Submitted By: Mike Spindell, Guest Blogger
When I awoke a short time ago my mind was in its usual morning fog that slowly dissipates as I go through my wake-up routine which includes laying out the 35 or so pills that I take to stay alive. That fog mentally is usually a jumble of wide ranging short thoughts that are later forgotten as the fog lifts after my first coffee. On the way to the bathroom for my morning ablutions I found myself thinking about the biggest news all week which had been the shutdown of the government and the crisis that ensued. Suddenly, as an idea arose that woke me from the fog. Political Theater, it is all political theater. The threatened shutdown by the Republican Congressman, led by John Boehner et. al. was merely a show whose purpose was to destroy the publicity that would have surrounded the inception of enrollment in the Affordable Care Act (ACA) dubbed by the conservative PR geniuses “Obamacare”. How obvious this was took my breath away and also gave me some chagrin that it took me so long to see this con job in the making, while I mulled over the ramifications of a government shutdown. As the President has said and as some Republican have opined the GOP’s great fear regarding “Obamacare” is that it will succeed. Since enrollment was scheduled to begin on October 1st, without the shutdown speculation dominating the news cycle there would have been much publicity on the beginning of people enrolling in the plan. There would have been actual discussion of the plan and not just the cacophony of misinformation deftly spread by well placed conservative rumor mongers, broadcast blaringly on FOX News and flacked by the innumerable leaders of the “Tea Party”. Our mainstream media would play their continuing game of false equivalence by blithely accepting all information as being equal and not bothering to supply context when lies are told in the service “informing” the public.
Instead we have a manufactured crisis that sends the ACA to the back pages of virtual news media and we have faux layoffs and service loss endlessly debated. Now in truth this thought make me even a little sad for those “Tea Party” congresspeople that haven’t been let in on the nature of the game, nor their role as pawns in the manipulations of some the wealthy elite in this country. As I explained awhile ago in these guest blogs: http://jonathanturley.org/2011/08/02/tea-party-and-the-myth-of-a-grassroots-movement/#more-38049 and http://jonathanturley.org/2013/02/16/tea-party-a-phony-movement-mantled-as-legitimate/ the so-called “Tea Party” is not a grassroots movement, but the creation of the Koch, via an organization known as “Freedomworks” which they fund. On the Bill Maher show last Friday night one of his panel guests was the President and CEO of “Freedomworks” Matt Kibbe. From my perspective he was debunked by the panel, particularly Congressman Alan Cranston. What caught my attention though, was that Kibbe was at one point railing about how big government was run by insider lobbyists. None on the panel, or Maher, were perceptive enough to call him out on this since he is the quintessential lobbyist for the Koch Brothers. To my mind there is nothing to see here folks, move along and allow yourselves to be distracted by yet another manufactured crisis, designed to prevent you from actually evaluating the health care plan that is now available to you without adequate health care, or who are paying far too much for what should be a basic right of citizenship, health care. The Affordable Care Act is not my ideal of what American health insurance should be about because I believe in the “single payer” system used in most civilized nations. However, it is far better than what we already have and because of that should be fairly evaluated by the public. Perhaps though that fair evaluation will never get a chance since there are those who consciously work to distract us through propaganda, mythology and political theater into supporting what is in our own worst interests.
After I had written and posted this to my surprise I discovered this article in The New York Times. “A Federal Budget Crisis Months in the Planning” http://www.nytimes.com/2013/10/06/us/a-federal-budget-crisis-months-in-the-planning.html?hp&_r=0 . A short excerpt:
“WASHINGTON — Shortly after President Obama started his second term, a loose-knit coalition of conservative activists led by former Attorney General Edwin Meese III gathered in the capital to plot strategy. Their push to repeal Mr. Obama’s health care law was going nowhere, and they desperately needed a new plan.
Out of that session, held one morning in a location the members insist on keeping secret, came a little-noticed “blueprint to defunding Obamacare,” signed by Mr. Meese and leaders of more than three dozen conservative groups.
