Cash for Trash

For time it seemed that President Obama was poised to really "shake up the system". During his run to the White House many (myself included) anticipated that his administration would have "new New Deal" prize- winning economists like Jeffrey Sachs and Joseph Stiglitz leading an old-fashioned populist revolt against the corporate banksters.

Alas we had forgotten that after he was a community organizer Obama went to Harvard where good rebels go to die-- or come out with a deeper appreciation for Capitalism with a capital C. (the C stands for Collusion, Cronyism or Corruption-- take your pick or just go with all three.)

Eliot Spitzer elaborates in Slate Magazine: "the New York Federal Reserve is the first among equals. Unlike the Washington board of governors or the other regional fed branches, the N.Y. Fed is active virtually every day, changing the critical interest rates that determine the liquidity of the markets and the profitability of banks.

And who sat on the committee of this august financial chamber that appointed Tim Geithner? Why none other than Hank Greenberg, the then not-yet-disgraced chairman of AIG. Joining him were John Whitehead, chairman of Goldman Sachs; Walter Shipley, a former chairman of Chase Manhattan Bank, now JPMorgan Chase; and Pete Peterson, former chairman of Lehman Bros. No doubt these eminent personages have our national interests embedded in their altruistic psyches.

Which explains why when faced with the financial crisis born of the post-Enron virus the reserve board also brought in Dick Fuld, the former chairman of Lehman; Jeff Immelt, the chairman of GE; Gene McGrath, the chairman of Con Edison; Ronay Menschel, the chairwoman of Phipps Houses and the wife of Richard Menschel, a former senior partner at Goldman Sachs. Makes you feel all warm and cuddly, doesn't it, knowing these egalitarian public servants are safeguarding the Treasury as well as our pensions and 401k's.

Among the many shady operations that went on at AIG under Greenberg's chairmanship was the use off shore entities to escape even the lax enforcement of U.S. insurance regulators and the Securities and Exchange Commission (SEC). Offshore tax havens such as Barbados and Bermuda were used to hide insider connections in supposedly "arms-length" deals shield profits from U.S. taxes.

As Naomi Klein, author of the must-read "Shock Doctrine", resignedly bewails: no matter how you slice it "we the people" have been been robbed by our royal princes yet again and we still can't afford the upkeep.