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Posted on Mar 3, 2009
AIG building
AP photo / Mark Lennihan

AIG executives hid risky practices from company auditors even as losses mounted, according to documents obtained Tuesday by a congressional panel examining the events that forced the government to bail out the conglomerate. Above, a view from the ground at AIG headquarters in New York City in 2008.

By Robert Scheer

This is crazy! Forget the bleating of Rush Limbaugh; the problem is not with the quite reasonable and, if anything, underfunded stimulus package, which in any case will be debated long and hard in Congress. The problem is with what is not being debated: the far more expensive Wall Street bailout that is being pushed through—as in the case of the latest AIG rescue—in secret, hurried deal-making primarily by the unelected secretary of the treasury and the chairman of the Federal Reserve.

Six months ago, we taxpayers began bailing out AIG with more than $140 billion, and then it went and lost $61.7 billion in the fourth quarter, more than any other company in history had ever lost in one quarter. So Timothy Geithner and Ben Bernanke huddled late into the night last weekend and decided to reward AIG for its startling failure with 30 billion more of our dollars. Plus, they sweetened the deal by letting AIG off the hook for interest it had been obligated to pay on the money we previously gave the company.

AIG doesn’t have to pay the 10 percent interest due on the preferred stock the U.S. government got for the earlier bailout funds because that interest will now be paid out only at AIG’s discretion, which means never. The preferred stock, which got watered down, carried a cumulative interest, meaning we taxpayers would have recaptured some money if the company ever got going again, but that interest obligation was waived in the new deal.

We’ve already given AIG a total of $170 billion—an amount that dwarfs the $75 billion allocated to helping those millions of homeowners facing foreclosures. And more will be thrown down the AIG rat hole because President Barack Obama is blindly following the misguided advice of his top economic advisers, who insist that AIG is too big to fail.

“AIG provides insurance protection to more than 100,000 entities, including small businesses, municipalities, 401(k) plans and Fortune 500 companies who together employ over 100 million Americans,” the joint Treasury Department and Fed statement declared while insisting that for that reason, plus the “systemic risk AIG continues to pose and the fragility of markets today, the potential cost to the economy and the taxpayer of government inaction would be extremely high.”

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What about the cost of inaction by Treasury and the Fed before this meltdown? If AIG were so important to the American economy, shouldn’t government regulators have been looking more closely at its activities? They couldn’t then, and even now they don’t understand what AIG has been up to, because the company was allowed to operate in an essentially unregulated global economy in which multinational corporations have their way. As the Treasury/Fed statement concedes: “AIG operates in over 130 countries with over 400 regulators and the company and its regulated and unregulated subsidiaries are subject to very different resolution frameworks across their broad and diverse operations without an overarching resolution mechanism.”

Oh, really? And you’re discovering that only now, when you’re making us bail AIG out? It wasn’t that long ago that a couple of hustlers operating out of an AIG office in London were going wild making money off selling insurance on credit default swaps that no one could understand, but the company execs loved those huge profit margins. To challenge their maneuvering, as some in Congress attempted, was said by their defenders, including Geithner, to put them at an unfair disadvantage in the world market. Ignorance was bliss … until the bubble burst.

This was all belatedly conceded by Bernanke in his Senate testimony on Tuesday: “AIG exploited a huge gap in the regulatory system. There was no oversight of the Financial Products division. This was a hedge fund, basically, that was attached to a large and stable insurance company, made huge numbers of irresponsible bets—took huge losses. There was no regulatory oversight because there was a gap in the system.”

AIG used to be in the conventional insurance business, covering identifiable risks it knew something about, until it took advantage of deregulation and a lack of government surveillance to come up with contrived new financial products. Even Maurice Greenberg, the man who built AIG from the ground up over a span of 40 years before he was forced out amid corruption charges in 2005, admits that he didn’t understand the newfangled financial gimmicks that the company was peddling. This week, claiming he too was swindled, Greenberg sued in federal court, charging the AIG execs who forced him out with “gross, wanton or willful fraud or other morally culpable conduct,” over the credit default swap portfolio that was part of his settlement.

U.S. taxpayers now have ownership of almost 80 percent of AIG, but with the company’s once solid traditional insurance business now suffering a steep loss of consumer confidence, it’s not likely that even the formerly healthy parts of the company will be worth much. What we have here is all pain and no gain for the taxpayers roped into this debacle, which is proving to be the story of the entire banking bailout.

Click here to check out Robert Scheer’s book,
“The Great American Stickup: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street.”


Keep up with Robert Scheer’s latest columns, interviews, tour dates and more at www.truthdig.com/robert_scheer.



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By Trithoverlies, March 23, 2009 at 7:56 am Link to this comment

There is no outrage about the congress attempt to sneak in a massive tax increase on all bonuses not just those that are not deserved by some banking firms. Most are legitamite but they will be taxed just the same is this fair of course not but the leftest leaning social engineers in congress will do anything to further their Comunist, O’ I mean their socialist agenda. If My bussiness is doing alright, and Playing by all the rules This bill now being debated in the Senate would penalize me and my people for being successful, while granted what is going on at AIG and some others is wrong we can not rush through a bill that doesn’t help but only hurts the economy. We have already done so on three occassions, yet our economy has lost 41% of its wealth and unemployment continues to rise at an alarming rate. Call your Congressional representatives, and Senators and put your foot down the PORK must Stop now and they must begin to address the real concerns not attempt social engineering as has been happening in Europe and is a major disaster in the making.
        Trithoverlies/Truthoverlies.
            John R. Bloxson Jr.

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By cann4ing, March 21, 2009 at 1:54 pm Link to this comment

“I have come to the realization that we all share the same mother.  The winged things that fly, the four-legged and the two-legged creatures were all spawned by Mother Earth.”
    —Russell Means

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By TAO Walker, March 21, 2009 at 1:05 pm Link to this comment

The “truth” cann4ing is earnestly digging for lies much deeper than the superficialities of “power” politics and strip-search “poker.”  Those are merely elements in the smoke-and-mirrors facade CONcocted to keep “....your huddled masses” from seeing how awfully flimsy is the apparatus of their CONfinement.

HokaHey!

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By Trithoverlies, March 16, 2009 at 11:24 am Link to this comment

As I sit here the nation has lost 33% of its wealth, and Individuals have lost 1/3 rd. of their wealth in America. Why was it the Politicians? was it Business, the Banks, or the cycle of events? I believe the blame lays with all of the above but their is two keys missing in that list 1. We the people let it happen when we were warned it was happening in 2001 by Pres. Bush NO less then 17 times. 2. Mans greed and lust unteathered from morals. We began losing our way almost Immediarely on forming the Constitution with the Wiskey rebellion, and the, continual errossion of any morals as Politics became a game of who could lie the most convincingly, when Business was given no boundries. When mans greed took over agianst morality and as the rule of law was slowly erroded by the Idea that there is no bedrock unchangable laws.  That society makes laws for that time and that time alone. As society changes so should the laws which only leads to eventual lawlessness. The Idea that rules are made to be broken has a dire and a sad end. 
          Trithoverlies/Truthoverlies.
              John R. Bloxson Jr

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By Truth OR Consequences, March 9, 2009 at 8:31 pm Link to this comment
(Unregistered commenter)

Truth Dig?  Really?
Scheer is the editor of TruthDig.

