THE PRESIDENT AND POLITICIANS WHO SUPPOSEDLY SPEAK FOR THE “LITTLE GUY” HAVE FAILED TO DELIVER WHERE IT MATTERS MOST.

by Robert Scheer
for HUSTLER Magazine – June 2010

So the Democrats lost their much-vaunted“filibuster-proof” majority in the Senate?Well, they’re probably relieved: ScottBrown’s arrival gives them another excuse notto deliver on campaign promises that upsettheir financiers from Wall Street and theFortune 500.

Seriously, the Democrats are not so muchinept or unorganized—as the frequent accusationsfrom frustrated supporters would haveit—as they are simply locked in an impossiblecontradiction: The companies that fund theirpricey TV-ad-driven political campaigns have acompletely different agenda than the actualAmericans who vote for them.

Case in point: The healthcare reform debaclethis past fall highlighted that, when it comesto any progressive legislation that would favorAmericans over corporations, the Democratsare simply unable and unwilling to deliver. Theyfear the bite of Big Business more than thebark of the vox populi. Forget filibusters; this isabout who is paying whom in a form of legitimizedbribery.

Of course, the voters get their punches in.Witness the recent creaming of the President inMassachusetts, where dispirited liberalsallowed Republican Brown to clock the Demswith a stiff right, and the tea bagger triumphantlyentered the Senate. Yet even thoughObama’s opportunistic search for win-win solutionsto our healthcare concerns and our largereconomic problems is leading to a lose-loseoutcome for the President and the country, he isonly digging himself deeper into the “triangulation”hole that Bill Clinton so doggedly pursued.

The two issues that mattered in 2010’s specialelections thus far were the latest “joblessrecovery” and Obama’s plea to save healthcarereform, even though the latter didn’t includeanything really meaningful, such as a publicoption or a major expansion of Medicare.

It is significant that it was the voters ofMassachusetts who have now derailed the Democrats’efforts to revamp the country’s healthcaresystem, for these voters know the subjectwell. The federal proposal is based on theirown state’s model requiring people to obtainhealth insurance without the state doing anythingto effectively control costs through an alternativeto the private insurance corporations.

Lacking a public option, the cost of healthcarein Massachusetts, already the highest inthe nation at the time of the plan’s implementation,has spiraled upward. Services have beencurtailed, and many, particularly younger people,feel they are being forced to sacrifice to payfor a system that doesn’t work.

That the Democrats now blame Massachusettsvoters for spoiling their lock on Congress—even though they hadn’t been able todo much with it—is thus ironic. They sold outthe voters to the healthcare profiteers, whichmakes our healthcare three times as expensiveas any other country with a developed economy.

Too strong a statement? Consider: Last yeara New York Times/CBS poll found 72% ofAmericans “supported a government-administeredinsurance plan—something like Medicarefor those under 65—that would competefor customers with private insurers.” Yet theparty that supposedly speaks for the “little guy”couldn’t even pass such a plan despite wieldingmajorities larger than the Republicans held foreight years of Bush misrule. Hell, even half ofthose identified as Republican said they wouldback such a public plan, as would three out offour independents!

This is similar to how, despite a massiveoutcry, the Democrats have stalled on deliveringany meaningful financial reform more thana year since the megabanks’ gambling drove usinto a severe recession. One out of six Americansis now unemployed or underemployed, yetthe President is only now calling for Congressionalaction to pump up the job market, as henoted in his 2010 State of the Union Address.

Unfortunately, in this speech, Obama alsodoubled down on his pandering, this time to illinformed“deficit hawks” by proposing a federalspending freeze. Never mind that such afreeze would exempt the national security budgets,which have by far the most fat to trim andsuck up the majority of our tax revenue. Thereal problem with this cynical move is that it isterrible economic policy at a time when somany Americans are hurting.

In fact, the President should be pushing inthe opposite direction: a second major stimuluspackage. The first one helped, especially bypreventing a total meltdown for the middleclass, but as economics brainiacs like PaulKrugman and Robert Reich noted at the time, itwas not large enough.

“The best and fastest way for government toprime the [economy’s] pump is to help statesand locales, which are now doing the opposite,”wrote former Labor Secretary Reich afterObama’s disappointing State of the UnionAddress. “They’re laying off teachers, policeofficers, social workers, healthcare workers andmany more who provide vital public services.”

Funny thing, though: Obama is not thatbeholden to all those middle-class workers andthe small-shop owners they support, despitethe storyline that places them at the heart of themodern Democratic Party. He faces biggerbosses on Wall Street and K Street, and untiltheir stranglehold on D.C. is weakened, it ishard to see when the Democrats can functionas a true party of “hope” and “change.”

Before serving 30 years as a columnist for the Los Angeles Times, Robert Scheer spent the late 1960s as Vietnam correspondent, managing editor and editor in chief of Ramparts magazine. Now editor of TruthDig.com, Scheer has written such hard-hitting books as The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America and his latest, The Great American Stick-Up: Greedy Bankers and the Politicians Who Love Them.

——————————————

Before serving 30 years as a columnist for the Los Angeles Times, Robert Scheer spent the late 1960s as Vietnam correspondent, managing editor and editor in chief of Ramparts magazine. Now editor of TruthDig.com, Scheer has written such hard-hitting books as The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America and his latest, The Great American Stick-Up: Greedy Bankers and the Politicians Who Love Them.

Buy this issue – $15.00.
Comes with full length DVD and free shipping!

Buy the digital issue for immediate download – $8.99.

