Mar 9, 2014
Truthdigger of the Week: Greg Palast
Posted on Sep 22, 2013
Every week the Truthdig editorial staff selects a Truthdigger of the Week, a group or person worthy of recognition for speaking truth to power, breaking the story or blowing the whistle. It is not a lifetime achievement award. Rather, we’re looking for newsmakers whose actions in a given week are worth celebrating. Nominate our next Truthdigger here.
The man President Obama and every corporate banker in the nation favored as the next chair of the Federal Reserve unceremoniously exempted himself from consideration for the post Sept. 15 after cries of opposition from members of the Democratic Party and others in Congress.
“I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interest of the Federal Reserve, the Administration, or ultimately, the interests of the nation’s ongoing economic recovery,” Lawrence Summers, Obama’s former economics czar, wrote in a letter confirming his decision to the president.
Summers is undeniably right. More direction from the man whose performance in Clinton’s Treasury department helped create the 2008 economic crisis and the ongoing horrors that followed runs directly against the interests of all Americans, including those in the ruling and owning class. But I and many others were looking forward to a hearing to confirm Summers. Why? Because as the Indian news service Niti Central may have been the first to point out, Summers could have been asked to publicly explain the meaning of a secret 1997 Treasury memo (viewable here) reminding him to pick up a phone and reassure the most powerful CEOs in the world that plans to tear apart laws protecting the economies of 156 nations from predatory bankers were going ahead as scheduled.
That document lit up the Web when investigative reporter Greg Palast spotlighted it in his column in Vice magazine in mid-August. Palast, who acquired the document from an unnamed source, had published it before—in his 2011 book “Vultures’ Picnic” and elsewhere—but Summers’ nomination earlier this year provided an urgent opportunity to give the public another look at the memo and the nature of the man it exposed.
“It’s not the little cabal of confabs held by Summers and the banksters that’s so troubling,” Palast continued. “The horror is in the purpose of the ‘end game’ itself.
“The year was 1997. US Treasury Secretary Robert Rubin was pushing hard to de-regulate banks. That required, first, repeal of the Glass-Steagall Act to dismantle the barrier between commercial banks and investment banks. It was like replacing bank vaults with roulette wheels.
“Second, the banks wanted the right to play a new high-risk game: ‘derivatives trading.’ … Deputy Treasury Secretary Summers (soon to replace Rubin as Secretary) body-blocked any attempt [by U.S. legislators and regulators] to control derivatives. But what was the use of turning US banks into derivatives casinos if money would flee to nations with safer banking laws? … The answer conceived by the Big Bank Five: eliminate controls on banks in every nation on the planet—in one single move. It was as brilliant as it was insanely dangerous.”
The bankers and their friends in the Treasury proceeded to pull off this “mad caper,” Palast explained, by rewriting international trade agreements to hold the purchase of key exports of target countries hostage until they agreed to accept trade in “toxic assets like financial derivatives.”
“Until the bankers’ re-draft of the [Financial Services Agreement], each nation controlled and chartered the banks within their own borders. The new rules of the game would force every nation to open their markets to Citibank, JP Morgan and their derivatives ‘products.’ ” Every bullied country signed. Thus was the ground prepared for world economic collapse almost 10 years later.
Palast’s expose was widely reported internationally and among alternative news sites in the United States. (Before ending her search, a Truthdig associate counted 130 such pages.) But the American mainstream press took no notice. Like most of Palast’s investigations, the “End-Game Memo” was ignored by CNN, CBS, NBC, MSNBC, PBS and Fox. Major papers, including The New York Times, the Los Angeles Times and The Washington Post, also pretended it didn’t exist. The compelling question, given the story’s immense bearing on the nation’s future, is why?
I asked a variation of this question in early June during a visit to New York City. It was after midnight on a Saturday and I was sitting across from Palast, drinking a glass of his vodka. “I read your work,” I remember saying, “and it’s this intricate, crucial stuff. Then I go to sites where most people are getting their news and I’m in another dimension. Facts and relationships that you uncover, that change a whole story—they’re nowhere in sight. What gets reported is so obviously incomplete. How can this happen?”
Temporarily out from beneath his signature fedora, Palast cracked a wry, forbearing smile. “I’ll show you,” he said. “Come with me.”
We did a bit of traveling and found ourselves inside a dark room. Palast flicked on a light. Before me was a desk bordered with papers and notes. A shelf filled from end to end with three ring binders hung directly above. Behind me was more of the same, rows of boxes and notebooks, all crammed into maybe four or five shelves from ceiling to floor extending the entire length of the wall.
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