Volatility

October 30, 2009

Bailout War

Filed under: Disaster Capitalism, Global War On Terror — Tags: , — Russ @ 11:01 am
As we enter year two of Bailout America and reach the end of year two of the official bank-created recession, and as we continue further and deeper into the decades-long quagmire of financialization and the devastation of the real economy, we should look to the state of what’s supposed to be our democracy as well, since it has been just as degraded as our wages, just as hollowed out as our manufacturing, just as fictitious as our “growth”.
Last fall the Bush administration tried to seize the ultimate disaster opportunity when it sought to steamroll Congress into passing a three-page authorization which would have made Henry Paulson a veritable dictator. They threatened a complete meltdown, that by Monday “there might not be an economy” unless Congress stampeded. The “leadership” was suitably terrified, which reinforced their normal corporatism and cowardice. They did all they could to deliver the “emergency” war powers Bush and Paulson sought. (That’s exactly how the inception of the bailouts should be seen, as an internal economic war authorization, and very similar to the Enabling Act demanded and obtained by Hitler in 1933.)
 
By some miracle the House at first listened to the fierce wisdom of the people who immediately saw this for the coup d’etat it was. But the miracle was ephemeral. The coup plotters added a few pages and toned down a few provisions. They added some limits and oversight authority. Meanwhile the corporate media kept up a drumbeat similar to the SA troopers outside the Reichstag shouting in unison, “We want the Enabling Act or there’ll be hell to pay!”, while an astroturf telephone and e-mail campaign laid seige to the holdouts. “We want the Bailout or there’ll be hell to pay!” It was a classic top-down/bottom-up vise.
 
Congress caved and Bailout America was officially established. The result wasn’t perfect from the looters’ point of view. They’d had to compromise on those limits, deadlines, oversight.
 
But one year in Obama and Geithner are trying to finish the job. They’ve proposed, as part of the general package of phony reforms being bandied about, that Treasury war authorization be made permanent, that there no longer be independent oversight, and that there be no limits on time frames or funds conveyed to the Too Big To Fail rackets. When Congressman Brad Sherman, wanting to avert this “TARP on steroids”, asked Geithner if he could accept a $1 trillion limit on his discretion, Geithner flatly said No. He’s demanding complete bailout dictator power.
 
(All this comes as another TBTF corpse, GMAC, staggers up to the trough for the third time. It’s been a year since the crisis hit and two bailouts already for GMAC, a dog so decrepit and diseased that its own daddy, Cerberus, won’t put money into it. Yet in all this time not only has the administration done nothing to unwind and dismantle it, or any other TBTF entity, but every policy has sought to make them bigger, more unsustainable, to further concentrate them, further entrench them.)
 
You put all this together and it’s clear that this administration, beyond even the normal standard of corrupt government, is nothing but the hired thug arm of the bank rackets. This is the one and only priority. Bush was always rightly pegged as a childish warmonger who wanted to let big corporations loot the country. Obama was rightly questioned for running a vacuous campaign based on nothing but charisma and vaporous rhetoric. What would be the basis of an Obama presidency, and how would it represent Change from Bush?
 
Now we see that Obama represents not change from but the refinement of Bush corporatism. The core of his policy is delivering the country to the Wall Street racketeers as a mine and a playground. The pretext is the crisis, the vehicle is the bailout. Every other policy flows from this.
 
So the overthrow of democracy and institutionalization of looting remains the same, but it’s more focused, better organized. It has more of a sense of permanency.
 
Just as the Global War on Terror is intended to now be permanent (Gates and others consistently refer to the “Long War” and “our wars”), so the Bailout War will now be permanent. The GWOT represents the institutionalization of military Keynesianism (that is, the state as dedicated corporatist buyer to the military-industrial complex), the security- and prison-industrial complexes, and rising authoritarianism, fostered by the power of these complexes as well as by MSM propaganda. The astroturf teabaggers will supplement with street terror from below, if necessary.
 
Similarly, the Bailout War institutionalizes the government as primarily a loot conveyor to the finance sector (and, using Wall St as conduit, to other sectors and to the GWOT), while here authoritarianism takes the form of releasing the government’s fiscal powers from any democratic accountability. This will dovetail with the Fed’s existing anti-democratic unaccountability in its monetary policy, to remove the government from all taxpayer oversight and accountability.
 
Put the bailouts and the Global War on Terror together, see them being used to pursue the policy of resource fascism, and you have a complete precis of what this power structure intends to do in the coming decades of Peak Oil energy descent. It’ll be serfdom for an increasing majority, the looting of our wealth, labor, and blood, and the creeping totalitarianism which won’t be creeping much longer.
 
We’ll have come full circle to the original taxation without representation. After over 230 years we’ve come back to ground zero. American history must end here or start anew.
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October 29, 2009

Peak Oil and Health Care Reform

Filed under: Health Racket Bailout, Peak Oil — Russ @ 3:47 am

 

Political junkies, policy wonks, and the mainstream media, as well as a few people who actually care about the results, have been capitvated by this year’s health care reform show.
 
The sorry story can be summed up as follows. After having campaigned on Change and the promise of real health care reform, Obama and the Democratic leadership instead sought to hijack the concept of reform and use it for the benefit of the insurance and drug rackets by herding together a conscript market of forced consumers through an individual mandate. The money for all this would supposedly come from government subsidies, to the point that the bill’s real purpose is clearly another racket bailout, via the mechanism of junk mandated “insurance” which won’t really expand coverage or cut down on costs, but will expand racket balance sheets.
 
The only real reform solution, single-payer Medicare for All, was politically achievable but ideologically odious to Obama. Instead the administration played a bait-and-switch game with the public option. This was meant to divert progressives away from single-payer long enough for that idea to die completely.
 
As soon as this was accomplished the whole political and media crew then tried to backpedal from the public option as well. They alternately tried to gut it with triggers or neuter the concept through exchanges or co-ops or just disparage it completely.
 
Only fierce opposition from the grassroots and the blogosphere kept the concept in play at all, to the point that now something called a “public option” is looking likely to appear in the final bill.
 
But this too is going to be a phony PO. It’s just been gutted in other ways – participation pool, rate negotiation, breadth of subsidies, and so on.
 
In the end, reform was always a scam. We know by now that this corporatist system will never reform anything. Every major step it takes will be in exactly the wrong direction, the path of propping up zombie structures and looting the people for the benefit of those structures.
 
But what if we did get a real public health plan or single payer? Even real reform like this would still face an even greater looming crisis, Peak Oil.
 
The last 150 years of medical advance have been coincident with the fossil fuel platform. Has this advance been caused by cheap, plentiful oil?
 
Oil is used in antibiotics, antihistamines, psychiatric medications, medicated skin creams, many other drugs, vitamins; tubing, catheters, syringes; operating tables and other infrastructure; all sorts of hi-tech machines; it is the lifeblood of the electrical generation and transportation systems upon which modern medicine depends – everything from global transportation of medical products to ambulance runs.
 
“Oil allows for complexity”. It allows for ever greater specialization, more procedures quantitatively and qualitatively. The esoterica of medical technology and treatment which allows for top-of-the-line care for the rich is unthinkable without that oil platform. The system has become ever more resource intensive.
 
This is related to the ecological costs of the oil-based “growth” model for health care. There’s the upstream costs: Extraction, manufacturing; transportation of the raw materials. The downstream costs include how drugs contaminate groundwater and drinking water, and how the incineration of plastic medical waste pollutes the air.
 
These and many other externalities of the system sicken people and add to health costs. So in a feedback loop the system adds to its own burden.
 
This leads to the broader ethics of the system. Modern medical ethics are rather myopic, almost completely focused on the patient at hand, with zero focus on the environmental and energy aspects of the system which in turn have bad effects on general health. A reformed, holistic medical ethics would take the big picture into account. We need not just the microethic but the macroethic.
 
This was never so clear as it is today as we undergo the interlinked economic and Peak Oil crises. By now everyone’s aware of the eroding health care prospects of the non-rich.
 
What’s happening today: People are postponing elective surgery; waiting for preventable problems to become acute and then rushing to the emergency room; if they can afford “insurance” at all, getting the lowest-cost, highest-deductible and co-pay, most restricted coverage plan, and then getting care based on the lowest-cost treatment; hospitals and medical schools face wage cuts/freezes, job cuts, grant money drying up; local and public health systems are on the verge of shutting down completely (just like public legal services).
 
This is all under the momentary circumstances of relatively depressed oil prices.
 
I’ve written a lot on how the exponential debt/growth system cannot be restored beyond perhaps a temporary zombification of a year or two. Here I’ll discuss the implications of this for health care.
 
Even as we ooze into depression, oil prices are already back up in the $80 range based on nothing but the animal spirits of the phony rally. If there is a temporary zombie “recovery”, oil prices will surge once more the moment consumption actually increases. (Meanwhile we’ll hit classical Peak Oil within five years.)
 
Growth cannot really resume. The debt unwinding (personal, business, government) has only just begun, and cannot be completed.   
 
This will place a hard ceiling over the recovery and only accelerate the debt deflation cycle, leading to more wage and benefit cuts and job loss, and subsequent inability to afford health care. At the same moment, oil-based medical costs will also be rising.
 
Just like pretty much everything else in America, the health care system is based and completely dependent upon growth. It requires an ever-growing pie, and all its structures and processes are built on this. Americans have been spending twice as much on health care as any other industrialized country, 16% of GDP and rising, all under conditions of a “growing” pie (growth based on debt).
 
The medical culture is based on speed and heroic levels of care (for those who can afford these), without concern for cost or consumption levels. It’s all based on exponential growth. The investment model (high-tech, high-impact, high quantity) and the funding model (grants and endowments for medical schools as well as ever-rising tuition, supported by a corporatist debt structure) assume infinite growth. The government tax base is shrinking at a frightening rate, so there’s less and less public funding available for anything. Yet the leadership, public and private, still envisions (and budgets) everything based on growth.
 
