Bailout Spending

By David Swanson

Michael Moore's movie motivated me to bring this out. Here's a theme song for Capitalism that I wrote at the time of Paulson's Plunder. Here it is sung by Timbrewolf:

By David Swanson

If you're like me you find it at least a bit disturbing that we're giving trillions of dollars to save the economy to the very people who wrecked it, and more disturbing that we're doing so without any solid basis for expecting to get much of it back and without making fundamental changes to prevent a repetition. But if you're like me, you also aren't 100 percent certain how a credit default swap works with a cubed collateralized debt obligation, much less whether such a monstrosity needs to be eliminated or reformed. What to do?

Bankruptcy "cramdown" reform was defeated in the Senate today, which caused Sen. Dick Durbin to accurately declare, "banks own the place." Glenn Greenwald, Jane Hamsher and Howie Klein explain how. So what do we do about it?

Chris Bowers thinks we must retreat until broader cultural change occurs:

Atrios nails it as always:

I really do hope that Larry and Timmeh get that turning the machines back on and returning to a world where massive amounts of cheap credit are available regardless of ability to repay is actually a bad idea.

And this idea that banks just need to lend more... to whom? For what?

By Dave Lindorff

As you’re mailing out that tax return again this year, it’s time to
remember once again how much of your hard-earned bucks are being devoted to destruction, imperialist domination, slaughter and
war, to funding ridiculous programs like the failed anti-missile
system, and also to supporting a massively bureaucratic and overstaffed
military.

Even with the current US budget predicted to hit a record $3.5
trillion, thanks to a whopping $800 billion, two-year economic stimulus
package, and with several hundred billion being poured into a group of
banks and the bottomless pit called AIG, the $800 billion budgeted for the military to date
(a figure that includes an $85 billion “supplemental” request for the
wars in Iraq and Afghanistan) represents 22% of total US spending.

Flyers to take to teabag rallies:

Large jpg. PDF. Word. Old Word.

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.

We now know AIG traders got their bonuses through blackmail - even CEO Edward Liddy admits it in today's Pentagon Post. The message from the traders is crystal clear: pay us handsomely or we will screw you royally.

Although we have wound down more than $1 trillion [of nearly $3 trillion] in the portfolio of the AIG Financial Products unit that is at the root of the company's troubles, there remains substantial risk in that portfolio. The financial downside for taxpayers is potentially very large, and that's why we're winding down this business.

To prevent undue risk exposure in the meantime, AIG has made a set of retention payments to employees based on a compensation system that prior management put in place.

For the sake of argument, let's stipulate that "the financial downside for taxpayers is potentially very large" since $1.6 trillion in derivatives still need to be wound down. But here's the question: why are we depending on AIG to do it?

By Dave Lindorff

It may not be obvious today, and certainly it’s not how the corporate media reported it, but future historians are likely to look back at March 13, 2009 as the day that American imperialism began it’s inexorable decline. That’s the day that Chinese Premier Wen Jiabao announced that his country was “worried” about its holdings of over $1 trillion in US treasury securities, and warned that he wanted the US to assure China that it would maintain its good credit and “honor its promises” and “maintain the safety of China’s assets.”