WHERE WAS THE BLUE-COLLAR COMMUNITY ORGANIZER WHEN TIMOTHY GEITHNER TOLD HIM TO TRUST THE BANKS?

by Robert Scheer
for HUSTLER Magazines – May 2010

What’s up with Barack Obama? I thought this guy had some tough, everyday smarts and, having witnessed life a bit on the mean streets of Chicago, would stand up to the Wall Street big shots who’ve made life so miserable for the little people back in the blue collar communities he once tried to organize. Instead, he got bamboozled by the banking bandits big time and may have fatally sunk his own legacy in the process.

Sure, the President inherited the banking mess rather than helping to create it. That distinction goes to his Republican predecessor George the Second, who fiddled while the financial markets burned. And while the fires raged through the mortgage market, destroying the savings of 15 million families whose homes were suddenly “under water” and in danger of foreclosure, it was Bush who decided to save the bankers and not those they had swindled.

Yet it was Obama who decided to blindly follow Bush’s example and turned to the Democrat toadies of Wall Street who had cooperated in that scam to be his point men on the economy.

One was Timothy Geithner, who was picked by Obama to replace Henry Paulson as Treasury secretary in the obvious but erroneous belief that more of the same— mindlessly throwing money at Wall Street—was the way to go.

Indeed, Geithner was, from jump street, even more enthusiastic than his Republican predecessor in doing just that: In June 2008, while president of the New York Federal Reserve branch, he shocked even Paulson and other GOP bankers in a crisis meeting by proposing they ask “Congress to give the President broad power to guarantee all the debt in the banking system,” according to two participants cited by a New York Times report. Incurring what could be many trillions of dollars in bad debt was too rich for even that crowd. Later, though, in the White House, Geithner was able to maneuver Obama aggressively down that road. The fantasy was that if the banks, who had sunk themselves with high-risk behavior, were made more liquid with government welfare, they, in turn, would bail out beleaguered homeowners.

Of course they did nothing of the sort, as the 15 million families whose homes are under water—real value now falling below the mortgage value—and subject to foreclosure could tell you.

The smoking gun here, the incident that tells you all you need to know about what went wrong with the Geithner plan to help homeowners by bribing the banks, was reported by Joe Nocera in the New York Times back on October 25, 2008, a few weeks before Obama’s victory. An intrepid reporter covering Wall Street, Nocera managed to get in on a conference call of heavyweights at JPMorgan Chase, a bank that was given $25 billion by Bush that it apparently didn’t even need.

“Twenty-five billion dollars is obviously going to help the folks who are struggling more than Chase,” one of the top bankers on the call said, according to the Times, gloating over the fact that his bank was not in as much trouble as some of the others. But JPMorgan Chase was going to take the money and run—not in the direction of helping families stay in their homes but in locking up profits in other distressed banking properties. “What we do think it will help us do is perhaps be a little more active on the acquisition side or opportunistic side for some banks who are still struggling,” the aforementioned banker added.

That strategy, the same as the one employed by Goldman Sachs and the others who got more money from the Feds than they needed, paid off super-big. By the end of Obama’s first year in office the banks reported an all-time record of $145 billion in payouts to their top executives. JPMorgan Chase garnered $11.7 billion but didn’t put it into lowering the terms for distressed homeowners.

As the guy on the call had correctly predicted in what was supposed to be a secret conference call 14 months earlier, “We would think that loan volume will continue to go down as we continue to tighten credit.”

The dismal results of the misplaced trust the United States put in these banks have been reflected in Obama’s falling poll numbers as homeowners, the unemployed and stressed small businesses feel the pain of that tight credit market. Folks have turned against the President who had promised so earnestly to represent the little guy but who sold out so totally to Wall Street.

Before serving 30 years as a columnist for the Los Angeles Times, Robert Scheer spent the late 1960s as Vietnam correspondent, managing editor and editor in chief of Ramparts magazine. Now editor of TruthDig.com, Scheer has written such hard-hitting books as The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America and his latest, The Great American Stick-Up: Greedy Bankers and the Politicians Who Love Them.

—————————————————

MAY 2010 – HUSTLER Magazine


Buy this issue – $15.00.
Comes with full length DVD and free shipping!

Buy the digital issue for immediate download – $8.99.
Includes 4 movie clips in the issue!

A LAWMAKER DEMANDS AN AUDIT OF THE FEDERAL RESERVE BANK, BUT OBAMA AND HIS BRAIN TRUST REFUSE TO MAKE THE FINANCIAL INDUSTRY “NERVOUS.”

by Robert Scheer
From HUSTLER MAGAZINE March 2010

You don’t have to salute every time Ron Paul raises the libertarian flag, and personally I don’t like leaving education, health and Social Security to the tender mercies of the inevitably rapacious capitalist markets. But the Republican congressman from Texas is on target with his bill demanding a full public audit of the Federal Reserve, the government monster that has a power over the economy that many dictators would envy and operates under a cloak of secrecy that even the CIA rarely attains.

It was the Federal Reserve, under the leadership of the once exuberantly honored but now disgraced Alan Greenspan, that got us into this banking mess. The Fed looked the other way while the finaglers of Wall Street packaged and sold those mysterious Collateralized Debt Obligations and Credit Default Swaps that brought the economy to near death when they exploded with a destructive force and then were covered by trillions of taxpayer dollars.

The Federal Reserve—more than any other institution, public or private— deserves blame for shoving the world economy into the huge financial hole it now inhabits. The Fed, most definitely including the New York Federal Reserve Bank—headed for the five years prior to the Wall Street meltdown by Timothy Geithner until Obama named him Treasury secretary—miserably failed in its regulatory obligations while the bankers looted the banks. But where the libertarians and Ron Paul are wrong is to resist any meaningful regulation, and where Obama is equally wrong is his belief that we can get it from the Fed.