Today the key to EVERY socioeconomic and political dynamic is that everything we have was developed under conditions of a growing pie, and now the pie will be shrinking.
 
(And don’t forget the boomer “retirement”. Here too, their health care presupposed a growing economy. Many of them also had retirement investment nest eggs. But now the economy’s shrinking, and we can imagine how well those investments are going to hold up.) 
 
Because of this, coupled with the existing curve of rising health costs, these costs as a proportion of the shrinking economy are going to skyrocket. At the same time as the zombie middle class must face up to the fact of its own economic liquidation and impoverishment, it will face health costs which are absolutely insurmountable.
 
This is all calculated to enslave us in everything but the physical chains.
 
(So think of that every time you see a politician, corporate thug, media cadre, or right winger making light of the situation and trying to block reform. He’s laughing at us as he shovels more dirt onto the grave of our dreams, a grave he personally dug for us.
 
And remember that when you consider how Obama and his Dems betrayed and destroyed reform.)
 
So we are now passing the Peak. What will we be seeing post-Peak, during energy descent? Prices of oil and electricity will rise steadily. More acutely, there will be spot shortages and blackouts. These will come with increasing frequency. They’ll affect the non-rich first, and as long as possible the rich will monopolize all energy for themselves (first through rationing by ability to pay, then by rationing through violence and tyranny).
 
There will be fewer hospitals, which will exacerbate transportation difficulties (already laboring under high fuel prices and perhaps shortages). Health professionals will be less able to profitably and energetically specialize, but will be driven back toward generalization. This effect will be multiplied as the medical education system unwinds, starved of its financial wherewithal.
 
If health insurance companies still exist, they’ll find it harder and harder to profitably invest an ever-smaller bag of loot from a diminishing customer pool, as fewer and fewer people can afford insurance. (I write that in the expectation that there’s no way government will be able to enforce this vile “mandate” even if they do legislate it. According to the proposals being batted around, whatever they do isn’t going to kick in until 2013. Very courageous on the part of Obama and the senators up for re-election before then. But 2013 is pretty much the outer bound for depletion from existing oil fields to be outrun by demand, as the effect of all the projects cancelled on account of this past year’s credit crunch comes home to roost. Thanks to all that oil which won’t be flowing, by 2013 the real Peak Oil effect will be in full force. The Depression will really set in at that point.)
 
(And so Peak Oil provides a clue to this politically insane mandate concept. The insurers know that the system is blowing up. They’re going to be the first big victims of Walmart-style consumer cannibalism, as their own racketeering has destroyed their customer base. The mandate really is intended to be a bailout, to counteract those shrinking pools. So it’s not just an aggressive roundup, but a defensive bailout measure as well.)
 
The health insurance bailout mandate is an example of the broader resource fascist agenda. Health commentator Dan Bednarz comments that “Most Americans tell pollsters they believe health care is a human right, not a privilege awarded those with higher income.” But Bednarz correctly foresees that under shrinking pie conditions the rich will seek to claim health care and every other resource through the simple expedient of might makes right. They’ll try to prop up the existing high-end dominated system, making the people pay for it even as access is limited to the rich.
 
You’ll get to break your back and receive no care for it, so that they can still get nose-jobs and botox.
 
Bednarz starkly lays out our choices: If we continue with the status quo we’ll increasingly have a two-tiered “Ferrari and jalopy” system until even this has to collapse. (And I doubt even the jalopy will run for long.)
 
Or we can muster the political will to truly change the system.
 
Mainstream medicine has the understandable bias that medicine – expensive, high-maintenance, high-tech – is not only the most important but the only thing. This is all it’s ever known under conditions of exponential growth driven by cheap oil.
 
But soon, for ever growing numbers of people, food, shelter, physical safety, and basic medicine will be paramount. (I add with hope, maintaining (or restoring) a sense of community.)
 
A restored public interest health care system would have as its first priority providing crisis care to the impoverished masses. It’s not a stretch to say it’ll have to be reconstituted along the lines of relief organizations like Doctors Without Borders. (Indeed, DWB may in fact find its services needed in America before long. We already could have used them after Katrina.)
 
This may be looking ahead five years or so. How to get there from here? How can we look at today’s debate and see any possibility of a coherent path from here to the outcome we need to reach?
 
The only obvious principle is that there’s no inconsistency between anticipating tomorrow’s financial collapse and seeking deficit spending today for a real public option or single-payer. We know that the dollar is doomed. So does everybody else. That’s why the powers that be are running up bills for bailouts, wars, weapons, tax cuts for the rich. They know they’ll never have to pay for any of it. The direct cost of this capital theft and the opportunity cost are incalculable.
 
So if the people could seize control of this process, we could stop binging on all that worthless, antisocial, criminal dross. We could instead use the remaining power of the dollar, what social wealth we still have, to rebuild the safety net and ease the energy transition. (The health care and energy bills should be interconnected, and should have same broad goal.)
 
A revolutionized health care system, focusing on the needs of the real citizens and not the luxuries of antisocial parasites, would be the centerpiece of such a safe transition.
 
Even if you doubt Peak Oil’s dire promises, you could look at real health reform as another stimulus. A healthier populace, less work days lost, a more productive and creative work force, reduced health care expenditure, more disposable income…it’s as Keynesian as it gets.
 
So either way, political or fundamental, the political revolution or the social, all the signposts, all the paths trodden by prior and present wisdom, point to this reform goal. All we have to do is fight.

October 28, 2009

Financial Superfund?

Filed under: Reformism Can't Work — Russ @ 4:38 am

 

In its efforts to clean up the finance sector’s toxic waste dump, the House Finance Committee has apparently taken a page out of the environmentalist playbook.
 

The Obama administration and the head of an important House committee unveiled legislation on Tuesday to give the government broad new powers to shift the cost of rescues of big, troubled financial institutions from taxpayers to other large companies.

The new legislation was drafted jointly by Treasury officials and Representative Barney Frank, the head of the House Financial Services Committee.

The legislation, drafted jointly by Treasury officials and Representative Barney Frank, the head of the House Financial Services Committee, would create a special fund, paid by assessments on financial companies with more than $10 billion in assets, to bear the costs of big firms that fail.

A statement by the committee said that the legislation followed a “polluter-pays model where the financial industry has to pay for its mistakes — not taxpayers.”

Assessments on those companies would be made only after the collapse of a large institution, and the legislation gives the government authority to levy such payments over an extended period.

 
“Polluter pays” sounds very good. It’s one of the core environmental policy principles, and not just environmental policy either.
 
Indeed I thought immediately of the Superfund polluted-site clean-up law.
 

The Superfund program was launched in 1980 in the wake of a national tragedy that unfolded at Love Canal, N.Y. Lois Gibbs, a housewife-turned-activist who would come to be known as the “Mother of Superfund,” discovered that her family’s and neighbors’ sickness could be traced to toxic waste buried underneath her hometown decades earlier by Occidental Petroleum Co.

Initially, the program was funded by a tax on polluters, which fed the actual “Superfund,” a pool of money used to pay for the cleanup of sites whose polluters were unknown or unable to do the work.

 
The law started out well. The tax was collected, a trust fund built up, the money was fruitfully used. (And all of this under Reagan and Bush no less.)
 
But then what happened?
 

But the tax law expired in 1995, under a Republican-controlled Congress, and the $3.8 billion that had accumulated in the fund at its peak ran dry in 2003.

The program is now funded with taxpayer dollars and money that the EPA manages to recover from polluters for work the agency has done at their sites.

But Superfund’s budget has not kept up with inflation. In 1995, the program received $1.43 billion in appropriations; 12 years later, it received $1.25 billion. In inflation-adjusted dollars, funding has declined by 35 percent.

 
The Superfund law was well-crafted. It had a practically simple and morally sound funding mechanism. Its procedures were clear and it worked well in practice.
 
Until, that is, the political equation adversely changed even a little bit. It seems that given all the political dependences it has, and where it’s up against a clear and present structural danger, regulation is a frail thing.
 
Now let’s look at this proposed financial Superfund. It’ll tax companies to clean up the pollution spewed by their sector. Yet this assessment will come only after the toxic drums leak into the groundwater?
 
We already know from the first Superfund that even preemptive taxation won’t work in the long run, that it’ll eventually be gutted.
 
And here they’ll only try to tax after the explosion? Where presumably everyone will be stressed and maybe in a panic? Where the disaster capitalists will be on the prowl? Where the heads-I-win-tails-you-lose ideology will be screaming “you can’t tax now, when we’re in the midst of the crisis!”
 
That’s too thin. They can’t really be serious about this.
 
Just more fig leaves and misdirection. It’s not supposed to actually ever work. This tax is not supposed to ever actually be collected (otherwise they would be truly precautionary and collect it a priori).
 
Another example of how real reform will not be legislated so long as the rackets exist.

October 27, 2009

Two Incredible Governments

Filed under: Afghanistan, Global War On Terror, Mainstream Media — Tags: — Russ @ 10:16 am
The history of America’s dismal, self-destructive trudge through Vietnam includes many missed opportunities where the circumstances were ripe for a politically plausible withdrawal.
 
The most obvious was Johnson’s overwhelming victory in the ’64 election running as the peace candidate vs. Barry Goldwater’s warmongering.
 
There were also the many proofs of Diem’s incorrigible corruption, and that of his string of successors, offering ample justification to throw our hands up and say, “We can do nothing without a legitimate national government, but clearly there’s no prospect of that here. Therefore we have to end our involvement.”
 
Similarly, when the history of America’s even more futile and self-destructive Afghan war is written, it will take note of milestones that were missed.
 
