Spitfire List Web site and blog of anti-fascist researcher and radio personality Dave Emory.

For The Record  

FTR #651 The Engineer Has Wrecked The Train

MP3: Side 1 | Side 2

Intro­duc­tion: Sup­ple­ment­ing a pre­dic­tion from FTR #412 (June of 2003), this pro­gram notes that the engineer–the Bush administration–has wrecked the train. As we pas­sen­gers stum­ble from the eco­nom­ic wreck­age, iden­ti­fy­ing the caus­es of the dis­as­ter is as impor­tant as pur­su­ing the male­fac­tors behind the deci­sive actions. The pro­gram begins with review of an arti­cle by Lucy Komis­ar stress­ing that the U.S. gov­ern­ment should use its stew­ard­ship of AIG to inves­ti­gate the off­shore oper­a­tions through which it con­duct­ed busi­ness in the past. In addi­tion to review­ing AIG’s pio­neer­ing devel­op­ment of “cap­tive” rein­sur­ance com­pa­nies to laun­der prof­its and evade tax­es, the arti­cle high­lights AIG’s use of Coral Rein­sur­ance for a vari­ety of ille­gal gam­bits. It should be not­ed that AIG’s ille­gal oper­a­tions have been aid­ed by a num­ber of pow­er­ful and influ­en­tial peo­ple. Much of the first side of the pro­gram con­sists of analy­sis of why AIG was cen­tral to the insti­tu­tion­al finan­cial col­lapse of Sep­tem­ber 2008. Among those who note the role of what Lucy Komis­ar calls “off­shore” in the cur­rent eco­nom­ic deba­cle is Man­hat­tan Dis­trict Attor­ney Robert Mor­gen­thau, who helped inves­ti­gate the BCCI affair. Con­clud­ing with infor­ma­tion from FTR #412, the pro­gram sets forth a col­umn by Paul Krug­man of The New York Times (a pro­fes­sor of eco­nom­ics at Prince­ton Uni­ver­si­ty.) In numer­ous recent broad­casts, Mr. Emory has used the phrase “the engi­neer is out to wreck the train” to describe the direc­tion of the Bush admin­is­tra­tion and the forces that dri­ve it. For some time, the For The Record series has advanced the work­ing hypoth­e­sis that this admin­is­tra­tion is a front for the Under­ground Reich, with the goal of the polit­i­cal, eco­nom­ic and/or phys­i­cal destruc­tion and/or sub­ju­ga­tion of the Unit­ed States as its goal. By mani­a­cal­ly reduc­ing the fed­er­al bud­get and dra­mat­i­cal­ly increas­ing fed­er­al expen­di­tures, the GOP extrem­ists are going to destroy the coun­try. Now, the notion that “the engi­neer intends to wreck the train” is not just Mr. Emory’s refrain.

Pro­gram High­lights Include: Detailed dis­cus­sion of the role of AIG’s cred­it default swaps in first but­tress­ing and then under­min­ing the sub­prime mar­ket; a stun­ning recap of the grim sta­tis­tics con­cern­ing the loom­ing deficit pic­ture; review of the fact that Karl Rove and Grover Norquist are the archi­tects of both fis­cal dis­as­ter through mas­sive tax cuts and the forg­ers of the GOP/Muslim Broth­er­hood alliance.

1. The pro­gram begins with review of a paper writ­ten by Lucy Komis­ar in which she dis­cussed the neces­si­ty of exam­in­ing AIG’s use of off­shore tax havens.

