Unless You're a Shill for Banks and Big Business, The Washington Elites Will Call You Controversial

Unless You're a Shill for Banks and Big Business, The Washington Elites Will Call You Controversial

By David Sirota, AlterNet
Posted on July 21, 2010, Printed on July 22, 2010
http://www.alternet.org/story/147594/

Editor's Note: As chair of the bailout oversight panel, Elizabeth Warren held Wall Street executives' feet to the fire and proved time and time again that she was not afraid to speak out. Treasury Secretary Timothy Geithner is fighting to block her appointment. Sign Credo's petition pushing Elizabeth Warren police Wall Street.

Over the last few days, Connecticut Senator Chris Dodd and Treasury Secretary Tim Geithner have made the case that Harvard professor and Congressional Oversight Panel chairwoman Elizabeth Warren is too controversial a figure to head the new Consumer Financial Protection Agency. This, then, raises the revealing question of how Washington defines "controversial"?

Recall that the charge of "too controversial" was not made by Senate Democrats (or at least not at the volume they are being made against Warren) against Gary Gensler, the former Goldman Sachs executive appointed by President Obama to head the Commodity Futures Trading Commission. It was not made by most Senate Democrats against Larry Summers, a hedge fund executive subsequently appointed to a top economic position in the administration. It was not made against Citigroup executive Jack Lew when last week he was appointed to head the Office of Management and Budget. And it wasn't made against Tim Geithner, who orchestrated massive taxpayer giveaways to major banks during his time at the New York Fed.

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http://www.alternet.org/story/147594/

Geithner and the AIG Emails: Scandal Is Only Tip of the Iceberg

By Eliot Spitzer and William K. Black and Frank Partnoy, NewDeal 2.0
Posted on January 7, 2010, Printed on July 22, 2010

In a December New York Times op-ed, we called for the full public release of AIG email messages, internal accounting documents and financial models generated in the last decade. This Thursday, a Bloomberg story revealed that under Timothy Geithner's leadership, the Federal Reserve Bank of New York told AIG to withhold details from the public about its payments to banks during the crisis. This information was discovered when emails between the company and the Fed were requested by representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.

The emails requested by Issa span five months beginning in November 2008. If five months of emails reveal information key to our understanding of the aftermath of the crisis, imagine what 10 years of emails could contribute to our understanding of its causes. We believe the AIG emails and other internal company documents are the 'black box' of the financial crisis. If we understand the failure of AIG, we will more fully understand the crisis -- what caused it and more importantly how to prevent it from happening again.

The emails today detail the efforts of the Fed to suppress the disclosure of payments made to banks such as Goldman, Sachs Group for reimbursement of their credit-default swap exposure. When the Treasury Department stepped in, AIG had at least $440 billion in credit-default swaps outstanding. The Fed, led by Tim Geithner, paid Goldman, Sachs Group and other banks 100 cents on the dollar for these instruments rather than negotiating a lower rate closer to the actual value, (estimated by some to have been as little as 20 cents). In testimony to the Congressional Oversight Panel, Tim Geithner insisted it was necessary to make these payments in full, arguing that even a small downward negotiation would prove catastrophic to the financial sector. Elizabeth Warren, head of the oversight panel has repeatedly challenged repeatedly this assertion.

SNIP...

The taxpayer's stake in AIG is held by the A.I.G. Credit Facility Trust, whose three trustees are Jill M. Considine, a former chairman of the Depository Trust Company and a former director of the Federal Reserve Bank of New York; Chester B. Feldberg, a former New York Fed official who was chairman of Barclays Americas from 2000 to 2008; and Douglas L. Foshee, chief executive of the El Paso Corporation and chairman of the Houston branch of the Federal Reserve Bank of Dallas. We call on these three officials (interestingly all former Fed officials) to immediately release the documents we request.

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http://www.alternet.org/story/145020/

The Origins of the Overclass

By Steve Kangas

The wealthy have always used many methods to accumulate wealth, but it was not until the mid-1970s that these methods coalesced into a superbly organized, cohesive and efficient machine. After 1975, it became greater than the sum of its parts, a smooth flowing organization of advocacy groups, lobbyists, think tanks, conservative foundations, and PR firms that hurtled the richest 1 percent into the stratosphere.

The origins of this machine, interestingly enough, can be traced back to the CIA. (my bold, sw) This is not to say the machine is a formal CIA operation, complete with code name and signed documents. (Although such evidence may yet surface; and previously unthinkable domestic operations such as MK-ULTRA, CHAOS and MOCKINGBIRD show this to be a distinct possibility.) But what we do know already indicts the CIA strongly enough. Its principle creators were Irving Kristol, Paul Weyrich, William Simon, Richard Mellon Scaife, Frank Shakespeare, William F. Buckley, Jr., the Rockefeller family, and more. Almost all the machine's creators had CIA backgrounds.

