Unscrupulous Manipulation of the US Financial Architecture: The Failed Presidency of George W. Bush A Dismal Legacy. Part II
By Prof. Rodrigue Tremblay
Global Research, October 25, 2008
“Greed is good. Greed is right. Greed Works.”Gordon Gekko, corporate raider (played by Michael Douglas) in the movie Wall St.
“President [George W.] Bush will be remembered as the most fiscally irresponsible president in our nation’s history.” Sen. Kent Conrad, Chairman of the Senate Budget Committee
[The government's decision to buy shares in the nation's leading banks] “is not intended to take over the free market, but to preserve it.”President George W. Bush, October 14, 2008
“Our country for the first time in my life time has abandoned the basic principle of human rights. …We’ve said that the Geneva Conventions do not apply to those people in Abu Ghraib prison and Guantanamo, and we’ve said we can torture prisoners and deprive them of an accusation of a crime to which they are accused.” Jimmy Carter, former American president
“After [this] war [against Iraq] has ended, the United States will have to rebuild much more than the country of Iraq. We will have to rebuild America’s image around the globe.”Sen. Robert Byrd, (D-W.Va), March 19, 2003
Economically, the Bush-Cheney administration is leaving behind a big financial and economic mess. In fact, this is an administration that has brought misery upon America by its misguided economic policies that have built a mountain of shaky debt and rendered dysfunctional large segments of the American banking industry and large sectors of the U.S. economy, through inappropriate deregulation to enrich greedy special interest characters, wheeler-dealers, corporate con men, professional short-sellers and other scam artists and swindlers. In so doing, it has empowered rich parasitic speculators and turned the financial sector into a giant casino, thus risking the health of the entire economy.
Indeed, and to complete the picture, the Bush-Cheney administration has emptied the public treasury, debased the U.S. currency and fueled deflation, inflation and, in the end, produced stagflation and what can turn out to be a very serious recession.
This is understandable. Over the last eight years, the Bush-Cheney administration has adopted a laissez-faire policy based on a let-them-eat-cake ideology. It has pushed for economic deregulation throughout the government, beginning with the de-fanging of the Securities and Exchange Commission. It has pursued an aggressive policy of deregulation of the large global investment banks, which were basically left to self-regulate themselves and allowed to build up the largest mountain of flimsy backed debt instruments and risky financial derivative products ever seen in history. It did the same thing for other regulatory agencies such as the Consumer Product Safety Commission, the Environmental Protection Agency, worker safety and transportation agencies.
It is thus no accident that the Bush-Cheney administration has presided over one of the worst financial collapses and credit crises in U.S. history, by packing regulatory agencies with cronies whose mission it was to let rapacious speculators and market manipulators go wild. The result has been the creation of a casino-like speculative economy that is now crashing down before our very eyes.
Under Bush-Cheney, financial markets became manipulated by unscrupulous bankers and by rapacious hedge funds, as public regulation was reduced to a minimum. Millions of Americans lost their homes through foreclosure and many more saw their working and pension incomes eroded and destroyed by inflation and plant closings. And as what could be a protracted recession proceeds, many more will lose their jobs in the coming months, while some older employees may have to postpone their retirement because of the disappearance of their pension money.
In a parody of President Abraham Lincoln, we can say this has been an administration that deserved to be dubbed “a government of the wealthy, by the wealthy and for the wealthy.” Some would not hesitate to say, also in parody, that it has been “a government of Goldman Sachs, by Goldman Sachs and for Goldman Sachs,” considering the ubiquitous political and economic role which that firm has played within the Bush-Cheney administration. President Bush’s own Chief of Staff, Mr. Joshua Bolten, comes from Goldman Sachs. And these days, everybody pretends not see the real and potential conflicts of interests of other public servants who are now on the giving public side of things, at the U.S. Treasury, and who are going to be on the receiving private side of public money, in a scant few months. It is the same thing with a lot of what the U.S. Treasury does. —Even the Governor of the Bank of Canada, Mr. Mark Carney, is a former employee of Goldman Sachs!
