The Remains of the Day: Rhodes MemorialThe global financial system was teetering on the edge of collapse when President Bush and his economics team huddled in the Roosevelt Room of the White House for a briefing that, in the words of one participant, "scared the hell out of everybody."
It was Sept. 18. Lehman Brothers had just gone belly-up, overwhelmed by toxic mortgages. Bank of America had swallowed Merrill Lynch in a hastily arranged sale. Two days earlier, Mr. Bush had agreed to pump $85 billion into the failing insurance giant American International Group.
The president listened as Ben S. Bernanke, chairman of the Federal Reserve, laid out the latest terrifying news: The credit markets, gripped by panic, had frozen overnight, and banks were refusing to lend money.
Then his Treasury secretary, Henry M. Paulson Jr., told him that to stave off disaster, he would have to sign off on the biggest government bailout in history.
Mr. Bush, according to several people in the room, paused for a single, stunned moment to take it all in.
"How," he wondered aloud, "did we get here?"
Eight years after arriving in Washington vowing to spread the dream of homeownership, Mr. Bush is leaving office, as he himself said recently, "faced with the prospect of a global meltdown" with roots in the housing sector he so ardently championed.The New York Times |
White House Philosophy Stoked Mortgage BonfireSuch writing I cannot resist. It suggests the apocalyptic, promising all manner of catastrophe and calamity — perhaps even Armageddon. There's great injustice here. Good. It feeds my sense of
moral indignation.¹
Who is this Hannah Arendt? What is she speaking about?²
Bring her to me.Needless to say, the
White House did not appreciate the
Times's well-researched,
sympathetic overview of George W. Bush's ineptitude, published as part of a series of articles entitled
The Reckoning.
Their discomfort probably had something to do with the
Office of Federal Housing Enterprise Oversight's December 2003
Report of the Special Examination of Freddie Mac, the subsequent January 2004
Subcommittee on Capital Markets hearing, and the later shooting of the messenger, OFHEO chief
Amando Falcon.
Bloomberg now tells us:
"A 13 percent drop in the median resale price was the most since records began in 1968 and was likely the largest since the 1930s, the National Association of Realtors said." ... "The figures were worse than economists had forecast and signal that the battered housing market that led the economy into a recession may be taking another lurch down."
Mind you, back in 2003 Americans were otherwise occupied and had little time to indulge rational or factual truths. I wrote at the time:
"Robert Jensen and Sam Husseini were out of the blocks at CounterPunch before anybody, running a scorching piece of satire, New Bush Tape Raises Fears of Attacks, within hours of Dubya's return. They've since been followed by a more serious look at America's freewheeling Jamie Oliver by Dave Lindorff. In Bush's Baghdad Pitstop, he revisits war zones trodden by former U.S. presidents, notably Johnson and Nixon in Vietnam, and raises the possibility:"...this latest presidential war-zone junket will someday be seen as a precursor not of victory, but of increased bloodshed, a wider war, and quite possibly, of another humiliating defeat for American forces."
Military defeat was an unpopular truth four years ago. Today, it is accepted with equanimity. U.S. forces have been humiliated and their
commander-in-chief has been dutifully pelted with shoes. On the same day, I compared Bush to Mugabe:
Now that Western media monopolies have successfully airbrushed Bush's crimes (his rape of the U.S. economy and illegal invasions and occupations of Afghanistan and Iraq), he is free to consolidate his beachhead on the Middle-Eastern mainland and his hold on the U.S. political system. As Democrats squabble over who should oppose the GOP death's head late next year, his political axmen are ridding the corridors of political power of all opposition, ensconcing themselves in the belly of a beast displaying a rapacious appetite for excess, deception and deceit.
Mugabe, promising retirement and a retreat from mainstream politics, is steaming ahead with plans to expel white farmers from Zimbabwe, crush his opposition and entrench Zanu-PF's position for decades to come. When the smoke and mirrors are removed, politics becomes a simple exercise in clawing one's way to the top and staying there.
Bush and Bob have much in common.
Little, bar the battlefield of choice, has changed — as Amando Falcon warned, and today's mainstream messengers are decidedly more blunt.
Miguel Fernandez Ordonez, Governor of the Bank of Spain warned Sunday of total economic meltdown.
"This is the worst financial crisis since the Great Depression" he said.
We're hearing that a lot. I call my fascination with it "the visceral realisation of an emerging factual truth" to which most persist in turning a blind eye and, to ensure their continued ignorance, a deaf ear. The Associated Press tells us it's
business as usual on Wall Street.
"Banks that are getting taxpayer bailouts awarded their top executives nearly $1.6 billion in salaries, bonuses, and other benefits last year, an Associated Press analysis reveals." ... "Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found."
This in the face of a recent
57-page report on business insolvencies worldwide released by Paris-based
Euler Hermes, the world's largest credit insurer. After a 47 percent increase in U.S. bankruptcies during 2008 — including, worryingly, many household names, the report looks forward to 2009 and concludes:
"Credit to households and businesses has hardened, presaging a growing number of bankruptcies among US companies, with an increase of 50%, potentially to some 60,000 cases, a level last seen in 1993."