It articulated a take-no-prisoners legislative strategy that had long percolated in conservative circles: that Republicans could derail the health care overhaul if conservative lawmakers were willing to push fellow Republicans — including their cautious leaders — into cutting off financing for the entire federal government.”
Perhaps my subconscious was channelling, but it seems that my idea through the morning fog has some weight to it.
Submitted By: Mike Spindell, Guest Blogger
actually most men today could afford an ounce. Especially those in the countries with capitalism to some degree.
http://www.gourmetfoodworld.com/Caviar/Osetra-Classic-Caviar-Malossol-details-7811.asp?af=googleprod2&gclid=CMC3g_OUiroCFdSd4AodOSQAXQ
DAVIDM:
if you and I lived just 300 years what you say would probably not have happened. We would also probably be dead since we are over 40.
For every man to eat bread, some men must eat caviar.
If we wait until all men have bread before some have caviar we will all starve.
Oops, sorry: Only 2500 BILLION (I said million above). But I think my point remains valid…
DM: Reviewing the GAO audit of the Federal Reserve myself, on page 143 is a summary of loans made by the Fed to various banks under their “emergency” powers, which did NOT include TARP (which is accounted for separately): These are powers the government decided were available to the Fed under its existing charter; so did not require Congressional approval.
The big “emergency loan” programs thus initiated include:
TAF: $3.818 trillion
PDCF: $8.951 trillion
TSLF: $2.319 trillion
CPFF: $0.738 trillion
AMLF: $0.217 trillion
TALF: $0.071 trillion
Total: $16.115 trillion, through 2011 only.
These do not show up on the budget because they are internal to the Fed; and in many cases according to standard accounting practices are a wash: If the Fed buys 9 trillion dollars in toxic mortgages at face value, then they can claim they spent 9 trillion in cash but received 9 trillion in assets: No harm, no foul!
But they are engaged (with the American people) in exactly the same fraud that was perpetrated by the banks on retirement funds, trusts, and other institutional investors, which bought income streams from mortgages that were quite likely to produce net losses instead of gains.
The majority of these emergency loans were indeed repaid, but the Fed (at last report) has increased its “asset holdings” by about 2.5 trillion dollars. That is not a GOOD thing, because these assets are basically the junk nobody else would buy on the market without demanding a steep (bankruptcy level) discount, and they are held on the books at face value.
The face value of those “assets” is the residue of the emergency loan programs that were audited, and represents the amount of money I consider stolen from American taxpayers: That residue of $2.5T in “assets” is on paper only and actually represents a loss, and by the nature of money as a zero-sum game, our loss is balanced exactly by the gain of others.
Who? Well, it is only 2500 million, easily accounted for in the bonuses, tangible asset increases, and other “trading profits” of the twenty or so banks listed on page 143.
What appears in the budget and does not is entirely up to the President and Congress. For example, trillions in expenses related the Iraq war were kept “off the books” by Bush/Cheney; they just spent the money under their “borrowing facility” and came up with some bogus legal “opinion” that they did not have to document it. Like all their other black box expenses (CIA, NSA, 3000 other intelligence agencies (literally) with classified expenses).
Reading the report details a few other gems, as well. For example, I said earlier I suspect the President could just declare a state of emergency and fund the government anyway. Well no need! The Fed asserts its 1913 charter allows it to make financial intervention of any size to address any systemic risk it perceives on its own. So, if Congress refuses to raise the debt ceiling, and the country is threatened with default: The Fed can legally step in under its own power and print the money to prevent default. It does not violate the debt ceiling, because the money is not borrowed. Debt service would be a trivial expense compared to the $16T it felt free to throw around in 2009-2011. And since the Fed pays banking profits back to the federal government, it could pay itself back the debt service, with interest, as a program expense deductible from banking profits (which is how it is offsetting the losses it takes on the toxic assets it bought, by paying us less: a shadow tax). A “shadow loan,” off the books, taking care of business while the posturing buffoons in Congress shake their fists at each other for the entertainment of the masses, and provide the fodder for alarmist talk show hosts to create fake conflict and real ratings.
