Naomi Klein: "Here Is What Bush & Paulson Are Hoping We Won't Figure Out"

[kpete]

The New Trough
The Wall Street bailout looks a lot like Iraq — a "free-fraud zone" where private contractors cash in on the mess they helped create

NAOMI KLEINPosted Nov 13, 2008 12:00 AM



On the same day that he allocated the first $125 billion to the banks, Secretary Paulson announced the largest federal budget deficit in U.S. history. Buried in his statement was a preview of the next phase of the financial disaster. The deficit numbers, he declared, reinforce the need to"pursue policies that promote economic growth and fiscal responsibility, and address entitlement reform." He was referring to Americans who feel entitled to receive Social Security in their old age and Medicaid when they are sick. Those programs, Paulson implied, might not be able to survive the budget crisis he is currently creating for the next administration.

This is why the stakes of the bailout are so high: Unless we get a good deal, there will be nothing left over after the banks are done feeding to pay for the meager services now provided in exchange for taxation, let alone for the more ambitious initiatives promised on the campaign trail. The spiraling cost of saving Wall Street from its bad bets is already being used as an excuse for why we can't solve our many other crises, from health care to climate change.

There is a better way to fix a broken financial system. Treasury's plan to buy up the toxic debts never made sense and should be immediately scrapped - a move that would also handily get rid of most of the crony contractors. As for purchasing equity in banks, the next round of deals - and there will be more - has to start from the premise that the banks are bankrupt and will therefore accept whatever terms we choose to impose, including real regulatory oversight. The possibilities of what could be done if a chunk of the banking system were genuinely under public control - from a moratorium on home foreclosures to mandatory investment in green community redevelopment - are limitless.

Because here is what George Bush and Henry Paulson are hoping we won't figure out: When a society no longer has enough money to pay for its most pressing needs, there are worse things than discovering you own the banks.

more at:
http://www.rollingstone.com/politics/story/24012700/the_new_trough

[Idealism]

1. This is about a month old.

[kpete]

2. updated

Editor's note: The online version of this story has been amended to reflect developments since the publication of the print edition.

http://www.rollingstone.com/politics/story/24012700/the_new_trough

[kentuck]

3. Congress could put a freeze on all these funds...

And nothing goes anywhere without Congressional approval. The $700 billion does not yet belong to GWB and Hank Paulson to do with what they wish. They are creating a crisis of unmentionable magnitude if they are not stopped, is what I fear.

[Triana]

5. That is also my fear. Congress need to pull its collective head out of its ass and STOP this. n/t

[robinlynne]

6. Obama voted FOR it.

[girl gone mad]

7. And I still believe he was given bad advice...

unless he has a plan to mitigate the damage ASAP.

[tomp]

23. good advice or bad, he is responsible for his decisions.

and, isn't the obama camp claiming that one of his skills is to bring the right people into his circle? isn't that what biden was about? obama is not who you think he is.

[snappyturtle]

35. I don't want to cause trouble but I've heard so many times from

Freepers, I might add, that PE Obama is not who I think he is. Well, if indeed that is true, please enlighten me to who he is. Thanks.

[MadMaddie]

10. If he wouldn't have it could have backfired against him

I say the same thing about FISA.

I have a feeling that many of these things will be revisited after he takes control.

[truedelphi]

24. It made me mad and sad that he did this, and it is a totally unacceptable excuse that

he feared the media repurcussions.

He had enough money in his coffers to vote against BOTH FISA and the Bailout, and then produce a half hour infomercial explaining why. And much of the money in his campaign coffers came from people of modest means!!

Instead, every lower income and middle income person in America will end up paying $ 2,000 a piece to assist the rich in the looting of our banking system.

[earth mom]

26. Exactly it's inexcusable. And who did Obama meet with this past week? Bankers.

Saturday, November 8, 2008

Bankers were biggest donors to Obama

ANDREW CLARK in New York

BARACK OBAMA owes Wall Street bankers a debt of gratitude for generous campaign donations as he ponders how to cope with a financial crisis that poses challenges over government aid and regulation for the banking industry.

Staff at banks, Silicon Valley technology firms and universities topped the list of contributors to Obama's record treasure chest of $640 million (€503 million).

Goldman Sachs was linked to more donations than any other company, as its employees and their families provided $847,207 to the successful Democratic candidate's fundraising machine.

People associated with JP Morgan provided $581,460 and donors linked to Citigroup gave $581,216, according to figures culled from public disclosures.

<snip>

http://www.irishtimes.com/newspaper/world/2008/1108/1225925566965.html

:grr:

[dothemath]

42. put foot here. .....................

Get your head out of your ass.

If big money interests donated a few bucks (less than 3% of his total) to Obama and become a bother, he can tell them to go to hell and raise more in one day from his ten and twenty dollar backers - the INDIVIDUALS who gave him more than 600 million dollars to run his campaign.



