News StoriesExcerpts of Key News Stories in Major Media
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One famous aria after another: the operatic hit parade began as the bus pulled away from the depot, empty. “La donna č mobile” from Verdi’s “Rigoletto” was followed, somewhere on the West Side Highway, by “Nessun dorma” from Puccini’s “Turandot.” The A’s and that high B at the end were thrilling. And then the bus turned onto Clarkson Street, on the way to the first stop on the M8 line. “This is difficult sitting down,” said the driver, Christopher G. Dolan, 51. “You got to be standing up.” Mr. Dolan ... has been a New York City driver for 27 years, starting in the Bronx and then transferring to Manhattan. You never know whom you will meet on a bus — he married one of his passengers. “That’s worth my $2,” said Elaine Smalls, who boarded at Eighth Street and Avenue C. He started as a baritone. On the job one day in 2002 — he was on the M10 then — he picked up a passenger on Eighth Avenue whom he recognized as Vincent La Selva, the artistic director of the New York Grand Opera. “I called him over, which surprised him, being recognized on the bus, and I said, ‘What does somebody have to do to get an audition with you?’ He handed me his card and said, ‘Give me a call.’ ” Mr. Dolan did, and soon he was in Mr. La Selva’s studio, plowing through aria after aria. He remembers what Mr. La Selva told him when he finished: “I love your voice, but you’re not a baritone. Go home and learn to be a tenor and come back.” Mr. Dolan did as he was told: he worked on getting his voice up to a higher tessitura.
Note: To watch a short video of Mr. Dolan singing while driving his bus, click here. For a video of a short recital off the bus, click here.
The National Security Agency intercepted private e-mail messages and phone calls of Americans in recent months on a scale that went beyond the broad legal limits established by Congress last year, government officials said in recent interviews. Several intelligence officials, as well as lawyers briefed about the matter, said the N.S.A. had been engaged in “overcollection” of domestic communications of Americans. They described the practice as significant and systemic. The legal and operational problems surrounding the N.S.A.’s surveillance activities have come under scrutiny from the Obama administration, Congressional intelligence committees and a secret national security court. Congressional investigators say they hope to determine if any violations of Americans’ privacy occurred. It is not clear to what extent the agency may have actively listened in on conversations or read e-mail messages of Americans without proper court authority, rather than simply obtained access to them. While the N.S.A.’s operations in recent months have come under examination, new details are also emerging about earlier domestic-surveillance activities, including the agency’s attempt to wiretap a member of Congress, without court approval, on an overseas trip. After a contentious three-year debate that was set off by the disclosure in 2005 of the program of wiretapping without warrants that President George W. Bush approved after the Sept. 11 attacks, Congress gave the N.S.A. broad new authority to collect, without court-approved warrants, vast streams of international phone and e-mail traffic as it passed through American telecommunications gateways.
Note: For further disturbing reports from reliable sources on government efforts to establish total surveillance systems, 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 Justice Department ... made public detailed memos describing brutal interrogation techniques used by the Central Intelligence Agency, as President Obama sought to reassure the agency that the C.I.A. operatives involved would not be prosecuted. In dozens of pages of dispassionate legal prose, the methods approved by the Bush administration for extracting information from senior operatives of Al Qaeda are spelled out in careful detail — like keeping detainees awake for up to 11 straight days, placing them in a dark, cramped box or putting insects into the box to exploit their fears. The interrogation methods were authorized beginning in 2002, and some were used as late as 2005 in the C.I.A.’s secret overseas prisons. The United States prosecuted some Japanese interrogators at war crimes trials after World War II for waterboarding and other methods detailed in the memos. Together, the four memos give an extraordinarily detailed account of the C.I.A.’s methods and the Justice Department’s long struggle, in the face of graphic descriptions of brutal tactics, to square them with international and domestic law. Passages describing forced nudity, the slamming of detainees into walls, prolonged sleep deprivation and the dousing of detainees with water as cold as 41 degrees alternate with elaborate legal arguments concerning the international Convention Against Torture. The revelations may give new momentum to proposals for a full-blown investigation into Bush administration counterterrorism programs and possible torture prosecutions.