“The U.S. takeover of the world’s largest insur­ance con­glom­er­ate, AIG, puts it in a unique posi­tion to look into the inner deal­ings of a com­pa­ny that is a prof­li­gate user of tax havens. AIG has employed off­shore shell com­pa­nies to cook its books and dodge tax­es. The new U.S. man­agers should inves­ti­gate how they do it. AIG’s favorite off­shore juris­dic­tions are Bermu­da, Bar­ba­dos, Switzer­land, and Lux­em­bourg, places immune from even the lax enforce­ment of America’s state insur­ance reg­u­la­tors and the Secu­ri­ties and Exchange Com­mis­sion (SEC). AIG’s off­shore sub­sidiaries include Amer­i­can Inter­na­tion­al Assur­ance Com­pa­ny Lim­it­ed, Bermu­da; Amer­i­can Inter­na­tion­al Rein­sur­ance Com­pa­ny, Ltd., Bermu­da; AIG Life Insur­ance Com­pa­ny Ltd., Switzer­land; and AIG Finan­cial Advi­sor Ser­vices, S.A., Lux­em­bourg. AIG in the past has used tax havens to evade reg­u­la­tions and hide insid­er con­nec­tions in sup­pos­ed­ly “arms-length” deals. This is espe­cial­ly sig­nif­i­cant as the com­pa­ny has moved into finan­cial ser­vices and asset man­age­ment. It has also used the off­shore sys­tem to evade U.S. tax­es.

Here are two exam­ples, the first report­ed exclu­sive­ly by this writer. AIG helped Vic­tor Pos­ner, a noto­ri­ous­ly crooked investor, set up an off­shore rein­sur­ance com­pa­ny so that Pos­ner could evade U.S. tax­es. The pol­i­cy scam was dis­cov­ered in the ear­ly 1990s, after the SEC pros­e­cut­ed Pos­ner for a fraud­u­lent takeover scheme con­coct­ed with Wall Street thieves Michael Milken and Ivan Boesky, ordered him to pay $4 mil­lion to fraud vic­tims and banned him from serv­ing as offi­cer or direc­tor of any pub­licly-held com­pa­ny. New man­agers took over Posner’s NVF Corp., which ran a Delaware vul­can­ized rub­ber plant. An insur­ance agent charged with exam­in­ing com­pa­ny poli­cies dis­cov­ered that NVF was pay­ing AIG’s Nation­al Union Fire of Pitts­burgh sub­stan­tial­ly over mar­ket for workmen’s com­pen­sa­tion insur­ance. AIG rein­sured the pol­i­cy through Chesa­peake Insur­ance, an off­shore rein­sur­ance com­pa­ny Pos­ner owned in Bermu­da. In essence, NVF, owned by Pos­ner, was buy­ing insur­ance from an AIG com­pa­ny which was buy­ing rein­sur­ance for the pol­i­cy from an off­shore com­pa­ny owned by Pos­ner. Bermu­da pro­vid­ed tax and cor­po­rate secre­cy, so Chesapeake’s books were safe from the eyes of Amer­i­can reg­u­la­tors and tax author­i­ties. AIG and Pos­ner made out like ban­dits. AIG got a high­er com­mis­sion from the inflat­ed NVF pre­mi­um before send­ing the rest to Chesa­peake. Pos­ner wrote off the entire amount as a busi­ness expense and enjoyed the extra cash in Bermu­da, tax free, stiff­ing the U.S. gov­ern­ment. Reduced prof­its also meant small­er div­i­dends and share prices for investors. The insur­ance agent can­celled the NVF pol­i­cy with AIG, but the Delaware Insur­ance Depart­ment did not make the scam pub­lic or take any action against AIG. A for­mer insur­ance depart­ment reg­u­la­tor told me, “This was not an iso­lat­ed case with Vul­can [NVF]. AIG did that a lot. AIG helped com­pa­nies set up off­shore cap­tive rein­sur­ance com­pa­nies.” A “cap­tive” is owned by the com­pa­ny it insures. AIG, he alleged, “would then over­charge on insur­ance and pay rein­sur­ance pre­mi­ums to the cap­tives, giv­ing the cap­tive own­ers tax-free off­shore income.”

“U.S. Should Exam­ine AIG’s Use of Tax Havens” by Lucy Komis­ar.

2. Much of the first side of the pro­gram con­sists of analy­sis of why AIG was cen­tral to the insti­tu­tion­al finan­cial col­lapse of Sep­tem­ber 2008:

“If Sep­tem­ber did­n’t give you enough to wor­ry about, con­sid­er what will hap­pen to real estate prices as unem­ploy­ment grows steadi­ly over the next sev­er­al months. As bad as things are now, they’ll get much worse.