You lost, move on.

And in case you haven't noticed, he is the president (that would be the real, honest-to-God president-elect) - he is not the president quite yet. And your guy, dubya, is running so scared, he, dubya, is already kissing Obama's ass big time. And many more repubs will be getting in line in the coming days.

[closeupready]

27. Far more than $2,000 - more like $10,000, based upon the $700B pricetag alone,

not counting any subsequent bailouts.

[truedelphi]

30. Yikes. Don't know if I should thank you for correcting me

Or sit and cry!!

$ 10 K a piece. That is 16 times our stimulus checks - which might well end up being the only benefit we see out of this whole "Stimulate the economy" mess

[pretzel4gore]

32. one minute...the rightwing still in control!

the fight aint fair. Even Obama's win was inevitable.... Does anyone think the horrific mess we face is so maleable to correction that a mccain/palin win would not, in effect, have come off like national suicide? Economic suicide by 300 million people, chopchop! Does ANYONE believe that mcain/palin were ever in line for a win? Two durn fools who made ridiculous the very idea of '4 more ears'! Anyone? Can't people see that the mess is almost of biblical proportions, and we require a prophet from god to make the ph calls necessary to preserve our health, if not our virtue...ahem? Victor hansen and grover norquist are FREE MEN, still kicking! Do you folks understand what that means?

[truedelphi]

50. Taht is a very wise point you mention. Just say "No!"

Congress, just say no.

[natrat]

58. barney street whore frank pimped this, along with many dems, why would they change it ?

[Triana]

4. " might not be able to survive the budget crisis he is currently creating for the next ..."

..."administration."

And THAT, folks was the MAIN POINT of the "bailout", IMO. In short, we've been ROBBED - the plutocracy's M.O. was to empty public coffers into private ones and then throw their hands up and say "well, SS and Medicaid will just have to go I guess - no money left sorry!"

There ya go. The pigshits have been chomping at the bit to get rid of these FDR "social" programs since the day he passed them. They seem to have found the way to do it.

[Merlot]

8. There are no coincidence's in politics

I think this looting happened now because they knew Obama would win and needed an excuse to take these actions. Had mcbush been winning, they would have done the same thing, but without all the drama.

[JDPriestly]

39. Agreed, Triana

[snappyturtle]

44. Oh I think you're definitely right. I am hoping that someone will become extremely

vocal about this to make certain this deception is positioned on the record before the rat in the WH vacates.

edit: Maybe Paulson ought to be detained in some accountable capacity because he has some 'splainin' to do.

[JHB]

57. Taking a page from the Old Man, I see...

Poppy Bush felt the sudden need to send troops to Somalia at the end of his term. After all, having troops active overseas would work against the then-anticipated Peace Dividend following the dissolution of the USSR. After all, we wouldn't want the military (contractor) budget reduced just because the only nation capable of engaging us in a world war suddenly didn't exist anymore...

[KakistocracyHater]

9. This applies overseas too

it's an orchestrated attack on Representitive Democratic Nations by the Country Club Class; Italians are marching in their streets against pay & benefit cuts. Our military budget can EASILY be halved & still remain #1 for funding; this is a challenge-of what America values, in a time where one must cut back WHAT you cut back on matters, it reveals your values.

Frankly I sick of seeing gov cuts to public education, disabled veterans & civilians, cuts to the elderly while they run up huge costs for some bs Missile Command crap that will never work. I'd get rid of CEO positions completely, & CFOs too-they have not been good for the businesses, it really is that simple, & the costs these idiot CEOs incur are unforgivable-especially since they demand Congress hand them benefits while they destroy their own workers' benefits so they get more of that "in God we trust" leaf lettuce.

[Tashca]

11. Enlightening read

I read the article and needless to say found it disturbing.

I wonder....as these banks line up and sign these Halliburton like contracts, for oversite of this program, can the future President or Congress renege on them? I suspect not.

Correct me if I'm wrong here....didn't our Democratically controlled House and Senate ok this? I assume most of those that voted in favor were reelected? This is a done deal. Maybe there will be abit of rearranging the furniture so to speak, but in general we are being screwed with a capital S.

[snappyturtle]

45. Once again, I doubt many read the bailout bill. They should have demanded the

time to thoroughly digest the implications interwoven into this deceit.

[autorank]

12. Every time I think they've hit bottom, they go lower. k*r n/t

[Independent_Liberal]

13. And the "sane faction" of *management* isn't too happy about this.

:)

[bertman]

14. Keep this one climbing. I'll read the details tomorrow.

[whatchamacallit]

15. K and R n/t

[snot]

16. k&r'd

[SpiralHawk]

17. The ultimate republicon screw-job to America

Republicons have been ripping off America for 8 years, and now this...

