Journalism of Appeasement. Corruption, Smoke and Mirrors

(A must read)

by David DeGraw, Global Research

Here’s a brief summation of my recent reporting:

If we continue to let our politicians and wealthy members of society live in comfort, free from the consequences of their actions, we are complicit in our own demise.

Our country is so overrun with corruption, we cannot remain passive and expect things to get any better.

The economy is propped up by smoke and mirrors and will inevitably collapse. Without immediately breaking up the banks and holding the thieves accountable, we will continue on our downward spiral with increasingly severe and devastating consequences.

These are extremely unpleasant truths that we are now forced to confront. We have to act now. If you are not calling for revolution or organizing, you are either unaware of what’s happening around you, horribly naïve or a fascist sympathizer.

In response to statements like those above, I’ve been exchanging emails with colleagues (journalists and news editors) who have become “uncomfortable” with my reporting style and been saying some variation of the following: “You’re being too radical. This is too extreme for us to publish.”

While I appreciate their opinions, I want to make something 100% clear. I am fully aware that these words are harsh, and may turn off some people. However, in extreme times, telling the truth will make you sound extreme. Ultimately, I don’t mind if you think I sound “too extreme,” I don’t care if I make people “uncomfortable,” or if, in your opinion, I’ve become “too radical.” Try telling that to the 52 million Americans who are now living in poverty. Tell that to the millions of American families who have lost their homes and jobs. Tell that to the 59 million people who can’t afford health insurance. Tell that to the overwhelming majority of the population who are stressed out, living paycheck to paycheck, buried in debt they will never get out of and desperately struggling to make ends meet.

Try telling that to all the people who have emailed me explaining their dire situations due to this economic crisis. Tell that to all the people I personally know who have taken major pay cuts.

I will not participate in the journalism of appeasement.

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The assault on US workers’ wages

by Tom Eley and Barry Grey, WSWS

An article published in Wednesday’s Financial Times under the headline “US Matches Indian Call Centre Costs” gives some indication of the impact on American workers of a coordinated and escalating wage-cutting drive by big business, backed by the Obama administration.

The article begins: “Call centre workers are becoming as cheap to hire in the US as they are in India, according to the head of the country’s largest business process outsourcing company. High unemployment levels have driven down wages for some low-skilled outsourcing services in some parts of the US, particularly among the Hispanic population.”

According to the article, a number of Indian outsourcing firms are shifting operations to the US to take advantage of low labor costs, a reversal from the 1990s when many call centers and software firms shuttered American operations to exploit educated but low-paid workers in India.

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Secret AIG Document Shows Goldman Sachs Minted Most Toxic CDOs

by Richard Teitelbaum, Bloomberg

When a congressional panel convened a hearing on the government rescue of American International Group Inc. in January, the public scolding of Treasury Secretary Timothy F. Geithner got the most attention.

Lawmakers said the former head of the New York Federal Reserve Bank had presided over a backdoor bailout of Wall Street firms and a coverup. Geithner countered that he had acted properly to avert the collapse of the financial system.

A potentially more important development slipped by with less notice, Bloomberg Markets reports in its April issue. Representative Darrell Issa, the ranking Republican on the House Committee on Oversight and Government Reform, placed into the hearing record a five-page document itemizing the mortgage securities on which banks such as Goldman Sachs Group Inc. and Societe Generale SA had bought $62.1 billion in credit-default swaps from AIG.

These were the deals that pushed the insurer to the brink of insolvency — and were eventually paid in full at taxpayer expense. The New York Fed, which secretly engineered the bailout, prevented the full publication of the document for more than a year, even when AIG wanted it released.

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Obama vs. Obama

by Michael Brenner, Huffington Post

The enigma that is Barack Obama grows day by day. Contradiction after contradiction, abrupt gear shifts, perpetual motion that never reaches a destination. ‘Obscene’ Wall Street bonuses suddenly transmute into well earned rewards for a good guy golfing buddy; the imperative to act boldly on the jobs crisis means placing it the callous hands of Max Baucus and Chuck Grassley of health care fame; the plotting of exit strategies from Afghanistan by 2011 becomes a ‘long as we have to’ occupation. All these contrapuntal reversals against a sound track of non-stop exhortation and a restless shuttling from one photo-op to another. Who is this guy, anyway?