They’ll get worse for the obvi­ous rea­son: because more peo­ple will default on their mort­gages. But they’ll also remain depressed for far longer than any­one expects, for a rea­son most peo­ple will nev­er under­stand.

What fol­lows is one of the real secrets to Sep­tem­ber’s stock mar­ket col­lapse. Once you under­stand what real­ly hap­pened last month, the events to come will be much clear­er to you...

Every great bull mar­ket has sim­i­lar char­ac­ter­is­tics. The spec­u­la­tion must – at the begin­ning – start with a rea­son­ably good idea. Using long-term mort­gages to pay for homes is a good idea, with a few impor­tant caveats.

Some of these lim­i­ta­tions are obvi­ous to any intel­li­gent observ­er... like the need for a sub­stan­tial down pay­ment, the ver­i­fi­ca­tion of income, an inde­pen­dent appraisal, etc. But human nature dic­tates that, giv­en enough time and the right incen­tives, any endeav­or will be cor­rupt­ed. This is one of the two crit­i­cal ele­ments of a bub­ble. What was once a good idea becomes a farce. You already know all the sto­ries of how this hap­pened in the hous­ing mar­ket, where loans were even­tu­al­ly giv­en with­out fixed rates, with­out income ver­i­fi­ca­tion, with­out down pay­ments, and with­out legit­i­mate appraisals.

As bad as these prac­tices were, they would not have cre­at­ed a glob­al finan­cial pan­ic with­out the sec­ond, more crit­i­cal ele­ment. For things to get real­ly out of con­trol, the farce must evolve fur­ther... into fraud.

And this is where AIG comes into the sto­ry. . . .”

“How AIG’s Col­lapse Began a Glob­al Run on the Banks” by Porter Stans­ber­ry; DailyWealth.com; 10/04/08.

3. Not­ing the sig­nif­i­cance of “off­shore” for rec­ti­fy­ing the cur­rent finan­cial cri­sis, Man­hat­tan Dis­trict Attor­ney Robert Mor­gen­thau high­lights the fact that much of the untaxed mon­ey can­not, under cur­rent reg­u­la­tions, be reclaimed by the U.S. Note that Mor­gen­thau helped inves­ti­gate the BCCI case, cit­ed by him in the arti­cle.

“A major fac­tor in the cur­rent finan­cial cri­sis is the lack of trans­paren­cy in the activ­i­ties of the prin­ci­pal play­ers in the finan­cial mar­kets. This opaque­ness is com­pound­ed by vast sums of mon­ey that lie out­side the juris­dic­tion of U.S. reg­u­la­tors and oth­er super­vi­so­ry author­i­ties.

The $700 bil­lion in Trea­sury Sec­re­tary Hen­ry Paulson’s cur­rent pro­posed res­cue plan pales in com­par­i­son to the vol­ume of dol­lars that now escape the watch­ful eye, not only of U.S. reg­u­la­tors, but from the media and the gen­er­al pub­lic as well.

There is $1.9 tril­lion, almost all of it run out of the New York met­ro­pol­i­tan area, that sits in the Cay­man Islands, a secre­cy juris­dic­tion. Anoth­er $1.5 tril­lion is lodged in four oth­er secre­cy juris­dic­tions.

Fol­low­ing the Great Depres­sion, we bragged about a new­ly installed safe­ty net that was sup­pose to save us from such a hard eco­nom­ic fall in the future. How­ev­er, the Secu­ri­ties and Exchange Com­mis­sion, the Fed­er­al Reserve Sys­tem, the Comp­trol­ler of the Cur­ren­cy and oth­ers have ignored tril­lions of dol­lars that have migrat­ed to off­shore juris­dic­tions that are secre­tive in nature and out­side the safe­ty net — beyond the reach of U.S. reg­u­la­tors. . . .”

“Too Much Mon­ey Is Beyond Legal Reach” by Robert Mor­gen­thau; Wall Street Jour­nal; 9/30/2008.

