Corporate Scandals

Thoughts on Saving an Old Barn

dlindorff — Wed, 16 Sep 2009 16:05:22 -0400

Corporations have no more place in a democracy than carpenter ants and mold have in the beams of an old barn.

By Dave Lindorff

For the last two weeks, I’ve been contemplating the mysteries of a post-and-beam barn, trying to work out how to rescue the long-ignored structure from the fate of many barns of its vintage (probably about 150 years old), which is total collapse.

This particular barn was left unattended for years by its last owner, and I am guilty of continuing that neglect for the 12 years that I have owned it. I knew that the shingles on its roof had long passed their sell-by date. When we first bought the property, the shingles had that telltale roughness that announced that they were eroded and brittle. The chronically wet ground floor was also a pretty convincing sign that the roof wasn’t doing its job of keeping the rain out. But the real evidence of looming disaster were the plants that began to sprout right out of the roof this wet summer. Big plants. Even a few young trees. And the mushrooms growing out of the ends of exposed beams. Not a good sign.

I made my way gingerly up the rickety stairs to the second floor in August, and looked around at the underside of the roof. Someone had obviously once re-roofed the structure perhaps two decades ago or more, using plywood sheathing over the old slats, but the plywood from the front wall on up halfway to the ridge was all rotten. One corner of the roof had actually fallen in, so there was an eight-foot-by-four-foot unimpeded view of the sky. Several rafters were so rotten they had cracked and were sagging downward, held up only by the rusty nails coming down into them from the gimpy plywood and slats above them.

I’ve never attempted anything this big, but I decided I simply had to rescue this sad old building. Someone had once put an enormous effort into its hand-hewn ten-inch-by-ten-inch beams (probably chestnut), notched and pinned together by wooden pegs. There had probably been a community barn-raising to erect the thing, once upon a time.

There’s no community today to do this kind of work, unless you’re part of one of the Amish communities in central Pennsylvania or Ohio. I have a few friends I could probably get to hold a ladder, or maybe help me hoist some shingles to the roof, once I get to that point, but nobody would likely want to devote a week or two to the hard labor of rebuilding a dangerous old barn, just for the sake of community spirit or camaraderie. Those days are gone. People are just too busy trying to get by.

So I’m doing this project myself.

I started from the ground up, using a hydraulic house jack to lift giant floor joists whose tenons had rotted away, and installing heavy uprights posts made of treated lumber, to fend off the inevitable carpenter ants that are attracted to damp wood like bees to clover. Then I moved to the second floor, and began replacing the planking that had rotted away to the point that it could no longer hold a child’s weight. (It didn’t help things that the last owner of the property had let a flock of chickens inhabit the second floor, and that, until I had cleaned it out, it was four or five inches deep in desiccated chicken shit.) Once I had a sound second floor, so I could walk around freely without having to test each board before stepping on it, it was time to tackle the roof.

That’s when I first noticed that the front of the barn was actually tilting forward, as if poised to take a dive.

Uh-oh.

This was an urgent fix. I raced out to Deck’s, an old family-owned hardware store in the next town—a throwback to an earlier time, with floor-to-ceiling cabinets that had the items inside mounted on the doors, so you could see what you were looking for, instead of having to struggle to explain to the shop personnel the shape of some item, the name of which you could never, in a million years, recall, if indeed you had ever known it. In my case, it was a humongous turnbuckle—a device with welded eyes at either end on threaded bolts, one reverse-threaded. By attaching this turnbuckle to an eye-bolt that was put through the sill beam and clamped down with a nut and a large washer on the outside, and attaching one end of a big cable to the other, with the cable stretching to another eyebolt running through the opposite sill beam, I could crank the thing around and shorten the cable, pulling the barn together, I figured.

When I got back to my barn and assembled this apparatus, drilling the holes through the two sill beams, and began the cranking process, I could see immediately that the tilted upper story was pulling back, but then it dawned on me: How did I know I wasn’t also pulling the other ood wall over with the bad one? I checked it out with a level, and it was still nice and vertical, but obviously I couldn’t count on its staying that way. I needed to put in some angle braces against the opposite sill to keep it from moving.

But there was still something I hadn’t anticipated. I kept cranking in the outer wall, and managed to mover its top about four inches back towards true. It was still leaning out about four inches though, and the cable was getting disturbingly taut. Then I noticed that the eyes of the huge eyebolts I had put through the sill beams were starting to pull away from their nice round shape!

Damn! I should have found bolts with welded eyes, or taken these to be welded.

I couldn’t bring myself to re-loosen the cable, so I gave the turnbuckle a couple more careful cranks, checked the eyes, and then decided that was as far as I could go.

Later, I was talking with a contractor who does renovations of old houses about the problem, and, after first declaring me “crazy” for attempting a project of this scale on my own, he explained that unbeknownst to me, when I was cranking the wall back, I was also trying to lift the entire roof of the barn with that turnbuckle. It was actually the slumping and spreading of the heavy roof’s angled rafters that was forcing the front wall out. In trying to pull it back, I was actually trying to force the roof back up to its original angle.

Can’t be done. If I wanted to really pull the wall back to true, I’d have to get a few big jacks and jack up the peak of the roof at the same time, to take the pressure off the wall.

Good enough, I decided. Mine would be a crooked barn. At least it wouldn’t fall over now.

Next it was time to tackle the rafters. There was a total of 12 of these. Two had to be completely replaced, or else I had to run a double alongside of them—the option I chose. Again I used treated lumber—two 14-foot lengths of beam that I bolted through the good wood I could find in the old rafters.

The other rafters all had varying degrees of rot, but all of it seemed to be near their lower ends, where most of the rain water had settled over the years of my and others’ neglect. That made reinforcing them a little easier, but it created another problem: the rot had extended out past the wall to the eaves, which were starting to fall off the barn as a result.

I would have to replace the ends of the rafters, right out to the end of the eaves.

What this meant was bolting new sections of rafter to the good wood of the old rafters, and extending each one out past the wall to the length of the desired eave—about 14 inches.

Once I had done this all the way across the length of the barn, it was time to get up on the roof to start replacing the rotten plywood. But with 1 15-foot drop to the ground from the edge of that roof, I didn’t want to be up there without protection, so I had to construct a scaffolding that would both give me a platform to work on at the base of the roof, and a fence strong enough to hold me back if I were to accidentally slide off the roof at some point.

My answer to this challenge was to nail several 2X4 beams horizontally along the inside of the wall, just below the sill beam, and to then cut holes through the wall every four feet large enough to run other 2X4 beams out through them projecting out about three feet from the wall. Inside the barn, I let these latter beams extend about six feet, and then tied them into upright studs that extended from floor to ceiling. These solid horizontal beams would support a couple of 2X10 planks just below and beyond the eaves. I then hung 18’ lengths of 2X4 from the ground up past the planks and linked them with several runs of 2X4s to make safety railings. Lower down, I ran cross ties in to the barn wall to keep the uprights from moving inward if the fence were hit, and also diagonally from one upright to the next, to stabilize these “legs” of the scaffold.

