Senior Greek Official: “We may have an uprising in the making”

Originally posted at Firedoglake/Seminal

What if three million protesters poured into the streets of American cities, and with a general strike shut down all transportation, closing government offices, and setting banks and office buildings ablaze?

If one takes into account the size of Greece, a proportionate amount of the Greek population did just that on May 5. Over 100,000 protesters took took to the streets. But this was not your ordinary European mass rally. World markets, including Wall Street, felt the tremor from these demonstrations. The protests are against onerous economic cutbacks in the wake of a € 110 billion Euro ($145 billion) bailout for a near-bankrupt economy. But a large percentage of the Greek population doesn’t see itself paying for a generation for the corruption of their own officials, and the economic shock therapy dictated by the International Monetary Fund (IMF) and German bankers.

From the UK Guardian:

"All of us are angry, very, very angry," bellowed Stella Stamou, a civil servant standing on a street corner, screaming herself hoarse, a block away from where the bank had been set alight.

"You write that – angry, angry, angry, angry," she said, after participating in one of the biggest ever rallies to rock the capital since the return of democracy in 1974. "Angry with our own politicians, angry with the IMF, angry with the EU, angry that we have lost income, angry that we have never been told the truth."

From the Wall Street Journal:

"For 30 years the Greek people have been held hostage," said Periandros Athanassakis, 48, a garbage collector in Piraeus, the port near Athens. "Those who stole the money should pay."

Some officials saw in Wednesday’s protests the seeds of broader discontent. "We may have an uprising in the making," one senior Greek official said.

The New York Times focused on the violence, predicting (in their hopeful way) that the violence would bring about a government reaction, and a backlash of Greeks "against a growing number of extremists". The Grey Lady intoned, "Some said they were willing to endure what some economists predict could be 10 years before the economy bounces back," even while others were responding differently:

… clustered among the protesters were subgroups numbering in the hundreds — mostly young and many clad in black, wearing hoods or masks and carrying helmets, wooden bats or hammers — that the police and other demonstrators identified broadly as anarchists. They led efforts to storm the Parliament building, chanting “thieves, thieves,” and hurling rocks and gasoline bombs.

Everyone agrees that the situation in Greece is dire. And Greece is the proverbial canary in the coalmine, as world financiers look doubtfully upon Spain’s 20% unemployment rate and indebtedness, and precarious economic conditions from the UK to Italy. The Germans are the real power behind the EU, and their economy is the one that others are looking to for a bail out the weaker states — but only at a price. The Germans are holding firm to the terms of their bailout, even as German chancellor Angela Merkel said, "Quite simply, Europe’s future is at stake."

What’s the Bailout Deal?

Greek Prime Minister George Papandreou has a difficult, maybe impossible austerity package to sell to the Greek people. The Greek state has been living on borrowed funds for some time. The bailout deal proposed by the Germans and IMF demands Greece reduce its national borrowing rate from 13.4% of national income to 3% within four years. But where’s the money going to come from?

According to another New York Times story:

The new measures include an increase of two percentage points in the value-added sales tax, which is now 19 percent; a further increase in the fuel tax; increases of 20 percent for alcohol taxes and 6 percent for cigarette taxes; a new tax on luxury goods; and a 12 percent cut in supplements to wages for civil servants, Mr. Petalotis said.

They also include a 30 percent reduction in the bonuses given to civil servants as holiday pay, which amount to two additional monthly wages, he said.

The Gerson Lehrman Company describes how the Greek economy is going to be chopped up and sold to the highest bidder, many of those foreign. Of course, they are quite sober about it all:

The government will accelerate privatizations (€ 2.5 bill. budgeted for 2010) and may change its mind regarding majority ownership by strategic (foreign/EU) investors of types of assets / industries that have been protected under the existing social /political model, including utility/infrastructure, transport or special state (monopoly) assets. Examples might include the railway company, water distribution companies, the electricity grid or the power company (PPC), as well as the soccer betting company (OPAP), gambling Casinos and the remaining stake in Hellenic Telecom (OTE), which will probably be sold to Deutsche Telekom. Other interesting candidates for privatization might include airports and seaports and enhanced PPP/PFI models will be considered for infrastructure investments.

So goodbye living wages, goodbye state-run utilities, transport, and telecom. As the quote above makes clear, German companies are primed to sweep up the goodies off the bargain basement floor. This is a bitter pill for the Greeks, who endured Nazi occupation during World War II, which they answered with a large bloody resistance. The old hatreds and resentments still simmer under the surface.

Back in February, Greek Deputy prime minister Theodoros Pangalos lashed out:

Nazi theft of Greek gold during the Second World War is to blame for the country’s faltering finances, Athens claimed yesterday….

Greece said the real culprit for its problems were the Nazis, whose occupation lasted from 1941 to 1945….

Germany swiftly rejected the accusation, saying it paid £50 million in compensation by 1960 and more to forced labourers of the Nazi regime.

Where is this all headed?

People in the U.S. are used to hearing about European general strikes. In the popular mind, fostered by a somnolent and ignorant press, such protests are quaint European customs, artifacts of a past that is not relevant anymore, especially since the fall of the Soviet Union. But this is a crisis that is not going to go away. And within living memory, European states have turned to violent coups and dictatorships to quell popular dissent, as in Greece and Portugal in the 1960s and 1970s.

In Italy, U.S./NATO-backed right-wing terrorists, part of the left-behind armies of Operation Gladio, facilitated the Italian government’s "strategy of tension" during the 1980s in order to keep the then-popular Italian Communist Party from entering the Italian government. Philip Willan covered the revelations of this story in the UK Guardian a decade ago:

The 300-page [Italian parliamentary] report says that the United States was responsible for inspiring a "strategy of tension" in which indiscriminate bombing of the public and the threat of a rightwing coup were used to stabilise centre-right political control of the country.

Those who carried out the attacks were rarely caught, it said, because "those massacres, those bombs, those military actions had been organised or promoted or supported by men inside Italian state institutions and, as has been discovered, by men linked to the structures of United States intelligence".

