Check It Out for Friday, April 3
ProPublica has an article about Tim Geithner as of the Federal Reserve in New York and his cozy relationship with those who caused this crisis and his failure to prevent the disaster.
"In September 2005, Timothy Geithner made one of his most visible moves as a supervisor of the U.S. banking system. He summoned the nation's top financial firms and their regulators to streamline an antiquated system that threatened Wall Street's boom.
"Billions of dollars worth of financial instruments known as credit derivatives were being traded daily, as banks and investors worldwide tried to protect against losses on increasingly complex and risky financial bets. But the buying and selling of these exotic instruments was stuck in a pencil-and-paper era. Geithner, then head of the Federal Reserve Bank of New York, pressed 14 major financial firms to build an electronic network that would cut backlogs and make the market easier to monitor.
"Geithner's summit, held at the New York Fed's fortress-like headquarters near Wall Street, was a success. By fall 2006, the new system had all but eliminated the logjam, helping derivatives trade more efficiently. One financial industry newsletter honored Geithner as part of a "Dream Team" for his leadership of the effort.
"Yet as Geithner and the New York Fed worked to solve narrow mechanical issues in the derivatives market, they missed clear signs of a catastrophe in the making. When the housing market collapsed, derivatives stoked the fires that ignited inside some of the biggest banking companies. The firms' failure to assess an array of risks they were taking has emerged as a key element in the multi-trillion dollar meltdown of the global financial system.
"Although Geithner repeatedly raised concerns about the failure of banks to understand their risks, including those taken through derivatives, he and the Federal Reserve system did not act with enough force to blunt the troubles that ensued [1]. That was largely because he and other regulators relied too much on assurances from senior banking executives that their firms were safe and sound, according to interviews and a review of documents by The Washington Post and the nonprofit journalism organization ProPublica.
"Records and interviews show that Geithner and his colleagues did not employ some of the harsher tools at their disposal to bring the banks into line. From 2006 through the start of the credit crisis in the summer of 2007, they brought no formal enforcement actions against any large institution for substandard risk-management practices. The Fed also did not use its confidential process during that period to downgrade any large bank company's risk rating, according to two people familiar with the process, a step that could have triggered costly consequences for the firms."
Jonathan Tasini at Working Life writes about the actual unemployment figures adding up to a whopping 15%, not 8.5%, and lazy reporting.
"When you think about having a job, the logical person would consider that a situation where you were making enough money to pay your bills, and maybe save a bit. Anything less is not real employment. And by that measure, our unemployment figure is more than 15 percent.
"So, each month, the media does a pathetic job in reporting unemployment figures--and today is no different. The New York Times:
The American economy shed another 663,000 jobs in March, the government reported Friday, bringing the toll of job losses during the recession to more than 5 million.
The Bureau of Labor Statistics reported that the national unemployment rate climbed to 8.5 percent from 8.1 percent in February, its highest levels in a quarter-century, as employers raced to cut their payroll costs. It was the 15th consecutive month of job losses.
"How does the lazy-ass reporter arrive at that figure? Well, he simply rewrites the first paragraph of the Department of Labor's press release:
Nonfarm payroll employment continued to decline sharply in March (-663,000), and the unemployment rate rose from 8.1 to 8.5 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Since the recession began in December 2007, 5.1 million jobs have been lost, with almost two-thirds (3.3 million) of the decrease occurring in the last 5 months. In March, job losses were large and widespread across the major industry sectors.
"But, if that reporter bothered to go a bit further--like read the actual tables attached the press release--he would find this Table A-12, which is euphemistically called "Alternative measures of labor underutilization"...in English that means another way of actually looking at how bad the employment situation is. Here's what that measure looks at:
"Which essentially is the picture of economic misery in America today. In the footnote (yes, can you imagine a reporter reading a footnote, let alone a table?), the report explains that:Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers
Marginally attached workers are persons who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past....Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule.
"In other words, the economy is not providing decent jobs for people who want to work.
"15.6 percent of the people in this country effectively do not have work that pays enough money to survive. That's almost double the number being tossed around.
"The bottom line is this: we have to demand that the press start working a little harder to tell the full story of the misery in America. And that the elected leadership level with the people."
Chan Akya at Asia Times is astounded by the G-20's piling folly on folly.
