Tag Archives: Wall Street

Matt Taibbi explains why the government is an executive committee of the rich

Now Taibbi doesn’t put it exactly that way, but there is no other conclusion that can be drawn from his fabulously clear explanations and analyses of the global economic meltdown in a trilogy of articles for Rolling Stone.

In “Wall Street’s Naked Swindle” (in the latest Rolling Stone #1089), Taibbi describes how investment banks cannibalized their own kind (Bear Stearns and Lehman Brothers) via a counterfeit stock scheme (e.g., naked short-selling). (Taibbi gives a video lesson on short-selling here.)

Taibbi clearly illustrates that “the American capital markets are a crime in progress,” and that “our economy is so completely fucked, the rich are running out of things to steal.” Thus why they are turning on themselves.

He sums things up this way:

The nation’s largest financial players are able to write the rules for own their [sic] businesses and brazenly steal billions under the noses of regulators, and nothing is done about it. A thing so fundamental to civilized society as the integrity of a stock, or a mortgage note, or even a U.S. Treasury bond, can no longer be protected, not even in crisis, and a crime as vulgar and conspicuous as counerfeiting can take place on a systemic level for years without being stopped, even after it begins to affect the modern-day equvialents of the Rockefellers and the Carnegies. What 10 years ago was a cheap stock-fraud scheme for second-rate grifters in Brooklyn has become a major profit center for Wall Street. Our burglar class now rules the national economy. And no one is trying to stop them.

Well, the government is not only not trying to stop them, Taibbi’s own article describes how the U.S. Treasury Department, staffed by ex-Goldman Sachs executives, facilitates the fleecing of the rest of us. Why is this happening…because the U.S. government is an executive committee of the rich.

See Taibbi’s other RS articles on the economy:

The Big Takeover—The global economic crisis isn’t about money – it’s about power. How Wall Street insiders are using the bailout to stage a revolution (RS 1075, March 19, 2009)

Inside The Great American Bubble Machine—Matt Taibbi on how Goldman Sachs has engineered every major market manipulation since the Great Depression (RS July 2, 2009)

Banks “frankly own the place” (Congress that is)

Visit msnbc.com for Breaking News, World News, and News about the Economy

Glenn Greenwald reports,

Sen. Dick Durbin, on a local Chicago radio station this week, blurted out an obvious truth about Congress that, despite being blindingly obvious, is rarely spoken: “And the banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place.” The blunt acknowledgment that the same banks that caused the financial crisis “own” the U.S. Congress — according to one of that institution’s most powerful members — demonstrates just how extreme this institutional corruption is.

Greenwald’s piece for Salon (and republished at Global Research), clearly illustrates how the US government functions as an executive committee of the rich when it comes to handling the economic crisis.

Greenwald points to the revolving door from Congress to K Street lobbyists; how Goldman Sachs has a lock on US Treasury jobs and is funding Congressional banking committee members like Evan Byah; and just happens to post a $1.8 billion profit, just coincidentally of course.

And why isn’t there more outrage? Greenwald thinks its because of what Matt Taibbi calls the “peasant mentality” of Americans:

After all, the reason the winger crowd can’t find a way to be coherently angry right now is because this country has no healthy avenues for genuine populist outrage. It never has. The setup always goes the other way: when the excesses of business interests and their political proteges in Washington leave the regular guy broke and screwed, the response is always for the lower and middle classes to split down the middle and find reasons to get pissed off not at their greedy bosses but at each other. That’s why even people like [Glenn] Beck’s audience, who I’d wager are mostly lower-income people, can’t imagine themselves protesting against the Wall Street barons who in actuality are the ones who fucked them over. . . .

Actual rich people can’t ever be the target. It’s a classic peasant mentality: going into fits of groveling and bowing whenever the master’s carriage rides by, then fuming against the Turks in Crimea or the Jews in the Pale or whoever after spending fifteen hard hours in the fields. You know you’re a peasant when you worship the very people who are right now, this minute, conning you and taking your shit. Whatever the master does, you’re on board. When you get frisky, he sticks a big cross in the middle of your village, and you spend the rest of your life praying to it with big googly eyes. Or he puts out newspapers full of innuendo about this or that faraway group and you immediately salute and rush off to join the hate squad. A good peasant is loyal, simpleminded, and full of misdirected anger. And that’s what we’ve got now, a lot of misdirected anger searching around for a non-target to mis-punish . . . can’t be mad at AIG, can’t be mad at Citi or Goldman Sachs. The real villains have to be the anti-AIG protesters! After all, those people earned those bonuses! If ever there was a textbook case of peasant thinking, it’s struggling middle-class Americans burned up in defense of taxpayer-funded bonuses to millionaires. It’s really weird stuff.

