Monday, September 22, 2008

Fleecing What’s Left of the Treasury

Posted on Sep 21, 2008

By Chris Hedges

The lobbyists and corporate lawyers, the heads of financial firms and the crooks who control Wall Street, all those who spent the last three decades assuring us that government was part of the problem and should get out of the way, are now busy looting the U.S. treasury. They are also working feverishly inside the Democratic and Republican parties to blunt any effective regulatory reform as they pass on their distressed assets to us. The process is stunning in its hubris and mendacity, and two of the most potent enablers of this unprecedented act of corporate welfare are John McCain and Barack Obama.

The federal government, reeling backward from the meltdown of financial markets, is now considering taking responsibility for the bad assets of numerous financial companies. But if that intervention does not include robust new mechanisms of regulation, accountability and control we will see nothing more than a massive taxpayer-funded bailout of stockholders and the financial industry.

The rhetoric of the two presidential candidates about the crisis has been filled with pious outrage about the abuses of Wall Street and short on actual solutions. John McCain and Barack Obama know, after all, who funds their campaigns. The financial industry has given $22.5 million in the current election cycle to Obama and $19.6 million to McCain, according to the Center for Responsive Politics. And the financial industry has come around to collect. Two of the biggest financial groups in Washington, the Financial Services Roundtable and the Mortgage Bankers Association, have been holding meetings with McCain and Obama’s economic advisers. They are working with the campaigns to protect the unregulated power of financial industries and at the same time to shift bad debt to taxpayers. The Wall Street Journal reported that the Financial Services Roundtable, made up of the very banks and firms that got us into this mess, has developed draft legislation. The Roundtable has called a meeting this week with the chief executives of more than 50 banks, brokerages and insurers. The three-day meeting includes private, closed-door sessions on Thursday with Obama economic adviser Ian Soloman and McCain adviser Ike Brannon. Those hovering around Obama—economists like Paul Volcker, Robert Rubin, Lawrence Summers and Laura Tyson—bear as much responsibility for the dismantling of government regulation as those advising McCain.

If the financial-services industry is able to suck us dry, our assets, from our homes to our retirement investments, will continue to tumble. Taxes will go up. Jobs will be lost. The grim economic indicators will get worse. The dollar, which has already lost about a third of its value against the euro, will continue to plummet. The rate of foreclosures, one in every 416 U.S. households in August, will skyrocket. Consumer spending, the engine of the U.S. economy, will continue to decline. Industrial production, which has fallen for three consecutive quarters, will fall further. Unemployment, which shot up to 6.1 percent in August from 5.7 percent in July, will get worse. These tremors presage an earthquake.

Ralph Nader, who has spent his adult life battling corporations, understands more about the rise of the corporate state and the steady fleecing of American citizens by corporations than anyone else in the country. The core of his message is that Republicans and Democrats are hostage to corporate power...MORE


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