4. Con­clud­ing with infor­ma­tion from FTR #412, the pro­gram sets forth a col­umn by Paul Krug­man of The New York Times (a pro­fes­sor of eco­nom­ics at Prince­ton Uni­ver­si­ty.) In numer­ous recent broad­casts, Mr. Emory has used the phrase “the engi­neer is out to wreck the train” to describe the direc­tion of the Bush admin­is­tra­tion and the forces that dri­ve it. For some time, the For The Record series has advanced the work­ing hypoth­e­sis that this admin­is­tra­tion is a front for the Under­ground Reich, with the goal of the polit­i­cal, eco­nom­ic and/or phys­i­cal destruc­tion and/or sub­ju­ga­tion of the Unit­ed States as its goal. By mani­a­cal­ly reduc­ing the fed­er­al bud­get and dra­mat­i­cal­ly increas­ing fed­er­al expen­di­tures, the GOP extrem­ists are going to destroy the coun­try. Now, the notion that “the engi­neer intends to wreck the train” is not just Mr. Emory’s refrain. Note that FTR #412 was record­ed in June of 2003.)

“ ‘The lunatics are now in charge of the asy­lum.’ So wrote the nor­mal­ly staid Finan­cial Times, tra­di­tion­al­ly the voice of sol­id British busi­ness opin­ion, when sur­vey­ing last week’s bill. Indeed, the leg­is­la­tion is dou­bly absurd: the gim­micks used to make an $800-bil­lion-plus tax cut car­ry an offi­cial price tag of only $320 bil­lion are a joke, yet the cost with­out the gim­micks is so large that the nation can’t pos­si­bly afford it while keep­ing its oth­er promis­es.

“But then maybe that’s the point. The Finan­cial Times sug­gests that ‘more extreme Repub­li­cans’ actu­al­ly want a fis­cal train wreck: ‘propos­ing to slash fed­er­al spend­ing, par­tic­u­lar­ly on social pro­grams, is a tricky elec­toral propo­si­tion, but a fis­cal cri­sis offers the tan­ta­liz­ing prospect of forc­ing such cuts through the back door.’ Good for The Finan­cial Times. It seems that stat­ing the obvi­ous has now, final­ly, become respectable.

“It’s no secret that right-wing ide­o­logues want to abol­ish pro­grams Amer­i­cans take for grant­ed. But not long ago, to sug­gest that the Bush administration’s poli­cies might actu­al­ly be dri­ven by those ideologues—that the admin­is­tra­tion was delib­er­ate­ly set­ting the coun­try up for a fis­cal cri­sis in which pop­u­lar social pro­grams could be sharply cut—was to be accused of spout­ing con­spir­a­cy the­o­ries. [Ital­ics are Mr. Emory’s] Yet by push­ing through anoth­er huge tax cut in the face of record deficits, the admin­is­tra­tion clear­ly demon­strates either that it is com­plete­ly feck­less, or that it actu­al­ly wants a fis­cal cri­sis. (Or maybe both.)”

“Stat­ing the Obvi­ous” by Paul Krug­man; The New York Times; 5/27/2003.


4 comments for “FTR #651 The Engineer Has Wrecked The Train”

  1. http://www.investmentweek.co.uk/investment-week/news/2124105/rogers-100-chance-2008-crash

    Rogers: 100% chance of anoth­er 2008 crash

    10 Nov 2011

    Invest­ment vet­er­an Jim Rogers has said he is 100% sure the world will face anoth­er finan­cial crash prompt­ed by the euro­zone debt cri­sis, adding this time it will be worse than 2008’s col­lapse.

    The CEO and chair­man of Rogers Hold­ings told CNBC the upcom­ing cri­sis could be worse than the Lehman Broth­ers col­lapse three years ago due to astro­nom­i­cal­ly high­er debt lev­els in economies.

    “In 2002 it was bad, in 2008 it was worse and 2012 or 2013 is going to be worse still — be care­ful,” he warned.

    “The world has been spend­ing stag­ger­ing amounts of mon­ey it does not have for a few decades now, and it is all com­ing home to roost.

    “We are cer­tain­ly going to have more crises com­ing out of Europe and Amer­i­ca; the world is in trou­ble.” said Rogers.

    He said bor­row­ing more cash to fix the prob­lem was no longer a solu­tion for indebt­ed nations.