Although I haven’t clicked on every “hit” on my search for the word “Bilderberg” in a TruthDig article, a cursory review of a few of the articles gives one the impression that “Bilderberg” shows up ONLY in the readers’ comments.  In the above article, nowhere does Scheer mention “Bilderberg.”  In Estulin’s book, “The Story of the Bilderberg Group,” the facts that the Bilderberg Group (1) has chosen every President since Truman, (2) has its people placed as Directors of all main Federal departments who, in turn, flood said departments with more Bilderbergers, etc., are clearly stated.  The idea of a 2-party system (Republicans/Democrats) is just a dog-n-pony show for the rubes of America so that their attention will be directed AWAY from the Bilderberg agenda.  It’s Bilderberg that controls EVERYTHING!  Their central banks & financial institutions DELIBERATELY caused the current crisis—not incomptenence, stupidity, personal greed, etc., but at the DIRECTION of the Bilderberg Group.  The bailout is both their REWARD for instituting the Bildergberg plan & a continuation of the redistribution of America’s wealth OUTSIDE of America. (Where have the TRILLIONS gone?)  Can anyone say NORTH AMERICAN UNION or AMERO?  For the Amero to be accepted by the ex-Americans (soon to be slaves in the North American Union), the dollar has to TANK. All according to the Bilderberg agenda of their ONE WORLD.  Scheer’s lack of pointing any of this out in his articles—when he has to know about the central banks (and their 1954 creation, the Bilderberg Group) being behind both the Great Depression & the current depression in order to siphone the wealth of America OUT of the country as part of their plan to destroy the American middle class (armed FREE people, their greatest threat)—has to be either (1) fear of retaliation by Bilderberg &/or (2) he is himself a Bilderberg shill.

All of you need to do more reading & expand your awareness past the dog-n-pony show of Republicans/Democrats, conservative/liberal, etc.  Until you do, you’re just exhibiting a Pavlovian response to the Bilderberg stimuli!  You’re playing their game & throwing freedom into the sewer where the Bilderbergs want it.  (NEWS FLASH - Google any of Obama’s appointees along with the word “Bilderberg” & see what you find.)

If this “unregistered” comment is allowed, I’ll be surprised.  If Scheer responsibly replies to it in an extensive expose of the Bilderberg Group & their agenda, I’ll be shocked.

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By cann4ing, March 9, 2009 at 4:34 pm Link to this comment

By TAO Walker, March 9 at 6:28 pm #

Is “The Invisible Hand” quicker than “The All-seeing Eye”?  A chance to come back for “The Next Round” may be riding on your answer.
___________________________________

The “invisible hand” is the one that has been picking the pockets of the working class over the past 40 years.  The only “all seeing eye” is the one the U.S. intelligence agencies have erected to spy on Americans, making sure that the vast majority do not so much as see, let alone attempt to stop, the “invisible hand.”

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By TAO Walker, March 9, 2009 at 3:28 pm Link to this comment

Is “The Invisible Hand” quicker than “The All-seeing Eye”?  A chance to come back for “The Next Round” may be riding on your answer.

HokaHey!

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By Bud, March 9, 2009 at 2:22 pm Link to this comment
(Unregistered commenter)

What is it going to take in order to straighten this horrendous mess out? Evidently,the ballot box is not working!!It doesn’t matter who we put in office.It doesn’t matter if they are democrats,republicans,conservatives,liberals,moderates.or run of the mill assholes.Personally,I place the blame on every politician in this country!!!EVERY GODDAMN ONE OF THEM!

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By Outraged, March 9, 2009 at 12:33 am Link to this comment

Re: joe blow

Your comment: “<i>I rent Mr. Scheer. Where the hell is MY free cupcake?”,<i>

So…. joe blow, WHY do you rent if you could BUY?  Obviously… BUYING is in your best interest.  Are you a glutton for punishment?

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By msgmi, March 8, 2009 at 12:37 pm Link to this comment
(Unregistered commenter)

AIG, the lynchpin of the financial fiasco. AIG, the center of gravity, of global finance. AIG hunchos still in charge, salaried and making those tough decisions. AIG makes Berbie Maddoff look like a small time hoodlum.

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By whyzowl1, March 7, 2009 at 9:19 pm Link to this comment

Tao,
I just want you to know how much I appreciate your comments here. Keep ‘em coming. BTW, you’re a Lakota? Which band, may I ask, if that’s a relevant question in your case?

A lot of people seem to think losing the trappings of so-called “civilization” would be a terrible thing to have happen. Worse than the costs of retaining them?

It’s time to go back to the ol’ drawing board and pull out the ORIGINAL blueprints for how to live in harmony with our fellow passengers (two-leg, four-leg, winged, and etc., etc.) on this beautiful earth. To do that, we’re going to have to question all of those buried, unexamined presumptions in the Judaeo-Christian-Muslim religion that assume a state of hostility between Man and Nature and God and Nature and God and Man, etc. Pretty god-awful religion, really. 

I looks like Robert Scheer is fully awake to the reality of THE GREATEST THEFT IN WORLD HISTORY that is unfolding daily before our eyes. Is it a good day to die, Robert? Yet? Finally?

altlic,
A mobilization for a series of anti-war marches around the nation is set for March 23, last I knew. You’ll have to google it, particularly as to time/place in your vicinity. For further details tune in the Taking Aim radio program on WBAI (Tuesdays at 5:00 PM).

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By Trithoverlies, March 7, 2009 at 8:33 pm Link to this comment

As I sit here and read the reports I find myself wondering what our dear President is thinking when in April he promises an end to earmarks, and now he is ready to sign the Omnibus Bill with 8700 earmarks and has sent to the Congress the 2010 budget with another 9000 earmarks. While getting the News that as of the end of this week 12.3 million Americans are unemployed, and the Wealth of America has droped 30% since He took office, and now we hear he wants to ship another million jobs to illegal immagrants. this will put atleast another 1 million Americans out of work. He says he wants to help but he shows his true Comrad President Obamessiah of the United Socialist Republik of Amerika(U.S.R.A) colars. I wonder when he will get around to changing the flag, and the seal. Socialism doesn’t work it only leads to despotism, and Dictatorship as has been amply showed with the Soviets, Nazi’s, and Communist nations of the last 100 years none finished well and the dictators that took over have destroyed what ever ecconomy they still had in short order. I don’t understand Comrad President Obamessiah’s beliefe in something that has been tried and felled not once not twice but multiple times. I have lived for half a century now, and in 1975 if you would have told me the inpending Moral plummit we were destined to in 1994 with the election of Roaming eyes and hands Bill and his court of jesters, that lead to 911, and the lose of faith in our Nation. The lies being taught in our public Schools and Universities/Colleges I would have called you mad, insane, or a lier.  Well the America I knew would never have become the Amerika I see today.  I just saw a report on a conference of big Labor held at some resort where the Union Bosses spent of our hard earned union dues on $399.00 a night Hotel rooms, and ate three scrumpteous meals a day on the worker that cost almost $300.00 and all this to discuss the plight of the American workforce today.  $700.00 pluss a day for five days was your money well spent, or just the sort of thing we must expect under the 7% secular socialist progresive leadership in our county Comrads.
      Trithoverlies/Truthoverlies.
          John R. Bloxson Jr.