With the barn structure completely reinforced, I’m now pulling up the rotten plywood roofing and am replacing it with god plywood. I’ll cover that with tarpaper and then a layer of 30-year shingles, which should, since I’m 60, guarantee that it’s the last roof I have to do in this life.

With luck, I’ll have the whole project completed before the first frost.

Saving an old barn is an immensely satisfying activity, even for someone like me with only basic carpentry skills. It also makes one think about other things that need saving and repairing.

Take our political system. The old US political system is, like my barn, shot through with rot and in imminent danger of collapse. We Americans have been busy with our lives for too long, and have allowed the whole structure to decay. Greedy corporations and individuals, like mold and carpenter ants, have infested every post and beam and have been eating them away for years. Now, as we start to become aware of the extent of the rot, many of us are saying that fixing the mess will be just too difficult. Many just turn away and focus on smaller things. Others suggest that just tearing the whole thing down and building something new would make more sense. But I think that given the effort that went into constructing the thing in the first place, we owe it to ourselves and the people who came before us to try and fix it.

That means first of all cutting away all the rot. Corporations deserve absolutely no place in the process of politics and governance. The Constitution refers to We the People, not to We the People and Corporations. Indeed, the whole idea of corporations is profoundly antithetical to democracy. Corporate law was designed to separate ownership from personal liability, and to free owners and managers from personal responsibility for their actions. You cannot have any kind of decent political or governmental system where organizations that are free to act recklessly and without regard to consequences can influence decisions, anymore than you could allow a barn to be built—or repaired—by someone who had no responsibility for the finished project (that’s why contractors have to be, or should be, bonded).

It also means thinking ahead in a long-term way. I doubt that I’ll be living on this property and owning this barn 20 years from now. If we are lucky, my wife and I will be living in some tropical paradise when we’re in our 80s. But I could not live with myself if I just put 10 or 15-year shingles on this barn roof, making it likely that it would start leaking again before long, again putting the long-suffering framing at risk. No, it never occurred to me to do anything less than put the most durable type of 35-year shingle on the roof. In fact, I would have opted for slate if I could afford it.

Yet, in our politics, we Americans keep refusing to think long-term. We refuse to pay for anything, whether it’s schools or wars, preferring to borrow for everything, and passing on a country buried in debt to our children and grandchildren. The fiscal soundness of a nation is no less important than the structural soundness of a barn, and we ignore that truth at our, and especially our children’s peril.

I fixed my barn myself, but no one can fix this country by her or himself. It’s got to be a collective effort.

The first step is recognizing the problem.

That shouldn’t be hard. When you look at the corrupt process underway in Washington today as the White House and the Democratic Congress try to produce what they are euphemistically calling a “health reform” bill, you can see the problem. The whole process is being distorted and controlled by the very corporations that have produced the dysfunctional system that we have today. It’s as if one were expecting the ants that were eating away the beams to rebuild my barn.

When you look at the war in Afghanistan, which is getting bigger and uglier by the day, even as nearly two thirds of the public says they want it to be ended, you can see how little democracy we have left in America. The only ones really benefiting from this war are the war industries—and of course the military, which keeps eating up more and more of our collective wealth.

The way I see it, it’s time to take matters back into our own hands. We need to get out the wrecking bars, the hammers and the saws, and start ripping out the rot and the decay, and rebuilding the structure with solid, durable materials. We don’t have to rebuild it the way it was—installing solar panels would make sense, and maybe we could add more windows to make the whole thing more visible than it used to be.

We should however, vow this time to keep all the manure down in the stalls in the basement.

No more chicken shit on the upper floor.
_________________

DAVE LINDORFF is a journalist and sometime carpenter living outside Philadelphia. His latest book is “The Case for Impeachment” (St. Martin’s Press, 2006). His work can be found at www.thiscantbehappening.net

Using the Economic Crisis to Attack Workers: Employers Undermine Stimulus Program

dlindorff — Mon, 22 Jun 2009 13:21:47 -0400

By Dave Lindorff

Reports are starting to appear suggesting that laid-off or
underemployed Americans, and the long-term unemployed, are losing
patience with the Obama administration’s and Congress’ economic
stimulus plan, which thus far has not done anything to arrest the
growth of unemployment, now at close to 20 percent of the US workforce,
at least as unemployment used to honestly be counted in the 1970s and
early 1980s.

While millions of jobs have been lost since the beginning of this
year alone, the number of jobs that have been created as a result of
the Obama administration’s signature $780-billion stimulus spending
package is under 150,000—a far cry from the 3.5 million that were
promised when the bill was being put before Congress.

There has been a lot of hype from Washington sources, dutifully
reported with little analysis or criticism in the corporate media,
suggesting that the recession is bottoming out. One example was a
report last week that the number of people receiving unemployment had,
for the first time in six months, dropped slightly. Unmentioned was the
hard reality that the reason for this drop was that many laid-off
workers are now reaching the end of their 26 weeks of unemployment
benefits in states that do not offer any extended benefits program. On
inspection, that is hardly good news.

There is also a mantra, trotted out regularly by administration
officials, that unemployment figures are a “lagging indicator,” and
thus are no indication that the recession is continuing to worsen. The
problem with this sleight-of-hand is that unemployment itself, when it
is rising rapidly as it has been now for a year, is a cause of
deepening recession. When one in five workers is unemployed or
unwillingly underemployed, that represents not only a huge drop in
consumer demand for everything from basic necessities to luxuries, but
also a huge dark cloud of anxiety that hangs over most of the rest of
the public, leading everyone to cut back on their spending, thus
dragging down the economy further.

But there is another factor at work, which is not getting much
attention, and that is the negative role being played by employers,
both public and private, in worsening the recession and undermining the
stimulus effort, such as it is, by actually using economic crisis as an
excuse to further attack and undermine workers and their incomes.

Take Temple University, where I live. The university, a largely
publicly-funded institution, has received $10 million in federal
stimulus funds, largely replacing the state funding that it lost when
the state cut back on its educational budget, and though those funds
were specifically intended by Congress to be used to improve student
achievement and to put people to work quickly, Temple, which has also
seen student admissions and tuition revenues increase during the
recession, has done the opposite—laying off staff, including
departmental staff and other personnel. The university for the past
year has also been engaged in a classic union-busting campaign against
one of its staff unions, which has been working 0n an expired contract
for a year, and its faculty union, which has been working on an expired
contract since last October. The school last year hired an outside law
firm, Ballard Spahr Andrews & Ingersoll, that on its website touts
its expertise in “union avoidance,” to handle the school’s “bargaining”
with faculty.

In this, Temple is hardly alone. Across the country, companies and
public institutions have been taking brutal advantage of the economic
crisis as an opportunity to attack their workers, slashing employment,
demanding pay cuts (the New York Times, for example, has cut
employee paychecks by 5%), reducing long-held benefits, and generally
contributing to the impoverishment and insecurity of the broader
American workforce. According to a recent report, 29 percent of
employers who had historically been offering their employees a match
for their own contributions to 401(k) retirement plans have eliminated
that matching money over the last year.