Greenwald concludes,

That Congress is fully owned and controlled by a tiny sliver of narrow, oligarchical, deeply corrupted interests is simultaneously so obvious yet so demonized … that even Durbin’s explicit admission will be largely ignored. Even that extreme of a confession … hardly causes a ripple.

We need to start making ripples and waves…

Rouge Forum Update—Bailouts and the “anti-war” movement

Dear Friends,

For those teaching or learning about the current depression, here are some more good sources:

Lewis Corey’s outstanding 1934 book, Decline of American Capitalism, is online free;
How Goldman Sachs was at the Center of the Oil Trading Fiasco that Bankrupted SemGroup;
The auto crisis, likely leading to the bankruptcy of GM (and the end of retiree health benefits, etc.) but this is also an indicator of the power of finance capital over industrial capital and the shift to the corporate state as US society decays;
Stiglitz on State Capitalism as Robbing Workers;
Updated interview with John Bellamy Foster;
Bello’s Primer on the Economic Meltdown;
The Economist on the Huge Fraud Beneath the Fiscal Crisis: Missing the Deeper Fraud; Exploited Labor
Five Million Jobs Lost So Far This Depression

Current Developments:

Centinela CalfiorniaTeachers Wildcat Strike;
Al Sharpton and the Ruling Class;
Labor Bosses Forge Unity Committee: The plum here is the dues from 3.5 million education workers, members of the National Education Association who will quickly learn that they are funding yet another layer of enemies.

Criticism of “Progressive” Warmongers:

The term “progressive” may have no meaning anymore. If it is Move.on, that means slavish support for the demagogue, Obama. If it is United For Peace and Justice, it means the same thing in shifty terms. UFPJ’s recent Wall Street demos, deliberately set up to counter demands from rank and filers to demonstrate on the anniversary of the war, failed completely. This is nothing to gloat about even though we said, years ago, that following UFPJ would do just this. Still, it is tragic.

Less than 10,000 people demonstrated, down from the one million who hit the streets six years ago. But numbers are not everything. UFPJ trumped that by teaching people nothing at all important about why things are as they are, what to do in order to develop grand strategy (peace, justice, equality, freedom, etc.) or strategy (how to understand specific local circumstances and to seek out choke points where people can use powerful direct action moves) and tactics (particular actions that link these three elements).

Why would that be? Because UFPJ is run by remnants of the Communist Party USA, people who have never sought to build a mass class conscious movement and who have always fought those who try. The current Rouge Forum News has a very fine article by Tom Suber about the wreckage that UFPJ leadership is creating.

Let us be clear. The core issue of our time is accelerating color coded inequality met by the potential of organized mass class conscious resistance. Neither the CP nor UFPJ want any part of that.
Here is a sampling of UFPJ’s failures:

The task at hand is ours. The $10.9 trillion dollars the corporate state just printed for the banks and insurance companies is going to come from the lives and labor of someone. Either it will come from the ruin of hundreds of thousand of poor and working people, or, if we fight back, it can come from the rich. Let them suffer and pay, as they should. The degree of the pain will be determined by the levels of our real resistance in schools, in communities, at work places, and in the military. When they say Cut Back; We should say Fight Back.

This is a critique from Antiwar.com: Progressive Warmongers.

We note with sadness the death of a friend, Janet Jagan.

Thanks to Joe and Charles B., Steve and all the sharp eyes who caught the misspelled word in the last update (argh), Adam, Gina, Greg and Katie, Wayne, Sandra, Colin, Josh and M, Suber (s), the Sally’s, Penny and Rick, Doug and Connie, Betty, Joe C, Susan O and H, Ginny H, Jim S, Ricky C., Chris, Carol Panetta, Sharon A, David, Donnie A, the Breedloves, and the entire RF Steering Committee and folks working on the upcoming conference. http://www.rougeforumconference.org/

All the best and good luck to us, every one.