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By libertarian, March 7, 2009 at 2:39 pm Link to this comment
(Unregistered commenter)

racer and truther>>>

raceto- re your notion of the need for more regulation, baloney. The rules in-place are fine. It’s the Chris Cox/Greenspan elitist non-enforcement mindset
(screw the needy) that infected both the Bush Jr and Reagan regimes. My crowd holds the conviction that you buy only that for which you can pay. If, though, our federals deem it necessary to throw away tens of trillions on dumbass, diversionary invasions and handouts to corporate crooks, I’d rather go into debt creating a green America with the poor elevated to some level of dignity. Consider that for the recent $3 trillion wasted, homes for fifty-million American families (at $60,000 per) could have been built, providing massive employment and a no-mortgage America. Bankers want their interest, you say?

folktruther— your statement, “..Obama has stated repeatedly that he intends to gut social security and medicare, as Bush tried to do,” is false. Cite the quote. I have no patience for liars.

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By joe blow, March 7, 2009 at 2:14 pm Link to this comment
(Unregistered commenter)

I just registered at Truthdig in an attempt at getting Mr Scheer to rethink his “poor homeowner” “let’s make ‘em whole” mindset.
TAKING money from prudent homeowners and GIVING it to dubious “homeowners” (amongst all the other taking and giving going on right now) will NOT reverse the downward trajectory of home prices. It will just prolong the general national pain (and antipathy of the prudent/“host” citizens) and create even more unintended consequences in a rapidly expanding universe of them.

I rent Mr. Scheer. Where the hell is MY free cupcake?

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By Birdland, March 7, 2009 at 12:10 pm Link to this comment
(Unregistered commenter)

And forget not that AIG insures some of the banks, etc. that we have already bailed out. It’s like a huge sucking whirlpool of money drawing in dollars from DC (taxpayers) and then keeping it amongst themselves…round and round and round it goes, where it stops…we all know.

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By Folktruther, March 7, 2009 at 12:01 pm Link to this comment

trith, I don’t expect truth from you since you are obviously deranged but even you should modify your puerile right wing ideology to note that the stock market began its descent under Bush.  A traditonal cut-taxes-for the-rich and spend Republican.  It was Bush that devised the first bailout swindle that Obama is continuing.

And Obama is not raising the taxes on the rich.  So economic ineqaulity is still increasing with the unemployment and reduced wages of the population.  And Obama has stated repeatedly that he intends to gut social security and medicare, as Bush tried to do.  Taqking away from the destitute even what they hath, eh, Trith?

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By winston, March 7, 2009 at 9:48 am Link to this comment
(Unregistered commenter)

Arrest Bernanke, Geithner, Paulson, etc.—this is nothing short of an illegal diversion of public funds to private hands.  The bailout of AIG is not a bailout of the economy but of the gamblers who had placed derivative bets with AIG (‘the hedge fund hiding behind an insurance company’).  Watch how the AIG “bailout” still keeps growing and growing.

That sucking sound you hear is the world economy being sucked down the drain behind all those trillions in derivatives bets.  This is TRULY, ABSOLUTELY INSANE.  Bernanke may be able to get out of the charges due to criminal insanity.  They are simply helping their own Ratpublican parasite lifeforms.  It is worth it to them to destroy the world first before hurting their own.  They won’t even tell us who these gamblers (the counterparties) are.

All derivatives must be declared unenforceable and uncollectible gambling debts.  The federal government could do this with complete legality.

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By robert puglia, March 6, 2009 at 7:36 pm Link to this comment
(Unregistered commenter)

enduring survival is the tell tale sign of an entity too big to fail. those entities falling apart before your eyes are necessarily tailored for failure.

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By howie bledsoe, March 6, 2009 at 4:23 pm Link to this comment
(Unregistered commenter)

Which shadows?  Where??? Im there!!!!

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By TAO Walker, March 6, 2009 at 3:32 pm Link to this comment

All this frantic effort to “....get the eCONomy back on-track,” ignores a critical fact.  The reason the damned thing “derailed” in-the-first-place was the panic-stricken attempt by its “engineers” to take it air-borne (against Natural Law) as they recklessly ran it hell-for-leather past THE-END-OF-TRACK.  So now there is no “track” at-hand to put the piled-up wreckage “back-on” anyhow….even if anybody on-the-scene had the faintest clue how to go-about it.  Though the belated realization that only idiots would ever’ve tried to “fly” a train to begin with is welcome, it comes way too late to help the hapless “passengers,” who can only gawk in stunned disbelief as the “crew,” on-orders from the absentee “owners,” finishes looting the baggage/mail/express “car” of everything they can carry off, which will certainly be every last thing of any “monetary value” whatsoever.

Meantime, as hazardous waste fires, impromptu gang-banging, and other grim threats break-out all along the crash-site, CONfused and frightened Human livestock marooned on the edge The Wilderness, with (as Folktruther noted on a related thread) no possibility of ever getting back “on-track” OR -to-where-they-came-from, is having to come to grips with the stark reality that their titanic eCONomy has reached “....the end of the line”....the “ride” is over.  The only Way left to ‘em out-of the mess, once they recognize the utter futility (not to mention the serious health issues) of hanging-around the disaster area, is to get up on their hind-legs and….WALK!  TOGETHER!

Granted, the true scope and CONtent of the “pickle” they’re in has yet to dawn on the vast majority of our tame Sisters and Brothers….and there remain amongst ‘em gangs of armed thugs, opportunists of the “disaster capitalism” ilk who’ll try to prevent “escapes” from ad hoc detention camps hastily erected and ruthlessly “stocked.”  To all intents and purposes however, this self-styled “western” version of “civilization” has come to the conclusion long-ago foreseen for it by those of us who’ve been paying attention.  Why, after all, should it be any different, except in trivial “details,” than any of its several much more sophisticated predecessors here?

Welcome to the Tiyoshpaye Way, Y’all.

HokaHey!

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By Eric L. Prentis, March 6, 2009 at 10:28 am Link to this comment

More trillions of dollars for the rich, no way! The Geithner/Summers/Bernanke “public-private partnership” trial balloon is just another example of the plutocracy trying to legally steal as much taxpayer money as possible before they no longer have control of the Federal Reserve and Treasury. The proposed $1 trillion dollar giveaway to the hedge fund and private equity crooks confirms yet again that Washington D.C., overflowing with venal congressional hacks, is a stinking cesspool of corruption.

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By Trithoverlies, March 6, 2009 at 8:24 am Link to this comment

I find it interesting that since President Obama took office the Stock market has lost 2.5 trillion dollars while president Obama has proposed a 3.6 trillion dollar budget that has 9000 earmarks in it this is on top of the 8700 earmarks in the almost 500 million Omnibudsman bill to run the Government until the new budget is voted on and signed into law. I also find it sad that the Man who supossedly championed the slogan change we need has started out as the same old same old tax and spend liberal he realy has always been.  change we don’t need and change that Kills an economy, rather than grows an economy. The Political Partisianship has been gowing on since 2003 and the only differance is on whose mortgaging our childrens future now.
            Trithoverlies/Truthoverlies.
                John R. Bloxson Jr.

