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Cut the Partisan Crap ... BOTH the Private Sector AND the Government are to Blame for the Financial Crisis

George Washington's picture




 

Washington’s Blog

Partisan GOP hacks say the financial crisis was caused by too much regulation, and government interference in the markets.

But Glass-Steagall was repealed, derivatives were left unregulated, and the regulators were watching porn instead
of preventing fraud. Giant banks, hedge funds and other fat cat private
players knowingly gamed the market and committed fraud in more ways
than can be listed in a single post.

And remember, even the "father of economics" - Adam Smith - didn't believe in completely unfettered free markets.

On
the other hand, partisan Democratic party hacks say that bad
corporations caused the crisis, and that if more power is given to
Summers, Bernanke, Geithner and the other governmental honchos, they'll
fix everything.

But Summers, Bernanke, Geithner and the other meatheads largely caused the crisis through their actions. And as Simon Johnson points out, the government created the mega-giants, and they are not the product of free market competition.

As I pointed out in February 2009, government fraud is pervasive:

In
case you believe that there are only "a couple of bad apples" in the
United States, here is an off-the-top-of-my-head list of corruption by
leading pillars of American society:

  • Senior military officials stole approximately $125 billion dollars out of Iraq reconstruction funds, dwarfing Madoff's $50 billion Ponzi scheme (in turn, the looting which is now occurring under the bailout/stimulus programs will far surpass $150 billion)
  • The
    government-endorsed ratings agencies which were supposed to accurately
    rate the credit-worthiness of companies and nations committed massive fraud

There are hundreds of similar stories of corruption which have come out recently.

 

But surely government employees would have done something to stop such corruption if had known about it, right?

 

Well, actually:

  • Instead of insisting on accurate books, the government encouraged fraudulent bookkeeping. For example, as of 2006:

    "President
    George W. Bush has bestowed on his intelligence czar ... broad
    authority, in the name of national security, to excuse publicly traded
    companies from their usual accounting and securities-disclosure
    obligations."

  • The government knew about mortgage
    fraud a long time ago. For example, the FBI warned of an "epidemic" of
    mortgage fraud in 2004. However, the FBI, DOJ and other government
    agencies then stood down and did nothing. See this and this

These are just some of the many examples of the government aiding and abetting corruption.

A lot has come out since then about Geithner, Bernanke, and other officials. See this, this, this, this, this and this.

Indeed, government employees are mainly using their time in office to feather their own nests, rather than to do anything constructive.

So let's cut the partisan crap.

Both the fat cat players and the government are to blame for the financial crisis, and we need to rein in corruption and fraud in both.

 

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Sun, 05/02/2010 - 19:13 | 328323 goober
goober's picture

I agree witht the basic premise of the OP. They are all guilty of pandering one way or the other for votes(Dems/Reps). How can you possibly overlook Charlie Rangel/Geithner/Dodd/BFrank for their malfeasance. You can't. Until some of it is prosecuted there will never be ANY confidence in the "system". H Paulson ,a rep, and another Goldmanite is also one of the major offenders with his saving GS with AIG full payments, via ultra scare tactics that the world would end. There is plenty of blame to go round to include the idiots that used their homes as ATMs and others that could not possibly afford the RE they were given via bad legislation. I say start choppin off heads immediately. There is ample evidence to prosecute lots of malfeasance via internet tracks left by the majority of offenders. We simply don't seem to have the political will to correct much of anything. THEREFORE WE SUFFER at our own expense! When people start thinking differently and accepting the realities this OP points out, only then will anything actually change for the better. Not until. We will simply be stuck in this "economic twilight zone" ! I urge everyone to RESIST the madness of fiscal insanity. I do. If you can enlarge the picture(on my moniker) you will see it is a protester in front of a Congressmans office. I took the photo. It speaks a million words. Also it is no coincidence that all the GS alumni are now in the current administration. Count em, you'll weep! There are six in the highest positions running the economic show. It is nothing more than a continuation of the grand illusions, with the help of the MSM on the same grand scale. Control of taxpayers money is control of the masses! Your money is being used against you every single day!

Mon, 05/03/2010 - 16:51 | 329667 JW n FL
JW n FL's picture

The Banks are using profits to pay for their Lobby? not the 0% Fed Window?

http://www.wired.com/threatlevel/2009/08/bank-lobbyists/


**** "In the first three months of 2009, the financial sector spent $104.7 million to lobby Congress and the administration, down 8% from the same period last year" ****

http://online.wsj.com/article/SB124640640747376775.html

So that I am clear... 2008 was a vintage year for Banks? they made soooooooooooooooooooooo much money on 2008 that in the first 3 months of 2009... they could drop $104.7 MILLION DOLLARS?

http://en.wikipedia.org/wiki/Emergency_Economic_Stabilization_Act_of_2008

 

Sun, 05/02/2010 - 19:11 | 328317 Crab Cake
Crab Cake's picture

"...we need to rein in corruption and fraud in both."

That, Mr. Washington, is called a revolution.  It can be done peacefully, or may in the end come to violence if the fraud, theft, and graft continues unabated, but any which way you cut it the only way to fix anything is with a revolution.  It won't fix everything, that's not possible, but there are no fixes to this nations problems without hitting the restart button on the status quo somehow someway.

Sun, 05/02/2010 - 17:30 | 328200 Quantum Nucleonics
Quantum Nucleonics's picture

 I disagree.  Private enterprise (aka the banks) were the drunk drivers on our financial highways, but it was the Congress that gave them the keys to the new car and the Fed feeding them those 19 red bull and vodkas.

