Terrorist Bankers

February 13, 2009, 8:50 a.m.

Understandable -- and Productive -- "Public Anger"
(brought to you by FromDC2Iowa.blogspot.com*)
After eight years of hunting, America's top intelligence and law enforcement agencies have finally found the most deadly terrorists threatening our nation's national security.

Who are they?

Bankers.

I'm not kidding. Read on.

There's been an almost "boys will be boys" reaction in Washington to the destruction of the American economy by those very generous campaign contributors who call themselves "masters of the universe." Few have been removed from power or had their pay cut, none (to my knowledge) has been required to pay back any of their past obscenely large and ill-gotten gains, and a statistically insignificant number have even apologized for the harm they've caused -- let alone been prosecuted and sent to prison.

There are undoubtedly "a few good apples" somewhere in that rotten barrel, but they are few and far between.

For the most part, those whose incompetence, irresponsibility, immorality, criminality and greed have created widespread hardship on the American people (and much of the rest of the world) have been very slow to "get it." "Why do they hate us?" they seem to be asking from the comforts of their $1 million redecorated offices, $50 million private jets, and posh resort retreats.

Well, now that "public anger" has become a political force of some consequence at least some of our elected officials (to whom these guys must come for more trillions of our taxpayer dollars) are trying to explain it to some of their most generous contributors.

"'Alleviating that public anger, not with mumbo jumbo but with reality, is essential if we’re going to have the support of the country,' House Financial Services Committee Chairman Barney Frank said today at a hearing in Washington," speaking to eight CEOs of some of the nation's largest banks. Alison Vekshin, "Congress Tells Bank Chiefs to Lend, Ease Public Anger," Bloomberg, February 11, 2009.

At long last we may now have even more basis for our "public anger" and a sense of accomplishment for expressing it.

No more "boys will be boys."

Dennis C. Blair, our new intelligence czar (Director of National Intelligence), speaking for the federal government's "intelligence community" has just told the Senate Intelligence Committee that the wreckage caused by our nation's irresponsible, selfish CEOs has now "outpaced terrorism as the most urgent threat facing the United States" (excerpts from the Times' February 13 story below).

Apparently the FBI agrees. "With thousands of [corporate and "an even bigger mountain of" mortgage] fraud investigations under way [including "some of the biggest names in corporate finance"], the FBI is considering shifting agents away from counterterrorism work to help sort through the wreckage of the financial meltdown. . . ." (more excerpts from the Bloomberg report below).

Perhaps our elected officials -- who quickly spring to action with trillions for the nation's bankers, but tell us it will be "a few weeks" before they will be able to focus on the human carnage those bankers have caused among the officials' constituents -- will be willing to give a little more attention to prosecuting these terrorists and criminals among us, normally very handy and popular targets for politicians, now that they have been identified as such by the intelligence and crime fighting agencies of our government.

Watch this space. Let's see.

Here are excerpts from the referenced stories:

Mark Mazzetti, "Global Economy Top Threat to U.S., Spy Chief Says," New York Times, February 13, 2009

The new director of national intelligence told Congress on Thursday that global economic turmoil and the instability it could ignite had outpaced terrorism as the most urgent threat facing the United States.

The assessment underscored concern inside America’s intelligence agencies not only about the fallout from the economic crisis around the globe, but also about long-term harm to America’s reputation. The crisis that began in American markets has already “increased questioning of U.S. stewardship of the global economy,” the intelligence chief, Dennis C. Blair, said in prepared testimony.

Mr. Blair’s comments were particularly striking because they were delivered as part of a threat assessment to Congress that has customarily focused on issues like terrorism and nuclear proliferation. Mr. Blair singled out the economic downturn as “the primary near-term security concern” for the country, and he warned that if it continued to spread and deepen, it would contribute to unrest and imperil some governments.

“The longer it takes for the recovery to begin, the greater the likelihood of serious damage to U.S. strategic interests,” he said. . . .

Mr. Blair delivered his assessment to the Senate Intelligence Committee, in what was the new administration’s first public recitation of the national security challenges facing the United States. . . .