Despite Obama’s sorry record of enabling Wall Street greed, choosing Geithner to run the Treasury Department may be his biggest mistake. And it is not only Geithner but also every other major appointment of those who formulate economic policy—notably deferring to the Fed—that demonstrates the President’s fawning response to the financial hustlers.

Take key White House economic adviser Lawrence Summers, who during his tenure as Clinton’s Treasury secretary pushed through the deregulation of mortgages and other derivatives that made the housing collapse inevitable. After the collapse it was the Federal Reserve that orchestrated a bailout package under George W. Bush and continued under Obama to save—indeed reward— the “too big to fail bankers” whose destructive greed the Fed had promoted.

Paul is right with his legislation, which as of this writing had the support of hundreds of lawmakers but had already been gutted by Democrats on the key House Banking Committee in response to signals from the White House. Not only was the administration opposed to transparency for the Federal Reserve to check its unbridled power, but Obama also compounded the error by advocating an even larger role for the Fed in new legislation designed ostensibly to prevent another banking meltdown.

When Chris Dodd (D-Connecticut), chairman of the Senate Banking Committee, proposed to take major banking oversight power away from the Fed and put it in the hands of a new agency to regulate all federally chartered financial institutions, the Obama Administration treated it as a dangerously subversive proposal. In the words of White House economic adviser Austan Goolsbee, it would cause financial industry “nervousness.”

Isn’t that what we ordinary folk want? Shouldn’t the banking bandits with their proven record of chicanery be made just the least bit nervous when they cook up their next series of scams? Not so, in the view of Neal Wolin, Obama’s choice as deputy Treasury secretary. Despite massive evidence to the contrary,Wolin insisted that the Federal Reserve “is the agency best equipped for the task of supervising the largest, most complex firms.”

Consider the source: Wolin, as the Treasury’s top lawyer during the Clinton years, drafted the language of the infamous Gramm-Leach-Bliley Act, which allowed the merger of investment and commercial banks with insurance companies to create the toolarge- to-fail monstrosities like Citigroup, with which the taxpayers are now saddled.

Between his government stints under Clinton and now Obama, Wolin benefited from those breakthrough mergers. He served as general counsel at The Hartford insurance company, which—thanks to the deregulatory legislation Wolin had helped draft—was allowed to buy up troubled banks and qualify for federal TARP funds.

Even the conservative Washington Times voiced skepticism in an editorial on Wolin: “Revolving doors between industry and the administration and fat-cat political contributors getting bailed out at taxpayer expense sound like business as usual. This certainly isn’t change we can believe in.” Painful as it is to admit, the Right got that right.

——————————————

Before serving 30 years as a columnist for the Los Angeles Times, Robert Scheer spent the late 1960s as Vietnam correspondent, managing editor and editor in chief of Ramparts magazine. Now editor of TruthDig.com, Scheer has written such hard-hitting books as The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America and his latest, The Great American Stick-Up: Greedy Bankers and the Politicians Who Love Them.

You may purchase the hard copy of the March 2010 Issue of HUSTLER Magazine (with free shipping) at HustlerMagazine.com. Comes with full length DVD and free shipping!

You may purchase a digital copy of the March 2010 Issue of HUSTLER Magazine at UnderCoverMags.com.

WALL STREET’S MOST INFLUENTIAL CEOs HAVE OBAMA’S TREASURY SECRETARY ON SPEED DIAL, AND IT PAYS.

by Robert Scheer
from HUSTLER Magazine – January 2010

When Timothy Geithner headed the Federal Reserve Bank of New York, he was very good at mealtime, particularly with the Wall Street fat cats he was supposed to be governing. The details of his endless private dining with the likes of Sanford Weill, Robert Rubin and other big bankers responsible for the economic meltdown only came out after President Obama named him Treasury Secretary—and in response to a Freedom of Information lawsuit.

“An examination of Mr. Geithner’s five years as president of the New York Fed, an era of unbridled and ultimately disastrous risk-taking by the financial industry, shows that he forged unusually close relationships with executives of Wall Street’s giant financial institutions,” the New York Times reported. “His actions, as a regulator and later a bailout king, often aligned with the industry’s interests and desires, according to interviews with financiers, regulators and analysts and a review of Federal Reserve records.”

You would have thought that the embarrassing disclosures of how tight this guy was with the banking bandits would have led him to change his social habits—and it has: Instead of private dining encounters, he now schmoozes the bankers during incessant phone calls. Of course, we only learned this when the Wall Street Journal and other news organizations forced the information public through another FOIA lawsuit.

Under the headline “Wall Street on Geithner’s Speed Dial,” the WSJ reported that “Geithner has kept frequent contact with an exclusive group of Wall Street executives since taking the helm at Treasury, speaking most often with top officials from Goldman Sachs Group Inc., J.P. Morgan Chase Co., CitiGroup Inc. and BlackRock Inc.” And, in fact, he logged far more time talking with Lloyd Blankfein, the CEO of Sachs, than he did with Barney Frank and Chris Dodd, the two leaders of Congress to whom he was supposed to be reporting.

The bigger concern is not the frequency of Geithner’s calls, however, but which end of the call is setting the tone. Representative Brad Sherman (D-California), who has been pushing for tougher regulation of financial institutions, complained: “I don’t mind that he’s talking to Wall Street. The problem is that he appears to be listening.”

