Check It Out for Tuesday, May 25th
Andy Kroll at Tomgram explains the six ways that the financial bailout scams taxpayers with an intro by Tom Engelhardt.
"Here's a snapshot in words of Treasury Secretary Tim Geithner when he was still president of the New York Federal Reserve Bank from a recent portrait in the New York Times:
"He ate lunch with senior executives from Citigroup, Goldman Sachs and Morgan Stanley at the Four Seasons restaurant or in their corporate dining rooms. He attended casual dinners at the homes of executives like Jamie Dimon, a member of the New York Fed board and the chief of JPMorgan Chase. Mr. Geithner was particularly close to executives of Citigroup, the largest bank under his supervision. Robert E. Rubin, a senior Citi executive and a former Treasury secretary, was Mr. Geithner's mentor from his years in the Clinton administration, and the two kept in close touch in New York."
"Small world, don't you think? This catches something of the lifestyle of Wall Street's rich and financially powerful as well as those who "regulate" them. It's no longer news that the revolving door from Wall Street to Washington and back is now spins endlessly. Hence, the increasingly popular moniker "Government Sachs."
"Crony capitalism" was once a term applied to the power oligarchs of "emerging economies" or -- a term not heard so much these days -- banana republics. Now, however, as economist Simon Johnson has written, the U.S. is beginning to look startlingly more like one of those "emerging economies" in meltdown. And overseeing the response to the crisis are, of course, representatives of the same crony capitalists and oligarchs who helped create it." Tom Engelhardt
"What cannot be disputed, however, is the financial bailout's biggest loser: the American taxpayer.
"The bailout's perks have been no less favorable for private investors who are now picking over the economy's still-smoking rubble at the taxpayers' expense. The newer bailout programs rolled out by Treasury Secretary Timothy Geithner give private equity firms, hedge funds, and other private investors significant leverage to buy "toxic" or distressed assets, while leaving taxpayers stuck with the lion's share of the risk and potential losses.
"Given the lack of transparency and accountability, don't expect taxpayers to be able to object too much. After all, remarkably little is known about how TARP recipients have used the government aid received. Nonetheless, recent government reports, Congressional testimony, and commentaries offer those patient enough to pore over hundreds of pages of material glimpses of just how Wall Street friendly the bailout actually is. Here, then, based on the most definitive data and analyses available, are six of the most blatant and alarming ways taxpayers have been scammed by the government's $1.1-trillion, publicly-funded bailout.
"1. By overpaying for its TARP investments, the Treasury Department provided bailout recipients with generous subsidies at the taxpayer's expense.
"3. The bailout's newer programs heavily favor the private sector, giving investors an opportunity to earn lucrative profits and leaving taxpayers with most of the risk.
"4. The government has no coherent plan for returning failing financial institutions to profitability and maximizing returns on taxpayers' investments.
"5. The bailout's focus on Wall Street mega-banks ignores smaller banks serving millions of American taxpayers that face an equally uncertain future.
"6. The bailout encourages the very behaviors that created the economic crisis in the first place instead of overhauling our broken financial system and helping the individuals most affected by the crisis.
"Of even greater concern is the message the bailout sends to banks and lenders -- namely, that the risky investments that crippled the economy are fair game in the future. After all, if banks fail and teeter at the edge of collapse, the government promises to be there with a taxpayer-funded, potentially profitable safety net.
"The handling of the bailout makes at least one thing clear, however: It's not your health that the government is focused on, it's theirs -- the very banks and lenders whose convoluted financial systems provided the underpinnings for staggering salaries and bonuses while bringing our economy to the brink of another Great Depression."
"Royal Dutch Shell will revisit one of the darkest periods of its history tomorrow as a potentially groundbreaking court case opens in New York.
"The oil giant stands accused of complicity in the 1995 execution of Ken Saro-Wiwa, a Nigerian environmental activist.
"The world's boardrooms are watching the case, which is seen as a test of whether transnational companies owned or operating in the US can be held responsible for human rights abuses committed abroad.