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By racetoinfinity, March 5, 2009 at 8:53 pm Link to this comment

“flow” wrote:  “Friedmanism has dominated Washington, on both side of the aisle, since Reagan. It is the preeminent ideology of “free-market” conservatives, but it is (or was) embraced by moderates, and progressives as well.”

I want to make a correction (IMO) (Milton)“Friedmanism” has never been embraced by progressives; it was firmly embraced by Democratic NEO-LIBERALS of the Clinton variety in the 90s (and some “paleo-liberals”).  I’m sure that’s what you had in mind.  I assure you that true progressives are and have always been firmly against Milton Friedman’s laissez-faire, no-regulation market economic philosophy.

“cann4ing” - I wholeheartedly agree that Summers must go, too, and to others who have said Obama is hardly innocent, in that he appointed them:  I agree.  Obama seems to be in on protecting Wall St. banksters - why else would he appoint two Robert Rubin acolytes? 

Btw, It was announced today that subordinates of Geithner are resigning - no reason was given that I’m aware of. 

Finally, one thing David Gergen said on “AC360” tonight is certainly true - Obama needs to focus on the economy first—- then get to health care, as urgent as that is.

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By TAO Walker, March 5, 2009 at 4:49 pm Link to this comment

Folktruther and others here have the ‘anatomy’ of this “swindle” down cold.  What they seem so-far to be missing is the huge ‘service’ “the rich” are doing their soon-to-be-emancipated serfs (aka, everybody who’s not “rich”) by gathering unto their own ‘selfs’ ALL “the money.”  What’s more, and quite contrary to popular belief, they WILL take-it-with-them when they leave (all together and all-at-once) this “vale of tears.”

Now if we can just get them to take all the toxic industrial waste-products and weaponry their money-grubbing has ‘created’ (along with the toxic, corrosive, and habit-forming “money” itself), the genuine organic RECOVERY our Mother Earth is even-now well-into will suddenly be a long Way toward its welcome completion.  Meantime, it’s okay to keep seeming to “cling-to” the “money,” and the guns.  Let your tormentors keep believing they’re too “valuable,” or too dangerous, to leave in the hands of the commoners….making them all-the-more determined to have both all to their ‘selfs.’ After all, that’s one of the best of the ‘old Indian tricks.’  Just ask the hungry ghosts of Fetterman or Custer.

What fools these un-dead be….to up-date The Bard.

Hokahey!

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By Folktruther, March 5, 2009 at 1:00 pm Link to this comment

The solution to the credit swindle is quite simple economically but politically impossible within the American power system.  It is to nationalize ALL THE BANKS and for a central organ to increase credit to finance jobs.  In addition ot creating more jobs by direct financing in health, education, infostructure, etc.  And, as Cann4ing says, to essentially give money to the people losing their homes by various financial means.

This is politically impossible because the rich who own and adminsister the banks and corporations need to reatain them in their own hands, since their wealth depends on being protected by power. So a small portion of the public funds currently being looted by the banksters finds it way into ‘campaign contributions’ or whatever to the mispresentatives, elected and unelected, dishing out the money.  Which is being stolen in plain sight.

And how much in campaign controbutions do teachers aides, medical aides, owners of homes in forclosure, contribute to the misreps campaingns.  Zilch.  So why should the misreps, if they are to retain office, give them any money.  they need campaign money to retain their seats and A.I.G. and other financial power figures come across.  So the rich essentially own the government, and no government that they own is going to nationalize their banks.

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By cann4ing, March 5, 2009 at 12:58 pm Link to this comment

By racetoinfinity, March 5 at 8:00 am #

Timothy Geithner’s got to go!
________________________________

Yup!  Summers too.  Replace them with Paul Krugman.

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By flow, March 5, 2009 at 12:22 pm Link to this comment

Good article addressing the need for real change in the way federal elections are funded in this country. The Audacity of Reform published by In These Times.

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By altlic, March 5, 2009 at 10:44 am Link to this comment

racetoinfinity,

Nah, just waxing poetic.  I must say though, I don’t see how we get these ‘financial terrorists’ (good meme) out of the driver’s seat.  I mean, this is the time to do it, and it’s not happening.  I’m not optimistic that it will be handled in a ‘democratic’ way because ‘we-the-people’ are still so enthralled and so fragmented.  Maybe Ron Paul or equivalent can get elected in four years?? Maybe.  But it always seems like too little, too late. 

Soo..I expect it’s going to be a bumpy ride.  Personally, I am ready to start marching in the streets, just to blow off some steam!  Anybody know what’s happening with that?

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By anonymous, March 5, 2009 at 8:33 am Link to this comment
(Unregistered commenter)

I don’t say forget Rush Limbaugh, but your point is well taken. Both Limbaugh and Wall Street have obviously been doing whatever they can get away with. The Wall Street news is terrible. I think we now know the name for the bailout of AIG (etc.): THE RAW DEAL.

On Limbaugh, I don’t know why so little coverage has been given to some of his most outrageous—slanderous even—RECENT comments. (Maybe you are right to see Limbaugh as a convenient diversion.) Apparently MSNBC pays big star Olbermann so much they don’t have enough left for a research staff? Is that why they prefer to recycle Rush’s golden oldies instead of researching and reporting on his most recent flagrant remarks?

I am hoping for a Stage Two in this scuffle with Limbaugh in which he is soundly defeated on substance. (The truth about the Reagan tax cuts and the Reagan economy; what liberals really think about free markets and individual liberty, etc.)

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By racetoinfinity, March 5, 2009 at 4:27 am Link to this comment

“altlic” - I sympathize greatly with your sentiments, but are you leaving us?  We need you, too.

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By racetoinfinity, March 5, 2009 at 4:00 am Link to this comment

Timothy Geithner’s got to go!

I’m calling for the resignation of the Treasury Secretary (and I’ve been reading others on the net saying the same thing.)

Let’s have a Treasury Sec’y who is working for the people, not the banksters and the Wall St. rich elite class.

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By ib42, March 5, 2009 at 2:32 am Link to this comment
(Unregistered commenter)

A few words from a simpleton. Somewhere, hidden from our collective grasp, is a group of evil human beings
who are basically celebrating their vast wealth while we the people are fed names like AIG, GM, etc.
Are these peole sorry, or even aware that it’s their greed and crookery behind these company’s failure? I don’t hear of any PERSON behind these company failures ending up broke and contrite. No, it’s the common man who’s so used to struggling that we’re apathetic and in despair.