Ask yourself this: Would Countrywide have been able to make all those absurd subprime loans if they couldn't sell them to banks with access to dirt cheap money from the Fed? No.  Would those banks have bought those loans, even with dirt cheap money, if they couldn't have sold them to Fannie & Freddie?  No.  Would investors have bought all those loans from Fannie & Freddie without the implicit guarantee from the Treasury? No.

Who were Fannie & Freddie's biggest defenders: a hit squad of Democrats in Congress led by Barney Frank and Chris Dodd.  Who ran these 200-1 levered hedge funds? Democrats all.  Who tried to limit their leverage and scope? Republicans.

There is certainly lots of blame to go around, but to say Democrats don't bear a disporporation share is historical revisionism.

Tue, 05/04/2010 - 08:58 | 330526 moneymutt
moneymutt's picture

most loans in Cali, where Countrywide ran amok were not conforming, Countrywide sold them to private hands via MBS, Countrywide funded themselves with commercial paper and incestuous relationship with Indymac  that many sincere, professional accounting types tried to whistleblow on but were squashed by captured regulators (meaning the bank was essentially unregulated due to corruption) etc, so whole Cali bubble could happen on its own, no govt needed, just as Tulip bubble did.

Bush admin used the OCC to squash state's rights, states' attempts to protect their citizens/consumers of home loans from predatory mortgage loan sharking and to also protect investors secondary subprime from markets that were rife with fraud but feds (duruing Bush admin), at the lobbying of the big national banks, squashed this state action. See this summary (and there are many others) http://www.slate.com/id/2182709. The derivatives market is/was a libertarian's dream, in fact its an experiment in the very core concepts of libertarian financial anarchy, a completely private and unregulated market, and yet it has great problems and it is way bigger than stock market or housing market so can/does more damage that manipulated stocks or housing. See this op piece for why derivatives, a private market pushed US govt to bail out Fred and Fan http://www.webofdebt.com/articles/its_the_derivatives.php

Glass Steagall was repealed by Gramm Leach bill that was supported by Repub congress and Dem president, Clinton and his WStreet loving cronies Summers, Rubin etc....but the small minority opposed to it were mostly Dem congresspeople. One of the most outspoken against it was a Dem Senator from ND, Dorgan, that correctly predicted it would lead to bailouts in a decade.

Many at this blog could write pages and pages evidencing GW's point, it is not all one parties fault and neither of the partisan orgs have been good actors in representing the interest of their constituents...thus looking for solution by flipping from one party to another, is, at best, naive.

That is not to say govt did not have a huge role in the problem, in my mind, mainly as state system captured and working for a private oligarchy,  like corrupted local police force being run by a drug king pin...so as a libertarian would say, you might prefer legalizing drugs over making them illegal AND having a corrupt police force. But we also see time and again completely unfettered unregulated situations cause problems too, like bullies take over, hence the reason we have a local legal/criminal system that is something short of former USSR and short of hill slums of Rio where only ruling "authorities" are drugs gangs as govt authorities have no power.

For same reason in financial world we have had to have Andrew Jackson fight banks, Teddy Roosevelt to fight trusts, Ike to fight Mil/Industial complex etc...democratic controls to stop undue control by small group of powerful elites is necessary, or economy gets taken over by cartels, trust, monopolies... and govt might often totally f things up and get completely corrupted, but no govt/anarchy is not a solution, instead "we the people" continually reassert our rights to control things for our commonwealth or we will be controlled by others that have no interest in the general public's success. Of course, one thing in our interest is not too much tyranny or interference from govt or any other source. We must protect the space for citizens to have liberty and pursue happiness. But it is also in our interest to control thugs and gangs and keep them from taking over.

From 2000-2006 Repubs controlled both Presidency and Congress, if repubs were the key solution, why did so many of these issues fester or become worse under them? And now Dems have had 2 years of control of Presidency and Congress, and lo and behold financial reforms not happening. This is because both parties are duping us into thinking they are sincere as us...and then they go to get campaign contributions...

 For a good first hand account of how Wall Street and govt work hand in glove to parasite us, check out this free financial autobiography by Catherine Fitts...there is dirt on both dems and repubs in here...http://dunwalke.com/

Sun, 05/02/2010 - 16:31 | 328143 abc123
abc123's picture

There's lots of high-level blame to be cast about but the essense of the problem is with people -- and their character.

Don't roll your eyes at me! 

People can be convinced they DESERVE something by a slick TV commercial or an ad campaign.  They'll give in to temptation when they can't afford it because of HUBRIS.

They'll take absurd risks with someone else's money in order to advance their careers for the same reason -- HUBRIS. 

They'll lie or omit the truth or take bribes 'because everybody else is doing it' to shield themselves from appearing provincial.

They'll convince themselves that exporting jobs or growing the government is OK if it benefits their 'team' to the detriment of millions of others -- HUBRIS. 

In the past two or three decades, most people have lost the capacity to assess their intrinsic self-worth.  Instead, we gauge ourselves by the length of the shadow that's cast by the gigantic heap of shit we own. 

Pretty sad. 

Without that pandemic character flaw there would be no soil for the weeds of financial fraud to take root in. 

We would collectively have the inner compass to deduce that financial innovation is pornography and that it's no basis for greatness and certainly nothing to subjugate a population's honest labor to. 

We've got the same problem that Captain Smith had.  He sailed at 26 knots at night through the North Atlantic and *whoops!* he broke the boat.  hubris.

If you follow mythology, the partner of hubris is nemesis -- retribution.  That's followed by catharsis.  A slow road back to zero. 

This will happen to all people -- more or less proportionately -- because of hubris. 

Don't get me wrong...  THROW ALL THE BASTARDS IN JAIL!!!  Government, Finance, Etc. 