The crisis in Greece and the European Union in general is exposing the deep flaws within the post-Soviet economic and political structure in Europe. The fires in Athens are a harbinger of a bigger crisis to come, one that Americans will have to pay attention to. But do not count on the U.S. press to honestly report what will happen, or the U.S. government to stand aside in neutrality. The Obama administration is pushing the Europeans and the IMF to get the bailout deal in place quickly, even as right-wing Republicans are screaming they will not support the U.S. paying its portion of the IMF bailout funds.

The people of Greece seem determined they will not pay for the orgy of corruption and double-dealing that has left their economy in tatters. Whether it was Goldman Sachs playing funny with derivatives to help the Greek government to hide its debt, or German companies rushing to buy up newly privatized industries, or the wide-spread corruption of Greek politicians, they are saying something that American workers and middle class might be thinking, and that has some people afraid: "’let the plutocracy pay’…’400">

AIG Scandal: America Wakes Up To Extent of Capitalist Thievery

The news that AIG executives were to receive hundreds of millions of dollars in bonuses (maybe as high as $450 million!), even after a $170 billion dollar bailout, has fueled a populist revolt not seen since the initial shock of the economic crisis hit Americans last October. When Obama Treasury Secretary Timothy Geithner told American Insurance Group CEO, Edward M. Liddy, that government loans to AIG might be renegotiated as a result, Liddy responded with "grave concern" over the firm's ability to retain "talented staff."

Talented in rip-off, that is. But former New York governor and supposed scourge of Wall Street, Elliot Spitzer, is reporting over at Slate that the outrage in the media over the bonuses is a diversion. (H/T Inky99 at Daily Kos.) Not that they aren't an outrage, the scandal misses the larger crime: the siphoning off of billions of taxpayer dollars to a handful of companies, who insured their highly risky investments with AIG. These companies have received hundreds of billions of dollars in bailout money. Now they are to receive 100% on the dollar reimbursement for their losses from AIG. Spitzer comments:

The payments to AIG's counterparties are justified with an appeal to the sanctity of contract. If AIG's contracts turned out to be shaky, the theory goes, then the whole edifice of the financial system would collapse.

But wait a moment, aren't we in the midst of reopening contracts all over the place to share the burden of this crisis? From raising taxes—income taxes to sales taxes—to properly reopening labor contracts, we are all being asked to pitch in and carry our share of the burden. Workers around the country are being asked to take pay cuts and accept shorter work weeks so that colleagues won't be laid off. Why can't Wall Street royalty shoulder some of the burden? Why did Goldman have to get back 100 cents on the dollar? Didn't we already give Goldman a $25 billion capital infusion, and aren't they sitting on more than $100 billion in cash?....

The appearance that this was all an inside job is overwhelming. AIG was nothing more than a conduit for huge capital flows to the same old suspects, with no reason or explanation.

No reason? No explanation? But there is always a reason. Always an explanation, though Spitzer may not want to go there.

Private ownership of the wealth and capital, freed of most regulatory restraints, is the distal cause, while the proprietors of this capital have gone on an orgy of thievery that may have never been seen in the history of civilization, outside of a world war.

Consider the new TALP plan ("Term Asset-Backed Securities Loan Facility"), which bobswern has dissected so well over at Daily Kos (bold in original).

1.) $2 trillion in taxpayer funds with no salary restrictions to recipients....
2.) Shadow Bankers get almost all of their investment money for free, from you. [Shadow bankers consist of "non-bank financial institutions that, like banks, borrow short, and in liquid forms, and lend or invest long in less liquid assets... via the use of credit derivative instruments which allow them to evade normal banking regulations," e.g., hedge funds, investment banks, "structured investment vehicles," etc.]
3.) Shadow bankers will skim administrative fees off the top of $2 trillion, first.
4.) Government has virtually no say in terms of regulating what these entities must do with the money once they give it to them. [And on and on...]

Congress has responded to constituent anger, and hearings are being held even today (see liveblogging of those hearings by Emptywheel over at FDL). But while more details will leak out, it's unlikely we will see much more than the spectacle of what Chris Floyd describes as "faux shock in the Beltway over Wall Street fat cats paying themselves big bonuses with the free money that Washington knowingly gave them."

The following points will never be mentioned:

... the capitalist class is a definite concrete group composed of those who own and have a monopoly over the means of production (including loanable capital). The capitalist class is bound together by innumerable personal, familial and organizational filiations; the atomized non-capitalist entrepreneur -—the central figure of bourgeois economic theory -— is a fiction. The capacity to borrow is strictly limited by one’s ownership of the capital assets required for security against loans. In reality, credit under capitalism is always rationed, on the basis of specific monopoly complexes involving financial, industrial and commercial capitalists.

The ingrown nature of the capitalist class, who has united to unleash a frenzy of greed and stealing, is no better illustrated than by the biography of Obama's Treasury Secretary Geithner. Born to a scion of the capitalist class -- his father was a prominent leader of the Ford Foundation -- Geithner's early career (after attending the best Ivy League schools) was working for Kissinger and Associates in Washington, D.C. He began working for various divisions of the Treasury Department as early as 1988, when he was 27 years old. He was close to two former Treasury secretaries, Robert Rubin and Lawrence Summers. During the George W years he worked at the Council of Foreign Relations and the International Monetary Fund. In October 2003, he became president of the Federal Reserve Bank of New York, and a few years later joined the elite, Rockefeller Foundation organized "Group of Thirty."

In March 2008, he arranged the rescue and sale of Bear Stearns... in the same year, he is believed to have played a pivotal role in both the decision to bail out AIG as well as the government decision not to save Lehman Brothers from bankruptcy.

Hmmm... the same guy who organized the AIG bailout, with its non-regulation of monies, including millions for "bonuses" to the same execs who helped manufacture the crisis... naw, that can't be true, can it? (It is.)

Oh, and he "forgot" to pay $35,000 in self-employment taxes over several years.

AIG and the CIA

Another strange aspect of the AIG affair, and one with which to end this post, concerns AIG's links to the CIA, another aspect of the entire scandal that seems to have escaped the mainstream press, if not the bulk of the blogosphere.

From CorpWatch:

Though it is an American company listed on the New York Stock Exchange, AIG makes extensive use of offshore jurisdictions such as Barbados, Bermuda and Luxembourg that are immune from U.S. regulatory and tax scrutiny. They help the company launder profits to evade U.S. taxes and hide insider connections in supposedly "arms-length" deals. This is especially important as the company has moved into financial services and asset management, handling the wealth of “high net-worth” clients -- the mega-rich.

