The Fleecing of America
Stephen Lendman
October 6, 2008
Over 200 years ago, Thomas Paine wrote a treatise on government in which he said "a republic is supposed to be directed by certain fundamental principles of right and justice, from which there cannot, because there ought not to, be any deviation. (It) is executed by a select number of persons, who act as representatives, and in behalf of the whole, and who are supposed to (govern) as the people would do were they all assembled together....
When a people agree to form themselves into a republic (they) mutually resolve and pledge themselves to each other, rich and poor alike, to support this rule of equal justice among them....A republic, properly understood, is a sovereignty of justice, in contradistinction to a sovereignty of will."
Since its founding, America was never governed by Paine's principles. Never less so or more disgracefully than under George Bush.
This article follows from an earlier one titled Grand Theft America. On the crime of the century. The greatest one ever. Unbridled excess gone awry. An economic system built on a foundation of greed and fraud. Threatening the country with insolvency and ruin. World economies with it. Plundering the national treasury to save it. Bailing out criminal bankers. Rewarding fraudsters with public funds. Making the world safe again for capital (or trying to) and heading it for an even greater calamity ahead. Maybe next time (or this one) one no financial engineering can fix.
An Update on the "Bailout": The Emergency Economic Stabilization Act (EESA)
EESA defrauds the public. Fleeces the treasury to reward criminal bankers. Arranged secretly behind closed doors. The $700 billion is just for starters. Another $150 billion was just added to it (discussed below). Trillions will be pilfered for this scheme. Millions of innocent people will suffer grievously. Crumbs at best are in it for them.
This goes way beyond a subprime crisis as author Ellen Brown explains. The real problem is a "black hole of ($180 trillion in bank-held) derivatives." If enough of them implode, so will world economies. The "bailout" and various other schemes hope to prevent it, but there's no guarantee anything will work. That's the real dilemma.
Public pronouncements about EESA were deceitful on their face. George Bush calling it a plan for Main Street, not Wall Street. Nancy Pelosi saying that "All of this was done in a way to insulate Main Street and everyday Americans from the crisis on Wall Street," and added: "The party is over. No longer will taxpayers be forced to bail out reckless investors." That's precisely what they're being forced to do.
Both presidential candidates endorse the plan and voted for it. Most party leaders as well. A bipartisan conspiracy to compound the fraud. Reward criminals with public money. Empower the Treasury secretary as a financial czar. With unlimited authority to dispense public money. Direct it as he wishes. Stipulate the terms. Conceal the plan's true purpose from the public. To save Wall Street and big banks. The entire financial system. Industrial capitalism in trouble. And make ordinary people pay for it.
The Senate passed EESA on October 1 - by a 74 - 25 vote. The same body that (on September 26) rejected a $56 billion stimulus plan that would have extended unemployment benefits, increased food aid, and funded new construction projects to create jobs at a time the economy is in a deepening recession.
After first rejecting EESA, the House reversed itself (263 - 171) on October 3. Global markets reacted convulsively. Plunging on September 29. Soaring the next day. Plunging again. Continuing the same volatile pattern begun last fall. From the crisis-level weakness of major banks worldwide and the effect on global economies. The possibility that nothing proposed will work. The likelihood that only mass worldwide infusions of public funds and recapitalizations have a chance.
Ignoring the core reason for the crisis. The extraordinary amount of criminal fraud. Rewarding and not prosecuting the fraudsters. Compounding the enormity of their crime. Looting the national treasury for it. Rejecting emergency measures with proven past success. Recapitalizing banks through government interest-bearing loans with guaranteed repayment provisions out of future profits. Temporarily nationalizing troubled banks. Letting governments take over weak ones until things stabilize. Restarting credit flows now frozen. Then designing a whole new system to replace the current failed one.
