Reply #23: AIG was used to launder the money from the

[sabrina 1]

bailouts. Just as many ordinary people suspected.

WILLIAM K. BLACK: What we're doing with -- no, Treasury and both administrations. The Bush administration and now the Obama administration kept secret from us what was being done with AIG. AIG was being used secretly to bail out favored banks like UBS and like Goldman Sachs. Secretary Paulson's firm, that he had come from being CEO. It got the largest amount of money. $12.9 billion. And they didn't want us to know that. And it was only Congressional pressure, and not Congressional pressure, by the way, on Geithner, but Congressional pressure on AIG.

Where Congress said, "We will not give you a single penny more unless we know who received the money." And, you know, when he was Treasury Secretary, Paulson created a recommendation group to tell Treasury what they ought to do with AIG. And he put Goldman Sachs on it.

BILL MOYERS: Even though Goldman Sachs had a big vested stake.

WILLIAM K. BLACK: Massive stake. And even though he had just been CEO of Goldman Sachs before becoming Treasury Secretary. Now, in most stages in American history, that would be a scandal of such proportions that he wouldn't be allowed in civilized society.

A 'massive conflict of interest' for Paulson as a former CEO of Goldman Sachs.

In the documentary, 'Inside the Meltdown', it outlines how Paulson allowed Lehman Bros. to fail and claims he did it to 'send a 'tough love' message to Wall St. that the government would not be stepping in, as they did with Bear Stearns. The dreaded 'Socialist' label was what they feared, far more than they feared a total collapse of the world's economy.

In the documentary it claims he totally underestimated what would happen if Lehman Bros. failed, eg he didn't take into account how many other obligations Lehman Bros had, and was SHOCKED at the reaction after it happened!

If all this is true, and these are the geniuses of our economic system, it's little wonder that we are now where we are.

Funny, the people, and a few members of Congress such as Marcy Kaptur and Kucinich, 'got it' from the moment they saw Paulson's performance on Sept. 15th.

What is happening is they are desperately trying to preserve the 'system', the failed system of runaway Capitalism, but are caught in a trap of their own making, as over and over again, they have been forced to go the government, proving their system is unsustainable, that the 'market will take care of it' is nonsense (which they still deny) but continue to use the people's money to bail themselves out. Conservatives especially ought to be outraged by these people, as they are the cause of the failure of Capitalism, unregulated Capitalism was bound to fail, but taking human nature into account, was never something they did. Corporations have 'personhood status', people don't matter to them and this is the result of that kind of thinking.

Reading Black's interview, and several others by Bill Moyers, and watching 'Inside the Meltdown', it's hard to believe that Obama has gotten behind this 'scheme' to try to save a system that has failed so massively, and has a history of failure (the S&L scandal) where the bill for the greedy capitalists always goes to the tax-payers, who never benefit in any way from all the money they are forced to pay to bail out these fraudulent scam artists, over and over again.

If you haven't watched 'Inside the Meltdown' it is well worth watching. It is on Frontline's site, here http://www.pbs.org/wgbh/pages/frontline/meltdown/view/

Funny that Madoff is in jail for operating HIS Ponzi scheme, but many of those who operated a far bigger one, are running off with their profits, and some are in this administration trying to convince us they know what they are doing.

Who will stop this? Congress is basically bought and paid for. One of those interviewed by Moyers, I forget which one, says that the only hope is to see massive outrage from the people themselves.