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Wednesday, May 2, 2012

Frontline: "Money, Power and Wall Street"



Dear Arthur,

A few nights ago I watched Frontline's "Money, Power and Wall Street."  


Episode 1 begins with background on Wall Street's collapse and the collapse of the real estate market. 

Both economic craters were deliberately dug by the vicious Cowboy Capitalists who now rule the roost. 

I use the word "vicious" in its original sense: i.e., relating to attitudes and behaviors rooted in personal vice.


The first twelve minutes of "Money and Power" are slow-going. It is a slog to detail predatory capitalism's calculated Collapse deliberately induced by the creation of complex (and willfully worthless) "financial instruments" - investments so byzantine that only a few of the predators could descry the demon they'd conjured.

In essence, America's economic Collapse was guaranteed by the creation of unregulated, "in house" financial "products" whose operation was so obscure, so void of legal responsibility, and so hidden from regulatory view that a toxic stew of Self-Imposed Benightedness and Bewildering Complexity became fertile ground for greed, envy, pride, "lust" and "gluttony." 

These "deadly sins" propelled America to predictable ends - the destruction of people and institutions (Democracy not least among them). http://paxonbothhouses.blogspot.com/2012/04/ayn-rand-atheist-cornerstone-of-tea.html

Despite "Money and Power's" slow start, the story soon shifts to "high drama" when, of a sudden, it becomes clear that "the center no longer holds and things fall apart." 

Foundational to America's Undoing -- as well as the linchpin error made by Wall Street's "best and brightest" -- was the insane belief that risk can be "subdivided, packaged and sold" so that eventually, with enough "massaging" and enough "sub-division," risk can be eliminated - like dust motes blown by wind. (The Big Boys-and-Girls call this minute sub-division "tranching." http://en.wikipedia.org/wiki/Tranche

Fascism distills to the desire to make reality safer than God-Universe intended it to be. 

Under aegis of eliminating risk, fascists -- be they political or economic -- concoct "systems" that lure "the unwitting" with promises of fail-safe "security." (Ever wonder why they call stocks "securities?")


In Episode 2, free-marketeer "Hank" Paulson invokes "moral hazard" to justify "letting banks fail" - in particular Lehman Brothers

Paulson was cut from the same cloth as Obama Treasury Secretary, Timothy Geithner. Like Geithner Hank is a Wall Street "graduate." Both men suck the teat of financialization. 

In the last twenty years, the financial service industry overtook industrial production, then doubled industrial production. 

In comparison with sheer high-rolling speculation now typical of Wall Street, the actual production of necessary goods-and-services is increasingly secondary to The Bull's operation. 

Currently, placing wagers on bizarre, computer-driven games-of-chance is immeasurably more attractive to American financiers than nuts-and-bolts productivity. Those clients who were formerly the sole focus of Wall Street are now held in contempt. They are mere "marks" to be sold the same financial vomitus that Wall Street firms then bet against. In the proud parlance of high finance, traders talk about "ripping a client's face off." http://www.duffminster.com/times/node/810

Money and Power's third episode spotlights Geithner persuading Obama NOT to re-regulate the financial industry. 

And so, the implicit extortion of "Too Big To Fail" remains as dangerous as ever. 

Remarkably, Episode 3 notes that America's top five banks have sequestered more wealth since The Collapse than they controlled before The Collapse. Flabbergastingly, The Big Five are now responsible for fifty six percent (56%) of all financing in the "United" States. 

Already, the nation's big banks (encouraged by Geithner-Obama's unconditional exculpation) have resumed the same reckless practices that caused The Bush Breakdown. High-rolling financiers were not even slightly chastened and therefore are eager to resume the "killings" of yesteryear.

If this top-heavy condition continues, America will either endure an unprecedented Depression, or, we will have definitive proof, not only that God exists but that Deity is eager to intervene - miraculously - to save us from ourselves. 

Paulson's decision to let Lehman Brothers fail catapulted markets toward economic paralysis. 

Glimpsing this horror, Paulson immediately dumped his "free market" principles, TELLING Bush, TELLING bankers, and TELLING Congress that everything would go to hell (in the literal sense of the word) unless the United States immediately bailed the banks, the same organizations that first created, then swallowed, so much financial excrement that The System had to be put on life support, or very soon The Great Depression would seem a banner day on Wall Street.

There are few people I hold in such low esteem as Wall Street's predatory capitalists.

It is also no secret that I advocate strict legislation (in the spirit of Glass-Steagall) to prevent corporations "Getting Too Big To Fail." http://en.wikipedia.org/wiki/Glass_steagall

Specify precise "size thresholds" and - when exceeded - oblige corporations to spin off "sub-divivions" just as AT&T was required to spin off "The Baby Bells." http://en.wikipedia.org/wiki/Bell_System_divestiture 

Not only would obligatory sub-division be smart prophylaxis, it would give tremendous boost to competitive capitalism. 

Without courting regression to some neo-Dark Age (an eventuality not yet ruled out), Paulson's decision to "bail" the banks was the only way to prevent economic quadriplegia. 

As you know, the 750 billion dollar Wall Street bailout was enacted by George W. Bush. 

Less well known is that Bush surrendered Total Policy Control to Paulson, authorizing him to do whatever he thought necessary.

The reins were given to Paulson only after Bush's advisors informed him that "free markets" were no longer working. 

This bleak message was delivered to Dubyah while he was dressing for a nationally broadcast speech whose purpose was to reassure the nation that "free market mechanisms would soon solve the crisis." 

In his fine memoir, "Speech Less" -- http://www.amazon.com/Speech-less-Tales-White-House-Survivor/dp/0307463729 -- Bush speechwriter, Matthew Latimer, describes that fateful day when a phalanx of sheepish capitalists arrived at the White House to tell the president that nothing short of massive federal intervention could prevent national and global economies from cratering. 

And if they cratered, they would void everyone's net worth. 

Without immediate intervention on a scale never before imagined, The Economic End Time would make all previous hardship look like A Day in the Park

"Money, Power and Wall Street"
 is the perfect bookend to "Inside Job," the 2010 Oscar-winning documentary that is freely streamable at http://vimeo.com/23086688

***
In related vein...

The bipartisan authors of "It’s Even Worse Than It Looks" point out that Congress is now paralyzed by ideological posturing because many American (perhaps a majority) will not (and "existentially" can not) contemplate The Facts - http://www.npr.org/2012/04/30/151522725/even-worse-than-it-looks-extremism-in-congress  ///  http://www.thedailybeast.com/newsweek/2011/07/24/gop-antitax-dogma-endangers-the-country.html (Why do we no longer consider the facts? Consider "The Death of Facts in an Age of Truthiness" - http://www.npr.org/2012/04/29/151646558/if-a-fact-dies-in-the-forest-will-anyone-believe-it?ps=cprs)

Again, American ideologues in the tradition of Ayn Rand -- http://paxonbothhouses.blogspot.com/2012/04/ayn-rand-atheist-cornerstone-of-tea.html -- will not (and probably can not) bring themselves to examine "Money, Power and Wall Street" and "Inside Job" because once they set aside their straight-jacket, they confront the same metanoiac choice Paulson faced when - after glimpsing the abyss by "letting Lehman die" - he turned his back on Too Pure Principles to accommodate the inexorable demands of Reality. 

Pax on both houses,

Alan


Practicing Christian and free market Republican, Joe Heim, reverses position on Global Warming.



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