Mr. Blair’s focus on the world economy was a surprise to some senators. . . ."

Devlin Barrett, "FBI may shift counterterror agents to anti-fraud," Associated Press/Yahoo! News, February 11, 2009:

With thousands of fraud investigations under way, the FBI is considering shifting agents away from counterterrorism work to help sort through the wreckage of the financial meltdown. . . .

[FBI Deputy Director John] Pistole told Congress his investigators have 530 active corporate fraud investigations, and 38 of them involve some of the biggest names in corporate finance — cases directly related to the current crisis.

In addition, FBI investigators are tackling an even bigger mountain of mortgage fraud cases in which hundreds of millions of dollars may have been swindled . . . more than double the number of such cases just two years ago . . . industry professionals generating fraud schemes that could total as much as hundreds of millions of dollars . . . 'lawyers, brokers or real estate professionals . . . systematically trying to defraud the system,' Pistole said . . . [including] some instances of organized crime getting involved in mortgage fraud . . ..

"If You Can't Trust Your Banker . . ."

[Credit: "Shady Deal at Sunny Acres," Maverick, 2nd Season, 1958. The popular early television series, Maverick, "starring James Garner and Jack Kelly, remains the most famous and widely discussed episode of the Western comedy television series Maverick. Written by Roy Huggins and Douglas Heyes and directed by Leslie H. Martinson, this 1958 second season episode depicts gambler Bret Maverick (James Garner) being swindled by a crooked banker (John Dehner) after depositing the proceeds from a late-night poker game, then recruiting his brother Bart Maverick (Jack Kelly) to mount an elaborate sting operation to recover the money." It's also the source of two oft-quoted lines: "If you can't trust your banker, whom can you trust?" and "I'm working on it." See, "Shady Deal at Sunny Acres," wikipedia.org.]

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Related Blog Entries on Global Economy and Bailouts
Nicholas Johnson, "Who's The Reason?" September 5, 2008

Nicholas Johnson, "How Much Do You Owe the Chinese?" September 6, 2008

Nicholas Johnson, "Taxpayer Rescue," September 15, 2008

Nicholas Johnson, "Global Finance: The Great Fountain Pen Robbery," September 21, 2008

Nicholas Johnson, "Alternatives to 'The Plan,'" September 28, 2008

Nicholas Johnson, "Better Alternatives to Congress' Bailout Plan," October 2, 2008

Nicholas Johnson, "Can We Trust Our Bankers?" October 29, 2008

Nicholas Johnson, "It's the Economy," November 7, 2008

Nicholas Johnson, "Jobs, Not Unemployment, Key to Recovery," November 8, 2008

Nicholas Johnson, "Trust Your Instincts, Auto Bailout's Terrible Idea," November 14, 2008

Nicholas Johnson, "Auto Bailout: An Open Letter to Congress," November 19, 2008

Nicholas Johnson, "A Trillion Here, a Trillion There," November 20, 2008

Nicholas Johnson, "FromDC2Iowa's Weekend Edition," November 21, 2008 ("The Answer to Global Economic Collapse" and "Auto Bailout: 'Show Me the . . . Plan'")

Nicholas Johnson, "Citigroup Deal Stinks," November 25, 2008

Nicholas Johnson, "Only Select Few Are Thankful for Trillions," November 27, 2008

Nicholas Johnson, "Auto Loan Makes Too Few Dollars Even Less Sense," December 4, 2008

Nicholas Johnson,"Quick Fix for the Economy," December 12, 2008

Nicholas Johnson, "You Know It's Serious When We Start Laughing," December 15, 2008

Nicholas Johnson, "A Car in Every Garage," December 16, 2008

Nicholas Johnson, "Forget Madoff, Focus on Bernanke," December 17, 2008

Nicholas Johnson, "Of Theaters and Automobiles," December 20, 2008

Nicholas Johnson, "There's Bad News and . . . and . . .," December 21, 2008

Nicholas Johnson, "Et Tu, Toyota?" December 22, 2008

Nicholas Johnson, "Revolting Developments," December 23, 2008

Nicholas Johnson, "First Things First," January 8, 2009

Nicholas Johnson, "Why We Should 'Point Fingers' and 'Look Backwards,'" January 13, 2009

