'The finance industry has effectively captured our government.'

[seafan]

The chilling, bare truth. And fairy godfather Geithner skips merrily on.



"Liquidate the Banks; Fire the Executives!"

By MIKE WHITNEY
April 10-12, 2009

On Tuesday, a congressional panel headed by ex-Harvard law professor Elizabeth Warren released a report on Treasury Secretary Timothy Geithner's handling of the Troubled Assets Relief Program (TARP). Warren was appointed to lead the five-member Congressional Oversight Panel (COP) in November by Senate majority leader Harry Reid. From the opening paragraph on, the Warren report makes clear that Congress is frustrated with Geithner's so-called "Financial Rescue Plan" and doesn't have the foggiest idea of what he is trying to do.

.....

Six months and $1 trillion later, and Congress still cannot figure out what Geithner is up to. It's a wonder the Treasury Secretary hasn't been fired already.

.....

So, while Congress approved a mere $700 billion in emergency funding for the TARP, Geithner and Bernanke deftly sidestepped the public opposition to more bailouts and shoveled another $3.3 trillion through the back door via loans and leverage for crappy mortgage paper that will never regain its value. Additionally, the Fed has made a deal with Treasury that when the financial crisis finally subsides, Treasury will assume the Fed's obligations vis a vis the "lending facilities", which means the taxpayer will then be responsible for unknown trillions in withering investments.

.....

From the report:

"To deal with a troubled financial system, three fundamentally different policy alternatives are possible: liquidation, receivership, or subsidization. To place these alternatives in context, the report evaluates historical and contemporary efforts to confront financial crises and their relative success. The Panel focused on six historical experiences: (1) the U.S. Depression of the 1930s; (2) the bank run on and subsequent government seizure of Continental Illinois in 1984; (3) the savings and loan crisis of the late 1980s and establishment of the Resolution Trust Corporation; (4) the recapitalization of the FDIC bank insurance fund in 1991; (5) Sweden’s financial crisis of the early 1990s; and (6) what has become known as Japan’s “Lost Decade” of the 1990s. The report also surveys the approaches currently employed by Iceland, Ireland, the United Kingdom, and other European countries."

This statement shows that the congressional committee understands that Geithner's lunatic plan has no historic precedent and no prospect of succeeding. Geithner's circuitous Public-Private Investment Program (PPIP)--which is designed to remove toxic assets from bank balance sheets--is an end-run around "tried-and-true" methods for fixing the banking system. In the most restrained and diplomatic language, Warren is telling Geithner that she knows that he's up to no good.

.....

The committee agrees with the vast majority of reputable economists who think the banks should be taken over (liquidated) and the bad assets put up for auction. This is the committee's number one recommendation.

.....

Liquidation, conservatorship and government subsidization; these are the three ways to fix the banking system. There is no fourth way. Geithner's plan is not a plan at all; it's mumbo-jumbo dignified with an acronym; PPIP. The Treasury Secretary is being as opaque as possible to stall for time while he diverts trillions in public revenue to his scamster friends at the big banks through capital injections and nutty-sounding money laundering programs like the PPIP.

.....

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time. ---Simon Johnson, The Atlantic Monthly, May, 2009

Mr. President, time is of the essence. We must liquidate these failed institutions and auction off their bad assets. Only then will confidence in our financial system even begin to recover.

And Mr. Geithner and Mr. Summers should be reassigned.

[patrice]

1. What we need is a National Bank and they'll kill him, or there'll be another 9/11, if he tries it.

We need a National Bank that finances our own investments in ourselves: Social Security, Free Education, Single Payer Health Care.

[defendandprotect]

19. Good idea . . . and sadly I think your observation is correct about elite violence . .. .

not that anyone in power is willing to acknowledge America's out-in-the-open

political violence over the past half century -- which is the only way the

right wing can come to power.

That and stealing elections --

[biopowertoday]

2. "Congress still cannot figure out what Geithner is up to" For the

most part, most members are quiet about this whole thingy.

