Trillion $ Bailouts – Questions that won’t die
by Ronald Bleier
A major political question that doesn’t want to die is whether the billion and trillion dollar Wall Street bailouts that Washington handed out were necessary to keep the economy from disintegrating. Despite the persistence of the question, the only answer seemingly allowed in the mainstream is the monotonously uniform: Without the bailouts we’d be using beads for currency -- a line I heard on TV this week.
Yet there is another, rather different answer available. The alternative response is that not only were the bailouts unnecessary to save the economy, but they represent perhaps the biggest single criminal theft and transfer of wealth to the wealthy from the rest of us.
Some of the evidence for such an unorthodox view was presented back in September by Mike Whitney, a regular contributor to the indispensable Counterpunch.org website.
Whitney took the trouble to read some of the findings of independent economist, Dean Baker, who took the trouble to look at some of the relevant data.
According to Mike Whitney
Lehman Bros. didn't die of natural causes; it was drawn-and-quartered by high-ranking officials at the US Treasury and the Federal Reserve. Most of the rubbish presently appearing in the media, ignores this glaring fact. Lehman was a planned demolition (most likely) concocted by ex-Goldman Sachs CEO Henry Paulson, who wanted to create a financial 9-11 to scare Congress into complying with his demands for $700 billion in emergency funding (TARP) for underwater US banking behemoths. The whole incident reeks of conflict of interest, corruption, and blackmail.
(9.15.09)“Lehman Died So TARP and AIG Might Live”) http://Counterpunch.org/whitney09152009.html)
Whitney explains that Lehman brothers could have been saved relatively easily if “Bernanke and Paulson had merely provided guarantees for some of their trading positions.” According to Whitney, their claim that they didn’t have the legal authority for such guarantees was “a lie.”
Whitney continues by quoting economist Dean Baker who explains that the $700 billion TARP authority wasn’t necessary to rescue the commercial paper market - –the market that most major companies rely on to meet their payrolls and pay other routine bills. Dean explains that Bernanke “forgot to tell Congress…that the Fed has the authority to directly buy commercial paper from financial and non-financial companies [and thus] the power to prevent the sort of economic collapse that Bernanke warned would happen if Congress did not quickly approve the TARP.” Indeed, Dean continues, the weekend after TARP was approved the plan for the Fed to buy this commercial paper was put in motion. (emphasis mine)
For more on the case for criminal indictments of Messrs Bernanke, Geithner, Summers, et. al., read the work of the brilliant Matt Taibi in recent articles in Rolling Stone -- if you can deal with his liberal use of obscenities which he childishly thinks somehow improves his prose -- who has done the legwork and taken the trouble to understand and to pass along the nature of some of the frauds that have been managed – and are doubtless continuing.
Wall Street's Naked Swindle by Matt Taibbi -- October 2009
A scheme to sell fake stocks helped kill Bear Sterns and Lehman Brothers — exposing the counterfeit nature of our entire economy.