As most of us understand by now, the stark increase in US income inequality in the 21st century coincides with the off-shoring of US jobs, which has enriched executives with � ���"performance bonuses� �� � and the rapid rise of unregulated over-the-counter (OTC) derivatives, which enriched Wall Street and the financial sector at the expense of everyone else.
Frontline's October 21 broadcast, � ���"The Warning,� �� � documents how Federal Reserve Chairman Alan Greenspan, Treasury Secretary Robert Rubin, Deputy Treasury Secretary Larry Summers, and Securities and Exchange Commission Chairman Arthur Levitt blocked Brooksley Born, head of the Commodity Futures Trading Commission, from performing her statutory duties and regulating OTC derivatives.
Greenspan may have bet our country on his free market ideology, but does anyone believe that Rubin and Summers were doing anything other than protecting the enormous fraud-based profits that derivatives were bringing Wall Street? As Brooksley Born stressed, OTC derivatives are a � ���"dark market,� �� � which means there is no transparency -- regulators have perilously inadequate information on them just as do their buyers.� �� �
(In actual fact, no one has any idea of the true value of all the derivatives that have been sold over the past decade or so. Some say $500 trillion, others $50 trillion, while many claim that the price at which most of them could be sold or redeemed may well be much much less than is consistent with even the lowest of those two figures.)
Roberts continues:
� ���"The financial insiders running the Treasury, White House, and Federal Reserve shifted onto taxpayers the cost of the catastrophe they created. When the crisis hit, Henry Paulson, appointed by President Bush as Rubin's replacement as the Goldman Sachs representative running the US Treasury, hyped fear to obtain from � ���"our� �� � representatives in Congress, with no questions asked, hundreds of billions of taxpayers' dollars (TARP money) to bail out Goldman Sachs and the other malefactors of unregulated derivatives.
Yet despite the total insanity of unregulated derivatives, the high level of public anger, and Greenspan's confession to Congress, nothing has been done to regulate derivatives. One of Rubin's Assistant Treasury Secretaries, Gary Gensler, has replaced Brooksley Born as head of the CFTC. Larry Summers is the head of President Obama's National Economic Council. Former Federal Reserve official Timothy Geithner, a Paulson protege, runs the Obama Treasury. A Goldman Sachs vice president, Adam Storch, has been appointed the chief operating officer of the Securities and Exchange Commission, which means that the Banksters are still in charge.
Is there another country in which, in full public view, so few so blatantly use government for the enrichment of private interests, with a coterie of � ���"free market� �� � economists available to justify plunder on the grounds that � ���"the market knows best� �� �? A narco-state is bad enough. But the US surpasses this horror with what can most accurately be called a financo-state.� �� � http://www.counterpunch.com/roberts10262009.html
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