Not that this is important to me personally, or to anyone who opposes imperial corporate wars on both principle and pragmatism. Where it comes to the big things, we have principles and a clear view of the possible, and therefore don’t need to seek pretexts.
 
But there seem to be a lot of people, and not all of them obvious right-wingers or corporatists, for whom “credibility” and “peace with honor” and all that self-hypnotizing moonshine are paramount. At least that’s what they claim when they oppose a complete withdrawal from Afghanistan and a general disengagement from and winding down of the Global War On Terror and the imperial footprint (hundreds of bases and “consulates”) in general.
 
So for them I propose that the means are at hand to withdraw with honor. The politics allow it. Indeed, the only thing which can preserve American credibility and honor (“preserve”? maybe more like try to start to restore) is to recognize the futility of the venture and cut our losses.
 
I’m referring of course to the new Diem, the equally irredeemable Hamid Karzai.
 
By now everyone’s familiar with Karzai’s brazen attempt to steal the election. When the embarrassment finally forced the administration and the UN to demand a run-off, they had to beg Karzai to even agree to this. Of course, there’s little chance that the same fraud won’t be replicated, albeit perhaps it won’t be as blatant and grotesque. But Karzai’s flunkey who heads the election commission has already declared, “with a grin”, that “Karzai will win”.
 
Does this sound like a recipe for credibility going forward?
 
Here’s Obama sounding quite credible and honorable:
 

So Karzai had to agree to at least go through the motions of participating in a real election.

And when he did, Obama hailed a man who stands accused of orchestrating a massive effort to thwart democracy as someone whose “constructive actions established an important precedent for Afghanistan’s new democracy.”

Obama’s precise statement went like this: “While this election could have remained unresolved to the detriment of the country, President Karzai’s constructive actions established an important precedent for Afghanistan’s new democracy. The Afghan constitution and laws are strengthened by President Karzai’s decision, which is in the best interests of the Afghan people.”

The “yuck factor” was high.

But it got higher when Obama praised Karzai for helping to foster “such a vibrant campaign.”

It is, of course, true that Obama is not the first American president to have to pretend that a local bad guy who got caught red handed was some kind of statesman.

Still, having to speak well of Karzai is a lot — arguably too much — to ask.

And if Obama has any sense of the region — or of the trouble his Afghanistan initiative is in — he had to be hoping that Karzai and his henchmen would refrain from obvious lawbreaking in the second round.

 
Meanwhile in another typical quote Gary Hart declared that you get one mulligan where it comes to stealing an election, but now Karzai better straighten up and fly right:
 

The international community must make it clear to the incumbent Karzai government that it will be held accountable for the integrity of the runoff voting process. This can be enforced by post-election audits of the sort that disclosed the blatant fraud in the unstable eastern and southern provinces. If the Karzai government tries manipulation again, it will sacrifice the confidence of the international community and suffer the consequences.

 
Supplicating before a crook, genuflecting with a thug…smells like credible spirit to me.
But don’t take my word for it. Mr. “Suck on this” himself, uber-neocon Tom Friedman, recently agreed:

But I keep asking myself: How do we succeed with such a tainted government as our partner?
I know that Jefferson was not on the ballot. But there is a huge difference between “good enough” and dysfunctional and corrupt. Whatever we may think, there are way too many Afghans who think our partner, Karzai and his team, are downright awful.

That is why it is not enough for us to simply dispatch more troops. If we are going to make a renewed commitment in Afghanistan, we have to visibly display to the Afghan people that we expect a different kind of governance from Karzai, or whoever rules, and refuse to proceed without it. It doesn’t have to be Switzerland, but it does have to be good enough — that is, a government Afghans are willing to live under. Without that, more troops will only delay a defeat.

I am not sure Washington fully understands just how much the Taliban-led insurgency is increasingly an insurrection against the behavior of the Karzai government — not against the religion or civilization of its international partners. And too many Afghan people now blame us for installing and maintaining this government…..

We have to be very careful that we are not seen as the enforcers for this system….

This is crazy… I would not add a single soldier there before this guy, if he does win the presidency, takes visible steps to clean up his government in ways that would be respected by the Afghan people.

If Karzai says no, then there is only one answer: “You’re on your own, pal. Have a nice life with the Taliban. We can’t and will not put more American blood and treasure behind a government that behaves like a Mafia family. If you don’t think we will leave — watch this.” (Cue the helicopters.)

So, please, spare me the lectures about how important Afghanistan and Pakistan are today. I get the stakes. But we can’t want a more decent Afghanistan than the country’s own president. If we do, we have no real local partner who will be able to hold the allegiance of the people, and we will not succeed — whether with more troops, more drones or more money.

(Meanwhile McChrystal says, “If every soldier is authorized to make one mistake then we lose the war.”)
 
It’s obvious that this government can never be legitimate and credible even by normal standards. But even if it didn’t win by out-and-out fraud, it has a deeper ethnic problem.
 
The key to Afghan legitimacy is the Pashtuns, who represent 42% of the population. Most of the Taliban come from their ranks, which means that any attempt to entice Taliban factions or rank and file fighters to join a governing coalition will have to come from a government seen as legitimate by the Pashtuns.
 
But while Karzai is the “Pashtun face” of this regime, its real power base derives from the former Northern Alliance, who were predominantly from the 27% Tajik minority. On account of this the Tajiks comprise over 70% of the officer cadres of the army, police, and intelligence service. They are set on maintaining that monopoly.
 
For as long as that condition holds, with Tajik cadres monopolizing the instruments of violence while Pashtuns face such career barriers in the few areas where real jobs might seem to exist, the Pashtuns will see this as an alien, oppressive government.
 
And on top of that you can add how this government is clearly a stooge of the foreign occupier, meant only to faciliate that foreigner’s imperial goals.
 
Imperial puppet, ethnically oppressive, and winning only through election fraud, there’s no way this government can achieve legitimacy with the Afghan people.
 
And without a legitimate national government in place, any American attempt at counterinsurgency is doomed to fail.
 
One guy who knows this very well is General Stanley McChrystal. He’s intimately familiar with the Army’s Counterinsurgency Manual, which says
 

Success in counterinsurgency operations requires establishing a legitimate government supported by the people and able to address the fundamental causes that insurgents use to gain support. Achieving these goals requires the host nation to defeat insurgents or render them irrelevant, uphold the rule of law, and provide a basic level of essential services and security for the populace. Key to all these tasks is developing an effective host-nation security force.

 
Or perhaps he knows this and yet doesn’t know. By his own official premise, the effort is hopeless and we must withdraw.
 
But like with almost every other officer, careerism supersedes known truths. If accepting his own COIN premise would require McC to recommend withdrawal, he’ll instead throw over his premise and call for escalation anyway, perhaps giving some nonsensical disclaimer.
 
What if the people view the government as hopelessly illegitimate, McC?
 

Then we are going to have to avoid looking like we are part of the illegitimacy.

 
Of course, McC already violated his own doctrine on troop levels. According to his manual successful COIN requires 20-25 troops per 1000 populace. By this measure COIN in Afghanistan would require over half a million troops, not somewhat over 100000 as he’s currently claiming will get the job done.
 
Is he just trying to get his foot in the door to ratchet up the demands later, Westmoreland-style? Either way, we cannot trust anything he says, since everything he says contradicts what he wrote before.
 
(So much for the Washington Post’s sycophancy regarding what “General McChrystal believes” he needs. We know this is a fallacious appeal to authority, since McC is clearly not an authority here. Rather, it’s clear he’ll say anything to get what he wants, and that there’s no conceivable context where he wouldn’t want a large escalation, because he’s motivated by careerism and nothing else.)
 
So for anyone who’s worried about this kind of American credibility, here you see how it’s impossible for the American adventure in Afghanistan to ever be credible or successful according to the state of the art counterinsurgency doctrine authored by McChrystal himself.
 
This government cannot be retrieved for legitimacy, and an imperial government which would wage aggressive, exploratory war in “partnership” with such an illegitimate government would be laying bare the illegitimacy of its own policy, and therefore of itself.
 
Is it possible to retrieve the legitimacy of American policy, of this government? It’s clear that America has trashed its credibility with the deranged foreign policy it’s been pursuing. There’s no question of escalation or muddling through* in Afghanistan being the path to maintain the credibility which has already been lost on account of that very path.
 
Rather, it’s a matter of restoring this lost credibility, and the only way to do this is to break the pattern, snap out of the derangement, end the policy, get out of Afghanistan.
 
The political argument is sitting right there: The generals themselves including McC said this can only work given certain preconditions. Those conditions don’t hold. There’s no viable national government. Karzai betrayed us. Therefore our own military doctrine decrees that we should end the war. Our boys shouldn’t be dying for a gang of thieves. We’re getting out.
 
What could be more credible to a public who already wants to get out than that?
 
[*Not long ago the MSM was still framing the “debate” (which of course never included even momentary discussion of getting out completely) as a choice between the McC escalation, counterinsurgency, and nation-building plan, or the Biden notion of shifting to video-game counterterrorism with an emphasis on drones over Pakistan.
 
Regardless of the merits of these (they’re both stupid but at least internally coherent), one thing apparently not on the table was simply splitting the difference, muddling through, sending some troops but less than McC wanted, only sort of modifying their deployment, and in general trying to split the difference between McC and Biden. This would guarantee failure from every point of view.
 
Back then nobody seemed to take this possibility seriously, but I knew my Obama.
 
Sure enough, out of all his dithering we’re hearing that he’s leaning toward no major strategic changes, but simply sending another 10000-20000 troops to continue with business as usual.
 
Muddling through. (Or maybe they’ll guarantee the “credibility” of this next election, the way the previous 20000-troop escalation was supposed to guarantee the last one.)]

