Wednesday, March 25, 2009
Haven’t taxpayers already lost the class war?
by Larry Geller
The news (the real news, if you know what I mean) is sometimes very depressing. Take this morning’s Democracy Now (which you can catch at 10 p.m. on channel 56 on Oahu or anytime on their website. Here’s a snippet from the middle of the first segment. It’s illustrative of how our taxpayer money is being used by Obama’s advisors, the very people who brought us to today’s economic meltdown, to perpetuate their ability to continue shaking us down:
AMY GOODMAN: Matt Taibbi, our guest, contributing editor to Rolling Stone Magazine, latest article, “The Big Takeover.” I’m Amy Goodman, as we continue on this piece, where Matt Taibbi says, “The global economic crisis isn’t about money—it’s about power. How Wall Street insiders are using the bailout to stage a revolution.” What do you mean?
MATT TAIBBI: Well, you know, one of the things that happened when this whole mess exploded is that the financial community basically said to the government, “Look, we’re the only people who understand this stuff. You have to let us kind of work this out.” And so, the bailout was really just a conversation between Wall Street and a few very connected ex-Wall Street figures, like Hank Paulson and Timothy Geithner, and a lot of this was sort of done in secret, because the bailout facilities in the Federal Reserve are—you can’t audit—Congress is not allowed to audit any of these programs. So it’s really sort of—the bailout is just a giant dictatorially administered program by the Federal Reserve and partially by the Treasury, and it’s all done by ex-Wall Street people and current Wall Street people, and, you know, the ordinary people really don’t have any input into any of this.
And a great example of how Wall Street has actually risen in influence is this new program that Timothy Geithner introduced the other day, which is really just state-subsidized hedge fund profiteering. They’re actually—the government is actually going to be lending a trillion dollars to hedge funds so that they can invest in these securities, and they’re going to basically guarantee that they can’t really lose any money in these investments. It’s sort of a, you know, “heads, I win; tails, the taxpayer loses” situation. And, you know, it’s a really bad situation for ordinary people.
AMY GOODMAN: Is this about restoring Wall Street to the way it was? I mean, you say, “Wall Street insiders are using the bailout to stage a revolution.” Are they succeeding?
MATT TAIBBI: I just think we’re entering into unprecedented territory. Because of the way the bailout was engineered, we’ve essentially created a giant holding company, with the government as senior management. We now own controlling stakes in an enormous variety of companies, a dying insurance giant in AIG. We’ve absorbed all these toxic instruments, so we’re now the world’s largest hedge fund and the world’s riskiest hedge fund. We’ve bought part of auto finance companies and credit card companies.
And so, we’ve created this enormous—an enormously complex holding company, and the only people who really understand how to administer that company are these Wall Street insiders and the ex-Wall Street insiders who are now in the administration. And because the rest of us don’t really understand this stuff, you know, they’ve essentially increased their political power, because they’ve created a political system that’s too complex for ordinary people to understand. [Democracy Now, AIG and the Big Takeover: Matt Taibbi on “How Wall Street Insiders Are Using the Bailout to Stage a Revolution”, 3/25/2004]
Elsewhere in the segment is the connection of most of the bailout to Goldman Sachs.
Scary, huh? And it’s not too clear what ordinary people can do about it. In Europe they are in the streets (not that your newspaper will tell you about this). What solution can we find to turn our economy around?