"A collection of cases brought by torture victims in the oil-rich Niger Delta and by relatives of those killed has been brought together under the umbrella of Wiwa v Shell."Mr Saro-Wiwa was hanged in November 1995 after being convicted by a military tribunal in which he was denied proper legal representation or appeal. Shell subsequently faced a storm of protest and Nigeria was suspended from the Commonwealth. The then British prime minister John Major called the execution "judicial murder".
"In the Niger Delta, farmlands and fish stocks have been destroyed amid environmental degradation brought on by oil spills, deforestation and the notorious practice of gas flaring, which continues despite being banned.
"Tomorrow's proceedings will see the Dutch-based energy giant charged with collaborating with Nigerian authorities in the execution of Mr Saro-Wiwa and eight other members of his ethnic Ogoni group on "trumped-up charges". Shell has vigorously denied any involvement and says it appealed to the Abacha government for clemency on Mr Saro-Wiwa's part.
"The suit also alleges that the company consistently conspired with military authorities to violently put down peaceful protests by the Ogoni people, hundreds of thousands of whom Mr Saro-Wiwa had helped to mobilise.
Manuel Garcia, Jr., a physicist, writes at Counterpunch about North Korea's second nuclear test.Today,
"The DPRK has made the clearest possible statement that the best defense against domination by superior powers is nuclear weaponry. The greater care with which the U.S. and Security Council Nuclear Powers approach the DPRK confirms this argument. When observing the situations of Palestine, Iraq and Iran, most of the rest of the world would concede the validity of the argument.
"The policy of the U.S. is to encourage other nations to abide by the terms of the Nuclear Non-Proliferation Treaty -- and renounce nuclear weapons -- while exempting itself from it; essentially "disarm that we may more easily rule." The DPRK posture is a rejection of the US policy, and a pointed example of rebellion calling out to the rest of the world.
"Japan fustigates that it may have to build its own nuclear weapons (within one year!) to counter those of the DPRK, and South Korea issued similar statements to assuage domestic concerns about the nuclear developments in the North. There is little reason to fear aggression by the DPRK. While it may soon be true that it could launch a few nuclear warheads into South Korea, Japan and toward US bases and fleets in the Pacific, such attacks would ensure the swift destruction of the DPRK elite by retaliatory actions of the most modern military forces on this planet.
"Unfortunately, urging the DPRK leadership to engage in nuclear disarmament is equivalent to urging it to dissolve; the nature of their brittle power structure could not withstand the corrosive effects of the psychological, cultural and economic forces within world capitalism. They know this, hence the obsessive defensiveness. The most humane policy toward the DPRK would be to leave it alone. Over the long term, if it is neither harassed nor provoked, it will slowly relax many of its fears. Once the apprehensions of the DPRK are reasonably lowered because it is no longer being pressured and hurried to fit into a foreign capitalist agenda, then it is likely the society of the DPRK will evolve into greater harmony with the world consensus on many issues."Internationally, patient respect will ultimately soften the fearful pride of an otherwise unaggressive state. The real solution to nuclear proliferation is the expansion of social and economic justice within our own nations, because nuclear arms are primarily a symptom of economic class warfare coupled with racism. Let the people of North Korea deal with their economic elite, and let us reform ours; and in that way we can eliminate the nuclear weapons squeezed out of the world's popular collective labor by our various ambitious and parasitic ruling classes."
Danielle Kurtzleben at IPS News reports that environmental groups are concerned about the US "e-waste" exportation newly introduced legislation
"Environmentalists are expressing discontent over recently introduced legislation regarding the U.S.’s exporting of electronic waste, or "e-waste".
"The new legislation was introduced on Thursday with the title of "To restrict certain exports of electronic waste". Proponents of the bill say that it provides "safeguards" against the export of toxic e-waste to developing nations.
"E-waste has been a rapidly growing problem over the past decade, as people are increasingly discarding accumulated electronics equipment that is obsolete or broken.