October 26, 2009

What Vistas of Reform

Filed under: Reformism Can't Work — Russ @ 11:43 am

 

Nate Silver recently predicted that breaking up the Too Big To Fail banks is likely to be the big issue going into the 2010 election. As welcome as this would be, if it’s going to happen it’s going to happen from the bottom up, because the “reform” bill the establishment is cobbling together as we speak is a bogus bag of weakness and pretense. It further confirms what has already been proven, that no real reform will be legislated so long as the rackets exist. 
 
Let’s look at this bland, tepid stew they want to serve up.
 
The state of reform is dismal. Derivatives regulation had been gutted before it even reached the House committees, where they then took their own night-sticks to it. The proposed Consumer Finance Protection Agency was similarly hobbled coming out of committee. Meanwhile the administration has rejected out of hand the only thing which could truly constitute reform, breaking up the TBTF banks.  
 
In both cases we have the entrenched pattern of “government”: (1) fierce lobbying of pre-bribed administration officials and Congressmen to strangle reform in its cradle and, if possible, use it instead to extract further rents and set up further anti-competitive barriers; (2) corrupt, conservative, and complacent, government willingly submits. It’s apparently relieved to do so. it gives away everything the bounds of politics allow.  
 
If we were really serious about regulating the finance racket, we’d start with real derivatives regulation. We’d force all derivatives onto public exchanges and ban secret over-the-counter (OTC) trading.
 
Instead the rackets demanded the death of reform from the start. Even after all that’s happened they blithely said they could self-regulate. They got CDS oversight taken off the table. Then, when they couldn’t get the plan killed completely, they got the administration to submit a proposal which would leave gaping loopholes rent in the whole structure. Any company using derivatives to hedge operating costs would be exempt from the exchange. But the line between real hedging and speculation is impossible to discern, and the bill has been written in a way to err on the side of the speculators. Hedge funds and others will be allowed to pretend they’re legitimate and therefore exempt operators.
 
The Finance Committee bill also does not allow regulators to ban any practice no matter how obviously dangerous and fraudulent. Chairman Barney Frank openly boasted that his first priority was not to do anything which the big banks would consider “untenable”.
 
Meanwhile the CFPA was also heavily compromised in its inception. Here the banks used lobbying judo to turn reform to their reactionary advantage. Their main goal was to use the idea of the CFPA to override states who have engaged in real regulation. A weak CFPA will now preempt stronger state law.
 
It’s true that they didn’t yet get everything they wanted, which was straight preemption across the board. As it came out of committee, the bill will only let the OCC override where a state is deemed to be “significantly” uppity.
 
But they have the floor fight to try to do better.
 
The bill also exempts the vast majority of smaller banks from any active oversight. Just like with derivatives, it mostly forbids any restrictions on the kinds of products and trades allowed, no matter how abusive or reckless. (In both cases, the administration itself insisted on giving the rackets a free hand.)
 
Outrageously, the bill exempts auto lenders, one of the hotbeds of predatory and abusive lending, from CFPA oversight.
 
The bill’s supporters assure us that it had to be so racket-friendly in order to get out of committee (why?), but that it can be improved in the floor fight (why would those Congressmen be any less corrupt than those in the committee?). This is a typical symptom-obscuring scam. As the NYT editorial page says, “We can’t remember many finance-related bills that improved during the legislative process”. It’s the spoonful of sugary denial to help the corporatist medicine go down.
 
Meanwhile the administration continues to declare that artificially propping up the insolvent TBTF banks is the centerpiece of Obama policy. He will stake his presidency and his place in history upon this.
 
None of the proposed reforms even touches upon the existential issues of size and complexity. On the contrary, when Paul Volcker recently said the banks need to be broken up, and TARP inspector Neil Barofsky accused the administration of intentionally making the TBTF problem worse, they were smacked down.
 
Fed banker Dan Tarullo sneered that Volcker’s call was “more a provocative idea than a proposal”, while Bernanke said he wants “a more subtle approach without losing the economic benefit” of giant, inextricable banks.
 
(Beyond boilerplate they never explain what these benefits are, or how it is that everyone is wrong in not understanding what these benefits are.)
 
What is broadly happening here? The banks have been in their permanent war mode. Lobbying is a war of attrition, and so long as the rackets exist they will always eventually overcome any regulatory resistance. Of course the administration and Congress have not put up any resistance, and it’s hard to see who ever will. (Indeed the original administration derivatives proposal was written by the rackets themselves. There too they were using judo, trying to use reform to set up barriers to entry.)
 
Industrial organization economist Peter Fox-Penner recently laid out the problem. Each regulatory agency should have one mission; it shouldn’t have extraneous duties; its functioning should be simple; wherever necessary it should constrain product choices, as well as size and complexity in themselves; it should have the right balance of independence and accountability.
 
Instead what does Obama like in a regulator? The same things Bush liked. Agencies have multiple, ill-defined, diffuse, often contradictory missions; lots of non-regulatory duties (in particular, everyone is saddled with the mandate to help keep down the costs for business); instead of simplicity we have Rube Goldbergs devices everywhere, complexity for its own sake, loopholes galore, set up in order to make the regulator’s job impossible; all proposed regulation explicitly forbids any restraints on practice, size, or complexity (Obama and his cadres oppose size restrictions on ideological principle); no regulator is independent, but on the contrary is to be subject to constant scrutiny by political commissars, while the Fed is unaccountable in principle.
 
So long as the rackets exist, regulation can’t work. We should see their corrupting influence as if they were simple AI machines like the Terminator. They are objectively, existentially, congenitally incapable of doing anything other than this. (The exact same dynamic has been playing out with health care, climate change, and agriculture, to give three examples.)
 
There is something downright weird about what has happened to this country. More to the point, that there is no longer a country, in the sense of the people having any control at all over their own lives. Politics has ceased to exist in any meaningful sense; instead all we have is an astroturf polity, and astroturf media, astroturf elections. All of it involves masses indoctrinated to trot themselves out to “support” this policy or “vote” for that candidate, while the whole time every policy and every candidate are completely corrupted to the purposes of a few rackets. That’s the essence of what is no longer a democracy but a corporatist oligarchy dressed in a pseudo-democratic process.
 
We know now that finance capitalism lied about everything. It has spent forty years claiming it would create universal American prosperity. Instead it has done nothing but destroy: jobs, wages, stability of wealth distribution, the safety net, public services, public spaces, public politics, the quality of life itself, democracy itself, freedom itself.
 
Tarullo thinks changing this would be “provocative”? No, what’s provocative is the existence of this system of institutionalized crime. What’s provocative is that civilization is being burned down, and the arsonists are being allowed to walk free, with the loot and their firestarting equipment intact and enhanced.
 
So we can look to the system for nothing, no matter what empty words it utters. If the prophets of Change are to be proven right, the change will have to come from the grassroots.
 
In seeking this change we have to go with the realization that meager goals can never force what we need. Here the most pragmatic politics is also the most radical from the point of view of the establishment and the MSM.
 
Society cannot coexist with the rackets. One of them must perish.
 
We need a grassroots movement demand:
 
Break up the Too Big To Fail Banks! Too Big To Fail is Too Big To Exist! 

October 23, 2009

Draft for A Bank Heuristic

Filed under: Mainstream Media — Russ @ 9:32 am

 

There’s so much information (not to mention “information”) about the banks, the bailoutocracy, and the financialized economy they constructed and now use as the vehicle of tyranny.
 
How to process it all? How to separate the good information from the bad, the useful from the pointless, the truth from the lies? How to weaponize each idea, anecdote, and piece of data?
 
In some ways it may be more difficult for those of us who lack a formal background in this stuff, but we have the much bigger advantage that we have less brainwashing to overcome in our struggle toward clarity and truth.
 
So I’ve been thinking about how to organize all the material into a basic heuristic. I’ve tentatively settled on a list of categories which I think are both true and useful.
 
Some involve ongoing processes, others basic truths. My goal is, as much as is possible from my humble position, to assemble a knowledge base and analysis for resistance against the finance tyranny.
 
The goals would be education of the not-yet-educated, radicalization of the educated (and of course educating existing radicalism, which is usually the even more common process), and figuring out a plan of action. (I’ll write more about radicalization and action later; for today I’m writing about education, including self-education.)
 
Maybe this list isn’t final. Perhaps some of these can be folded into others, and at any rate lots of things straddle categories, but I thought I’d suggest this list as a first draft. From there I think I’ll try posting periodic roundups detailing how each of these is playing out. And perhaps in comments people can give examples.
 
If anybody thinks any of these are wrongly conceptualized, or can think of other ones I missed, then make suggestions.
 
1. The big banks caused the crash. They hold the overwhelming responsibility for a Tower of Babel which was bound to come down and is bound to come down again. Any other responsibilities are trivial. The proximate causes are irrelevant.
 
2. The bailouts artificially propped up insolvent banks. But in spite of their phony profits, the banks remain collectively insolvent, and most if not all of them individually so.
 
3. The bailouts accomplished no socially valid end, but only enabled the banks to reopen the casino.
 
4. The bailouts only intensified monopoly concentration, which lay at the core of the Too Big To Fail extortion dilemma. (The policy of TBTF only helped confirm the structure in a positive feedback loop.)
 
4A. (Wealth and power concentration in themselves are anti-democratic, socially and economically destabilizing, and morally perverted.)
 
5. The finance sector is a purely rentseeking monopoly. We can place pretty much anything it does on the list of feudal tactics. All its “innovations” are con jobs, and all its lobbying is bribery and extortion.
 
6. No true reform will be legislated thanks to corruption.
 
7. Anything which is legislated will not be enforced thanks to corruption and capture. We can extend the principle: The law itself is a battleground, and the rule of law in great jeopardy.
 