These cutbacks and layoffs are bad enough when made by private
firms, many of which are still quite profitable and which have
benefited over the years and recently from tax incentives aimed at boosting
employment, but they are particularly obscene when they are made by
institutions that are receiving public stimulus money, like schools,
public transit agencies, and state and local governments. Indeed, it’s
probably the case that much of the potential stimulus of the
taxpayer-funded stimulus plan has been negated by job cuts and pay cuts
being made by the state and local entities that have received the bulk
of that money. If a state, for example, uses $50 million in stimulus
funds to repair a bridge, in the process providing jobs to perhaps 100
construction workers, and then lays off 200 state workers, that
stimulus money is completely wasted in terms of boosting the economy.

So far, most of the frustration and anger over this undermining of
the economic stimulus program is coming from the unemployed. Taxpayers,
who will end up paying for this stimulus (all of which was borrowed
money) in future years, have so far not raised a fuss, perhaps because
they have not gotten the news that employers are busy undermining the
program. That could change if unemployment, as expected, keeps rising
inexorably. Maybe at that point people will start demanding that their
taxes be used by the federal government to directly employ people,
instead of trusting employers to pass it through to their workers, or
that at a minimum, organizations receiving stimulus program funds be
barred from laying workers off or cutting their pay.

______________

DAVE LINDORFF is a Philadelphia-based journalist. His latest
book is “The Case for Impeachment” (St. Martin’s Press, 2006). His work
is available at www.thiscantbehappening.net

Where's the Anger as the Wheels Come Off Obama's and the Democrats' Recovery Program?

dlindorff — Wed, 10 Jun 2009 16:05:35 -0400

By Dave Lindorff

My bank, a small regional institution that was not involved in sub-prime lending, and that was not a recipient of any TARP bailout money, cut off my home equity line of credit two weeks ago. They did it abruptly, with no notice—I only discovered it had happened when I tried to get a $500 advance from it to cover a payment I was making on my credit card. When I asked what was going on, the local branch manager informed me that “we are closing out a lot of credit lines while we reassess the value of houses in this region, which have been falling.”

Now, in my particular case this was ridiculous. First of all, in our county, just north of Philadelphia, property prices have been static, but not falling. Furthermore, I had taken out a $160,000 mortgage 12 years ago, and it was now paid down to $60,000, and my balance on the home equity credit line was pretty small, so there was no way that we were in any way “under water”—in fact our equity in our home is much higher than it was 12 years ago.

The bank informed me that it was no problem. I could simply take out a new credit line, at no charge, and transfer the balance on the current line over to the new one. The only hitch: Instead of paying one percent over prime as I had been, I would be paying nearly 4 percent over prime on that balance, effectively doubling the cost of borrowing money.

This kind of thing is going on all across America, as banks that once spread around credit like a Philadelphia Democratic Party ward captain on Election Day, start tightening the screws on individuals and on small businesses.

While the Obama administration and the Treasury and the Fed are bulldozing funds into the coffers of the big banks, allegedly to get them to lend, the banks, from the largest to the smallest, are pulling back, afraid that borrowers will end up going bust on them. So much for economic stimulus efforts.

Not that borrowers have been lining up to get credit. Rather, most people, if they aren’t simply going bankrupt or letting collection agents harass them for nonpayment, are trying to pay off credit card balances, and to cut expenses. With official unemployment approaching 10%--a level it may hit this month—and real unemployment, as measured the way it used to be back in 1980, at closer to 20 percent, the majority of Americans not only have friends and family members who are unemployed or working part-time or at odd jobs involuntarily, but are worried about getting the axe themselves.

Meanwhile, the short-lived but incredibly expensive Obama rescue program, like a stagecoach at the end of a spaghetti western chase scene, is about to have the wheels fall off and go sliding over a cliff.

Bond yields and commodity prices are spiking as investors are waking up to the reality that massive borrowing by the US Treasury and massive printing of money by the Federal Reserve are going to lead to serious, perhaps even hyper inflation of the dollar. That in turn will force the Fed at some point, probably fairly soon, to raise interest rates, choking off not only those so-called economic “green shoots” that the cheerleading media have been citing as evidence that the recession is “bottoming out,” but also even the recent stock market rise, which was being touted as one of those signs of economic “spring.” On Tuesday, the interest rate or “yield” on the benchmark 10-year Treasury Bill jumped from 3.86% to 3.98 percent, and at one point went over 4%. Meanwhile, crude oil prices rose to over $70/barrel—an odd thing given the significant decline in demand caused by the global recession, but evidence that investors are anticipating a dollar slump and aren’t interested in supply and demand issues. Other commodity prices are also jumping for the same reason.

News that the big banks that were recipients of hundreds of billions of dollars in federal TARP loans were paying some of that money back to the government in order to be able to go back to their old ways was hardly reassuring. Those banks, like Bank of America and Citibank and Goldman Sachs, are not suddenly healthy. They have used accounting gimmicks to disguise the fact that they are what some economists have dubbed “zombies,” with bad debts far in excess of their assets. And they will stay that way, while enriching their top managers with bloated salaries and “bonus” payments, while keeping credit tight and available only to the absolutely best corporate borrowers.

Obama’s wars in Iraq and Afghanistan are going from bad to worse. There is no savings coming out of Iraq, as he had claimed would happen during last year’s presidential campaign, and even if there were, it’s all simply being transferred over to Iraq, where the US war effort is morphing from a small special forces operation into a full-scale war, destined to rival or even surpass the one in Iraq in terms of human and financial costs.

It’s all coming unglued, just as the president puts forward his signature program—a health care reform scheme that is supposed to guarantee health care for everyone in the country.

Fat chance that one has. When America’s economic house of cards finally really collapses, which looks to be starting to happen now, there simply won’t be any cash in the till for health care.

So far, most Americans remain unaware of the scale of this crisis. The news media continue to tout shamelessly whatever signs of recovery they can detect, leaving all those whose personal finances are falling apart to feel like it’s just their problem. Astonishingly, given the extent of the joblessness, there has been no national jobs march on Washington, no mass protests over the inadequacy of unemployment benefits, which reach only a minority of workers and are at levels far below what they were in prior recessions, no sit-down strikes at companies that are laying workers off or cutting salaries. The labor movement, such as it is at this point, is so wedded to Obama and the ruling Democrats, and so narrowly focused on trying to win passage of the seemingly doomed Employee Free Choice labor law reform bill, that the unions aren’t trying to organize any mass actions to demand economic justice.

Maybe this public passivity in the face of rampant corporate welfare and corporate pillage will come to an end as unemployment benefits begin to run out and unemployment rates continue to climb.

The coach is heading for the cliff, but there is still time for people to jump out.

_____________

DAVE LINDORFF is a Philadelphia-based journalist. His latest book is “The Case for Impeachment” (St. Martin’s Press, 2006 and available on my website in signed collector edition). His work is available at www.thiscantbehappening.net

Where's the Goddamn Outrage: When It Comes to Labor Laws, We Have a Corporate Crime Wave

dlindorff — Wed, 20 May 2009 11:50:06 -0400

By Dave Lindorff

A new study of 1004 union organizing drives conducted by the
director of labor education research at Cornell University’s School of
Industrial and Labor Relations has found that two-third of the
companies involved were violating US labor law by holding one-on-one
interrogations of workers, by threatening workers about their union
support, by firing union organizers or using half a dozen other illegal
tactics to defeat unionization campaigns.