The big lie that “progressives” tell themselves about Obama

This issue is been bugging me since the US presidential campaign heated up, oh two years ago.

Why is it that so-called “left-liberals” (including venerable liberal publcations like The Nation) think that Obama and his policies are progressive?

Is it that the notion of progressivism has lost all meaning; has become detached from progressive liberalism of the early 20th century that focused on issues of social justice and social democracy? I think so.

The vague, meaningless slogans of Obama the campaign (“Change” and “Hope”) offered no indication of the actual substance of how societal (or governmental) conditions might be improved. The lack of substance in the campaign allowed, no, encouraged people to project their own meanings onto Obama’s slogans and campaign promises.

But what really amazes me is how so many left-liberals ignored or did not believe Obama meant what he said when it comes to war and Wall Street.

How do peace activists and the anti-war movement in general back Obama when he balances his promise to end the war in Iraq with a promise to intensify the war in Afghanistan? I just don’t get the logic and apparently there is none, these folks are just hoping for Obama to be something different from what he says he is.

But if you take a look at Obama’s team there is really no doubt about where he’s coming from or where he’s headed. His cabinet appointments are—as Alexander Cockburn and Jeffrey St. Clair at CounterPunch put it, “a slap in the face to Obama’s base”—ex-Harvard, pro-business, and pro-war.

Even Karl Rove praised Obama’s economic team in a Wall Street Journal column!

Here are some of the heavy hitters in the Pro-War line up: Rahm Emanuel (the only Illinois Congressman to vote Yes to the war in Iraq); Hillary (another yes vote for the Iraq war); Robert Gates (Bush’s Pentagon chief!)

The Pro-Business line up is populated by Wall Streeters and Clinton-era appointees who help create the current economic crisis: Lawrence Summers (head of the National Economic Council and Clinton’s Treasury Secretary); Treasury Secretary Timothy Geithner (Summers’ former deputy at the Clinton Treasury, who has also worked for Kissinger and Associates and as head of the NY Fed decided to bailout Bear Stearns and AIG and let Lehman Bros go bankrupt); Interior Secretary Ken Salazar has proven his loyalty to ranchers and the coal industry; Ag Secretary Tom Vilsack is a lobbyist for genetically engineered biocrops (“Monsanto pinup boy,” according to Cockburn, who “comes factory guaranteed as a will-do guy for the agro-chemical complex.”)

And perhaps most disappointingly for “progressive” (whatever that means) educators, Obama’s man at the Education Department is the former “CEO” of Chicago Public Schools (and one of Obama’s Hyde Park basketball buddies), Arne Duncan.

Duncan is an “education reformer”, which is today’s media nomenclature means he aims to reshape schools to better serve the interests of capital through privatization and militarization of public schools and the commodification of childhood. See for example Chicago’s Renaissance 2010 project.

I actually harbored some of that Obama hopefulness when Linda Darling-Hammond was advising O’s campaign on education issues and headed the his transition team on education. Darling-Hammond is a Stanford education professor, who is no political radical, but is certainly one of the most highly respected scholars in the world on issues of teacher education; school redesign; educational equity; instruction of diverse learners; and education policy.

Instead of a thoughtful, educational researcher in the ED—who understands much about what’s wrong with No Child Left Behind and has ideas about how to right federal education policy so that works in the interests of student learning—we have a tool of the Business Roundtable who offers no hope for change from Bush’s Education Secretaries Margaret Spellings and Rod Paige (who famously called the National Education Association a “terrorist organization” because it criticized NCLB.)

Over at the huffingtonpost.com, Jerry Bracey describes the “hatchet job” on Darling-Hammond that paved the way for Duncan to be appointed to the ED slot.

If you want to read about the trail of dead that Duncan leaves behind in the public schools of Chicago, check out Substance News, edited by long-time Chicago teacher and journalist George Schmidt. You can start your reading with this article:

“Duncan leaves to continue attacks on public education from Obama cabinet post as U.S. Secretary of Education”