8. We don’t need the big banks for recovery, for lending, for international competition, for anything else. All the evidence is that smaller banks provide the real value here, while big banks are not only unable and unwilling to engage in constructive action themselves, but their monopoly power actively hinders the smaller banks.
 
9. The size of the banks runs counter to our need for a decentralized economy with greater resiliency and robustness. The stimulus has been remarkable for how little money has headed in a constructive direction, as opposed to down reactionary ratholes like Cash for Clunkers and the housebuyer’s tax credit. This is because of the banks.
 
10. Only the rich have benefited from the bailouts. Only they will continue to benefit. Everyone else is prey.
 
11. The banks (and therefore the bailouts) fund the permanent war, which in turn militarizes the country for the benefit of the banks.
 
12. The stock market is the terrorist wing of finance monopoly. Its purpose is to punish all public interest government action (for example letting the market work in Lehman’s case, or the Congressional rejection in the first bailout vote). Such punishment is a tool of disaster capitalism, generating the sense of immediate crisis, the Shock Treatment, to terrorize and stampede policy-makers, the media, and the public into allowing or enabling the power and loot grabs.
 
(On the other hand, it rewards official crime. Thus health insurance stocks have been a barometer of the policy debate on health reform, for example going up after things like Obama’s very racket-friendly speech.)
 
Appendix: The mainstream media’s coverage is systematically bias in favor of corporatism, often atrociously so. The infrequent good articles are accidents, incidental to the media project. (They don’t have very good discipline.) 
 
 
For example this morning’s news. The big story is czar Feinberg’s pay decree for TARP recipients (along with the Fed’s own pay initiative).
 
The first thing that leaps out about this is the anodyne, demagogic nature of it. Pay reform (which will apply only to outstanding TARP patients, will be gentle, and probably easily evaded) doesn’t go to the base of the structural problem. Meanwhile possible real reforms like a CFPA and derivatives restrictions have already been gutted. So it’s utterly insufficient even if it works as it’s supposed to, and is primarily meant to be misdirection. Compare it with the gutting of finance reform in the House committee, and we see that it’s an example of No Reform Will Be Legislated[6].
 
(As for MSM alerts, the NYT piece on Feinberg’s decree is a particularly bad example. It elides the fact that the bailouts go way beyond the TARP[2] (every MSM piece has been doing that) and bends over backward to feature pro-racketeer arguments and quotes[5], including parroting the Big Lie that We Need The Big Banks For Recovery[8].)
 
Meanwhile, Freddie Mac severance agreements are an attempt at legalized bribery to cover up crime [7, 5]; Joe Nocera informs us that AIG is at it again with the bonuses [3, 10]; and Christina Romer gives us more bad news on jobs [10].
 
So there’s my proposed twelve categories. Everything I see fits into one or more. Unfortunately, nothing runs counter to them. 
 
Any suggestions?

October 22, 2009

Freedom and the War’s Credibility

Filed under: Afghanistan, Freedom, Global War On Terror, Globalization — Russ @ 3:40 am

 

I’ve been rereading Hannah Arendt’s On Revolution, and her introduction, “War and Revolution”, got me thinking a bit on the Global War on Terror.
 
What does Arendt say about all the ideologies – “nationalism and internationalism, capitalism and imperialism, communism and socialism” – which have been enlisted to support war?
 
They have outlived all their ideological justifications. In a constellation which poses the threat of total annihilation through war against the hope for the emancipation of all mankind through revolution no cause is left but the most ancient of all, the one that from the beginning of history has determined the very existence of politics, the cause of freedom versus tyranny.
 
Only freedom, the primeval basis of the American Republic itself, could justify the tremendous exertions, risks, terrors of war. But far more often it’s simply lied into things, just an empty word.
 
For example, the terrorists “hate our freedom”. What does that even mean? It’s utterly incoherent. They can have what Westerners call freedom any time they want it. The 9/11 hijackers did have it, and even enjoyed it to some extent, going to strip clubs and so on. So whatever motivates them, it’s not hatred of any alleged “freedom” the West possesses.
 
But the very incoherency is emblematic of how denuded a word and concept “freedom” has become where it comes to globalization politics.
 
Does freedom have a place in the Global War on Terror? Even its defenders don’t seriously claim that it does. Rather, they emphasize “credibility” and “security”. But what is supposed to be secured? They say “freedom” even as they assault our civil liberties. What is supposed to be credible? The integrity of the American ideology. But I think this rather begs the question, since it’s America’s own imperial aggression which gives the lie to its claims to cherish freedom and its pretensions to virtue. It’s the war existentially which renders America not credible.
 
So where it comes to security we have a simple lie, while with credibility we have an ideological vicious circle: To stay credible we must fight the war which renders us not credible. I think we can see the bad faith in this argument.
 
What’s really supposed to be credible is belligerence and menace itself, abroad and at home. This means, giving primacy to arrogance, vanity, and fear.
 
Meanwhile Ben Franklin famously cast the slavish obsession with security as the antipode of freedom. In our Permanent War framework this obsession is conjured up both to shred the Bill of Rights and on a broader front to shout down any protest against the real program of corporatist plundering of the country.
 
With that we get to the real purpose of the war.
 
Arendt explores the history of the concept of the Just War. Only in the 20th century did there briefly prevail the idea that aggressive war was ipso facto unjust. When we go back to the Romans, who were the first to enshrine the concept, we find that they had a very different idea.
 
“The war that is necessary is just”, said Livy, “and hallowed are the arms where no hope exists but in them.”
 
Necessity, since the time of Livy and through the centuries, has meant many things that we today would find sufficient to dub a war unjust rather than just. Conquest, expansion, defense of vested interests, conservation of power in view of the rise of new and threatening powers, or support of a given power equilibrium…
 
And now we seem to have come full circle. This litany of aggressive “necessities” is the essence of American policy, both foreign and domestic. We’ve regressed to the just war as the aggressive war. The power elites are merely too morally cowardly to say so, unlike Livy’s Romans.
 
At the time Arendt was writing (the book was published in 1963) thinking on war was preoccupied with Cold War dynamics, and in this light she believed that in many ways war was no longer a practical way out of human difficulties. The reasons she gives are still valid today, although in ways she didn’t envision, because things are very different now.
 
1. Modern economies and weaponry, especially nukes, entailed a return to the ancient ways of total war with no distinction between soldier and civilian. On its face it seemed obvious that the problem with this awesome power was that it could never be used, only threatened, and the threat was the only use.
 
Today the situation is even more perplexing. America still maintains an overwhelming physical preponderance over the insurgencies it confronts, yet in asymmetric warfare it finds its tremendous power just as useless as it was under Mutually Assured Destruction vis the USSR.
 
Only nazi tactics could militarily “win” these wars, yet the return on investment of these, in terms of international condemnation (where America desperately tries to maintain its “credibility”) and domestic opposition, would quickly run up against insuperable limits. In the end, this leadership doesn’t have the stomach for it.
 
So for all its physical and economic power America is still very limited in what it can do, and the forces are not really as “asymmetric” as is usually pretended. Here as everywhere else, huge size is simply inefficient. It can’t be effectively deployed the moment it runs into reality-based obstacles.
 
(Another example – the banks could not enforce their political hegemony if the people resisted them. They depend completely on a corporatist government and public apathy. The former can temporarily overcome economic limits, the latter simply overcomes itself.)
 
2. No government can survive defeat in a real war. Arendt was thinking in terms of physical destruction in nuclear war, or the victor in a total war dismantling the existing government, or a revolution overthrowing a government which had failed in its core duty to defend the populace during a total war.
 
It’s the economic equivalent of the third of these which is most interesting today. We take “war” in the broad sense of the Permanent War, the Global War on Terror, the “Long War” as perhaps the corporatists themselves want to call it. This dovetails with the Bailout War by the banks and government on the people, the class war from above.
 
Certainly the existing cadres of this system cannot survive its collapse. Their existence is predicated on the exponential debt system and the government acting primarily as a collections agency, taxing the people to deliver this revenue as corporate profit. All governmental power by now is founded on this. (Most of the personnel are personally committed to it as well, consciously seeing themselves as private agents of big contributors rather than as public servants.)
 
The GWOT is an extension of this. More and more, not only is the Pentagon budget a mechanism of corporatist conveyance, but its multipliers radiate out through the civilian economy, as sector after sector becomes enmeshed in Pentagon partnerships, as suppliers, marketers, etc.
 
So permanent war itself is another Too Big To Fail bank. The permanent war is a permanent corporate bailout. (The conventional name for this is “military Keynesianism”, though what we have today goes way beyond what they envisioned in the old textbooks.) The economic unwindings ending it would entail are just as daunting to any captured or corrupted official or journalist as the derivative unwindings of any financial entity.
 
3. Deterrence must be the primary goal, not fighting. Again we have a paradox. According to counter-terrorist ideology deterrence can’t work, since terrorists cannot be deterred, only killed or otherwise neutralized.
 
This is a convenient dogma for the warmongers, since it tries to be a debate-killer regarding whether or not the Taliban have been or can be deterred from allowing Al Qaeda to set up shop again if they ever retook Afghanistan.
 
So here they try to rule out the diplomatic option by ruling out the deterrence option, even though there’s plenty of evidence that most of the Taliban are not motivated by jihad, and therefore have no natural interest in helping Al Qaeda or any other jihadist.
 
4. Finally, the intimate relationship between war and revolution.
 
The globalist imperial war is meant to beat down reform and revolutionary movements everywhere (including domestically) and to forestall the structural revolution which would automatically follow in the wake of economic and resource collapse, such as could happen if the war itself were ever severely curtailed.
 
(Elsewhere in On Revolution Arendt analyzes the deplorable fact that America, the primal homeland of revolution itself, born out of the will to freedom, became the ultimate counter-revolutionary, anti-freedom power of the modern age.) 
 
