News ArticlesExcerpts of Key News Articles in Major Media
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The murder of President Kennedy was a seminal event for me and for millions of Americans. It changed the course of history. It was a crushing blow to our country and to millions of people around the world. Today, ... profound doubts persist about how President Kennedy was killed and why. My film "JFK" was a metaphor for all those doubts, suspicions and unanswered questions. Now an extraordinary new book offers the best account I have read of this tragedy and its significance. That book is James Douglass's JFK and the Unspeakable: Why He Died and Why It Matters. In his beautifully written and exhaustively researched treatment, Douglass lays out the "motive" for Kennedy's assassination. Simply, he traces a process of steady conversion by Kennedy from his origins as a traditional Cold Warrior to his determination to pull the world back from the edge of destruction. Many of these steps are well known, such as Kennedy's disillusionment with the CIA after the disastrous Bay of Pigs Invasion, and his refusal to follow the reckless recommendations of the Joint Chiefs of Staff in resolving the Cuban Missile Crisis. But many of his steps remain unfamiliar: Kennedy's back-channel dialogue with Khrushchev and their shared pursuit of common ground; his secret opening to dialogue with Fidel Castro (ongoing the very week of his assassination); and his determination to pull out of Vietnam after his probable re-election in 1964. All of these steps caused him to be regarded as a virtual traitor by elements of the military-intelligence community. These were the forces that planned and carried out his assassination.
Note: For more on this important book, click here. For an excellent collection of the best information, videos, books, and essays on the John F. Kennedy assassination, click here.
In an interview with SPIEGEL, epidemiologist Tom Jefferson speaks about dangerous fear-mongering, misguided, money-driven research and why we should all be washing our hands a lot more often. SPIEGEL: Do you consider the swine flu to be particularly worrisome? Jefferson: There are some people who make predictions year after year, and they get worse and worse. None of them so far have come about, and these people are still there making these predictions. Sometimes you get the feeling that there is a whole industry almost waiting for a pandemic to occur. SPIEGEL: Who do you mean? Jefferson: The WHO and public health officials, virologists and the pharmaceutical companies. They've built this machine around the impending pandemic. And there's a lot of money involved, and influence, and careers, and entire institutions! And all it took was one of these influenza viruses to mutate to start the machine grinding. SPIEGEL: Do you think the WHO declared a pandemic prematurely? Jefferson: Don't you think there's something noteworthy about the fact that the WHO has changed its definition of pandemic? The old definition was a new virus, which went around quickly, for which you didn't have immunity, and which created a high morbidity and mortality rate. Now the last two have been dropped, and that's how swine flu has been categorized as a pandemic.
Note: For lots more on the Swine Flu "false pandemic," click here.
A swine flu vaccine will be fast-tracked for use in Britain within five days once it is developed, and 130 million doses are on order. The Department of Health expects to have enough vaccine this year to give it to half the population. Further supplies will be available if needed. Each person will need two doses of the vaccine, unless one single jab is found to provide high rates of immunity. The first doses specific to the H1N1 swine flu virus are set to arrive in September and could be given regulatory approval in less than a week. The move came after the first British patient without underlying health problems died from swine flu, taking the number of swine flu-linked deaths in Britain to 15. Peter Holden, the British Medical Association’s lead negotiator on swine flu, said that ... although swine flu was not generally causing serious illness in patients, health officials were eager to start a mass vaccination campaign, starting first on groups that were susceptible to infection or prone to complications. It is likely that the elderly would be given a seasonal flu jab to guard against other circulating flu strains — as happens every year — as well as the swine flu vaccination. “The high-risk groups will be done at GPs’ surgeries. People are still making decisions over this, but we want to get cracking before we get a second wave, which is traditionally far more virulent,” Dr Holden said. It takes several weeks or months to make flu vaccines, which are cultured using chicken eggs. The European Medicines Agency said the fast-tracked approval procedure has involved trials of a “mock-up” vaccine and that the speed would not compromise patient safety. “The vaccines are authorised with a detailed risk management plan,” the agency said.
