Sunday, February 15, 2009

Abolish Wall Street - Obama Economy


The economic stimulus
The finanacial crisis

who did he select to deal with it?

The people who created it!

His top advisers: Robert Rubin and Lawrence Summers
who helped to lay the basis for the crisis.

Rubin was in the lead to undermine the NEW DEAL LEGISLATION

(wikipedia Bucket Shops!!)
(credit default swaps = Toxic debts)

the Glass-Steagall Act, that protected commercial banks from risky investments.
As soon as he got that recinded he left the government and became a director of CITY GROUP
which used the new legislation to buy up and hold on to all kinds of risky investments.
And it crashed! Now the government is pouring tens of billions of dollars trying to rescue it from his decisions and others like him.

Robert Edward Rubin (born August 29, 1938) served as the 70th United States Secretary of the Treasury during both the first and second Clinton administrations
Before his government service, he spent 26 years at Goldman Sachs. His most prominent post-government role was as Director and Senior Counselor of Citigroup.
On January 9, 2009 Citigroup announced his resignation, after having been criticized for his performance. He received more than $126 million in cash and stock during his eight years at Citigroup.

He was replaced by Lawrence Summers. Summers was in the lead in undermining congressional efforts to regulate exotic financial instruments, derivatives, credit swaps...
He succeeded. They wouldn't regulate. Another mayor element of the crash! And nobody knows who owes what to whom, you can't figure out what the toxic assets are.

These two are picked as the first two top economic advidors (FOR OBAMA).
Summer's protege, Tim Geithner is now the Secretary of Treasury
and if you go down the list it is pretty much the same.
In fact, the business press, Bloomberg News, had an interesting article on Obama's couple of dozen economic advisors and went through the records one by one, and concluded that these people shouldn't be invited to run the economy, half of them should be getting subpoenas for devious financial shicanery and fixing books.
There are other economists - who have a more progrssive slant - but they were excluded.

=== Stephen Lendman guest NOAM CHOMSKY ===

How "Brilliant" Men Crashed the Economy

What to Do About Wall Street

February 2, 2009

Soon after the passage in 1999 of the
Clinton-Rubin-Summers-P. Graham DEREGULATION of the
financial industry, I boarded a US Air flight to Boston
and discovered none other than then-Secretary of the
Treasury Lawrence Summers a few seats away. He was
speaking loudly and constantly on his cell phone. When
the plane took off he invited me to sit by him and

After reviewing the contents of this Citibank-friendly
new law called the Financial Modernization Act, I asked
him: "Do you think the big banks have too much power"?

He paused for a few seconds and replied: "Not Yet."
Intrigued by his two word answer, I noted the rejection
of modest pro-consumer provisions, adding that now that
the banks had had their round, wasn't it time for the
consumers to have their own round soon?

He allowed that such an expectation was not
unreasonable and that he was willing to meet with some
seasoned consumer advocates and go over such an agenda.
We sent him an agenda, and met with Mr. Summers and his
staff. Unfortunately, neither his boss, Bill Clinton,
nor the Congress were in any mood to revisit this
heavily lobbied federal deregulation law and reconsider
the blocked consumer rights.

The rest is unfolding, tragic history. The law
abolished the Glass-Steagall Act which separated
commercial banking from investment banking. This opened
the floodgates for unwise mergers, acquisitions and
other unregulated risky financial instruments. Laced
with limitless greed, casino capitalism ran wild,
tanking economies here and abroad.

One champion of this market fundamentalism was Alan
Greenspan, then chairman of the Federal Reserve. Last
October before a House Committee, Greenspan admitted he
was mistaken and expressed astonishment at how
corporations could not even safeguard their own
self-interest from going over steep speculative cliffs.

Greenspan and Summers were deemed "brilliant" by the
press and most of Congress. Summers' predecessor at
Treasury, Robert Rubin, was also a charter member of
the Oracles--those larger-than-life men who just knew
that the unfettered market and giant financial
conglomerates would be the one-stop shopping mart
consumers were assumed to be craving.

Now the world knows that these men belong to the "oops
oligarchy" that bails itself out while it lets the
companies collapse into the handcuffed arms of Uncle
Sam and bridled taxpayers who have to pay for
unconditional megabailouts. Instead of the Wall Street
crooks being convicted and imprisoned, they have fled
the jurisdiction with their self-determined
compensation. Corporate crime pays, while pensions and
mutual fund savings evaporate.

Now comes the next stage of the Washington rescue
effort in a variety of stimulus packages which every
vendor group imaginable wants a piece of these days.
When trillions are offered, many come running.

As the public focus is on how much, when and where all
this money should be spent, there are very serious
consequences to be foreseen and forestalled. First,
consider how much more concentrated corporate power is
occurring. Forced or willing mergers, acquisitions and
panic takeovers of big banks by bigger banks along with
bankruptcies of companies further reduce what is left
of quality competition for consumer benefit.

Remember the anti-trust laws. Obama needs to be their
champion. The fallout from the Wall Street binge is
likely to lead to a country run by an even smaller
handful of monopolistic global goliaths.

In the stampede for stimulus legislation, there is a
foreboding feeling on Capitol Hill that there is no
proposal on the table to pay for it other than by the
children and grandchildren. Just the opposite is
raining down on them. Everybody including the private
equity gamblers, Las Vegas casinos and Hollywood
studios along with the banks and auto companies are
looking for tax breaks.

So with the economy deteriorating and taxes being cut,
where is the enormous money coming from? From borrowing
and from printing money. So look out for big time
inflation and decline in the dollar?s value vis-a-vis
other currencies.

In all the hundreds of pages of stimulus bills, there
is nothing that would facilitate the banding together
of consumers and investors into strong advocacy groups.
We have long proposed Financial Consumer Associations,
privately and voluntarily funded through inserts in the
monthly statements of financial firms.

If this bailout-stimulus-Wall Street funny money waste,
fraud and abuse sounds confusing, that is because it
is. A brand new paperback "Why Wall Street Can't Be
Fixed and How to Replace It: Agenda For a New Economy"
by long-time corporate critic, David C. Korten will
explain some of the wheeling and dealing.

You don't have to agree with all or many of Korten?s
nostrums. Just read Part II: the Case For Eliminating
Wall Street. He considers three central questions:

First, do Wall Street Institutions do anything so vital
for the national interest that they justify trillions
of dollars to save them from the consequences of their
own excess?

Second, is it possible that the whole Wall Street
edifice is built on an illusion of phantom wealth that
carries deadly economic, social, and environmental
consequences for the larger society?

Third, are there other ways to provide needed financial
services with greater results and at lesser cost?

Bookmark and Share
posted by u2r2h at 12:32 PM


Post a Comment

<< Home