"Despite the creation of takeback programmes at electronics companies, as well as recycling initiatives, e-waste recycling remains far from the norm in the U.S. The U.S. Environmental Protection Agency (EPA) reports that U.S. e-waste recycling rates were at only 18 percent of all discarded products in 2007.
"Much of the remainder ends up overseas, in places like China, Hong Kong, India, and Nigeria. A 2008 U.S. Government Accountability Office (GAO) report finds that such exporting is not necessarily a bad phenomenon, and can lead to "viable and productive secondhand use of electronic devices in developing countries."
"Furthermore, these countries exhibit strong demand for the valuable raw materials, such as copper, contained within many electronic devices. Around 70 percent of requests for U.S. e-waste come from developing Asian nations, especially China and India. Africa also requests significant amounts.
"However, the GAO report also found that e-waste recipient countries "often lack the capacity to safely handle and dispose of used electronics if the units are not in reusable condition when received, and the countries’ extremely low labor costs and the reported lack of effective environmental controls make unsafe recycling commonplace."
"The Basel Action Network, a toxic trade watchdog group, notes that there is no overarching U.S. law to prohibit e-waste dumping.
"The Electronics TakeBack Coalition (ETBC) reports that the U.S. exports enough e-waste each year to fill 5,126 shipping containers. The EPA estimates that the U.S. disposed of over 300 million electronics units in 2007. And e-waste exporting is not just a U.S. problem; by some estimates, over 80 percent of the world’s e-waste ends up in China.
"The result is both an environmental and a human rights disaster. The exported waste sits in dumps until it is taken on by recycling operations. These operations can range from companies employing thousands to individuals with their own circuit-board smelting fires. Regardless of the method, the result is poisonous."
Bob Fitrakis at The Free Press (via Common Dreams) writes about Democratic Socialism and the Democratic Party not being half that good.
"The Republican National Committee recently dropped its resolution to brand the moderate pro-corporate Democratic Party “Socialists.” As the late, great Democratic Socialist leader Michael Harrington liked to tell it when he testified before a dying Senator Hubert Humphrey on the Humphrey-Hawkins Work Bill, that would theoretically guarantee every American a right to a job, Humphrey bluntly asked him “Is my bill socialism?” Harrington replied, “Senator, your bill’s not half that good.”
"Here’s why the Democratic Party is also not half that good. Obama’s “Me too” bailout policy to the largest and most irresponsible banks and investment houses has nothing to do with socializing capital. Democratic Socialists believe in democratizing and socializing money matters. They favor credit unions and co-ops with democratically elected boards over large welfare checks to transnational corporations. In fact, there’s little difference between Obama’s approach to the big bankers and George W. Bush’s.
"If the Democrats were European Democratic Socialists or Social Democrats, they would have never allowed 20% of all U.S. workers and 47 million people in the U.S. to live without health care. They would have at least called for a general strike to shut down the system until the injustice was stopped.
"Historically, U.S. Socialist leaders like [Eugene V.] Debs, Norman Thomas, and Michael Harrington were not cowards hiding behind pragmatism and popularity polls. When virtually no U.S. politicians spoke on behalf of accepting Jewish immigrants from Nazi Germany during the Great Depression, Thomas fought for their admittance.
"Martin Luther King, Jr. called Norman Thomas “the bravest man” he ever met. When Thomas gave his nominal blessing for the last remains of the Socialist Party to merge into the Democratic Party in 1960, he did not surrender his conscience. For example, he called John F. Kennedy “all profile and no courage,” particularly in regards to the President’s civil rights actions. In 1965, Thomas spoke at the first major anti-Vietnam War rally in Washington D.C. and announced he had come to “cleanse” the American flag, not to burn it.
"Debs, Thomas and Harrington came to realize that democracy was more important than socialism and that decision-making from the bottom up was the key. To label the timid, triangulating Obama Democratic Party as Democratic Socialists is absurd. Not only is Obama not half as good as Debs, Thomas and Harrington, he’s not yet a pale imitation of FDR. And we can only dream that he would adopt the infrastructure programs and progressive tax policies of President Dwight Eisenhower from the 50s."
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