Formerly Madhoosier's Journal
Six Easy Steps to Understanding Economic Armageddon.
An original analysis by Kevin Cloyd
There has been a meme in the Main Stream Media that the current economic woes were largely unavoidable. Recently Thomas Friedman penned a New York Times op-ed including this little gem as the thesis of the column;
"This financial meltdown involved a broad national breakdown in personal responsibility, government regulation and financial ethics.”
As long as the “we’re all guilty” meme gains traction in the MSM, calls to hold to account those responsible for the economic meltdown will be categorized as sour grapes from those who were too stupid to wade into the economic marketplace and shovel up a big old steaming pile of…profits...for themselves.
“Hey, Thomas." Wasn’t “more deregulation” the third most repeated phrase in George W. Bush’s rather limited vocabulary, exceeded only by “the war on terra” and “Saddam’s weapons of mass destruction?”
I’m mean really, isn’t this sentence; “This financial meltdown resulted from the ascendancy of greed to a desirable virtue, widespread economic deregulation, which was then topped off by even more greed.” a far better description of what really occurred than;
"This financial meltdown involved a broad national breakdown in personal responsibility, government regulation and financial ethics.”?
Here are three more gems from Friedman’s New York Times oped;
“Long Beach Financial,” wrote Lewis, “was moving money out the door as fast as it could, few questions asked, in loans built to self-destruct. It specialized in asking homeowners with bad credit and no proof of income to put no money down and defer interest payments for as long as possible. In Bakersfield, Calif., a Mexican strawberry picker with an income of $14,000 and no English was lent every penny he needed to buy a house for $720,000.”
Lewis continued: Eisman knew that subprime lenders could be disreputable. “What he underestimated was the total unabashed complicity of the upper class of American capitalism... ‘We always asked the same question,’ says Eisman. ‘Where are the rating agencies in all of this? And I’d always get the same reaction. It was a smirk.’ He called Standard & Poor’s and asked what would happen to default rates if real estate prices fell. The man at S.& P. couldn’t say; its model for home prices had no ability to accept a negative number. ‘They were just assuming home prices would keep going up,’ Eisman says.”
That’s how we got here — a near total breakdown of responsibility at every link in our financial chain, and now we either bail out the people who brought us here or risk a total systemic crash. These are the wages of our sins. I used to say our kids will pay dearly for this. But actually, it’s our problem. For the next few years we’re all going to be working harder for less money and fewer government services — if we’re lucky.
Friedman's fll column here; http://tinyurl.com/6rylzz
When in doubt the responsible thing to do is to bail out those responsible for the mess.
Interestingly Friedman's oped lays an ample serving of the blame on the strawberry picker hauling in $14,000.00 a year, who didn’t speak English and didn't say "thanks, but no thanks" when a guy in a suit handed him $370.000.00, yet his call for a bailout that rescues the millionaire banksters but not the victims of the banksters is the responsible thing to do. I guess if you wear a suit and tie you're deserving of a bailout, picking veggies under the hot sun, not so much.
We in the United States have been living beyond our means since the end of the last Great Depression, consuming vast unsustainable quantities of energy and natural resources while destroying the air we breathe, the water we drink and the environment that sustains ALL LIFE ON EARTH. “How did we manage this; by installing the dollar as the reserve currency for the planet while forcing our interests upon the rest of the planet at the point of a gun, missile, or police action.”
So long as the rest of the world was willing to finance our orgy of economic gluttony, the Ponzi scheme also known as Wall Street was able to rush ever faster toward Economic Armageddon. Warning signs along the way like traditional cost to earnings stock ratios, the Telecom bubble, and TV’s “Flip this House” were ignored like doddering Aunt Agnes during the Thanksgiving Day football games.
Economic utility theory, the theory that explains how various economic acts add value to goods and services, came to see possession utility as the ultimate source of value.
Form utility (manufacturing) was outsourced to cheap labor markets. Location utility (transportation) was containerized, there was only one market; the World.
Time utility (coordinating supply with demand in a timely fashion) was overnighted.
While information utility was taken care of with a few tersely worded e-mails, in the worst case scenario you might have to actually venture into the obscure domain of the overpaid geeks in IT and draw them a picture…Oops, I mean create a digital image…
Yes Possession Utility was the new GOD, Kenny boy Lay and Enron were the wave to catch. Why design it, manufacture it, ship it, or warehouse it when you could make far, far more by leveraging it?
America was to become an “OWNERSHIP SOCIETY and there was no rule on the books that couldn’t be bent, broken or ignored to achieve this laudable aim.
“Poor credit, bad credit no credit…No Problem, we’ve got just the loan for you.”
“No job? Just write down the name of some company, we really don’t waste much time checking on all that stuff.”
“Can’t afford a down payment? No problem, we don’t need one, in fact we’ll lend you enough money to buy that new house, fill it up with nice furniture and park a brand new car in the driveway to boot.”