During the 1970s, these men would take the propaganda and operational techniques they had learned in the Cold War and apply them to the Class War. (my bold, sw) Therefore it is no surprise that the American version of the machine bears an uncanny resemblance to the foreign versions designed to fight communism. The CIA's expert and comprehensive organization of the business class would succeed beyond their wildest dreams. In 1975, the richest 1 percent owned 22 percent of America's wealth. By 1992, they would nearly double that, to 42 percent; the highest level of inequality in the 20th century. (sw: and of course nowadays we've all seen it go even much higher)

How did this alliance start? The CIA has always recruited the nation's elite: millionaire businessmen, Wall Street brokers, members of the national news media, and Ivy League scholars. During World War II, General "Wild Bill" Donovan became chief of the Office of Strategic Services (OSS), the forerunner of the CIA. Donovan recruited so exclusively from the nation's rich and powerful that members eventually came to joke that "OSS" stood for "Oh, so social!"

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http://www.huppi.com/kangaroo/L-overclass.html

When the Waters Were Changed

Once upon a time Khidr, the Teacher of Moses, called upon mankind with a warning. At a certain date, he said, all the water in the world which had not been specially hoarded, would disappear. It would then be renewed with dfferent water, which would drive men mad.

Only one man listened to the meaning of this advice. He collected water, went to a secure place where he stored it, and waited for the water to change its character.

On the appointed date the streams stopped running, the wells went dry, and the man who had listened, seeing this happening, went to his retreat and drank his preserved water.

When he saw, from his security, the waterfalls again beginning to flow, this man descended among the other sons of men. He found that they were thinking and talking in an entirely different way from before; yet they had no memory of what had happened, nor of having been warned. When he tried to talk to them, he realized that they thought that he was mad, and they showed hostility or compassion, not understanding.

At first he drank none of the new water, but went back to his concealment, to draw on his supplies, every day. Finally, however, he took the decision to drink the new water because he could not bear the loneliness of living, behaving and thinking in a different way from everyone else. He drank the new water, and became like the rest. Then he forgot all about his own store of special water, and his fellows began to look upon him as a madman who had miraculously been restored to sanity.

SOURCE: The Waters of Knowledge versus The Waters of Uncertainty - Mass Denial in the Assassination of President Kennedy by E. Martin Schotz

The Real Deal: The Ultimate New Business Cold Call

Monday, 18 February 2002, 10:13 am
Column: Catherine Austin Fitts

Narco-Dollars For Dummies (Part 3)
How The Money Works In The Illicit Drug Trade
Part 3 in a 13 Part Series
By Catherine Austin Fitts
First published in the Narco News Bulletin

A Real World Example:
NYSE's Richard Grasso and the Ultimate New Business "Cold Call"

Lest you think that my comment about the New York Stock Exchange is too strong, let's look at one event that occurred before our "war on drugs" went into high gear through Plan Colombia, banging heads over narco dollar market share in Latin America.

In late June 1999, numerous news services, including Associated Press, reported that Richard Grasso, Chairman of the New York Stock Exchange flew to Colombia to meet with a spokesperson for Raul Reyes of the Revolutionary Armed Forces of Columbia (FARC), the supposed "narco terrorists" with whom we are now at war.

The purpose of the trip was "to bring a message of cooperation from U.S. financial services" and to discuss foreign investment and the future role of U.S. businesses in Colombia.

Some reading in between the lines said to me that Grasso's mission related to the continued circulation of cocaine capital through the US financial system. FARC, the Colombian rebels, were circulating their profits back into local development without the assistance of the American banking and investment system. Worse yet for the outlook for the US stock market's strength from $500 billion - $1 trillion in annual money laundering - FARC was calling for the decriminalization of cocaine.

To understand the threat of decriminalization of the drug trade, just go back to your Sam and Dave estimate and recalculate the numbers given what decriminalization does to drive BIG PERCENT back to SLIM PERCENT and what that means to Wall Street and Washington's cash flows. No narco dollars, no reinvestment into the stock markets, no campaign contributions.

It was only a few days after Grasso's trip that BBC News reported a General Accounting Office (GAO) report to Congress as saying: "Colombia's cocaine and heroin production is set to rise by as much as 50 percent as the U.S. backed drug war flounders, due largely to the growing strength of Marxist rebels"

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http://www.scoop.co.nz/stories/HL0202/S00069.htm

Tax the Very Rich

The "Pursuit of Happiness" Means a Job

By PAUL BUCCHEIT
CounterPunch
July 22, 2010

It's guaranteed for all of us by the Declaration of Independence. While 'happiness' is a vague word, the unhappiness caused by extreme economic inequality has been clearly demonstrated by Richard Wilkinson and others, as it leads to increases in homicide, obesity, drug use, mental illness, anxiety, teenage pregnancies, and the high school dropout rate. People need employment to function safely and comfortably as a part of society.

That's why we should tax the very rich. It's not socialism. It's as American as the Declaration of Independence.

Instead we stubbornly support a "free market" system that allows a financial expert to make enough money to pay the salaries of 50,000 police officers.

Police departments are shrinking, schools are being closed, teachers laid off, educational programs cut. The media would have us believe that everyone is suffering. But the latest Merrill Lynch-Capgemini "world wealth" report found that in North America last year, the number of rich (millionaires and multi-millionaires) rose 17 percent and their wealth grew 18 percent to almost $11 trillion.

Thirty years ago, when Reagan took office, the richest 1% of America took ONE of every fifteen income dollars. Now they take THREE of every fifteen income dollars. They've TRIPLED their cut of America's income pie. That's a TRILLION extra dollars a year.

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http://www.counterpunch.org/buccheit07222010.html