At home a totalitarian structure is being legally, technologically, and logistically prepared against the possibility of political or social revolution against the finance dictatorship.
 
Meanwhile Islamic fundamentalism itself was a revolution in response to globalism and imperial war.
 
Couldn’t ending the Global War on Terror take off some of the political pressure? But this government thinks it can’t survive if it can’t maintain the empire, which is necessary to secure the oil and preserve the dollar as the reserve currency, which is necessary to keep growth going, which is necessary to wage the wars to maintain the empire.
 
Given their premises, which mesmerize them in the same way the absolute need to “invest” mesmerizes the rentier who controls this government, they’re correct. Ergo, the Permanent War is a Necessity, and therefore a Just War.
 
And where does this tyranny leave freedom? Out in the wilderness. But as we have learned, and Arendt so profoundly elaborates in her book, to bring this prodigal freedom home is the only cause which justifies war.
 
Today our proposed war is figurative, and it starts with the attack on the “credibility” of the banks and the bailout.
 
But equally important, the same fight, is the war on the credibility of the war and of the war hawks. Though they may sport bemedalled uniforms or the imprimatur of the most prestigious and heavily funded think tanks (“paid to think by the makers of tanks”, as Naomi Klein said), they’re really glorified bank tellers.
 
We must meet their fraudulent war with our will to restore freedom.

October 21, 2009

MSM Hearts the Banksters

Filed under: Bailouts Only Reopened the Casino, Mainstream Media — Tags: — Russ @ 9:36 am

 

As part of its duty to the public interest, the NYT Dealbook blog has favored us today with some educational condescension by Goldman Sachs board cadre Bill George.
 
George has clearly put a lot of thought and effort into his educational mission, and with good reason. As comes through very clearly in his remarks, he’s up against some verrrry misguided hippies.
 
He concedes that, yes, some banks “aggressively hawked” some bad loans and instruments, some investment banks as well were guilty and “paid the price”. The government was “forced” to bail out the system.
 

There can be little doubt that the excessive risk-taking by bankers who aggressively hawked subprime mortgages and credit cards to earn high fees imposed enormous hardships on the American public. The worst offenders — Citigroup, Washington Mutual and Wachovia — irresponsibly over-leveraged their balance sheets and forced the United States government to step in to avoid complete collapse of the system. These banks and investment bank counterparts like Merrill Lynch, Lehman Brothers and Bear Stearns paid their price.

Unfortunately, the sins of the wrongdoers created a public relations problem for the remaining banks — at precisely the wrong time.

 
Unfortunately the good, upstanding, responsible banks – Goldman Sachs and JPMorgan, are being tarred with guilt by association. This injustice comes just when these good Lords of the Manor were exercising noblesse oblige, “calling for an industry self-assessment”.
 
Just by coincidence, George finds this recent speech by his company’s CEO Blankfein to be especially wise and constructive:
 

Leading bankers like Jamie Dimon of JPMorgan Chase and Lloyd C. Blankfein of Goldman Sachs (where I serve on the board) are calling for an industry self-assessment. Mr. Blankfein’s well-received speech to the Council of Institutional Investors in March was a humble and honest appraisal of the industry’s shortcomings:

“We held ourselves up as the experts, and the loss of public confidence from failing to live up to the expectations that we created will take years to rebuild. Worse, compensation decisions at banks that destroyed shareholder value look self-serving and greedy.”

 
Good stuff. I can see how I’d be pissed if I were at Goldman and I was being lumped in with those who had done such things. 
 
Now the good part:
 

Many pundits are advocating an increased role for government in regulating banking behavior and managing compensation. Past attempts along these lines have proven counterproductive and have produced unintended consequences. Yet in response to the public anger, such proposals are inevitable.

 
This takes balls. He’s equating the calls for regulation with the previous onslaught of deregulation and lawlessness. Yes, I bet it would be “counterproductive” to you if we shut down the casino once and for all while finally bringing you all to justice.
 
(Not that that’s what most reformers are really calling for, of course. Let’s remember, he’s arguing here against even a slap on the wrist.)
 
We see here the most common tactic of any entrenched criminal when faced with the prospect of any reform. He depicts the status quo, that is, the regime of entrenchment and crime which he fought long and hard to establish (that is, they paid a lot of bribes), as some natural, rational, “peaceful” baseline against which all calls for change must be seen as risky, disruptive, prone to “unintended consequences”, and perhaps malign.
 
I first recognized this line of obstruction where it was argued against environmental reform, but it’s the same across the board. Every criminal uses it, and wherever you see it used you can be sure you’re dealing with a criminal.
 

The danger is that we will punish healthy banks for the sins of failed banks. Most bankers have behaved responsibly throughout the crisis. This is the wrong time to tie their hands. Instead, we need these banks to get back to their chartered roles: to provide financial resources to consumers and businesses — large and small, new and old.

 
What a load of crap. No bankers behaved responsibly from any social point of view. What he means is, some were more competent in hedging their bets. But everyone was betting against society and against the people who actually create social and economic value every step of the way.
 
“The wrong time to tie their hands” – Of course, any time is the wrong time. During the boom, everything’s fine and will be fine forever, so don’t rock the boat. During the bust, now’s when we need bank credibility, and now’s not the time for ill-advised precipitate regulatory initiative (let alone socially divisive finger-pointing), so don’t be hard on those who we need for the recovery.
 
Either way, it’s never time to restrain them. Heads I win, tails you lose.
 
Again we see the class war baseline. Their decades of aggressive antisocial warfare is the natural baseline of Orwellian peace, while social activists are divisive troublemakers, warmongers.
 
Compare this to the arguments for the de jure wars in Afghanistan and elsewhere, and going back to Vietnam. There too it’s never made clear why we need to be doing it, but above all morale and unity, credibility, must be maintained on principle.
 
But for some reason it’s only the status quo, which is itself a radical and unstable (and democratically unpopular) stance, which is said be the thing around which this trumped up unity and pseudo-principle and tawdry credibility have to be mustered.
 
Why not truly unify, around a true principle, and create true credibility through our cleansing action of Change toward realizing that principle? Would this not in the end bring us to real credibility, real unity, real virtue?
 
The villains have no answer to this, and the reason is obvious.
 

Commercial and investment banks are the backbone of American commerce. They provide the capital for business expansion and new company formation. In the past 20 years, 70 percent of all jobs have been created by start-up companies and small businesses. But the lack of available financing in the past year has severely crimped the ability of small businesses to grow their business and to add jobs. New company start-ups are finding it extremely difficult to get any financing.

 
This is a flat out lie. The big banks are not the engines of small business and individual lending, and were not even before the crash. The fraudulent bailout alleged it would “get them back” to lending they hadn’t been doing in the first place. According to the Independent Community Bankers of America, over 50% of small business loans are made by community banks. Meanwhile, especially since the repeal of Glass-Steagal, big banks like Goldman have engaged mostly in parasitic, antisocially reckless speculation: in assets, commodities, securities, derivatives, all the scam paper real human beings don’t need to have existing in the first place. 
 

Continuing to vilify all bankers will create a vicious cycle: It will fan the flames leading to excessive regulations. This will cause banks to pull back and lend less, thereby crimping expansion by small business and shutting down start-ups. This will intensify the jobs crisis and throw the United States into a double-dip recession.

 
Going with his lie, George claims that imposing constraints on bank gambling and looting will cause them to further cut back on lending. Since they’re NOT lending, I guess he means they’ll use a time machine to go back and call in loans outstanding during the Fifties or something.
 
As for the double-dip recession, this may be triggered by the unsustainability of the globalist debt system, or it may be triggered by Peak Oil, but it cannot be triggered by any level of reform or justice.
 
On the contrary, these offer us the only possible path to social and economic sustainability and stability.
 

But the banks can’t just retreat or lobby to stave off all regulation. Instead, they need to go on the offensive by advocating responsible regulations that reward sound practices and constrain and punish the egregious ones. They need to recognize the desperate needs of small businesses and start-ups and provide the funds they require. And they need to show marked restraint in cash compensation, rewarding only long-term performance with long-term rewards.

 
That’s written in code. We’ve seen what they really mean by “going on the offensive” where it comes to proposed regulation.
 
For a Goldman cadre to call for “restraint in cash compensation” is rich. We know how empty such words are, like the way any murderer claims to be against murder in principle.
 

Let’s stop vilifying the bankers. The current public sentiment towards banks misses the forest for the trees. Anger is rarely cathartic. In this recession, it has become counterproductive.

 
More patronization. We’ll see how cathartic it is when you’re all swinging.
 

The economic crisis was set off by an unbalanced approach to risk management, but the “antibank” rhetoric is an unbalanced reaction to the vital role banks must play in rebuilding trust and fueling economic growth. A blanket indictment of the entire system defeats the essential role that well-functioning banks must play in rebuilding the vitality of the American economy.

 
This wouldn’t have been complete with that same old claim that this was all a combination of natural disaster and honest mistake: an “unbalanced approach to risk management”.
 
The dirty secret and official lie of “growth” is that there has been no real growth in decades. Rather, we’ve had only phony debt-binging “growth” as a feature of financialization, even as the banks presided over the erosion of wages, labor organization and protections, and the social safety net. Thus they were able, for political purposes, to maintain the pretense of there being a “middle class” even as they hacked away at all the roots of its reality.
 
Now the game is up, and society totters. There’s no economic basis for our existence under this dispensation. We can reestablish ourselves only by taking our country back from those who have stolen it.
 
I think that also answers the question of how much “trust” we can repose in the banks.
 