Blankfein’s Goldman Sachs bears as much responsibility for the banking meltdown as any other firm and was one of the main beneficiaries of the government’s subsequent heaving of trillions into the gullets of culpable financial institutions that had gambled themselves to the brink of bankruptcy. Remember, it was former Goldman head Robert Rubin who, as treasury secretary in the Clinton Administration, had pushed through the radical deregulation that allowed Wall Street to spin out of control. And it was another Goldman honcho, Henry Paulson, who served as treasury secretary to George W. Bush and ignored the ballooning problem, then led the government bailout that saved the very companies, like Goldman, that deserved to fail.

Thanks to Paulson, Goldman was allowed to reconstitute itself as a commercial bank and therefore became eligible for $10 billion in TARP bailout funds, as well as massive additional support from the Treasury Department and the Federal Reserve. But the daisy chain doesn’t end there.

After leaving the government, Rubin became a top leader of Citigroup, a company allowed to grow too big to fail by the deregulation he had pushed through. He made over $100 million looking the other way while Citigroup sank close to the point of oblivion. It was prevented from total collapse when Geithner, a Rubin protégé in the Treasury Department who had become New York Fed chairman thanks to Rubin’s influence—joined Paulson in bailing out Citigroup. The bank was given $45 billion outright and a federal guarantee for $300 billion of its toxic assets.

Treasury Secretary Geithner, who took office in January 2009, had frequent phone conversations with the leaders of Citigroup, which might be acceptable if he had gained some concessions on its part. Instead, Citigroup was actively lobbying against any serious efforts to rein in this and other highflying banks. Even though we taxpayers are supposed to own 34% of Citigroup, there is no evidence that this has translated into making the bank’s policies more transparent or accountable.

In contrast, Geithner did not care to hear from the executives of the auto companies that were being saved, at far lower cost, from disaster. As the Wall Street Journal reported, “Mr. Geithner appears to have had no contact with officials at General Motors Co. and just one call with a Chrysler Group LLC official.” Apparently the grittier types in Detroit don’t rate solicitous calls from Wall Street CEOs’ obedient lackey, Obama appointee Timothy Geithner.

—————————————–

Before serving 30 years as a columnist for the Los Angeles Times, Robert Scheer spent the late 1960s as Vietnam correspondent, managing editor and editor in chief of Ramparts magazine. Now editor of TruthDig.com, Scheer has written such hard-hitting books as The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America and his latest, The Great American Stick-Up: Greedy Bankers and the Politicians Who Love Them.

You may purchase the hard copy of the February 2010 Issue of HUSTLER Magazine (with free shipping) at HustlerMagazine.com. Comes with full length DVD and free shipping!

You may purchase a digital copy of the February 2010 Issue of HUSTLER Magazine at UnderCoverMags.com.

THE PRESIDENT IS TALKING THE TALK, BUT CAN HE REALLY KEEP WALL STREET IN CHECK?

by Robert Sheer
for HUSTLER MAGAZINE – JANUARY 2010

Are you kidding? Barack Obama wants Wall Street to make nice to Main Street because it’s the right thing to do? Yeah, that’ll work. “The fact is, many of the firms that are now returning to prosperity owe a debt to the American people,” President Obama told banking heavyweights in a September 2009 address on their turf. “It is neither right nor responsible after you’ve recovered with the help of your government to shirk your obligation to the goal of wider recovery, a more stable system and a more broadly shared prosperity.”

Oh, but they will; they will. Who doubts it? The laws haven’t changed, the same passive or overmatched regulators are still on patrol, and short-term profit is still the overriding goal of every trader, stockholder and executive on watch at the even bigger and more dominant financial firms that survived the crash. Now, to be fair, Obama wants to pass some new laws and change the regulatory structure. The questions that remain, of course, are how sincere is he, and what can he get passed through Congress in the face of a blizzard of cash flying down from Wall Street to K Street?

“The reforms I’ve laid out will pass, and these changes will become law,” said Obama, talking tough to the polite-yet-unenthusiastic zillionaires assembled at the historic Federal Hall— the same crew that recklessly destroyed the world economy and then cheerfully let the U.S. government rescue them. “I want everybody here to hear my words: We will not go back to the days of reckless behavior and unchecked excess that was at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses.”

“I can’t tell you how many young people have come up to me in these years and said, ‘I went to Wall Street because of that movie,’” echoed Stone, now making a sequel. Obama, however, is consistent in forever trying to seize the high ground. Thus, he entered the den of wolves to try out moral suasion in a place that has no use for anything but the pursuit of profit. Giving him the benefit of the doubt, he must be agenda-setting rather than hoping the assembled CEOs would rise out of their seats, shaking, to have evangelical conversions—since any American with a bank account, mortgage or credit card already knows from bitter experience how these corporations will screw them at every turn if they are not constantly vigilant.

In fact, the myth of corporate self-regulation is the key to understanding how we got here. Since President Clinton, Congress has been systematically erasing the post-Great Depression financial services laws, like the Glass-Steagall Act, that for seven decades successfully protected American capitalism from its worst excesses. However, after the stunning collapse of several of the world’s biggest banks, and the subsequent unprecedented bailout of these greed centers by the American taxpayer, Obama and Congress have no choice but to save face by passing some kind of financial reforms.

The day of his speech, an Associated Press poll showed that “seven out of ten Americans lack confidence the federal government has taken safeguards to prevent another financial industry meltdown.” Public opinion demands something be done; the devil, of course, will be in the details.

One devilish detail is enforcement. Passing regulatory laws only works if somebody makes sure they are followed. Before the collapse, the few regulators actually sounding alarm bells—such as Brooksley Born—were crushed by more politically powerful players like Democratic Party darling Robert Rubin. Others, from the Federal Reserve to the Securities and Exchange Commission, simply did not do their job, whether out of fear, incompetence, ideological blinkers or corruption.