[Board Chairman Maurice] Greenberg has enviable political clout, never so much in evidence as when, with the help of Henry Kissinger -- chair of AIG's international advisory committee and a paid consultant via Kissinger Associates – AIG became in 1995, the first company licensed to sell insurance in China. AIG was the only foreign firm that owned 100 percent of its license there.

The American International Group at its origins was linked to the OSS (Office of Strategic Services) the forerunner of the CIA. It grew from the Asia Life/C. V. Starr companies founded by Cornelius Starr who started his insurance empire in Shanghai in 1919, the first westerner to market insurance in China.

Some of the links between AIG and the CIA can take us to some pretty heady conspiracy territory, as in this link from a Ron Paul website:

Since 1997, Frank G. Wisner, Jr., has been a board member of Kroll , and is currently Greenberg's Deputy Chairman for External Affairs. Wisner's father was a founder of the U.S. Central Intelligence Agency, who killed himself over the scandal from his being duped by British-Soviet masterspy Kim Philby. Frank Wisner, Jr., is a director of the George Bush-linked energy giant Enron (a client for whom AIG negotiated payments from Peru over nationalization of Enron operations).

Of course, nothing in this quote above is wrong, but whether these dots connect or not is another matter. Still, the connections between AIG and U.S. government operations is a shadowy land that is worth investigating. Wisner, by the way, stepped left AIG late last year.

Michael Ruppert made an impressive case regarding the intelligence connections of AIG in an article back in 2001. He quotes a September 22, 2000 L.A. Times article by Mark Fritz, the text of which is worth considering as the AIG scandal unfolds.

Newly declassified U.S. intelligence files tell the remarkable story of the ultra-secret Insurance Intelligence Unit, a component of the Office of Strategic Services, a forerunner of the CIA, and its elite counterintelligence branch X-2.

Though rarely numbering more than a half dozen agents, the unit gathered intelligence on the enemy's insurance industry, Nazi insurance titans and suspected collaborators in the insurance business. But, more significantly, the unit mined standard insurance records for blueprints of bomb plants, timetables of tide changes and thousands of other details about targets, from a brewery in Bangkok to a candy company in Bergedorf.

"They used insurance information as a weapon of war," said Greg Bradsher, a historian and National Archives expert on the declassified records....

The men behind the insurance unit were OSS head William "Wild Bill" Donovan and California-born insurance magnate Cornelius V. Starr.

Starr had started out selling insurance to Chinese in Shanghai in 1919 and, over the next 50 years, would build what is now American International Group, one of the biggest insurance companies in the world.

Ruppert, seven years prior to the current economic meltdown, highlighted the uses of reinsurance for national security purposes. From Fritz's article (emphases added):

"Stiefel mapped the entire system," said Naftali, a historian at the University of Virginia's Miller Center of Public Affairs. "Each time I take a piece of your risk, you've got to give me information. I am not going to reinsure your company unless you give me all the documents. That's great intelligence information"....

With the Axis defeat imminent, U.S. intelligence officials focused greater attention on ways the Nazis would try to use insurance to hide and launder their assets so they could be used to rebuild the war machine. It's a task that continues today.

It's no secret that the CIA needs to launder vast amounts of money to fund its secret wars around the world. That's a good deal of what the Iran-Contra affair was about. Alfred McCoy also plumbed these depths in his classic work, The Politics of Heroin: CIA Complicity in the Global Drug Trade. According to the Wikipedia article on McCoy, in his work just cited:

He also uncovered money laundering activities by banks controlled by the CIA, first the Castle Bank which was then replaced by the Nugan Hand Bank, who had as legal council William Colby, retired head of the CIA [3]. He also alludes to the BCCI, which seems to have played the same role as the Nugan Hand Bank after its collapse in the early 1980s, claiming that "the boom in the Pakistan drug trade was financed by BCCI." [3].

There's a lot that is horrifically dirty in the entrails of American capitalism. Why is this huge outflow of capital happening at this time? Where is money going, exactly? Why are the same people who engineered the bailout now in charge of policing it?

Standing outside the intricacies of this scandal, whatever they may be, as uncovered, stand two unassailable facts. One, this breakdown of the capitalist system is causing untold suffering for billions of people around the world. Two, the causes of the economic collapse are complex, and rooted first of all in the inadequacies of the capitalist system -- a system that argues it needs an influx of public monies in the trillions of dollars every fifty to seventy years or so or it will implode. Great system!

But further questions remain: how was this collapse handled? Who benefited? What was the role of secretive government agencies that use sophisticated schemes of investment and money laundering in all this? I don't trust the U.S. government to reveal this to us. The failure of public oversight and the need to preserve a crooked system at all costs led to the downfall of the Stalinist Soviet empire. It seems likely to do the same to the American empire as well, if not now, then someday soon.

Depth of Economic Downturn in Europe Spurs Large Protests

The UK Guardian is reporting that thousands of Europeans in capitals from Paris to Riga to Kiev are taking to the streets to protest the massive unemployment stemming from the economic recession. Millions of East Europeans, tired of Stalinist repression and economic stagnation, were lured to the glittery dreams of the capitalist West. Now, things aren't looking so good.

But even in the big Western states, things are not looking so good. While the U.S. population remains quiescent, placing their hopes in the new Obama administration, American bankers hauled in their sixth-largest year of bonuses, nearly $20 billion, for administering the greatest financial disaster since the 1930s. Some of this money came from taxpayers dollars for the bank bailout. Obama bristled, but nothing will stop this ongoing transfer of wealth to the very richest, all while the official unemployment figures are over 11 million, and growing by 100,000 leaps and bounds.

Meanwhile, in France, the Sarkozy government is so so afraid of their own people -- rioters are busting up the streets of Paris, while a million workers are now on strike -- that they won't even release their latest unemployment figures out of fear of raising even more angry dissent. In Iceland, riot police patrol Reykjavik, and the old government has been forced from power.

