Friday, September 26, 2008

Crime Of The Century

Thursday afternoon we first heard that there had been an agreement in principle struck by criminals and thieves masquerading as politicians in Washington to stick their greedy little fingers in your pocket and give Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke nearly a trillion dollars of your money to bail out their buddies on Wall Street.

We then later in the day heard that there had been a hastily arranged meeting in the White House with both presidential candidates invited by Bush in which John McCain had "destroyed" chances of an agreement in a desperate political stunt of an attempt to bolster his failing campaign. McCain's involvement, in the words of House Financial Services Chairman Barney Frank, was compared to "Richard Nixon blowing up the Vietnam peace talks in 1968."

Country first my ass.

McCain's stunt was not a stupid stunt. It was part of a shell game. A setup designed to con you. Designed to con you by giving top Democrats, Pelosi, Reid, et al a reason to support Bush's plans to rob you blind while looking like they are saving you from a Republican plan to kill the bailout.

Think about that for a minute. Remember who passed all the Iraq Occupation funding bills for the past two years?

Oppose Bush my ass.

They are on his side. They are part of the scam. How clear does it have to be?

Now Wall Street financial analyst and historian Dr. Michael Hudson, Distinguished Research Professor at University of Missouri, Kansas City, cuts through all the crap to say bluntly that the proposed bailout is an empire buster likely to virtually destroy an already very shaky US and global economy, and is nothing more than a pyramid scheme, a blatant Once In A Century Rip-Off intended as a last ditch effort to save, at your expense, the finally and utterly discredited neocon "philosophy" of economics and governance, and George Bush and his criminal friends. The crooks attempting to steal every last cent they can bullshit you out of before republicanism and the disastrous presidency of George W. Bush finally go down in flames and ignominy. Taking you down with them.

If there is one overriding reason to oppose this "bailout" with everything in you, it's this - it's A Once In A Century Rip-Off.

A Once In A Century Rip-Off of... you.

September 26, 2008 - Once In A Century Rip-Off
Economist Michael Hudson: the bailout is a giveaway that will cause hyperinflation and dollar collapse
Bailout talks stall as Bush meets with Congressional leaders and Presidential candidates. German Finance Minister says US will no longer be the financial Superpower. French President Sarkozy says the days when "the all powerful market is always right are over". The Real News Network spoke to economist and historian Dr. Michael Hudson who says that it's not a "bailout" but a "giveaway" and will create a new kleptocracy of billionaires.

Dr. Michael Hudson is a Wall Street financial analyst and historian. Dr. Hudson was Dennis Kucinich’s Chief Economic Advisor in the recent Democratic primary presidential campaign, and has advised the U.S., Canadian, Mexican and Latvian governments, as well as the United Nations Institute for Training and Research (UNITAR). A Distinguished Research Professor at University of Missouri, Kansas City, he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire and of Super-Imperialism and of The Myth of Aid .
The view around the world of the banking crisis and Paulson's bailout proposal appears to be much less as panicky as closer to home, if at all, and more of recognition of the realities of the situation with a general attitude of encircling and isolating a cancer to keep it localized.

Paulson Plan Throws Oil On Fire
By Hossein Askari and Noureddine Krichene
Asia Times
With the creation of the so called Mortgage and Financial Institutions Trust (MFI), the unfolding financial crisis, considered by many to be the worst in over 60 years, has become ever-more dangerous.

While such an institution has not existed in any country, the MFI could prove to be disastrous for US public finance, economic growth, the dollar, relations with major foreign holders of dollars, the global financial system, and could ignite the worst inflation in the economic history of the United States and reverse globalization to levels not seen since the Great Depression.

The initial cost of the MFI, put at US$700 billion, could easily escalate to trillions of dollars. At the same time, the Congressional Budget Office had previously projected a record fiscal deficit of US$500 billion for 2009. The MFI will further blow up the deficit to an unprecedented level, exceeding US$1.4 trillion. US debt, jumping with the takeover of Fannie Mae and Freddie Mac to 86% of GDP, has moved to an unsustainable level.

The financing of previous large fiscal deficits under the George W Bush Administration has already caused external deficits (current account) to widen to 5-7% of GDP, turned national savings negative, sent the dollar plummeting, and ignited rapid inflation, particularly in food, energy, and housing prices. Further financing of extraordinary large fiscal deficits, as required by the MFI, can only disrupt economic stability both in the US and world-wide. It will only further undermine the dollar, exacerbate widening external deficits, soaring energy and food prices, and rising unemployment.

Nonetheless, the main architects of the MFI, Messrs Henry Paulson and Ben Bernanke, Treasury Secretary and Federal Reserve chairman respectively, are determined to protect Wall Street. They have decidedly transformed the US budget and the US central bank into vehicles that only care for the welfare of Wall Street and divert public resources to bankers, under the guise of protecting the economy and averting systemic risk.

Albeit evidence of a systemic risk has not been established, vast public resources have so far been devoted to bailouts at the expense of growth-generating spending. The Fed has been pouring billions of dollars into financial institutions, buying worthless paper, and incurring huge losses. To quote Paulson "I am convinced that this bold approach [that is creation of the MFI] will cost American families far less than the alternative - a continuing series of financial-institution failures and frozen credit markets unable to fund economic expansion."

Contrary to Paulson’s claim, domestic credit is still expanding at a fast rate, at 9% per year as of July 2008, and the notion of frozen markets cannot be supported by Fed’s published monetary data. Banks have excess liquidity and are still extending loans to safe customers. Certainly they are no longer in the mood of reigniting a new speculative euphoria by lending to speculator and impaired credit.

And contrary to Paulson’s belief, the MFI will in the end cost American families more than other alternatives.


All of this cannot but impair the global financial and economic reputation of the US. Just in a matter of days the dollar has declined from $1.39 to $1.48 to the euro, oil has climbed from $90 to over $120 (at one point rising by more than $20 in one day, September 22) and gold has jumped from $750 per ounce to over $900 .

The declining value of the dollar will adversely affect the value of foreign holdings in the US. China Investment Corporation (CIC) and a number of other sovereign wealth funds are major stakeholders in US financial and non-financial sectors, as holders of US government securities, debt of Fannie Mae and Freddie Mac, and owners of manufacturing companies.

Asia and Persian Gulf oil exporters will no longer continue to trust the United States with their money. Financial trust, a needed but already a rare commodity in finance, will evaporate. Countries will withdraw from participating in the global financial system and autarchy will once again raise its ugly head. Moreover, oil exporters with large financial surpluses, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates, may cut back their oil exports. Why would they want to sell their depleting oil reserves for worthless paper?


Hossein Askari is professor of international business and international affairs at George Washington University.
Noureddine Krichene is an economist at the International Monetary Fund and a former advisor, Islamic Development Bank, Jeddah.

Read the entire article here... (it's worth it)
Listen to Marcy Kaptur, D-OH, speaking on the floor of the house this past Monday, Sept.22:

From Glenn Greenwald two days ago:
Wall Street and corporate America can't lose in Congress -- they never do -- for one very simple reason: they own Congress and the "leaders" of it. Just listen to Rep. Marcy Kaptur; she's been in Congress for 26 years and she knows how it works:
To Wall St. insiders . . . you have perpetrated the greatest financial crimes ever on this American Republic. You think you can get by with it because you are extraordinarily wealthy and are the largest contributors to both presidential and Congressional campaigns in both major parties.