Important Note: Don't be fooled by this media propaganda. The same rushed attitude is what led to hundreds of deaths from the swine flu vaccine in 1976. Click here for a powerful CBS 60 Minutes video showing how a huge vaccine propaganda campaign by the government led to these deaths. And a recent article in The Scotsman quotes a spokesperson for the Scottish government saying "We have said that a vaccine is being worked on and the plan is to vaccinate everybody." Remember that the media is beholden to pharmaceutical companies for billions of dollars in advertising income. For lots more powerful information on this vital topic, click here.
Swine flu is a nasty disease, but no nastier than other strains of influenza. True, it has killed hundreds of people in Mexico; but even there, other variants of ‘flu virus have been far more lethal. Why, then, the urgent need to inoculate the entire British population? Perhaps I’m being overly cynical, but I can’t help wondering whether we’re being pushed into a wrong-headed course of action by the health scare industry. We’re told that Tamiflu needs to be taken at once, without a moment’s delay – meaning that anyone with a sniffle is likely to start glugging the stuff. We’re also told that the virus may mutate, meaning – conveniently – that we’ll soon need a new variety of medicine. In any case, these flu vaccines have short shelf lives. Good news for the drug manufacturers and their lobbyists; bad news for the taxpayer. Ministers must suspect that the danger is being exaggerated. Yet they would rather spend gazillions than run the slightest risk of being accused of not having done enough. And, needless to say, there isn’t a medical advisory body in the world that will say: “Actually, minister, considering everything in the round, the danger posed by this virus is minor, and we recommend the disbandment of this panel”. You may think I am being unconscionably flippant. But back in April, when newspapers were filling their pages with science fiction scenarios of a deadly epidemic, I suggested that, taking everything together, we weren’t going to die of swine flu. Who has the better track record so far: the Big Pharma doom mongers, or this blog?
Scientists have now documented behaviors like tool use and cooperative hunting strategies among whales. Orcas, or killer whales, have been found to mourn their own dead. Just three years ago, researchers at Mount Sinai School of Medicine in New York discovered, in the brains of a number of whale species, highly specialized neurons that are linked to, among other things, the use of language and were once thought to be the exclusive property of humans and a few other primates. Indeed, marine biologists are now revealing not only the dizzying variety of vocalizations among a number of whale species but also complex societal structures and cultures. Whales, we now know, teach and learn. They scheme. They cooperate, and they grieve. They recognize themselves and their friends. They know and fight back against their enemies. And perhaps most stunningly, given all of our transgressions against them, they may even, in certain circumstances, have learned to trust us. For all of their inherent elusiveness, the gray whales of Baja baffle scientists for the opposite reason: They cant seem to get enough of us humans. The question of why present-day gray-whale mothers, some of whom still bear harpoon scars, would take to seeking us out and gently shepherding their young into our arms is a mystery that now captivates whale researchers and watchers alike. There may be something far more compelling going on in the lagoons of Baja each winter and spring. Something, lets say, along the lines of that time-worn plot conceit behind many a film, in which the peaceable greetings of alien visitors are tragically rebuffed by human fear and ignorance. Except that in this particular rendition, the aliens keep coming back, trying, perhaps, to give us another chance.
Note: For many important reports from reliable sources on the amazing capabilities of marine mammals, as well as serious threats to their well-being and survival from human activities, click here.
Like others in the so-called good-food movement, [Will] Allen, who is 60, asserts that our industrial food system is depleting soil, poisoning water, gobbling fossil fuels and stuffing us with bad calories. Like others, he advocates eating locally grown food. But to Allen, local doesn't mean a rolling pasture or even a suburban garden: it means 14 greenhouses crammed onto two acres in a working-class neighborhood on Milwaukee's northwest side, less than half a mile from the city's largest public-housing project. And this is why Allen is so fond of his worms. When you're producing a quarter of a million dollars' worth of food in such a small space, soil fertility is everything. Without microbe- and nutrient-rich worm castings (poop, that is), Allen's Growing Power farm couldn't provide healthful food to 10,000 urbanites — through his on-farm retail store, in schools and restaurants, at farmers' markets and in low-cost market baskets delivered to neighborhood pickup points. He couldn't employ scores of people, some from the nearby housing project; continually train farmers in intensive polyculture; or convert millions of pounds of food waste into a version of black gold. With seeds planted at quadruple density and nearly every inch of space maximized to generate exceptional bounty, Growing Power is an agricultural Mumbai, a supercity of upward-thrusting tendrils and duct-taped infrastructure.