But according to the Guardian, it's in the Eastern European countries where the dissatisfaction, and the economic disaster runs deepest:

The old Baltic trading city {Riga] had seen nothing like it since the happy days of kicking out the Russians and overthrowing communism two decades ago. More than 10,000 people converged on the 13th-century cathedral to show the Latvian government what they thought of its efforts at containing the economic crisis. The peaceful protest morphed into a late-night rampage as a minority headed for the parliament, battled with riot police and trashed parts of the old city. The following day there were similar scenes in Vilnius, the Lithuanian capital next door.

After Iceland, Latvia looks like the most vulnerable country to be hammered by the financial and economic crisis. The EU and IMF have already mounted a €7.5bn (£6.6bn) rescue plan but the outlook is the worst in Europe.

The biggest bank in the Baltic, Swedbank of Sweden, yesterday predicted a slump this year in Latvia of a whopping 10%, more than double the previous projections....

A balance of payments crisis last autumn, heavy indebtedness and a disastrous budget made Hungary the first European candidate for an international rescue. The $26bn (£18bn) IMF-led bail-out shows scant sign of working. Industrial output is at its lowest for 16 years, the national currency - the forint - sank to a record low against the euro yesterday and the government also announced another round of spending cuts yesterday.

Bailout Politics: Is the Constitution Now Null and Void?

Article I, Section 9, Clause 7, U.S. Constitution

No money shall be drawn from the treasury, but in consequence of appropriations made by law; and a regular statement and account of receipts and expenditures of all public money shall be published from time to time.

A Congressional watchdog program tasked with accounting for the hundreds of billions of dollars allocated to the Troubled Asset Relief Program, or TARP, reports that it can't get enough information on how the money is being spent.

According to ABC News:

Of the 44 questions the panel presented earlier to the Treasury Department, the department responded to 19. The report suggests that some of the answers the Treasury provided were inadequate.

"While Treasury's letter provided responses to some of the panel's questions and shed some light on Treasury's decision-making process, it did not provide complete answers to several of the questions and failed to address some of the questions at all," the report said.

Harvard Law professor Elizabeth Warren, who heads the congressional panel, says she's "shocked," but that it's up to Congress to do something about it.

Will anyone do something about it? After all, an accounting for government money is a requirement laid down in the Constitution. Does the Constitution mean anything anymore? Can any and all laws be broken now? Or only if you belong to the executive branch of government.

The non-accountability of government funding was established first in 1947, when the National Security Act created the CIA, and placed its budget outside the purview of Congressional oversight. In 1976, a Congressional committee investigating how the CIA spent its money concluded (as reported in the New York Times, emphasis is added):

Washington, Jan. 25 -- The House Select Committee on Intelligence has concluded following a year-long investigation that the Federal intelligence agencies, as they are currently constituted, operate in such secret ways that they are "beyond the scrutiny" of Congress, according to the panel's final report....

The expenditures of [intelligence] funds, the report said, were largely unchecked by Congress and even by the Office of Management and Budget.

This House report was written by what is known today as the Pike Committee. It was contemporaneous with the famous Church Report from the Senate. The CIA protested making the Pike report public, and as a result, it was never officially published, or made available by the government. (Maybe someone could get Obama or Pelosi to finally release it!)

Daniel Schorr (with NPR today) leaked the report and it was published in the Village Voice. However, it is unavailable online, and one would have to go to a library to find it.

We are paying today for the bargain with the devil that blithely canceled out a portion of the Constitution in the name of secrecy. Then it was the Cold War, now it is a financial crisis.

In Justice Joesph Story's famous commentaries on the U.S. Constitution, he wrote:

...in arbitrary governments the prince levies what money he pleases from his subjects, disposes of it as he thinks proper and is beyond responsibility or reproof.... [In a republic] Congress is made the guardian of [the public treasure]; and to make their responsibility complete and perfect, a regular account of the receipts and expenditures is required to be published, that the people may know what money is expended for what purpose and by what authority. (from R. Borosage, "The Central Intelligence Agency: The King's Men and the Constitutional Order", in The CIA File, 1976, p. 134)

The cancer of secret government is spreading from the intelligence and clandestine branches to the very heart of the working government -- the Treasury Department. Congressional will and oversight are flouted and there are no consequences.

The flow of societal authority and legitimacy flows downhill. When there is lawlessness at the top, and the rule of arbitrary authority, the social contract is broken, and the menace of anarchy, fascism, and civil war rises ominously.

The press is too house-broken to take on the reality of the lawlessness by the government. They proved this already when it came to the Iraq War build-up, or on the craven attitude towards the use of torture, even today, when the truth about the abusive torture techniques in the supposedly reformist Army Field Manual is denied or hidden from view. Even the mainstream bloggers -- Glenn Greenwald, Scott Horton, Andrew Sullivan, who have reported so much on the torture issue -- have had nothing to say about the AFM issue. Nor has anyone in the U.S. press even noted that there is a Constitutional requirement that the Treasury Department report to Congress a full accounting of expenditures.

Is Congress ignorant, unable, or totally corrupted by the executive power? Probably some combination of all three. Meanwhile the average American lives in dread of a total economic collapse, or least the loss of a job and lowered wages, with very little to look forward to for the fruits of a life's labors.

Sooner or later, trust in the government will fall like the house of cards that was the bubble economy. Then, the legitimacy of all branches of government will be nil, and their power, so vaunted now, so sure of itself with its courts, and jails, and mighty army and secret police, will be like tinkling brass. But how many will suffer until then? How many generations will live and struggle and die under the rule of a lawless elite?

I'm not sure any rule of law is possible anymore. But we could start with enforcing the U.S. Constitution, including Article I, Section 9, Clause 7. That beginning would find both the U.S. Treasury and the CIA finally giving account for the taxpayers money that flows in billions and billions into their coffers.

Taxpayer Bailout $ Goes for Bonuses, Chauffeurs, Country Club Memberships

No, I shit you not. Associated Press reports that about $1.6 BILLION dollars have been paid out by bailed-out banks in salaries, bonuses and various fringe benefits. All this goes to prove that in America, if you are filthy rich and one of the financial elite, you have a license to rip off the public at will.

Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found.

The total amount given to nearly 600 executives would cover bailout costs for many of the 116 banks that have so far accepted tax dollars to boost their bottom lines.

