It's over — we're officially, royally fucked (Rolling Stone)

[kentuck]

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

<snip>
It's over — we're officially, royally fucked. no empire can survive being rendered a permanent laughingstock, which is what happened as of a few weeks ago, when the buffoons who have been running things in this country finally went one step too far. It happened when Treasury Secretary Timothy Geithner was forced to admit that he was once again going to have to stuff billions of taxpayer dollars into a dying insurance giant called AIG, itself a profound symbol of our national decline — a corporation that got rich insuring the concrete and steel of American industry in the country's heyday, only to destroy itself chasing phantom fortunes at the Wall Street card tables, like a dissolute nobleman gambling away the family estate in the waning days of the British Empire.


<snip>
The latest bailout came as AIG admitted to having just posted the largest quarterly loss in American corporate history — some $61.7 billion. In the final three months of last year, the company lost more than $27 million every hour. That's $465,000 a minute, a yearly income for a median American household every six seconds, roughly $7,750 a second. And all this happened at the end of eight straight years that America devoted to frantically chasing the shadow of a terrorist threat to no avail, eight years spent stopping every citizen at every airport to search every purse, bag, crotch and briefcase for juice boxes and explosive tubes of toothpaste. Yet in the end, our government had no mechanism for searching the balance sheets of companies that held life-or-death power over our society and was unable to spot holes in the national economy the size of Libya (whose entire GDP last year was smaller than AIG's 2008 losses).

So it's time to admit it: We're fools, protagonists in a kind of gruesome comedy about the marriage of greed and stupidity. And the worst part about it is that we're still in denial — we still think this is some kind of unfortunate accident, not something that was created by the group of psychopaths on Wall Street whom we allowed to gang-rape the American Dream. When Geithner announced the new $30 billion bailout, the party line was that poor AIG was just a victim of a lot of shitty luck — bad year for business, you know, what with the financial crisis and all. Edward Liddy, the company's CEO, actually compared it to catching a cold: "The marketplace is a pretty crummy place to be right now," he said. "When the world catches pneumonia, we get it too." In a pathetic attempt at name-dropping, he even whined that AIG was being "consumed by the same issues that are driving house prices down and 401K statements down and Warren Buffet's investment portfolio down."

....more

[lonestarnot]

1. Yes we are!

[mdmc]

4. YES

WE
ARE!

[tularetom]

2. K & R - print this article out and refer to it often

You won't find a better summary of how we got fucked.

[Double T]

3. The corporate criminals are definitely in charge.

It's malfeasance and corruption as usual. See you at the bottom!

[1]

5. cool! fuck this climate change theory! fuck thoughts of regulation! it's over, why bother?

let's just party and forget any of our responsibilities.

booya!

[Warpy]

Every once in a while, Rolling Stone puts out a blockbuster

and this is one of those times. The description of Cassano, King Rat at AIG, is well worth reading the whole article but the article has so much more.

This has been posted several times over the past few days. Since everybody really needs to read this article, it can't be reposted enough.

[TahitiNut]

20. I agree. Taibbi's 'Gonzo' style actually enhances the clarity of the article.

Not only does he candidly display his own attitude (without pretense or obfuscation), he aptly portrays the basis for that viewpoint. When one checks the FACTS he presents, the viewpoint is well-supported. It's a very clear and focused article.

[lonestarnot]

6. "$465,000 a minute, a yearly income for a median American household"

Wha?

[Political Heretic]

7. An extra zero. 46,500 would be close to median household income

[lonestarnot]

8. So a typo then?

[Toucano]

10. Read it as a whole sentence and it is easier.

That's $465,000 a minute, a yearly income for a median American household every six seconds, roughly $7,750 a second.

Could have been worded better.

[Political Heretic]

11. Ah I see yes, just finished reading the whole thing.

Yeah so 465,000 a minute...

...but then a median income for average american family every 6 seconds.

[krispos42]

9. "every six seconds"

"a yearly income for a median American household every six seconds"


The sentence kind of blurs together, doesn't it? :-)

[lonestarnot]

13. Yes it did. I couldn't see it for the smoke.

:smoke: Only smoke 1/2 pack today. On with the quitting agenda. :P

[krispos42]

14. Glad to help... :-)

And good luck with quitting!

[lonestarnot]

15. A market decision being made for me.

:evilgrin:

[Political Heretic]

12. I admit I blew this off the first time because of the opening sentence. But that was great history

Really nice review of how we got into this fucking disaster.