In a related matter, for historical purposes, it will be remembered that, in the fall of 2008, the Bush-Cheney administration sponsored a huge rescue-plus-bailout of the largest speculative Wall Street investment banks (which the Bush SEC had deregulated on March 28, 2004) and of a host of other banking and insurance institutions which had engaged in alchemy or synthetic finance and made risky investments. To that effect, it is ready to place at risk close to $2.0 trillion of public money and let the public debt explode, with few conditions attached to protect the public interest. In fact, the Bush administration stood ready to advance hundreds of billions of dollars and only requested non-voting preferred shares in the troubled banks and insurance companies that it rescued from bankruptcy. As a consequence, contrary to what the Roosevelt administration did in the 1930s, the U.S. government has no direct say about the way the troubled financial institutions are managed and run, and thus, if the bail-out were to be successful, most of the benefits would go to bank owners and their executives; but, if things continue to deteriorate, taxpayers will be the ones left holding the bag.
Some have said this is an example of corporate socialism for the rich. In fact, this has nothing to do with socialism per se, but everything to do with legal and unapologetical extortionism on a high level. For all these reasons, if the ongoing recession and financial crisis were to turn into a full-fledged economic depression, as it could possibly do, and as it did in 1873-1880 and 1929-1939, it would have to be dubbed by historians “the Bush-Cheney Grand Economic Depression” of 2008-20(?).
George W. Bush will also be remembered for having financed his whimsical and ill-conceived three-trillion-dollar war of aggression against Iraq on credit, thus worsening the U.S. financial situation in the world, perhaps irrevocably. He is leaving behind him a financial mess like no one has seen since the great depressions following 1873 and 1929.
In all fairness, it must be said that some Democrats in Congress, the so-called Bush Democrats who usually vote with Republicans on foreign policy issues, have also been supporters of the Iraq War from the beginning and have invariably voted for the hundreds of billions of dollars required to finance it.
The Bush-Cheney administration has presided over economic dislocations and greed-fed financial bubbles, and it has been an agent of poverty and of financial and economic crises. This is an administration that will be sadly remembered for its huge tax cuts for the super rich, for its huge fiscal deficits bequeathed to future generations and for its huge and costly bailouts for speculators and high flyers, and very little for families and ordinary citizens.
As a consequence, on the whole, Americans are today poorer than when this duo took power eight years ago, while the gap between the very rich and the average American has never been wider. It has been a regime that has borrowed and borrowed, debased the currency, waged unnecessary wars and doled out defense contracts in the most reckless possible way, with a minimum of oversight and accountability.
International Mess: An Irresponsible Attempt to rekindle the Cold War
Internationally, Bush and Cheney not only started a war against Iraq, a country that had never attacked the United States, but they also did their utmost to recklessly restart the Cold War with Russia. They did that by unilaterally abrogating the Anti-Ballistic Missile Treaty, by transforming NATO into an offensive military alliance and by installing anti-missile sites, manned by American soldiers, in former Warsaw Pact countries, such as Poland and the Czech Republic, and in former Soviet republics, right next to Russia’s borders.
The Bush-Cheney administration designed a policy of encircling Russia by arming pro-U.S. European client states. That is why they have directly provoked Russia by incorporating six former Warsaw Pact nations and three former soviet republics in the now offensive and U.S.-controlled military alliance that is NATO. They went as far as to openly support and arm aggression-prone governments in some former Soviet republics, especially in Georgia, the birthplace of Stalin. All this reflects a pro-active and aggressive military stance against Russia designed to provoke Russia and restart the Cold War, thus dangerously increasing the chances of a nuclear world war.
Let us recall that when Khrushchev’s Soviet Union tried to install missiles in Cuba in 1962, it nearly started a world war. Now, half a century later, with Bush-Cheney, the brinkmanship is on the other side. They have acted irresponsibly in provoking Russia, as if they did not mind restarting a cold war with that country. Russian exasperation was well expressed by then Russian President Vladimir Putin when, in 2007, he said that “The United States [under Bush and Cheney] has overstepped its national borders in every way, and as a result, no one feels safe. . . . such a policy stimulates an arms race.”
Disrespect of Military Advice
Complete article at:
Rodrigue Tremblay is professor emeritus of economics at the University of Montreal and can be reached at: rodrigue.tremblay@ yahoo.com.
He is the author of the book ‘The New American Empire’.
Visit his blog site at
Check Dr. Tremblay’s coming book “The Code for Global Ethics” at:
‘You’ll have a revolution on your hands.’ –Sen. Chris Dodd, D-CT: So When Will Banks Give Loans?