But unless We The People change our ways and live within our means, the basic problem will never go away. 

Sun, 05/02/2010 - 16:04 | 328120 tony bonn
tony bonn's picture

george - you are one of the very few commentators on zh - smartknowledgu being another - who does not have his head caught in a spincter vise.....

thank you for another astute commentary and i look forward to more especially when you call crap on the obushma wars of imperial aggression and torture....

big is bad.....anyone or anything who gets so big that he moves policy or markets is not good for the republic.....

tbtf / tbts is a litmus test for anti-trust action....and the gop can shove it up its bloated ass with a bunch of dems....

keep the wisdom flowing....

Sun, 05/02/2010 - 15:59 | 328113 JW n FL
JW n FL's picture

                     So what caused the 50 to 1 leverage to be put under pressure? WallStreet!? Shorts!? or was it when the monies where pulled out of the programs that provided the backstop for the 50 to 1 leverage that was until that time backed by Federal or as I like to call them Tax Trough Dollars... Bush pumped 100% more money into the programs and then several years later... he pulled funding from those same programs he pumped...

                    50 to 1 leverage on Federal monies that had been flowing like a river for 2 or 3 decades? which then got pulled... caused the stresses that lead to Goldman being able to short, which lead to Lehman's collapse and so on… This financial crisis was engineered and is was an Austrian lite thought process that lead us to this collapse… Reigning in any spending, on a broad scale has a ripple effect that spans well beyond what we would choose to see.

 

                   Bush Pumped the Housing markets up 100% more than the Liberal Dumbocrats... and then pulled the rug out from under WallStreets feet... Not a story on the first domino that fell anywhere, even here. Bush pulled the backstop away from WallStreet... maybe all of those dollars going the other way pissed him off? http://money.cnn.com/2006/10/31/news/political_donations/index.htm

 

December 16, 2003. The American Dream Downpayment Assistance Act authorizes up to $200 million annually for fiscal years 2004 - 2007.

http://www.hud.gov/offices/cpd/affordablehousing/programs/home/addi/

 

HOME is the largest Federal block grant to State and local governments designed exclusively to create affordable housing for low-income households. Each year it allocates approximately $2 billion among the States and hundreds of localities nationwide. The program was designed to reinforce several important values and principles of community development:

http://www.hud.gov/offices/cpd/affordablehousing/programs/home/

 

Which was part of: HOME is authorized under Title II of the Cranston-Gonzalez National Affordable Housing Act, as amended. Program regulations are at 24 CFR Part 92.

Which Daddy Bush pushed thru...

 

Now, after pumping all of these dollars in... Bush cut funding, never mine the shit head idiot dems v. reps...

When Bush pumped the housing market, with the magic, un-written Federal backstop clause and then cut the funding... all of that 50 to 1 leverage took on a new sheen... 50 to 1 leverage for an ongoing Federal Program, or as I would call it... The big boys feeding from the public trough of tax dollars... was safe, safe enough that how many absolute return funds bought into the rated, magic Federal funded and back stopped debt machine / vehicles? LOTS!

But, when the Federal monies where cut... and the magic backstop was found to be a lie... the domino's fell, one after another... Goldman, being smarter than the rest bought shorts and insurance? how many different ways did Goldman profit from the failure, per deal... in the plainest of terms... for every one dollar in failed debt Goldman earned $2 dollars? Short + Swaps? I am guessing there just for the fun of it... sorry.

 

But the failure was brought on by Bush pumping and then de-stablizing the Federal dollars (really tax payer dollars) that where assumed to be safe by Bear, Lehman and so on... Don't get me wrong, Barney is an idiot Lobby whore just like Bush... but there is no difference between Barney, Bush, Obama, Clinton and so on... they are all moved by Lobby dollars... the song and dance is strictly for the public's entertainment.

Sun, 05/02/2010 - 15:03 | 328036 Kayman
Kayman's picture

I have a bad feeling that no one in power has a grasp of the monster that has been created.

Ideally, we have a President who tells the American people that he  was wrong to take Goldman money, that before the election, Hank filled his head with bullshit, and that he is firing all the Wallstreet insiders in his government.

If Obama thought it through, he would ask his other supporters to replace the blood money that Goldman gave him.  A worthwhile project that would earn his stripes.  All his Goldman insiders will be advising him not to....

And I think the real bellweather question we need an answer to- is where has the Bankster "bonus" money gone ??  Hard gold bricks, offshore ???  I think these crooked canaries already have financed their escape route.

Just like when Dubya made sure his Saudi benefactors escaped during 9/11, I am certain Blankfein and their ilk have a "get the hell out of Dodge plan."

 

Mon, 05/03/2010 - 15:40 | 329523 moneymutt
moneymutt's picture

I like that idea...call a surprise press conference, tell people you are turning on your masters and you need support from regular folks to make this happen and then reveal away and hope your alive at end of press conference. At that point if they get you, at least people know who did it and will rebel.

Not that we have a politician in a high place that would ever be smart or caring or clean or courageous enough to do that.

By the way Cantor openly stated Wall Street had buyers remorse about giving money to Democrats...what a laugh, like WS is afraid or dissappointed with Dems? Only people that go down will likely be the competition to the people really in charge, like a cop on-the-take, arresting one drug dealer, so the cop's drug dealer gets arrested guy's territory...public is happy a drug dealer was arrested, public thinks we are tough on drugs...and the music plays on

Sun, 05/02/2010 - 14:45 | 328017 sgt_doom
sgt_doom's picture

Blankfein  =  jail time

Make it so.

Great post, BTW, your excellency.

Sun, 05/02/2010 - 14:26 | 327983 naiverealist
naiverealist's picture

In third word countries it is called fraud and corruption.  In the US it is called innovative financial instruments.

