. Those things cost money. The people who have the money to “invest” in such machinations, usually find themselves rewarded handsomely . . . at the expense of the taxpayers. Here’s how Matt wrapped it up:
But this is it. This is the world we live in now. And in this world, some of us have to play by the rules, while others get a note from the principal, excusing them from homework until the end of time, plus 10 billion free dollars in a paper bag to buy lunch. It’s a gangster state, running on gangster economics, and even prices can’t be trusted anymore; there are hidden taxes in every buck you pay. And maybe we can’t stop it, but we should at least know where it’s all going.
Amen.
How The Democrats Self-Destruct
June 29, 2009
For the past few days, we have been inundated with news reports detailing the self-destructive behavior of the late singing sensation, Michael Jackson. Perhaps it is this heightened awareness of self-destruction that is causing people to take a closer look at the self-destructive behavior taking place within the Democratic Party.
Most notable is the behavior of President Obama. As his Inauguration approached, many people were surprised to learn that some principal players selected for Obama’s economic team were the same people responsible for creating this mess during the Clinton years. The most prominent of these is Larry Summers, who is expected to replace Ben Bernanke as Chairman of the Federal Reserve in January. On June 24, Robert Scheer, on his Truthdig website, bemoaned the fact that Obama is following the “trickle down” strategy of bailing out the big banks, while doing nothing to really solve the mortgage crisis:
If President Obama doesn’t prove Robert Scheer wrong, Obama might find himself facing some hostile crowds at the “town hall” meetings as 2012 approaches.
The President might also be surprised to encounter large-scale Democratic grassroots disappointment over his proposed “overhaul” of the financial regulatory system. As I pointed out on June 18, President Obama’s financial reform proposal, released on that date, drew immediate criticism for the expanded powers granted to the Federal Reserve. On June 24, The Nation (which prides itself on having a liberal bias) ran a harshly critical piece by William Greider, entitled: “Obama’s False Reform”. In addition to criticizing the expanded powers granted to the Federal Reserve, Greider emphasized that the proposal did not contain any significant measures, or “hard rules”, to reform the financial system. Beyond that, Greider took Obama to task for the false claim that the regulatory system was overwhelmed by “the speed, scope and sophistication of a 21st century global economy”. The article emphasized the need to “slow down the rush to weak solutions” by taking the time to find out about the root causes of the breakdown and then to address those causes:
President Obama is now taking pride for the passage in the House of Representatives of the “climate change bill” (H.R. 2454, the American Clean Energy and Security Act of 2009). Despite the claim of House Majority Leader Steny H. Hoyer (D-Md.) that the bill’s passage in the House was “a transformative moment”, 44 Democrats voted against the bill. One harsh critic of the bill is Democrat Dennis Kucinich. Here’s some of what Mr. Kucinich had to say:
Worse yet is the Democrats’ fumbling and bumbling with their efforts at healthcare reform legislation. Polling wiz Nate Silver of fivethirtyeight.com, did a meta-analysis of the polls conducted to assess public support for the so-called “public option”in healthcare coverage, wherein people have the option to buy health insurance from the government. The insurance companies obviously aren’t interested in that sort of competition and they have launched advertising campaigns portraying it as controversial and flawed. Nevertheless, Nate Silver’s report revealed that five of the six polls analyzed, demonstrated lopsided support for the public option, exceeding 60 percent. Despite the strong popular support for the public option, Mr. Silver pointed out in another posting, how there is a great risk that Democrats might oppose the measure due to payoffs from lobbyists:
Awareness of this venality obviously has many commentators expressing outrage. On June 23, Joe Conason wrote such an article for The New York Observer:
Those Democrats inclined to oppose the public option don’t appear to be too concerned about public indignation over their behavior. Take California Senator Dianne Feinstein for example. Do you really believe she gives a damn about voter outrage? She was re-elected in 2006, despite criticism that as chair of the Senate Military Construction Appropriations subcommittee, she helped her husband, Iraq war profiteer Richard C. Blum, benefit from decisions she made as chair of that subcommittee. So what if MoveOn.org is targeting her for ambivalence about the issue of healthcare reform? MoveOn.org is also targeting other Democrats who are attempting to eliminate the public option. If these officials have so much hubris as to believe that they can get away with scoffing at the public will, they had better start looking for new jobs now . . . because the market isn’t very good.