AP gathered their information using Securities and Exchange Commission documents on 116 banks that have received nearly $200 BILLION dollars in the taxpayer robbery bailout pushed by both political parties last September. The kind of data they gathered would make any working U.S. citizen sick (and what the growing army of the unemployed might do or think upon seeing this, I shudder to imagine).

The average paid to each of the banks' top executives was $2.6 million in salary, bonuses and benefits.

Goldman Sachs, where Treasury Secretary Henry Paulson, the overseer of the bailout, was recently Chairman and Chief Executive Officer, gave over a quarter of a BILLION dollars to their top five executives alone.

Merrill Lynch, which got $10 BILLION in bailout cash last October, gave its CEO, himself yet another former CEO of Goldman Sachs, $83 million in earnings last year.

You can't say that the bailout money was all going to lavish salaries and country club memberships and home security systems, there were practicalities to be considered, too, for the poor impoverished execs of our country's financial elite:

Wells Fargo of San Francisco, which took $25 billion in taxpayer bailout money, gave its top executives up to $20,000 each to pay personal financial planners.

And then there was Madoff...

Meanwhile, the SEC's broken oversight system (or system of corrupt payoffs?) led to the perpetuation of Bernard Madoff's now-notorious and now collapsed Ponzi scheme, which bilked investors out of $50 BILLION. Led to believe initially by the press that Madoff's clients were all the well-to-do, for whom the average American could wag their heads with schadenfreude, it now turns out that charitable foundations around the country were rocked by the collapse of Madoff's company.

One major loser was "the JEHT Foundation, a six-year-old New York City-based philanthropy focused on juvenile and criminal justice, human rights, and election reform." JEHT funded hundreds of advocates and non-profits, who are now struggling to survive. JEHT, which distributes tens of millions in grants each year, is now shutting down operations.

Nobel Prize-winning Physicians for Human Rights, who have been in the vanguard in fighting against torture and war crimes, had received over a million dollars in the past six years via JEHT grants, and now find themselves suddenly $175,000 short of funds for their 2009 Campaign Against Torture project.

Two foundations that funded various Jewish causes -- the Robert I. Lappin Foundation the Chais Family Foundation -- have totally shut down.

Even in ritzy Marin County, California, the nonprofit Commonweal group has lost its funding and is shutting down its juvenile justice program.

San Francisco attorney Jay Gould explained to the local paper there that those who lost money will have to compete for legal representation with those who profited from Madoff's Ponzi scheme over the years. The latter are clamoring for legal representation, too, fearful the feds will call back some of their winnings profits over the past several years. Gould elaborated:

"It's possible that anybody who takes on one client is conflicted out of taking on any other client because everybody is potentially adverse to one another," Gould said. "These little guys who call in that lost $2 million or $6 million or $10 million - I can't guarantee we're going to represent them."

U.S. capitalism has revealed itself to be one big clusterfuck. While the politicians and opinion makers rail over the Detroit automakers request for a few billion in loans, castigated as out-of-touch cheaters flying around in posh corporate jets, intent on milking the American public (and all the while the government says the unions will pay with BILLIONS in cutbacks to make Detroit "competitive"), Wall Street (including the firms that received BILLIONS in bailout cash) maintains "fleets of jets to carry executives to company events and sometimes personal trips."

A Nightmare From Which I'm Trying to Awake

How is it that this country hasn't descended into one giant jacquerie is beyond me. It is testimony to the huge superprofits that American capitalism has stolen or engendered over the years that it can blatantly waste billions, if not trillions, and still not yet be totally bankrupted. But no doubt we are getting very close, and bringing down the world economy with us in our steep descent. And then again, the economic tsunami that will accompany the shock of the trillion dollar bailout has not yet fully hit.

Where is all the money going? How is it being spent? Oh, it's secret, a matter of national security, and the Treasury Department won't account for all the money and how or where it's spent, not even to the Chairwoman of the Congressional oversight panel supposedly overseeing the humongous "bailout."

No wonder I'm having a repetitive dream these days. I'm being driven in a car on a curvy mountain road, when all of sudden there's a jerk and the car is directly and quickly driven right over the cliff. In my panic I look and I can't see the driver. My last thought is: who did this? Who steered me right over the cliff?

Unlike my unconscious and pathetic dreamer, we know who has been doing the driving and the steering. They work on Wall Street, inside the Beltway, in T.V. studios and Pentagon hallways. How much money is going to -- besides the wallets and expense accounts of the superrich -- secret military projects, to overseas dictators, covert operations? We may never know.

Wake up America, before the car definitively spins, and in one vertiginous fall, we are directed into a nightmarish void... if it is not too late already.

Capitalist Follies: Rancheros Visitadores, Citigroup, and the CIA

A posting the other day, quoting Chris Floyd on the machinations of the U.S. power elite, prompted a regular reader of mine to send a very interesting link to a story a friend of his worked on over the past few years.

As reported by Seattle Post-Intelligencer columnist Joel Connolly, Alejandro Tomas, a senior faculty member at Seattle Central Community College, has assembled a startling photo essay on one of the conclaves where the rich and privileged meet. The horse ride known as Rancheros Visitadores takes place every May in the Santa Ynez Valley near Santa Barbara, Calif. The event is one of those elite conclaves that take place annually. The best known is probably the Bohemian Grove gathering near the Russian River in Northern California.

Connolly describes the doings at Rancheros Visitadores, where no women are allowed (except maybe prostitutes):

The men are shown with sex toys around their necks, doing skits in blackface, dressed in wigs and women's clothing and consuming copious quantities of alcoholic beverages....

Who goes on the ride? The club is exclusive, white and male, with a membership limited to 600. A couple hundred invited guests and guys from the wait list attend each year.

Photos from the 1989 ride show Reagan, an honorary member, on a buckboard beside former Interior Secretary William Clark. Gen. P.X. Kelly, commandant of the Marines, also is pictured....

"I was a little taken aback by many of the attitudes," Tomas said. "Here are men at the highest rungs of power in this country. Quite blatant forms of racism and anti-Semitism and misogyny are on display. ... The festive debauchery represents a cohesion of the power class. They seem to feel stronger by putting down others."