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By prole, March 5, 2009 at 1:55 am Link to this comment

“This is crazy!” alright - St. Barack’s biggest acolyte Scheer desperately trying to square the circle again by assuring himself and anyone else who will listen that none of this has anything to do with his savior, Obama. It’s all the fault of those Judas’s, Geithner and Bernanke. No doubt, at a later date Scheer will break the scoop and at last reveal the secret behind-the-scenes drama about how Geithner burst into Obama’s transition office one day after the election and twisted the Great One’s arm until he consented against his will to make Geithner his Treasury Sec. And no doubt Obama press agents Eugene Robinson and E J Dionne will swear out affadavits to support the story. No wonder then that Geithner is the first “unelected” Treasury Sec. in U.S. history. No self-respecting Democratic senator would ever vote for his confirmation now, would they?  Certainly not with pure and righteous Obama so strenuously opposing the appointment and an altogether unprecedented lack of an election to decide who should be the Cabinet choice. All of this is highly irregular. No wonder “the unelected secretary of the treasury and the chairman of the Federal Reserve” had to meet in secret behind the altar-boy president’s back to plot the whole dastardly deed. Good thing Scheer is on the case to defend Barack’s political virginity. And so the course is set for the next four years. Whenever there is any odious business to be done, it’s always someone else’s doing. The buck can never stop with St. Barack. And it never will as long as Scheer and Robinson and Dionne et.al. are around. ‘Ignorance is bliss … until the Obama bubble bursts’.

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By diamond, March 5, 2009 at 12:59 am Link to this comment

Bad news, Robert Scheer: AIG is too big to fail. Way too big. The argument you’re making is fundamentally a moral one - AIG did bad things so it should be punished. This is very American but it overlooks the fact that morality has nothing to do with business or how it’s conducted. And economic rationalism believes that’s how it should be, open slather and no regulation, and economic rationalism has been the dish du jour for at least two decades now. I still remember in the eighties and nineties how if you pointed out that globalization was just another form of feudalism people looked at you as if you were a dangerous nut who would bomb the house. If you added to your sins by explaining that economic rationalism was just a fancy name for corporate fascism people giggled nervously and gave you even stranger looks. This is all just chickens coming home to roost. The whole world will pay for years for the outbreak of gangster capitalism and crazy irresponsibility that followed the stolen election of 2000. And it’s like Russian roulette: you have to keep pulling the trigger (stimulus packages) and hope you don’t blow your head off. There is no other way. Yes, I would like to see all of them thrown in jail but it’s a bit like what Louis Mayer is supposed to have said about an actor: ‘Throw that bastard off the lot and don’t let him back unless we need him’. There’s the difficulty. You do need them, and their companies, to get out of the mess. THEN you can throw them off the lot. But the fault lies in the final analysis with the society that allowed it to happen. Pigs will be pigs and only regulating how much time they get at the trough will ever work.

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By altlic, March 4, 2009 at 11:43 pm Link to this comment

Thanks to everyone for all of the insightful and instructive comments here, esp. Wadosy and flow, but everyone.

Since the sixties I have been watching America and the West drift hypnotically toward the brink of catastrophe.  And still it is a shock to finally be here.  And it is with a sense of grief that I now turn away from that wonderful confection: the American Dream.

Of course, this is pure sentimentality, seeing as the Dream was built on the oppression of countless millions, but I must confess my addiction to the idea that America would somehow come good in the end. And maybe in some new paradigmatic and planetary way, it eventually will.  It is impossible to know how things will unfold over the coming years.

Bon voyage, everyone.  I am glad that there are many sane and stout citizens out there amid the chaos.  You will be needed.

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By samosamo, March 4, 2009 at 9:25 pm Link to this comment

**************************************
By Camilo Wilson, March 4 at 5:18 pm #
(Unregistered commenter)

The simple question that nobody wants to address is this: How much are taxpayers at risk for?
**************************************

Off hand, I would say we the taxpayers are going to have to cough up several trillions of dollars to keep our financial terrorists satiated and will gladly give more because we are too stuck on how right our government is working and the amount of control(no matter how small) that is held over corporations squeezing the life out of everybody. What is truly amazing is that we the taxpayers appear to be ready to have our last bit of ‘legal tender’ yanked out of our mouths just as a evil person would take the candy from a baby’s mouth, no let us be real here and say it properly, take the last bit of food from the starving baby’s mouth. And even then I think we will just sit here and wait until someone comes to take us off to one of those quaint ‘private’ prisons that are beginning to proliferate like bacteria. As noble as obama sounds, I keep getting the feeling the people are just going to have to rise up and take our federal, state and local governments back because as of now those prisons are multiplying and more and more devious people are being put on the ‘security’ payroll and that ‘security’ is not for the taxpayers, it is for the protection of those traitors that are allowing and aiding this current crisis.
I have told people here time and again and I am not the only one either, but I have said it,‘WAR HAS BEEN DECLARED ON THE TAXPAYERS’ but apparently not many out there quite understands what it means and what comes next when ‘war has been declared’ on a group. Ask the Iraqis, ask the afghans, they are well aquainted with what it means along with a host of other luckless souls in this planet. It may all be done here by a bunch of ‘finanical terrorists’ and the methods are a bit different but the outcome will be the same.

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By mill, March 4, 2009 at 8:16 pm Link to this comment

Think Mr Scheer has this nailed.

Don’t think there’s not enough money to prop up the financials, if everybody else is pulling back.  Gotta reverse the herd psychology to reduce spending.  The banks may not be the shepard to redirect the herd.  They caused the herd to stampede after all by contracting credit.

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By P. T., March 4, 2009 at 6:51 pm Link to this comment

Karl Marx Predicted the Current Crisis


With respect to financial expansion and crisis, Karl Marx wrote in volume three of Capital that the whole “sphere of production may be saturated with capital,” with the result that profits increasingly enter into the sphere of speculation.

“If . . . new accumulation,” he wrote, “meets with difficulties in its employment, through a lack of spheres for investment, i.e., due to a surplus in the branches of production and an over-supply of loan capital, this plethora of loanable money-capital merely shows the limitations of capitalist production. The subsequent credit swindle proves that no real obstacle stands in the way of the employment of this surplus-capital. However, an obstacle is indeed immanent in its laws of expansion, i.e., in the limits in which capital can realise itself as capital.”

The “credit swindle,” arising with the turn to money capital as the basis of the amassing of wealth, inevitably precedes a bust. “Business always appears excessively sound right on the eve of a crash.”

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By Christopher, March 4, 2009 at 5:56 pm Link to this comment
(Unregistered commenter)

How many idiots i.e. taxpayers does it take to screw in a light bulb?
Answer: As many as it takes, to keep the system going… over a cliff.

JUST SAY NO! Stop paying taxes! STOP YOUR OWN ENSLAVEMENT!

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By Ivan Hentschel, March 4, 2009 at 4:46 pm Link to this comment
(Unregistered commenter)

While we were all busy shopping for Chinese-made flat panel TV’s at Wal-Mart, with our MasterCard, buying SUV’s and getting a third mortgage on the too-big house we don’t need, we screwed ourselves with the blessings of Wall St and the government. Then, when we figured out it wasn’t working (Greenspan: OOPS), and the goverment realized that we were still alive and breathing, they decided to screw us again. They figured, “Hell, it worked last time,let’s do it again.”

And no, brother, I cannot spare a dime.

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By JimBob, March 4, 2009 at 4:27 pm Link to this comment

Bob.  If you were a passenger on the Titanic in its penultimate moments, would you be complaining about how many buckets of water had been BAILED OUT of the boat?  Dude, the secret is out: the strings emanating from AIG are tied to grenade-pins in all the world’s major banks.  It is too integral to our financial survival to fail.