    “Last time, Amer­i­ca quadru­pled its debt. The sys­tem is much more extend­ed now, and Amer­i­ca can­not quadru­ple its debt again. Greece can­not dou­ble its debt again. The next time around is going to be much worse,” he said.

    Rogers told CNBC he believed the only solu­tion to the glob­al finan­cial cri­sis was to allow “every­one to go bank­rupt”.

    “Get every­one in a room and decide you will go bank­rupt. You will sur­vive and we are going to ring-fence you. We will make sure your cheques clear. Every­one’s deposits are going to be ok, the sys­tem is going to sur­vive,” he said.

    How­ev­er, he warned let­ting Greece leave the euro would be a dis­as­trous deci­sion because the coun­try would go back to its “same old ways”.

    “They would start print­ing mon­ey, no one would lend them mon­ey and infla­tion would go through the roof. The Greek econ­o­my would get worse and worse. That is not good for Greece and it is not good for the world.

    “It would be bet­ter off if we can hold the euro togeth­er and reor­gan­ise. Peo­ple are bank­rupt and when peo­ple are bank­rupt you might as well face real­i­ty.”

    Posted by R. Wilson | November 19, 2011, 1:38 am
  2. I’m not sure how much accoun­tants and tax attor­ney’s for major multi­na­tion­als get paid, but the ones work­ing at the 10 large firms that man­aged to booked more in tax-free over­seas prof­its than they report­ed in net rev­enue are real­ly ‘good’ at their jobs:

    Updat­ed March 10, 2013, 8:15 p.m. ET

    More U.S. Prof­its Parked Abroad, Sav­ing on Tax­es


    U.S. com­pa­nies are mak­ing record prof­its. And more of the mon­ey is stay­ing off­shore, and light­ly taxed.

    A Wall Street Jour­nal analy­sis of 60 big U.S. com­pa­nies found that, togeth­er, they parked a total of $166 bil­lion off­shore last year. That shield­ed more than 40% of their annu­al prof­its from U.S. tax­es, though it left the mon­ey off-lim­its for pay­ing div­i­dends, buy­ing back shares or mak­ing invest­ments in the U.S. The 60 com­pa­nies were cho­sen for the analy­sis because each of them had held at least $5 bil­lion off­shore in 2011.

    The prac­tice is a result of U.S. tax rules that cre­ate incen­tives for com­pa­nies to max­i­mize the earn­ings, and hold­ings, of for­eign sub­sidiaries. The law gen­er­al­ly allows com­pa­nies to not record or pay tax­es on prof­its earned by over­seas sub­sidiaries if the mon­ey isn’t brought back to the U.S.

    Big Amer­i­can com­pa­nies are book­ing more of their sales in faster-grow­ing for­eign mar­kets. But com­pa­nies also are mov­ing more of their earn­ings over­seas by assign­ing valu­able patents and licens­es to for­eign units.

    Untaxed for­eign earn­ings are part of a con­tentious debate over U.S. fis­cal pol­i­cy and tax code. The cur­rent sys­tem attracts crit­i­cism from many points of view. Busi­ness groups want the U.S. to tax prof­it based on where it is gen­er­at­ed, as many coun­tries do, rather than glob­al­ly, as the U.S. does now. More­over, they point out, tax rates are high­er in the U.S. than in many oth­er nations, putting Amer­i­can com­pa­nies at a dis­ad­van­tage.

    Oth­ers say that the grow­ing cash hoards often are the result of sophis­ti­cat­ed cor­po­rate maneu­vers to shift prof­its to low-tax coun­tries.

    With­in the group of 60 com­pa­nies, the Jour­nal found 10 that parked more earn­ings off­shore last year than they gen­er­at­ed for their bot­tom lines. They include Abbott Lab­o­ra­to­ries, whose store of untaxed over­seas earn­ings rose by $8.1 bil­lion, to $40 bil­lion. The increase exceed­ed the phar­ma­ceu­ti­cal mak­er’s net income of $6 bil­lion, which was weighed down by a $1.4 bil­lion charge relat­ed to ear­ly repay­ment of debt. Includ­ing that charge, Abbott report­ed a pre­tax loss on its U.S. oper­a­tions.