A blanket indictment of the entire system defeats the essential role that well-functioning banks must play in rebuilding the vitality of the American economy

 

 
He closes with an Orwellian fallacy. It was the banks who sapped and poisoned the vitality of the American economy. There is no big bank which functions well or plays any essential role from any social point of view. They only lie, steal, and gamble with taxpayer money. They are predatory and parasitic at the same time. Since they’re realistically insolvent, that’s all they can do even if they wanted to do anything differently.
 
But they do not and will not want to change, and here too it’s because they cannot. They are existentially criminal. That’s what they are, that’s all they are, and that’s all they’ll ever be for as long as they’re allowed to exist.
 
Will we let them continue to poison the wells?

October 19, 2009

Confirmed: The Bailout Failed

 

After a sojourn among the green shoots, Paul Krugman has returned to his old beat criticizing the bailout. He picked a good time for it.
 
What have we learned about the bailout, one year on? It was explicitly supposed to get the banks lending again. (And implicitly, our government promised us that if the banks were bailed out they’d never go back to their psychopathic casino ways.)
 
The basic idea was straightforward enough. Banks were needed to keep lending to small businesses and individuals. This would preserve and create jobs.
 
It was never explained why this required bailing out the big bank structures rather than shoring up the smaller ones, who have always been the real drivers of that kind of lending, but the government and the MSM claimed that this was the case. Never mind that they had no coherent argument. They just said “trust us”.
 
Being trusted, what did the government do? It doled out trillions of dollars of taxpayer handouts and exposure to these rackets, demanding nothing in return. The Bush and Obama administrations directly conveyed the money via the TARP, they laundered it through AIG, they let them borrow unlimited funds at practically zero interest through the Fed, they let them borrow on the open market with the FDIC guaranteeing their debt, and in many other ways lent, conveyed, laundered, insured, guaranteed, an unfathomable amount of money.
 
Meanwhile they asked nothing in return. Nothing. There were no strings attached. No one was investigated, arrested, tried, convicted. No conditions were placed on subsequent activities. Pay, trading, accounting shell games, everything has been not only untouched, but the administration has gone to villainous lengths to facilitate it. 
 
What was the inevitable result of this?
 
By dispensing the largesse and the “forbearance” with no strings, rules, or threats attached, the government aggressively helped Goldman Sachs, JPMorgan and others not to “resume lending” but to ratchet up their predatory and parasitic casino actions.
 
This past week GS and JPM reported billions in “profits”. That these are not real profits, that they are the result of the Too Big To Fail put and accounting games, matters nothing to corporatism. It’s profit for the gangsters, while the people take the loss and the exposure.
 
And what has been the nature of their “profitable” activities? As the NYT said, “hot areas like trading stocks and bonds rather than in the ho-hum business of lending people money.”
 
Indeed these are the big winners of the great crime. They were bailed out directly and indirectly. Goldman and Morgan Stanley were allowed to transform themselves into “bank holding companies”, which gave them access to endless cheap Fed borrowing. The MSM lied and said this would mean greater regulation and restricted activities, but in practice Goldman hasn’t been restricted one bit. They’ve gotten the best of both worlds, of law and crime.
 
GS, MS, and JPM have also issued tens of billions in FDIC-guaranteed bonds. (The FDIC doesn’t have the money to cover its obligations. Indeed it is now borrowing money from the very banks it is supposed to help regulate. So when you picture the FDIC as a grizzled old reliable mainstay which is guaranteeing your modest bank deposits, remember that it is now on the hook for vast amounts of gangland money. When the crash comes it won’t have anywhere near enough to pay off everyone. Who do you think is going to get paid off? This is another massive looting job which simply is in place but hasn’t happened yet.)
 
GS and the other high-flying casino rackets are simply speculating parasites, using the people’s money to make endless reckless bets against the well-being of the people. Thanks to the TBTF premium, they have a big advantage over any would-be competitors who don’t have such government protection. Because they have no risk, no restrictions, and endless funds with which to gamble, there are literally no limits on their psychopathy in search of odious gain.
 
(By now they’re so confident in the government as their bagman and hired thug that they no longer even recognize political limits, brazenly looting for themselves tens of billions for what they still call “bonuses”. Goldman alone has put aside $16.7 billion in money that was simply stolen from the taxpayer.)
 
Does the government at least have to recognize political limits? How does the government defend this? It hardly bothers to try. Obama recently trotted out White House economic cadre Diana Farrell to openly admit that the Too Big To Fail banks are purely an artificial government creation. This was the latest stark declaration of overt corporatism, that the number one priority of the federal government is the continued existence, empowerment, and profitability of a handful of bank rackets.
 
Farrell also chirped that the administration will “manage and oversee” the New Racketeer Order and made the fatuous claim that big banks are somehow necessary. (How, she didn’t say.) But these were just political lies. The record of the administration is clear. Without exception every major action has been pro-bank, and it has done nothing against the banks or for the people. It is an unbroken record of class war from above.
 
So much for the “profitable” casino banks. What about the theoretically “real” banks among the Too Big To Failers? Those who are heavily immersed in mortgages and credit cards, like Citi and BofA, who were also supposedly profitable in the first two quarters? Surely more than anything else their continued health would be the best measure of the progress of the bailout and the recovery.
 
But they just reported multi-billion dollar losses. Even with the TBTF put, even with mark-to-management accounting, even with every other trick and lie the government allows them, they had to report big losses. As Krugman said today, this is the real economy coming back to bite. 
 
These are the ones who are supposed to take the lead in “getting back to lending”. But they can’t.
 
Here’s what’s happening, according to Krugman. The economic turndown is on account of the credit crunch driving asset and debt deflation. This causes more credit card and mortgage defaults, more foreclosures. The bailout was premised on renewed lending to individuals and businesses in order to break this cycle. But instead banks like Citi and BofA have hoarded the cash even as these mounting defaults hit their balance sheets harder and harder. This causes them to further retrench, they don’t lend, and the bailout fails to accomplish its purpose even if we pretend that anyone was ever telling the truth about it in the first place.
 
So let’s sum up. The two premises of the bailout were that banks would then be enabled to play their allegedly necessary role, lending in order to break the debt deflation cycle, and that their casino days were over.
 
We see how not only is no one lending, but everyone is rushing back to the casino as fast and as flagrantly as possible.
 
So the bailout was a de jure lie in the case of rackets like Goldman and JPM. Under no conceivable circumstance would they ever have been of service to Main Street. And it was at least a de facto lie in the case of the likes of Citi and BofA. They especially were supposed to be the lending leaders. They can’t and won’t play that role. So they’re useless.
 
So, as most of us knew at the time in spite of the lies of government, academia, and the MSM, every cent of the bailout money was pointlessly gambled. It was thrown away down history’s worst rathole.
 
And to think of what could have been done instead, if the biggest lie of all hadn’t been when the people believed they were voting for Change.    
 
Never in human history was such a robbery committed by a handful of criminals, with an entire society as the victim.

October 16, 2009

Citi On A Hill

Filed under: Bailouts Only Reopened the Casino, Corporatism, Mainstream Media — Tags: , — Russ @ 5:20 pm

 

You are the light of the world. A city that is set on a hill cannot be hidden.  Matthew 5:14
 
This inspirational line provided the source for John Winthrop’s legendary “City on a Hill” sermon, delivered as he and his fellow pilgrims were about to found the Massachusetts Bay Colony.
 
History’s ways are strange, and this inspiration has reverberated to our own time, as Ronald Reagan repeatedly cited the image of the city on a hill to describe what lighted his vision of what America should be, as at the 1984 Republican Convention, not long after he had signed the Garn-St. Germain act.
 
Did he think of this amazing bill as he evoked that shining city? It is a perfect crystallization of everything he stood for.
 

Now the only way to avoid this shipwreck, and to provide for our posterity, is to follow the counsel of Micah, to do justly, to love mercy, to walk humbly with our God.

 
Shipwreck.
 
Coming into office the Obama administration inherited a big economic mess and an even bigger bailout to “solve”, not the real problems, but the problem of where the banks would next extract their rents.
 
This was “an inheritance with a vengeance”, as Sir Henry Baskerville might have said, and Obama took it up with gusto. Never did an heir more exuberantly seize the estate and embrace it. Immediately the manifestoes came flying: the administration’s top priority was “private profit”, “private investors”, “private banks”. The Bush/Paulson bailout was now the Obama/Geithner bailout.
 
To justify this policy they launched an all-consuming propaganda offensive. With the avid collaboration of the MSM, the official corporate line became that the banks ARE America; by saving them Obama had saved the economy; now everywhere the green shoots are surging and blooming; Wall Street is solvent and profitable; the stock market rally reflects our newfound economic weal; the recovery is on; new growth forever is right around the corner.
 
All of this is a lie. We never needed the bank rackets, which are purely parasitic. Their existence and bailout harm, not help, America. By temporarily propping them up with stolen public wealth Obama and Bush have doomed the economy. The green shoots are a fraud; every real economic indicator is despondent. Wall St. is bankrupt, and its “profits” are all the result of accounting fraud. The stock market is a fantasy goosed by the artificial stimulus of taxpayer money looted by the banks. There is no recovery except for the racketeers. There will never be real growth again.
 
Even by these rather low standards, Citigroup is a pathetic loser. It has received $45 billion in direct welfare through the TARP and over $300 billion in taxpayer guarantees, insurance, and other backstops through the FDIC for all the worthless toxic paper on its balance sheet. To this day it is still the most decrepit and insolvent of the rackets. It’s a suitable poster child for the top Obama/Bush priority. Let’s explore further.
 
Citi just reported a $3.2 billion loss for the third quarter. The first two quarters even it was able to post bogus profits through shell games and accounting tricks, as the other rackets were still able to do this week. But now Citi can’t even scrape together a decent paper scam. A harbinger? (Would you expect a real loser like Citi to be the first to fail at claiming phony profits, before the better-run liars like Goldman and JPMorgan? But that they too must inevitably succumb?)
 
