The Big Takeover

Bernard Well-Known Member

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#1

Rolling Stone published an excellent article about shenanigans currently taking place to rob the American taxpayer:

http://www.rollingstone.com/politics/story/26793903/the_big_takeover/print

If you aren't livid by the time you finish reading it, you are probably a zombie.

Bernard, Mar 24, 2009 IP

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Bushranger Notable Member

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#2

Very long, and very interesting article indeed. Thanks for the link.

Bushranger, Mar 24, 2009 IP

Bernard Well-Known Member

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#3

And here's another equally informative and infuriating article in the same vein:

The Quiet Coup

I take it from the lack of responses that most DP readers who find this thread are not reading the articles. I can't imagine people are reading them and not wanting to vent in some manner.

Bernard, Mar 26, 2009 IP

gauharjk Notable Member

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#4

Bernard said: ↑

And here's another equally informative and infuriating article in the same vein:

The Quiet Coup

I take it from the lack of responses that most DP readers who find this thread are not reading the articles. I can't imagine people are reading them and not wanting to vent in some manner.
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Shocking article... Especially the date --> (May 2009)

Countries in crisis need to learn to live within their means after a period of excessâ€”exports must be increased, and imports cutâ€”and the goal is to do this without the most horrible of recessions. Naturally, the fundâ€™s economists spend time figuring out the policiesâ€”budget, money supply, and the likeâ€”that make sense in this context. Yet the economic solution is seldom very hard to work out.
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Typically, these countries are in a desperate economic situation for one simple reasonâ€”the powerful elites within them overreached in good times and took too many risks. Emerging-market governments and their private-sector allies commonly form a tight-knitâ€”and, most of the time, genteelâ€”oligarchy, running the country rather like a profit-seeking company in which they are the controlling shareholders.
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But inevitably, emerging-market oligarchs get carried away; they waste money and build massive business empires on a mountain of debt. Local banks, sometimes pressured by the government, become too willing to extend credit to the elite and to those who depend on them. Overborrowing always ends badly, whether for an individual, a company, or a country. Sooner or later, credit conditions become tighter and no one will lend you money on anything close to affordable terms.
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And here is the most damning line in the article...

At the outset of the crisis, the oligarchs are usually among the first to get extra help from the government, such as preferential access to foreign currency, or maybe a nice tax break, orâ€”hereâ€™s a classic Kremlin bailout techniqueâ€”the assumption of private debt obligations by the government. Under duress, generosity toward old friends takes many innovative forms. Meanwhile, needing to squeeze someone, most emerging-market governments look first to ordinary working folkâ€”at least until the riots grow too large.
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The US government is doing just that... straight from the Kremlin text-book on how to bankrupt your nation...

But thereâ€™s a deeper and more disturbing similarity: elite business interestsâ€”financiers, in the case of the U.S.â€”played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them.
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gauharjk, Mar 27, 2009 IP

Bernard Well-Known Member

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#5

Ron Paul got an opportunity to explain the situation on TV (and did a fairly good job of elucidating the point clearly):

http://www.youtube.com/watch?v=inef9wxSzYk

~~~

Following the Rolling Stone article (in OP), the government suspended the head of the Office of Thrift Supervision:

Wall Street Journal said:

The acting director of the Office of Thrift Supervision has been put on leave pending a review of the agencyâ€™s role in the backdating of capital infusions by some banks, the agency said Thursday evening.

OTS said in a surprise statement that Scott Polakoff, who has been serving as acting director of the OTS, would be replaced by OTS Chief Counsel John Bowman during the review by the Treasury Department.

The OTS, a division of the Treasury Department, has come under fire after it was revealed last year that the agency had allowed IndyMac Bancorp Inc. (IDMCQ) to backdate a May 2008 $18 million capital infusion to the first quarter. IndyMac failed a few months later, a collapse that cost the Federal Deposit Insurance Corp. $10.7 billion, the costliest failure in U.S. history. A subsequent review of the issue by the OTS uncovered four other cases of backdating by banks, cases which the agency said in a January letter to U.S. lawmakers â€œwere not acceptable to current OTS standards.â€ Allowing the banks to backdate capital infusions to earlier quarters could allow firms to avoid regulatory penalties for having too little capital.

The Treasury Department Inspector General is investigating the matter, and it is unclear what sparked Polakoffâ€™s sudden departureâ€¦
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OTS Acting Director Polakoff Put On Leave

~~~

Here's a pretty clear explanation on how the government is bailing out the banks:

http://www.youtube.com/watch?v=n-arbfLTCtI

~~~

If you are mad about what's happening, I'd urge you to contact your Congressional Representative and tell them to support HR 1207 (The Federal Reserve Transparency Act of 2009):

http://www.youtube.com/watch?v=4LmWgp9JIS0

Bernard, Mar 28, 2009 IP

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