    An Abbott spokesman declined to com­ment.


    Abbott runs man­u­fac­tur­ing plants in more than a dozen for­eign coun­tries, plus Puer­to Rico, and gen­er­at­ed 58% of its $40 bil­lion in 2012 rev­enue out­side the U.S. In a secu­ri­ties fil­ing, Abbott esti­mat­ed that low­er tax rates on its for­eign oper­a­tions cut its U.S. tax bill by $1.6 bil­lion last year.

    A big Abbott sub­sidiary in Ire­land, Abbott Lab­o­ra­to­ries Vas­cu­lar Enter­pris­es Ltd., report­ed prof­it of €1.1 bil­lion for 2011 ($1.43 bil­lion), the lat­est fig­ures avail­able, and paid no Irish tax, because it is incor­po­rat­ed in Bermu­da, accord­ing to an Irish cor­po­rate fil­ing.


    Posted by Pterrafractyl | March 14, 2013, 1:46 pm
  3. Here’s a reminder that when the GOP 2016 can­di­dates pledge to “over­turn Oba­macare”, the real­i­ty is that if a GOP­er wins the White House in 2016 they’re prob­a­bly going to have an oppor­tu­ni­ty to over­turn all the poli­cies that have come out of Con­gress or the White House since the end of the Bush admin­is­tra­tion that were actu­al­ly help­ful. So while the 2016 will inevitably be por­trayed as an oppor­tu­ni­ty to roll back Oba­macare, it’ll prob­a­bly effec­tive­ly become a de fac­to ref­er­en­dum on whether or not to roll the Unit­ed States back to the Bush era, wars and all. And, amaz­ing­ly, it’s a ref­er­en­dum that the GOP just might win:

    TPM Cafe: Opin­ion
    2016 Might Be Amer­i­ca’s Next High-Stakes Elec­tion
    By Ed Kil­go­re
    Pub­lished March 18, 2015, 6:00 AM EDT

    In this space a cou­ple of weeks ago I made the argu­ment that par­ti­san and ide­o­log­i­cal grid­lock was feed­ing on itself by cre­at­ing an insa­tiable crav­ing for the occa­sion­al Big Elec­tion with big con­se­quences. What didn’t ful­ly occur to me is that the next Big Elec­tion might be the one just ahead, in 2016.

    No, it’s extreme­ly unlike­ly that 2016 will pro­duce the kind of tem­po­rary gov­ern­ing capac­i­ty for either par­ty that Democ­rats won in 2008, with a big major­i­ty in the House and a fil­i­buster-proof major­i­ty in the Sen­ate (for a year, at least, until the dis­as­ter of Scott Brown’s spe­cial elec­tion vic­to­ry in Jan­u­ary 2010). But a rapid­ly esca­lat­ing series of Repub­li­can post-elec­tion promis­es that do not require a land­slide are mak­ing this a “high-stakes elec­tion” nonethe­less.

    Most notably, Repub­li­can pro­to-pres­i­den­tial can­di­dates are trip­ping over each oth­er to promise to revoke Obama’s exec­u­tive orders and reg­u­la­tions. This threat­ens to become a coun­ter­rev­o­lu­tion­ary exec­u­tive agen­da that goes beyond high-pro­file items like immu­ni­ty for pros­e­cu­tion for immi­gra­tion vio­la­tions and util­i­ty car­bon emis­sions reg­u­la­tions and extend deep into every­thing Democ­rats were able to accom­plish since 2009. It’s just a mat­ter of time until a com­pe­ti­tion breaks out that cul­mi­nates with demands and promis­es to repeal every­thing Oba­ma ordered, includ­ing reg­u­la­tions need­ed to imple­ment every­thing Con­gress passed since 2009. That’s obvi­ous­ly a pret­ty big deal.