Prof. Kate Bronfenbrenner, author of No Holds Barred: The Intensification of Employer Opposition ot Organizing,
says that these illegal tactics by employers have been used to drive
union representation at American companies down to only 12.4 percent
from a level of 22 percent just 30 years ago.

If a similar level of illegal behavior by companies was reported
dealing with, say, false billing of customers, deceptive reports to
shareholders or violation of environmental laws, there would be a
clamor for action in Congress, and among the public, but so far, there
is no outcry over this wholesale violation of the nation’s labor laws.

One reason may be because nobody except the unions themselves and
the companies breaking the law would know about this particular
corporate crime wave.

The only article I’ve seen on this study was published by the New
York Times, but it was run in an inside page of the Times business
section, which is largely ignored by most readers.

Why would an article about workers be consigned to the business
pages? Is it only of interest to businesses and investors? Surely not.
The author of the piece, Steven Greenhouse, one of the nation’s last
journalists to actually have a labor beat, is a fine reporter, and
writes his articles not in business jargon but in a style that would be
easily understood by anyone who could read. His article, headlined
“Study Says Antiunion Tactics Are Becoming More Common,” surely belongs
in the front section of the newspaper, and in fact, given its shocking
evidence of rampant criminality on the part of employers on a national
scale, should be on the front page of the paper if editors were
applying honest news judgement (How many people are impacted? How new
is the information? How dramatic is the new information?).

But a second reason may be that unions themselves are doing a poor job of getting the story out.

Right now the US labor movement is desperately trying to win
passage of the Employee Free Choice Act, a bill which, if passed as
currently written—a long shot at this point—would address some of the
issues raised in Prof. Bronfenbrenner’s study by eliminating the need
for secret ballot unionization votes. Those elections, companies and
their labor-busting lawyers have long ago learned, can be delayed for
years while they illegally whittle away at union support. But because
the unions are trying to keep the support of a wavering President
Barack Obama and of Democrats in Congress for passage of EFCA, in the
face of massive lobbying by big business interests, they are avoiding
the kind of street politics that would make this corporate crime wave a
big story.

What should be happening is mass marches in the nation’s cities,
and especially in Washington, demanding action on EFCA. President Obama
and most Democrats in both Houses of Congress, all campaigned saying
they backed EFCA, but now many are backing away from that promise.

A million angry workers massed and shouting on the Washington Mall
would stiffen their spines, as would big demonstrations in the major
cities of the country.

Mass action would also force the media to look at the way companies
are simply thumbing their noses at the nation’s labor laws, which
outlaw intimidation of workers, outlaw firing of union activists, and
guarantee free elections on the issue of whether to have a union at a
workplace.

Of course, a third problem is that American workers have long been
quiescent on the issue of labor unions. Polls show that a majority of
Americans would like to have a union where they work, but very few of
us seem willing to fight for that right. Maybe with polls showing that
over 50 percent of Americans now worry that they may be laid off, and
with companies clearly using the economic crisis as an excuse for
bashing employees, that quiescence is ending. The only way to find out
is for the labor movement to call for street action.

This is no time to be polite with politicians, and no time to limit
political action to writing email letters, signing petitions and making
phone calls.

This is a time to call out the corporate managers who are treating
the labor laws like so much toilet paper—a time for boycotts, for
marches, and for sit-ins.

End the American corporate crime wave of labor law violations!

Demand stiff penalties for breaking labor laws!

Support unionized companies and boycott anti-union companies!

Pass the ECFA, as written, with no compromises!

________________

DAVE LINDORFF is a Philadelphia-based journalist and long time labor
activist. His latest book is “The Case for Impeachment” (St. Martin’s
Press, 2006). His work is available at www.thiscantbehappening.net

Politicized Accounting: No End to the Scams

dlindorff — Tue, 07 Apr 2009 11:55:46 -0400

By Dave Lindorff

The accounting profession might seem like the last place that you’d
find serious political hanky-panky going on, and it’s probably not on
very many people’s A-list of fun subjects to read about, but the
Financial Accounting Standards Board, a quasi-governmental body that
has statutory authority to regulate and establish the rules by which
public companies, including banks, do their books, has just caved in to
pressure from those banks and from the large number of members of
Congress who pocket huge piles of campaign swag and perks from those
banks and other public companies, and gravely undermined the integrity
of corporate balance sheets.

This may sound incredibly arcane, but what the FASB has done is
declare that assets held by companies (including banks) on their books
will no longer have to be valued at their current market value. Under
new guidelines, effective retroactively to March 15, these assets can
now be valued at what the corporate managers think (or pretend to
think) they will be worth at some time in the future when they might
try to sell them.

Think about it for a minute. Say you own a house, which you might
have bought 10 years ago for $200,000, using a $180,000 mortgage.
Today, depending on where you live in the country, that house might be
worth as little as $100,000. If you still owe $100,000 on your
mortgage, that would give you a net worth of 0 (a lot more than what
Citibank and Bank of America are worth today). Now let’s say you want
to go out and buy a $20,000 car on credit. The auto dealer, before
extending you a car loan, will want to know what your net worth is.
Under market-to-market accounting rules, you would have to say that
your net worth is 0, and you probably wouldn’t get a loan—especially if
your employment, like that of many Americans, is iffy, and you’re
carrying a big balance on your credit cards. But under the new FASB
guidelines, if you were to be treated like a bank, you could estimate
the value of your house as $200,000 (the price you paid for it), or
perhaps even $250,000 (the price you “expect” it to get when you decide
to sell it). You have no real way of knowing whether your house will
ever return to being worth $200,000. For all you know, it could fall
further over the next five years to $75,000 or $50,000, but that
doesn’t matter. You, the owner, are saying that your “reasonable
expectation” is that this asset of yours is “worth” $200,000. And
bingo, thanks to the magic of modern FASB-approved accounting, your net
worth, instead of being 0, is now $100,000. You can buy your car.

This is what the FASB is now saying banks and other companies can do.

If you are an investor, or a potential investor, you now have to be
very wary. After all, how are you top establish what a company is
really worth, if the management is able to play games with the value of
its assets? The answer is you really can’t know. Things get much worse
when it comes specifically to banks, which after all, are all about the
assets.

Remember those “toxic” assets—the alphabet soup of debt products
with initials like CDO, CDS, SIV, all composed of diced and sliced debt
that for the most part is close to worthless? Well, thanks to the
FASB’s accommodating change in the rules, instead of valuing those debt
holdings (remember, loans are assets to a bank) at what they are worth
on the market today, the banks are now able to value them at what they
supposedly think they will be worth at some future date when the bank
might want to sell them. This is a wholly fictional figure, of course.
Nobody knows what, if anything, these crap debt instruments are going
to be worth, but it’s a fair bet that most of them won’t be worth any
more a decade hence than they are worth today (and maybe less). But who
cares? The important thing is that now the banks, who have huge black
holes in their balance sheets, can now fill those holes with
artificially inflated assets and make themselves look a whole lot
better financially than they really are.