Note: For many revealing reports from major media sources on increasing threats to civil liberties, click here.
A San Francisco federal judge rejected on Friday the Obama administration's attempt to derail a challenge to former President George W. Bush's electronic surveillance program by withholding a critical wiretap document. President Obama's Justice Department had appeared to defy a previous order by Chief U.S. District Judge Vaughn Walker to allow lawyers for an Islamic organization to see the classified document, which reportedly showed that the group had been wiretapped. The document, which the government accidentally sent to the Al-Haramain Islamic Foundation, could establish its right to sue over the legality of the program. Justice Department lawyers told Walker in February that he had no power to enforce his order, and indicated they would remove the document from his files if he planned to disclose it to Al-Haramain's lawyers. But after a federal appeals court denied the department's request to intervene, Walker told the government Friday to cooperate. "The United States should now comply with the court's orders," the judge said. He told lawyers for the administration and Al-Haramain to work out a protective order by May 8 that would maintain the document's secrecy after it had been shown to the Islamic group's lawyers. If the two sides can't agree, Walker said, he will issue his own protective order "under which this case may resume forward progress." The case is one of two before Walker challenging the constitutionality of the program that Bush secretly authorized in 2001 to intercept phone calls and e-mails between Americans and suspected foreign terrorists without seeking a court warrant, as required by a 1978 law.
Note: For more reports on government secrecy from reliable sources, click here.
U.S. taxpayers need to know the risks behind the Federal Reserve’s $2 trillion in lending to financial institutions because the public is now an “involuntary investor” in the nation’s banks, according to a court filing by Bloomberg LP. The Fed refuses to name the borrowers, the amounts of loans or assets banks put up as collateral under 11 programs, arguing that doing so might set off a run by depositors and unsettle shareholders. The largest U.S. banks have tapped more than $125 billion in government aid under the Troubled Asset Relief Program in the past seven months. Assets, including loans and securities, on the Fed balance sheet totaled $2.09 trillion as of April 9. Banks oppose any release of information because that might signal weakness and spur short-selling or a run by depositors, the Fed argued in its March 4 response. The release of the information “can fuel market speculation and rumors,” including a drop in stock price and a run on the bank, the Fed said. Bloomberg replied yesterday that “these speculative injuries relate only to the reactions of customers, shareholders and other members of the public, not to competitors’ use of the borrowers’ proprietary information to their advantage,” the exception to disclosure under the FOIA law. Government loans, spending or guarantees to rescue the U.S. financial system total more than $12.8 trillion since the international credit crisis began in August 2007, according to data compiled by Bloomberg as of March 31. The total includes about $2 trillion on the Fed’s balance sheet.
Note: For an extensive archive of key reports on the hidden realities of the Wall Street bailout, click here.
President Obama must stop the bailouts and start the prosecutions. It's time to focus on anti-poverty programs to protect the growing unemployed from hunger and homelessness. Stealth payments to billionaire bondholders must cease immediately. Since the mid-1970s, average Americans' wages have stayed flat when adjusted for inflation. Productivity rose, profits rose, but not wages. To compensate for stagnant wages and the desire to consume more each year, Americans worked more, retired later, spouses went to work, and many burned savings. Then they started borrowing. Debt became America's growth industry. The scheme collapsed because Americans' wages weren't sufficient to pay the interest on existing debts. The administration and the banks keep talking about a credit crisis, but there isn't one. Banks are lending. If you want a mortgage and can afford to pay it back, you can borrow at low rates today. But most Americans don't want more debt because it is a debilitating path to poverty. The average American family already pays 14 percent of annual income in interest to banks. To fix this fake crisis, there are fake discussions about what the government must do. The endlessly recycled plan to buy "troubled" assets isn't to get banks lending again, because they haven't stopped lending. The plan seeks for taxpayers to buy worthless assets at high prices to absorb rich investors' losses. That's it. It keeps coming back as a different plan, but with that same goal. There is no goal beyond that one goal: keep rich people from taking losses.
Note: For an extensive archive of key reports on the hidden realities of the Wall Street bailout, click here.