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By Tim Kelly, March 4, 2009 at 4:10 pm Link to this comment
(Unregistered commenter)

Not to sound like a “Republican troll” (I’m a left-winger) but I thought Obama said he would set the agenda, not his Cabinet picks and advisors?  Sheer says it’s Obama’s advisors telling him AIG is too big to fail.

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By TAO Walker, March 4, 2009 at 3:59 pm Link to this comment

Having been CONned into CONceiving of their “selfs” as almost exclusively “eCONomic” entities, “your huddled masses” of “civilized individuals” are now caught-up all-together in the strangling toils of an apparatus they have absolutely no way to CONtrol….one that will only go on doing what it is designed and built to do, which is to squeeze the very last of their half-lives out of them, at a “profit” to the owner/operators, so long as it exists here in any shape whatsoever.  Yet there is a Way OUT of the CONtraption, and it has nothing to do with “money” or “purges” or cobbling-up some hopefully less destructive version of the ideological/institutional machinery now wreaking such havoc on its lower-order subject/citizenry.

“Individuals” are, by-design, prey for the “global” gangsters.  Why else do they willingly spend so much of their loot keeping their livestock CONvinced of their “individual”-ity, and terrified of the imagined consequences to these entirely false IDentities in the “wilderness” beyond the increasingly suffocating confines of the system being employed by the tormentors to exploit so effectively their “property.”

There’s no “half-way” between free wild natural Human Beings and domesticated two-legged “individuals.”  The latter can be more-or-less “comfortable” and CONtent in their captivity, more-or-less restricted in their movements about the “global” detention facility.  They can none of ‘em, though, know the whole Life that is altogther natural-to and necessary-for Humanity, within the Living Arrangement of our Mother Earth.

“Live free or die!” is the “law” of Life Herownself.  There’s no place in Her Song ‘n’ Dance for the industrialized abuse of captive populations Human or “other.”

Your “eCONomic” CONdidtion is becoming intolerable to you, tame Sisters and Brothers, because your captivity is intolerable to all the rest of us, your Relations.  One Way or another you are about to be freed from its clutches.  Us surviving Savages will catch you now….or we’ll catch you later.

Either Way, though, you’re joining us in the Tiyoshpaye Way.

HokaHey!

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By Bboy56, March 4, 2009 at 3:52 pm Link to this comment
(Unregistered commenter)

Insert :barfey: here.

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By P. T., March 4, 2009 at 3:36 pm Link to this comment

AIG cannot be saved.  Customers are not going to buy insurance from a company that may lack the money to pay claims.  The government should stop trying to save rich people from themselves.

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By felicity, March 4, 2009 at 2:30 pm Link to this comment

flow - you’ll appreciate this paraphrased Friedmanism; corporations have no business engaging in socially beneficial acts.  They have no social responsibility, and in fact “they are only responsible for making as much profit as possible.”

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By Camilo Wilson, March 4, 2009 at 1:18 pm Link to this comment
(Unregistered commenter)

The simple question that nobody wants to address is this: How much are taxpayers at risk for? If I were backing AIG, I’d surely know what my exposure is. But nobody seems to know what the exposure is. Some calculations run into the tens of trillions. At what point do we say, “The US taxpayer can’t do this any more?”, and what are the consequences and how do we deal with them?  Even the US does not have an unlimited piggy bank to draw upon without immense consequences.  All we are doing now is making good on the irresponsible insurance bets made by AIG, with no end in sight. 
In my dictionary, next to fiscal irresponsibility, now belong Bernake and Geithner. Unparallelled irresponsibility.
Blindly arguing that “we can’t let AIG fail, there are too many insurance policies that will go unpaid”, without realistically assessing the risk, is just as irresponsible as what AIG did.

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By flow, March 4, 2009 at 12:48 pm Link to this comment

How much has Treasury tossed into this black hole — AIG — so far? 170 Billion? The federal government (i.e. the US taxpayer) owns 80% of the company, correct?

And yet, are we able to know who is receiving the CDS payments? Our money is dropped off at the front door by the truckload and shoveled out the backdoor as quickly as it arrives.  Passed right through with no end in sight, and with several indications that billions more will be needed.

The trunk of the problem is on Wall St., but the root lies in Washington. Our present crisis stems from the seed of a certain ideology: Friedmanism. Friedmanism has dominated Washington, on both side of the aisle, since Reagan. It is the preeminent ideology of “free-market” conservatives, but it is (or was) embraced by moderates, and progressives as well. 

It might also be called corporatism.  However you elect to label it, its prime symptom is the influence lobbying dollars are able to exert in legislative corridors.  It is not that legislators did not see the problem, it is that the industry did not want to be interfered with by government.

It was senator Phil Graham, I believe, who slipped a paragraph into a piece of legislation signed by president Clinton, that not only sanctioned the creation of the Credit Default Swap markets, but prevented the federal government from regulating it, and denied states the right to regulate CDS as gambling. Which is exactly what a CDS should properly be called.

And so here we are with privatized profits and socialized losses. Free-markets work great until it is time to distribute consequences. Distributing consequences is better left to the government, right?

And here is the most disturbing aspect of the whole charade. The Culture of Incumbency that permeates Washington, particularly the Senate.  Can we continue sending the same people back to Washington and expect different results? Yes, the present crisis is severe, but is this the first time legislators have acted in favor of special interests rather than in favor of tax-payers?

I think each of us needs to make a careful, critical inquiry concerning our personal responsibility for allowing the culture that is the breeding ground of this disease to persist in Washington. Who was it that said, “those who will not defend their democracy, do not deserve it?

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By thebeerdoctor, March 4, 2009 at 11:45 am Link to this comment

wadosy’s comment is a very frightening one to consider: what if this entire system is nothing but a house of cards? Guess what? It really is. This is where the leadership part gets involved; an elected politician is only as good as the symbolism he or she is able to convey to the general population; to keep those many of the great unwashed from taking dire, drastic, and direct action. A government is all about population control. In a so-called democratic republic there really are a myriad number of ways to manipulate the electorate. President Obama finds himself up to his eyeballs with those who are quite skilled at performing actions and operations to suit the needs of their particular interests; a populist agenda, in such an atmosphere, becomes non-existent. How else can you explain the recent additional treasury infusion into A.I.G.? Tell me who exactly voted for it? But of course, no one! The Treasury Secretary and the Federal Reserve Chairman can loot this cash, solely on the assumption that they are the experts and know what is best.
This is where President Obama is making a tragic error. Just because these wizards were able to make money for Wall Street in the past decade, by basically abolishing all the regulatory safe guards, does not mean that they have the intelligence nor inclination to solve a problem that truly requires populist reforms, which is actually quite foreign to their backgrounds. So it is not surprising in the least, that these titans of finance resist, quite vehemently, any moves that would actually regulate the racket. This racket, what Larry Summers calls “shadow banking” has been of great benefit to the select few, at the expense of everyone else.
President Obama has got to make some real economic decisions. As they say at a bar during Saturday night closing: “Come on folks, last call. It’s hotel/motel time.”