There’s an irony here. The big banks that hold most of the toxic
debt (and especially the five largest banks that hold 96% of the
garbage) desperately wanted this FASB rule change because they wanted
to prettify their balance sheet in hopes of boosting their share values
and of maintaining the pretense that they are not zombies. But in doing
this, they are undermining a key goal of the Obama administration and
of Treasury Secretary Tim Geithner and Federal Reserve Chair Ben
Bernanke, who wanted to have the government and private investors start
buying those trillions of dollars’ worth of toxic assets off of the
banks’ hands.

Remember, if the banks declare that the toxic assets on their books
are worth some fictitious amount, they have to sell them at that price,
or stand accused of faking their books, i.e. fraud. But investors, like
hedge funds and other institutional investors, are not going to want to
buy those assets at anything but distressed bargain-basement prices,
because even with the government assuming 92 percent of the risk, they
are not going to buy these trash assets unless they see the chance for
a significant upside.

So with the new rule, the banks will end up being stuck holding the
very toxic assets that have sent them into a tailspin in the first
place.

The vote to end market-to-market accounting rules was controversial
even on the five-member FASB board, which ended up narrowly voting 3-2
in favor of the measure. One member who voted against the change,
Thomas Linsmeier, decried what he said was “pressure” on the board to
act. A House committee had threatened to introduce legislation that
would force the change if the FASB didn’t act on its own.

The US budget has long been a work of fiction. Now the books of the
nation’s banks and of many of its public companies will also be pure
works of fiction.

As columnist Jonathan Weil wrote in Bloomberg.com last month as the
FASB was considering making this change in its rules, “The FASB ought
to change its name to the Fraudulent Accounting Standards Board.”

The road to ruin, it turns out, is not paved with good intentions
after all. It is paved by powerful lobbyists buying short-term benefits
at the public’s expense.

By the way, if you think Citigroup is solvent, I have a great deal on a house for you.
________________________

DAVE LINDORFF is a journalist based in Philadelphia. His latest
book is “The Case for Impeachment” (St. Martin’s Press, 2006). His work
is available at www.thiscantbehappening.net

History Lesson: And These Are the People We Expect to Fix Things Now?

dlindorff — Fri, 27 Mar 2009 13:03:54 -0400

By Dave Lindorff

George Santayana once famously said, “Those who cannot learn from
history are doomed to repeat it.” But what about those who don’t just
ignore history, but who hire and take counsel from those who committed
historic follies in the past?

Back in November 1999, Congress passed legislation pushed by then
Sen. Phil Gramm (R-TX), rescinding the Depression-era Glass-Steagall
Act. The measure, backed by the Clinton administration, and
overwhelmingly passed by the Senate (90-8) and the House (362-57),
opened the way for banks to merge with investment banks and insurance
companies, and led directly to the current financial cataclysm.

A report on that Congressional action written by reporter Stephen
Labaton and published in the New York Times on Nov. 5, 1999 under the
headline “Congress Passes Wide-Ranging Bill Easing Bank Laws,” includes some remarkable quotes from key players in that sellout to the financial sector.

Here’s Larry Summers, a chief architect of the current financial
industry multi-trillion-dollar bailout giveaway being orchestrated by
the Obama administration, where he serves as director of President
Obama’s National Economic Council:

''Today Congress voted to update the rules that have governed
financial services since the Great Depression and replace them with a
system for the 21st century. This historic legislation will better
enable American companies to compete in the new economy.''

And here’s what Sen. Charles Schumer (D-NY), awash in Financial
industry campaign donations but currently in high dudgeon over the Wall
Street’s bonus payments to executives, speaking about the ’99 measure
eliminating Glass-Steagall:

''If we don't pass this bill, we could find London or Frankfurt
or years down the road Shanghai becoming the financial capital of the
world. 'There are many reasons for this bill, but first and foremost is
to ensure that U.S. financial firms remain competitive.”

The article quotes the Clinton administration and Summers’ Treasury
Department as predicting that revoking Glass-Steagall and permitting
banks to expand into investment banking and insurance would save
consumers “$18 billion a year” through economies of scale—a figure that
seems rather quaint as taxpayers now pony up trillions of dollars to
rescue those same institutions. (The article notes that critics of
deregulation argued that even those paltry savings, probably
overstated, would flow to financial sector investors, not to consumers.)

The old Times clip (brought to my attention by alert
veteran radical writer and activist Bert Schultz of Philadelphia), does
highlight a couple of prophetic heroes, too.

Sen. Byron Dorgan (D-ND), one of seven Senate Democrats who voted against revoking Glass-Steagall, said:

“I think we will look back in 10 years' time and say we should not
have done this but we did because we forgot the lessons of the past,
and that that which is true in the 1930's is true in 2010. I wasn't
around during the 1930's or the debate over Glass-Steagall. But I was
here in the early 1980's when it was decided to allow the expansion of
savings and loans. We have now decided in the name of modernization to
forget the lessons of the past, of safety and of soundness.''

And then there’s the late Sen. Paul Wellstone (D-MN), who died in a
tragic and still unexplained plane crash during his campaign for re-election in 2002. Congress, he
said, seemed:

“…determined to unlearn the lessons from our past mistakes.
Scores of banks failed in the Great Depression as a result of unsound
banking practices, and their failure only deepened the crisis.
Glass-Steagall was intended to protect our financial system by
insulating commercial banking from other forms of risk. It was one of
several stabilizers designed to keep a similar tragedy from recurring.
Now Congress is about to repeal that economic stabilizer without
putting any comparable safeguard in its place.''

For the record, also voting against Glass-Steagall repeal in the
Senate were lone Republican Richard Shelby of Alabama, and six other
Democrats: Barbara Boxer (CA), Richard Bryan (NV), Russ Feingold (WI),
Tom Harkin (IA), and Barbara Mikulski (MD). 51 Democrats, 5 Republicans
and 1 independent voted against the measure in the House.

Treasury Secretary Tim Geithner, a key player in the current bailout
scheme, isn’t mentioned in the Times article about Glass-Steagall, but
at the time was a protégé of Summers, working as undersecretary of the
treasury for international affairs.

While they are thankfully well out of the loop in the current
scramble in Washington to both reverse the economic collapse
and try and help financial companies and financiers profit from it,
it’s worth reading too in this 10-year-old clip what Phil Gram and then
Sen. Bob Kerrey (D-NE and now embattled president of the New School in
New York City) had to say about ending Glass-Steagall.

Sen. Gramm:

'The world changes, and we have to change with it. We have a new
century coming, and we have an opportunity to dominate that century the
same way we dominated this century. Glass-Steagall, in the midst of the
Great Depression, came at a time when the thinking was that the
government was the answer. In this era of economic prosperity, we have
decided that freedom is the answer.''