DM: because these so-called “evil corporations” have this mentality of turning money and labor into profit,
No, the aptly labeled evil corporations have this mentality of endangering workers and treating them like disposable replaceable parts, destroying the environment, corrupting governments with money and profits on the blood and misery of people that have been boxed in and have no choice but to submit to their predation.
Of course you’d rather turn a blind eye to those practices; because what you don’t see only hurts the people you refuse to see.
Tony C wrote: “Of course you’d rather turn a blind eye to those practices; because what you don’t see only hurts the people you refuse to see.”
The rich live in a different world from me. Whether they are evil or not is for someone else to judge. I don’t think I am turning a blind eye. I just look at overall circumstances of what I can see.
The truth is that most people today live much better economically than their parents did. I live better than my parents did. So does my brother and his family, and my sister and her family. Part of the reason for this is the trickle down effect of wealth from those who have to those who have not. A cat whose owner is rich lives better than a free alley cat, and dogs enjoy the crumbs that fall from the master’s table.
The GAO figure is what I remembered reading; the exact amount of 16 trillion had slipped my recollection; but trillions is what I remembered and is the fact.
It makes no difference if it is called “loans” or not, David, it is a bailout and in the end a giveaway, crony to crony, supporting and rewarding the same people that drove the economy over the cliff in the first place.
Davidm,
“You get the idea.”
More than you know. My wife worked for the fed for twelve years, in the member bank intra-loan office where she lent out millions of short term loans to fed member banks so that their reserve requirement were met.
She also audited the member banks and fined them when their reserves were found to be inadequate. I know lots of stories.
Oh mercy, no, gbk.
Can’t have those pesky facts gettin’ in the way.
Davidm,
Maybe you should read the GAO report. But then, you would be dealing with facts, can’t have that, can we, David.
gbk wrote: “Maybe you should read the GAO report. But then, you would be dealing with facts, can’t have that, can we, David.”
LOL. Why read the GAO report when I have you? Based upon your comments about your wife’s work experience, you should be able to provide us all the facts we need. And that is what I asked you to provide, but instead you offered me this smug response.
I looked at the GAO report from Senator Sanders office, but I really do not have the time nor interest in reading all 266 boring pages of it. I know not to believe everything I read, and checking the GAO report confirms my suspicions. The Forbes article headline was made into a spectacular attention grabber. They omit to inform us that these emergency loans are the job of the Federal Reserve, and that they have been done since 1913 when the Federal Reserve was created. The Federal Reserve has never lost money doing these loans in their entire history. Furthermore, the Federal Reserve is an independent bank. We are not talking about taxpayer money being loaned out. The implication of the article is that our government reports providing only $608 billion in bailout money when really there were secret bailouts happening to the tune of $16 trillion. Such is simply sensational journalism meant to pull in gullible people into wanting some of that money for themselves. Why do the evil corporations get all that money and not poor little ole me?
The balance sheet of the Federal Reserve is produced weekly, and the total assets for all Federal Reserve Banks is $3.7 trillion.
http://www.federalreserve.gov/releases/h41/current/h41.htm
I’m glad the Federal Reserve is independent, or we probably would not access this information if it was under President Obama’s control.
The impression conveyed in the article is that the Federal Reserve has all this money sitting around, and they handed out $16 trillion in bailout money to those who needed it. The truth is what I had suspected all along: the reporter compounded multiple loans to get a figure much higher than the assets of the Federal Reserve. Imagine you had $500 in the bank that you loaned out to friends every week until their paycheck came in. Then someone comes along after 4 years of you doing this and they say, “gbk is so rich, he bailed out all his friends to the tune of $104,000!” You might be thinking, “What are they talking about? I wish I had $104,000 sitting in the bank to do that. All I have is $500.”
In regards to the Federal Reserve’s activity, this was all business as usual. It happened before the recession and after it. Every penny they ever loaned has always been paid back, and they increase their assets doing it. So it is not appropriate to conflate this financial activity by an independent bank with taxpayer funded bailout money where about $53 billion still hasn’t been paid back. If you disagree, please bring out the facts to prove me wrong.
