Saturday, November 22, 2008

You've Been Robbed

On last night's Bill Moyers' Journal, Joe Nocera, featured financial reporter, moved right up next to using a line that I am waiting to hear. Then, instead of saying that Treasury Secretary Henry Paulson was robbing the U.S., misusing public money, he said Paulson was resigning:

...the sad part is, to me, that his actions this week have really kind of signaled that he's shutting down between now and January 20th. It's like, "I'm done. I'm out of here."

He said Paulson is acting as a banker instead of a Treasury Secretary.

He is, you're right, a big banker, an investment banker, a deal maker. She (FDIC Director Bair) has basically spent most of her life as a regulator. And one of the things that's been missing in this crisis is people who think like regulators. That's not a dirty word, you know? A good regulator can do a lot of good. A bad regulator can do a lot of bad.

And Nocera told us that Paulson is a part of the problem:

...what is the saddest part about Paulson's actions these past months is that instead of restoring confidence, it is helping destroy confidence. He can give $100 billion to Citigroup if he wants. But if the marketplace and the investment community and the clients and the customers don't have confidence in Citi, it doesn't matter. And if banks don't have confidence in each other, they won't do inter-bank lending. And if banks don't have confidence in businesses and customers, they won't lend the money.

DEBORAH AMOS: As simple as that?

JOE NOCERA: It's really, really that simple. I was in Chicago this week and just talking to a company or two about how they're dealing with the credit crisis. And it's just so clear that nobody trusts anybody to pay anything back. So, you know, cost of capital for a company that used to be three percent is now 15 percent. I mean, it's almost like 1980 again. They're trying to jawbone banks into making loans. But banks are scared. And banks don't think there's much percentage in making loans right now. And they think the money is better spent shoring up their balance sheet. So they can jawbone all they want, but it's not going to make that much difference.

DEBORAH AMOS: As we watch the bailout unfold, there's a lot of people that say it's tax money; therefore, it's my money. There's not enough transparency even though it was called for in the original bailout plan. Why not? Why don't we know?

JOE NOCERA: It is so baffling. The Treasury Department just doesn't seem interested in ferreting out this information or at least supplying this information to the American people. I think it has to do with Paulson's background, that he is an investment banker. That when you're an investment banker, you don't want anybody to know who your trading partner is. You don't want anybody to know that you're going to sell a big position because they'll front run you. And, you know, there's a whole aura of secrecy justifiably in many cases in how you trade in the marketplace.

DEBORAH AMOS: So he's thinking like an investment banker and not like a Treasury Secretary?

JOE NOCERA: Right and meanwhile, you've got a situation where, you know, AIG is sucking up government money like crazy. I mean, they're over $100 billion. They have kept coming back for more. And nobody knows where that money is going. That's taxpayer money. What institutions is AIG, AIG is using this money for collateral. (Emphasis added.)

In a time when the effects of robbing the poor to give to the rich became manifestly the failure of the entire economic structure, the occupied White House and its minions in the executive branch have used taxpayer money to shore up the investment brokers who made the crisis - more robbing the poor to give to the rich. They are in denial, and need to be stopped from more wrongheaded thievery. I do not agree with Nocera that it is a crisis of confidence, the bankers know that those bundled mortgages have no assignable value. The same bankers who thought the AAA ratings would cover for them are well aware nothing is underpinning what they are being asked to trade in.

The only machinery for removing an acting executive branch is Congress, and it has been stalled by the destruction of the constitution and of the Department of Justice that is the means of carrying out the laws.

We aren't so much in a Depression, as in an absence of constitutional government. Instead of taking the money and running, the war criminals have taken the money and stayed.

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Anonymous Anonymous said...

The best expression I've heard is "post-Constitutional era." With luck, we're past the post-Constitutional era, but since there won't be any accountability for it, through a combination of "pragmatism" from Obama precluding the appropriate payback (some might foolishly think of the notion of "justice"... as if!), and Bush likely pardoning everyone up to and including himself.

7:11 PM  
Blogger Ruth said...

The crimes are so great to the world at large, though, I think this government is taking the chance of bringing world justice down on the past regime. See al-Bashir.

8:04 AM  

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