And then Sen. Kerrey, with a line that should probably be etched someday on his tombstone as his most memorable line:

“The concerns that we will have a meltdown like 1929 are dramatically overblown.”
__________________
DAVE LINDORFF is a Philadelphia-based journalist. His latest book
is “The Case for Impeachment” (St. Martin’s Press, 2006). His work is
available at www.thiscantbehappening.net

Obama Administration Careening Towards Disaster (and Taking the Country With It)

dlindorff — Sun, 22 Mar 2009 18:36:09 -0400

By Dave Lindorff

Six months after the failed Bush administration effort to "rescue"
the US financial system, and after two months of failed efforts by his
own new administration, at an expense to the American public of several
trillion dollars and counting, the Obama administration is announcing
plans to blow another $1 trillion in a massive taxpayer giveaway to
investors who will be subsidized in an effort to get them to buy the
so-called toxic assets on the books of the nation's biggest banks.

The problem with this plan is that its goal--getting these zombie banks to start lending again--is not going to work.

It doesn't matter how good the balance sheets of the banks are. Good
companies, and even individuals and families with good credit, are
simply not borrowing. As I wrote last month in the magazine Treasury and Risk,
the problem isn't that banks are too weak to lend (though the zombie
banks certainly are), it's that the strong banks don't want to throw
money at bad borrowers.

It is the nature of economic downturns like this current one that
companies and ordinary families don't borrow, but rather cut back on
their spending and try to reduce their debt, the better to ride out the
hard times. It is only the companies that are in trouble, like General
Motors, Ford and Chrysler, that are looking for loans, and no bank is
going to want to lend to them regardless of how much money the
government pumps into it. (And if the public decides that it is in the
national interest to prop up such companies, it is much more effective
to have the government loan them the money directly, rather than try to
get banks to lend it to them at much higher interest.)

What this means is that all the Obama administration, the US
Treasury and the Federal Reserve are doing by buying the toxic assets
off the books of banks like Citigroup, Bank America or Wells Fargo is
giving a taxpayer handout to those banks' investors and
bondholders--the very people who enabled those companies to invest in
the corrupt credit default swaps and other shady derivatives in the
first place.

What should happen? Citibank, Bank of America, Goldman Sachs, and
the other financial institutions that made bad bets on these structured
financial instruments, should be allowed to fail, taking with them the
investors who played this dirty game, and the managers who decided to
gamble instead of run conservative banking operations.

The government would protect the assets of depositors in those
failed banks, which would be sold to healthier, better run banks,
making those banks much stronger and better capitalized in the
process--and thus ready to start lending as needed. This is standard
operating procedure for the Federal Deposit Insurance Corp.

Note that this process would mean no crisis in the economy, since
the ability to access credit would not be crimped in the least by the
failure of some of the country's larger banks. It would, in fact,
probably be enhanced.

The toxic assets would be eliminated through the bankruptcies, and
the government--and taxpayers--would be $1 trillion less in the red.

Why isn't the Obama administration doing this? Because Obama has put
his trust in the advice of men--Treasury Secretary Tim Geithner, Chief
Economic Advisor Larry Summers, and, informally, former Clinton
Treasurer Robert Rubin, all linked to the investment bank Goldman
Sachs, which was also the corporate home of Bush Treasury Secretary
Henry Paulson. The same Goldman Sachs which was given $10 billion in
Troubled Assets Relief Program funds directly, and which then snagged
another $13 billion in TARP funds in secret, which was laundered
through the now-government-owned insurance company AIG.

It should be clear at this point that the Goldman cabal burrowed
deep inside the Washington apparatus is working not to rescue the US
economy, but rather to ensure the survival and enrichment of the big
banking establishment, and of course Goldman Sachs.

What we are witnessing in the policies of the Obama administration
is not the creative experimentation of a modern-day Franklin Roosevelt,
but rather the greatest heist in the history of mankind, as trillions
of dollars in public funds are shifted from taxpayers' pockets into the
hands of the very banks and bankers and bank investors who brought us
this financial debacle.

Instead of decrying the bonus payments to AIG executives, the
American public should be demanding the indictment of Paulson, Summers,
Geithner and Co. for IGL: Incomprehensibly Grand Larceny.

Instead of trying to rescue the nation's giant banks, we should be demanding that they be shattered into little harmless pieces.

Come to think of it, maybe it's time for a run on the banks--not
because your money is not safe at Chase or Citibank or B of A, but
because these institutions need to be killed off for the good of the
nation.

If you have an account at any national bank, go there tomorrow and
take it out. Transfer it to a local bank in your community. You'll get
better service, your money will still be just as safe, and you won't be
propping up institutions that have been stealing the country blind.
_____________
DAVE LINDORFF is a Philadelphia-based journalist and columnist. His
latest book is "The Case for Impeachment" (St. Martin's Press, 2006 and
now available in paperback from www.thiscantbehappening.net). His work is available at www.thiscantbehappening.net

Now We Can See Why Open Government Is the Only Way to Go

dlindorff — Wed, 18 Mar 2009 12:53:41 -0400

By Dave Lindorff

For years, advocates of open government, mostly on the left, but
also on the right, have railed against the growing secrecy of the US
government. But the focus, particularly of left critics, has been on
the Intelligence budget, a $40+ billion “black box” that is completely
protected from public and even congressional scrutiny, and on large
swaths of the Pentagon budget, which are kept hidden allegedly for
“national security” reasons.

For the most part, the American public has adopted an ovine
attitude towards such secrecy, assuming that the “government knows
best.”

Now, however, with the economic crisis, and the collapse of AIG,
Citibank, Bank of America, Merrill Lynch, Bear Stearns, Lehman
Brothers, General Motors, Chrysler and other leading US firms, and with
bailouts that are putting taxpayers on the hook to the tune of
trillions of dollars, the people are waking up, or at least are
starting to get restless in their slumber.

Perhaps there will be a new awareness soon of the importance of transparency in all parts of government.

For now, the Obama administration, the Federal Reserve and Congress
are all trying desperately to ease the citizenry back into a state of
torpor by adopting a position of mock outrage at the $135 million in
bonuses paid out by AIG to the very employees who created the
disastrous and crooked Credit Default Swap market that precipitated the
global economic collapse.

What they don’t want to happen is for people to start thinking
about the $183 billion that Congress and the Fed approved for AIG,
which we now have learned was simply a devious scheme for passing more
money in secret through to troubled banks and investment banks – among
them Citigroup, Bank of America, Goldman Sachs, Morgan Stanley and
others – that had bought these CDOs.

Recall that back in September, when the crisis first hit in earnest
and Treasury Secretary Henry Paulson first called for a bailout
program, he asked—in a three-page proposal to Congress which he
insisted they must pass or risk total economic collapse and the
imposition of martial law!—for absolute authority as Treasury Secretary
to hand out the $700 billion and for protection against any legal
action for whatever he might choose to do with it.

Congress didn’t accede to his imperious request, though it did give
him half the money he wanted: $350 billion, saying it would provide the
second $350 billion later (the new Congress did hand the second half of
the money over just before President Obama took office). A sizeable
chunk of that huge sum of taxpayer money went to AIG, the giant
insurance company that had devised a scheme to sell “insurance” for the
mortgage-backed securities that banks were gorging on. The term
insurance has to be placed in quotes, because since these contracts
were not backed by any assets, they were really not insurance at all.

