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February 18, 2010

Declarations of Bankruptcy

With the Wednesday anniversary of the $787-billion package of tax cuts and spending in the Recovery Act, in defense of the stimulus, President Obama said, “One year later, it is largely thanks to the Recovery Act that a second Depression is no longer a possibility.” Democratic and Republican leaders in Washington marked America’s legalized corruption by sniping at each other. Bankrupt after 8 years of the leadership of George Bush, Republican lawmakers stepped up their attacks on what was the Paulson-Bush stimulus plan, calling it wasteful and ineffective.

From an article by Simon Johnson in the Atlantic, America’s Legalized Corruption

“The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.”


From the transcript of Frontline on February 16, 2010:

We didn’t truly know the dangers of the market, because it was a dark market,” says Brooksley Born, the head of the Commodity Futures Trading Commission [CFTC] — an obscure federal regulatory agency — who not only warned of the potential for economic meltdown in the late 1990s, but also tried to convince the country’s key economic powerbrokers to take actions that could have helped avert the crisis.

They were totally opposed to it,” Born says. “That puzzled me. What was it that was in this market that had to be hidden?

They being the same people advising the current president. Then Assistant Treasury Secetary Lawrence Summers, Treasury Secretary Robert Rubin, as well as Alan Greespan heading up the Federal Reserve. And who did Timothy Geithner worked for through this all? As Henry Paulson got his start working in the Nixon White House; was it for Erhlichman or Haldeman? He learned under the best of hatchet men.

It had taken 40 years of the media making us all world experts, and this expertise along with the lobbyists had bankrupted American government. It was why I felt uncomfortable having my retirement accounts with Fidelity, with Merrill Lynch, with Morgan Stanley. They all had hijacked the government of the United States, through the Democratic Party and the Republican Party.

One year later, President Obama was sounding a lot like George Bush, announcing victory in Iraq. Or Henry Paulson and Ben Ben Bernanke, with their similar pronouncements all along, when the Bush Administration on July 13, 2008 rescued Fannie Mae, Freddie Mac, or Bear Stearns. When that second Depression “was no longer a possibility.”

The Congressional Oversight Panel, chaired by Harvard law professor Elizabeth Warren, warned on the same anniversary date that it remains “deeply concerned” that commercial loan losses could jeopardize the stability of many banks, particularly the nation’s mid-size and smaller banks. Highlighting yet one more hurdle for this country’s fragile economy, a wave of commercial real estate loan failures could threaten over the next few years America’s already-weakened financial system. The Congressional Oversight Panel was formed as part of oversight for the Troubled Asset Relief Program.

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1 Comment »

  1. Comment by paperlessworld — October 18, 2015 @ 8:09 PM | Reply


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