[Old and In the Way]

16. Taibbi scores another one.

He has a knack with distilling a very complex subject into a coherent framework for the masses...should be required reading for all Americans. I'm even more fearful that we won't be able to overcome the institutional obstacles that created the problems in the first place. I hope to Gawd Obama recognizes the minefield he's stepping through...

At some point, the Fed is coming to have to be retrained as to who they answer to.

[cilla4progress]

17. What happened to CHANGE?

They need to listen to their own message. They need to listen to Axelrod.

[Bigmack]

18. Read it twice... so far...

and it is the best written description of what's happened that I've seen.

Only one problem. Murikans don't read. They most especially don't read looooong pieces with big words and clever phrasing.

You and I will read it, but the people who need to read it... won't.

[kentuck]

19. We cannot overlook the politicians in this mess...

<snip>
But in the late Nineties, a few years before Cassano took over AIGFP, all that changed. The Democrats, tired of getting slaughtered in the fundraising arena by Republicans, decided to throw off their old reliance on unions and interest groups and become more "business-friendly." Wall Street responded by flooding Washington with money, buying allies in both parties. In the 10-year period beginning in 1998, financial companies spent $1.7 billion on federal campaign contributions and another $3.4 billion on lobbyists. They quickly got what they paid for. In 1999, Gramm co-sponsored a bill that repealed key aspects of the Glass-Steagall Act, smoothing the way for the creation of financial megafirms like Citigroup. The move did away with the built-in protections afforded by smaller banks. In the old days, a local banker knew the people whose loans were on his balance sheet: He wasn't going to give a million-dollar mortgage to a homeless meth addict, since he would have to keep that loan on his books. But a giant merged bank might write that loan and then sell it off to some fool in China, and who cared?

<snip>
So that's the first step in wall street's power grab: making up things like credit-default swaps and collateralized-debt obligations, financial products so complex and inscrutable that ordinary American dumb people — to say nothing of federal regulators and even the CEOs of major corporations like AIG — are too intimidated to even try to understand them. That, combined with wise political investments, enabled the nation's top bankers to effectively scrap any meaningful oversight of the financial industry. In 1997 and 1998, the years leading up to the passage of Phil Gramm's fateful act that gutted Glass-Steagall, the banking, brokerage and insurance industries spent $350 million on political contributions and lobbying. Gramm alone — then the chairman of the Senate Banking Committee — collected $2.6 million in only five years. The law passed 90-8 in the Senate, with the support of 38 Democrats, including some names that might surprise you: Joe Biden, John Kerry, Tom Daschle, Dick Durbin, even John Edwards.

The act helped create the too-big-to-fail financial behemoths like Citigroup, AIG and Bank of America — and in turn helped those companies slowly crush their smaller competitors, leaving the major Wall Street firms with even more money and power to lobby for further deregulatory measures. "We're moving to an oligopolistic situation," Kenneth Guenther, a top executive with the Independent Community Bankers of America, lamented after the Gramm measure was passed.

[bdamomma]

21. kick

[Kansas Wyatt]

22. Don't you all get it?

This is the end result, or the blow-back, from the last 8 years of smoke & mirrors. Everyone knew it has been very shitty for the last 8 years, but BushCo. still propped up evidence and alleged winners who claimed the economy was booming.

Everyone knows that the system has always been rigged to favor the upper class for the last 30 years, but with that model of the upper class feeding off the middle class, the middle class cannot be sacrificed and gutted on a wholesale level. Which is exactly what has been taking place the last 8 years to make it appear like the economy was "never better" during the Bush years. BushCo. & Republicans, Inc. were running the Middle Class Slaughter House around the clock and they didn't even bother to hose the place down in between shifts.

To put it another way, Boy Wonder was running out of gas, so he decided it was better to floor it and peg the speedometer, in hopes of gaining enough speed to continue coasting the rest of the way on a long road trip. Now we are stranded and out of gas, while Boy Wonder is having a good time at the Last Chance Saloon 20 miles back. We won't get into all the mechanical damage ditches can do to autos, when they are driven in.

Those who made gains during the last 8 years, you were the beneficiary of ill gotten gains, even if it was indirectly. Most people lost their smoke & mirror gains when the market crash landed. Others who knew about the ill gotten gains, removed their money from that risk. FDR said that he saved capitalism from itself with his New Deal. Just like all of us know, a Newer Deal is over-due, but it's purpose should not be to save capitalism this time. It should be a Newer Deal to save this country and it's people from capitalism.

[kentuck]

23. Yeah, but my 401K is supposed to be safe.

It is for my retirement. I don't want to lost that.