Fraud and corruption have decimated any supposed integrity that US banks and businesses were to have had, and the man on the street will be forced to bail them out.

I have a very shallow level of expertice on the banking world, but as I read more and more of the PIIGS troubles, one thing that I rarely read is just who is being "bailed out" by the IMF, American taxpayer, EU, etc.  As far as I can see it, large banks and pools of money have made loans to the various governments (not unlike the Fed, who is a consortium of private banks) and these are the ones in danger of losing their  investments in these countries.  Now I see that the public sector of Greece is being blamed for the spending problem, and as a result wages, pensions, and benefits are being cut to enable paying back of the loans made to "savvy" (read, entitled) entrenched government leaders, who by their position, are able to skim and redirect this money into their or cronies pockets.  As a result, the money pools get paid back, but the citizens face added austerity in all aspects of their lives.

Whether or not they pay the bankers, the citizens are facing austerity.  Why not just default against the bankers, who have assumed absolutely no risk for their investments, as they feel entitled to their money.  I don't see anything changed, as the countries will still be under austere conditions when they face bankers anymore.  Maybe with a default, countries will not be able to put insane amounts of money into supposed "defense" (and other) appropriations, and learn that there really is no such thing as a free lunch.  Then real things will again have value, not financial constructs like dirivitives.

 

Enough of my rant. . . .

Mon, 05/03/2010 - 15:32 | 329509 moneymutt
moneymutt's picture

hey it's not fraud and corruption, its an export item....imagine how much GSacs improved our trade inbalance by saying this crap to foreigners..

Sun, 05/02/2010 - 16:51 | 328161 abc123
abc123's picture

I think you're right on target. Feels kinda pointless, though.  I guess the only thing to do is realize the collapse is coming this way and one had better have a survival plan because "the times they are a-changin."

Sun, 05/02/2010 - 15:55 | 328108 Commander Cody
Commander Cody's picture

You are talented - and a pisser, Mr. Banzai!

Sun, 05/02/2010 - 13:54 | 327949 onlooker
onlooker's picture

AIG. What about AIG. AIG was the bandit at 12:00 a few short months back. Now it is off the radar. What happened??  Was not AIG and the rating agencies a big part of this shell game? You guys know anything??

Sun, 05/02/2010 - 14:44 | 328016 sgt_doom
sgt_doom's picture

Hmmmm....could they have outlived their use as an options scam?

Sun, 05/02/2010 - 12:31 | 327889 the grateful un...
the grateful unemployed's picture

Lets review the history of this thing, Doug Noland over at Prudent Bear first reported that the credit monetization machine, which the Fed runs, grew beyond its control. The private sector was creating money, (credit), faster than the Fed. Technically this was free market activity, stimulated by loose Fed policy, but generated by private financial firms, on the back of the mortgage security business.

If this is true, the Fed should have raised interest rates at the first sign of trouble. The growth in the money supply should have provided enough revenue to run the government without bringing a lot of new issuance to market, but while the housing bubble was growing the real economy, personal income was dropping, and then Bush ran those disasterous tax cuts, many for corporations who were shipping jobs offshore. Still no word on what we're doing about that?

 

When Wall Street faltered, the Fed assumed their debts, out of fear the money supply would deflate too rapidly, and the cost of servicing the debt accumulated during the Bush years would be onerous. If the Fed was in control of the money supply in the months leading up to the crisis, they would have never allowed excess money growth (credit creation) during a time of economic contraction. (That would be their point I think). The Fed can print money, but they can't monetize credit, if there is no one on the other side of the loan. There is of course this system by which bank reserves are added, that money gets leveraged into the stock market, and that creates the wealth effect but that's a long difficult process while the rentier class sucks off the excess. 

Then of course Obama, when given the choice, offers tax credits instead of cash stimulus, which is idiotic. If you give consumers money, they spend, and your tax revenues go up. What lunacy.

 

In sum the Fed lost regulatory control of the money supply, and they then failed to take responsibility, by raising interest rates, having been painted into a political corner as well, by the insane policies of the Bush adminstration. Not only did the Fed lose their regulatory power, they didn't make the necessary tough choices, which is why some want to abolish the bank, they smell fear, weakness, and ineptitude, the critics are emboldened by the Feds inability to complete their mission, which is also why the dollar keeps crashing, a lack of confidence in their ability. Bernake has said, the dollar is not his problem, which was complete capitulation on his part. (He later tried to backtrack)

It doesn't sound as though the Socialists are ready to take over. Obama turned Healthcare reform into mandatory Health Insurance, that sounds like a booyah for corporate America, but it reflects the same weakness to provide leadership, at the political level. The Democrats failed to provide the checks and balances that would have stopped the spending in Iraq, and created some fiscal restraint, which may have prevented the financial crisis.

 

These institutions (political and economic) are weak and dying. What comes next, we can't say, but for those who worry about the police state, history suggests the problem is the opposite. What happens when you call the police and no one comes? 

Mon, 05/03/2010 - 15:29 | 329505 moneymutt
moneymutt's picture

thanks for the great comments, good stuff...its true, as much as I love to hate the Fed (and they are a totally uneccesary parasite) I do think they follow the herd. Credit is money and private banks create it. So too much money(credit) was created, especially given it went into speculative asset bubbles rather than good things like technology/manufacturung/infrastructure.

Our political structures are strong if you are an oligarch, you have a strong military and domestic police force and taxing authority at your beck and call, but political institutions are weak in representing true interests of people...we were all against bank bailout...a lot of good that did..

Sun, 05/02/2010 - 11:57 | 327853 anarkst
anarkst's picture

All systems are designed by the few to benefit the few.  It's never been any other way.