“Senior regulators who stood idly by for years as financial firms built their houses of cards have been rewarded with even bigger jobs or are jockeying for increased responsibilities,” wrote veteran New York Times finance reporter and former stockbroker Gretchen Morgenson in a September 13, 2009, column. “Those in the public sector ask us to believe that regulators who snoozed during the credit bubble will be alert to emerging problems on their beats when the next mania begins. That’s asking a lot, isn’t it?”

Indeed, it is. Yet denial of the depth of the problems this crushing economic debacle has exposed is fueled by gushing pipelines of cash that run straight from New York City to Washington, D.C. Until we can reclaim our democracy from the legal corruption of corporate campaign donations, it is unlikely that any systematic reforms can succeed.

———————————-

The HUSTLER January 2010 Issue  can be purchased with free shipping at HustlerMagazine.com. 

Before serving 30 years as a columnist for the Los Angeles Times, Robert Scheer spent the late 1960s as Vietnam correspondent, managing editor and editor in chief of Ramparts magazine. Now editor of TruthDig.com, Scheer has written such hard-hitting books as The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America and his latest, The Great American Stick-Up: Greedy Bankers and the Politicians Who Love Them.

by Robert Sheer

It is the great and terrible irony of capitalism that if left unfettered, it inexorably engineers its own demise, either through revolution or economic collapse. The guardians of capitalism’s survival are thus not the smug free-marketers and brainy libertarians who, in defiance of the pragmatic Adam Smith himself, want to chop away at all government restraints on corporate actions, but rather liberals who seek to harness its awesome power while keeping its workings palatable to a civilized and progressive society.

Unfortunately, we seem to have misplaced all our liberals. See, whether it was child labor in dark coal mines, the buying and selling of human beings to pick cotton, or the unfathomable devastation of the Great Depression, the brutal creativity of the pure profit motive has always posed a stark challenge to our belief that we are moral creatures. The modern bureaucratic governments of the developed world were built, unconsciously, as a bulwark, something big and oafish enough to, occasionally, stand up to capital, much as a referee must show the yellow card to stronger, younger athletes. Our referees right now are as honest as that NBA guy with the gambling debts.

Sure, when times are relatively good, it is predictable that the managers of our government will be seduced by the mythology of capitalism. This seduction is fueled by bribes, legal or not, as well as by an echo chamber of excitement in the larger media and society. It helps too if the worst consequences of greed can be portrayed as dusty textbook memories no longer possible in our modern whiz-bang America.

Remember the “Dow 50,000″ guy? By the 1990s, having been beat up by Ronald Reagan, the Democratic Party decided to cut its ties with its Great Regulator and party builder, Franklin Roosevelt, having soured of playing the “good cop” exemplified by that moralizing bust, Jimmy Carter. With the steep decline in the clout of manufacturing unions, it seemed natural to follow the big money dripping out of Gordon Gekko’s Italian suit pockets.

It was Bill Clinton, a good but overly ambitious man, who tapped into this new paradigm so aptly, accepting both Wall Street money and vision, compliantly teaming with a Republican Congress to knock down the fences set up by FDR to protect the banking industry from its own greed. Clinton’s reward was to receive credit—and a second term—for creating a boom economy much like that of the “Roaring ’20s,” a series of bubbles creating paper wealth for the lucky folks already blessed with real estate, inheritances and high salaries.

When the Republicans took over for eight truly horrible years of non-governance, they were only too happy to look the other way as it became increasingly clear to all with a strong stomach and a keen eye that there was deep, deep, dangerous rot in the pillars of the globalization boom so celebrated by cheerleaders like the New York Times ‘ Thomas Friedman.

To make sure nobody with real clout authorized careful scrutiny of the pyramid schemes and predatory lending and all the rest of it, the sluices were fully opened. According to the watchdog group Public Citizen, Wall Street spent $5 billion in campaign contributions and lobbying over the past decade alone.

As we now know, of course, that five bill was chump change as an investment, seeing how the federal government has put up trillions in loans and toxic asset guarantees for these wheeler-dealers. Meanwhile, back in Real America, according to the Federal Reserve’s June 2009 report, seven straight quarters of declining household wealth left us $14 trillion poorer.

But the true horror for liberals who believe the power of capitalism must be harnessed for the good of society, rather than vice versa, is that their own party has been completely co-opted by the money guys. All the Goldman Sachs and Citigroup suits who talked Clinton and Congress into deregulating derivatives are now advising Obama, leading his Treasury department and so on. It’s as if Obama had hired Dick Cheney and Don Rumsfeld to run his Iraq policy.

Voters had thought Obama got it. To be sure, he can talk a great game. “Millions of Americans who have worked hard and behaved responsibly have seen their life dreams eroded by the irresponsibility of others and by the failure of their government to provide adequate oversight,” he said. “Our entire economy has been undermined by that failure.”

Yet as the ever-prescient Ralph Nader put it in a recent column, “One would think that his 88-page reform proposal to Congress would be up to his words. Instead he provides Washington aspirins for Wall Street brain cancer.”

As former Labor Secretary Robert Reich writes, “The [Obama reform] plan doesn’t stop bankers from making huge, risky bets with other people’s money. … Nor does the plan do anything to prevent banks from becoming too big to fail. It doesn’t hint at a return to the days before the late 1990s when commercial banks were separate entities from investment banks— before mammoth bank supermarkets like Citigroup came to be so tied up with so many other commercial and investment vehicles that they couldn’t be allowed to go under. And there’s not the slightest mention of antitrust law.”
The reality is our government will protect us from the extremes of capitalism only if we demand it does. Those watching the store don’t have our interests in mind, no matter how charming or well-spoken they may be.

by Robert Sheer

AMERICA’S UNREGULATED BANKING SYSTEM ROBS THE POOR TO GIVE TO THE RICH.