The world is a step closer to a global currency, backed by a global central bank, running monetary policy for all humanity. A single clause in Point 19 of the communiqué issued by the G20 leaders amounts to revolution in the global financial order. "We have agreed to support a general SDR allocation which will inject $250bn (Ł170bn) into the world economy and increase global liquidity," it said. SDRs are Special Drawing Rights, a synthetic paper currency issued by the International Monetary Fund that has lain dormant for half a century.In effect, the G20 leaders have activated the IMF's power to create money and begin global "quantitative easing". In doing so, they are putting a de facto world currency into play. It is outside the control of any sovereign body. Conspiracy theorists will love it. There is now a world currency in waiting. In time, SDRs are likely evolve into a parking place for the foreign holdings of central banks, led by the People's Bank of China. Beijing's moves this week to offer $95bn in yuan currency swaps to developing economies show how fast China aims to break dollar dependence.
Note: For an extensive archive of key reports on the hidden realities of the Wall Street bailout, click here.
Chinese leaders have adopted a plan aimed at turning the country into one of the leading producers of hybrid and all-electric vehicles within three years, and making it the world leader in electric cars and buses after that. The goal, which radiates from the very top of the Chinese government, suggests that Detroit’s Big Three, already struggling to stay alive, will face even stiffer foreign competition on the next field of automotive technology than they do today. To some extent, China is making a virtue of a liability. It is behind the United States, Japan and other countries when it comes to making gas-powered vehicles, but by skipping the current technology, China hopes to get a jump on the next. The United States has been a laggard in alternative vehicles. G.M.’s plug-in hybrid Chevrolet Volt is scheduled to go on sale next year, and will be assembled in Michigan using rechargeable batteries imported from LG in South Korea. China’s intention, in addition to creating a world-leading industry that will produce jobs and exports, is to reduce urban pollution and decrease its dependence on oil, which comes from the Mideast and travels over sea routes controlled by the United States Navy. Beyond manufacturing, subsidies of up to $8,800 are being offered to taxi fleets and local government agencies in 13 Chinese cities for each hybrid or all-electric vehicle they purchase. China wants to raise its annual production capacity to 500,000 hybrid or all-electric cars and buses by the end of 2011, from 2,100 last year.
Note: For lots more on new developments in auto and energy technologies from reliable sources, click here.
Annie Leonard, named one of Time magazine's 2008 Environmental Heroes, knows better than most: It's not so easy living green. Leonard created and narrates the international Web documentary phenomenon "Story of Stuff," which summarizes her 20 years of global sleuthing: tracking the source of the stuff we buy and the fate of the stuff we throw away. This lively animated film makes the point that if everyone on Earth consumed at U.S. levels, we would need five planets. Leading by example, Leonard shows how simple steps and a little patience can help people create environmentally friendly, energy-efficient, stuff-free lives. In her cozy Berkeley home, the first clue sits in her driveway: A blue ZENN, or zero emission no noise, electric vehicle. The car is a NEV, or neighborhood electric vehicle, which is a U.S. Department of Transportation classification for speed-limited battery electric vehicles. The car quietly sucks sun power from solar panels on Leonard's roof and only goes 25 mph, which is just fine with her. "I am always racing around, and this forces me to move at a slower pace. I need any help I can get to do that." Leonard didn't go solar just to charge her car. She says she did it to save mountaintops in Appalachia. "ILoveMountains.org uses Google Earth technology to show coal mine destruction of mountains - the environmental and social devastation. It's really intense. You type in your ZIP code and see the lines of power plants supplying your house. There is mountaintop-removal coal going into my grid. I don't want any part of that."
Note: To watch the powerful 20-minute video "The Story of Stuff", click here.