Sun, 05/02/2010 - 11:55 | 327849 doolittlegeorge
doolittlegeorge's picture

Good luck suing the government.  Love the "regulation but realist" comment as well.  Business at every level is nothing next to the government.  Government, for lack of a better word, is God.  Obviously who wouldn't like a "can't we all get along" sort of thing.  But that's now how the system works.  The system works to get you angry then you either a.  say something or b. doing something or c: (ideally) do a lot of bad things while saying lot's of bad things at the same time.  It's called being human and if you're not wanting to act on your outrage you've got real issues.

Sun, 05/02/2010 - 11:24 | 327793 Commander Cody
Commander Cody's picture

The PLAN objective is this:

WORLD DOMINATION

The PLAN goes down something like this:

  • Concentrate wealth by:
    • Creating the TBTF banks.
      • Repeal of Glass-Steagall.
      • Various FTC-approved mergers.
      • Establishment of creative financing: MBS, CDO, CDS, and their offspring.
    • Consolidating the TBTF banks.
      • Deliberate creation of the housing "crisis".
        • Laws to encourage anybody to get a loan.
        • Elimination of mortgage qualification criteria.
        • Federal Reserve establishment of low interest rates for extended period.
        • Enter: creative financing.
      • Use of housing "crisis" to fold the non-anointed into TBTF and eliminate competition.
        • WaMu > Wells Fargo.
        • Countrywide > BoA.
        • Merrill Lynch > BoA.
        • Lehman > ?
        • Bear Stearns > ?
        • Redistribution of assests from local and regional banks by the FDIC to larger entities who will then merge with TBTF.
    • Absolute protection of the TBTF by the Federal Reserve and US Treasury (supported by the full faith and credit of us serfs).
      • TARP.
      • TIRP.
      • TALF.
      • Automatic transition to bank holding company for the Squid (Can someone please explain how they qualify.)
      • Federal Reserve discount window.
      • Congressional and FASB support of mark-to-myth.
      • PPT.
      • Fed MBS purchase at par.
      • AIG intervention to pay CDS at par.
      • SEC indifference.
  • Use this wealth to control governments.
    • The immense lobbying effort by the banksters.
    • The purchase of influence - campaign contributions.
    • Allowing lobbyists to write legislation to benefit the financial ponzi.
    • The unwillingness to Audit the Fed to reveal all that will plunge the world into darkness.
  • Use this wealth in combination to control governments.
    • IMF.
    • WTO.
    • EU.
  • Allow serfs to exist to service the oligarchs.
    • Population control.
    • "Climate change" taxation.
    • Universal healthcare.
      • Government control. (Hoo, boy!)
    • VAT.

Feel free to fill in some of the blanks in the above strategy.  This is a very well-crafted PLAN.

Is GS a sacrificial lamb and part of the PLAN?  Or is Obama actually trying to break up the PLAN.  The results will show.  Keep your enemies close at hand.  Be safe!

Sun, 05/02/2010 - 13:12 | 327914 KTV Escort
KTV Escort's picture

Well done. I feel at home here, intelligent (and often extremely humorous) people with integrity who get it, who want clarity, who want justice and a better way. But the more I learn, the more therapy required, thus, my comfort in reading more ZH articles and comments, thus, more therapy required... a catch-22 of sorts.

Sun, 05/02/2010 - 11:48 | 327831 gmrpeabody
gmrpeabody's picture

+1000

Sun, 05/02/2010 - 11:44 | 327824 moneymutt
moneymutt's picture

Obama's intentions are almost moot point under your scenario...plenty of people already think he was CIA/TPTB plant from beginning, regardless of his birthplace so I don't need to cover that...but say he was a sincerely trying to serve public, and he was smart enough to try to play a chess match and undo the TPTB with help of public sentiment, does he stand a chance against the scenario you describe? I don't think so.

Most likely scenario in my mind is the TPTB have dueling groups promoting various versions of your outlined plan. Volcker/JPMorgan group which Obama seems to serve, knowingly or unknowingly, trying to do it in a slightly more evolved and subtle way (give the slaves some crumbs, keep them happy on plantation, reform) vs the more aggressive, arrogant GSacs/Greenspan group that Bush, knowingly or unknowingly seemed to serve, the group which seems to have attitude of: grab for everything you can now, if it's there for the taking it, take it...the long-term viability of your control systems is not to be worried about no matter how much US/Global economy trashed, you always win.

Sun, 05/02/2010 - 14:43 | 328014 sgt_doom
sgt_doom's picture

"...plenty of people already think he was CIA/TPTB plant from beginning.."

<sarcasm>Gee, just because his mom was affiliated with the Ford Foundation, as was Geithner's dad, and just because the VAST MAJORITY of the top people in the CIA's intel directorates all came through the Ford Foundation from the '50s through the early '70s, is no reason to be suspicious, after all </sarcasm>.

Just becase George W. Bush's daddy was former CIA, is also no reason to be suspicious.

Gee, now I'm beginning to see a pattern finally.....

Sun, 05/02/2010 - 11:19 | 327791 AR15AU
AR15AU's picture

Its hard to make the case that AIG, Fannie, Freddie, WaMu, and GM are "private sector / free market" enterprises when they are intertwined with the govt on so many levels...

Sun, 05/02/2010 - 11:11 | 327783 Madcow
Madcow's picture

When a central-bank-driven-fiat-money-system reaches the end of its useful life, the civilization and political economy built around it collapses.

Because TPTB don't want to see that happen, they're forced to resort to more and more blatantly illegal, immoral, and unfair actions. 