Some will rob you with a six-gun, and some with a fountain pen.” That image from “The Ballad of Pretty Boy Floyd” is out of date these days, since bankers and other thieves who foreclosed on the bereaved widow’s home in Woody Guthrie’s old folk song don’t use fountain pens anymore. Instead, they rely on computerized transactions, online solicitations, international money swaps and all sorts of other secret shenanigans that leave the robbed consumers blindly unaware of who actually assaulted them.

First, a bank hustles them into deceptively low-cost introductory loans, which are then sold in a Ponzi scheme of speculation. When the homeowner’s interest rate inevitably balloons, it’s some other bank the consumer never heard of that lowers the foreclosure ax.

The other thing Guthrie’s tune missed is that only a fool of a stickup man would use a gun, because the criminal penalties are super-high and the loot paltry by comparison. Not so the money to be ripped off from home mortgage foreclosures and credit card hustles— and those robberies are not even classified as punishable crimes.

Sure, loansharking is a crime—a hoodlum loans you money at an exorbitant interest and then busts your kneecaps when you can’t pay up—but that’s because ordinary thugs don’t have a license to steal; banks do. And any time the government makes the slightest move in the direction of cracking down on the banks or stockbrokers who operate these officially sanctioned swindles, their lobbyists go to town and win. Individual states once had reasonable caps on interest rates and sound lending practice standards, but all of that got swept away by a federal government that the financial giants own.

Don’t believe for a minute that the long election campaign we just suffered through is going to change any of this. Lending-industry bandits lavishly bankroll both major political parties, and neither is about to punish them for their excesses. Quite the opposite: The only serious regulation of the financial world was wisely enacted in the 1930s during the Great Depression to prevent another meltdown and was repealed with solid bipartisan support during the Clinton Presidency. The banks bought that legislation with more than $300 million in lobbying costs, thus reversing the 60-year-old ban on mergers between banks, insurance companies and stockbrokers.

The first major beneficiary of the new deregulation legislation was Citigroup, which had been attempting an illegal merger with the Travelers Group insurance company. Once the banking giant got the law changed, the merger went through, and Robert Rubin, Clinton’s Secretary of the Treasury, then resigned to head up—yes, you guessed right—Citigroup.

These guys have no shame. Before he went into the government, Rubin made hundreds of millions running Goldman Sachs, which played the mortgage market for all it was worth before sticking others with the cost. Henry Paulson, Rubin’s predecessor at Goldman Sachs, also occupied that position of Secretary of the Treasury, in George W. Bush’s administration. See how nonpartisan these con artists are?

You might be thinking, What, me worry? —that is, if you don’t happen to be one of the tens of millions stuck in foreclosure on their interest-only adjustable mortgage loan or bearing the burden of credit card debt, suckered in by low introductory rates that later expand astronomically. But it will also cost you big-time even if you never took out a lousy loan. That’s because the taxpayers— yeah, you—are left holding the bag, buying out the banks and bailing out their top executives so that they can continue the hustle.

These are the thieves that Scripture warned us against. One of the clearest moral injunctions of the Bible is that usury—which is what these guys routinely practice—is a sin. As is stated in Ezekiel 22:12: “…thou hast taken usury and increase, and thou hast greedily gained of thy neighbors by extortion, and hast forgotten me, saith the Lord God.”

Funny how Christian moralizers pilfer from the Bible to find quotes that confirm their repressive views, but manage to miss anything in that same hallowed tome which smacks of social justice. But according to Ezekiel 22:12, the Lord God will not be as forgiving of our bankers as the politicians who constantly invoke His name.

——————————————
Before serving 30 years as a columnist for the Los Angeles Times, Robert Scheer spent the late 1960s as Vietnam correspondent, managing editor and editor in chief of Ramparts magazine. Now editor of TruthDig.com, Scheer has written such hard-hitting books as Thinking Tuna Fish, Playing President: My Close Encounters With Nixon, Carter, Bush I, Reagan and Clinton—And How They Did Not Prepare Me for George W. Bush and his latest, The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America.

by Robert Scheer

DON’T BE FOOLED: THIS ADMIRAL’S SON BELIEVES WARS AND GOVERNMENTS ARE BETTER WHEN BIGGER.

There are two John McCains. One is the rebellious moderate who claims to oppose torture and wasteful military spending, who argues we should shut down the Guantanamo Bay detention facility. The other—the dominant and really, really dangerous one—thinks it would be fine if we spent “100 years in Iraq,” as long as we have enough “boots on the ground.”

That latter McCain, the son and grandson of admirals, never met a problem he didn’t think the U.S. government and its military power couldn’t solve.

If you elect him President, make him commander in chief and put him at the seat of power, which of the two McCains do you think you’ll get?

Another four years of expensive bloodshed, according to Matt Welch, author of McCain: The Myth of a Maverick. The libertarian journalist, whose book offers an insightful examination of the “Arizona senator’s largely unexamined philosophy about the proper role of the U.S. government,” credits Bush’s decision to end his Presidency with a significant expansion of troop levels in Iraq as pure McCain.

“Like almost every past McCain crusade,” Welch wrote in Reason magazine, “the [troop] surge involved an increase in the power of the federal government, particularly in the executive branch. Like many of his reform measures— identifying weapons pork, eliminating Congressional airport perks, even banning torture— the escalation had as much to do with appearances (in this case, the appearance of continuing to project U.S. military strength rather than accept ‘defeat’) as it did with reality. And like the reputation-making actions of his heroes—including his father, his grandfather and his political idol, Teddy Roosevelt—the new Iraq strategy required yet another expansion of American military power to address what is, at least in part, a nonmilitary problem.”

