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The Obama “Dream Team”: Rubin-clones and political fakery
- Text size
Mike Whitney
Global Research
November 30, 2008
Things are getting crazier by the day. On Tuesday, Treasury Secretary Henry Paulson announced that the Fed would commit another $800 billion to fight the financial crisis which has spread to the broader economy and is causing sharp declines in consumer spending. The Fed plans to buy $600 billion of mortgage-backed securities (MBS) from Fannie Mae and Freddie Mac and another $200 billion of Triple A bonds from non-bank financial companies that provide financing for consumers. There’s just one little glitch, Fannie and Freddie are already owned by the government, so buying the bad paper is like moving the figures from one ledger to another. It’s pointless. Except for the fact, that by shuffling the paperwork, Bernanke can drive down long-term interest rates and (hopefully) rekindle flagging home sales. It’s a parlour trick.
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| The men behind these remedies are limited by institutional loyalties that will keep them from overhauling the system in meaningful way. Photo: Former Treasury Secretary Lawrence Summers. | |
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And with the other $200 billion he can kick-start the securitization market by purchasing bundles of student loans, credit cards and car loans. Investors have been boycotting the asset-backed securities (ABS) markets for months now which has choked off the flow credit to consumers. So the Fed is trying to unclog the plumbing by stepping in as the lender of last resort. Of course, if the Fed really wanted to get money to consumers, there are much easier ways to do it, like cutting the payroll tax, mailing out stimulus checks or issuing tax rebates to couples making under $60,000 per year. But that’s not the objective. What Bernanke really wants to do is to rev up securitization again because that’s the vehicle the investment banks and hedge funds use to increase profits through leveraged bets on odd-sounding derivatives. (CDO, MBS, CDS). BFor now, no one is buying dodgy securities because no one knows they’re really worth. Until that can be worked out, investors will stay away. That’s why it would be better to cut back on the liquidity and work harder on transparency. Price discovery for structured investments is critical. If investors think that prices are reliable, then they’ll jump back in. If not; it’s no dice.
Bernanke and Paulson are trying to tackle the financial crisis from the wrong end. This isn’t about liquidity or “access to credit”, its about confidence. The public’s trust has been betrayed a million times over. They’ve been tricked with WMD, bamboozled with phantom enemies, and cheated with bogus securities. All the surveys say the same thing; public confidence is at an all-time low. As a result, fear and pessimism are more widespread than any time in recent history. People no longer expect tomorrow to be better than today. In fact, they expect it to be worse, and for good reason. The country has broken loose from its moorings and is adrift. There’s no accountability at any level of government. It doesn’t matter how big or heinous the crime, no one pays. The justice system is a sham. In fact, the D.O.J. is just a weapon for destroying political enemies; that’s it. The one noteworthy conviction in the last 8 years was home-decorating guru Martha Stewart. What a joke. In his memoirs, Bush can boast, “At least we got Martha Stewart off the streets.”
And it’s not just the justice system that lacks credibility either; it’s the financial system, too. The stampede out of the stock market to US Treasurys shows how quickly trust can turn to panic. The downward spiral of the economy reflects the mood of the country; dark and gloomy. That’s not something that can be changed with more liquidity. After all, the economy is more than the sum of its parts, just like people are more than just consumption machines that can be zapped like rats into spending themselves into oblivion. They’re sentient beings who can see the deteriorating economic conditions closing in on them and threatening their security. They’re scared. Bernanke–the academic–sees the economy through the lens of his research on the Great Depression. He, like many other monetarists, believe that the depression was the result of the one-third contraction in the money supply during the 1930s. It is a widely held view and it could be true. But if that’s the case, than why haven’t the Fed’s myriad lending facilities–which have flooded the financial system with trillions of dollars of liquidity–stopped the markets from crashing and the recession from deepening. Could it be that there are other factors involved besides money supply?