Note: For another excellent article on this most amazing man and the urban farming movement, click here.
Weapons inspector David Kelly was writing a book exposing highly damaging government secrets before his mysterious death. He was intending to reveal that he warned Prime Minister Tony Blair there were no weapons of mass destruction anywhere in Iraq weeks before the British and American invasion. He had several discussions with a publisher in Oxford and was seeking advice on how far he could go without breaking the law on secrets. Following his death, his computers were seized and it is still not known if any rough draft was discovered by investigators and, if so, what happened to the material. Dr Kelly was also intending to lift the lid on a potentially bigger scandal, his own secret dealings in germ warfare with the apartheid regime in South Africa. US television investigators have spent four years preparing a 90-minute documentary, Anthrax War, suggesting there is a global black market in anthrax and exposing the mystery suicides of five government germ warfare scientists from around the world. Director Bob Coen said: The deeper you look into the murky world of governments and germ warfare, the more worrying it becomes. We have proved there is a black market in anthrax. David Kelly was of particular interest to us because he was a world expert on anthrax and he was involved in some degree with assisting the secret germ warfare programme in apartheid South Africa. Dr Kelly was found dead in woods near his Oxfordshire home on July 17 2003. His apparent suicide came two days after he was interrogated in the Commons over his behind-the-scenes role in exposing the flaws in the sexed-up Number 10 dossier which justified Britain going to war with Iraq. Conspiracy theorists have claimed he was murdered.
Note: For more on the CBC documentary Anthrax War, click here. And to read about the strange deaths of 13 renowned microbiologists in the space of less than five months, click here.
For generations, The Washington Post has been a scrupulous watchdog over the capital’s cozy world of power networking. For a short time, it almost became the network’s host. The Post decided Thursday to cancel plans to charge lobbyists and trade groups $25,000 or more to sponsor private, off-the-record dinner parties at the home of its publisher, Katharine Weymouth, events that would have brought together lobbyists, business leaders, Post journalists and officials from the Obama administration and Congress. The revelation of the parties early Thursday morning by Politico.com appalled members of The Post newsroom and put the paper squarely in the cross hairs of journalism ethicists. In response, Ms. Weymouth canceled the first dinner, scheduled for July 21. A flier describing the events promised corporate sponsors conversation (“Spirited? Yes. Confrontational? No.”) at the Washington home of Ms. Weymouth. Sponsors were asked to pay $25,000 to attend an event, or underwrite a series of 11 for $250,000. The July 21 event, focusing on health care reform, “guaranteed” a “collegial evening” with health industry advocates, Post journalists covering the field and administration officials involved with its policies. The Politico article prompted an immediate newsroom reaction. The Post’s ombudsman, Andrew Alexander, wrote on his blog that “this comes pretty close to a public relations disaster.” With the print business in tough straits, many news organizations have turned to conferences and other events to raise revenue and their profiles. But the planned Post events seem particularly audacious, not only acting essentially as a paid conduit between lobbyists and government officials, but also providing sponsors the opportunity to make their case to Post journalists.
Note: This article shows the blatant manipulations going on behind the scenes in our major media. To learn just how compromised the media have been for a long time, click here to read about former Post owner Katharine Graham's connections with the CIA. And to understand how major news is suppressed, click here.
Americans who refuse to buy affordable medical coverage could be hit with fines of more than $1,000 under a health care overhaul bill unveiled Thursday by key Senate Democrats looking to fulfill President Barack Obama's top domestic priority. The Congressional Budget Office estimated the fines will raise around $36 billion over 10 years. Senate aides said the penalties would be modeled on the approach taken by Massachusetts, which now imposes a fine of about $1,000 a year on individuals who refuse to get coverage. Under the federal legislation, families would pay higher penalties than individuals. In a revamped health care system envisioned by lawmakers, people would be required to carry health insurance just like motorists must get auto coverage now. The government would provide subsidies for the poor and many middle-class families, but those who still refuse to sign up would face penalties. Called "shared responsibility payments," the fines would be set at least half the cost of basic medical coverage, according to the legislation. The goal is to nudge people to sign up for coverage when they are healthy, not wait until they get sick. The legislation would exempt certain hardship cases from fines. The fines would be collected through the income tax system. Obama wants a bill this year that would provide coverage to the nearly 50 million Americans who lack it and reduce medical costs. In a statement, Obama welcomed the legislation, saying it "reflects many of the principles I've laid out." The government's costs would be covered by a combination of higher taxes and cuts in projected Medicare and Medicaid spending.