The Rancheros Visitadores is apparently one of a number of such events, or other "Rancheros" camps. Tomas co-wrote a paper on the event with two sociologists. According to Connolly:

They argue that the "special time" each May reaffirms the riders' sense that they are the chosen leaders of American society. "The Rancheros retreat reinforces the imminent morale or esprit de corps of the corporate leaders and the landed elite," the authors report.

Masters of the Universe, Do You Need a Dime?

The ruling class is more than a collection of ideologies and bank accounts. There is a cohesiveness to their rule that suggests a cultural and social interconnectivity that transcends mere political parties.

This has been made painfully clear in the collaboration between different political groupings to give billions of dollars away, with little or no control or oversight, to the Wall Street "masters of the universe" who have looted the economy of trillions of dollars with speculative schemes, and just out and out thievery. The latest egregious hit to the U.S. taxpayers for another financial bailout comes with the announcement of a mega-billion bailout to Citigroup.

As F. William Engdahl explains in an article at Global Research:

Citigroup and the government have identified a pool of about $306 billion in troubled assets. Citigroup will absorb the first $29 billion in losses. After that, remaining losses will be split between Citigroup and the government, with the bank absorbing 10% and the government absorbing 90%. The US Treasury Department will use its $700 billion TARP or Troubled Asset Recovery Program bailout fund, to assume up to $5 billion of losses. If necessary, the Government’s Federal Deposit Insurance Corporation (FDIC) will bear the next $10 billion of losses. Beyond that, the Federal Reserve will guarantee any additional losses. The measures are without precedent in US financial history.

Yet, no one in the mainstream political discourse argues to hold these criminals to account. Instead, aim has been taken lately against unions, like the UAW, who conservatives argue have made companies like GM non-competitive in the global marketplace, with their demands for humane work rules, a decent, living wage, health care, etc. Even when the liberals criticize the CEOs of the Big Three automakers, and argue that the lack of nationalized health care puts the car companies behind the economic eight-ball, they barely raise a peep when it's argued that everyone, including the workers, will have to sacrifice to "save" Big Auto (which means tearing up the union contracts, fought for by workers over decades).

In the latest sign of complete moral, ethical, and political collapse, Bloomberg now reports the capitalists' bailout will top $7 trillion dollars -- "half the value of everything produced in the nation last year"!!! For once, the use of multiple exclamation points fails to describe the exaggerated circumstances.

But will this near-total failure of the economic system lead any respectable mainstream or blogging analyst to question the bankruptcy of the capitalist system as a whole? Not unless you're waiting for Barack Obama to lay the foundation stone for a new mammoth statue of Joseph Stalin on the D.C mall. (The rot of communism -- really Stalinism -- was declared by sober folk on both the U.S. left and right, based on far less economic failure.)

A Nicer, Kinder CIA?

The liberal hopes in Obama's incoming administration demonstrates the inability to think beyond the parameters of acceptable political discourse, which means never challenging the right of capital to rule. Nor does it challenge the right of the U.S. to continue conducting covert operations wherever it wants around the world. The fact that Obama seeks to ramp up the latter in Pakistan deters the liberals nary a bit.

When John Brennan's name was floated for new CIA chief recently, a group of dissident psychologists who fought within the American Psychological Association to change their position on torture, and with whom I have sometimes been associated, launched a campaign to stop Obama from appointing Brennan, a former member of Tenet's CIA team. They rightly pointed out that Brennan was involved in decisions and policies that promoted torture against detainees held by the U.S. in the "war on terror."

But their protest letter says nothing about about CIA covert action, nor does it even question the existence of the CIA itself. It only seeks, in what I see as a sincere but Utopian fashion to reform that institution. From the letter, quoting Brennan first:

Even though people may criticize what has happened during the two Bush administrations, there has been a fair amount of continuity. A new administration, be it Republican or Democrat — you’re going to have a fairly significant change of people involved at the senior-most levels. And I would argue for continuity in those early stages. You don’t want to whipsaw the [intelligence] community. You don’t want to presume knowledge about how things fit together and why things are being done the way they are being done. And you have to understand the implication, then, of making any major changes or redirecting things. I’m hoping there will be a number of professionals coming in who have an understanding of the evolution of the capabilities in the community over the past six years, because there is a method to how things have changed and adapted.

In order to restore American credibility and the rule of law, our country needs a clear and decisive repudiation of the “dark side” at this crucial turning point in our history. We need officials to clearly and without ambivalence assert the rule of law. Mr. Brennan is not an appropriate choice to lead us in this direction. The country cannot afford to have him as director of our most important intelligence agencies.

As John Prados pointed out in his recent history of CIA covert wars, Safe for Democracy: The Secret Wars of the CIA, the use of covert action has harmed U.S. foreign policy more than it has ever helped. Furthermore, both Democratic and Republican administrations have blocked any substantive change in the intelligence agency's charter, unwilling to forego the executive's power or use of covert action. If the psychologists wanted to send a powerful statement to President Obama, they would have called for the abolition of the CIA. But that's not a politically popular stance (at least these days).

Justice and Class Society

A very sick and sclerotic set of individuals essentially run the United States. They see nothing worth prosecuting when one of their own (George W. Bush) manipulates a country into a war that kills over a million civilians. They see nothing wrong in having a covert intelligence agency that wages war and commits assassinations wherever it wants in the world. They cry crocodile tears over the torture of detainees, but do nothing to disassemble the apparatus that perpetuates "touchless torture" (Darius Rejali's term in his magnificent compendium, Torture and Democracy).

The ingrained culture of class society, as represented in part by Tomas's photo essay on one ruling class ritual conclave, represents one of the most resistant aspects to change we truly and desperately need. It may have to all come tumbling down -- and how close we have come to that in recent days -- before the old social order gives up its ghost, and radically new ways of organizing society come into being. When the power elite fades into obscurity, so too will its championing of racial, sexual, and national/religious discrimination. (Anyone who believes the election of Obama has turned around things for African-Americans in this country should visit their local housing project, or better yet, their local jail or prison.)

Perhaps the political genius of Barack Obama (if genius he turns out to be) can hold off the inevitable, but the internal contradictions of a society that runs on class privilege and national supremacy over other countries is bound to lead to either collapse or conflagration sooner or later. We need bold action and bold leaders now.