In fact, while McCain has savaged the current President in thinly veiled critiques of his handling of Iraq—and further nurturing the senator’s “maverick” image—he is even more enamored than Dubya with the dual neoconservative theorems that war is a solver of problems and that being the President of the United States is an invitation to become planet Earth’s neo-imperial ruler as well.

Of course, McCain wants that rule to be somewhat benevolent. For example, he doesn’t envision a hypothetical century in Iraq to be senselessly bloody or rude. It should all be in line with supporting democracy, prosperity, etc. Don’t call it an occupation! As long as we are not losing any of our “most precious asset… American blood,” he believes Americans will go along with enforcing a Pax Americana.

Never mind that after seven years of such an approach it should be clear that empire doesn’t come without death, terrorism, the discrediting of democracy and any number of other terrible costs we should be informed of before the bill comes due. McCain campaign wonks like to talk about the terrible “consequences of failure,” but what about the consequences of “success”?

Was betting on the creation of a U.S.-friendly democracy worth the over 4,000 American and hundreds of thousands of Iraqi lives that have already been lost? How about bringing home a generation of mentally and physically wounded combat veterans? And what about the hundreds of billions of dollars we are spending on the war, or the soaring price of gasoline here at home? Aren’t cheap resources supposed to be the reward for building an empire?

McCain optimistically says we “will win the war in Iraq and win it fairly soon,” but in any case he makes it clear no cost in lives or treasure is too dear to do so. If he’s said it once, he’s said it a thousand times:We need “more boots on the ground,” as many as we can spare.

Once all those “boots” finally stamp out all this Iraqi mischief, a few tens of thousands of them should—in McCain’s vision—remain posted there for ten or more decades to ensure that Iraq stays in our orbit as a loyal satellite. And if the Iraqis end up prosperous and vaguely democratic along the way, why should they begrudge us a few mega-bases shimmering outside town in the desert heat, as well as some sweetheart deals with Western oil corporations?

“No American argues against our military presence in Korea or Japan or Germany or Kuwait or other places, or Turkey, because America is not receiving casualties,” McCain declared at Rice University at the end of February 2008. “I think, generally speaking, we have a more secure world thanks to American presence, particularly in Asia, by the way, as we see the rising influence of China.”

In other words, what McCain supports— and it is one of the few political opinions he hasn’t flipped and flopped about—is a never-ending expansion of America’s military role in the world. This November you’ll get to decide if you agree. 

——————————————
Before serving 30 years as a columnist for the Los Angeles Times, Robert Scheer spent the late 1960s as Vietnam correspondent, managing editor and editor in chief of Ramparts magazine. Now editor of TruthDig.com, Scheer has written such hard-hitting books as Thinking Tuna Fish, Playing President: My Close Encounters With Nixon, Carter, Bush I, Reagan and Clinton—And How They Did Not Prepare Me for George W. Bush and his latest, The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America.

WHAT JOHN Q. PUBLIC SHOULD KNOW ABOUT THE FISCAL FANTASIES OF REPUBLICANS.

Hey, sucker! Yeah, you—the so-called average male, the guy those pollsters tell us favors the Republicans because you want to end “wasteful” government spending. Wake the hell up, buddy!

(Now, if you aren’t one of those foolish enough to want more of what George W. Bush has given us—the most bloated federal government ever—pass this on to someone who needs to read it. Thanks.)

Sorry, but it ticks me off that so many people I run into—mostly guys—still believe this crap about how “liberals” rip off our tax dollars. The reality is it’s not the folks who collect Social Security and Medicare checks who benefit from government charity. These people paid for their so-called
entitlements.

No, when it comes to the “discretionary” federal budget items that can be controlled, the big pigs at the trough are the military and corporate war profiteers—what President Eisenhower termed “the military-industrial complex.”

They gobble up more than half the slop. Without missing a beat, they saw the “War on Terror” as
a perfect replacement for the now-defunct Cold War, a way to keep a wartime economy running for another 50 years.

After a terrorist attack that used no weapon more sophisticated than a $2 box cutter, the current administration and a GOP-led Congress lavished the profiteers with a plethora of contracts to build futuristic and astoundingly expensive weapons systems—at least 72 of them in all. Never mind that
they are designed to fight a superpower enemy that does not exist.

For example, while al Qaeda sits in the desert with not even a dinghy to its name, we are now committed to spending $85 billion for a new Virginia Class submarine fleet. That is hardly relevant in a war against cave dwellers. But hey, those subs’ll look good in the recruitment commercials, and that means more Appalachian boys to walk those deadly beats in Baghdad.

According to official statistics of the Government Accountability Office, since 2000 the Department of Defense (DOD) has roughly doubled its planned investment in new systems from $790 billion to $1.6 trillion in 2007. Compare that to the $4 billion allotted to provide medical insurance to uninsured children, funds that George Bush vetoed as wasteful.

We’re like a man in a midlife crisis who decides to spend his children’s college money on a Ferrari. Only we spend it on things like the troubled Joint Strike Fighter plane that Lockheed Martin is building for a projected $240 billion.

Do you hear any of those right-wing talkshow jocks mention that if we decided to stick with our reliable old subs and jets—of which we have more than the rest of the world combined— we could give every American child full health coverage for decades and have hundreds of billions left over? No, you won’t hear that, but you can’t scan the AM dial without encountering some blowhard raging about how the government wastes money providing emergency room care to illegal immigrants or complaining about high taxes.