People are hunkering down for a reason, and its not just lost revenue. They’ve lost faith in their institutions–the government, the banks, and the media; everybody is in it for themselves, and it shows. Even now, with the economy teetering at the brink of disaster, high-ranking officials like Paulson are still diverting hundreds of billions of dollars from the Treasury to their Wall Street buddies leaving nothing behind but a few scraps for the working stiffs. And Paulson isn’t alone either; his Darwinian “dog eat dog” creed is the prevailing ethos of the corrupt oligarchy that runs the country, Republican and Democrat alike, it makes no difference. It’s “me first” and the public be damned.
If Bernanke really wants to know how the economy is doing, he should pay a visit to any town or city in America. Business is off everywhere; it’s not just retail. The restaurants, the gas stations, the dry cleaners; even the casinos are hurting. The lines at the food banks are longer than the unemployment lines, and the only business that’s booming is the pawn shops where the family silver is traded away for gas money or a few bucks to blow on groceries. This is what recession looks like from the ground floor where people are struggling to just make ends meet. No more 3-course dinners at Olive Garden and no more $5.25 lattes and cranberry scones at Starbucks. It’s Campbells for lunch, Spam for dinner and plenty of wool blankets for evening TV.
Does Paulson think he can “turn off” the public’s pessimism like a light switch?
Does Bernanke think he can get people to spend themselves further into debt by lowering interest rates?
It can’t be done. And the Obama camp is going to run into the same brick wall. The nation’s confidence has been shattered and people are developing a bunker mentality.
- A d v e r t i s e m e n t
The truth is, Obama was shoehorned into the White House because the ruling elite saw that the country was slipping into a consumer-led depression. They needed a bright new face to restore confidence and spark optimism during the tough times ahead. But now that he’s been elected, they’ve surrounded him with the same men who created the present crisis. Lawrence Summers pushed for the repeal of the laws which prevented commercial banks from merging with the Wall Street casinos and he also helped to deregulate derivatives trading which now threatens to bring down the entire financial system if a major player, like Citigroup, goes under.
Timothy Geithner and Lawrence Summers were central figures in the bubble-driven growth and deregulation mania of the last decade. Their influence factored heavily into the speculation that was brought on by low interest rates, easy credit and massive leverage; the lethal combo that created the present crisis. Their elevation to the top positions in the administration –along with Paul Volcker–proves that the Obama presidency is just more political fakery; a charming and charismatic figurehead placed in front of the executive podium to conceal the machinations of deeply-entrenched interests who are busy rebuilding the trickle-down system from the ground up. There’s nothing new here, and certainly nothing progressive. The much-celebrated “Dream Team” is an amalgam of Rubin-clones who used Obama as a land-bridge to the White House to strengthen the status quo and get on with the task of shifting the nation’s wealth to Wall Street’s economic royalists.
The fact is, the Obama star-studded economic recovery team emerges from the same ideological petris-dish as Bernanke and Paulson. Their world view is shaped by the same strong sense of entitlement which will prevent them from enacting the regulatory reforms that need to be put in place to restore transparency, confidence and credibility. Instead, they will unleash a torrent of stimulus (infrastructure and green technology mainly) followed by unorthodox monetarist/fiscal chicanery (like purchasing stocks on the equities market or buying long-term Treasurys) all of which will hide the fact that they are not forcing the bad debts out into the open so they can be written down and the markets can reestablish equilibrium.
No one disputes that Geithner, Summers and Volcker are smarter and more competent than Team Bush, and that, their Keynesian plan to inject massive doses of stimulus into the economy will have a positive effect. But that’s as far as it goes. The men behind these remedies are limited by institutional loyalties that will keep them from overhauling the system in meaningful way. Neither Summers, nor Geithner nor Volcker would ever dare to tamper with the revenue-producing system which maintains the orderly division between rich and poor. That just won’t happen.