[bluesmail]

3. Financial coup that they've been planning and working on since the birth of America.

It took patience. Many sacrifices. Tons of ill-gotten money. (literally)

[defendandprotect]

20. Agree . . .

the very purpose of capitalism is to move a nationa's wealth and natural resources

from the many to the few.

[ananda]

4. Piracy of a different order..

.. but just as bad, worse even,
because they are ours.

[rhett o rick]

5. K & R

[Hawkowl]

6. Are we to be a Banana Republic?

This is what it comes down to. US banks have been perpetrating this type of loan shark fraud on "emerging markets", (third world countries) for 50 years. Now they are doing it to America. The banks have taken down Iceland--will we be next? Can "we the people" retain our democracy?

I view the current crisis as a true turning point in all of human history. Will the criminal banks take over the world? Can Obama stop them? Does he want to? In my opinion he must defeat Wall Street first, or he will fail in all other endeavors.

[notesdev]

13. To be? That implies it is not ALREADY the case

and I think any objective evaluation would have to conclude that it already is the case. 10% approval of Congress, 95%+ re-election rate... laws made by bribery, government picking winners and losers in commerce, by name... we're there, baby.

Hope you like bananas.

[defendandprotect]

21. We are now pretty much the GOP's "third world America" . . . !!!

[truedelphi]

7. I was able to watch the Senators receiving Warren's report on C Span

And I noticed Michael Moore in the audience as well. (Go Michael!)

The Senators are baffled by Geithner. They still show him respect, and still say that he is honest and hard working.

But they pointed out to Ms Warren, when she mentioned how Geithner did not get back to her, despite her oversight panel's authority, to answer any of her questions or offer explanations -the senators pointed out to her that he doesn't get back to them either.

Wiht all the insidious Goldman Sachs ties that Geithner, Bernanke, Paulson etc have held, this is very upsetting.

If helping Goldman Sachs was good for the nation, I'd be in a great mood. But that does not appear to be the case.

[defendandprotect]

22. Thanks for the report -- helpful because I see so little of C-span these days--!!!

but a sad report --

both on the economic leadership Obama has selected --

and on Congress' inability, it seems, to to demand compliance.

[truedelphi]

28. Congress has been pushed into a corner.

Bernanke has said that he and he alone will have authority over the Federal Reserve.

And although Geithner likes to make noises about regulations and oversight, I think Warren's and the Senators' experience speaks volumes about Geithner's real feelings about oversight.

[defendandprotect]

31. Congress should begin re-regulation ... and reinstitute Glass Seagall . . .

Stand up and push for Single Payer Health Care which would not only improve

the health of our nation but our financial well-being.

[truedelphi]

32. Unfrotunately, Congress needs the same people writing checks for

Campaign contributions that President Obama needs.

Even as they worry out loud, into the microphones of C Span, that Obama's policies might fail and leave us as destitute as some third world nation, they still act as though they are clueless about Glasss Steagall's existence. And its need to be re-instated.

[defendandprotect]

33. Wait a minute . . . Obama took in near $1 billion from ordinary citizens . . .

the difference between those ordinary citizens and the corporate elites is that THEY

have leverage over Obama and Democrats because they've essentially "bought" them and

have their lobbyists/enforcers on hand constantly to make sure the right things happen

to benefit their own interests.

Ordinary citizens contribute -- but have no leverage. THAT has to change!

Haven't heard any Democrats as yet call for RE-REGULATION . . . !!!

How can that be???

Of course we need to bar corporations from any participation whatsoever in our elections ---

Imagine . . . a private corporation controls the presidential debates--!!!

[truedelphi]

34. Oh I agree. We do have some leverage - after all, who voted for Obama?

I'd love to see a law go on the books that says a candidate has to have at least 50% of the voting populace's numbers before being elected.

Year after year, NOBODY wins the Presidency, because so many stay home.