Note: How can Congress even consider forcing people to buy insurance with threat of a major fine? What happened to the country of freedom and liberty? And is the people or the HMOs who benefit here?
A written exam administered by the Pentagon labels "protests" as a form of “low-level terrorism” – enraging civil liberties advocates and activist groups who say it shows blatant disregard of the First Amendment. The written exam, given as part of Department of Defense employees’ routine training, includes a multiple-choice question that asks: “Which of the following is an example of low-level terrorism?” – Attacking the Pentagon – IEDs – Hate crimes against racial groups – Protests. The correct answer, according to the exam, is "Protests." “Its part of a pattern of equating dissent and protest with terrorism," said Ann Brick, an attorney with the American Civil Liberties Union, which obtained a copy of the question after a Defense Department employee who was taking the test printed the screen on his or her computer terminal. "It undermines the core constitutional values the Department of Defense is supposed to be defending,” Brick said, referring to the First Amendment right to peaceably assemble. She said the ACLU has asked the Defense Department to remove the question and send out a correction to all employees who took the exam. “There were other employees who were unhappy with it and disturbed by it,” Brick said. Anti-war protesters, who say they have been targets of federal surveillance for years, were livid when they were told about the exam question. “That’s illegal,” said George Martin, national co-chairman of United for Peace and Justice. “Protest in terms of legal dissent has to be recognized, especially by the authorities. It’s not terrorism or a lack of patriotism. We care enough to be active in our government.”
Note: For lots more on the continually-escalating government threats to civil liberties, click here.
We've all heard the stories about near-death experiences: the tunnel, the white light, the encounter with long-dead relatives. Now some researchers are giving a closer neurological look at near-death experiences and asking: Can your mind operate when your brain has stopped? Pam ... Reynolds' journey began one hot August day in 1991. An MRI revealed an aneurysm on her brain stem. "The aneurysm was very large, which meant the risk of rupture was also very large," [Dr. Robert] Spetzler says. "And it was in a location where the only way to really give her the very best odds of fixing it required what we call 'cardiac standstill.'" "I was lying there on the gurney ... unconscious," Reynolds recalls. "I don't know how to explain this ... I popped up out the top of my head." She found herself looking down at the operating table. She could see 20 people around the table and hear what sounded like a dentist's drill. Soon after, the surgeons began to lower her body temperature to 60 degrees. It was about that time that Reynolds believes she noticed a tunnel and bright light. She eventually flat-lined completely, and the surgeons drained the blood out of her head. During her near-death experience, she says she chatted with her dead grandmother and uncle, who escorted her back to the operating room. As they looked down on her body, she could hear the Eagles' song "Hotel California" playing. A year later, she mentioned the details to her neurosurgeon. Spetzler says her account matched his memory.
Note: Read the entire fascinating story at the link above to learn more about this woman who had to die in order to live. Explore a treasure trove of concise summaries of incredibly inspiring news articles on near-death experiences.
Five Muslim community workers have accused MI5 of waging a campaign of blackmail and harassment in an attempt to recruit them as informants. The men claim they were given a choice of working for the Security Service or face detention and harassment in the UK and overseas. They have made official complaints to the police, to the body which oversees the work of the Security Service and to their local MP Frank Dobson. Now they have decided to speak publicly about their experiences in the hope that publicity will stop similar tactics being used in the future. Three of the men say they were detained at foreign airports on the orders of MI5 after leaving Britain on family holidays last year. After they were sent back to the UK, they were interviewed by MI5 officers who, they say, falsely accused them of links to Islamic extremism. On each occasion the agents said they would lift the travel restrictions and threat of detention in return for their co-operation. When the men refused some of them received what they say were intimidating phone calls and threats. Two other Muslim men say they were approached by MI5 at their homes after police officers posed as postmen. Each of the five men, aged between 19 and 25, was warned that if he did not help the security services he would be considered a terror suspect. A sixth man was held by MI5 for three hours after returning from his honeymoon in Saudi Arabia. He too claims he was threatened with travel restrictions if he tried to leave the UK."
