Wednesday, November 19, 2008

Mission Accomplished - Again

Did you like the "Free Fraud Zone" in Baghdad where the Bush administration handed out criminally over-priced, bid-free contracts to the likes of Halliburton, awarded new contracts to proven frauds, and lost over $9 billion -- we mean, just lost it? Well, then, you're just going to love the "New Trough" for Wall Street that the Bush administration is filling with your money.

Award-winning reporter and author Naomi Klein is all over it:
See if any of this sounds familiar: As soon as the bailout was announced, it became clear that Treasury officials would hire outsiders to perform their jobs for them — at a profit. Private companies wanting to help manage the bailout were given just two days to apply for massive, multiyear contracts. Since it was such a mad rush — after all, the entire economy was about to implode — there was no time for an open bidding process. Nor was there time to draft rigorous rules to make sure that those applying don't have serious conflicts of interest. Instead, applicants were asked to disclose their conflicts and to explain — and this is not a joke — their "philosophy in fulfilling your duty to the Treasury and the U.S. taxpayer in light of your proprietary interests and those of other clients." In other words, an open invitation to bullshit about how much they love their country and how they can be trusted to regulate themselves.
You know the rest... the same Wall Street geniuses who sliced-and-diced mortgages into unrecognizable goo and then re-packaged the detritus into derivative contracts, and the same genius banks that bought those derivatives without a clue what they were worth, are now being handed the keys to Fort Knox -- no strings attached.

"It didn't have to be this way," Klein explains, as our British cousins well know:
Five days before Paulson struck his deal with the banks, British Prime Minister Gordon Brown negotiated a similar bailout — only he extracted meaningful guarantees for taxpayers: voting rights at the banks, seats on their boards, 12 percent in annual dividend payments to the government, a suspension of dividend payments to shareholders, restrictions on executive bonuses, and a legal requirement that the banks lend money to homeowners and small businesses.

In sharp contrast, this is what U.S. taxpayers received: no controlling interest, no voting rights, no seats on the bank boards and just five percent in dividend payouts to the government, while shareholders continue to collect billions in dividends every quarter. What's more, golden parachutes and bonuses already promised by the banks will still be paid out to executives — all before taxpayers are paid back.

How much more of the public's money can the Bush administration squander? January 20 can't come fast enough.

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