Or as a friend of mine used to sing:

"There's no government like no governmment
There's no government at all..."

He was a crazy anarchist who put out his own newspaper.

[defendandprotect]

35. Presume you mean you disagree . . .

however, the right to vote for someone is LEVERAGE on their decision making.

We've had corporate reps sitting in with Congress writing legislation in their
favor!

Personally, I believe in a "people's government" -- which would exclude corporate

influence and elite money.

[truedelphi]

36. I'm not trying to disagree.

Rather, I think solutions need to come forward.

I can bellyache all I want about certain lacks of action that Obama has stood by, but here is the thing that is a victory for us -
We selected the internet candidate ahead of the MSM candidate. By huge numbers.
Now we have to continue the fight.

Naomi Klein says pretty much the same thing here:(though mroe eloquently)
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x8349552

I like this sentence from the article:
"If the superfan culture that brought Obama to power is going to transform itself into an independent political movement, one fierce enough to produce programs capable of meeting the current crises, we are all going to have to stop hoping and start demanding."

[vssmith]

8. I could not agree more

[Delphinus]

9. Glad you posted this here. n/t

[earth mom]

10. Reassigned is too kind. Geithner & Summers need to be FIRED. nt

[Jakes Progress]

11. Phillips or Torx

We have been screwed. The war is over. What we are seeing now is just a mopping up operation, clearing out any little scattering of resistance.

[Locrian]

12. screwdriver

Make mine with vodka and orange juice comrade.

We are as screwed as screwed can be. If there ever was a question of who is running this country, well, you have the answer. Naomi Kleins Shock Doctrine predicted this. Summers was part of the Russian "shock".

We are seeing the final nails being pounded in the coffin.

[acmavm]

14. I think we're out of time. When we started up the printing presses to cover

all this debt, we were sunk. And to give it to the guys who caused the problems was just criminal. And for one man who doesn't think he answers to anyone, not even members of the US government, not tell us what he did with OUR money is absolutely surreal. That just boggles my mind. What the fuck kind of system are we running? I can tell you one damn thing for sure, it is not a democracy. And this kind of scam was not what I expected November 4th. I expected a little breathing room before the next set of shysters took over. Everyone who is pissing and moaning about this 90 days crap needs to shut up and acknowledge that what is wrong and what is bad is wrong AND bad from the very START. And there is something very, very wrong when one man is divvying up our money amongst the corporation he worked for and the other major financial corps, and then telling us its none of our fucking business where the money went.Yes it is our business when it is in regard to a debt that our kids and grandkids and great-grandkids will still be paying after we are gone.

And I think that this is bad too...

The dollar is in trouble. The IMF and everyone else wants a new reserve currency , they want to shitcan the dollar.

<snip>
IMF boss talks up new reserve currency
26th March 2009, 9:30 WST
http://www.thewest.com.au/default.aspx?MenuId=3&ContentID=132432
<snip>

Hell, even the UN wants to kick our monetary asses:

<snip>
UN panel touts new global currency reserve system
Mar 26 04:09 PM US/Eastern
http://www.breitbart.com/article.php?id=CNG.18e9e5692442aa61d7510553b5ffc14e.8b1&show_article=1
<snip>

Anyway, I wonder about this little theory. I wonder, and have for a long time, if whether all this off-shore banking has (at least) two purposes. I think 1) yes, to hide the money; and 2) to protect the money when the dollar crashes. I think that everyone who is anyone has invested in foreign currency. I think that AIG and GS and Citi and everyone that got money from Geithner sent that money out of the country and invested it in Euros, Yuan, what-the-fuck-ever because our dollar is gonna tank.

(I notice I am getting paranoid again. Being scammed does that to me.)

Obama has got to put an end to this. Now.