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By samosamo, March 4, 2009 at 11:06 am Link to this comment

To begin with, and this is what caused me NOT to vote for obama and so far he has done nothing and everything to make me feel that I was correct in not voting for him, he campaigned on taking care of the corporate world over that of the people, so I am not surprised and others should not be either considering that his 42 or 43 some odd days in office has done very little to show that he knows how to go in and take control and dare the corporations to do their worst.
This is almost like having a decent grip on the serpent but unable or unwilling to do what should be done, kill it. After all corporations have killed far more people now and created much more havoc than what could still be anything left of their true worth or value. And the corporate world is going to do their best to keep the status quo and damn those that don’t like it.
If someone comes up to you with a hand made suit and a briefcase in his/her hand, you know you are about to lose a lot of what you worked so hard for all your life.

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By michael roloff, March 4, 2009 at 11:00 am Link to this comment
(Unregistered commenter)

why not let the system go down? what’s so great about it? and next time, start the way the Germans did in 1948 with the currency reform: everyone gets $ 1000 NEW DOLARES and, personally, to keep 10 acres and a house if they have one. if they have more than one house or own apartment building, these are distributed to those that ain’t got. corporations all become publicly owned and run.

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By RdV, March 4, 2009 at 10:56 am Link to this comment

“And more will be thrown down the AIG rat hole because President Barack Obama is blindly following the misguided advice of his top economic advisers….
  ...that he appointed.

  Either Obama is playing us by supporting them…or is unspeakably naive—more than the average Joe on the streets who can see through the scam—or psychologically he ain’t nothin’ but a boy to the rich man.

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By Eric L. Prentis, March 4, 2009 at 10:01 am Link to this comment

Fed Chairman Bernanke is an AIG one-trick pony, “give my friends on Wall Street more taxpayer money and everything will be just fine.” Baloney, doing over-and-over-again for the third time what isn’t working and expecting a different result is the height of irresponsibility. When are we going to get rid of this loser Bernanke and his crony friends, i.e., Geithner and Summers. President Obama, you are being played.

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By felicity, March 4, 2009 at 9:41 am Link to this comment

To briefly quote wadosy”...grab what you can while you can” pretty much summarizes what’s been going on at large financial firms for the last who-knows-how-many years.  (And that ‘gap’ argument from Bernanke is a very large pile of shit.)

Case in point:  Former Bear-Stearns employee, John Paulson made $3 billion in ‘07 and early ‘08 by short-selling subprime mortgages (because he knew their value was heading in the tank)  and all the while he was doing that, his counterparts were issuing the worthless paper non -stop.

And guess what corp was insuring against what was known to be huge losses.

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By O-gee, March 4, 2009 at 9:15 am Link to this comment
(Unregistered commenter)

I used to have a bumpersticker that read, “Silence is the voice of complicity.” Scheer’s cry-from-the-heart, “This is crazy!” highlights the Main Stream Media’s complicity. Obama is driving the nation over a cliff with his bailouts. Now it’s Greenspan, Graham and Jim Baker who are calling for the nationalization of banks, indicating that the money power has switched sides.  The only book to deal with this kind of mass exodus into make-believe is Morgan Ibarra’s Scamming God.  It’s based on an incredible true 70s story about a career criminal masquerading as a financial genius. This magnetic charmer has the business media, Wall Street lawyers and the doped-up canaille rallying to his side in a “world turned upside-down, life the wrong way ‘round,” carnivalized romance with brokers in gorilla suits mugging an unsuspecting public.

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By Jason!!, March 4, 2009 at 9:02 am Link to this comment

hahaha. This is a great day.

I laugh because I have a trust that “hedged” with AIG. So all the money I “lost” was insured and my broker tells me that I will now be paid. Bush shot ppl like me down. Obama is showing the love.

I guess you could say that Obama socialized the losses on my investments. So thank you to all who voted for him.

I plan to roll my dough into the cap and trade. huge money to be made on this scam with very low risk.

Whoever thought we would be able to make money off the air. Only in America.

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By cann4ing, March 4, 2009 at 8:17 am Link to this comment

A.I.G. is failing because it underwrote credit default swaps—multiple mortgages that were bundled together, packaged, sold and repeatedly resold as so-called mortgage-backed securities so many times that the equity to risk ratio is undetectable.  This produced potential losses estimated to be in trillions, not billions.

Pouring billions of dollars into companies holding these toxic assets, A.I.G. or zombie banks, is a fool’s errand.  The money would be far better spent if the government directly purchased homes in default at their current market value and resold to the victims of usury mortgages, writing new, affordable fixed-rate mortgages.  All insolvent banks should be seized by the F.D.I.C., and A.I.G. should indeed be forced into bankruptcy.

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By PTDBD, March 4, 2009 at 8:16 am Link to this comment
(Unregistered commenter)

“The Bezel” thrives. It is the cancer of our financial health. Governments are feeding “The Bezzel” instead of eliminating it. Root embezzlement out now or nothing can live.

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By Shift, March 4, 2009 at 8:03 am Link to this comment

Obama’s rhetoric and actions seldom harmonize.  I know a hustle when I see one and Obama has learned well the Southside Chicago hustle.  Turn off his rhetoric and watch what he actually does.  AIG is a perfect example.

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By sns, March 4, 2009 at 8:01 am Link to this comment
(Unregistered commenter)

The world is simply becoming more and more ridiculous. You really just can’t take anything seriously anymore (easier to state when your bases are covered):

Ex-Leaders at Countrywide Start Firm to Buy Bad Loans

http://www.nytimes.com/2009/03/04/business/04penny.html?hp

The invisible hand of the market or laissez-faire…..but what really rubs me the wrong way is that you have this government that on one hand lets these vultures operate and even goes so far as to justify them by saying we need them in order to allow the markets to operate freely as well as their expertise in advising us (it’s like letting the guilty rat testify and then setting them up not in witness protection but in the very same business that the kingpin ran and was prosecuted for with the help of said rat and a few days later when the coast is clear the rat peels off his mask to reveal that he’s the kingpin) AND then they say let’s nationalize and improve regulations and clamp down on their unethical irresponsible actions. A token handslap an indignant face and some verbiage and we’re right back to same ol’ same ol’. The delicate policy balancing act is so tenuous and fraught with disastrous missteps (wtf is the FDIC doing here exactly?) that hope and change is simply not enough. I’m afraid Obama and his team are not getting this incredibly complex economic unraveling—even Roubini who is brilliant is unsure how to really proceed despite offering nationalization tips etc. It is clearly a STRUCTURAL issue. And of course the nature of our American culture or lack thereof isn’t helping matters. These guys scoff and sneer at human suffering—they just want another mill to go with another yacht. Factor in the IQ stats and the demographics of population growth and contraction and we’re headed for a new medieval age. And how much does Buffet pay his secretary? Is it really a meritocracy? What exactly typifies sucksess? I guess if you can start up a co. that can dig up the dead conjure up their spirits and successfully call in their debts, then you can better rule the living: http://www.nytimes.com/2009/03/04/business/04dead.html?hp

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By RX, March 4, 2009 at 7:25 am Link to this comment

March 3 (Bloomberg)—Federal Reserve Chairman Ben S. Bernanke said American International Group Inc. operated like a hedge fund and having to rescue the insurer made him “more angry” than any other episode during the financial crisis.