So, after the fanfare subsides and Obama’s economic team puts its stimulus plan in motion, there should be some marginal uptick in economic activity. But unless the underlying problems are addressed, there’s little hope of any lasting recovery. The banks need to take their medicine and write down the losses. Regulators have to decide which institutions are solvent and can be saved, and which are underwater and will have to be shut down. The Obama administration will have to open a bank morgue, like the Resolution Trust Corporation (RTC), so the bad assets from failed banks can be sold at auction to the highest bidder. That’s the only way to put this whole mess behind us and start to dig out. Putting the securities up for bid will restore confidence and, eventually, lure investors back into the stock market. It will also remove the zombie banks from hanging on and depending on government bailouts. There’s a method for unwinding sick banks through restructuring debt. It needs to be put to use.
Regardless of what the new administration does, the stock markets will take another leg down between the end of 2009 to early 2010, finding a bottom on the Dow of 4,500 or thereabouts (70% plus declines took place on the NASDAQ following the dot.com bust, Japan during the 1990s “lost decade” and the Great Depression. In none of these cases was the bottom reached in the first year) Hedge fund redemptions will force more deleveraging and more wild swings on the stock market. The banks–which have accounted for nearly half of their losses–will need to write off another $800 to $900 billion before they see daylight. It’s a long uphill slog and no one knows where they’ll get the capital. Unemployment will skyrocket, housing will overshoot to the downside, and there will be the first random incidents of political instability (and rioting) in major US cities. The economy will be flat on its back for some years into the future. How quickly the markets rebound depends largely on how fast Obama’s team is able to grasp that the system needs deep structural change and a banking system that is not paralyzed with debt.
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November 30th, 2008 at 11:42 am
Nothings changed except the noose is getting tighter. Watch that first step.
November 30th, 2008 at 1:07 pm
what. i thought you just print more money. take care of your wealthy friends and it’s all good.
http://www.aniboom.com/video/301279/obama-plan/
November 30th, 2008 at 2:21 pm
mythbusters 2hr special on world trade center slated for 2009!!!
http://www.youtube.com/watch?v=g8DFdSAEL4o
November 30th, 2008 at 2:30 pm
That’s what I see too #3!!!
I don’t see any of this money reaching us….it has to be going somewhere.
Even then I am not sure I want it if they keep printing it like the newspaper.
These guys have truly messed up and this is the last resort strategy.
November 30th, 2008 at 2:41 pm
Petri dish, not petris.
Can’t expect too much intelligence from this site…
November 30th, 2008 at 2:45 pm
VOTE FOR A NEW INDEPENDENT INVESTIGATION ON CHANGE.ORG !!!
https://www.change.org/ideas/view/conduct_a_new_independent_investigation_into_the_attacks_of_september_11_2001
November 30th, 2008 at 3:14 pm
There is no money. It is simply approved “numbers” on a computer transition between the Fed and the banks.
After all that has surrounded this sham .. some of you actually expect to get money?
I am serious and no sarcasm intended. There was never any intent to do with this loan from the US citizen what it was intended to be designated for.
YOU fooled yourself again. This act tops the Fed Act of 1913. This country has been used up for now, and it is time for the “engineers” to move on to another one. Money in itself is an illusion. People who work and provide services would not need money to operate. Thsoe who provide nothing require money to control those who provide a service and produce physical things.
November 30th, 2008 at 3:14 pm
what is humorous — these guys are all very ugly and very old, look at Bush, i mean had you ever seen such a man who resembles a monkey (missing link perhaps??), well momma and pop were none too glorious…..rumor has it that they are “into” cryogenics, but if they were really serious, they might have frozen up years back….
just strikes me as very funny, that these elites are so very ugly (and they breed, uglies should never breed), goes to some psych in that regard as well……
November 30th, 2008 at 3:23 pm
VOTE FOR A NEW INDEPENDENT 9/11 INVESTIGATION @ CHANGE.ORG !!!
https://www.change.org/ideas/view/conduct_a_new_independent_investigation_into_the_attacks_of_september_11_2001
November 30th, 2008 at 3:48 pm
#8 thats 1 of the reasons why theyre so evil. they look in the mirror and see nothing but a disgusting miserable monster and have the need to take out their misfortunes on others.