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Exposed: Bernanke’s “Skimming Operation”

(So what the banks did in a sense was, they carefully removed restrictions on housing loans and created what the industry called “liar loans”, loans that they knew would default when they were making them. They got their co-conspirator at the credit rating agencies to slap “AAA” ratings on them.  They got their money up front and then packaged them up and sold them as bundles, making even more money on the toxic assets that only they knew were toxic. They sold them to various 401 ks, state and local governments, other nations. Then, as they started to default and the massive bubble began to burst, they rushed to congress, with the same people who helped create this scam, namely Bernanke and Paulson and Geithner, to blackmail congress into pumping nearly a trillion dollars of liquidity into their banks so they could then buy up all the other institutions that they had sold the bad debts to. They got paid on the front end, in the middle, and on the back end.)

by Mike Whitney, Information Clearing House

The reappointment of Fed chairman Ben Bernanke means that the opportunity for change has passed and the reform movement is dead. It means that and that derivatives trading, off-balance sheet operations, securitization, dark pools and high frequency trading will go on much as they have before. It means that the public will continue to be gouged so that a handful of Wall Street sharpies can rake in obscene profits using complex “financial innovations” and over-leveraged debt instruments. It means that the entire system will continue to be put at risk to protect the interests of investment banks and hedge funds. It means that the subsidies, the preferential treatment, and the bailouts will continue to fuel populist rage and exacerbate deepening divisions in society. It means that the status quo has been preserved and that it’s “business as usual”.

  No reform movement will succeed as long as Bernanke is at the Fed.  He’s an agent of the big banks and a Wall Street loyalist. He’s also the author of “Too Big To Fail”, the controversial theory which provides unlimited state support for financial institutions that are deemed too large or interconnected to fail. TBTF means that capitalism’s vital market-clearing function can avoided if one is rich or powerful enough. Bernanke repealed capitalism to save his friends.

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The Crisis Is Not Over

by Paul Craig Roberts, Information Clearing House

Readers ask if the financial crisis is over, if the recovery is for real and, if not, what are Americans’ prospects. The short answer is that the financial crisis is not over, the recovery is not real, and the U.S. faces a far worse crisis than the financial one. Here is the situation as I understand it:

The global crisis is understood as a banking crisis brought on by the mindless deregulation of the U.S. financial arena. Investment banks leveraged assets to highly irresponsible levels, issued questionable financial instruments with fraudulent investment grade ratings, and issued the instruments through direct sales to customers rather than through markets.

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What a Sad Week for Democracy

by Scott Creighton

***UPDATE*** (Five. I stand corrected. There are now 5 events from this past week that I should have mentioned. Please see the last one reported on by Glenn Greenwald at the end of this article.)

What a week it was for our democratic freakshow. How many more shocks can our fragile egos take before the entire illusion of American exceptionalism crumbles from under our feet? What happens when it does? This past week, four events played out that should by all rights shake the people of this nation out of their self-induced comas. I’m not holding my breath.

1. Obama Plays the Populist Card

This week President Obama and his script writers did what they could to help shore up the decaying illusions of our democratic foundations. They announced some new rules, the Volcker rules, supposedly to reign in the Wall Street bankers. The hasty press conference Obama and his DLC/New Dems staff put together couldn’t have looked more like a sophomoric propaganda pep-rally session if George Bush and his pathetically unsophisticated writing staff had done it themselves. They might as well have shipped in some homeless, jobless, ex-middle-class Americans and piled them up on the floor so that Obama could stand on top of them with a bullhorn to deliver the speech.

I hear they are already planning for President Obama’s “Mission Accomplished” celebration to be held in a soup kitchen in Detroit next week (figured they would get a photo-op session in before the banks shut it down).

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Emails implicate Treasury Secretary Geithner in cover-up of AIG deal to bail out the banks

by Barry Grey, WSWS

A financial scandal has erupted that implicates Treasury Secretary Timothy Geithner in efforts to conceal the funneling of $62 billion in taxpayer funds to 16 large banks as part of the government bailout of the insurance giant American International Group (AIG).

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US bankers cash in despite phony pay restraint

by Patrick Martin, WSWS

The executive pay regulations announced Thursday by the Obama administration’s “pay czar” and the Federal Reserve represent a cynical attempt to placate public outrage over Wall Street bonuses while allowing the financial speculators to continue awarding themselves multi-million-dollar compensation packages.

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Renegade Economist US Special with Dr. Michael Hudson

by Scott Creighton

What they are calling a “post industrial” economy is really a lapse back into a neo-feudal economy and into debt peonage.” (“Peonage is a system where laborers are bound in servitude until their debts are paid in full. Those bound by such a system are known, in the US, as peons.” ) … This is NOT a free-market economy.”