Karma gonna crap all over the corrupt republicon homelanders for what they have done to America.

[malaise]

18. K & R n/t

[GeorgeGist]

19. I think entitlement reform might be best served by ...

eliminating the entitlement to profit from providing society's needs.

[Thothmes]

60. How do you think entitlement reform

will occur if there is not profit. We should tax profit, those taxes pay for the things the country need. In normal circumstance, no business, no profit, no proit, no taxes.

[liberalla]

20. MUST read.

Appalling.

:kick:

[riderinthestorm]

21. K & R! A thousand times if I could.

Naomi Klein's Shock Doctrine should be required reading for all Americans.

[pattmarty]

63. amen to that!! I just read it for the SECOND time.

[dailykoff]

22. The Soc Sec money is safe unless WE (Congress) let them have it-- and we won't.

We managed to keep their paws off it for eight years and I hope to heaven Obama doesn't cave now.

[Thothmes]

61. I would bet you

that every red cent of social security taxes collected, in excess of annual benefit payout requirements, went directly to the general fund.there it went to pay for whatever. Social Secuity Administration was given treasury bonds in return for the cash taken out of the system.

[Greyhound]

25. Exactly what we told the panicky bailout mavens here, but of course it was their

401(k)s they were worried about, not the country or it's people. (You know who you are)

Now, barring a miracle, we are well and truly fucked. 3 more months of this loot-fest will, most likely, sink us.

(and your portfolios are going to be worthless anyway. Thanks)
:kick: & R

[truedelphi]

31. Jack Nicholson said it best:

You can't handle the truth!

We progresives have worked so hard to accomplish so little.

Although I am delighted to see the Old Guard change, I am seeing that with the Treasury looted, there will little for the New Guard to stand Guard over!

[depakid]

43. Had you been paying attention or doing some anaylsis you might have seen

the actions taken here and abroad by leaders and central and reserve banks was meant to unfreeze credit markets- and to prevent a collapse in the global financial system that would have meant ruin for a good many solid and ethical companies- which in turn would have meant far higher unemplyment (with the attendent government payouts- and opposed to revenues paidn by solvent companies and their employees).

And in fact, the credit markets have been slowly yet surely responding, something that wouldn't have happened if the "burn baby burn crowd" and the conspiracy theorists had their way.

Forutnately, more rational policy choices prevalied, meaning that the nations of the world are in for a nasty recession, but in all likelyhood have managed avoided something MUCH worse. Most of them at least. Something more akin to Iceland and some emeging economies are facing.

[slipslidingaway]

28. K&R n/t

[bdamomma]

29. kick

[OwnedByFerrets]

33. All the while, "our" congress sits on its happy hands letting this theft happen.

Facilitating it, in fact. Fucking pisses me off to no end.

[NoSheep]

34. WHERE are all the DUer's NOW who screeched at us that this HAD to happen?

Where are all the experts who said those of us who KNEW we were being ripped off were just crazy? Why aren't they defending themselves against Naomi Klein?

[nadinbrzezinski]

36. Naomi, NAOMI... THE GIGS UP for the bushies

Read the damn bill...

If all of you who think this is disaster capitalism READ it, you'd figure this out... IT AIN'T

And with the TRANSFER OF POWER our worst fears will NOT come to be

Yet, she still NEEDS to sell books

Oh and this is a MONTH OLD... got it? Something minor happened last week... really, really minor... that means the gig's up

[goforit]

51. Unfortunately there will not be one ounce of enforcement of these crooks.

[Gregorian]

37. Furthermore, I see they're already paving the way to cricifying Obama.

Newt Gingrich was on cspan discussing how the precursor to a bad economy is creating a new economy based on alternative energy. And that doing such a thing would put America at financial risk. And that it would be tantamount to terrorism to do such a thing.

Translation, ignore the fact that Bush caused this, Obama is a terrorist. And we will do everything we can to stop him.

Folks, I see the road we're on, and republicans are going to sandbag us every step of the way. There are two ways out of this mess. A huge huge disaster, or a very smart president who has an impenetrable shield around him.

[bbgrunt]

38. k & r.

[Disturbed]

41. Pres Obama & his Team will do what is best for America.

Pres. Obama & his Team are smart. He wants to serve for 8 years, so he will do everything that is possible to bring America out of the mess that was created by the Repubs.

[wildbilln864]

40. k&r! nt

[kestrel91316]

46. If they don't want to provide us with Social Security and Medicare benefits,

they can damned well refund every single penny we have paid into the fund. Plus interest.

I don't care if they have to tax the wealthy into early graves to do it, either.