November 30th, 2008 at 4:01 pm
American politics are a complete and utter joke. Theres no deficet..its a scam..another excuse to charge more taxes. Just like 911..people dont use that 10% of their brain to unravel the truth swept underneath the carpet. We cannot allow these rich money hungry politicians run our world…speak up people.
November 30th, 2008 at 4:40 pm
A thought..
Our political system forces us to choose different politicans through a fake electoral process. We do so.
But if the elected politician is knowingly put in place to keep a small contigency of the “same old people, like Kissinger and Brezinki in place, and now we are seeing the same old cronies getting rotated back into positions to solve problems they helpd create, well.. when will the light come on in people’s heads?
Answer: It won’t. People don’t pay attention nor do they care. All it takes to pull this scam off is doing it.
There is a battle between the two political parties in the US and the losers will be the US citizens..whether you are intelligent enough to figure it out or not.
November 30th, 2008 at 5:01 pm
Well, I believe that this whole mess was a carefully planned job. This was the next plausible step to one world money. I expect to see the Amero being promoted in the next year to two years.
There is no doubt in my mind that in order to be in the largest office of the USA you must be a team player with the new world order comrades.
I look to also see the Mideast step up it’s efforts to bring war against Isreal. and Anti-Semitic opinions will continue to expand throughout the world.
There is no bail=out for us. We are just part of an expendable source. The Governments are looking to control the banks, the land, and the people.
November 30th, 2008 at 5:36 pm
YOU ALL NEED TO UNDERSTAND THAT THE UNITED STATES IS A CORPORATION AND YOU ARE AN EMPLOYEE ON THE UNITED STATES CORPERATION! SOUNDS CRAZY?? LOOK AT YOUR BIRTH CERTIFICATE IT’S ALL IN CAPITOL LETTERS, THAT MEANS THAT YOU ARE A SUB-CORPORATION
OWNED AND WORKING FOR THE MAIN CORPORATION, THE UNITED STATES. iF YOU DON’T BELIEVE ME LOOK INTO MATERIAL BY JORDON MAXWELL, OR GO TO THINKFREE.CA and YOU WILL SEE, WAKE UP & SMELL THE FACISM!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
November 30th, 2008 at 6:58 pm
OFF TOPIC : For those that have been following—On the 14th I said there will be apx. 7 newsworthy earthquakes after the shuttle went up. There were 6. Thats not counting the cluster of 4/5 in ark. on the scale of 2.8 or less that they didn’t tell us about until 2 days later. They didn’t report after shocks on any of these that were reported because thats the signature of NASA made quakes. The shuttle landed today. So, from now until feb. 12th (next lift off), if there is a quake it will have an after shock.( call it the control test ). Just watch. For those of you that have been following, you must be seeing a pattern by now, this is the third time this year I put your attention there. Weaponized space with tesla knowledge. For the ones that want to laugh-thats ok.
November 30th, 2008 at 7:46 pm
It is possible that our current financial crisis is an elaborate plot to change our currency into the Euro. One world, one currency, one government, one mind. I just read that Britain is considering converting to the Euro.
As for the comment regarding the shuttle and weapons testing. Perhaps you have watched the Mel Gibson film “Conspiracy Theory” lately? If my memory serves, that was ultimately what the conspiracy was that his character uncovered. I am not discounting you, only asking for some clarification.
November 30th, 2008 at 7:47 pm
Oh yes, and where were the 6 newsworthy quakes that you speak of, Shadow?
November 30th, 2008 at 7:47 pm
shadow —
do you have URLs of the warnings you issued? I didn’t see them, so I can’t evaluate them
November 30th, 2008 at 7:51 pm
Besides all of the self-inflicted “Economic Woes” that convinced US citizens that we MUST bail out the banksters and theives, under threats from Paulson that “martial law” would commence if Congress tried a patriotic revolt, we still have the Iranian War to consider.
What will be the January surprise That Colin Powell, Joe Biden, Albright and even McCain warned us would come? War with Iran after a major “terrorist” attack like the false flag event of 911? Or will it be biomedical, Anthrax, Bird Flu or DRTB strains. Perhaps it will be the official notice of Death to the US dollar and our sovereignty and Constitution.