The idea, like with the World Bank and the International Monetary Fund, is to hold the rest of the world in bondage of debt. Sort of like our privatized Federal Reserve Banking system does with us.  They give away trillions of our dollars, collapsing the economy further (to their own banks) then we are on the hook not only for that money, but also for the interest.  And of course we have no say in the matter (remember how many people wrote and emailed and called congress and the White House last year before the TARP bailouts were passed?) yet our lives have been greatly diminished by it and we are now locked into the debt created by it.

“Our central banking system loans money to impoverished nations, gets them on the hook, then INSISTS they increase taxes, cut back public spending, sell-off their assets, sell-off their railroad systems and their road systems, in order to pay the debts.  And that is done right there at the Federal Reserve to pay the bonds that are held by Chase Manhattan (and the other 5 biggie banks we talked about earlier)…”

That is what we have been allowing the Fed and it’s tentacles the World Bank and the IMF to do to other countries all across the world.  Well, guess what?

It’s OUR turn now.

Federal Reserve Paying Banks to Freeze Credit

by Scott Creighton

I remember the head of the Dallas Federal Reserve Bank, I think, testifying before congress back in Sept. of last year stating that the treasury department had worked out a deal with the Federal Reserve so that they would tighten the credit markets. In effect worsening the depression we are going through right now.

Here in this video from a July 21st 2009 House Committee on Oversight and Government Reform hearing,  Rep. Kucinich questions Neil Barofsky, Special Inspector General for the Troubled Asset Relief Program, about this very issue.

Barofsky agrees with Kucinich’s conclusions. It appears that the Fed is STILL “paying” the large banks to keep the tap shut on lending.

[for those of you without video capabilities, I provide the transcript after the break]

I think the case for high treason is becoming more and more obvious with the passing of each day.

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International banks exploit the crisis to reap massive profits

(What we are witnessing is a world-wide social counterrevolution led be a few international banks with the intent of the eradication of any “New Deal” type policies and the Keynesian economics philosophy behind them. This will leave 4 or 5 international banking cartels in place to control the economies of every single nation. It would be impossible for them to do this, without the consent and the collusion of a majority of the representatives in our political structure… and our tax money.)

by Stephan Steinberg, WSWS

At the start of this week, German-based Deutsche Bank announced a huge increase in its profits. The bank reported a net profit of €1.1 billion in the second quarter of this year, nearly doubling its earnings over the same period last year (€645 million).

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Decoding Paul Krugman’s Incoherent Op Ed

by Scott Creighton

In his New York Times Op Ed piece, Paul Krugman can’t seem to make any sense of the obstructionist behavior of the so-called “Blue Dog Dems” toward the passage of the Obama healthcare bill.  Though quite frankly I don’t know what’s so hard to understand about it.

What I can’t figure out is why Krugman doesn’t come to the conclusion that the Blue Dogs are simply doing exactly what the White House wants them to do.  Seems pretty obvious when you think about it.

“Pretty obvious” that is, if you know just who and what the Blue Dogs are and how often they line up shoulder to shoulder with the all the “New Democrats” that are infesting the White House as we speak.

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Spitzer: Federal Reserve is ‘a Ponzi scheme, an inside job’

by Daniel Tencer, Raw Story

The Federal Reserve — the quasi-autonomous body that controls the US’s money supply — is a “Ponzi scheme” that created “bubble after bubble” in the US economy and needs to be held accountable for its actions, says Eliot Spitzer, the former governor and attorney-general of New York.

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Barack Obama is a Flat Out Liar: Says Medicare and Medicaid are Causing the Deficit

by Scott Creighton

This evening, President Obama gave yet another one of his infomercial speeches.  This time it was in favor of his healthcare reform measures that have been rightly condemned in the House and the Senate by a few.

Apparently his Chief of Staff, Rahm Emanuel, can’t twist enough arms to get the measure written exactly the way the secretive White House visitors from Big Pharma and the insurance industry want, so now the president of the most power country in the world has to take the stage and flat out lie to the people of this nation in order to sell the new “Insurance Company Bailout Plan“.

What was the lie?  President Obama, the president of “CHANGE” and the so-called “Greatest Man of Our Generation“,  said that Medicaid and Medicare are the cause of the federal deficit.

That’s right; he’s blaming the deficit… on the elderly and the poor.

He (Obama) said Medicare and Medicaid, government health care programs for the elderly and the poor, are the “biggest driving force behind our federal deficit.”  MSNBC

His exact quote was…

The biggest driving force behind our federal deficit is the skyrocketing cost of Medicare and Medicaid,” he said. “So let me be clear: If we do not control these costs, we will not be able to control our deficit.”  WSWS

Is he joking?  I’m afraid not. Let’s examine his claim…

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