above, for articles in
The Bottomless Bailout
by Ralph Nader
anybody in the federal government know or could know “who, what, where and when”
of the massive, complex, vertical, horizontal, global collapse of Wall Street
and its planetary tentacles in over 100 countries abroad? Step forward if you
exist! Uncle Sam needs you!
the multi-million dollar bailout of this financial mess and house of cards, this
phantom wealth mummy hitting air beyond the federal governments’ salvage
It is relatively easy to announce hundreds of billions of
dollars of corporate rescue programs here and hundreds of billions of
dollars of guarantees of corporate recklessness there and trillions of
dollars of assorted stimulus, loan availabilities and foreclosure prevention
initiatives in all directions. Now comes the rubber hitting the
Where are the skilled people to be hired by the federal
agencies—the administrators, field implementers, auditors, financial whizzes
able to understand the complexity of greed and over-reach; the inspectors,
prosecutors and contract negotiators to name a few categories?
words, how are a hurried President Obama and his deputies going to rapidly build
up the infrastructure of the federal government itself to advance all
these “public works” efficiently and to avoid expenditure disasters amidst a
potential orgy of waste, fraud and abuse by the coast-to-coast
So many of the federal government’s functions have been
contracted out to corporations and consulting firms under Clinton and the Bushes
that there is a serious dearth of skilled civil servants. Moreover, Obama has
indicated he wants this work done by an accountable government and not by
Halliburton-type outside contractors at greater expense to
Knowing and doing have to go hand in hand.
Some Congressional Committees have finally gotten around to asking the basic
questions about what is actually going on inside companies like the giant
financial conglomerate AIG. Since the Goliath’s near collapse in September, the
federal government has committed $160 billion to keep it from splattering its
reckless red ink over small businesses, municipalities, 401(k) plans,
policyholders and of course the Fortune 500 big companies led by the omnipresent
Goldman Sachs bank.
At a Senate hearing on March 5, 2009 to review yet
another $30 billion in rescue funds, Senators from both parties demanded that
the Federal Reserve make public the names of the parties benefiting from all
this taxpayer largesse. These include the derivatives trading partners (eg
credit default swappers) who have received tens of billions of these dollars
passing from Washington through AIG to them.
Senators Chris Dodd, Richard
Shelby and Jim Bunning went after Donald L. Kohn, the vice-chairman of the Fed
board of governors who finally promised he would ask the other governors to
Surprisingly, the Wall Street Journal editorial writers
weighed in three days earlier about this fourth ever-sweeter rescue of AIG. in
six months. In an editorial titled “AIG’s Black Box” the Journal thundered:
“Perhaps someday the feds will even explain to taxpayers which AIG creditors had
to be rescued and why…try figuring out exactly who benefits when taxpayer money
arrives at the insurance giant.”
Besides rebuilding the federal workforce
and finding out what is going on inside casino capitalism begging for bailouts,
the Obama Administration is wading into an administrative nightmare that could
run through trillions of mis-directed dollars and not turn around a deep
Recession plunging toward Depression.
When dealing with esoteric gambling
chips called “derivatives” that are bets on bets on debts on debts, more than
astute regulations and prosecutions are needed to punish, disgorge and deter
present and future self-paid corporate crooks looting and draining other
people’s pensions and savings. What is essential is that the federal surgeons
have to know just where to apply their scalpel on the continuum spanning the big
predators to the millions of direct and indirect victims.
So, during the
next Congressional hearings featuring government witnesses from the Federal
Reserve, the Treasury Department and the securities, insurance and banking
regulatory agencies, the Senators should start with four direct
1. Just what is it that you do NOT understand about what is
going on inside this widening Wall Street mess?
2. Why don’t you understand
what you need to know?
3. How are you going to use your powers to achieve
4. Finally, if these corporations like AIG are too big to
fail, too secret to fail and overwhelmingly global in structure and operations,
why aren’t you asking other governments to pitch in with their own rescue
packages and tell you what they know?
As one solid small town banker in
Indiana put it recently: “If these big companies are too big to fail, then
they’re too big.”
Reprinted with the author's permission.
Posted April 23,
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