Fiscal Crisis and Media Spin: simple explanation part two

Yes, yes, a comment on nakedcapitalism, (one of my favorite blogs and so topical now, wouldn't you say) got my brain working in a tizzy (again).

This is about the big posturing by the "angry" media and "oh so virtuous" politicians.

Why is everybody making such a big deal about this $160 million, when we really should be up in arms about the bonuses that were paid out on FICTITIOUS earnings over the past 7 years!

This is just a big distraction! It's a circus.

By the by, do you know how it was possible for AIG (and others) to give themselves such big bonuses using our tax money?

Because our politicians stripped measure restricting bonuses from bailout legislation:

A new revelation in the scandal surrounding AIG's decision to pay multi-million dollar bonuses to executives -- a provision that would have restricted companies receiving federal government bailout aid from paying bonuses was quietly stripped from a bill last month.

The measure, introduced by Sen. Ron Wyden (D-OR), was removed by negotiators in a late-night, close door meeting. In the negotiations, senators agreed to limit executive compensation but decided to forgo barring excessive bonuses -- in fact, they specifically exempted it.

Ohhh, the phrase "late-night, closed door meeting" just illustrates how our fantastic, magical "democracy" works - in late night meetings, behind closed doors.

Do you follow the narrative here?

Essentially, the same people who specifically stripped any and all control and limits on how the bailout money could be used by the corporations' executives and officers (in effect, the bailout is "free money", to be used by them as they see fit, with no oversight whatsoever) are now acting outraged that the executives used our tax bailout money as they saw fit - in part, to give themselves big bonuses (for destroying this country's - and the world - economy, I guess).

And did you catch the "D" after the name - as in Ron Wyden (D-OR)?

That's right - it was a democrat who did this.

By the by, keeping with our "lets keep this shit simple" theme, do you happen to know which politicians AIG made financial contributions to?

Why, per examine.com, quoting opensecrets.org, they were Barack Obama and Chris Dodd (democrat, of course).

Senator Barack Obama received a $101,332 bonus from American International Group in the form of political contributions according to Opensecrets.org. The two biggest Congressional recipients of bonuses from the A.I.G. are - Senators Chris Dodd and Senator Barack Obama.

The A.I.G. Financial Products affiliate of A.I.G. gave out $136,928, the most of any AIG affiliate, in the 2008 cycle. I would note that A.I.G.’s financial products division is the unit that wrote trillions of dollars’ worth of credit-default swaps and "misjudged" the risk.

My, my, my, isn't that interesting.

Also, my dear American (or not) reader, you have heard of this wonderful company/investment bank/whatever the fuck they are, called Goldman Sachs?

Henry Paulson bio on Wikipedia:

Henry Merritt "Hank" Paulson Jr. (born March 28, 1946) served as the 74th United States Treasury Secretary and is a member of the International Monetary Fund Board of Governors. He previously served as the Chairman and Chief Executive Officer of Goldman Sachs.

What about the current United States Secretary of the Treasury, Timothy F. Geithner?

After completing his studies, Geithner worked for Kissinger and Associates in Washington, D.C., for three years and then joined the International Affairs division of the U.S. Treasury Department in 1988.
(...)
He was Under Secretary of the Treasury for International Affairs (1998–2001) under Treasury Secretaries Robert Rubin and Lawrence Summers
(...)
In 2002 he left the Treasury to join the Council on Foreign Relations as a Senior Fellow in the International Economics department.
(...)
In October 2003, he was named president of the Federal Reserve Bank of New York [the most powerful branch of the FED - NY FED is most important, a more equal among equals, so to speak - AG].

In March 2008, he arranged the rescue and sale of Bear Stearns; in the same year, he is believed to have played a pivotal role in both the decision to bail out AIG as well as the government decision not to save Lehman Brothers from bankruptcy

So Geithner and Paulson arranged to have a competitor of Goldman Sachs, Bear Stearns and Lehman Brothers, to NOT receive our tax bailout money.

Wikipedia:

Paulson has described Geithner as "[a] very unusually talented young man...[who] understands government and understands markets."

So what about Goldman Sachs, the best connected thieves' organization in America?

Whose people are now in a position of power in the Obama administration (Paulson is just one example).

But, you ask, you do not understand - how does Goldman Sachs benefit from the AIG getting bailed out?

Reuters explains:

NEW YORK (Reuters) - American International Group funneled over $90 billion of taxpayer bailout funds to various U.S. and European banks, but the biggest beneficiary was politically connected Goldman Sachs Group Inc.

Suspicions of potential conflicts of interest and favoritism have been fueled by $12.9 billion AIG paid to Goldman Sachs -- where then-Treasury Secretary Henry Paulson had previously worked as chief executive -- in the months after the insurer was rescued by the government last September.

Goldman, for its part, has insisted it did not need the bailout money because it was "always fully collateralized and hedged."

Looking at that last sentence, and thinking somewhat logically in my (at this point) catatonic state, I get the following conclusion in my feverish, maniacal brain:
Since Goldman Sachs says that they are/were "always fully collateralized and hedged", then fuck it, they do not need our tax bailout money.

But will they be called on that $12.9 billion?

Crickets... they chirp.


What a gang of thieves, huh?

But you keep looking at the 1% of the total bailout money, like the media propagandists and the politicians doing the political kabuki theatre want you to (including Jon Stewart whose writers for the show dropped the ball on this one).

And do not ask any other questions which are somewhat uncomfortable (bears repeating - I love the very simple explanation in these 3 questions:

Why are we pumping taxpayer dollars into these companies to make their imaginary wealth real?

Why didn't the SEC detect any of this, including the Madoff ponzi scheme?

Why aren't those questions asked every fucking day on the media, but instead we get the outrage de jour everyday?

But never mind all that.

Never mind this great quote (from a reader of nakedcapitalsm - enough plug in of that blog, eh?):

Why is everybody making such a big deal about this $160 million, when we really should be up in arms about the bonuses that were paid out on FICTITIOUS earnings over the past 7 years!

This is just a big distraction! It's a circus.

Stick to the contrived meme, the narrative that is played out for you, the viewer of our media, and go shout about the 1% of the bailout money.