Note: For lots more on the "war on terror" from reliable sources, click here.
In 1901, Nikola Tesla began work on a global system of giant towers meant to relay through the air not only news, stock reports and even pictures but also, unbeknown to investors such as J. Pierpont Morgan, free electricity for one and all. It was the inventor’s biggest project, and his most audacious. The first tower rose on rural Long Island and, by 1903, stood more than 18 stories tall. Tesla, who lived from 1856 to 1943, made bitter enemies who dismissed some of his claims as exaggerated, helping tarnish his reputation in his lifetime. Today, his work tends to be poorly known among scientists, though some call him an intuitive genius far ahead of his peers. He was widely celebrated for his inventions of motors and power distribution systems that used the form of electricity known as alternating current, which beat out direct current (and Thomas Edison) to electrify the world. Around 1900 ... inventors around the world were racing for what was considered the next big thing — wireless communication. [Tesla's] own plan was to turn alternating current into electromagnetic waves that flashed from antennas to distant receivers. The scale of his vision was gargantuan. Investors, given Tesla’s electrical achievements, paid heed. The biggest was J. Pierpont Morgan, a top financier. He sank $150,000 (today more than $3 million) into Tesla’s global wireless venture. But Morgan was [eventually] disenchanted. Margaret Cheney, a Tesla biographer, observed that Tesla had seriously misjudged his wealthy patron, a man deeply committed to the profit motive. “The prospect of beaming electricity to penniless Zulus or Pygmies,” she wrote, must have left the financier less than enthusiastic.
Note: This article underplays a number of things about Tesla. Morgan stopped funding him primarily because he eventually realized that there would be no way to charge for the electricity Tesla was generating. If successful, electricity would be available virtually for free to those supplied by his tower. Tesla was then shunned by the power elite and his rightful claim as inventor of the radio (not Marconi) was erased in the history books. As stated on the PBS website, "It wasn't until 1943 — a few months after Tesla's death — that the U.S. Supreme Court upheld Tesla's radio patent number 645,576." For more on this amazing man, click here and here.
Something strange is afoot when Popbitch – provider of a weekly email beloved of students, stuffed full of celebrity tittle-tattle and links to the silliest miscellany of the web – breaks off from such glorious trivia to encourage readers to support GoldmanSachs666.com, a deadly serious website measuring the political tentacles of the mighty investment bank. The credit-market catastrophe that has plunged the world into recession is everywhere stirring new ways of thinking about how banking relates to the wider world, but nowhere more so than among a generation coming into political consciousness in these searing times. Something is brewing, some argue, that could make the "regulatory-financial complex" something to rail against in the same way that the military-industrial complex was in the Cold War. This should worry Goldman Sachs. More so than any other firm, it exists at the intersection of politics and high finance. "It was listening to the news coming out of AIG that got me fired up," says Mike Morgan, founder of GoldmanSachs666.com. "While politicians were screaming about $165m paid out to AIG executives in bonuses, $180bn was walking out the door." The Federal Reserve and the then-treasury secretary, Hank Paulson, decided to funnel public funds to AIG, and its counterparties were paid in full. You don't have to scratch far into the internet to find conspiracy theories: Mr Paulson was chief executive of Goldman before going into government; he appointed Edward Liddy, formerly of Goldman, to run AIG; Goldman was AIG's biggest counterparty, receiving $12.9bn from AIG after the bailout.
Note: For lots more on the Wall Street bailout, click here.