A collection of Tomas's photos can be accessed here.

Chris Floyd on Power Elites, the Bailout, & Afghanistan

Chris Floyd writes so well, and so often gets directly to the marrow of the problem, that there's nothing to do but reprint his words. I found the following particularly compelling, and they speak for themselves.

The economic disaster doesn't threaten the position of the imperial elites at all. On the contrary, as we have seen in the last few weeks, the Obama-backed "bailout" plan has enriched the already rich and powerful to a staggering degree. As CNBC reports, the government has spent more on saving the rich from the consequences of their greed than it spent in winning World War II: more than $4 trillion so far, with much more to come. This astonishing theft – the largest gobbling of public loot by a rapacious elite in the history of the world – will only further cement the powerful in their entrenchments on the commanding heights of society. The nation may rot beneath them, may be roiled by storms of blowback; but that is not their concern, it is no defeat for them. You can lose; they do not.

This is not to say that our elites don't tell themselves any number of flattering, self-justifying fairy tales about the boundless nobility and righteousness of their intentions. They can do this because they identify the interests of the system of elite rule (and the comfort, power and privilege they personally receive from the system) with the common good of the nation, or the world, as a whole. This allows them to pursue truly monstrous policies without regarding themselves as monsters. This allows them to order actions, such as the escalation of the destructive, destablizing conflict in Afghanistan, which they know, with absolute certainty, will needlessly murder innocent women, children and men -- and still talk earnestly and sincerely about their hopes for peace, their concern for humanity, their deep, abiding faith in a loving God. But again, as we have said over and over here, what matters are not the rhetorical justifications of power or the stated intentions of power -- or the charisma, likeability or compelling story of the wielders of power; what matters are the operations of power, its actual effects on the human beings on the receiving end of its machinations. Like love, power is what it does, not what it says.

Boom and Bust, from a Notable Economist

While many of us find ourselves swallowed up by the panic stimulated by 24-hour news cable services and the dying daily press, when we consider the current credit crunch and threats of doomsday, it is important to get some perspective on what is really happening.

History provides us that perspective. The following description of the famous economic panic that followed the collapse of the speculative bubble that surrounded railway expansion in Britain in the mid-nineteenth century presents an illustrative example.

The economist writing here looked back at this famous economic collapse and drew some serious conclusions. The parallels between then and now are striking, even if "then" was over 150 years ago (emphases added):

The years 1843-5 were years of industrial and commercial prosperity, a necessary sequel to the almost uninterrupted industrial depression of 1837-42. As is always the case, prosperity very rapidly encouraged speculation. Speculation regularly occurs in periods when overproduction is already in full swing. It provides overproduction with temporary market outlets, while for this very reason precipitating the outbreak of the crisis and increasing its force. The crisis itself first breaks out in the area of speculation; only later does it hit production. What appears to the superficial observer to be the cause of the crisis is not overproduction but excess speculation, but this is itself only a symptom of overproduction. The subsequent disruption of production does not appear as a consequence of its own previous exuberance but merely as a setback caused by the collapse of speculation....

In the years of prosperity from 1843 to 1845, speculation was concentrated principally in railways, where it was based upon a real demand, in corn, as a result of the price rise of 1845 and the potato blight, in cotton, following the bad crop of 1846, and in the East Indian and Chinese trade, where it followed hard on the heels of the opening up of the Chinese market by England.

The extension of the English railway system had already begun in 1844 but did not get fully under way until 1845, In this year alone the number of bills presented for the formation of railway companies amounted to 1,035. In February 1846, even after countless of these projects had been abandoned, the money to be deposited with the government for the remainder still amounted to the enormous sum of 514 million and even in 1847 the total amount of the payments called up in England was over £42 million of which over £36 million was for English railways, and £5 1/2 million for foreign ones. The heyday of this speculation was the summer and autumn of 1845. Stock prices rose continuously, and the speculators' profits soon sucked all social classes into the whirlpool. Dukes and earls competed with merchants and manufacturers for the lucrative honour of sitting on the boards of directors of the various companies; members of the House of Commons, the legal profession and the clergy were also represented in large numbers. Anyone who had saved a penny, anyone who had the least credit at his disposal, speculated in railway stocks. The number of railway journals rose from three to twenty. The large daily papers often each earned £14,000 per week from railway advertisements and prospectuses. Not enough engineers could be found, and they were paid enormous salaries. Printers, lithographers, bookbinders, paper-merchants and others, who were mobilized to produce prospectuses, plans, maps, etc; furnishing manufacturers who fitted out the mushrooming offices of the countless railway boards and provisional committees — all were paid splendid sums. On the basis of the actual extension of the English and continental railway system and the speculation which accompanied it, there gradually arose in this period a superstructure of fraud reminiscent of the time of Law and the South Sea Company. Hundreds of companies were promoted without the least chance of success, companies whose promoters themselves never intended any real execution of the schemes, companies whose sole reason for existence was the directors' consumption of the funds deposited and the fraudulent profits obtained from the sale of stocks.

In October 1848 a reaction ensued, soon becoming a total panic. Even before February 1848, when deposits had to be paid to the government, the most unsound projects had gone bankrupt. la April 1846 the setback had already begun to affect the continental stock markets; in Paris, Hamburg, Frankfurt and Amsterdam there were compulsory sales at considerably reduced prices, which resulted in the bankruptcy of bankers and brokers. The railway crisis lasted into the autumn of 1848, prolonged by the successive bankruptcies of less unsound schemes as they were gradually affected by the general pressure and as demands for payment were made. This crisis was also aggravated by developments in other areas of speculation, and in commerce and industry; the prices of the older, better-established stocks were gradually forced down, until in October 1848 they reached their lowest level.

Perhaps, if you read all the way through, you would have guessed the economist in question was Karl Marx, writing in November 1850 for the Neue Rheinische Zeitung Revue. His analysis of how the boom and bust cycles of capitalism persist was worked out a long time ago now. But, of course, "Marxism" is relegated to the dustbin of history by the triumphant U.S. rulers, who believed that the fall of the Soviet Union meant the eclipse of Marxist socialism.