FEMA is now storing huge caches of food and supplies to feed and support a martial law army made up of traitors and foreign troops who will follow dictatorial commands like attack dogs. Will our people finally say “Enough is Enough!” and take back our government? Will those who swore and oath to Defend and Protect the US Constitution against all enemies foreign or DOMESTIC live up to their sacred promise — or sell out like Judas to the psychopathic and deceived autocrats of the New World Order?
http://www.RightToRedress.com
November 30th, 2008 at 8:42 pm
F*** the Nazi banking cartel and the gov’t that allows it to rape up and keep us shackled in debt for the rest of our lives.
Hey, need a house…here we printed money to loan you.
Need a car….we printed more money to loan you.
Need an education…we printed even more money to loan you.
But don’t worry…we will sit back with the interest we collected off of your backs and still collect 50% of your money through taxation.
Don’t default or we will steal your assets that we traded for printed paper. Freaking Nazis.
November 30th, 2008 at 10:05 pm
So; should we trust private bankers to control our money supply? Or should we clarify and define the authority our government already has in the Constitution to print and coin money and regulate the value thereof? The government can print it; and loan it into for example infrastructure projects etc; all interest free! Debt free! There’s so many corrupt “laws” already made the “law of the land” to allow every sort of rabbit holel chasing, mindless maze diversions for the corrupt to reign with tyranny over us; we actually need a revolution; a True Rebellion as in what began this country; and re-instate Lawful Governance. History does show the record of which governments by law regulated and coined money to have a much better record than private bankers; gee I wonder why….
November 30th, 2008 at 10:20 pm
http://groups.google.com/group.....0?lnk=raot
Hear is an interesting read on the financial mess. I had this in my Bookmarks.
November 30th, 2008 at 10:51 pm
prisonplanet.tv subscriber here.
Are there any other prisonplanet.tv subscribers out there that can’t get any subscriber materials later than “The Alex Jones Show – L I V E – Nov. 21 With Lindsay Williams”?
Is it just me or are there others in this shape? I can still stream and DL all the movies, but GCNLive (or someone in between) has been blocking me for a couple of weeks. I used to love to get Tarpley and Rivero and Barrett, but now they are blocked. I called my ISP Tech Support, and the operator could get most but not all (about 80%) of their home page.
Here’s a key fact: I can get it all thru VTunnel, BUT when it comes to DLing the podcasts, I run into the 4Mb limit. So I’m still stuck.
Anyone care to comment? I’m a paid-up 3-year subscriber.
November 30th, 2008 at 11:30 pm
GOD has pulled his hand away from this country. IT’S THAT SIMPLE!
November 30th, 2008 at 11:33 pm
GOD has pulled his hand away from this country. IT’S THAT SIMPLE!
All the henry paulson’s and ben bernanke’s of the world are not going to be able to do a damn thing about it. Get on the same page with GOD and just maybe you”ll avoid “most” of the catastrophe that’s headed our way.
December 1st, 2008 at 12:57 am
hell we call for revolution, but who is going to fight it. I do not see people taking to the streets. sorry but most people will lay low not do anyting and hope it all goes away. They are scared and they just will do nothing. They are so dumbed down,and are able to think, except for trampling people to get their Chinese made junk for the holidays, because it is so important to get your little princes or princesses what they want for the holidays.
sorry we are f---ed, and the general public does not care and it makes me sick. lets just have the full blown Nuclear war and kill everyone.
We are screwed.
December 1st, 2008 at 12:57 am
hell we call for revolution, but who is going to fight it. I do not see people taking to the streets. sorry but most people will lay low not do anyting and hope it all goes away. They are scared and they just will do nothing. They are so dumbed down,and are able to think, except for trampling people to get their Chinese made junk for the holidays, because it is so important to get your little princes or princesses what they want for the holidays.
sorry we are f---ed, and the general public does not care and it makes me sick. lets just have the full blown Nuclear war and kill everyone.
We are screwed.