Along with its feckless twin brother Bank of America, Citi keeps whining that it’s capable of paying back the TARP, but the government won’t let it. That should tell you a lot about how hopeless they really are, that even as the administration very much wants to repeat the propaganda exercise of TARP repayments, they’re leery of letting these jokers go ahead.
 
Speaking of propaganda exercises, this week the House Finance committee hashed over its gutted “reform” bill, with administration blessing of course. What a freakshow it was with every imaginable kind of lobbyist calling for a lap-dance. The committee came through, the message is clear: The casino will be flung wide open, more open for business than ever, all bets now with house money.
 
Yep, the rackets are getting their money’s worth from the lobbyists (especially since they’re using taxpayer money). And who’s the ultimate lobbyist? Here’s one nominee:
 
Richard Hohlt was recently hired by Citi chairman Richard Parsons as a “consultant”. Hohlt is a former aide to Richard Lugar. His roster of clients has included, among others, JPMorgan, Washington Mutual, TimeWarner, Philip Morris, Bristol-Myers Squibb, Chevron, and the Nuclear Energy Institute. He’s a close associate of Karl Rove and collaborated with Robert Novak in outing Valerie Plame. He was a George Bush “Super Ranger” bagman.
 
William Black called him “infamous” and his hiring “obscene”.
 

For this end, we must be knit together, in this work, as one man. We must entertain each other in brotherly affection. We must be willing to abridge ourselves of our superfluities, for the supply of others’ necessities.

 
Work as one man, supplying each others’ necessities.
 
Going into the 1980s S&Ls were sleepy, dowdy things, closely regulated. Low risk, steady, modest profit, serving the needs of normal people. “Main Street” to the core.
 
But the racketeers had plans to turn these little engines into rent-seeking dynamos. The big deregulation push came in 1982. Loan restrictions were lifted, and with the Garn-St.Germain act the bipartisan floodgates were opened. The S&Ls were freed up to take and make any loan, pay any interest, so the money flooded in. Racketeers bought them, took in deposits to make loans to real estate developers. Reserve restrictions were removed. Meanwhile the lobbyists fought off the regulators.
 
One of these racketeers was Charles Keating of the Lincoln S&L, who discovered John McCain and bankrolled his congressional campaign. (Alan Greenspan, an economist at JPMorgan, also did flack work for Keating and Lincoln.)
 
Also in the thick of this was Richard Hohlt, chief lobbyist for the US League of Savings Institutions and close associate of Utah senator Jake Garn, chairman of the Senate Banking Committee whose name appears on his S&L blowout bill.
 
Over the years McCain went on to collect an impressive array of pet lobbyists and assorted clients. Yahoo asked, When did John McCain Jump the Shark? The top answer: when he associated with this nasty slew of lobbyists, including Richard Hohlt, who became a leading contributor and bagman.
 

We must uphold a familiar commerce together in all meekness, gentleness, patience and liberality. We must delight in each other; make others’ conditions our own; rejoice together, mourn together, labor and suffer together, always having before our eyes our commission and community in the work, as members of the same body. So shall we keep the unity of the spirit in the bond of peace.

 
Familiar commerce.
 
The taxpayers now “own” 34% of Citigroup, having “invested” $45 billion in direct handouts. Of course this is small compared to over $300 billion of added public exposure through federally guaranteed “insurance” and so on.
 
This incontinent ward of the state has had some strange adventures along the way. For example, it wanted to use $50 million in taxpayer money to buy a corporate jet. But that’s relatively tame compared to its freewheeling days when it was giving Robert Rubin a $115 million no-show job and issuing reports like “Plutonomy” which contemplated a more direct, ruthless dictatorship of the superrich.
 
Ah, those were the days. Where did it all go wrong? CEO Vikram Pandit, or “Vikula” as he’s affectionately called (also “Pandito”), doesn’t know. “This was something that was bigger than Citi”, he lamented. It’s nobody’s fault, he sighs.
 
(He got some backup from a government-ordered management review which gave Pandit and most of the cadre good marks. I’m sure it was at least as rigorous as the stress tests.
 
“Executives were evaluated according to their ability to develop and execute a business strategy, to work well with regulators and other executives, and to understand the bank’s business issues”.
 
Well that’s sure good to hear! How about finger-painting, sharing at recess, and being quiet during naptime? )
 
Indeed this was not the banks’ fault, according to the Obama/Bush administration. The banks aren’t the cause of the disaster but the solution. They aren’t predators but victims. The bailouts aren’t the definitive looting of the country, but a solid investment in a prosperous future.
 
It’s not surprising, since this arose naturally out of the corporatist system, which is by now an automatic machine, with the finance sector at the center of it. And if Citi is a special Obama darling, this must reflect the influence of his economic guru Robert Rubin.
 
“Rubin is the mole of today’s economic crisis.” He is the pivot of much that has happened. As Treasury Secretary in the 90s he worked closely with Greenspan to dismantle the entire regulatory structure which stood between America and the full fury of the bank psychopaths.
 
Perhaps the greatest beneficiary of 90s deregulation was Citigroup. The 1998 merger of Citi and Travellers Group constructed the most complexified Rube Goldberg structure of commercial banks, investment banks, and insurers. It was after Rubin stepped down from Treasury that they gave him the nine-figure job. And so it goes….In January 2008 Rubin declared that nothing was wrong, nothing to see here, “just periodic excess leading to periodic disruption”, the Great Moderation would continue at least for the superrich even if everyone else was doomed, in other words all was well in the world.
 
Evidently it’s to try to keep things that way that Citi has hired Richard Hohlt. According to the NYT he was hired by Parsons as “an advisor to provide strategic counsel on Washington matters related to the bank”. Citi insists he is not a registered lobbyist and won’t act as a lobbyist. No, he’ll keep Parsons informed about “the mood and tenor of the town”.
 
Hohlt himself insists he’s not the same criminal he was way back when. “I wish that everyone would comprehend that because of these past experiences, mistakes made, some problems that were created because of those mistakes, I can maybe offer more candid advice”.
 
The passive voice and channelling of Nixon inspire confidence. He also said that if you watch thirteen botched surgeries, you’re then qualified to advise on a fourteenth.
 
Sources say the real purpose of his hiring is as a strategist against the FDIC (Citi’s great benefactor), and by extension against the American people. So just as he helped loot $150 billion through the S&L crash, so he’s now going to help set up the FDIC as the sucker. The goal will be to take full advantage of that $300 billion backstop.
 

The Lord will be our God, and delight to dwell among us, as His own people, and will command a blessing upon us in all our ways, so that we shall see much more of His wisdom, power, goodness and truth, than formerly we have been acquainted with. We shall find that the God of Israel is among us, when ten of us shall be able to resist a thousand of our enemies; when He shall make us a praise and glory that men shall say of succeeding plantations, “may the Lord make it like that of New England.”

 
Ten of us shall resist.
 
In 1987 when the regulators finally started closing in, Charles Keating enlisted his kept man McCain, along with senators Deconcini, Cranston, Glenn, and Riegle, to try to run interference. Thus we have the egregious “Keating 5”. But when this didn’t work, and McCain bailed on Keating, the game was up. There was nothing left but the arson. As they said in Goodfellas: “You bust the place out. You light a match”. $150 billion.
 
But have no fear. Although Keating and some other scumbags landed in prison, everybody else landed on their feet.
 
McCain quickly found a new pimp. Since 1989 he’s been in the pocket of Big Oil, collecting nearly $3.5 million from fossil fuel “employees” and PACs.
 
And what about lobby kingpin Richard Hohlt? George H. W. Bush named him to the board of Sallie Mae, the student loan corporate launderers.
 
So he was right at home where he’s always been.
 

For we must consider that we shall be as a city upon a hill. The eyes of all people are upon us. So that if we shall deal falsely with our God in this work we have undertaken, and so cause Him to withdraw His present help from us, we shall be made a story and a by-word through the world. We shall open the mouths of enemies to speak evil of the ways of God, and all professors for God’s sake. We shall shame the faces of many of God’s worthy servants, and cause their prayers to be turned into curses upon us till we be consumed out of the good land whither we are going.

 
The worthy servants.
 
Tim Geithner was offered the Citi CEO job in 2007 but turned it down. But he’s kept in touch.
 
Through the first seven months of the Obama administration Geithner had at least 80 telephone contacts with Goldman CEO Lloyd Blankfein, JPMorgan chief Jamie Dimon, and Citi’s Pandit and Parsons. Only Obama himself was in the same exalted company. One time Geithner came out of an important meeting and got right on the phone. He talked first to Blankfein, then Dimon, and then Obama.
 
No word on whether he’s taking calls from Hohlt yet. But as they said, Hohlt’s job is to teach Parsons how to “communicate”. So he’s got a line to the White House regardless.
 

And to shut this discourse with that exhortation of Moses, that faithful servant of the Lord, in his last farewell to Israel, Deut. 30. “Beloved, there is now set before us life and death, good and evil,” in that we are commanded this day to love the Lord our God, and to love one another, to walk in his ways and to keep his Commandments and his ordinance and his laws, and the articles of our Covenant with Him, that we may live and be multiplied, and that the Lord our God may bless us in the land whither we go to possess it. But if our hearts shall turn away, so that we will not obey, but shall be seduced, and worship other Gods, our pleasure and profits, and serve them; it is propounded unto us this day, we shall surely perish out of the good land whither we pass over this vast sea to possess it. Therefore let us choose life,that we and our seed may live, by obeying His voice and cleaving to Him, for He is our life and our prosperity.

 
Whatever your guiding light, whatever covenant your heart compels, whatever article you hear recited by whatever voice, it must all say the same words decrying the misfortune which has descended upon America.
 
Shall we perish out of this good land?
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