[jwirr]

47. Read a little here and wondering if I accidently dropped in on the freepers,

[paparush]

48. The ONLY reason I voted for my Rep (Shuler- Dem, NC) is that he voted NO twice on the Bailout

[bridgit]

49. The entire republican game has been to undo new deal entitlements...

I thought that was common knowledge for a long time now :shrug: they call it 'starving the beast', g.w. bush is one tiny potato, he's the guy they put in there knowing he'd sign anything slipped under his nose, it's the others with their hands up his puppet sleeve

[Amonester]

56. Yes, but we 'see' exactly where that rethuglican game got U.S. into.

For the second time in a little less than 80 years - the previous one occuring between the years 1928 and 1932 - such disaster of a game, one that is switching the collective wealth into fewer and fewer corrupt hands, is the perfect course for a total meltdown of the economy as a whole. Why is it so difficult for these dangerous nuts to understand the simple notion of "If you give workers AND consumers enough rewarding income, THEY WILL PURCHASE THE PRODUCTS THAT YOU MARKET FOR THE PURPOSE OF MAKING PROFITS, including food, healt-care, housing, transportation, etc. But gradually REDUCE their net income while transfering it to the "have-more" class, and you'll only end up destroying BOTH CLASSES."

I guess (almost all) the entire rethuglican ruling class just can't learn anything from History...

NOT SURPRISED!

[Skittles]

52. Obama, get this gal on your team

yes INDEED

[McCamy Taylor]

53. Translation "We can not afford health care reform". Do not be fooled by the panic.

No one in the Medical Industrial Complex wants the government to touch Medicare, because it is the cash cow that keeps the business that is bigger than the Military Industrial Complex going. And no one wants to dismantle Social Security either, because no one has the will to watch the elderly die on the streets, homeless and starving . The whole reason they were able to put these two programs in place was because Americans got all sentimental about old folks.

While it is true that business would love to take a bigger cut of the big bucks that fund these programs, neither the Dems nor the GOP will be the party to end them.

When you hear either side making with the gloomy talk, what they are really trying to do is get AARP and the old folks on the side of the health insurance industry and the drug companies and all the others who do not want to see universal health care.

They are trying to scare old folks into thinking that their entitlement will be threatened if young people get health care insurance.

[whistle]

54. Can Paulson be impeached? He needs to be replaced right now!

...Order the Sergent at Arms of the U.S. Congress to go to Paulson's home, office or bar tonight wherever he is and take him under custody now and deliver him to the U.S. House of Representative sin the morning for the purpose of impeaching his ass and filing charges of corruption and criminal conspiracy for grand theft of the U.S Treasury.

[fasttense]

55. The inevitable result of "free" market capitalism.

Every single time this ignorant "free" market, neoliberal, laissez fair capitalism is promoted and implemented, it destroys the economy of a country or world. You would think people would catch on?

But no, they buy into it with each successive new label. Milton Friedman and the uber wealthy sold this to our government and a bunch of fools kept voting in the people who implemented it.

Now you have the final throes of a failed ideology. The uber wealthy are grabbing up all the nation's wealth before we little people realize the treasury has been looted.

Obama claimed he still believes in this "free" market crap. It's nothing but horse sh*t decorating greed and selfishness. It seems it takes a gargantuan effort to rid this country of ridiculous "free" market notions.

I think Obama's idea of free market ain't quite what Milton or the bush had in mind. Obama, the bush, most repukes and some Dems were true believers. The bush and some repukes are still believers. The rest of us have seen the results and have realized what a bankrupt idea "free" market capitalism really is. Obama is smart. He made the wrong decision on FISA but I think he is figuring out the truth.

[daggahead]

59. And now American Express wants to ...

become a commercial bank so it can get in on the gluttony.

We're being ripped off and the banks are laughing all the way to ... well, the bank?

[SteveM]

62. "The carajou [wolverine] is equipped with anal glands which secrete...

...an evil-smelling fluid. He cannot dispense this in the same manner as the skunk, but he uses it to spoil anything he cannot eat."

"Not content with robbing the trap line, he sometimes invades the trapper's cabin during his absence and destroys everything within. What he does not eat or carry away he tears to shreds and sprinkles with offensive scent. He often plagues hunters and lumbermen in the same manner."

-- The New Hunter's Encyclopedia, 3rd Rev. Ed., copyright 1966, 1972, Stackpole Co., Harrisburg, PA 17105

[peacetalksforall]

64. I am lost because I'm persuaded forward, backward, sideways - and I can't

seem to rely on people I thought I trusted from the past.

One thing that must be figured out is WHO is going to read the fine print? Aren't there enough smart people, new grads even, who would accept some lower pay just to get a job and scour these documents for Congress? Someone has got to see the destruction contained in them. (I hope the Obama era will see no dirty tricks and deliver no dirty tricks against the people). All we have is our trust and our signs.

Congresspeople need new eyes and analyzers.

I am intrigued by Obama talking about keeping some of the suspect conspirators of this theft against the people - would the same who oversaw (and are overseeing?) the theft be the ones to straighten it out?