By Joe Nocera
25 Oct 2008
It is starting to appear as if one of Treasury’s key rationales for the recapitalization program — namely, that it will cause banks to start lending again — is a fig leaf, Treasury’s version of the weapons of mass destruction. In fact, Treasury wants banks to acquire each other and is using its power to inject capital to force a new and wrenching round of bank consolidation… Mr. [Mark] Landler’s story noted that Treasury would even funnel some of the bailout money to help banks buy other banks. And, in an almost unnoticed move, it recently put in place a new tax break, worth billions to the banking industry, that has only one purpose: to encourage bank mergers… Late Thursday afternoon, I caught up with Senator Dodd, and asked him what he was going to do if the loan situation didn’t improve: “If it turns out that they are hoarding, you’ll have a revolution on your hands. People will be so livid and furious that their tax money is going to line their pockets instead of doing the right thing. There will be hell to pay.”
From: CLG News
Taxpayers for Common Sense: Deficits Do Matter
Deficits Do Matter
Volume XIII No. 43 – October 24, 2008
This week, Federal Reserve Chairman Ben Bernanke observed that it is “appropriate” to consider a “significant” stimulus. Of course, the Chairman’s comments that Congress “limit longer-term effects on the federal government’s structural budget deficit” didn’t get the same amount of attention.
Politicians of all stripes have recently been embracing the economic views of John Maynard Keynes, proclaiming that with today’s sizable economic challenges, broad government spending is the right way to jumpstart the economy. Budget discipline, many argue, has to be temporarily pushed to the side in favor of deficit spending on infrastructure, jobs programs, and other investments.
Unfortunately, pushing budget discipline to the side is nothing new to policymakers, and in recent years, deficit spending has been the norm. In 2002, Vice President Cheney told then-Secretary of the Treasury Paul O’Neill that “Deficits don’t matter.” Since that time, lawmakers and the administration have led the country into an ocean of red ink. Revenue cuts and massive spending increases became a recipe for record deficits.
Over the past seven years, we’ve added $4.2 trillion to our debt, bringing it to a whopping $10 trillion. In FY 2008, we paid more than $450 billion in interest alone. As the debt increases, so will our interest payments. Even without stimulus spending, our deficit spending would continue without a major change in course.
And as Dr. Robert F. Wescott, President of Keybridge Research, recently told Congress, “There can be a point where budget deficits are so large that they cause private investors to lose confidence in the country’s fiscal management.” That would be the tipping point; if investors lose confidence then the U.S. government is going to have to pay higher interest rates to get people to buy our debt.
So when Congress and the next President consider new major spending, it is more important than ever that they keep in mind that deficits do matter. Whatever stimulus is enacted needs to be targeted and effective, and not simply a regurgitation of political favorites regardless of whether they are appropriate fixes to the current problems.
Congress is talking about everything from extending unemployment insurance and expanding food stamps benefits to a temporary capital gains tax cut. There’s also talk about plowing money into infrastructure to generate jobs and providing aid to states in the red. Some of these provisions may be helpful, but only if considered in the context of the specific needs of the current crisis. It is time for Congress to put partisanship aside in favor of hard-nosed, tough decisions that benefit the country.
The argument for deficit spending in times of recession isn’t new. Unfortunately, years of deficit spending have given us no fiscal slack to deal with these tough times. Because we re-elected the Republicans and Democrats that led us over this fiscal cliff, politicians have concluded that concerns over the deficit take a back seat to other voter priorities. But deficits do matter, and we hope voters, Congress, and the next President don’t forget that.
Let us know what you think.
Going on at Taxpayer.net This Week
Fundraising Totals for Party Conventions
50% of Bailout Package Spent
President Approves $5 Billion in Defense Earmarks
FY2009 Appropriations Bills: TCS Analyses and Earmark Databases
Blogging the Senator Stevens Trial
Stevens Trial: Jury Dismissed for Weekend, Return Unknown
Pub Date: Oct 24, 2008
Stevens Trial: Jury Instructions
Pub Date: Oct 23, 2008
Stevens Trial: It’s the Jury’s Turn
Pub Date: Oct 22, 2008
Stevens Trial: Closing Arguments
Pub Date: Oct 21, 2008
Stevens Trial: Closing Arguments Tomorrow
Pub Date: Oct 20, 2008
Stevens Trial: Senator Continues Testimony
Pub Date: Oct 20, 2008
TCS in the News
TCS was cited in dozens of stories this past week Check them all out in the Headlines About TCS section of our redesigned website.