The present crisis shows industrial capitalism's failure. Financialization-based. Speculative finance. Frankenstein finance. Unfettered. Unregulated. Greed-based. Rewarding fraud and harming people. The government - business partnership behind it. The inevitability that nothing this pernicious is sustainable. The naked truth about an ugly system.
EESA's hidden details make the prima facie case. Besides add-ons, it's little different from its initial version. It:
-- directs the original $700 billion to Wall Street and big banks;
-- lets the Treasury buy unlimited amounts of junk assets (some worthless or close to it) but hold no more than $700 billion at one time; pay whatever prices it chooses; hold-to-maturity prices if it wishes for toxic waste;
-- includes whole mortgages in the program, not just securitized asset pools;
-- compounds fraud by rewarding it;
-- beyond tokenism and disingenuous rhetoric, provides no relief for beleaguered homeowners;
-- excludes a measure to allow bankruptcy judges to amend mortgage terms to help homeowners avoid foreclosure;
-- another one that would have allotted 20% of any government bank assets resale profit to a housing fund; set aside for the public;
-- also a bank-imposed fee to compensate the government for buying junk assets at inflated prices;
-- leaves executive compensation, golden parachutes, and lavish benefits unrestricted by inserting toothless provisions against them;
-- establishes a fake independent oversight panel consisting of the Treasury secretary, Fed chairman, SEC chairman, Federal Home Finance Agency director, and Housing and Urban Development (HUD) secretary;
-- an equally fraudulent Congressional Oversight Board composed of House and Senate leadership-chosen bankers and big investors - called "financial experts;" fraudsters to manage the "bailout;" business and government foxes in charge of the looting the national treasury;
-- includes a provision authorizing the SEC to suspend GAAP (Generally Accepted Accounting Principles) standards requiring mark-to-market valuations to let banks (on their balance sheets) carry toxic assets at purchased prices, not fair market value, and be able to conceal their losses; and
-- another providing tax breaks for companies holding Fannie Mae and Freddie Mac preferred shares.
The White House, Paulson and House and Senate leadership scrambled after EESA's defeat. Cobbled together a revised plan. Kept the original's core provisions unchanged, and added new ones:
-- temporarily (maybe permanently) increases FDIC insurance per account to $250,000;
-- lets FDIC borrow unlimited amounts from the Fed to protect against bank runs; thus exempts banks from paying premiums for additional deposit insurance;
-- another provision to exempt the bill from constitutional challenge;
-- includes about $150 billion in tax cuts and so-called "extenders"; provisions to renew or extend expiring tax breaks;
-- $78 billion for business as well as extending current business tax breaks for renewable energy efforts;
-- $8 billion for hurricane and other natural disaster relief; and
-- another $65 billion extension for Alternative Minimum Tax relief; mostly to high-income earners.
The plan ballooned from its original 3-page version to the House's 106 pages. Then to the final 451 pages (not likely written in 48 hours) with various additional earmarks for:
-- film and television productions;
-- wooden arrows for children;
-- Exxon Valdez oil spill litigants;
-- Virgin Island and Puerto Rican rum;
-- railroads;
-- auto racing tracks;
-- wool research and more.
In addition, Section 128's Acceleration of Effective Date refers to Section 203 of the Financial Services Regulatory Relief Act of 2006. EESA moved up its original effective date from October 1, 2011 to October 1, 2008, and thereby changed the United States Code Title 12 - Banks and Banking, Chapter 3 - Federal Reserve System, Subchapter XIV - Bank Reserves. The measure is solely to help banks. Foreign ones included. The changes:
-- no longer require banks to maintain cash reserves to cover deposits;
-- abolished the Fed's Earnings Participation Account for the supplemental reserve fees it charges banks; meaning the Fed can retain them; and
-- lets the Fed create its own rules for distributing earnings as well as payments to foreign banks.
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http://www.uruknet.info/?p=m47779&s1=h1Liberal thy name is hypocrisy. What's new?
by vigilant » Tue Oct 07, 2008 3:28 pm 
Carry on