December 1st, 2008 at 12:57 am
hell we call for revolution, but who is going to fight it. I do not see people taking to the streets. sorry but most people will lay low not do anyting and hope it all goes away. They are scared and they just will do nothing. They are so dumbed down,and are able to think, except for trampling people to get their Chinese made junk for the holidays, because it is so important to get your little princes or princesses what they want for the holidays.
sorry we are f---ed, and the general public does not care and it makes me sick. lets just have the full blown Nuclear war and kill everyone.
We are screwed.
December 1st, 2008 at 4:04 am
Nuclear war sux. How bout a deadly super contagious virus instead, that sounds much better. Kill mostly everbody in the world, start over again.
December 1st, 2008 at 7:23 am
The problem with the current and still enveloping world crisis is its evident nonlinear features which makes it impossible to anticipate its leading edge, as it were. The futility is like fighting a forest fire in high winds. Watch your back! The world financial system is in disarray. The ‘center’ has given way and the world is in chaos. No piecemeal measures like those anticipated by the Rubin/ Summers/Volker crowd will do.
I dream of revolution and the guillotine.
December 1st, 2008 at 10:58 am
I have only a few things to say to the miss informed that come to this sight.
I lost Brothers & sisters to the lie of 911(not to mention the 1000’s that died on that day)so stay out of our way becase the JIG is up and the truth is out on the one’s that comitted that act of war on this land and we are seeking justice for the ones that died.SO——-> (you are ether with the with US or you are with the TRUE terrorist) And I pity you for your BLIND STUPIDITY.
A little advice from a man that care’s( try useing your citical thinking and open your mind to the bare facts & not the minds of others)Thats true FREEDOM
(QUIT THINKING IN A BOX AND START THINKING FOR YOUR SELF’S),and so to the one’s of honor, I SALUTE you and to the ones that dishonor their Oath, I pity you for when you hold your child, think about the world you are giving to that souls’ future and what you may soon be dying for, like I probably will, (at least my death will be with honor)!
(WILL YOURS)
Sighed,
A VET who cares
December 1st, 2008 at 11:36 am
Our GOV is like a used car lot with sales closers setting us up for lemon. Not one thing will change untill we the people FIRE them and put the rule of law back inplace and hold them to the Constitution (99% of the are lieing CROOKS)
December 1st, 2008 at 11:51 am
WITHOUT monetary sovereignty PEOPLES WILL BE NOT BE PART NO. THE ILLUSION OF MONEY ALWAYS FALL ON HEADS usual.
December 1st, 2008 at 11:57 am
It is time to light a fire of LIBERTY!!!
http://www.youtube.com/watch?v=d0zp9uX9B6I
December 1st, 2008 at 12:01 pm
GLOBALIZZATION IS A DISASTER.EUROPEN SLAVE COPY THE AMERICAN SISTEM BANK.
WHEN A STATE LOSE SOVRANITY OF MONEY DEMOCRAZY IS IMPOSSIBLE.
MONEY IS A STUPID UNIT LIKE METERS.
FOR PROTEST MUST BE CLOSE ACCOUNT IN BANK. IS BETTER THE TOTAL COLLAPSE..SO THE INTELLIGENT OF THE SISTEM THAT WE UNDERSTAND YOUR SISTEM.
ALL THE NATION MUST BE HAVE SOVRANITY OF MONEY,DISTROY GLOBALIZZATION.
I BUY FROM AMERICA,OR FROM JAPPON WHEN I NEED SOMETHING THAT MY CONTRY DONT PRODUCE WELL. BUT IS STUPID GLOBALIZZATION ALL..
OBAMA WHEN YOU TAKE 90 NUCLERAR BOMB OF MY CONTRY? 90 NUCLER BOMB IN ITALY..
10 ARE OF ISRAEL-
December 1st, 2008 at 12:04 pm
Suicide bombing needed now more than ever! Aloha MCB
December 1st, 2008 at 12:11 pm
this world is a theater and we are watchin the show…. I wish I could see what goes on behind the curtain…