If credit can no longer be expanded legitimately, it must be expanded illegitimately. To prevent a global meltdown, the IMF$ is basically going to need to find every white collar criminal mastermind they can find - and give them each a few $Trillion - with promises of immunity and security for life. 

..."Just get the ball to Al Capone."  

 

 

Sun, 05/02/2010 - 10:34 | 327750 moneymutt
moneymutt's picture

Rainman, like your thoughts, and even really liked Paul E. Math's thoughts... when we get past partisan cliches I think most regular folks know solution is not complete financial anarchy or a completely dominate govt and that we must find effective ways to resist corruption and insider manipulation and avoid govt taking over whole show.

So that leads me to the question I ponder always these days...how do you best guard against a parasitic class of some form taking over economy, making it moribund and maladaptive while the parasites unfairly bloat themselves on the blood of others doing all the work? We must guard against govt tyranny and private excesses both. How do we do this while also not putting too much drag on known efficiencies and innovations of private markets?

Most successful global economies seem to be mixed. China and former Soviet Union only did well when they let private markets loose. Too little controls, and economy becomes run by a few oligarchs that stifle innovation, often have lots of danger and violence, and vast majority of regular working folks are impoverished (see Banana Republics, Slave plantation, modern Russia- to a lessor extent etc.).

It seems to me moderation and mixed systems with sturdy democratic controls (checks and balances) to resist corruption or excessive concentration of power along with countries maintaining self-determination their own monetary systems via democratic controls is our best hope. US Constitution seemed a decent try at this.

From what I have seen in development of countries worldwide, a healthy middle-class that makes up the vast majority of the population, that shares in the bounty coming from the country's resources and GDP (see Norway vs. Nigeria) seems crucial to a happy, stable state that benefits everyone, rich, middle-class and poor. 

In regards to cycles always being there and nothing to do but lurch from one crash to another, I like Steven Keens ideas on how to damp down on leveraged speculation while still having private markets and traditional investing. I also like the idea of countries having control over their monetary systems, not private banker cartels, ala Ellen Brown's Web of Debt. It all always seems to come back to how we manage debt. It think we can do better.

We now have ample case history of the advantages and failings of all kinds of economic systems and the last false idea that had a grip on us, the Greenspan Great Moderation and private markets will self-police risk has also had its intellectual bubble burst. Also, to the twisted Keynesians, we know private and sovereign debt matters, at least eventually, so stop.

But we can't even think about innovative economic and monetary systems based on hundreds years of modern learning and a newly, extremely-entwined global economy until we get out of the mode that the problems are just all one thing or the other. Thanks GW for helping to get us past that.

Sun, 05/02/2010 - 10:20 | 327743 RockyRacoon
RockyRacoon's picture

I've copied and pasted Washington's post into an email format.  Whenever I get a contrarian (partisan) view of the current goings-on I intend to fire out the email in response.  The source is properly attributed in the email -- Washington's Blog and Zero Hedge.   I will use this email bullet until a better substitute comes along.  If the recipients of the email want to follow up and do a little due diligence of their own, fine.  If not, fine.  I am done with busting my butt to "wake up" the rest of the couch potatoes.  I'll take care of me and mine, and share what I can with the fine folks on ZH as the occasion arises.

Sun, 05/02/2010 - 10:18 | 327741 Hulk
Hulk's picture

Agree completely GW. As a federal whistleblower myself, I see the fraud and corruption on a daily basis. Within 25 ft of where I sit, there was $852k of taxpayer money not showing up for work. Within 25 ft!

This would have went on forever had I not reported it. Lets face it, so called public employees are just another arm of the welfare system...the only difference being a nice fat pension when these no shows finally retire.

Sun, 05/02/2010 - 10:40 | 327753 moneymutt
moneymutt's picture

do tell more, if you can...what systems are failing that this can go on? is the current whistle blower system working?

also, are some agencies known to worse than others?

Sun, 05/02/2010 - 10:55 | 327770 Hulk
Hulk's picture

Moneymutt, there is just no accountability in the system and no one gives a shit. Its not their hard earned money they are wasting.

No one is paying attention. I was in the private sector for 20 years and can understand that AWOL federal workers is a most difficult concept to understand. Afterall, this problem is nonexistent in the private sector. For more on this problem read Tom Coburn's report

http://coburn.senate.gov/public/index.cfm?FuseAction=LatestNews.PressReleases&ContentRecord_id=e6e7a865-802a-23ad-4e5f-3dd73af8c6c2

I am being retaliated against and have retained an attorney. The attorney was stunned that fed workers do  not show up to work too. He told me he can't wait to get this before a jury, the jury will be outraged to hear this, especially at this point in time...

 

Sun, 05/02/2010 - 21:52 | 328515 trav7777
trav7777's picture

I'm not surprised at all.  My first experience with this was when I went to FCC HQ to file a rate tariff for a long distance reseller.  I went to the office that the tariff should be filed in and there were people in there.  I stood there as the affirmative action hires ignored me.  Eventually, I said excuse me, I need to file this tariff.  "Oh, we don't work here."

Basically my reponse was well then what the fuck are you doing in THIS office instead of your own?  They were all hanging out and bullshitting with each other.

This is why I have IMMENSE difficulty accepting the credibility of the grand conspiracy theories.  The government is LOADED with incompetent slackers at all levels.  They have hiring quotas to demonstrate diversity as well as promotions quotas to meet to continue to show it in all levels of the organization.  One of these AA hires can infest and then destroy an entire branch just like how Flight 11 took out support columns, transferring the load to other members.  Eventually, the structure collapses.

I have been a contractor on tons of gov't projects.  The reason for this is because the government is a JOBS PROGRAM for AA hires, exmils, the connected, and those who couldn't cut it in the private sector, consequently, they have absolutely NO competency to DO anything.  They must outsource ALL capability-related work.