Nicholas Johnson, "Fool Me Twice," January 14, 2009

Nicholas Johnson, "Economic Sorrows and Solutions," January 27, 2009

Nicholas Johnson, "No More for Wall Street!" February 1, 2009

Nicholas Johnson, "Hang Onto Your Wallet," February 5, 2009

Nicholas Johnson, "Quick Fix: Support Jobless, Not Bankers," February 7, 2009

Nicholas Johnson, "Geithner's Same Old, Same Old," February 10, 2009

Nicholas Johnson, "Terrorist Bankers," February 13, 2009
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* Why do I put this blog ID at the top of the entry, when you know full well what blog you're reading? Because there are a number of Internet sites that, for whatever reason, simply take the blog entries of others and reproduce them as their own without crediting the source. I don't mind the flattering attention, but would appreciate acknowledgment as the source -- even if I have to embed it myself. -- Nicholas Johnson

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Can We Trust Our Bankers?

October 29, 2008, 9:00, 10:15 a.m.

Looking for "The Economics of Conservation," October 28, 2008? Click here.

"If You Can't Trust Your Banker . . ."


[Credit: "Shady Deal at Sunny Acres," Maverick, 2nd Season, 1958. The popular early television series, Maverick, "starring James Garner and Jack Kelly, remains the most famous and widely discussed episode of the Western comedy television series Maverick. Written by Roy Huggins and Douglas Heyes and directed by Leslie H. Martinson, this 1958 second season episode depicts gambler Bret Maverick (James Garner) being swindled by a crooked banker (John Dehner) after depositing the proceeds from a late-night poker game, then recruiting his brother Bart Maverick (Jack Kelly) to mount an elaborate sting operation to recover the money." It's also the source of two oft-quoted lines: "If you can't trust your banker, whom can you trust?" and "I'm working on it." See, "Shady Deal at Sunny Acres," wikipedia.org.]

At the outset, let me make clear that I don't mean to be questioning the trustworthiness of our local bankers (notwithstanding the physical similarity between one of them and John Dehner). The "bankers" I'm talking about are those in Washington, represented by the President, his Secretary of the Treasury, those "to get along go along" campaign-contribution-receiving members of the House and Senate, and their Wall Street collaborators.

Given that they have fallen for the same "Chicken Little, 'the sky is falling, the sky is falling'" rhetoric from Bush on the economy that he used for the Iraq War,


[Credit: Jon Stewart, "The Daily Show," September 25, 2008.]

apparently what this country needs is a Washington invasion of chiropractors to strengthen their spines.

Europe is still providing examples of how to go about this bailout responsibly.

For example, in a story of some local interest we learn that the Dutch government is bailing out the corporate parent of Cedar Rapids' AEGON USA. Associated Press, "Netherlands Gives Aegon a $3.7 Billion Bailout," New York Times, October 28, 2008 (in this morning's Gazette as, "AEGON Gets $3.7 Billion Government Investment," The Gazette, October 29, 2008, p. B7 -- apparently Europe's "bailout" is America's "investment").

Note that the European AEGON parent has canceled dividends and executive bonuses for the rest of the year.

Note also that the government has given "Dutch Uncle treatment" a whole new meaning by simply nationalizing the biggest Dutch financial institutions, ABN Amro and Fortis.

Nor has it simply given AEGON $3.7 billion. It has acquired 750 million shares of a new class of non-voting AEGON stock which, if converted to common stock would be nearly a 50% stake in the company. It will name two members of the board. The stock will pay a minimum of 8.5% annually. And if the company ever chooses to buy them back it will cost them $5.6 billion, not $3.7 billion.

Meanwhile, here in the good old U.S. of A. it looks like Secretary Paulson is weakening on his commitment to obtain taxpayer equity in exchange for the $700 billion bailout. Meanwhile, apparently the banks are taking the money -- designed to ease the credit crisis -- and instead of using it to make loans have decided they might better enrich themselves by using it to buy up other banks at a bargain, thereby creating even larger financial institutions that "we just can't afford to let fail."