“If there is a single episode in this entire 18 months that has made me more angry, I can’t think of one other than AIG,” Bernanke told lawmakers today. “AIG exploited a huge gap in the regulatory system, there was no oversight of the financial- products division, this was a hedge fund basically that was attached to a large and stable insurance company.”

Doesn’t sound like a man who’s making deals in the shadows. The larger point is Obama is not being well-served by Geithner/Summers. This “too big to fail” meme has gotten out of hand. Something so large and capable of causing a catastrophe should its levers be broken, has no business not being stringently regulated by the government.

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By G.Anderson, March 4, 2009 at 7:18 am Link to this comment

Meanwhile the stock market continues it’s steady slide to 3,000. Sure there will be some ups and some downs on the way, but it’s on it’s way.

When that happens, nothing in America will have any worth anymore, and there will be no rich no poor. We will have pulled the plug on everything. The hard part will be trying to re boot.

Conservatives will continue to chant their mantra’s, that the way out of the mess, is to lower taxes on the wealthy, end government regulation, and encourage free trade. They will try to blame the debacle on president Obama, and deny any responsibilty for what they have wrought, immune from reality they will press on.

Basically, President Obama has one choice at this point, a managed economy, or it’s over.

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By dihey, March 4, 2009 at 6:44 am Link to this comment

The American flag waves on the top of the AIG building here in Houston.

It seems more appropriate if they changed “Old Glory” for the white flag of surrender.

Or else the maritime distress signal.

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By Alice Wahl, March 4, 2009 at 6:44 am Link to this comment
(Unregistered commenter)

Whatever happened to the memories of all who took Econ 101?  Why can’t they remember The Law of Diminishing Returns?  I see its application to all sorts of current problems including big banks, Globalization, factory farming, population, etc.

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By wadosy, March 4, 2009 at 6:31 am Link to this comment

thebeerdoctor says:

“this shit these big boys cooked up Barry, is not going to work, and they are going to take you down with them.”

it’s possible that the truth is too hot for any politician to handle…

what if peak oil turns out to the the real deal, and was the triggering motive for the 9/11 operation? would any politician in his right mind even hint at that?

what if the american system is so corrupt that looters are immune to any remedial action?

what if everybody’s given up…? what if people powerful enough to do anything know that the system’s doomed anyhow, so they might as well grab as much as they can before it falls down?

people who got high enough to do anything were predators to begin with, and it looks like now they’ve defaulted to basic predator mode… grab what you can while you can.

it’s likely americans realize, on some level or another, what’s going on, and since they’re so powerless, all they can do is wait until the crisis deepens enough that they can be effective locally by taking matters into their own hands.


meanwhile, the chances of an american putin showing up to banish the looters is pretty damn small… he’d never get into any elective office higher than dogcatcher… and we’ve got to assume that the military is as corrupt as the rest of the system, dont we?


whatever happens, the only chance at any real remedy lies in getting to the root causes of the crisis, purging the people who are exploiting the crisis, and trying to instill some hope and a spirit of cooperation.

you got to have a plan to instill hope, and you got to have money to pay for the plan, and you got to quit pouring that money down ratholes in the middle east if you’re gonna have enough money to pay for the plan.

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By thebeerdoctor, March 4, 2009 at 6:03 am Link to this comment

Robert Scheer is quite accurate on this. If these “too big to fail” financial entities exist in an unregulated market, what in the world is the United States government doing in propping them up? Here, President Obama’s conventional wisdom completely fails him (despite differences on foreign policy and other matters, I am not one of those Republican trolls, waiting under the bridge and praying for his failure) and one can only hope (and oh what a flimsy word to rely upon!) that someone whose counsel he holds in the highest regard (and I have no idea who that would be) will take the President aside and say: “this shit these big boys cooked up Barry, is not going to work, and they are going to take you down with them.”

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By jackpine savage, March 4, 2009 at 5:55 am Link to this comment

And considering the overall value of all the slippery financial instruments that AIG “insured”, the $175B is a drop in the bucket.

Put a fork in AIG, because it’s done.  And we will be too if we keep trying to reinflate the bubbles that we called “prosperity”.

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By wadosy, March 4, 2009 at 5:54 am Link to this comment

yup, it’s pretty obvious we ought to exterminate anyone over the age of 55 who has an income of less than $500,000 a year.

meanwhile, mr scheer wastes his own and everybody else’s time writing stuff like this while ignoring the real problems, which spell doom for america no matter how many boomers we exterminate.

we can anticipate race wars in addition to age wars, too, i’d imagine… i mean, it’s a hell of a lot more convenient to murder each other than to face the truth… not to mention the fact that we can get so wrapped up in murdering each other that we wont notice that the looters have took off with the loot, and can hunker down until the dust settles.

on the other hand, why shouldnt the looters loot? ...and the way america’s set up, there doesnt seem to be any legal way of getting to the real culprits and cranking up a spirit of cooperation, not only national cooperation, but international cooperation, too… which would be needed to maximize our chances of achieving the smoothest possible transition to post-oil.

when russia was looted—a dress rehearsal for the current project—apparently there was still enough apparatus left to crack down on the worst offenders, or at least the worst offenders who had loyalty to something other than russia… and russia still had enough oil to become the biggest oil producer in the world as they recovered.

but america’s been corrupted so bad that there doesnt seem to be any legal way to clean house… and our oil production peaked almost 40 years ago, and america’s been built from the ground up on cheap oil.

so here we are, hacking at the branches of evil because that’s what we’ve always done, and it’s always paid good.

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By Purple Girl, March 4, 2009 at 5:23 am Link to this comment

Not to cause a panic- because it wouldn’t amount to anything anyway at this point..The FDIC covers bank deposit, AIG covers Investment…Like 401K’s and annuity & pension. Consider what would happen if not only did your bank go belly up,but the FDIC had no cash to cover your deposits?
So what do you think would happen if we all found out our 401K,Annuities and pension funds were lost AND there was no Insurance to cover the loss, either? Ya think there might be panic? Riots? Vigilantism?
Are you starting to understand what accounts the Gov’t is trying to shovel money back into- the ones which said they’d cover the bets your investors were making with your ‘safe’ funds.
Considering our union will not grant us access to our annuity unless we are in a severe hardhship situation (foreclosure, medical,Death), with only a % allowed every 12 months- I’m guessing they can’t back up what they claim onthose quarterly statements- not worth the paper their printed on.MadOff was not the exception, he was the rule.WallStreet Is a Ponzi Scheme and they leveraged your retirment accounts out 40:1, and they lost the 1 and have no insurance to even cover that.
But for those of us in our 40’s, retirment has been a mirage anyway. The ‘boomers’ are going to suck US dry because they will live forever and demand better healthcare services,esp Long Term care (something they never fought for when their parents were old). and with the reduced numbers in the younger generations- there is no way US of the sandwich group will ever be able to retire- we’ll have to stick it out and help carry the burden of our older cousins the Boomers.Thanks for being such health fanatics Boomers, instead of dying timely from a heart attack you’ll live for decades with Alzheimers!
Good idea to Pre plan your funeral since it will also coincide with your Retirement party.A Two for One…. Surprise!

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