Every time 70-year-old Andy Mackie draws a breath, it's music to his ears - whether there's a harmonica there or not. Mackie's just glad to be alive. Mackie jokes, "I guess they don't need a harmonica player in heaven yet." Mackie, a Scottish-born retired horse trainer, lives in a camper in northwest Washington state - he lives there, even though technically -- medically -- he should have died long ago. After his ninth heart surgery, Mackie's doctors had him on 15 different medicines. But the side effects made life miserable. So one day he quit taking all 15 and decided to spend his final days doing something he always wanted to do. He used the money he would have spent on the prescriptions to give away 300 harmonicas, with lessons included. "I really thought it was the last thing I could ever do," he says. And when he didn't die the next month, he bought a few hundred more. Harmonicas in hand, he explains, "I just started going from school to school." It's now 11 years and 13,000 harmonicas later. Today there's nary a kid in the county who hasn't gotten a free harmonica from Mackie, or played one of his strum sticks. To keep the kids interested in music as they get older, Mackie now spends the bulk of his Social Security check making them beginner string instruments. He also buys store-made instruments for kids that show a special interest. He provides free lessons to everyone by getting the older kids to teach the younger kids. Mackie says, "I tell them music is a gift, you give it away - you give it away and you get to keep it forever." The end result is something truly unique to his corner of Washington. It seems everywhere you look, everyplace you go, every kid you meet has the same genuine passion for fiddle music.
Note: Don't miss the inspiring video of this story at the link above. For a treasure trove of great news articles which will inspire you to make a difference, click here.
In February 1976, an outbreak of swine flu struck Fort Dix Army base in New Jersey, killing a 19-year-old private and infecting hundreds of soldiers. Concerned that the U.S. was on the verge of a devastating epidemic, President Gerald Ford ordered a nationwide vaccination program at a cost of $135 million (some $500 million in today's money). Within weeks, reports surfaced of people developing Guillain-Barré syndrome, a paralyzing nerve disease that can be caused by the vaccine. By April, more than 30 people had died of the condition. Facing protests, federal officials abruptly canceled the program on Dec. 16. The epidemic failed to materialize. Medical historians and epidemiologists say ... the decisions made in the wake of the '76 outbreak — and the public's response to them — provide a cautionary tale for public health officials, who may soon have to consider whether to institute draconian measures to combat the disease. "I think 1976 provides an example of how not to handle a flu outbreak," says Hugh Pennington, an emeritus professor of virology at Britain's University of Aberdeen. Despite modern advances in microbiology, today's health officials still make decisions in a "cloud of uncertainty," Pennington says. "At the moment, our understanding of the current outbreak is similarly limited. For example, we don't yet understand why people are dying in Mexico but not elsewhere." Howard Markel, director of the Center for the History of Medicine at the University of Michigan and a historical consultant to the CDC on flu pandemics, says the most vexing decision facing health officials is when to institute mass vaccination programs.
Note: To watch two short commercials made in 1976 showing clear scare tactics, click here. Then read about and watch a highly revealing 60 Minutes segment covering this deception. Only one person died from the actual flu in this 1976 "epidemic," yet more than 30 died of the flu vaccine. To explore the serious risks of vaccines reported in the media, click here. For lots more on bird and swine flu scares, click here.
The National Security Agency has been campaigning to lead the government’s rapidly growing cybersecurity programs, raising privacy and civil liberties concerns among some officials who fear that the move could give the spy agency too much control over government computer networks. The security agency’s interest in taking over the dominant role has met resistance, including the resignation of the Homeland Security Department official who was until last month in charge of coordinating cybersecurity efforts throughout the government. Rod Beckstrom, who resigned in March as director of the National Cyber Security Center at the Homeland Security Department, said ... that he feared that the N.S.A.’s push for a greater role in guarding the government’s computer systems could give it the power to collect and analyze every e-mail message, text message and Google search conducted by every employee in every federal agency. Mr. Beckstrom said he believed that an intelligence service that is supposed to focus on foreign targets should not be given so much control over the flow of information within the United States government. To detect threats against the computer infrastructure — including hackers, viruses and intrusions by foreign agents and terrorists — cybersecurity guardians must have virtually unlimited access to networks. Mr. Beckstrom argues that those responsibilities should be divided among agencies. “I have very serious concerns about the concentration of too much power in one agency,” he said. “Power over information is so important, and it is so difficult to monitor, that we need to have checks and balances.”
Note: For further disturbing reports from reliable sources on government efforts to establish total surveillance systems, click here.