And the auto companies, having already been given $25 billion (I believe), are now back in line for whatever they can get from wherever they can get it -- a part of the $700 billion "financial institutions" bailout, the additional $25 billion auto "just for the hell of it" fund, and some $5 billion from the Department of Energy for retooling to (hopefully) begin building cars that Americans would actually like to buy.

The roughly $10 billion in government funds to support a merger would be in addition to whatever funds would be allocated under an already-approved $25 billion program to provide low-interest loans to the auto industry for retooling to make more fuel-efficient cars. . . .

Moody's Investors Service cut its GM rating on Monday deeper into junk territory on the view that GM's liquidity would continue to erode into 2009. The ratings agency also cut Chrysler for similar reasons . . ..

GM has a market capitalization of just over $3 billion based on Monday's close and roughly $10 billion of outstanding debt. Chrysler's privately held auto operations were valued at zero last week by Daimler AG (DAIGn.DE) . . ..

GM's shares have slumped nearly 80 percent this year and its market value has dropped below what it was in 1929.

Jui Chakravorty Das and Kevin Krolicki, "GM seeks $10 billion in aid for merger: sources," Reuters, October 28, 2008, 12:06 p.m. ET.

Far be it from me to yield to the persuasive forces of cynicism and conspiracy, but doesn't it kind of remind you of two things:

(1) Civil disorder and riots, whether in Baghdad after our invasion or American cities 40 years ago, with store windows broken and looters running down the streets with anything that was not locked down that they can carry. Even the foxes have stopped guarding the chicken coops and opened the door to any and all to come take as many as they can carry. This Administration and their friends in Congress realize that change is most likely coming. If they intend to keep on getting they best get while the getting is good. Since when they opened the vaults at Fort Knox they discovered they were bare, and they don't want the wealthy to have to pay taxes, they've simply run up debt for our great grandchildren to pay, and then started paying this borrowed money to themselves as fast as they can between now and January 20 (Inauguration Day). Maybe not, but that's sure as hell what it looks like to me.

(2) An almost equally valuable byproduct -- certainly politically -- of this unrestrained theft from taxpayers involves one of the most effective strategies of those who would like to do away with government entirely -- except for making war (while enriching the weapons merchants). By running up astronomical levels of debt they can totally eliminate any and all "discretionary spending" by the president and Congress. Remember Bush's adviser, Grover Norquist? "To Norquist, who loves being called a revolutionary, hardly an agency of government is not worth abolishing, from the Internal Revenue Service and the Food and Drug Administration to the Education Department and the National Endowment for the Arts. 'My goal is to cut government in half in twenty-five years,' he says, 'to get it down to the size where we can drown it in the bathtub.'" Robert Dreyfuss, "Grover Norquist: 'Field Marshall' of the Bush Plan," The Nation, May 14, 2001 (online April 26, 2001).

It's a two-fer for them: riches beyond their wildest dreams of avarice, and a political body blow to any Obama Administration. After all, what will Obama's options be? ("You can't always get what you want; but you can get what you need"? Not if "Change We Need" is "Change We Can't Afford.")

1. He can capitulate to the neocons' strategy; fail to put any of his proposals in place, and cut back even more on the few social programs that still exist, further extending the gap between rich and poor and driving America ever closer to third-world demographics.

2. He can, irresponsibly, increase the national debt beyond the $10 trillion or more that Bush is leaving for him -- and the $55 trillion of unfunded future obligations -- and just hope that the Chinese, and other peoples with greater inclination to save than Americans, will continue to loan us money.

3. He can (a) pray for an economic recovery sufficient to radically increase federal tax revenues (without increasing tax rates), using the money to both pay down debt and provide at least pilot project-level funding for new programs, or (b) increase tax rates notwithstanding the lack of economic recovery.

There may be other options, but those are the only ones that immediately occur to me.

Of course, I may be too cynical. After all, "If you can't trust your banker, whom can you trust?"

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