The news is bad. 2009 promises to bring worse. Is there a way out of this? Yes. Last month, I posted a detailed comment on a recently published book, Ellen Brown's
The Web of Debt. Here it is again and, should we not effect meaningful systemic change globally, we'll (again) be unable to resort to
"But we didn't know."³
¹
Phillip Hansen Hannah Arendt — Politics, History and Citizenship Stanford University Press 1993 pp90—116²
Alexander García Düttmann Making Poverty Visible — Three Theses Parrhessia Issue 4 2007 pp1—10³
Stanley Hauerwas Dietrich Bonhoeffer on Truth and Politics The Center of Theological Inquiry Reflections Vol 6 2002"Secretary Paulson, out in the real economy, the unbridled pursuit of greed that you and your friends on Wall Street have celebrated as a national religion has taken a terrible toll on ordinary Americans. Jobs with stagnant real wages have now given way to massive lay-offs, home foreclosures and real suffering."Leo Gerard (USW) |
Letter to Treasury Secretary Henry Paulson October 28, 2008The shifting of the political "site of struggle" from the
bloodied sands of Mesopotamia to Wall Street was accompanied by a growing realization that the global economic crisis is far graver and more complex than many of us care to admit — but the solution far simpler.
However, economic illiteracy obscures both the problem and its solution.
If you read one book over the next year, choose
The Web of Debt. Should you find yourself changing one or two misperceptions, you'll find
Ellen Brown's skilfully researched reportage from the front lines of the global economy changing your view of economics radically and unequivocally.
The nut of it? We've fallen lock, stock, and barrel for one of the simplest, oldest, most dangerous, and frequently-practiced con tricks of all time.
Put simply, a private elite is charged with issuing money — created out of nothing — to the public and private sectors, for which it charges interest (not issued). The result is a dog-eat-dog world in which income disparity, scarcity, and the absolute concentration of wealth are inevitable. Bailouts of the uber-wealthy banking fraternity are not new and a derivatives collapse, worth several hundred trillion dollars and against which there is no insurance, looms.
In short, if you think the past few months have been rough ... When it comes to money, regulating
a private sector given carte blanche to legally create its own wealth at the expense of others ain't gonna cut the mustard.
The scam is as blunt as it is craven.
Rigging, fixing, and manipulation are entrenched, pandemic, pervasive and
legal — infecting
every part of the system. Share and gold prices will never again behave rationally.
Not for nothing is the current
contrived charade posing as an economy derided as a Ponzi scheme. Yet, because we fail to question or do anything about it, it's hidden in plain sight. We are living in a cocoon of self-delusion and that's something for which we cannot blame the banks, the government, the economists, or the stockbrokers.
They have not deceived us. We have built our castles in the air and, a long time ago, decided to take up permanent residence. They're merely collecting the rent. We have conned ourselves and sought refuge in denial.
It's time to wake up and move beyond
calls for Roosevelt-style New Deals to systemic change. Will Obama go the distance? It's not his call. It's up to the American people and central bankers worldwide to salvage a fundamentally sound infrastructure from the terminal folly of fiscal fools.
The author of
Forbidden Medicine,
Brown's remarkable work — unashamedly draws on the likes of
Von Mises,
Hayek,
Rothbard, and
LaRouche†, runs to 500 pages but, covering every rejoinder she might encounter to proposed solutions, it is current, immediately relevant, and reads as easily as a novel.
There is a way out of this mess — and it does not include
cooperatives and credit unions, which do not address
the interest problem; but it demands economic literacy (which this book provides in great measure), a willingness to take on the most powerful vested interests in the world, and the fortitude needed to endure changing to an equitable, sustainable system.
The good news? As it stands, and epitomized by the private Federal Reserve, much of the dysfunction tacked to the present system has been around less than a century — the
1913 Federal Reserve Act formed a tipping point. It forms a mere blip on the history of economics. Its solution, wholly American and capitalist — refining age-old European economic practices, was
the norm in saner times.
Better still, it worked (you can blame the Brits and the gargoyles of Wall Street — watering away the wealth of taxpayers, for its disastrous demise).
It's time to
spread the wealth.
† On making a couple of references to the controversial Lyndon LaRouche (an undoubtedly brilliant but morally repugnant man),
Brown comments:
"On LaRouche, I'm neither a supporter nor a detractor; I'm just a researcher, reporting what I read that seems interesting and worth repeating, and his researchers have some of the most interesting material available on the subject, as you acknowledge."
To her credit, Brown's rigorous and all-inclusive research shows neither fear nor favor. She eschews embellishment and partiality. Our practice of economics, underpinning our daily reality, is far stranger and infinitely more terrifying than any fiction.
Note: If anyone can point to comprehensive reviews by recognized economists criticizing or highlighting technical or substantive shortfalls in
The Web of Debt, please send me the links. I doubt there will be many. It'd take a sage or a fool to argue the veracity of the fundamentals espoused by this most necessary antidote to the malignant tumor destroying our global economy.
"And perhaps the most important, there's been — the Fed in 1989 created what is called the Plunge Protection Team, which is the Federal Reserve, big major banks, representatives of the New York Stock Exchange and the other exchanges, and there — they have been meeting informally so far, and they have kind of an informal agreement among major banks to come in and start to buy stock if there appears to be a problem."Clinton economic advisor George Stephanopoulos [September 17, 2001]No matter the size of the lie, a factual truth will always surmount it. Somehow, though, I've a feeling we'll have to go through a full-blown Depression before we come to accept it.
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