As rumors spread that much of the so-called Troubled Assets Relief
Program (TARP) money that was provided to AIG was actually passed
through to banks and investment banks that were already receiving TARP
funds directly (including nearly $50 billion to foreign institutions),
Congress and some news organizations, notably Bloomberg, sought to
learn what firms were actually receiving the cash. AIG, the Treasury
Department and the Bush and later the Obama administration initially
fought such disclosure, as did all the bank recipients, claiming that
releasing the names of the recipients would make investors doubt their
stability.

Finally, thanks to the efforts of New York State Attorney General
Andrew Cuomo, whose office has been pursuing the issue in the courts,
we have the answer: the money was going primarily to the nation’s
biggest banks.

But most troubling is that a disproportionate amount of the AIG
bailout money--$13 billion -- went to Goldman Sachs, a company that
until July 2006 was headed by Treasury Secretary Paulson himself. No
wonder Paulson, AIG, Goldman Sachs and others wanted to keep this all
under wraps. No wonder too that Paulson initially tried to get Congress
to immunize him from the legal consequences of his bailout actions.

The truth is that Goldman Sachs and Paulson should be prosecuted
for corruption. The deal that Paulson engineered in secret for
shoveling taxpayer money into his former firm is surely one of the
largest acts of official larceny of public funds in the history of the
country.

Goldman Sachs even publicly announced in early February that it was
returning $10 billion in TARP funds it had received last fall, saying
it didn’t need the money. Well sure the company didn’t need the
money—because it was getting even more in secret via the AIG conduit.

With this backdrop, the rest of the bailout might well be seen as a
hugely expensive cover: give enough money to the rest of the big banks
and investment banks, and nobody in the industry will squeal about the
sweet deal Goldman Sachs was getting.

Of course, the corruption goes much deeper. While public money was
being funneled into the banks and other financial institutions, those
same institutions were using some of this taxpayer largesse to lobby
Congress to do even more. Just between October 1 and the end of 2008,
18 recipients of TARP funds reported spending nearly $15 million on
lobbying efforts in Washington. Among the biggest
bailout-recipient/lobbyists: American Express ($1.1 million), AIG ($1.1
million), B of A ($$880,000), Citigroup ($1.5 million), Goldman Sachs
($720,000), JPMorgan Chase ($1.1 million), Wells Fargo ($580,000).
These amounts represent quite an investment considering that these
firms all received, in return for their TARP lobbying efforts, billions
of dollars in bailout money.

Remember, Paulson’s original plan was to have even the TARP direct
bailout grants kept secret from the public. That idea didn’t fly. But
many of these companies that used their public funds to lobby for more
public funds also received secret bonus bailouts via AIG.

So here’s what happens when you have secret government. The public gets royally shafted.

Now that the story is coming out, the crooks in Congress, the White
House and at Treasury and the Fed are desperately trying to lull us all
back to sleep by feigning anger at the relatively paltry sums AIG is
handing out in bonuses to some of the crooks and scheisters on its
staff.

We should not put our heads down on the pillow being offered, though.

The lesson here is that we need open government, and that we need
to demand that our media not go for the cheap and easy story being
handed out by government press release.

Also, there’s this last thought: If you thought that the banking
mess was a horrible rip-off, just try to imagine what level of
corruption there must be in the Pentagon and the Intelligence programs
that have been operating in absolute secrecy and with no scrutiny for
decades!

Baa-a-a-a-a-a-a.
_________________
DAVE LINDORFF is a Philadelphia-based journalist. His latest book
is “The Case for Impeachment” (St. Martin’s Press, 2006 and now
available in paperback edition). His work is available at www.thiscantbehappening.net

Obama and Congress Must Act to Restore the Constitution

dlindorff — Fri, 16 Jan 2009 13:13:08 -0500

By Dave Lindorff

The calls for a reckoning for the criminals of the Bush/Cheney
administration are growing by the day, as the final few days of the
Bush presidency tick down, and as new evidence of their crimes keep
pouring out of the deflating gas bag that was the Bush White House.

For years, the Democrats in Congress, with a few notable
exceptions, have sat on their hands, allowing the ongoing destruction
of the Constitution, of the US military, of the nation’s reputation,
and of the rule of law, as well as of the institution of Congress
itself, by a cabal of Republicans in the White House, led by Vice
President Dick Cheney, who have sought to establish an executive-led government
that answered only to itself.

Obama, running for the White House, initially talked of restoring
the constitutional order, and of prosecuting crimes where they had
occurred, much as he talked of ending the war in Iraq. But now, as he
increasingly assumes the role of President, he is backing away from
that kind of talk, with plans instead to extend the war and occupation
in Iraq for years, while actually expanding the war in Afghanistan, and
to give the outgoing administration of criminals and
Constitution-wreckers a free pass, in the name of “letting bygones be
bygones.” Ironically, he is doing this even as some in Congress,
including House Judiciary Chair John Conyers, who ducked the issue of
impeachment and sat on proposed impeachment articles against Bush and
Cheney filed by Rep. Dennis Kucinich (D-OH) for two critical years when
he could have ordered a formal hearing by his committee, are now
calling for a special prosecutor.

But broken promises about the war aside, Obama cannot have it both
ways. If, as he is still declaring, “no one is above the law” in
America, then it is essential that those who have committed grave
crimes must be indicted and tried for those crimes. As he takes the
oath of office on Jan. 20, Obama will swear to uphold and defend the
Constitution. That means not only defending the integrity of the
document itself, but enforcing all the laws that have been passed in
accordance with that document.

As President, Obama has no more right than did his predecessor to
pick and choose which laws to enforce. At a time when the nation’s
jails are crammed to overflowing with hundreds of thousands of people
whose crimes are as minimal as stealing CDs from a convenience store,
if President Obama and his Justice Department fail to order an
investigation into profound White House crimes like the destruction of
evidence in the Valerie Plame spy-outing case, or the investigation
into the politicalization of the appointment and firing of US
Attorneys, or of the deliberate campaign of lies to justify an
unnecessary invasion of Iraq, if they fail to investigate fully what
the president’s illegal National Security Agency wiretapping program
was really all about, if they fail to investigate the rampant fraud and
profiteering by White House-connected private contractors in the Iraq
War zone, if they fail to investigate the clear evidence of White House
efforts to undermine fair elections in 2002, 2004, 2006 and 2008, if
they fail to prosecute the White House, right up to the offices of Vice
President and President, for authorizing, directing and then covering
up evidence of systematic torture of captives in the wars in Iraq and
Afghanistan and in the so-called “war” on terror, if they don’t
investigate what the administration really knew and what it covered up
in the days and weeks before the 9-11 attacks in 2001, it will no
longer be possible to say, with a straight face, that in America
everyone is equal under the law.

But that is only part of it.