Mon, 05/03/2010 - 22:50 | 330118 Hulk
Hulk's picture

Absolutely, the incompetence is stunning to behold.....I seriously don't even know how a quarter of the folks I work with even find their way to work...

Sun, 05/02/2010 - 15:40 | 328084 JW n FL
JW n FL's picture

Thank You Hulk!!! for the read!

 

Plus a million + 1,000,000

Sun, 05/02/2010 - 15:59 | 328114 Hulk
Hulk's picture

You are welcome. And now you know why I picked the hulk, because when I am actively dealing with these parasites, I stay angry for days/weeks/months on end.

 

 

Mon, 05/03/2010 - 16:55 | 329676 JW n FL
JW n FL's picture

I think some days I should be Hulk number 2... I stay pissed off about all of this...

 

My biggest beef is the Lobby... the lobby dollars that move the beltway gang, the lobby dollars that are stolen from you and I... out of the tax trough, that all the AAA Rated Corps feed at... that are used against us all...

 

The Banks are using profits to pay for their Lobby? not the 0% Fed Window?

http://www.wired.com/threatlevel/2009/08/bank-lobbyists/


**** "In the first three months of 2009, the financial sector spent $104.7 million to lobby Congress and the administration, down 8% from the same period last year" ****

http://online.wsj.com/article/SB124640640747376775.html

So that I am clear... 2008 was a vintage year for Banks? they made soooooooooooooooooooooo much money on 2008 that in the first 3 months of 2009... they could drop $104.7 MILLION DOLLARS?

http://en.wikipedia.org/wiki/Emergency_Economic_Stabilization_Act_of_2008

 

See if you can get the numbers to work? the way I see it... we all got, and continue to be screwed...

Sun, 05/02/2010 - 11:28 | 327805 moneymutt
moneymutt's picture

thanks, hopefully people are becoming more vigilant and cases like yours will change things.

Being in construction, I have worked extensively with folks from FHWA and the local DOT, while I drool over their benefits compared to mine, I have always found them to be reasonably professional, hard-working, repsonsive, and while they have shared many personal, confidential things with me, they do not seem to have no-show workers. They certainly are always at office during office hours and seem to produce an appropriate amount of work. So I'm curious how wide spread the problem is.

Locally here in MN, the TV crews followed the pot hole filling crews, St. Paul city workers and found many were spending more than half their day on breaks..the difference between private and public employees used to be far less...20-30 years ago private employees working for big corps often had cushy, kinda bureaucratic jobs and had better wages than public employees and nearly as good as benefits (good pensions, full medical, good vaction/sick time etc.) but those days are gone in private industry. Meanwhile Public employees wages are higher than private, they work less hours and their benefits, in the form of guaranteed pension their whole life, a private employee would have to have millions in their 401 k to get that.

I remember when I was a kid talking to an African guy, I think he was from Kenya, and he told me the best paying jobs were in the govt. I thought to my self at the time, that's not the case in US (I'm old), and that is a sign the govt is parasiting. Now US has fallen into the same trap, private econ not providing as much opportunity, not many middle class jobs anymore and govt more bloated, only source of middle class jobs, private middle class jobs all being out-sourced globally.

Are the workers claiming they were tele-commuting?

Sun, 05/02/2010 - 14:39 | 328009 sgt_doom
sgt_doom's picture

Oh, wow, moneymutt, you are sooooo well-informed!

NOT...just kidding your farce-face!  Ever hear about something known as "privatization"?  Been going on for over thirty frigging years! 

Nope?  Didn't think so, fart breath!

Your teabagging "bloated" govt has been privatized out the yin yang, dood!!

That means, it's the private sector who can't do anything right, dood!  That means, when an underwear bomber is allowed aboard a commercial airliner, it is because of security background checks from Xe (formerly known as Blackwater USA) and intel operations run by SAIC, Mantech International, Raytheon, et al.

Wages have been plummeting and depressed by offshoring, importation of foreign scab workers, increasing refugee programs (and allowing in more foreign scab workers under visa loopholes like Charlie Rangel put in the Singapore Accords for his corp. paymaster buds), etc., etc., etc.

Supply-side economics is about offshoring jobs to descrease local demand (wages) while increasing global demand, ad nauseum.

All jobs being outsourced globally, not simply middle class jobs, everything from $8.00 per hour jobs to $50 per hour jobs.

Mon, 05/03/2010 - 17:24 | 329731 JW n FL
JW n FL's picture

sgt_doom,

                The quality of life in this Country has fallen off since the 1950's (http://oregonstate.edu/instruct/anth484/minwage.html ) we are number 13 in the world for quality of life (http://en.wikipedia.org/wiki/Quality-of-life_index)...

 

Is a difference between privatization and corporations feeding at the tax trough... http://www.sourcewatch.org/index.php?title=Privatization

http://www.corporations.org/privatization.html

http://www.tcf.org/list.asp?type=NC&pubid=962

http://www.progressivestates.org/node/22923

 

Introduction to the Living Wage Calculator http://www.livingwage.geog.psu.edu/

 

Tax breaks for outsourcing? Corporations can save money by sending Jobs out of America? Corporations can save tax dollars by sending jobs out of the Country? The United States Government collects less in taxes because of the Jobs being moved offshore... and to make up for the lost tax revenue the United States Government gives more tax breaks for moving the jobs off shore? http://techpolicy.typepad.com/tpp/2004/03/tax_breaks_for_.html

"President Obama, in his first address to the Congress hinted at curbing outsourcing market by removing the tax break enjoyed by companies off shoring work" http://ezinearticles.com/?Tax-Break-Removed---How-Does-That-Have-Any-Impact-on-Outsourcing?&id=2044505

So why would a company want to pay extra taxes? that sounds like un-sound business practice to me...