[JenGatherer]

15. Buy canned food-batten the hatches

Really good financial analysis here. This man gets it.

www.market-ticker.org

What riles me is that we have a truly horrific situation going on here and people are trying to make it into a left wing, right wing thing. So I want to protest, I want to act, but then I get lumped in with the Right Wing Teabaggers. It's way too important to just let go but I don't know what more I can do. I am stocking food. Very quickly it will be difficult to maintain even the facade of normalcy as we keep printing more money and buying our own treasuries.

[defendandprotect]

23. Agree . . . and, basically, whatever you had at the end of the Clitnon adminsitration ...

is only worth half now, or less ---

Re foreign currency, think you're right -- didn't Cheney change his money into'
Euros more than a year back?

Bankrupting the US Treasury was the final way to destroy democracy!

We're not putting enough pressure on Obama -- or our Democratic Congress.

We've been waiting almost 2 1/2 years for our Democratic Congress to end the wars!!!

[bertman]

16. Too late to recommend, so here's the kick. When I saw Professor Warren on Rachel

Maddow a few months back I knew we had a "live one". She didn't pull punches then and she sure as hell ain't pullin' them now. I wish we had thousands more like her in important positions.

What I notice is how there has been no response from the Obama administration as to WHY Secretary Geithner is above answering to anyone. This reminds me of Bush and Paulson except worse because these guys are here for four years. Very scary shit.

[defendandprotect]

24. We're not putting enough pressure on Obama -- or Congress -- !!!

re finances or wars --

bankrupting the Treasury is a sure way to destroy democracy!

[bertman]

26. You're right, defendandprotect. I'll start the emails AGAIN tonight when I get home.

[paparush]

17. K&R!

[antimatter98]

18. We've seen this banking-corporate power out in the open at last...

and see as clearly as ever that we don't have a democracy, we have fascism--corporate/banking controlled government.

Our Congress does not represent its citizens, but takes orders from corporate/banking power, and so does the president.

This goes back years, not just suddenly 'now.' But today we've seen that our government gives 'health care' to banks and major corporations, but denies its own citizens health care.

Privatize the profits, socialize the risk.

We get cruel 'market forces,' (layoffs, foreclosures, living in tent cities) while the corporations and banks get socialized safety nets.

[defendandprotect]

25. The only way this illegitimate power is able to rise . . .

is thru political violence --

including election steals and heavy duty propaganda ---

and all of that has been going on since the coup on JFK/people's government ---

[Marie26]

27. You were warned

That's all I have to say.

[debbierlus]

29. Why is Obama always mentioned as if he if being duped by Geithner & Summers

?

Instead of being the one IN CHARGE - the one who APPOINTED THEM - and the one who is RESPONSIBLE for these economic policies...

Obama knows what is going on - he is a Harvard graduate - a smart man.

These are HIS policies. Not just Geithner & Summers.

[Jakes Progress]

30. Millionaires over Workers

On Sunday I read this column from Ed Wallace. http://www.star-telegram.com/ed_wallace/story/1311156.html

It points out the difference in how the banks are treated vs. the auto industry. Banks are being saved in ways that protect the life styles of the rich and greedy. The auto industry is told to sink or swim. Protecting it would save hundreds of thousands of jobs for average Americans. We spend anything to "rescue" the millionaires, but demand that Detroit default on their retirement funding. Here is a quote from the article that sums it up.

It’s the biggest problem we can fix the quickest for the least amount of money. I would guess that to completely retool Detroit and give them a solid financial base for the next century might cost in excess of $100 billion. My figure lines up with Mark Zandi’s of Economy.com: It would work out to around $40,000 per job saved. And saving those jobs would mean the money would be paid back in a decade just in the tax revenues from all these still-working taxpayers.

That might sound outrageous to you; frankly, it’s painful to me to suggest — but the alternative is much, much worse.

Let’s get some perspective: For the same amount of money as we’ve already committed to Wall Street so far, we could save all of Detroit 128 times over.

And $100 billion to save Detroit is a pittance compared to the taxpayer dollars Washington is anticipating might be lost from future fraud on Wall Street.