“Can’t make the payments right now? There aren’t any till two years from now and by then you’ll be able to flip it for 40% more than you bought it for.”
“How can we do this? We don’t hang on to these mortgages like banks did in olden times, no sireee, we bundle up the mortgages into “Mortgage Backed Securities”, and sell them to pension funds, hedge funds, the Saudis and big insurance funds like AIG. So long as they are making a nickel more than alternative investments they don’t seem to be too concerned that it’s impossible to unravel the underlying value of Mortgage Backed Securities.”
“And the people that market the Mortgage Backed Securities, the Big Investment Banks, also handle most all of the stock IPO’s and Corporate Bonds so when the investment banksters go to the Bond Rating Agencies with our Mortgage Backed Securities they get ratings just as good as if Wal-Mart was asking for a loan, and you know them Waltons got more money than God.”
Of course, here on planet Earth nothing takes place in a vacuum, just as unfettered greed drove the financial industry off the cliff, America’s corporate owned Main Stream Media sold its objectivity to advance a political agenda favorable to the real owners of American society; “the Haves…and the Have Mores.” That the “Haves and the Have Mores” also controlled the advertising budgets of nearly all of the Fortune 500 corporations may have played some small roll in the Corporate Masters of the media at Viacom, Disney and General Electric reaching the decision that controlling the content of the news media was far too valuable to allow it to be the duty journalists.
The elected politicians charged with the sworn duty to protect and defend the Constitution of the United States of America sold their souls for the bright shiny coins called campaign contributions, the wishes of the contributers came before the wishes of the voters.
And the Captains of Industry, what has been their fate? They’ve been forced to stoop so low as to Jet into Washington D.C. aboard their private, tax deductible, business jets, hat in hand, to beg Uncle Sugar for a bail-out, all the while reminding feeble old Uncle Sugar of the dire consequences should Uncle Sugar not pony up the billions. It’s a sight so pathetic as to make one go on a week long Dom Perignon binge.
You ask; “Is there any one thread that binds this disaster together?” Well, yes, as a matter of fact there is. The governance of the United States was stolen in 2001 by a political cabal that desired, and has been able to achieve, the exact outcome that has come to pass. They are the Neoconservatives.
In one of their founding documents published by the Project for a New American Century they speculated that a New Pearl Harbor would greatly increase the speed they would need be able to implement their policies. And low and behold, upon stealing the presidency, in less time than it takes for a knocked-up welfare queen to pop out another WIC’s recipient, their desire for a “New Pearl Harbor” was televised live by every TV network across the Globe.
In 1999 professional golfer Payne Stewart’s Lear jet lost cabin pressure asphyxiating all on board. The Air Force scrambled fighter jets and trailed the doomed plane, cruising on auto-pilot, across the continent till it ran out of fuel and crashed. On September 11, 2001 we are told that not one of the four hijacked airliners was intercepted by the military even though nearly two hours elapsed between the first hijacking and the last jet crashed in Pennsylvania…creating a debris pattern more similar to a jet that was shot from the sky...than a jet that was deliberately flown into the ground to thwart the “Heroes of Flight 93” from overpowering the hijackers…Which is the “official government account of the demise of Flight 93”.
Hours before the dust had cleared from the collapse of the Twin Towers the implementation of the neocon political agenda was underway, Richard Clarke, in “Against All Enemies” notes that from the afternoon of 9/11/2001 Rumsfeld, Cheney, and the other neocons in Bush’s inner circle advocated using the attacks of 9/11 as an excuse to attack Iraq, even though there was a consensus among America’s intelligence agencies that Iraq had played no roll in the attacks.
A second wish of the neocons is exemplified by this quote from Grover Norquist;
“I don't want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub."
When the neocons say they want to reduce the size of government they are talking about only a few sectors of government; social programs, environmental protection, labor protection, and protecting the civil rights of America’s citizens. If the poor and the Middle Class are the beneficiaries of a program it is to be defunded (see the mortgage bailout noted above that bails out the banksters while dumping on the victims of the banksters).
In addition to slashing taxes on the “Haves and the Have mores” their desire to empty the Federal Treasury has given us lavish spending to the Military Industrial Complex for weapons systems like the F-22 fighter jet, Star Wars anti-missile defense, and the F-35 fighter jet, systems that were designed to fight an enemy, the Soviet Union, that no longer exists.
The neocons also spend lavishly on the privatized prisons complex, expanded police powers, warrantless eavesdropping on American citizens and especially on no-bid contracts to crony capitalists that provide privatized paramilitary forces unfettered by all those pesky laws. But foremost the neocons lavish the bounty of the Treasury of the United States on illegal and immoral wars of aggression. All of these militaristic boondoggles are being advanced while pressing needs like universal health care and a living minimum wage are deemed by the neocons as “far too expensive.”
