great wealth wall street scam aig bailout

Should Goldman Give Back $2.9 Billion to Taxpayers?
banksters financial regulations fraud financial terrorists mortgage giants

Will banksters get away with it?

As Freddie Mac returns to Congress for more bailout, and Wall Street pays record bonuses, how can any of this be legal, moral, or healthy for the economy? We trim, blend, and append five 2011 articles from: (1) Washington Examiner, Feb 28 on George Will by Timothy P. Carney; (2) McClatchy Newspapers, Feb 16, on Goldman by Gregg Gordon; (3) Al Jazeera, Feb 26, on fraud by Danny Schechter; (4) AP, Feb 24, on Freddie Mac by Marcy Gordon; and (5) a request for videos from RestoreTheRepublic by Gary Franchi.

by T. Carney, by G. Gordon, by D. Schechter, by M. Gordon, and by G. Franchi

The government is so big, so deeply involved, everywhere you or it turns … When government decisions allocate great wealth and opportunity, great wealth will be spent on influencing government decision-making. It just follows as night to day.

To see the whole article, click here

JJS: And great wealth has been spent on squeezing every last drop out of land, into the coffers of Wall Street and its owners.

Goldman Sachs appears to have reaped a $2.9 billion windfall on a taxpayer-aided investment of a mere $20 million.

The Financial Crisis Inquiry Commission also exposed a potentially huge regulatory omission in the rescue of the insurance giant American International Group, which was the conduit for more than $90 billion in tax dollars to US and European banks.

While most banks that got billions of dollars from AIG simply relayed the money to clients they'd insured against losses, Goldman got to collect a more than 100-fold return on a number of securities that soured, because none of its clients was involved.

Congress could try to impose a tax on banks' profits from the bailout or adopt some other legislation to "claw back" the money, but it would be difficult because Goldman received it unconditionally, said Michael Greenberger, a University of Maryland law professor who specializes in complex securities. The New York Fed attached no strings to the money and let AIG decide how much Goldman would get.

Goldman paid $31.6 billion in employee bonuses in the past two years.

To see the whole article, click here

JJS: How did and does Wall Street get away with it?

Hats off to Matt Taibbi for asking in Rolling Stone: "Why Isn't Wall Street in Jail?"

After hundreds of bankers were jailed in the wake of the Savings and Loan crisis, financial fraudsters pushed for weakened regulations, so that their colleagues wouldn't be jailed next time. Practices that led to high profits and low accountability would be permissible and permitted. What was once illegal soon became "legal".

Prominent members of FIRE were appointed to top positions in the government agencies that should have cracked down on financial crime but instead looked the other way. The foxes were indeed guarding the chicken coop.

The industry invented, advertised, and rationalized exotic financial instruments as forward looking "innovation" and "modernization". Such “products” helped the banking system operate below the radar of monitoring.

Economist James Galbraith testified to Congress: "Economists have soft-pedaled the role of fraud in every crisis they examined, including the Savings & Loan debacle, the Russian transition, the Asian meltdown, and the bubble. They continue to do so now."

The industry promulgated economic theories and ideologies that won the backing of the economics profession which did not see the crisis coming, making those who favored a crackdown on fraud appear unfashionable and out of date.

Financial journalists increasingly embedded themselves in the culture and narrative of Wall Street by hyping stocks and CEOs. The "guests" routinely chosen by media outlets to explain the crisis were often part of it.

Convicted financial criminal Sam Antar said, "We have no respect for the laws. We consider your codes of ethics, and your laws, weaknesses to be exploited in the execution of our crimes. You subpoena documents, we destroy documents; you subpoena witnesses, we lie. Time is always on our side, not on, not on the side of justice."

Wall Street hires 25 lobbyists for every member of Congress. When abuses are exposed, politicians and corporate lawyers fashion settlements rather than prosecutions.

Cases are framed against individuals with a high standard of proving intent, not under other kinds of laws used to prosecute organized crime and conspiracies. By defining crimes narrowly, prosecutions became few and far between.

Republicans propose cutting the funding of regulatory bodies which would undercut recently passed financial reforms. One Commissioner of the Commodity Futures Trading Commission said, “The process will mean nothing, squat, diddley … if we get cut. There would essentially be no cop on the beat.”

Overseas, in Greece and England, and other parts of Europe, there has been an indictment of American corporate predators, especially Goldman Sachs. They are being denounced as "financial terrorists" and discussed in terms of their links to various elite business formations like the Bilderberg Group.

Progressives treated the crisis as if they were at a financial seminar at Harvard, focusing on the complexities of derivatives, credit default swaps, and structured financial products in language that ordinary people rarely can penetrate.

Workers rally to protect their jobs and pensions in Wisconsin, but pension funds have lost billions because of Wall Street scams. State governments have taken a big hit.

When will we call a crime a crime? When will we demand a jail-out, not just more bail-outs? Until we do, the people who created the worst crisis in our time will get away with the biggest rip-off in history.

To see the whole article, click here

JJS: And the bailouts don’t appear over yet.

Government-controlled mortgage buyer Freddie Mac managed a narrower loss of $1.7 billion for the October-December quarter of last year. But it has asked for an additional $500 million in federal aid -- up from the $100 million it sought in the previous quarter.

Freddie Mac also posted a $19.8 billion loss for all of 2010.

The government estimates its bailouts of Freddie and Fannie Mae in 2008 will cost taxpayers as much as $259 billion.

The Obama administration unveiled a plan earlier this month to slowly dissolve the two mortgage giants, to shrink the government's role in the mortgage system.

To see the whole article, click here

Gary Franchi (RestoreTheRepublic): Are you spurred to do something? You could make a youtube video telling the world what you are "Mad as Hell" about. More details about the webethon can be found at click here .

Once we get your video we will put it on the site so others can vote on it. The videos with the highest votes will be played on March 12 during our 12 hour LIVE broadcast webethon!

JJS: You might not have to get angry first. Instead, you might need a clear head to get to the root of the problem -- paying owners or sellers or lenders for land instead of paying the other members of one’s community.

When we pay a lone individual, we turn land into an object of speculation; thus vast amounts of those payments pile up on Wall Street. OTOH, when we pay our society, then nobody has a reason to speculate or withhold land from useful production. So society gets efficient land use and an even business cycle.

If we were to share the “rents” for land and resources, we could replace counterproductive taxes with land dues and replace addictive subsidies with a Citizens Dividend. It’s the policy of geonomics and delivers the economy that most of us want.


Editor Jeffery J. Smith runs the Forum on Geonomics.

Also see:

Let's add Land Speculators to the list, too

Why is so much wealth in the hands of the few?

Investigating Friedmanism at the Fed

Email this articleSign up for free Progress Report updates via email

What are your views? Share your opinions with The Progress Report:

Your name

Your email address

Your nation (or your state, if you're in the USA)

Check this box if you'd like to receive occasional Economic Justice announcements via email. No more than one every three weeks on average.

Page One Page Two Archive
Discussion Room Letters What's Geoism?

Henry Search Engine