Many of the current administration’s “crimes” are not statutory
violations. They are so called “high crimes” as defined by the
Founders. That is to say they are abuses of power that threaten the
nation’s very essense. They are not crimes in the sense that they
violate a law, but, even more seriously, they undermine our political
system and consequently threaten the very continued existence of our
free and democratic society.

The appropriate remedy for these high crimes—things like Bush’s
refusal, expressed through signing statements, to enact or envorce laws
or parts of laws duly passed by the Congress, his and Vice President
Cheney’s refusals to comply with Congressional subpoenas, his lies to
Congress regarding the true situation regarding the alleged threat
posed by Iraq in 2002 and 2003, and his overall assertion of “unitary
executive” power as commander in chief—was impeachment, but with Bush
and Cheney about to leave office, that is probably a lost cause.
(Certainly the two men could still be impeached, as impeachment itself
does not require that the impeached party still be in office, and the
potential penalty for conviction of an impeachable offence, besides
removal from office, also can include a permanent ban on holding any
future public office—an important sanction for the historical record.)
But here Obama—and the Democratic Congress--could act creatively, for
example by ordering the creation of a commission of inquiry to
investigate and condemn such constitutional undermining. By compelling
the testimony of witnesses under oath, it is possible that actual
punishable crimes such as contempt or perjury could still be committed
by White House officials and even by Bush and Cheney, but more
importantly, the nature of these crimes would be publicly exposed and
condemned, so that it would be far less likely that any future
administration would again commit them.

Obama should also act unilaterally to undo as much of the damage as
possible—for example revoking all unconstitutional presidential signing
statements from the Bush/Cheney years, and canceling all
unconstitutional Executive Orders, such as those authorizing torture
and extraordinary rendition programs.

The time is right for these actions. The public is almost uniformly
angry at the outgoing administration, which is walking away from office
leaving the nation a smoking ruin. Contrary to what Obama and his
advisers and the pathetic leadership in both houses of Congress seem to
think, the American public doesn’t want them to simply “move forward.”
Sure we want action to fix the wrecked economy, and to get all the
troops safely back home, but we also way the country put back together,
and we want those who wrecked the place to pay for the damage they’ve
done.

Few Americans would be dismayed to see Bush and Cheney squirming in the dock. Most would, in fact, be cheering and jeering.

The time has come for the newly empowered Democratic government in
Washington to stand up proudly and unambiguously for the Constitution
and the rule of law, and to prove that the phrase “No one is above the
law” isn’t just, as Bush’s hack lawyer Alberto Gonzales once said of
the Geneva Conventions, a “quaint historical artifact.”
________________
DAVE LINDORFF is a Philadelphia-based journalist. His most recent
book is “The Case for Impeachment” (St. Martin’s Press, 2006 and now
available in paperback edition). His work is available at www.thiscantbehappening.net

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Surprise! Congress Listened to the Voting Public!

dlindorff — Tue, 30 Sep 2008 10:43:24 -0400

By Dave Lindorff

The most entertaining thing about this Wall Street crisis and the
refusal of the House of Representatives (not failure but refusal) to
pass a bailout bill negotiated by the Bush White House and the House
leadership is how shocked and upset those leaders and the pundit class
have been by the idea that members of Congress would actually heed the
wishes of their constituents!

The Founding Fathers always saw the lower house of Congress as
voice of the people—the elected body that, because its members had to
face the voters every two years, would be most responsive to public
sentiment.

Because of the power of money and the role of the corporate media
in filtering the information that voters get about what is actually
going on, that close connection between public and public servant in
the House has long ago broken down. This time, however, because the
crisis hit within five weeks of the national election, and because the
crisis involved something that everyone cares about—their money—it
worked.

The public is paying attention, and most of us got it. It was
obvious that Congress and the White House were out to screw us out of
our money in order to protect the millionaire and billionaire traders
and conmen who have been running the Wall Street casino for the last
decade and a half without any adult supervision.

Now that people are paying attention, it will be interesting to see
how these corrupt leaders, Democrat and Republican, will fashion that
bailout and get it passed. Once aroused from their TV-induced slumber,
the American public may not be willing to get rolled. If the anger
grows, and the calls and emails to Congress—which brought down the
Capitol website Monday and jammed the switchboard for several days
beginning last week—continue to flood in threatening an electoral
Armageddon for those who back a bailout, Congress may yet be unable to
pass a bill.

It doesn’t get any better than this.

Now let’s make something clear. The stock market crash that
happened on Monday was no crisis. The market can rise and fall with
little or no significant impact on the broader economy, or even on
those who have their retirement income invested in equities. While
Treasury Secretary Hank Paulson, Fed Chairman Ben Bernanke and House
leaders like Speaker Nancy Pelosi or Minority Leader John Boehner may
point frantically to the falling Dow as a dire warning to members of
Congress to take action, it is all just scaremongering.

The real issue is not the stock market—it’s the credit markets. And
these have been shut down to borrowers—both individuals and
corporates—for months. Which means that there is no sudden urgency to
pass a lousy, rip-off bailout bill in days without proper hearings and
investigations into what is really needed.

The Bush Administration’s whole idea here from the start was to use
scare-mongering and high-pressure tactics honed in the 2002 campaign to
gin up a war against Iraq to get a bill through Congress that would
make a virtual dictator out of the Treasury Secretary, and to siphon a
trillion dollars or more out of taxpayers’ accounts and into the
pockets of the already stunningly rich financial class. It was to be
one final wrecking ball by the Bush/Cheney gang launched at the
American economic and political system, allowing the people who have
run the country into the ground over the last eight years, and their
financial backers to walk away with all the cookies.

It could still happen if the public doesn’t stay fired up and
angry. But for now, it’s at least exciting and deeply satisfying to see
the Administration, and the cowards who run the so-called Democratic
opposition in Congress, scrambling frantically to come up with a scheme
to get this ripoff passed.

What should happen? Congressional Democrats should put a hold on any action until after Election Day, which after all is only five weeks off. They should say that the voters must be heard on this critical national issue of how to rescue the economy and fix the financial system. Hearings should be scheduled in the relevant committees—oversight, banking, securities regulation, housing, the elderly, health and human services, etc. (yes, Rep. Dennis Kucinich is right in observing that given that most bankruptcies in the US are caused by medical emergencies, if the US had national healthcare, we wouldn’t have the housing foreclosure crisis)—and a special prosecutor should be established to look into the corruption behind all the recent financial sector failures. The real victims of the deregulatory orgy need to be heard, as do some of the 200 economists (including at least three nobel laureates) who have opposed this bailout. Then when the true nature and extent of the crisis and its causes have been laid out in clear public view, along with some real solutions for real people, appropriate legislative reforms should be drawn up, debated and voted upon, to be finally enacted into law.

No rush to judgment! No short-circuiting of the critical process of hearings!

The economy will survive this process.

What we cannot survive is a continuation of secret government, backroom deals and trillion-dollar bailouts.

BACK TO THE PHONES!
_______________________
DAVE LINDORFF is a Philadelphia-based journalist and columnist. His
latest book is “The Case for Impeachment” (St. Martin’s Press, 2006 and
now available in paperback edition). His work is available at www.thiscantbehappening.net