Any way... Privatization is a HUGE failure... yes... and tax breaks, plus reduced labor costs which add up to less tax revenue for the Country?! just don't make sense to me... The Lobby monies that pushed this legislation into place damn sure add up though... Gotta LOVE! that Corporate Lobby! Tax cuts for them, less expensive labor and then less Tax revenue for the people all in one grab bag of shit...

 

Fuck the ignorant American public... ya'll get what you deserve every time you vote!

 

Mon, 05/03/2010 - 15:17 | 329487 moneymutt
moneymutt's picture

Sgt Doom hey dood - are you a govt employee, did I hit a nerve? have you seen any other of my posts around here?, even my comments on this very topic ..I'm sooo not a teabagger...ask Econophile...but its to my great amusement I got called that. Only think that teabaggers and my views have in common are with those tea folks that are anti-wall street and anti-The Fed, although I also agree debts are bad.

I agree with many of your points actually, I think that often privatization of govt agency functions often leaves us with worse services, worse pay for average workers, and more profit for some speculator...just look at studies that have tracked what has happened with some water districts, prisons etc, have been privatized. The idea behind it is sound, that things might be run more efficiently than an agency, but usually its just as inefficient, but in a different way (workers are low paid and highly sucrutunzed but services go way down while profits to some rich guy goes up). I think privatization if often
"piratization"

Didn't I even mention that only middle class jobs are govt jobs and it's not just that govt jobs have gotten so much better but private sector has also gotten so much worse?

I do think we are being parasited by a captured govt that works on behalf certain insider money/business interests - the best overview of this "both govt and businesses are the problem" and solution is democratic govt controls regained are presented in a first hand account by Catherine Fitts - that I think you'd really like this story if you have not seen it already http://dunwalke.com/

 

That said, there is no reason why govt workers shouldn't be held accountable and shouldn't have salaries reflect general market, why should tax payers over pay for goods or services?...even if I paid same amount for taxes, I would prefer if what we are overpaying for fed workers instead go to vet benefits, building infra-structure like high speed rail, paying down debt, whatvever.... why squander it and not hold people accounatable? You might make an argument govt could pay a bit more the market as a general good for laborer's salaries, but surely the workers should have to show up for such well-paid work.

In fact, I want govt agencies, cops, police firemen,teachers, public works to be highly accountable and professional or there will be even more push for piratization.

Yes, I agree, our economy has been trashed by global wage competition and we could have protected workers better... but paying Fed employees to do nothing does not fix that and paying govt workers way more than rest of taxpayers is not right.

 

Sun, 05/02/2010 - 11:45 | 327826 Hulk
Hulk's picture

Are the workers claiming they were tele-commuting?

Of course! But their coworkers who carried the load disputed that. When this was looked at, it was obvious they had no productive output. Management was highly embarassed that they had no idea their charges were not showing up to work

Their salaries ranged from $120k to $150k

Now keep in mind that these AWOLs were within 25 ft of me. I am aware of many other no shows and did report those, but that was not investigated...

Sun, 05/02/2010 - 11:55 | 327847 moneymutt
moneymutt's picture

wow, just not something I have seen with my interactions with govt employees and seems really brazen...

so management has absolutely no controls! are they in on it or just incomps?

I hope you get some money (beyond just any restitution due to actual harm to you) so it will encourage others to whistle blow to.

Sun, 05/02/2010 - 12:28 | 327862 Hulk
Hulk's picture

I think you probably have a better work ethic in Mn than we do in the large urban areas/cities. Add to that these folks have been in the government their entire careers and do not know how to work.

Management is incompetent. Minimum management salary is $160k and ranges up to $250k. One of the managers was a no show for years herself.

I am taking them to the woodshed on this one moneymutt. Internal Audit told me that management stated that this was the most painful experience they had ever went through.(took about a year)Wait until I get them before a jury.

I will also be taking this to MSM. I want this as public as hell.....This outrageous behaviour has got to be exposed..

 BTW, federal government whistleblowing is the best way to ruin your life and I highly recommend it...

Mon, 05/03/2010 - 14:38 | 329421 moneymutt
moneymutt's picture

yes I hear you about whistle blowing...no matter what the finanical reward might be on other end living thru that stress and hostile environment can't be great...I'm sure working a decent job, doing solid work and getting along with your co-workers who are doing same is a much perferable scenario...

by the way, what do you have to do to have a $120-$150k job with Fed govt...sign me up, with those benefits and that salary, I'll show everyday with bells on, and I'm manager, engineer with 25 experience, salary alone beats the heck out of my gig...

Sun, 05/02/2010 - 11:23 | 327798 Madcow
Madcow's picture

Same problem in Greece.  Same problem all around the globe.

People are now wise to the fact that "taxes" = "theft, extortion, bribery" by the parasite class.

Dilbert on steroids, and armed with guns and an ability to imprison those who refuse to pay up.

 

 

Sun, 05/02/2010 - 11:53 | 327796 Madcow
Madcow's picture

 

 

 

Sun, 05/02/2010 - 10:14 | 327735 wyosteven
wyosteven's picture

GW the problem isn't regulation (or lack of), it's principle.

In the USA it's okay to lie, cheat and steal as long as you are rich, political, or in business.

You want to fix this mess?  Deregulate.  Protect nobody and enforce the law.

 

Let the pussies on fraud street, the liars on main street, and the thugs in government (like the Bush family of f**kheads, Federal selfpReserve monopoly, etc) eat their crow and enjoy prison.

 

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