People are looking for ways to trim budgets and cut down on energy use. There's a product heating up in Utah that does just that. It even helps a good cause. Don't underestimate the power of cooking with the sun. LaRue Howells first bought a Global Sun Oven a year ago to be prepared for an emergency, but now she uses it a few times a week, all-year round and shares her knowledge with members of her church. Howells said, "I can grab the solar oven and some food and take off if I needed to, and it's wonderful to have." She baked bread for us. The temperature outside was in the low 40s. "We baked bread when it was 17 degrees outside," she said. "The temperature outside isn't the issue, it's the sun." To control the heat of the oven, you adjust the angle of the oven to the sun. If you want to reduce the heat, you angle it away from the sun. One-third of the Sun Ovens sold in the U.S. are sold in Utah. Joe Crane, with Kitchen Kneads, said, "Just being prepared, self-sufficient brings a lot of peace of mind to people." Crane started to sell them nearly a year ago. "Temperature makes no difference," he said. "I've cooked at 5 below to 90 degrees in the summer time." All you need is sun, and cook times aren't much longer than with a conventional oven. As useful as we might find them, Sun Ovens are life sustaining in developing countries looking for solutions to deforestation and energy deficiency. Domestic sales help pay for ovens in Afghanistan, Nepal and South Africa. They cost around $300. Sun Ovens [use] no electricity and [burn] no fuels, meaning no emissions.
Note: For more on this fascinating development, https://www.sunoven.com. See also http://solarcookers.org
Religion and spirituality blogs today are buzzing about the "inspirational" performance of Susan Boyle, an ordinary-looking 47-year-old Scottish woman whose anything-but-ordinary voice stopped would-be snarky commenters in their tracks on the reality TV show Britain's Got Talent. In Beliefnet's religion and pop culture blog, Douglas Howe comments on the transformation of the skeptical audience the moment Boyle opened her mouth and began to sing: They loved her! They were touched by her raw talent, her beautiful voice. The part about each of us that is quick to judge is also quick to respond to excellence and beauty. We should be quicker to look for the beauty in people, and I'm not sure our media-driven culture trains us to do that. Rev. James Martin in America magazine's blog In All Things finds a homily here: The world generally looks askance at people like Susan Boyle, if it sees them at all. Without classic good looks, without work, without a spouse, living in a small town, people like Susan Boyle may not seem particularly "important." But God sees the real person, and understands the value of each individual's gifts: rich or poor, young or old, single or married, matron or movie star, lucky or unlucky in life. God knows us. And loves us.
Note: For an engaging article with the highly inspiring performance of Susan Boyle, click here.
Chances are you've heard of hybrids and biofuels, but what about oil-producing yeast and turbinelike buoys that transform ocean waves into electricity? Those are just a couple of the alternative-energy sources that may power the future according to Fred Krupp, president of the Environmental Defense Fund and coauthor, with Miriam Horn, of the new book Earth: The Sequel (Norton). "Everyone knows the current story of melting glaciers, rising sea levels, worsening hurricanes, dying coral reefs," said Krupp. "'The Sequel' is the story of what happens next." Newsweek's Katie Paul talked with Krupp about ... the next industrial revolution. Newsweek: You seem to be a big fan of solar energy. Why do you think there's so much promise to it? Fred Krupp: We have two chapters on solar energy at the beginning of the book because we think there's tremendous potential there. Every hour, the sun provides the earth with as much energy as all of human civilization uses in an entire year. So, if you could capture just 10 percent of it on a ... 100-mile square piece of land, you could power the entire United States. With solar thermal energy, capturing heat instead of immediately going to electricity, one advantage is that you can store hot water much more cheaply than you can store electricity. There is tremendous potential there, even before advanced batteries are developed, and reason to think solar energy can compete. [Newsweek:] And besides solar? How are they addressing some of the negatives associated with biofuels? [Krupp:] I think we've come to understand that the current generation of biofuels has problems and that we need a whole new generation.
Note: For more exciting reports from major media sources on new energy technologies, click here.
Medical personnel were deeply involved in the abusive interrogation of terrorist suspects held overseas by the Central Intelligence Agency, including torture, and their participation was a “gross breach of medical ethics,” a long-secret report by the International Committee of the Red Cross concluded. Based on statements by 14 prisoners who belonged to Al Qaeda and were moved to Guantánamo Bay, Cuba, in late 2006, Red Cross investigators concluded that medical professionals working for the C.I.A. monitored prisoners undergoing waterboarding, apparently to make sure they did not drown. Medical workers were also present when guards confined prisoners in small boxes, shackled their arms to the ceiling, kept them in frigid cells and slammed them repeatedly into walls, the report said. Facilitating such practices, which the Red Cross described as torture, was a violation of medical ethics even if the medical workers’ intentions had been to prevent death or permanent injury, the report said. But it found that the medical professionals’ role was primarily to support the interrogators, not to protect the prisoners, and that the professionals had “condoned and participated in ill treatment.” At times, according to the detainees’ accounts, medical workers “gave instructions to interrogators to continue, to adjust or to stop particular methods.” The Red Cross report was completed in 2007. It was obtained by Mark Danner, a journalist who has written extensively about torture, and posted Monday night with an article by Mr. Danner on the Web site of The New York Review of Books.