The Fed’s $16 Trillion Bailouts Under-Reported
9/20/11
http://www.forbes.com/sites/traceygreenstein/2011/09/20/the-feds-16-trillion-bailouts-under-reported/
Excerpt:
The media’s inscrutable brush-off of the Government Accounting Office’s recently released audit of the Federal Reserve has raised many questions about the Fed’s goings-on since the financial crisis began in 2008.
The audit of the Fed’s emergency lending programs was scarcely reported by mainstream media – albeit the results are undoubtedly newsworthy. It is the first audit of the Fed in United States history since its beginnings in 1913. The findings verify that over $16 trillion was allocated to corporations and banks internationally, purportedly for “financial assistance” during and after the 2008 fiscal crisis.
Bron,
Please allow me to fix your sentence. All those repealed and yet-to-be enforced regulations haven’t done anything for us.
OS:
Those huge volumes of regulations havent done anything for us.
we are doomed.
You go Bernie, kick some FED a$$.
Above should be $16T. My correction hasn’t posted, hopefully this one will.
Sorry, should be $16T, as in trillion.
Davidm,
“uh, are you using a little hyperbole here or am I missing something?”
Yes, you did miss something, David. The “bailout” figure is $16B.
http://www.forbes.com/sites/traceygreenstein/2011/09/20/the-feds-16-trillion-bailouts-under-reported/
gbk –
The claim of $16 trillion in bailout money just does not make sense. Clearly this is talking about non-TARP money, and TARP money is what we usually are talking about when we talk about bailout money. In any case, even calling non-TARP money bailout money, the figure of $16 trillion just does not pass the smell test. The annual spending of our federal government is roughly 3.5 trillion for EVERYTHING. So the entire spending of our federal government from 2009 through 2012 is somewhere in the ballpark of $14 trillion (3.5 * 4). How could they possibly afford to give bailout money $2 trillion higher than our total spending? Impossible. This is a case of 2 + 2 = 100,000 instead of 4.
The Federal Reserve is involved in a lot of short loans to corporations, both foreign and domestic. Think about it. It would be foolish to let all that money just sit around. Loan it out and earn something on it. I suspect what is happening here is something along these lines. Suppose the Fed loans $10 billion to a corporation and is paid back in one month, then the next month they loan that $10 billion to someone else, and after that, someone else gets the money as a short term loan, etc. You get the idea. Sometimes loans might even be just for a day or two before it is repaid, or maybe a week or two. Whoever analyzed this audit probably made the mistake of compounding all these figures. That $10 billion might be counted as $480 billion over four years if it was loaned out every month to different corporations. So perhaps someone compounds the amounts and then they write some spin article exclaiming how much money the Federal Reserve is giving away in bailouts. In actuality, they simply made a lot of short term loans to keep the money earning a little interest for them.
Feel free to show me I am wrong. I am just making an educated guess because I don’t have time to unravel this claim. I just don’t believe it.
Bron,
Well, not exactly government. More like the Radical Republicans and libertarians who oppose government regulation and try to destroy already weakened regulatory agencies. They block appointments for agency heads, block judges appointments, and try to eliminate any hint of regulation. If the oligarchs driving this movement had their way, they would return us to a business model from the late 1880s, before Teddy Roosevelt took office.
Sociopaths like the ones you claim are in the auto industry exist because they are protected by government. Government has the monopoly on the use of force, a corporation cannot take my money by force from my pocket to line theirs without an intermediary. Their intermediary of choice is the government.
tony c:
I could be mathematically challenged as it has been close to 20 years since I had need of an integral.
Who bailed them out? Who had the money to bail them out? It wasnt other corporations, it was government. If this had happened in, 1895, there would have been a bunch of former millionaires. But my guess, is that while we had problems back then, they could never have reached the scale it did today [in adjusted dollars of course] because there was no FDIC, no FED, no SEC to “regulate” and to “protect” the little guy.
Bankers like that exist because they are protected by government. Government has the monopoly on the use of force, a corporation cannot take my money by force from my pocket to line theirs without an intermediary.