    A sec­ond major “high stakes” area involves the president’s pow­er to use mil­i­tary force. In 2012 Repub­li­cans accused Barack Oba­ma of weak lead­er­ship and pre­dict­ed threats to Amer­i­can inter­ests rang­ing from Pales­tine to Iraq to Rus­sia to North Korea, with a par­tic­u­lar empha­sis on Iran. This time around Repub­li­cans both in Con­gress and on the pres­i­den­tial cam­paign trail are describ­ing these threats as immi­nent, and advo­cat­ing what amounts to a re-inva­sion of Iraq to deal with Islam­ic State and an ulti­ma­tum to Iran to aban­don its entire nuclear pro­gram imme­di­ate­ly or face U.S. or Israeli airstrikes. That’s aside from the equal­ly rad­i­cal but less imme­di­ate­ly dire course of action the GOP is advo­cat­ing with respect to Israeli-Pales­tin­ian rela­tions (an aban­don­ment of any two-state solu­tion), and its treat­ment of the cur­rent Israeli gov­ern­ment (which as of last night appeared like­ly to con­tin­ue in pow­er for the next four years) as the linch­pin of U.S. for­eign pol­i­cy.

    More gen­er­al­ly, what looked as recent­ly as a cou­ple of years ago like a bur­geon­ing intra-GOP debate over “non-inter­ven­tion­ism” as a corol­lary of lim­it­ed gov­ern­ment con­ser­vatism has col­lapsed, and even Rand Paul is join­ing his par­ty col­leagues in try­ing to sab­o­tage a nuclear deal with Iran at the risk of war, and reject­ing any oblig­a­tion to ful­fill diplo­mat­ic com­mit­ments made by Oba­ma. The fork in the road in Novem­ber of 2016 appears as stark for for­eign pol­i­cy as it does for exec­u­tive action on domes­tic pol­i­cy.

    A third “high stakes” area is leg­isla­tive, and involves the strong pos­si­bil­i­ty that Repub­li­cans will, if they con­trol the White House and both cham­bers of Con­gress, use the bud­get rec­on­cil­i­a­tion process to kill or at least dis­able the Afford­able Care Act, cut tax­es, boost defense spend­ing, and rad­i­cal­ly “reform” entitlements—all in one bill that requires only major­i­ty votes in each House. There were report­ed­ly plans in the works to do all that back in 2012, in a blitzkrieg action planned for ear­ly in 2013, had Mitt Rom­ney won and Repub­li­cans reclaimed the Sen­ate that year.


    There’s no telling what the next year of fre­net­ic cam­paign­ing, espe­cial­ly in the GOP pres­i­den­tial nom­i­nat­ing process, will add to the 2017 agen­da of action to make or remake his­to­ry. But at present, there are already enough cru­cial mat­ters of war and peace, pros­per­i­ty and aus­ter­i­ty, and equal­i­ty and free­dom, to make this a Big Elec­tion, even if the choice between, say, Hillary Clin­ton and Scott Walk­er as pres­i­dent were not choice enough.

    “This time around Repub­li­cans both in Con­gress and on the pres­i­den­tial cam­paign trail are describ­ing these threats as immi­nent, and advo­cat­ing what amounts to a re-inva­sion of Iraq to deal with Islam­ic State and an ulti­ma­tum to Iran to aban­don its entire nuclear pro­gram imme­di­ate­ly or face U.S. or Israeli airstrikes”.

    Are Amer­i­cans ready for anoth­er round of end­less war? We’ll find out in anoth­er year and a half but, for right now, it’s def­i­nite­ly look­ing like a ‘maybe’.

    Posted by Pterrafractyl | March 18, 2015, 1:23 pm
  4. Here’s a free hot stock tip: for­mer Sen­a­tor Phil Gramm, the dri­ving force in the Sen­ate behind the repeal of Glass-Stea­gall that is wide­ly attrib­uted with play­ing a major role in desta­bi­liz­ing the US finan­cial sys­tem and caus­ing the even­tu­al finan­cial melt­down, appears to have secret­ly invest­ed in torch and pitch­fork man­u­fac­tur­ers and is now try­ing to dri­ve up inter­est in their prod­ucts. Yes, there is no evi­dence that Gramm is heav­i­ly in vest­ed in torch and pitch­fork man­u­fac­tur­ers and is try­ing to cre­ate a torch and pitch­fork bub­ble, but that’s real­ly the only rea­son­able expla­na­tion what for he just said:

    Van­i­ty Fair
    For­mer U.S. Sen­a­tor: C.E.O.s Are the Vic­tims of “Big­otry”

    Get ready to expe­ri­ence 2008-finan­cial-cri­sis PTSD.