Note: Much of content of the Red Cross report was revealed in a March article by Mr. Danner and in a 2008 book, The Dark Side, by Jane Mayer, but the reporting of the Red Cross investigators’ conclusions on medical ethics and other issues are new.
Area 51. It's the most famous military institution in the world that doesn't officially exist. If it did, it would be found about 100 miles outside Las Vegas in Nevada's high desert. Then again, maybe not — the U.S. government refuses to say. You can't drive anywhere close to it, and until recently, the airspace overhead was restricted — all the way to outer space. Any mention of Area 51 gets redacted from official documents, even those that have been declassified for decades. It has become the holy grail for conspiracy theorists, with UFOlogists positing that the Pentagon reverse engineers flying saucers and keeps extraterrestrial beings stored in freezers. Urban legend has it that Area 51 is connected by underground tunnels and trains to other secret facilities around the country. Well, now, for the first time, someone is ready to talk — in fact, five men are, and their stories rival the most outrageous of rumors. Colonel Hugh "Slip" Slater, 87, was commander of the Area 51 base in the 1960s. Edward Lovick, 90, ... spent three decades radar testing some of the world's most famous aircraft. Kenneth Collins, 80, a CIA experimental test pilot, was given the silver star. Thornton "T.D." Barnes, 72, was an Area 51 special-projects engineer. And Harry Martin, 77, was one of the men in charge of the base's half-million-gallon monthly supply of spy-plane fuels. As for the underground-tunnel talk ... Barnes worked on a nuclear-rocket program ... in Area 51's backyard. "Three test-cell facilities were connected by railroad, but everything else was underground," he says.
Note: So the government has been lying to us for 50 years about Area 51 and underground research there. What else are they lying to us about? For a more powerful, incisive article on this development, click here. And why isn't this getting more coverage? For another report showing major media cover-up of UFOs, click here.
Tiny red and gray chips found in the dust from the collapse of the World Trade Center contain highly explosive materials — proof, according to a former BYU professor, that 9/11 is still a sinister mystery. Physicist Steven E. Jones, who retired from Brigham Young University in 2006 after the school recoiled from the controversy surrounding his 9/11 theories, is one of nine authors on a paper published last week in the online, peer-reviewed Open Chemical Physics Journal. Also listed as authors are BYU physics professor Jeffrey Farrer and a professor of nanochemistry at the University of Copenhagen in Denmark. For several years, Jones has theorized that pre-positioned explosives, not fires from jet fuel, caused the rapid, symmetrical collapse of the two World Trade Center buildings, plus the collapse of a third building, WTC-7. The newest research, according to the journal authors, shows that dust from the collapsing towers contained a "nano-thermite" material that is highly explosive. A layer of dust lay over parts of Manhattan immediately following the collapse of the towers, and it was samples of this dust that Jones and fellow researchers requested in a 2006 paper, hoping to determine "the whole truth of the events of that day." They eventually tested four samples they received from New Yorkers. Red/gray chips ... were found in all four dust samples. The chips were then analyzed using scanning electron microscopy and other high-tech tools. The red layer of the chips, according to the researchers, contains a "highly energetic" form of thermite.
Note: For the full text of this path-breaking scientific report, click here. Note that other major media failed to pick up this important news, though you can watch a Dutch news report (with English subtitles) on YouTube available here. For more key reports on the cutting-edge research of Prof. Steven Jones, click here.
