Freedom Rider: Ruling Class Bailed Out
by BAR editor and senior columnist Margaret Kimberley
"The decision to keep the ruling classes afloat will have terrible consequences for working Americans."
In a period of less than two weeks, the federal government pardoned some of the worst criminals in the nation, the thieves running the financial services industry. The absolution of evil doing began with the takeover of both the Freddie Mac and Fannie Mae mortgage agencies. The former heads of Fannie and Freddie were forced to resign in recent years because of "accounting irregularities." The AIG insurance giant was next in the bailout cue, and yes, the former CEO of that firm was also forced out after charges of accounting fraud.
The government takeovers, the bankruptcy of Lehman Brothers and the sale of Merrill Lynch to the Bank of America were not the end of the story. The Bush administration ended the roller coaster ride by asking Congress to put the American worker on the hook for $700 billion in mortgage related assets from private firms, both American and foreign. The proposal will raise the national debt to $11.3 trillion and allows the Treasury Secretary to buy these assets and in return do little more than report to Congress twice a year.
The draft of the bail out bill clearly states that Treasury Secretary Paulson will answer to no one, not even Congress. "The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act." Congress is poised to insure that neither they nor the courts will have the right to ever review or change this plan. "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."
"Treasury Secretary Paulson will answer to no one, not even Congress."
As usual, Democratic party control of Congress means absolutely nothing. There have been no questions, no demands for regulation or accountability. The Democrats endlessly repeat the grotesque mantra that the sky will fall unless the people who cooked up schemes to enrich themselves at the expense of humanity are let off with impunity. If homebuyers lose their homes to foreclosure there is endless condemnation of irresponsibility and bad decision making. If hedge fund chieftains and banking criminals get rich on funny money we are told that we must rescue them with our money and put ourselves in hock.
The economic meltdown has been in the making for a long time and the decision to keep the ruling classes afloat will have terrible consequences for working Americans. Naomi Klein, author of The Shock Doctrine, explains it this way. "The bomb is the debt that has now been transferred to the taxpayers so it detonates when, if John McCain becomes president in the midst of an economic crisis and says look we're in trouble, we have a disaster on our hands, we have to privatize Social Security, we can't afford health care, we can't afford food stamps, we need more deregulation, more privatization. The thesis of the Shock Doctrine is you need a disaster to rationalize these very unpopular policies so the real disaster has yet to come."
"When Nancy Pelosi and Harry Reid once again caved into the Bush administration and Obama is all in favor."
Klein is incorrect about one important point. Barack Obama will act in the same way as McCain. He has said as much. When Nancy Pelosi and Harry Reid once again caved into the Bush administration and agreed to go along with the biggest government transfer of wealth in over a century, and Obama is all in favor. "I think it's critical at this point that the markets and the public have confidence that their work will be unimpeded by partisan wrangling." In other words, "Assume the position." When the true implosion begins, the next president will claim that partisan wrangling or bickering or whatever word he chooses to use, must not prevent rich people from getting what they want. He and the other errand boys and errand girls, politicians, will do as they always have done. Follow the orders of the people who are really in charge.
Both John McCain and Barack Obama have raised large amounts of money from the securities and investment industries. Obama has raised $9.8 million from individuals in that group and McCain has raised $6.8 million. There is little chance that either man will ever ask for accountability from people who have made such significant contributions to their respective campaigns.
The ruling class foxes will be in charge of the hen house in November, no matter who wins. That is not surprising. They chose the candidates before any one cast a ballot in Iowa and they wouldn't have chosen them if they had an inkling that they wouldn't follow orders.
Margaret Kimberley's Freedom Rider column appears weekly in BAR. Ms. Kimberley lives in New York City, and can be reached via e-Mail at Margaret.Kimberley(at)BlackAgandaReport.Com. Ms. Kimberley maintains an edifying and frequently updated blog at freedomrider.blogspot.com.
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