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Blog of Mass Destruction

"The Innocent Bystander Fable"

By The Reverend Published: November 11, 2008

On September 30, 2008, I wrote....

It may be true that powerful monied interests are attempting to pull a fast one with the bailout package proposal. It just may be that blackmail is being attempted here. Wall Street may be telling Americans that if they don't get what they want in a bailout, they'll crash the stock market, creating a severe ripple effect on 401K's, pensions, credit availability, etc. Wall Street sell orders may be the murder weapon pointed at the economic future of most Americans. The ransom note might say, "Bail us out and we'll let the rest of you go. If you don't bail us out, we'll shoot to kill everybody's economic future." Could be, I suppose. Link

Now, here's an excellent exchange from last night's Rachel Maddow Show, explaining how those "monied interests" got away with pulling a "fast one"....

It seems that Bush and Paulson will interpret laws in such a way that banks who buy up other banks (with the tax dollars we gave them) will also receive a tax break, when they couldn't before. After approving a $700 billion bailout package, Congress added insult to injury by granting those same failed insitutions an additional $140 billion in tax breaks. Rachel's guest, David Sirota, debunks the typical political response from complicit, or negligent, Congress folks who say they didn't know this provision was in the "rescue" package. Sirota points to the odious Chuck Schumer's response of "we can't do anything about it", calling that "the innocent bystander fable".

Not only does our $700 billion go to pay shareholders dividends now and bonuses for CEO's, but in addition, $140 billion more of our money will be lost as these same shareholders and CEO's go about buying up whatever's left of value in their industry.

Politicians from both sides of the aisle have shilled for powerful monied interests for way too long. It seems the only time bipartisan efforts are pushed through Congress are when corporate interests are being rewarded. The telco immunity bill falls into this category. So does the "rescue" package for criminal financial institutions.

Sirota's reference to Naomi Klein's concept of disaster or shock capitalism is worthy of consideration here. Simply put....Klein suggests that disasters, or shock, are either created, like in Iraq, or responded to, like after Katrina, and then exploited by a tiny element of American capitalists. When shock or disasters occur, ample opportunities are created to move large sums of money, creating, as well, ample opportunities for wind falls.

I have learned from experience that America's financial machine operates on one premise..."the movement of money creates wealth." Not producing anything, not building anything....simply moving money, transactions. Basically, and in my opinion, all that banks, insurance companies and stock brokerage houses do is make transactions....they move money. They don't build anything, they don't make anything....they simply make transactions on paper.

It is those transactions, gone wild and without oversight, that created the meltdown "disaster" in need of a "rescue" package in the first place. The emergency "disaster" was then hurriedly "rescued" with even more disastrous, and overlooked, legalese....making it possible for the folks who created the disaster to exploit the rescued situation even further. And all the while, because everything was done in, you know, a hurry......negligent or complicit politicians can play dumb and say, "we didn't know, we had to do something."

Looking back now, it seems to me that Bush and Paulson realized that financial institutions were going to collapse...perhaps all of them....and the hurried disaster, bailout fix was simply the mechanism used for larger, viable banks to gobble up weaker banks in a concerted plan of consolidation. It may not be all bad in the end....but as usual....that's not what they told us.

What bothers me the most about the whole deal is that it was dropped on us in the middle of a presidential typical "disaster creation" style. After gambling away trillions of dollars of our money in unregulated transactions of chance, after collecting trillions of dollars of windfalls by placing our entire financial system in jeopardy.....these same people line up in the disaster line for even more handouts.

That stuff pisses people off.

Great Bob Herbert column today on this topic.



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