This is the ultimate in misdirection. Whatever you think about such “bleeding heart” social programs, you need to remember the total expenditure on such programs is chump change dwarfed by what the Feds are spending on useless war toys. In fact, John Q. Public has been brainwashed into believing
the lie that liberal programs are a significant part of our budget—and deficits—ever since the so-called Reagan Revolution.

Despite slashing social programs for the poor, President Reagan ran up the biggest debt this nation has ever incurred, bigger than the combined total of all his predecessors in the White House. He threw trillions in tax breaks and federal contracts at corporations that hardly needed a handout, especially those in the defense industry.

The end of the Cold War threatened this river of money. How could we justify spending trillions building weapons designed to defeat an enemy that no longer existed? Under the first President Bush and Bill Clinton some modest steps were taken to cut the most outrageous pork-barrel weapons systems.

Then came the 2001 attack by a score of well-prepared and highly coordinated men armed with…razor blades? Suddenly, illogically, insanely—yet predictably—all those massive Cold War projects were revived from their crypts.

It might come as a shock to some, given his pro-military spending rhetoric in the current Presidential campaign, that John McCain was one of the few Republicans to challenge the absurdity of military spending after the fall of the Berlin Wall. That was then, however. Now he has to appeal to the yahoos in what’s called the GOP “base.”

In other words, McCain has to pretend to be ignorant. But you don’t…and now you’re not!

by Robert Scheer

It was January 2008, with the Presidential race going full-bore, when we again learned why maverick candidates like progressive Representative Dennis Kucinich (D-Ohio) are so systematically marginalized by the ruling elites: They tend to point out when the emperor’s thong is showing. Without such truth-tellers crashing the party, frontrunners control public discussion more by what they don’t talk about than what they do.

So it was that the top Democrats were especially crafty in cutting Kucinich out of the crucial South Carolina debate, where they lamely attempted to deal with the dire consequences of the great banking meltdown of ’07 without confronting the banks themselves. This is like discussing steroids in baseball without confronting the sport’s players, managers or owners.

Sure, the candidates made all the proper concerned noises about millions of folks losing their retirement savings and homes, but none was willing to say what Kucinich would have: Bankers are crooks who will steal from the public unless the government holds them accountable.

How do I know Kucinich would have said that? Because I interviewed him for the Los Angeles Times back when he was mayor of Cleveland. Others can talk a populist line, but Kucinich has lived it. After he refused to sell the publicly owned municipal electric company, the banks put his debt-strapped city into default.
Kucinich was forced out of office, but ten years later, voters realized that their former mayor had been right. Thanks to his refusal to sacrifice Municipal Light in 1978, Clevelanders had low-cost electricity, and Kucinich was elected to the state legislature and then to Congress as his reward.

Kucinich, however, was going against the national tide. From Reagan on, deregulation became the mantra covering corporate theft in both Republican and Democratic administrations. It was disappointingly amazing that not one of Hillary Clinton’s questioners at the South Carolina debate asked about her husband’s signing of the Gramm-Leach-Bliley Act of 1999. This piece of legislation permitted banks, stockbrokers and insurance companies to merge, overturning one of the major regulatory achievements of the New Deal.
People forget lessons learned. The great wisdom that President Franklin Delano Roosevelt successfully dispensed in leading America out of the Great Depression was that boom-and-bust robber baron capitalism needed to be saved from itself. It required moderation and regulation of its potential excesses in order to provide both productivity and stability.

Just such excesses are now at the root of the financial chaos we have visited upon ourselves and the world in recent months. As with the Enron scandal—a direct result of bipartisan-supported deregulation of the energy industry—the sub-prime mortgage and easy-credit scandals now upon us are the natural product of government-allowed insanity. For decades, banking lobbyists have pushed through legislation freeing financial institutions to wreak havoc on our lives while they profit from lucrative personal bailouts regardless of a company’s overall well-being.

Even as the economy was crashing toward recession last winter, Wall Street was handing out $39 billion in bonuses. And when it came time for Washington to begin frantically “stimulating” the failing economy—what journalist Barbara Ehrenreich calls “clitoral economics”—President Bush proposed handing out cash tax rebates only to families that make more than $40,000 a year.  “This may qualify as an example of what [leading cultural critic] Naomi Klein calls ‘disaster capitalism,’ in which any misfortune can be rejiggered to the advantage of the affluent,” wrote Barbara Ehrenreich, author of the best-selling Nickel and Dimed, a devastating exposé of how damnably hard life is for the working class in America.  These folks, as well as the struggling middle class, both suffer enormously at the hands of predatory lenders of all types. Meanwhile, the Republican and Democratic parties refuse to place any serious restraints on the interest charged by banks. They apparently think it is perfectly normal, indeed healthy, for the economy that folks are given home loans or credit cards at unrealistic interest rates calculated to soar after an introductory phase. (This, while cynically rejiggering bankruptcy laws to heavily favor imploding banks over devastated individuals.)

What a sorry scene to have the top Democratic contenders unable to agree that some interest rates below 30% may rise to the level of usury. For those unfamiliar with the moral crime of usury, believing it’s only a legal crime if loan sharks threaten your knee caps, let me quote from Ezekiel 22:12 of the King James Bible: “[T]hou hast taken usury and increase, and thou hast greedily gained of thy neighbors by extortion, and hast forgotten me, saith the Lord God.”

Not being overly familiar with Scripture, I am grateful to Dennis Kucinich, a product of a stern Catholic upbringing, for having informed me, more than a quarter of a century ago, that it is the bankers—and the politicians who service them—who are courting the wrath of God…even if they fool the voters.