"As with the previous rounds of G-20 meetings, I actually did try to read the final, official statement [2] from the gathering.. Unfortunately the assembled brainpower completely lost me on the fifth point:
The agreements we have reached today, to treble resources available to the IMF to US$750 billion, to support a new SDR [the special drawing rights, or currency, of the International Monetary Fund] allocation of $250 billion, to support at least $100 billion of additional lending by the MDBs [multilateral development banks], to ensure $250 billion of support for trade finance, and to use the additional resources from agreed IMF gold sales for concessional finance for the poorest countries, constitute an additional $1.1 trillion programme of support to restore credit, growth and jobs in the world economy. Together with the measures we have each taken nationally, this constitutes a global plan for recovery on an unprecedented scale."(Japan, the European Union and China will provide the first $250 billion of the increase in IMF rescue funds to $750 billion, with the $250 billion balance to come from as yet unidentified countries, Bloomberg reported. The G-20 said they would couple the financing moves with steps to give emerging economic powerhouses such as China, India and Brazil a greater say in how the IMF is run, the report said.)
"In effect, the only tangible result of the G-20 meeting - the tripling of IMF resources - is astounding. The same people who drove the Latin American economy into dust and were responsible for widespread poverty in Asia in the aftermath of the Asian crisis; the very people who encouraged the idiotic accumulation of market-return independent foreign exchange reserves by Asian countries that subsequently caused the asset bubbles of the US and Europe; the very people who had no clue about the impending bubble burst up until the beginning of 2008, are now supposed to gather up the foresight and skills required to end an economic crisis whose only recent historic parallel was the 1929 depression in the United States; an event that took place a good 16 years before the IMF was itself created."
Melvin A. Goodman writes at The Public Record how the office of the Director or National Intelligence created by the criminal Bush regime has been a failure.
"Like its counterpart, the office of Homeland Security, the office of the Director of National Intelligence (DNI) has been a colossal failure. Both offices were created in the wake of 9/11 as part of the nervous and unnecessary overreaction to the terrorist attacks on 9/11. Hurricane Katrina exposed the futility and feckless nature of the office of Homeland Security. And now the inspector general of DNI has confirmed the ineptitude and mismanagement of the DNI.
"The Intelligence Reform Act created the DNI in December 2004 to centralize intelligence production and end CIA’s dominance of the intelligence production process within the intelligence community. Centralized intelligence production simply does not work and, in fact, increases the opportunities for politicized intelligence. When CIA director William Casey wanted to politicize intelligence for President Ronald Reagan in the 1980s, he appointed Robert Gates to the key positions of deputy director of intelligence and chairman of the National Intelligence Council.
"These positions allowed Gates to tailor all CIA intelligence analysis, including the National Intelligence Estimates, the daily briefings for the president, and all current intelligence. This is the only time in the CIA’s history that one individual controlled these positions, and it led directly to the politicization of intelligence on the Soviet Union, Central America, and Southwest Asia. Gates’s efforts led the CIA to thoroughly miss the decline and fall of the Soviet Union. Centralized intelligence production free of debate and dissent also produced the phony intelligence analysis that supported the decision to go to war against Iraq in 2003.
"The first intelligence tsar was a former ambassador, John Negroponte, who covered up sensitive intelligence in Central America in the 1980s and never displayed a willingness to tell truth to power. Since then, Presidents George W. Bush and Barack Obama have appointed retired naval admirals to be directors of national intelligence, the so-called intelligence tsar. Naval officers have rarely distinguished themselves in long-term strategic or geopolitical thinking, which are the main problems confronting the CIA and the entire analytic community."
Helen Cobban at IPS News has an analysis of Obama's Avigdor Lieberman (Israel's right foreign minister) problem.
"It is possible that some in the Obama administration may simply be hoping the "Lieberman problem" will quickly go away. On Thursday, Israeli anti-fraud detectives questioned Lieberman for more than seven hours about aspects of his own and his party’s business dealings, the latest in a series of probes that have continued for two years now.
"However, many longtime analysts of Israeli affairs doubt whether these police probes, on their own, will cause Lieberman to leave office. They recall that Israel’s last two prime ministers, Ariel Sharon and Ehud Olmert, and the last president, Moshe Katsav, were all dogged throughout their terms in office by police probes into alleged improprieties, and none of those probes, on their own, forced any of the men to resign.
"When Netanyahu was prime minister in the 1990s, he too was investigated for corruption. The charges damaged him politically at the time. But later they were dropped; and the memory of them did not prevent him emerging as a strong prime minister from the Feb. 10 election. Indeed, Netanyahu has now assembled such a large and ideologically diverse ruling coalition that he looks easily able to play any one or two parties in it off against the others, if necessary.
"Lieberman’s plain speaking - and the policy stance of the Netanyahu government in general - pose many challenges for the Obama administration as it tries to win the linked goals of revitalising Palestinian-Israeli peace efforts and assembling a strong coalition of Middle East governments with which to confront and contain Iran’s growing power in the region.
"The prospects for revitalising talks on the Palestinian track do not look good, anyway. PA President Mahmoud Abbas, a long-time pillar of the negotiation effort, lost a considerable amount of his already weak political support from Palestinians when his last Israeli "peace partner", Ehud Olmert, acted with such brutality towards Gaza during the recent war."
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