The Obama administration’s proposals to reform financial regulation sound ambitious enough as they aim to bring companies like A.I.G. under a broader umbrella of government rule-making and scrutiny. But there is a big hole in these proposals, as there has already been in the government’s approach to bailing out failing financial companies. Even as they focus on firms deemed too big to fail, the new proposals immunize the creditors and counterparties of such firms by protecting them from their own lending and trading mistakes. This pattern has been evident for months, with the government aiding creditors and counterparties every step of the way. Yet this has not been explained openly to the American public. In truth, it’s not the shareholders of the American International Group who benefited most from its bailout; they were mostly wiped out. The great beneficiaries have been the creditors and counterparties at the other end of A.I.G.’s derivatives deals — firms like Goldman Sachs, Merrill Lynch, Deutsche Bank, Société Générale, Barclays and UBS. These firms engaged in deals that A.I.G. could not make good on. The bailout, and the regulatory regime outlined by Timothy F. Geithner, the Treasury secretary, would give firms like these every incentive to make similar deals down the road. In both the bailouts and in the new proposals, the government is effectively neutralizing creditors as a force for financial safety. This suggests a scary possibility — that the next regulatory regime could end up even worse than the last.
Note: For a powerfully revealing archive of reports from reliable sources on the hidden realities of the financial bailout, click here.
Fannie Mae and Freddie Mac, the two troubled companies at the heart of the nation’s mortgage market, are set to pay their employees “retention bonuses” totaling $210 million, despite calls from lawmakers to cancel the payments. The bonuses, which were made public on Friday, were defended by the companies’ federal regulator, James B. Lockhart, who said he intended to let them proceed. In a letter sent last week to Senator Charles E. Grassley, an Iowa Republican, Mr. Lockhart disclosed that 7,600 Fannie and Freddie workers were scheduled to receive payouts aimed at retaining those “employees most critical to keep and difficult to replace.” Under the plan, 213 employees will receive retention bonuses worth more than $100,000 this year, and one Freddie Mac executive will receive $1.3 million. Those figures drew sharp rebukes from Mr. Grassley and other lawmakers, who noted that Fannie and Freddie had received pledges of $400 billion from taxpayers to offset huge losses since they were seized by the government in September. Similar bonuses paid by the American International Group, which was also bailed out by taxpayers, incited fiery attacks from the White House and legislators when they were revealed last month. “It’s hard to see any common sense in management decisions that award hundreds of millions in bonuses when their organizations lost more than $100 billion in a year,” Mr. Grassley said in a statement. “It’s an insult that the bonuses were made with an infusion of cash from taxpayers.”
Note: For many revealing reports on the realities behind the Wall Street bailouts, click here.
The Obama administration’s $500 billion or more proposal to deal with America’s ailing banks has been described by some in the financial markets as a win-win-win proposal. Actually, it is a win-win-lose proposal: the banks win, investors win — and taxpayers lose. Treasury hopes to get us out of the mess by replicating the flawed system that the private sector used to bring the world crashing down, with a proposal marked by overleveraging in the public sector, excessive complexity, poor incentives and a lack of transparency. In theory, the administration’s plan is based on letting the market determine the prices of the banks’ “toxic assets” — including outstanding house loans and securities based on those loans. The reality, though, is that the market will not be pricing the toxic assets themselves, but options on those assets. The two have little to do with each other. The government plan in effect involves insuring almost all losses. Since the private investors are spared most losses, then they primarily “value” their potential gains. This is exactly the same as being given an option. Under the plan by Treasury Secretary Timothy Geithner, the government would provide about 92 percent of the money to buy the asset but would stand to receive only 50 percent of any gains, and would absorb almost all of the losses. Some partnership! What the Obama administration is doing is far worse than nationalization: it is ersatz capitalism, the privatizing of gains and the socializing of losses. It is a “partnership” in which one partner robs the other.
Note: The author of this analysis, Joseph E. Stiglitz, is a professor of economics at Columbia University. He was chairman of the Council of Economic Advisers from 1995 to 1997, and was awarded the Nobel prize in economics in 2001. For many revealing reports on the realities behind the Wall Street bailouts, click here.
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