    Tina Nguyen

    July 29, 2015 1:39 pm

    Remem­ber when Amer­i­can tax­pay­ers paid for major finan­cial insti­tu­tions to receive a bailout worth hun­dreds of mil­lions of dol­lars, fol­low­ing the sub­prime-mort­gage cri­sis? Those insti­tu­tions, Cit­i­group, Inc. and Mer­rill Lynch & Co. among them, then award­ed bil­lions of dol­lars in bonus­es to their C.E.O.s, while the nation fell into a reces­sion. Get ready to expe­ri­ence 2008-finan­cial-cri­sis PTSD with this footage of for­mer U.S. sen­a­tor Phil Gramm, one of the men arguably respon­si­ble for the hous­ing bub­ble that led to the finan­cial cri­sis, say­ing that the very C.E.O.s were the vic­tims of “big­otry.”

    Gramm, a for­mer Repub­li­can from Texas who left the Sen­ate in 2002, was called before the House Finan­cial Ser­vices Com­mit­tee on Tues­day to tes­ti­fy on the effec­tive­ness of the 2010 Dodd-Frank Act, which was passed in the wake of the finan­cial bailout. Hilar­i­ous­ly, Dodd-Frank addressed some of the issues stem­ming from Gramm’s legislation—specifically, the Gramm-Leach-Bliley Act of 1999, which removed the bar­ri­ers between com­mer­cial bank­ing (i.e., the banks that hold people’s mon­ey and issue mort­gages) and invest­ment bank­ing (i.e., the banks that con­trol where to throw invest­ment mon­ey). And Gramm hap­pens to be one of the peo­ple—pos­si­bly the only per­son in Amer­i­ca—who thinks that his bill was not a direct cause of the 2008 finan­cial cri­sis.

    Gramm, cur­rent­ly a con­sul­tant for UBS, might have been expect­ed to express some remorse dur­ing the hear­ing. No one expect­ed him to argue that he and his fel­low rich peo­ple were the vic­tims of “big­otry”:

    “What all of this is about is polit­i­cal dem­a­goguery. It’s the one form of big­otry that is still allowed in Amer­i­ca, and that is the big­otry against the suc­cess­ful. Why do peo­ple pay exec­u­tives a lot of mon­ey? Why do C.E.O.s make these huge salaries? It’s because they add val­ue.”

    As an exam­ple, he cit­ed for­mer New York Jets quar­ter­back and “vic­tim” Joe Namath as an “exploit­ed” man who added val­ue to his team and received the high­est salary as a result. And it didn’t stop there:

    My friend Ed Whitacre at AT&T: if there’s ever been an exploit­ed worker—even though they made a big deal abut him get­ting $75 mil­lion when he retired, the man added bil­lions of dol­lars of val­ue. He was exploit­ed! It was an out­rage! But nobody’s rais­ing hell about it. They’re rais­ing hell about the fact that he made a lot of mon­ey, and oth­er peo­ple would like to have the mon­ey, and even if they don’t want it, they don’t want him to have it. I don’t get it.

    From this, we can derive that either Gramm has no idea how to use the word “exploit­ed,” or Gramm tru­ly believes that Joe Namath and the for­mer C.E.O. of AT&T are being unfair­ly used by...the pub­lic?


    Poor Ed Whitacre. Hope­ful­ly the addi­tion­al $83 mil­lion on top of the measly $75 mil­lion Phil Gramm cit­ed plus $24,000 in annu­al auto­mo­bile ben­e­fits and access to the cor­po­rate jet for 10 hours a month he got in his retire­ment pack­age made up for all the exploita­tion he suf­fered.

    Not all retire­ment crises are equal, but don’t think that means you can start harp­ing about inequal­i­ty in retire­ment crises. That’s just big­otry.

    Posted by Pterrafractyl | July 31, 2015, 4:49 pm

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