Forget about the $700 billion dollars in federal aid known as TARP that went to the banksters back in 2008, says Thom Hartmann. That was just the tip of the iceberg. According to new secret documents recently released by the Federal Reserve, between 2007 and this year, the Fed pumped more than $3 trillion into the hands of banks and businesses, to stave off financial collapse. Most of that money came in the form of short term lending -- banks were given billions of dollars at near zero-percent interest rates, which is essentially free money, insofar as the banks can then turn right around and buy Treasury bonds (from the same government that just loaned them the money at virtually zero-percent interest rates) so that they can then began to collect something like 4% return on investment -- or more if they decide to gamble in the credit markets or the stock market. This then is a cleverly disguised multi-billion dollar give-away, or theft, from us to them.
So who, specifically, benefited from this secret low-interest lending program by the Fed? The usual suspects: Citigroup, Lehman Brothers, and Merrill Lynch. "Well connected" foreign banks took advantage too -" banks like UBS of Switzerland and BNP Paribas of France. Also, American businesses like McDonalds, Verizon, GE, and Caterpillar received some of the cake as well. Suntrust Bank received about $7.5 billion, and received it directly from their own CEO, who just happened to also be serving on the Board of Directors at the Atlanta Federal Reserve at the time! At the height of this secret low-interest lending program -- in 2008 -- the Fed had made over $1.5 trillion in outstanding loans of this kind. This then is a cleverly disguised multi-billion dollar give-away, or theft, from us to them.
The release of these documents, showing more than 21,000 transactions unknown until now, highlights the need for a more transparent Federal Reserve, which is of course an issue that's been advanced by members of Congress like Ron Paul in the House and Bernie Sanders in the Senate. It also shows just how strong Wall Street's grip on our government is.
Banksters profited off this program and now sit on mountains of cash, to no small extent as a result of this until-now secret wealth transference program.
Meanwhile small businesses suffer around the country and can't get the loans they desperately need, which in ordinary times they would certainly get. And the very same financial institutions that received loans at an interest rate of less than a half percent, are now charging their credit card users 30% interest to borrow some of that money back! And their lobbyists are doing everything they can to crush Elizabeth Warren's new baby in its cradle. I refer of course the new Consumer Financial Protection Agency that President Obama as tasked her with setting up. The banksters know that the success of this agency, especially if it stays in her hands, will cost them hundreds of billions of dollars in lost profits -" profits which they would be able to continue squeezing out of unprotected and unwary consumers should her new agency somehow be scuttled, sidetracked, or otherwise be made to fail.
Banksters spend many millions of dollars each year lobbying Congress in opposition to financial reform, with much of that lobbying money borrowed at near-zero percent interest from the Fed.
All this is, from the point of view of the society as a whole, nothing less than insanity.
Bubble economy thievery and Tea Party blindness to it
According to Matt Taibbi, the United States has become mired in a complex web of economic and thievery-based instruments that are directly tied to the bubble economy he describes. Some economists regarded these instruments as potential means to assist Americans in buying homes, but in fact these instruments enabled the fraudulent behavior that wrecked the U.S. economy. Making matters worse is the dearth of understanding by the public, and the exploitation of that misunderstanding by particular politicians, according to Taibbi. His latest book, Griftopia: Bubble Machines, Vampire Squids and the Long Con That is Breaking America, identifies some of the personalities and looming problems within our very troubled financial and political system, and is highly recommended by preeminent scholar of this whole phenomenon, Danny Schecter, in an article that was recently summarized on the front page of OpEdNews.
In his book, Matt talks about the whole silent majority notion or meme that is playing on a kind of Southern white resentment. It's the notion/meme that "we obey the law, we pay taxes, we work and somehow it's all these other people that are reaping the benefits -- these people who don't want to work, these people who are immigrants, and who come and steal our social services" (Very useful rhetoric in getting people to not focus on the various Wall Street scams that are surreptitiously robbing them blind.)
In essence, Matt's book is about heretofore secret corporate-government operations and Wall Street criminality over the last ten or fifteen years. The politics are just one element of the crime. Another element is the propaganda campaign through which the PR agencies of the banksters could get ordinary people to not pay attention to what was going on. Tea Party ignorance and gullibility provided an example of exactly how that works. Wall Street found a way to convince these people to back the Wall St. political agenda and the deregulatory aims of banksters, and it all took place under the Reagan-blessed rubric of, "we're going to get the government off our backs."
Like anyone else, Tea Partiers want their food to be clean, don't want to drink poisoned water, and want to have cops to protect them from burglars, and yet they've been brainwashed into believing that the government causes all of their problems. What they fail to see is that in terms of its magnitude, this new, space-age global financial thing dwarfs all of their tea issues. And there is no politician that's speaking to them about it, which is the really depressing part. In addition, the mass media have not really done a very good job, either, of explaining this to them, or to anyone else for that matter.
The contradiction that is fundamental to American politics
On the one hand we have this propaganda about how government
has no place in the economy whatsoever: "There should be no regulation;
the government's only rule should be in the armed forces and the police." Then too, you hear all this foolish talk in
the Tea Party now, about strict constitutionalists -- that the government
should abolish every department except for the army. Alan Greenspan believed all this, on the
surface, but at the same time that he was preaching this objectivist
proto-capitalist religion, he was
building a massive welfare state for Wall Street! It was and is a complete contradiction: "Get the government off our backs," but also,
"Let's make the government into a permanent insurance policy for rich people."
The most important thing with Greenspan, as it pertains to the current problem, is his attitude towards the derivatives scheming that nearly bankrupted our country. He became the Fed chairman at the very beginning of the age of derivatives. This was right before the "87 stock crash, which was caused by derivatives, which were these computerized financial instruments that were pegged to transactions that derived from, and were therefore derivative to, other more fundamental market transactions. Example: a bet on whether an insurance policy (like a collateralized debt obligation or CDO) was going to be paid off -" the CDO insurance policy being a fundamental market transaction, the bet deriving from it and therefore being derivative to it. Greenspan completely missed the powerful way that this grand new casino of derivatives-betting was going to affect the economy as a whole.
In the early "90s, there was a series of disasters, including the Orange County disaster, that were caused by a variety of these (derivative) instruments, such as the interest rate swaps and foreign exchange swaps. Greenspan and the bankers of the Fed never understood this stuff. They thought that these instruments were just devices for creating more liquidity, and Greenspan persistently went before Congress and said that we do not need more regulation of these (derivative) instruments. Later on in the year 2000, he became a pivotal figure in affirmatively deregulating these forever, in a law called the Commodity Futures Modernization Act. He was very much the driving force behind that, which then led to the mortgage crisis. That's where derivatives really blew up and where we saw these collateralized debt obligations and other fancy devices that were created to disguise crappy sub-prime mortgages as AAA-rated debt. But he actually thought that they were just harmless instruments that banks could use to make a little bit more money. He failed to see the catastrophic potential.