Tuesday, November 18, 2008

Disaster Capitalists are Looting Our Common Weal Right Now

The Big Heist

By David Sirota

Originally published November 18, 2008 on Huffington Post

In the slapstick classic Funny Farm, Chevy Chase ends up writing a novel called The Big Heist which is so bad - so painfully, terribly awful - that he ends up going insane and burning it in front of his horrified wife. With that in mind, here's my question after reading this little-noticed two-week-old story: Are we all living on a funny farm, and does this story prove that we've just experienced the big heist - ie. a pathetically unfunny rip-off scheme of trillion-dollar proportions?

For Banks, What Credit Crunch?

By Mike Myers, Star Tribune

The nation indeed may be facing a financial crisis, with large institutions failing in the wake of multibillion debts, but most bank-lending to business customers actually has been on the rise.

The latest government numbers, through mid-October, show bank commercial and industrial loans up, bank commercial real estate loans rising and interbank loans climbing. Indeed, from September 2007 to mid-October of this year, the numbers in all three categories have climbed consistently. It's a puzzle that's getting little attention, even as hundreds of billions of taxpayer dollars are devoted to fixing a problem that seems belied by government figures.

"The analogies with the war in Iraq are more than disturbing," Chari said. "We're again hearing things like: 'We know things you don't know. Trust us.'"

Federal Reserve Board and Treasury representatives declined to comment on the discrepancies between the rising lending reflected by government statistics and statements about the fragility of the banking sector made by Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson.

"Paulson said the funds stopped flowing," Christiano said. "Nobody has explained how the money system has frozen when the data says it has not."

Chari, Christiano and University of Minnesota economist Patrick Kehoe, in a working paper published in October, note that bank deposits actually have climbed even as commercial-paper borrowing fell precipitously in recent weeks.

Four claims about the nature of the nation's financial crisis appear to be myths, they concluded.

Their findings:

• Bank lending to corporate America and individuals has not declined.

• Lending between banks has not dried up.

• Commercial paper (short-term borrowing by nonfinancial companies) has fallen, but not seized up as a source of commercial lending. (Indeed, commercial-paper levels last week started to head back up for the first time since the failure of Lehman Brothers, in mid-September.)

• Banks do not, as popularly believed, play a large role in channeling money from savers to borrowers.

If we are to believe this story - and it indeed quotes very credible economists - taxpayers were forced to give away hundreds of billions of dollars to banks that actually weren't experiencing nearly the credit crisis they and our government officials claimed. Even if only part of this story is accurate and statistics have somewhat changed, it still means we were royally ripped off.

I have that sinking feeling America was just the central character in the real-life version of Chevy Chase's Big Heist.


What are think tanks for? Myth-making.

The social Darwinian myth remains the same: Ayn Rand is god, free markets can do no wrong, and the way forward is to redouble our efforts along the path to disaster.

Feudalism, not democratic republicanism, cries out with every move of BushRoveCheneyCo: the conversion of our Common Weal into private property in the context of a holy war.


So, this plan was cooked up--it was between the head of USAID's Chile office and the head of the University of Chicago's Economics Department--to try to change the debate in Latin America, starting in Chile, because that's where developmentalism had gained its deepest roots....

[T]he Chicago Boys were born...to engage in what Juan Gabriel Valdes, Chile's foreign minister after the dictatorship finally ended, described as a project of deliberate ideological transfer, taking these extreme-right ideas...and transplanting them to Latin America. That was his phrase--that is his phrase.[End Klein]

"Feudalism in this sense is...based on the relation between lords and the peasants who worked their own land and that of the lord... [It] came to encompass all aspects of social organization and was characterized as a system that was both oppressive and hierarchical." [Encyclopedia Britannica 2008]

Disaster capitalists are looting our Common Weal using myths manufactured in think tanks to hack our psyches like mere machines.

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