“I am looking out there at three Bill Buckners. All of you let the ball go through your legs.”
–Rep. John Yarmuth (D-KY), referring to Alan Greenspan, John Snow, and Christopher Cox on October 23, 2008.
weekly wastebasket at www.taxpayer.net
Post Only Supports Bailout for Robert Rubin, Not Autoworkers
We all know how hard it is to get by on tens of millions of dollars a year. That is why the Washington Post was near hysterical in its support of the Wall Street bailout earlier this month. They argued that if we didn’t give $700 billion to the banks right away that all hell would break loose.
Those who wanted to put conditions that ensured that the money didn’t go into the pockets of shareholders or top executives, or even that the bailout was done the right way through direct injections of capital (as it eventually was) were denounced as reactionary Neanderthals. So, the bailout went through and the Wall Street executives are now getting tens of millions in compensation, courtesy of average taxpayers.
Now the occasion comes to bailout the auto industry and the Post goes ballistic the other way. After all, the average autoworker makes $56,650 a year. That’s almost as much as Robert Rubin makes in a day. Who do these autoworkers think they are?
There are serious issues that should be asked about any bailout of Detroit, but it is a bit obscene to see a paper that in both its editorial and news pages was an active supporter of handing tens of billions of dollars to rich Wall Street bankers suddenly turn around and get hysterical about the idea of helping workers making $57,000 a year. And remember, none of these autoworkers are responsible for wrecking the economy.
Dean Baker, CEPR
Beat the Press’ Weekly Roundup
Committee Holds Hearing on the Credit Rating Agencies and the Financial Crisis
“The House Oversight and Government Reform Committee held a hearing titled, Credit Rating Agencies and the Financial Crisis on Wednesday, October 22, 2008…The hearing examined the actions of the three largest credit rating agencies, Standard & Poor’s, Moody’s Corporation, and Fitch Ratings, leading up to the current financial crisis.”
MICHAEL MOORE: NO MORE SOCIALISM FOR THE RICH!
“McCain is going to make sure the wealthy get another incredible tax break while everybody else suffers.”
Committee Holds Hearing on the the Role of Federal Regulators in the Financial Crisis
“The Committee on Oversight and Government Reform held holding a hearing titled, The Financial Crisis and the Role of Federal Regulators on, Thursday, October 23, 2008. The hearing examined the roles and responsibilities of federal regulators in the current financial crisis. A preliminary hearing transcript (201 pages, PDF) is available for download.”
“Employment in the New York–New Jersey Region: 2008 Review and Outlook,”
by Jason Bram, James Orr, and Rae Rosen
The 2007 slowing in job growth in the New York–New Jersey region continued through August 2008. A projected weakening in the national economy through the end of 2008 combined with the market turmoil affecting New York City’s finance sector suggests that the region will post substantially smaller job gains this year than it did in 2007. Beyond 2008, continued financial stress could lead to an even sharper and more protracted contraction in the city’s finance sector, potentially spreading to other sectors of the region’s economy.