Why do they want to empty the Treasury of the United States? They know that when the policies of the neoconservatives are implemented they will have a nearly universal negative effect on the overwhelming majority of Americans; their policies have the same appeal as drinking from the proverbial punchbowl filled with turds.
By emptying the Treasury the options that president elect Barack Obama will have available to address the many, many problems he will face are reduced to slim and none.
Both fiscal policy and tax policy options, the traditional economic tools available to governments to address economic slowdowns, will be severely limited due the excesses of the neoconservatives.
You ask who will be blamed for the grave damage to the nation wrought by the neoconservatives? It will not be the banksters that created sub-prime, Alt-a and ARM mortgages. It will not be the corporate honchos that promoted the sales of giant gas guzzling SUV’s instead of fuel efficient alternatives. It will not be the financiers that created the opaque soup of financial derivatives. And thanks to the unquestioning main stream corporate owned media it will not be the administration of George W. Bush that has had control of the government for the last eight years.
If Thomas Friedman convinces the main stream media that the blame is to be shared by all, the banksters will be bailed out to organize the next Wall Street Miracle.
If not America’s corporate owned main stream media will do their damnedest to see that the recently elected democratic Congress and the incoming Obama administration will receive the lion’s share of the blame for the greatest economic crisis since 1929.
For additional reading I highly recommend Naomi Klein’s “The Shock Doctrine”.
At the risk of sounding like a right winger if the democrats win the election there must be investigations into the rampant domestic lawlessness of the Bush Cheney years to serve as a deterrence to persuade future right wing administrations that nobody is above the Rule of Law.
Upon determination that laws of the United States were violated those responsible must be held to account even if those responsible are pardoned by the departing Bush regime.
Below is my strategy to accomplish this.
I would suggest that the new Congress should fortify the laws for creating the office of Special Prosecutor and fully fund an investigation by this office as a start. Congress must also include provisions that include an absolute power of subpoena by this office and any person that fails to report, provide the requested documents, e-mails and e-mail logs, computer hard drives or anything else reasonably requested be held in contempt of court and a warrant for arrest be issued immediately.
I would suggest as a strategy this investigation use the same model of investigation as is currently used when investigating drug trafficking by first investigating at the lower levels. Upon finding that crimes were committed then the lower level criminals will be offered a plea bargain to roll over on those above them in the chain of command.
At the same time Congress should also hold public hearings to investigate additional wrong doings by this administration
Bush and Cheney see only those at the elite level as their contemporaries so I’ll guess that the pardons they issue won’t extend very far down the chain of command. However it would not surprise me if Bush will attempt to issue a blanket pardon attempting to exempt from prosecution “anybody who broke a law while advancing the "War on Terror”.
In the event that Bush does attempt to issue a blanket pardon Congress should enact a law banning such pardons retroactively, citing the many instances of retroactive laws President Bush signed into law.
Returning to being at the risk of sounding like a right winger, my motivation for pursuing the prosecution of violations of the law during the Bush Cheney administration is for the same reasoning right wingers defend the death penalty; to act as deterrence against future administrations acting as if they are above the law. In the aftermath of Watergate those at the lower levels were held to account while Richard Nixon received a pardon from Gerald Ford.
In Iran Contra, which was coordinated at the highest levels of 1600 Pennsylvania Avenue, Oliver North’s conviction was overturned on appeal and the highest level conspirators were later pardoned by George H. W. Bush.
A pattern has emerged where the right wing in the United States thinks that they are above the law. In the Bush Cheney administration this pattern exploded into their preferred method of operation.
This pattern must end or the United States will surely end.
The best way to end this pattern is to hold the Bush administration to account.
Here is a series of grave violations by the Bush administration that destroyed much of America’s ability to gather quality intelligence in a timely manor:
Bush’s authorized release of the Saudi tape clandestinely filmed of Osama bragging about 9/11 to the crippled Saudi sheik that destroyed the best opportunity to kill or capture bin Laden. The outing by Rice of the identity of Muhammad Naeem Noor Khan, an al Qaeda communication expert that had been turned by the Pakistani ISI into a double agent. The outing of Valerie Plame and Brewster Jennings by Cheney to discredit her husband, and the fact that somebody with a very high security clearance disclosed to Ahmed Chalabi that the U.S. had the ability to intercept and decode all Iranian diplomat messages to Iranian Embassies and diplomats across the globe. Chalabi then passed this information to Iran destroying a vital window into the inner workings of the Iranian government. These acts account to a treasonous assault on America’s ability to gather intelligence.
To advance the Neocon policy of regime change through wars of aggression the Bush administration had to use false intelligence to scare the public into supporting the illegal wars. Now you discover the motive for their actions, they needed to destroy quality intelligence so they could replace it with their own bogus intelligence. The results? Thousands of needless deaths of American soldiers.
Benedict Arnold did nothing worse than Bush, Cheney and Rice. While their pardons will prevent them from being prosecuted having history hold them in lower esteem than Benedict Arnold will serve to hold them to account.
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