In Season 5 of “Rescue Me,” which begins Tuesday on FX, the specter of 9/11 becomes a major character once again, when a French journalist starts interviewing firefighters about their experiences for a commemorative book. This season one major character will become seriously ill with cancer apparently caused by his work at ground zero. Another, Franco Rivera (Daniel Sunjata), will articulate his ... belief that 9/11 was “an inside job,” the result of “a massive neoconservative government conspiracy” that was designed to increase American power by creating a pretext for seizing control of the world’s oil supplies — a view Mr. Sunjata himself happens to share. “The reason we wrote it,” Mr. Tolan said, “is that Danny was spouting this stuff and even some of the guys, the firefighters on the set, were saying ‘What is this?’ We saw how divisive this was and thought: We have to do this.” Mr. Sunjata admits to some trepidation about how the show’s audience will react to the story line. “I won’t say that my opinions were warmly received on the set,” he said. “At one point I thought, ‘Maybe I’ll get fired if I keep opening my mouth.’ But even though Peter and Denis didn’t sign on to this conspiracy, they were brave enough to include it in the show. I give them and FX and Fox — I never thought I’d say this — a big round of applause.” Mr. Sunjata certainly had reason to fear losing his job, since “Rescue Me” has never been timid about dispatching major characters.
Note: To read why hundreds of professors and professionals agree with Daniel Sunjata, click here and here.
The Federal Deposit Insurance Corporation was set up 76 years ago with the important but simple job of insuring bank deposits. Now, because of what could politely be called mission creep, it’s elbowing its way into the middle of the financial mess as an enabler of enormous leverage. In the fine print of Treasury Secretary Timothy F. Geithner’s plan to lend as much as $1 trillion to private investors to help them buy toxic assets from our nation’s banks, you’ll find some details of how the F.D.I.C is trying to stabilize the system by adding more risk, not less, to the system. It’s going to be insuring 85 percent of the debt, provided by the Treasury, that private investors will use to subsidize their acquisitions of toxic assets. These loans, while controversial, were given a warm welcome by the market when they were first announced. And why not? The terms are hard to beat. They are, for example, “nonrecourse,” which means that if an investor loses money, he owes taxpayers nothing. It’s the closest thing to risk-free investing — with leverage! — around. But, as we’ve learned the hard way these last couple of years, risk-free investing is an oxymoron. So where did the risk go this time? To the F.D.I.C., and ultimately, to us taxpayers. A close reading of the F.D.I.C.’s statute suggests the agency is using a unique — some might call it plain wrong — reading of its own rule book to accomplish this high-wire act. Somehow, in the name of solving the financial crisis, the F.D.I.C. has seemingly been given a blank check, with virtually no oversight by Congress.
Note: For a powerfully revealing archive of reports from reliable sources on the hidden realities of the financial bailout, click here.
During World War I, Americans were exhorted to buy Liberty Bonds to help their soldiers on the front. Now, it seems, they will be asked to come to the aid of their banks — with the added inducement of possibly making some money for themselves. As part of its sweeping plan to purge banks of troublesome assets, the Obama administration is encouraging several large investment companies to create the financial-crisis equivalent of war bonds: bailout funds. The idea is that these investments, akin to mutual funds that buy stocks and bonds, would give ordinary Americans a chance to profit from the bailouts that are being financed by their tax dollars. But there is another, deeply political motivation as well: to quiet accusations that all of these giant bailouts will benefit only Wall Street plutocrats. If, as some analysts suspect, the banks’ assets are worth even less than believed, the funds’ investors could suffer significant losses. Nonetheless, the administration and executives in the financial industry are pushing to establish the investment funds, in part to counter swelling hostility against the financial industry. The embrace of smaller investors underscores the concern in Washington and on Wall Street that Americans’ anger could imperil further efforts to stimulate the economy with vast amounts of government spending. Many Americans say they believe the bailout programs ... will benefit only a golden few, including some of the institutions that helped push the economy to the brink. Critics like Joseph E. Stiglitz, a Nobel Prize-winning economist, argue that the bailouts merely privatize profits and socialize losses.
Note: For a powerfully revealing archive of reports from reliable sources on the hidden realities of the financial bailout, 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.
Important Note: Explore our full index to revealing excerpts of key major media news stories on several dozen engaging topics. And don't miss amazing excerpts from 20 of the most revealing news articles ever published.