Read the full article:
Automotive plant closing, over 550 losing jobs … and more
Chicago Tribune – United States
Johnson Controls Inc. announced it will be closing its automotive interiors manufacturing plant in Cadiz that employs 559 workers as part of a global
Dell is mum about possible plant sale
Winston-Salem Journal – Winston-Salem,NC,USA
Dell is closing a desktop-computer plant in Austin, Texas, cutting 900 jobs. “One person briefed on the plan said he expects the company to sell most — and …
Panasonic to close stereo plant in Peachtree City
WTVM – Columbus,GA,USA
(AP) – Panasonic is closing its car stereo manufacturing plant by the end of next year, meaning that 500 people will lose their jobs. The plant closing is 1 …
Local workers recall East Huntingdon plant closing – Tribune-Review
Aug 24, 2008
… Former Volkswagen Westmoreland workers remain bitter and angry over the German company’s decision to tell workers during Thanksgiving week …
Oddi Atlantic plant closing its doors
Bethany Beach Wave – Bethany Beach,DE,USA
By Deborah Gates • Staff Writer • September 27, 2008
PRINCESS ANNE — Employees drifted in and out of the Oddi Atlantic plant Friday as numbed
and shocked …
Tower Automotive closing TC plant
Traverse City Record Eagle – Traverse City,MI,USA
Tower announced the closing Friday morning, blaming the shutdown on “reduced automotive industry demand in North America” according to a statement issued by …
Central Pa. medical products company to close
Lebanon Daily News – Lebanon,PA,USA
Medical devices manufacturer Avail Medical Products is closing its plant in central Pennsylvania by the end of the year, a company official said. …
Closing will idle plant in Carlisle
The Patriot-News – PennLive.com – Harrisburg,PA,USA
Officials of International Automotive Components North America told 152 workers on Wednesday that the Carlisle plant will close on Dec. 12. …
Brunswick Corp. closing boatyard at Wilmington, cutting 270 jobs
New Bern Sun Journal – New Bern,NC,USA
This (closing) plant make smaller, fiberglass boats … and the market is hard on them right now. The New Bern plant has done a nice job of keeping its …
Janesville’s GM Plant Could Close Sooner Than Expected
The future of Janesville’s GM plant is looking grim. after recent rumors the plant could be closing sooner then expected.
Plant Closing Down In Troy – News Story – WHIO Dayton
Oct 10, 2008 … TROY, Ohio — Around 140 workers found out Friday that their plant will close down in Miami County. Friday, October 10, 2008.
Holly Hill plant closing, taking 100-plus jobs
The Times and Democrat – Orangeburg,SC,USA
By GENE ZALESKI, T&D Staff Writer
Sunday, October 19, 2008 Roseburg Forest
Products is closing its medium-density fiberboard manufacturing facility in Holly …
Poultry plant’s closing to cost 600 jobs
Atlanta Journal Constitution – GA, USA
The plant is not a slaughter facility. The closing is among the largest plant shutdowns announced in Georgia in the past two years, according to notices …
159 will lose jobs in Lake Mills plant closing
Wisconsin State Journal – Madison,WI,USA
The SPX Corp. filed notice with the state that it will close its APV North America plant on Dec. 31, eliminating 159 jobs from the western Jefferson County …
Plant closing puts 25 percent of Elm City’s workforce out of a job
WRAL.com – Raleigh,NC,USA
Sanders says he and his 379 co-workers learned about the plant’s closing during a morning staff meeting. “I think they were surprised. …
Northwest Ohio auto parts plant closing
WDTN – Dayton,OH,USA
… owned by Sypris Solutions of Louisville, Ky., makes axles for tractor-trailers. Officials say three years of losses for the plant led up to the closing.
Borowitz Report – Obama Ad Shocker
October 26, 2008
Glitch Knocks Obama’s Ads Off Air for Thirty Seconds
Half-minute Hiatus Causes Alarm in Campaign
Obama campaign officials today were trying to get to the bottom of a technical glitch that knocked the Democratic presidential nominee’s television ads off the air for thirty seconds yesterday.
Mr. Obama’s ads, which have been playing on a continuous loop for the past seven weeks, were scheduled to be broadcast without interruption until Election Day – and so the half-minute hiatus on Saturday set off alarm bells within the Illinois senator’s campaign.
“I was watching a football game and they went to commercial,” said Obama campaign manager David Axelrod. “And I was expecting to see one of Barack’s ads, but instead it was a car commercial. I totally freaked.”
Mr. Axelrod said that he and top campaign ads have spent the better part of the day trying to figure out what went wrong “and to make sure it doesn’t happen again.”
“Our strategy of airing Obama ads nonstop around the clock has really started to pay off,” he said. “Our polling shows that people are starting to see these ads in their sleep.”
Despite national polls showing Mr. Obama in the lead, Mr. Axelrod warned against overconfidence: “There’s always a chance of an ‘October Surprise’ – some kind of unexpected external crisis created by Joe Biden.”
January 1, 2009 at 12:01AM
Andy’s 2009 Shows
Watch this space for Andy’s performances in 2009.
three thousand words
Ben Sargent: The Other America
Ted Rall: humans against people
Monte Wolverton: palin’s pipeline plot