But no great thinker or scientist has to worry that their ideas will be lost. The earth revolves around the sun, and gravity affects all celestial bodies, no matter how much the Roman Catholic Church had condemned Galileo. The anti-evolutionists can pillory Darwin, but evolution continues nevertheless, every day, as the continuing crisis over evolving bacteria and the problem of finding new antibiotics to combat them makes clear.

And capitalist cycles of overproduction, speculation, and economic recession/depression continue no matter how much free market ideologues produce diatribes (with a twinkle in their eye) over the demise of Marxism, denouncing either its error, or its lack of contemporary relevance.

Yet today, the failure of the capitalist system looms as a mighty sword of Damocles above the heads of billions, living as we do in a very interlocked world of economic ties. We depend on each other now more than ever. Yet antiquated systems, whether they are based on religious doctrines or Harvard Business School economic models, threaten the survival of us all.

Even more, these antiquated national systems form the basis of an international organization of nation states existing in competition with each other. The ruling class fetishizes competition as something good, until the irrationality of individuals -- or at another level, of individual nation states -- seeking gain at the expense of others degenerates into economic collapse, evoking the nightmare of the war of all against all, producing, perhaps, a third and devastating world war.

The defeat of the bailout plan in Congress early this week saw a temporary alliance of free market ideologues, eschewing state intervention (falsely) as "socialism", and a nascent populist or leftist opposition opposing a giveaway to the richest speculators and capitalists who got us in this position in the first place.

Neither group has yet grasped what was widely known only a generation or so ago: capitalism is doomed to create these cycles, and with it untold suffering. The effort to create socialist states and an alliance of same in the world met with horrendous defeat in the 20th century, victim of unremitting attack by the non-socialist world, and of its own internal weaknesses and irrationalities (e.g., trying to believe socialism could be created in a single country, irrespective of the rest of the world's organization or economy, which was the program of Stalinism).

Oh disbelieving reader, ask yourself this: if Marx could accurately predict the kind of scenario we are seeing today over a century ago, perhaps there is far more of value in Marxist analysis than you thought. Today, it is a scary thing still to be called a "communist," just as it was in Marx's time. The epithet persists as a form of unconscious recognition that something terrible is amiss in our world. It is not like being called someone who believes in the divination of the future by means of examining animal entrails; it is not an object of humorous ridicule. It is something to be feared. There is force, yet, in the word. That's because it represents something repressed. It represents the eruption into modern consciousness of a necessary truth. And the time has come to grab that truth again and wrest it into the world as a tool against the exploiters.

Eating Shit

And that's a pleasant way to describe the bailout in the works by the corrupt politicians of the United States, these narcissistic, craven sellouts, who couldn't bring themselves to stop their own country from invading another and killing 100,000s and displacing millions more, who couldn't stop their military interrogators and gestapo-like spies from torturing thousands. These moral zeros are about to send something just under a trillion dollars to the scions of finance capital. These latter have lived high off the hog, raking in millions, and in some cases billions of dollars, off a pyramid credit scheme, leaving us -- the suckers -- to pay up for a generation or more when their con finally went spectacularly bust, unraveling into a wilderness of economic "instruments" and "derivatives" so convoluted and intertwined that no one could ever untangle it.

So long, dreams of universal health care. Adios, decent educational system for all. Eat shit, crumbling infrastructure of bridges and roads and public buildings. Die, pathetic human beings flooded by unfixed dikes in hurricanes, or straining for unreachable help in a major earthquake, crushed by masonry, wood studs, and national indifference. (And fear not, fearsome Mars, our honorable military, filled with honorable men and women and rockets and bombs and infrared sensors and shrapnel-stuffed "devices," will not be touched by the cost of the precious bailout, but expands and expands even unto world domination!)

Selfishness rules the nation now. It always did, but now it sits on the crown seat, so that each and every one of us may walk by and pay obeisance to king god capitalism, untouchable, beyond criticism, beyond repair, leering down on you and me and our bedraggled children, prostrate, struggling to survive.

This is like standing and looking at the long, long sweep of empty seabottom, pulled back by the massive tsunami current, and waiting for cataclysm. They have announced the total bankruptcy of the system, and you still don't believe you'll have to pay the bill.

Poor, silly, deluded us.

But no fear, for German dramatist Bertolt Brecht and composer Kurt Weill told us "how to survive" as far back as 1928. Here's your new bible. Here's the unbridled truth. Asking the question that ought to be asked, and soon the only question with any relevancy:

What keeps a man alive? It's his compulsion
to steal and cheat and kick his fellow man in the face.
We have to eat the shit without revulsion
and turn our backs on the human race.

You have to kill your neighbor to survive.
It's selfishness that keeps a man alive.

A More Sober Perspective (than me)

Edger over at Docudharma conjured up a quote from Nouriel Roubini regarding the unnecessary bailout. Roubini is professor at NYU's Stern School of Business. The selection below is from his blog, RGE Monitor:

Whenever there is a systemic banking crisis there is a need to recapitalize the banking/financial system to avoid an excessive and destructive credit contraction. But purchasing toxic/illiquid assets of the financial system is not the most effective and efficient way to recapitalize the banking system. Such recapitalization - via the use of public resources - can occur in a number of alternative ways: purchase of bad assets/loans; government injection of preferred shares; government injection of common shares; government purchase of subordinated debt; government issuance of government bonds to be placed on the banks' balance sheet; government injection of cash; government credit lines extended to the banks; government assumption of government liabilities.

A recent IMF study of 42 systemic banking crises across the world provides evidence on how different crises were resolved. First of all only in 32 of the 42 cases there was government financial intervention of any sort; in 10 cases systemic banking crises were resolved without any government financial intervention.

[snip...]

So this rescue plan is a huge and massive bailout of the shareholders and the unsecured creditors of the financial firms (not just banks but also other non bank financial institutions); with $700 billion of taxpayer money the pockets of reckless bankers and investors have been made fatter under the fake argument that bailing out Wall Street was necessary to rescue Main Street from a severe recession. Instead, the restoration of the financial health of distressed financial firms could have been achieved with a cheaper and better use of public money.

[snip...]

Thus, the Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown.

FYI: Link to "discussion draft" of the new "bipartisan" version of the bailout bill, circa September 28, 2008, approximately 106 pages long.